First Advantage Reports Fourth Quarter and Full Year 2025 Results
Rhea-AI Summary
First Advantage (NASDAQ: FA) reported fourth quarter 2025 revenues of $420.0M and full year 2025 revenues of $1,574.4M. Adjusted EBITDA was $116.8M in Q4 and $441.4M for 2025; adjusted diluted EPS was $1.04 for the year. The company announced a $100M share repurchase authorization, generated $195.1M of operating cash flow in 2025, and issued full year 2026 guidance: Revenue $1,625M–$1,700M; Adjusted EBITDA $460M–$485M; Adjusted diluted EPS $1.15–$1.25.
Positive
- Revenue +83% year-over-year (2025 revenue $1,574.4M vs 2024 $860.2M)
- Adjusted EBITDA +77% year-over-year (2025 $441.4M vs 2024 $249.3M)
- Adjusted diluted EPS +27% in 2025 (Adjusted EPS $1.04)
- $100M share repurchase authorization announced with no expiration
- $55M of acquisition synergies actioned through year-end 2025
Negative
- GAAP net loss $34.8M for full year 2025 (net loss margin (2.2)%)
- Q4 GAAP net income limited to $3.5M (0.8% margin) after acquisition-related items
- $166.8M depreciation and amortization from Sterling acquisition materially affected GAAP results
Market Reaction – FA
Following this news, FA has gained 17.02%, reflecting a significant positive market reaction. Argus tracked a peak move of +2.9% during the session. Our momentum scanner has triggered 7 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $11.14. This price movement has added approximately $282M to the company's valuation. Trading volume is above average at 1.8x the average, suggesting increased trading activity.
Data tracked by StockTitan Argus (15 min delayed). Upgrade to Silver for real-time data.
Key Figures
Market Reality Check
Peers on Argus
FA is up 4.96% while key peers like CBZ, ABM, TIC, UNF, and AZZ are all down between about 0.1% and 2.9%. Momentum scanner shows only AZZ in downside momentum, reinforcing that FA’s move appears stock-specific to its earnings and guidance.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 06 | Q3 2025 earnings | Positive | +6.7% | Q3 2025 beat-like metrics and narrowed full-year 2025 guidance with strong margins. |
| Aug 07 | Q2 2025 earnings | Positive | +8.0% | Q2 2025 revenue growth, solid adjusted margins, reaffirmed full-year guidance and deleveraging. |
| May 08 | Q1 2025 earnings | Positive | +19.1% | Q1 2025 revenue growth, strong Adjusted EBITDA and EPS, and ahead-of-schedule synergies. |
| Feb 27 | FY 2024 results | Neutral | -12.5% | FY2024 results with large net loss but rising revenues and initial 2025 guidance. |
| Nov 12 | Q3 2024 earnings | Neutral | +0.1% | Q3 2024 modest revenue decline, net loss, and early Sterling acquisition synergies. |
Earnings releases for FA have typically driven positive price reactions, with 4 of the last 5 earnings events showing aligned or slightly positive moves and an average move of about 4.3% around such reports.
Over the past five earnings cycles, First Advantage has consistently highlighted revenue growth, integration of the Sterling acquisition, and steady Adjusted EBITDA and EPS expansion. Prior quarters in 2025 (Q1–Q3) showed rising revenues and reaffirmed or narrowed guidance, generally met with positive price moves. The 2024 full-year results introduced the Sterling acquisition and initial synergy targets. Today’s Q4/FY2025 results and 2026 guidance extend that narrative with higher scale, solid margins, and continued focus on synergies and growth.
Historical Comparison
In the past five earnings reports, FA’s average move was about 4.28%. Today’s 4.96% move on Q4/FY2025 results sits slightly above that pattern, consistent with prior positive reactions to earnings updates.
Earnings events show a progression from early Sterling integration in 2024 to scaled revenues and stable Adjusted EBITDA and EPS growth through 2025, with recurring guidance updates and synergy execution milestones.
Market Pulse Summary
The stock is surging +17.0% following this news. A strong positive reaction aligns with First Advantage’s history of earnings-driven moves, where prior reports saw average swings of about 4.28%. The combination of solid Q4/FY2025 metrics, upbeat 2026 guidance, and a new $100M repurchase authorization could justify enthusiasm. However, past patterns also highlight that post-earnings strength can moderate, so position sizing and risk controls mattered for traders.
