Financial Data and Key Metrics Changes - The company reported net sales of $495.3 million for Q3 2025, a 77% increase compared to $280.3 million in Q3 2024, primarily driven by the Tymon acquisition [17] - A net loss of $276 million or $6.4 per diluted share was reported for the quarter, compared to a net income of $25.4 million or $0.77 per diluted share in the same period last year [18] - Adjusted EBITDA for the quarter increased by 67.2% to $70.3 million compared to $42 million during the same period last year [20] Business Line Data and Key Metrics Changes - Hardware Solutions segment generated net sales of $227.1 million, a 201% increase compared to $75.5 million in 2024, with a decline in legacy product line volumes by 2.4% [21] - Extruded Solutions segment reported revenue of $174.4 million, a 29.6% increase from $134.6 million in 2024, with a 2.6% decline in legacy product line volumes [22] - Custom Solutions segment net sales were $102.3 million, up from $72.7 million in 2024, with a 0.8% increase in legacy product line volumes [23] Market Data and Key Metrics Changes - In North America, volumes increased compared to the prior quarter but were below normal seasonal expectations due to extended downtime around the July 4 holiday [7] - European market share gains in vinyl extrusion and insulating glass spacer product lines helped offset market weakness despite ongoing pricing pressure [8] Company Strategy and Development Direction - The company is focused on achieving financial and operational objectives, prioritizing above-market growth and improved margin profiles over time [5] - The integration of Tymon is progressing well, with expected cost synergies of approximately $45 million, exceeding initial projections of $30 million [12] - The company aims to capitalize on pent-up demand as macroeconomic uncertainty subsides and customer confidence improves [11] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic headwinds persisted, impacting demand and order patterns, but expressed confidence in the company's resilience [6] - The company anticipates continued pressure on results in the Hardware Solutions segment in Q4 but expects gradual progress as operational issues are addressed [15] - Updated guidance for fiscal 2025 estimates net sales of approximately $1.82 billion and adjusted EBITDA of approximately $235 million [26] Other Important Information - The company repaid over $51 million of bank debt during the quarter, demonstrating strong cash flow generation [13] - Cash provided by operating activities was $60.7 million for Q3 2025, compared to $46.4 million for Q3 2024 [24] Q&A Session Summary Question: Is there a change in the competitive landscape affecting demand? - Management indicated that the softness in demand is more macro-related than competitive, with good performance across regions and product lines [28] Question: What is driving the strength in Europe? - Strength in Europe is attributed to market share gains and the delivery of quality products, particularly in extrusions and framing systems [29] Question: What is the expected EBITDA headwind from Mexico? - Management expects a similar EBITDA headwind in Q4 as seen in Q3, with some progress anticipated towards the end of the quarter [33] Question: What are customers saying about refinancing activity? - Management noted no signs of destocking and expects continued softness in demand due to seasonal factors [44] Question: What is the timeline for realizing synergies from the Tymon acquisition? - The timeline for the initial $30 million in synergies remains early 2026, with no pushout announced [70]

Financial Data and Key Metrics Changes - The first quarter revenues were $355 million, nearly flat compared to the previous year on a pro forma basis [22] - Adjusted EBITDA for the first quarter was $92 million, with an adjusted EBITDA margin of 26%, up approximately 200 basis points year-over-year on a pro forma basis [23] - Adjusted diluted EPS was $0.17, flat year-over-year [24] Business Line Data and Key Metrics Changes - Combined upsell, cross-sell, and new logo rates delivered 9.3% growth in the quarter, with retention remaining high at 96% [23][13] - The sales pipeline momentum included 14 enterprise bookings in the first quarter, totaling 78 in the last twelve months, each with $500,000 or more of expected annual contract value [13] - The average deal size increased, indicating strong package density and value selling across most verticals and geographies [13] Market Data and Key Metrics Changes - The transportation vertical showed healthy demand, while there was a slowdown in order volumes within the retail and e-commerce verticals [15][16] - International operations reported an 8% increase, with growth across all regions including EMEA, India, APAC, and Australia [90] Company Strategy and Development Direction - The company is focused on executing its FA five-point-zero strategy, emphasizing customer retention, synergy realization, and integration of the Sterling acquisition [8][9] - The integration process is on track, with a focus on leveraging the best solutions and technologies from both First Advantage and Sterling [18] - The company aims to achieve run rate synergies of $60 million to $70 million within two years post-acquisition [26] Management's Comments on Operating Environment and Future Outlook - Management remains cautious due to macroeconomic uncertainties but has not observed significant changes in fundamental demand drivers [9][11] - The company expects base revenues to remain a growth headwind in Q2 but