First Advantage(FA)2021-11-08 16:32Financial Data and Key Metrics Changes - The company reported revenues of 63.9 million, reflecting a 48% year-over-year increase and an adjusted EBITDA margin of 33.2%, a 160 basis point increase from the prior year [40][41] - Adjusted net income was 0.28 per diluted share, compared to 0.17 per diluted share in Q3 2020 [41] Business Line Data and Key Metrics Changes - The company experienced broad-based growth across all verticals, with significant contributions from existing customers and new customer acquisitions [11][65] - Revenues from the U.K. screening business acquisition contributed 13 billion, indicating substantial growth potential [8] Company Strategy and Development Direction - The company announced two acquisitions, Corporate Screening and MultiLatin, aimed at enhancing vertical expertise and expanding international presence [14][20] - A verticalized go-to-market strategy has been implemented to drive customer expansion and product development tailored to specific industry needs [15][62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued growth driven by favorable macroeconomic conditions and robust hiring trends [10][62] - The company anticipates strong year-over-year growth in Q4 2021, although growth rates may be tempered due to exceptionally strong performance in Q4 2020 [45][55] Other Important Information - The company has invested in robotic process automation and proprietary databases to improve operational efficiencies and enhance customer experiences [23][26] - Operating cash flows increased by 95% year-over-year to 564.7 million and cash at $275.5 million [48] Q&A Session Summary Question: Which end markets are seeing greater growth relative to others? - Management noted growth across all verticals, with the recent acquisitions expected to enhance the health care vertical [65] Question: Are supply chain issues impacting hiring plans? - Management indicated that clients are actively trying to hire and experiencing high turnover, leading to increased screening needs [67] Question: What assumptions are factored into the 2022 guidance? - Management is optimistic about another successful growth year based on discussions with clients, although full guidance will be provided later [70] Question: What is the outlook for SG&A expenses? - Management has factored in increased travel and public company costs into forecasts, which may flatten G&A leverage [75] Question: What are the international expansion plans? - The company is focused on organic growth and potential M&A opportunities in international markets, with recent acquisitions indicating this strategy [77] Question: How much margin expansion is attributed to proprietary databases? - Most margin expansion was driven by incremental revenue fall-through, with some contribution from automation and proprietary databases [80] Question: What is the outlook for post-hiring background monitoring? - Management believes this product has significant growth potential, but adoption is slow due to the complexity of change management on the client side [89] Question: How much of the revenue growth is from base business versus new business wins? - Management indicated that base growth has been higher than historical norms, driven by active hiring and turnover [94]