Key Terms
adjusted ebitda financial
adjusted net income financial
non-gaap financial
depreciation and amortization financial
AI-generated analysis. Not financial advice.
Delivers Outstanding Fourth Quarter Results and Issues Full Year 2026 Guidance
Fourth Quarter 2025 Highlights1
- Revenues of
$420.0 million - Net income of
$3.5 million (0.8% margin)2; Diluted Net Income Per Share of$0.02 - Adjusted EBITDA of
$116.8 million (27.8% margin) - Adjusted Net Income of
$51.9 million ; Adjusted Diluted Earnings Per Share of$0.30 - Cash Flows from Operations of
$65.9 million - New
$100 million authorization for share repurchases announced today
Full Year 2025 Highlights1
- Revenues of
$1,574.4 million - Net loss of
$(34.8) million ((2.2)% margin)2; Diluted Net Loss Per Share of$(0.20) - Adjusted EBITDA of
$441.4 million (28.0% margin) - Adjusted Net Income of
$181.7 million ; Adjusted Diluted Earnings Per Share of$1.04 - Cash Flows from Operations of
$195.1 million
Full Year 2026 Guidance
- Introducing full year 2026 guidance ranges for Revenues of
$1,625 million to$1,700 million , Adjusted EBITDA of$460 million to$485 million , Adjusted Net Income of$200 million to$220 million , and Adjusted Diluted Earnings Per Share of$1.15 t o$1.25 3
ATLANTA, Feb. 26, 2026 (GLOBE NEWSWIRE) -- First Advantage Corporation (NASDAQ: FA), a global software and data company, today announced financial results for the fourth quarter and full year ended December 31, 2025.
Key Financials
(Amounts in millions, except per share data and percentages)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | 420.0 | $ | 307.1 | $ | 1,574.4 | $ | 860.2 | ||||||||
| Income (loss) from operations | $ | 44.9 | $ | (80.7 | ) | $ | 132.5 | $ | (62.4 | ) | ||||||
| Net income (loss) | $ | 3.5 | $ | (100.4 | ) | $ | (34.8 | ) | $ | (110.3 | ) | |||||
| Net income (loss) margin | 0.8 | % | (32.7 | )% | (2.2 | )% | (12.8 | )% | ||||||||
| Diluted net income (loss) per share | $ | 0.02 | $ | (0.62 | ) | $ | (0.20 | ) | $ | (0.74 | ) | |||||
| Adjusted EBITDA1 | $ | 116.8 | $ | 82.9 | $ | 441.4 | $ | 249.3 | ||||||||
| Adjusted EBITDA Margin1 | 27.8 | % | 27.0 | % | 28.0 | % | 29.0 | % | ||||||||
| Adjusted Net Income1 | $ | 51.9 | $ | 30.2 | $ | 181.7 | $ | 123.7 | ||||||||
| Adjusted Diluted Earnings Per Share1 | $ | 0.30 | $ | 0.18 | $ | 1.04 | $ | 0.82 | ||||||||
| 1 Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings Per Share are non-GAAP measures. Please see the end of this earnings release for definitions and schedules with reconciliations of these measures to their most directly comparable respective GAAP measures. 2 Q4 2025 includes | ||||||||||||||||
“In 2025, we delivered exceptional financial results with meaningful success across all pillars of our FA 5.0 growth strategy,” said Scott Staples, Chief Executive Officer. “Our targeted go-to-market approach enabled us to grow revenues and expand margins, resulting in revenue, Adjusted EBITDA, and Adjusted Diluted EPS growth in line with or above our long-term targets. During the year, we completed the core integration activities for the Sterling acquisition, maintained a high customer retention rate of
Staples continued, “We closed 2025 with outstanding performance in the fourth quarter, again demonstrating our ability to deliver positive results in a relatively flat hiring environment. We generated impressive combined upsell, cross sell, and new logo growth of
With the core Sterling integration activities completed, we are well-positioned to maximize the benefits of our combined business and enhance our competitive strengths. Building upon the great success we have seen to date with our FA 5.0 growth strategy, in 2026, we are making strategic investments in our go-to-market and product capabilities to accelerate organic revenue growth. We are confident that we are positioned to further increase our momentum and deliver meaningful, sustained value for our customers and shareholders,” Staples concluded.