anticipates sequential improvement later in the year [29][30] - Management is confident in achieving adjusted EBITDA margins around or above 28% starting in Q2, with free cash flow projected between $65 million and $95 million for 2025 [31] Other Important Information - The company has contingency plans in place to manage potential economic slowdowns and is prepared to take actions to reduce costs as needed [11] - The company hosted a record number of attendees at its annual Collaborate User Conference, indicating strong customer engagement [20] Q&A Session Summary Question: Can you elaborate on the cross currents from clients? - Management noted strong order volumes but clients are in a wait-and-see mode regarding forecasting due to macroeconomic conditions [36][38] Question: How is retention trending for the Sterling base? - Retention remains high at 96%, with Sterling customers excited about new features and upgrades [40][42] Question: What gives confidence in the guidance? - Confidence stems from strong new logo generation and upsell/cross-sell revenue, with a focus on maintaining historical retention levels [71] Question: Are you seeing more RFPs post-Sterling? - RFP volumes are normal, driven by trends in the industry, particularly around digital identity [66] Question: How long does onboarding for large deals typically take? - Onboarding for large and complex deals typically takes about six months, with revenue expected to start in late Q2 or early Q3 [68] Question: How is the international business performing? - International operations have shown consistent growth, with an 8% increase, driven by a focus on risk and compliance [90]

Financial Data and Key Metrics Changes - First quarter revenues reached $355 million, nearly flat compared to the previous year on a pro forma basis [22] - Adjusted EBITDA for the first quarter was $92 million, with an adjusted EBITDA margin of 26%, up approximately 200 basis points year-over-year on a pro forma basis [23] - Adjusted diluted EPS was $0.17, flat year-over-year, impacted by increased interest on transaction financing and the dilutive effect of new shares issued for the acquisition [24] Business Line Data and Key Metrics Changes - Combined upsell, cross-sell, and new logo rates delivered 9.3% growth in the quarter, with retention remaining high at 96% [23] - The sales pipeline momentum included 14 enterprise bookings in the first quarter, totaling 78 in the last twelve months, each with $500,000 or more of expected annual contract value [13] - The average deal size increased, indicating strong package density and value selling across most verticals and geographies [13] Market Data and Key Metrics Changes - International operations saw an 8% increase, marking three to four consecutive quarters of growth, with positive momentum across all regions [85] - The transportation vertical experienced healthy demand, while retail and e-commerce showed a slowdown in order volumes [15] - The company noted that 87% of 2024 pro forma revenues were generated in the U.S., with limited direct exposure to U.S. Federal government hiring [10][11] Company Strategy and Development Direction - The company is focused on executing its FA five-point-zero strategy, emphasizing customer retention, synergy realization, and integration of the Sterling acquisition [8][9] - The integration process is on track, with a focus on leveraging the best solutions and technologies from both First Advantage and Sterling [17] - The company aims to reduce net leverage towards approximately three times pro forma adjusted EBITDA within 24 months post-close [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model despite macroeconomic uncertainties, noting that they have not observed sustained changes in demand drivers [9] - The company is prepared with contingency plans to reduce costs if economic conditions worsen [12] - Guidance for the full year 2025 remains reaffirmed, with expectations for base revenues to improve sequentially later in the year [29] Other Important Information - The company actioned an incremental $17 million in run-rate synergies in Q1, bringing the total to $37 million, exceeding synergy goals [24] - The company hosted a record number of attendees at its annual Collaborate User Conference, indicating strong customer engagement [20] - The implementation of AI agents in criminal records processing has improved speed and quality, enhancing customer satisfaction [19] Q&A Session Summary Question: Can you elaborate on the cross currents from clients? - Management acknowledged the unique macroeconomic times and emphasized a conservative outlook while noting strong order volumes and a "just in time" hiring mode among clients [37][38] Question: How is retention trending for Sterling clients? - Retention remains high at 96%, with Sterling customers excited about new features and upgrades, indicating successful communication and integration efforts [40][41] Question: What gives confidence in the guidance? - Confidence stems from strong new logo generation, upsell/cross-sell revenue, and historical retention levels, despite underlying base volume uncertainties [69][70] Question: How is the international business performing? - International business is up 8%, with growth across all regions, driven by a focus on risk and compliance [85][86] Question: What insights have been gained from the Sterling integration? - The integration has been treated as a merger, focusing on adopting the best practices from both companies, leading to a successful and rapid integration process [93][96]