Share Repurchase Program
Today, First Advantage announced that its Board of Directors has approved a share repurchase program with authorization to purchase up to
“This program underscores our confidence in our business and conviction in our attractive long-term opportunities,” commented Steven Marks, EVP and Chief Financial Officer. “Within our capital allocation framework, we consider current market conditions and view share repurchases at today’s valuation levels as a highly attractive use of capital, while maintaining a balanced focus on liquidity and shareholder value creation. Our commitment to disciplined balance sheet management and focus on deleveraging remains, evidenced by our
Full Year 2026 Guidance
“We are pleased to be commencing 2026 in a strong position, building upon our momentum of
The following table summarizes our full year 2026 guidance.
| As of February 26, 2026 | ||
| Revenues | ||
| Adjusted EBITDA3 | ||
| Adjusted Net Income3 | ||
| Adjusted Diluted Earnings Per Share3 | ||
| 3 A reconciliation of the foregoing guidance for the non-GAAP metrics of Adjusted EBITDA and Adjusted Net Income to GAAP net income (loss) and Adjusted Diluted Earnings Per Share to GAAP diluted net income (loss) per share cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of our control, or cannot be reasonably predicted. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results. | ||
Actual results may differ materially from First Advantage’s full year 2026 guidance as a result of, among other things, the factors described under “Forward-Looking Statements” below.
Conference Call and Webcast Information
First Advantage will host a conference call to review its fourth quarter and full year 2025 results today, February 26, 2026, at 8:30 a.m. ET.
To participate in the conference call, please dial 800-225-9448 (domestic) or 203-518-9708 (international) approximately ten minutes before the 8:30 a.m. ET start. Please mention to the operator that you are dialing in for the First Advantage fourth quarter and full year 2025 earnings call or provide the conference code FA4Q25. The call will also be webcast live on the Company’s investor relations website at https://investors.fadv.com under the “News & Events” and then “Events & Presentations” section, where related presentation materials will be posted prior to the conference call.
Following the conference call, a replay of the webcast will be available on the Company’s investor relations website, https://investors.fadv.com. Alternatively, the live webcast and subsequent replay will be available at https://event.on24.com/wcc/r/5179695/3B5073CD5631AA2BE2C785CFEC3D8000.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. These forward-looking statements relate to matters such as our industry, business strategy, goals, and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, and other financial and operating information. In some cases, you can identify these forward-looking statements by the use of words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” “target,” “guidance,” the negative version of these words, or similar terms and phrases.
These forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Such risks and uncertainties include, but are not limited to, the following:
- negative changes in external events beyond our control, including our customers’ onboarding volumes, economic drivers which are sensitive to macroeconomic cycles, such as interest rate volatility and inflation, geopolitical unrest, global trade disputes, uncertainty in financial markets, and changes in tax laws;
- our operations in a highly regulated industry and the fact that we are subject to numerous and evolving laws and regulations, including with respect to personal data, data security, and artificial intelligence (“AI”);
- inability to identify and successfully implement our growth strategies on a timely basis or at all;
- potential harm to our business, brand, and reputation as a result of security breaches, cyber-attacks, or the mishandling of personal data;
- our reliance on third-party data providers;
- due to the sensitive and privacy-driven nature of our products and solutions, we could face liability and legal or regulatory proceedings, which could be costly and time-consuming to defend and may not be fully covered by insurance;
- our international business exposes us to a number of risks;
- the timing, manner and volume of repurchases of common stock pursuant to our share repurchase program;
- the continued integration of our platforms and solutions with human resource providers such as applicant tracking systems and human capital management systems as well as our relationships with such human resource providers;
- our ability to obtain, maintain, protect and enforce our intellectual property and other proprietary information;
- disruptions, outages, or other errors with our technology and network infrastructure, including our data centers, servers, and third-party cloud and internet providers and our migration to the cloud;
- our indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and prevent us from meeting our obligations;
- the failure to realize the expected benefits of our acquisition of Sterling Check Corp.; and
- control by our Sponsor, "Silver Lake" (Silver Lake Group, L.L.C., together with its affiliates, successors, and assignees) and its interests may conflict with ours or those of our stockholders.
For additional information on these and other factors that could cause First Advantage’s actual results to differ materially from expected results, please see our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”), as such factors may be updated from time to time in our filings with the SEC, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which is expected to be filed after this press release, which are or will be accessible on the SEC’s website at www.sec.gov. The forward-looking statements included in this press release are made only as of the date of this press release, and we undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.
Non-GAAP Financial Information
This press release contains “non-GAAP financial measures” that are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”). Specifically, we make use of the non-GAAP financial measures “Adjusted EBITDA,” “Adjusted EBITDA Margin,” “Adjusted Net Income,” “Adjusted Diluted Earnings Per Share,” and “Adjusted Operating Cash Flow.”
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings Per Share have been presented in this press release as supplemental measures of financial performance that are not required by or presented in accordance with GAAP because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management believes these non-GAAP measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate, and capital investments. Management uses Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings Per Share to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings Per Share are not recognized terms under GAAP and should not be considered as an alternative to net income as a measure of financial performance or cash provided by operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP.
We define Adjusted EBITDA as net income (loss) before interest, taxes, depreciation, and amortization, and as further adjusted for loss on extinguishment of debt, share-based compensation, transaction and acquisition-related charges, integration and restructuring charges, and other non-cash charges. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues. We define Adjusted Net Income for a particular period as net income before taxes adjusted for debt-related costs, acquisition-related depreciation and amortization, share-based compensation, transaction and acquisition-related charges, integration and restructuring charges, and other non-cash charges, to which we then apply the related effective tax rate. We define Adjusted Diluted Earnings Per Share as Adjusted Net Income divided by adjusted weighted average number of shares outstanding—diluted.
Additionally, we use Adjusted Operating Cash Flow to review the liquidity of our operations. We define Adjusted Operating Cash Flow as cash flows from operating activities adjusted for cash costs directly associated with the Sterling acquisition and related integration. We believe Adjusted Operating Cash Flow is a useful supplemental financial measure for management and investors in assessing the Company’s ability to pursue business opportunities and investments and to service its debt. Adjusted Operating Cash Flow is not a measure of our liquidity under GAAP and should not be considered as an alternative to cash flows from operating activities.
For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures, see the reconciliations included at the end of this press release.
The presentations of these measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.
Numerical figures included in the reconciliations have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.
Share Repurchase Program
Stock repurchases may be effected through open market repurchases at prevailing market prices (including through the use of block trades and trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended), privately-negotiated transactions, through other transactions in accordance with applicable securities laws, or a combination of these methods on such terms and in such amounts as the Company deems appropriate. The Company is not obligated to repurchase any specific number of shares, and the timing, manner, value, and actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price and liquidity requirements, other business considerations, and general market and economic conditions. The Company may discontinue or modify purchases without notice at any time. The Company plans to use its existing cash to fund repurchases made under the share repurchase program. No shares will be purchased from Silver Lake or its affiliates.
About First Advantage
First Advantage (NASDAQ: FA) is a global software and data company. We provide comprehensive, end-to-end identity solutions, criminal background screening, credential verifications, drug and health screening, and continuous risk monitoring. Combining AI-powered proprietary technology platforms with proprietary data, primary source data, and third-party data, we help organizations hire with confidence and manage risk across the entire employee lifecycle. With over 80,000 customers worldwide – including approximately two-thirds of the Fortune 100 – we deliver fast, comprehensive, and reliable solutions for employers, their candidates, and their employees. We conduct more than 200 million screens annually across over 200 countries and territories, supported by our verticalized go-to-market strategy, decades of experience, and proprietary databases containing over 1 billion records. For more information, please visit our website at https://fadv.com/.
Investor Contact
Stephanie Gorman
Vice President, Investor Relations
Investors@fadv.com
(678) 868-4151
Condensed Financial Statements
| First Advantage Corporation Condensed Consolidated Balance Sheets (Unaudited) | ||||||||
| December 31, | ||||||||
| (in thousands, except share and per share amounts) | 2025 | 2024 | ||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 239,998 | $ | 168,688 | ||||
| Restricted cash | 86 | 795 | ||||||
| Accounts receivable (net of allowance for doubtful accounts of | 297,281 | 266,800 | ||||||
| Prepaid expenses and other current assets | 15,323 | 31,041 | ||||||
| Income tax receivable | 9,010 | 8,669 | ||||||
| Total current assets | 561,698 | 475,993 | ||||||
| Property and equipment, net | 250,865 | 307,539 | ||||||
| Goodwill | 2,143,604 | 2,124,528 | ||||||
| Intangible assets, net | 857,111 | 987,948 | ||||||
| Deferred tax asset, net | 4,183 | 5,682 | ||||||
| Other assets | 16,341 | 21,203 | ||||||
| TOTAL ASSETS | $ | 3,833,802 | $ | 3,922,893 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 109,888 | $ | 120,872 | ||||
| Accrued compensation | 60,537 | 52,805 | ||||||
| Accrued liabilities | 49,140 | 44,700 | ||||||
| Current portion of long-term debt | — | 21,850 | ||||||
| Current portion of operating lease liability | 3,568 | 4,245 | ||||||
| Income tax payable | 2,298 | 1,942 | ||||||
| Deferred revenues | 5,028 | 4,274 | ||||||
| Total current liabilities | 230,459 | 250,688 | ||||||
| Long-term debt (net of deferred financing costs of | 2,080,039 | 2,121,289 | ||||||
| Deferred tax liability, net | 190,255 | 222,738 | ||||||
| Operating lease liability, less current portion | 5,525 | 9,149 | ||||||
| Other liabilities | 13,972 | 11,990 | ||||||
| Total liabilities | 2,520,250 | 2,615,854 | ||||||
| EQUITY | ||||||||
| Common stock - | 174 | 173 | ||||||
| Additional paid-in-capital | 1,528,315 | 1,504,007 | ||||||
| Accumulated deficit | (194,632 | ) | (159,808 | ) | ||||
| Accumulated other comprehensive loss | (20,305 | ) | (37,333 | ) | ||||
| Total equity | 1,313,552 | 1,307,039 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 3,833,802 | $ | 3,922,893 | ||||
| First Advantage Corporation Condensed Consolidated Statements of Operations and ComprehensiveIncome (Loss) (Unaudited) | ||||||||||||||||
| Interim Periods | Annual Periods | |||||||||||||||
| (in thousands, except share and per share amounts) | Three Months Ended December 31, 2025 | Three Months Ended December 31, 2024 | Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||||
| REVENUES | $ | 420,017 | $ | 307,124 | $ | 1,574,389 | $ | 860,205 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Cost of services (exclusive of depreciation and amortization below) | 232,861 | 168,492 | 855,306 | 448,911 | ||||||||||||
| Product and technology expense | 23,886 | 24,765 | 101,853 | 63,817 | ||||||||||||
| Selling, general, and administrative expense | 55,662 | 138,590 | 236,179 | 263,942 | ||||||||||||
| Depreciation and amortization | 62,737 | 55,951 | 248,583 | 145,919 | ||||||||||||
| Total operating expenses | 375,146 | 387,798 | 1,441,921 | 922,589 | ||||||||||||
| INCOME (LOSS) FROM OPERATIONS | 44,871 | (80,674 | ) | 132,468 | (62,384 | ) | ||||||||||
| OTHER EXPENSE, NET: | ||||||||||||||||
| Interest expense, net | 37,261 | 23,734 | 168,667 | 51,848 | ||||||||||||
| Loss on extinguishment of debt | 391 | 383 | 1,052 | 383 | ||||||||||||
| Total other expense, net | 37,652 | 24,117 | 169,719 | 52,231 | ||||||||||||
| INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | 7,219 | (104,791 | ) | (37,251 | ) | (114,615 | ) | |||||||||
| Provision (benefit) for income taxes | 3,750 | (4,425 | ) | (2,427 | ) | (4,342 | ) | |||||||||
| NET INCOME (LOSS) | $ | 3,469 | $ | (100,366 | ) | $ | (34,824 | ) | $ | (110,273 | ) | |||||
| Foreign currency translation income (loss) | 4,141 | (18,636 | ) | 17,028 | (16,176 | ) | ||||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 7,610 | $ | (119,002 | ) | $ | (17,796 | ) | $ | (126,449 | ) | |||||
| NET INCOME (LOSS) | $ | 3,469 | $ | (100,366 | ) | $ | (34,824 | ) | $ | (110,273 | ) | |||||
| Basic net income (loss) per share | $ | 0.02 | $ | (0.62 | ) | $ | (0.20 | ) | $ | (0.74 | ) | |||||
| Diluted net income (loss) per share | $ | 0.02 | $ | (0.62 | ) | $ | (0.20 | ) | $ | (0.74 | ) | |||||
| Weighted average number of shares outstanding – basic | 173,637,367 | 162,774,306 | 173,199,004 | 148,582,226 | ||||||||||||
| Weighted average number of shares outstanding – diluted | 175,071,294 | 162,774,306 | 173,199,004 | 148,582,226 | ||||||||||||
| First Advantage Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| December 31, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (34,824 | ) | $ | (110,273 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 248,583 | 145,919 | ||||||
| Loss on extinguishment of debt | 1,052 | 383 | ||||||
| Amortization of deferred financing costs | 6,311 | 2,619 | ||||||
| Bad debt expense (recovery) | 705 | 158 | ||||||
| Deferred taxes | (31,011 | ) | (31,418 | ) | ||||
| Share-based compensation | 24,456 | 31,762 | ||||||
| Loss on foreign currency exchange rates | — | — | ||||||
| Loss (gain) on disposal and impairment of long-lived assets | 2,155 | (275 | ) | |||||
| Change in fair value of interest rate swaps | 4,842 | (10,511 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (29,672 | ) | 20,775 | |||||
| Prepaid expenses and other assets | 12,396 | (1,908 | ) | |||||
| Accounts payable | (16,020 | ) | (25,450 | ) | ||||
| Accrued compensation and accrued liabilities | 6,380 | 7,176 | ||||||
| Deferred revenues | 735 | 762 | ||||||
| Operating lease liabilities | (35 | ) | (883 | ) | ||||
| Other liabilities | (1,265 | ) | (961 | ) | ||||
| Income taxes receivable and payable, net | 338 | 321 | ||||||
| Net cash provided by operating activities | 195,126 | 28,196 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Capitalized software development costs | (47,619 | ) | (30,545 | ) | ||||
| Purchases of property and equipment | (6,633 | ) | (1,720 | ) | ||||
| Acquisitions of businesses, net of cash acquired | — | (1,619,812 | ) | |||||
| Other investing activities | 122 | 89 | ||||||
| Net cash used in investing activities | (54,130 | ) | (1,651,988 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Repayments of Amended First Lien Credit Facility | (70,463 | ) | (59,200 | ) | ||||
| Proceeds from issuance of common stock under share-based compensation plans | 3,751 | 14,653 | ||||||
| Net settlement of share-based compensation plan awards | (3,912 | ) | (14,305 | ) | ||||
| Cash dividends paid | (133 | ) | (255 | ) | ||||
| Borrowings from First Lien Credit Facility | — | 1,679,093 | ||||||
| Payments of debt issuance costs | — | (38,212 | ) | |||||
| Payments on deferred purchase agreements | — | (703 | ) | |||||
| Payments on finance lease obligations | — | (6 | ) | |||||
| Share repurchases | — | — | ||||||
| Net cash (used in) provided by financing activities | (70,757 | ) | 1,581,065 | |||||
| Effect of exchange rate on cash, cash equivalents, and restricted cash | 362 | (1,702 | ) | |||||
| Increase (decrease) in cash, cash equivalents, and restricted cash | 70,601 | (44,429 | ) | |||||
| Cash, cash equivalents, and restricted cash at beginning of period | 169,483 | 213,912 | ||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 240,084 | $ | 169,483 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | 161,803 | $ | 65,767 | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Property and equipment acquired on account | $ | 3,094 | $ | 539 | ||||
| Non-cash property and equipment additions | $ | — | $ | 540 | ||||
Reconciliation of Consolidated Non-GAAP Financial Measures
| Interim Periods | Annual Periods | |||||||||||||||
| (in thousands) | Three Months Ended December 31, 2025 | Three Months Ended December 31, 2024 | Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||||
| Net income (loss) | $ | 3,469 | $ | (100,366 | ) | $ | (34,824 | ) | $ | (110,273 | ) | |||||
| Interest expense, net | 37,261 | 23,734 | 168,667 | 51,848 | ||||||||||||
| Provision (benefit) for income taxes | 3,750 | (4,425 | ) | (2,427 | ) | (4,342 | ) | |||||||||
| Depreciation and amortization | 62,737 | 55,951 | 248,583 | 145,919 | ||||||||||||
| Loss on extinguishment of debt | 391 | 383 | 1,052 | 383 | ||||||||||||
| Share-based compensation(a) | 5,026 | 12,459 | 24,456 | 31,762 | ||||||||||||
| Transaction and acquisition-related charges(b) | 770 | 93,151 | 8,741 | 128,234 | ||||||||||||
| Integration, restructuring, and other charges(c) | 3,433 | 2,050 | 27,147 | 5,771 | ||||||||||||
| Adjusted EBITDA | $ | 116,837 | $ | 82,937 | $ | 441,395 | $ | 249,302 | ||||||||
| Revenues | 420,017 | 307,124 | 1,574,389 | 860,205 | ||||||||||||
| Net income (loss) margin | 0.8 | % | (32.7 | )% | (2.2 | )% | (12.8 | )% | ||||||||
| Adjusted EBITDA Margin | 27.8 | % | 27.0 | % | 28.0 | % | 29.0 | % | ||||||||
| (a) | Share-based compensation for the three months ended December 31, 2025 and 2024, includes approximately |
| (b) | Represents charges incurred related to acquisitions and similar transactions, primarily consisting of change in control-related costs, professional service fees, and other third-party costs. Transaction and acquisition related charges for the three months ended December 31, 2025 include approximately |
| (c) | Represents charges from organizational restructuring and integration activities, non-cash, and other charges primarily related to nonrecurring legal exposures, foreign currency (gains) losses, impairment of capitalized software, (gains) losses on the sale of assets, and other non-recurring items. Integration, restructuring, and other charges for the three months ended December 31, 2025 include approximately |
Reconciliation of Consolidated Non-GAAP Financial Measures (continued)
| Interim Periods | Annual Periods | |||||||||||||||
| (in thousands) | Three Months Ended December 31, 2025 | Three Months Ended December 31, 2024 | Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||||
| Net income (loss) | $ | 3,469 | $ | (100,366 | ) | $ | (34,824 | ) | $ | (110,273 | ) | |||||
| Provision (benefit) for income taxes | 3,750 | (4,425 | ) | (2,427 | ) | (4,342 | ) | |||||||||
| Income (loss) before provision for income taxes | 7,219 | (104,791 | ) | (37,251 | ) | (114,615 | ) | |||||||||
| Debt-related costs(a) | 2,091 | (6,232 | ) | 16,718 | 549 | |||||||||||
| Acquisition-related depreciation and amortization(b) | 52,238 | 45,079 | 204,678 | 112,966 | ||||||||||||
| Share-based compensation(c) | 5,026 | 12,459 | 24,456 | 31,762 | ||||||||||||
| Transaction and acquisition-related charges(d) | 770 | 93,151 | 8,741 | 128,234 | ||||||||||||
| Integration, restructuring, and other charges(e) | 3,433 | 2,050 | 27,147 | 5,771 | ||||||||||||
| Adjusted Net Income before income tax effect | 70,777 | 41,716 | 244,489 | 164,667 | ||||||||||||
| Less: Adjusted income taxes(f) | 18,860 | 11,531 | 62,809 | 40,953 | ||||||||||||
| Adjusted Net Income | $ | 51,917 | $ | 30,185 | $ | 181,680 | $ | 123,714 | ||||||||
| Interim Periods | Annual Periods | |||||||||||||||
| Three Months Ended December 31, 2025 | Three Months Ended December 31, 2024 | Year Ended December 31, 2025 | Year Ended December 31, 2024 | |||||||||||||
| Diluted net income (loss) per share (GAAP) | $ | 0.02 | $ | (0.62 | ) | $ | (0.20 | ) | $ | (0.74 | ) | |||||
| Adjusted Net Income adjustments per share | ||||||||||||||||
| Provision (benefit) for income taxes | 0.02 | (0.03 | ) | (0.01 | ) | (0.03 | ) | |||||||||
| Debt-related costs(a) | 0.01 | (0.04 | ) | 0.10 | 0.00 | |||||||||||
| Acquisition-related depreciation and amortization(b) | 0.30 | 0.27 | 1.17 | 0.75 | ||||||||||||
| Share-based compensation(c) | 0.03 | 0.08 | 0.14 | 0.21 | ||||||||||||
| Transaction and acquisition-related charges(d) | 0.00 | 0.56 | 0.05 | 0.85 | ||||||||||||
| Integration, restructuring, and other charges(e) | 0.02 | 0.02 | 0.16 | 0.05 | ||||||||||||
| Adjusted income taxes(f) | (0.11 | ) | (0.07 | ) | (0.36 | ) | (0.27 | ) | ||||||||
| Adjusted Diluted Earnings Per Share(Non-GAAP) | $ | 0.30 | $ | 0.18 | $ | 1.04 | $ | 0.82 | ||||||||
| Weighted average number of shares outstanding used in computation of Adjusted Diluted Earnings Per Share: | ||||||||||||||||
| Weighted average number of shares outstanding—diluted (GAAP) | 175,071,294 | 162,774,306 | 173,199,004 | 148,582,226 | ||||||||||||
| Options and restricted stock not included in weighted average number of shares outstanding—diluted (GAAP) (using treasury stock method) | - | 3,178,548 | 1,956,781 | 2,606,405 | ||||||||||||
| Adjusted weighted average number of shares outstanding—diluted (Non-GAAP) | 175,071,294 | 165,952,854 | 175,155,785 | 151,188,631 | ||||||||||||
| (a) | Represents the loss on extinguishment and non-cash interest expense related to the amortization of debt issuance costs for the 2021 February and 2024 October refinancing of the Company’s First Lien Credit Facility. This adjustment also includes the impact of the change in fair value of interest rate swaps, which represents the difference between the fair value gains or losses and actual cash payments and receipts on the interest rate swaps. |
| (b) | Represents the depreciation and amortization expense related to incremental intangible and developed technology assets recorded due to the application of ASC 805, Business Combinations. As a result, the purchase accounting related depreciation and amortization expense will recur in future periods until the related assets are fully depreciated or amortized, and the related purchase accounting assets may contribute to revenue generation. |
| (c) | Share-based compensation for the three months ended December 31, 2025 and 2024, includes approximately |
| (d) | Represents charges incurred related to acquisitions and similar transactions, primarily consisting of change in control-related costs, professional service fees, and other third-party costs. Transaction and acquisition related charges for the three months ended December 31, 2025 include approximately |
| (e) | Represents charges from organizational restructuring and integration activities, non-cash, and other charges primarily related to nonrecurring legal exposures, foreign currency (gains) losses, impairment of capitalized software, (gains) losses on the sale of assets, and other non-recurring items. Integration, restructuring, and other charges for the three months ended December 31, 2025 include approximately |
| (f) | Effective tax rates of approximately |
| Interim Periods | Annual Periods | |||||||||||||||
| (in thousands) | Three Months Ended December 31, 2025 | Three Months Ended December 31, 2024 | Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||||
| Cash flows from operating activities, as reported (GAAP) | $ | 65,941 | $ | (85,666 | ) | $ | 195,126 | $ | 28,196 | |||||||
| Cost paid related to the Sterling acquisition and integration | 4,419 | 125,107 | 36,749 | 136,311 | ||||||||||||
| Adjusted Operating Cash Flow | $ | 70,360 | $ | 39,441 | $ | 231,875 | $ | 164,507 | ||||||||
FAQ
What were First Advantage (FA) fourth quarter 2025 revenues and adjusted EBITDA?
What is First Advantage's full year 2026 guidance for revenue and adjusted diluted EPS?
How large is the share repurchase program First Advantage announced on February 26, 2026?
Why did First Advantage report a full year 2025 GAAP net loss despite strong adjusted results?
How much operating cash flow did First Advantage generate in 2025 and what does management plan?
