Sterling Check Stock Price, News & Analysis

Sterling Check Corp. (NASDAQ: STER), commonly referred to as Sterling, is a global company in the information sector that focuses on background screening, identity verification, and related data processing services. The company describes itself as a provider of background and identity services that help organizations build people-first cultures based on trust and safety. Sterling’s tech-enabled services are designed to support employers, partners, and customers across many industries and regions.

According to company disclosures, Sterling offers background and identity verification services to more than 50,000 clients. These services are used by organizations that want to create and maintain safe, compliant environments for workers, customers, and business partners. Sterling’s role in the data processing and hosting industry centers on collecting, processing, and delivering information that employers use in hiring and ongoing workforce management.

Global operations and geographic reach

Sterling reports that it has operations around the world. The company states that it operates in North America, Europe, the Middle East, Asia Pacific, and Latin America. Within the Asia Pacific region, Sterling has a local presence with employees based in Australia, Singapore, Malaysia, Hong Kong, India, the Philippines, and mainland China. This footprint supports employers that are hiring both locally and across borders.

The company has highlighted that it conducted more than 110 million searches in the twelve months ending December 31, 2022. These searches are part of its background and identity services, reflecting the scale at which Sterling processes and delivers screening information for clients worldwide.

Core business focus

Sterling consistently describes its business as providing technology-enabled background and identity services. The company emphasizes that its services are used to help clients:

• Perform background screening
• Conduct identity verification
• Support compliance in regulated industries
• Enhance hiring and workforce-related decision making

Within this focus, Sterling has called out drug and health testing as an important component of its offering. Through the acquisition of Vault Workforce Screening, a U.S. clinic management platform, Sterling expanded its drug and health services with access to a network of clinics and clinical options. The company states that this acquisition extends its drug and health testing capabilities and supports employers in healthcare, transportation, and other regulated industries where staffing needs are significant.

Acquisitions and service expansion

Sterling has used acquisitions to broaden its capabilities and geographic reach. The company has disclosed acquisitions such as Socrates Limited and its affiliates, A-Check Global, and Vault Workforce Screening. These acquisitions have contributed to Sterling’s revenue and have been described as part of its approach to expand through organic revenue growth and strategic M&A.

The acquisition of Vault Workforce Screening is described as bringing a large network of clinics and a flexible service model, including Medical Review Officer services and emergency or after-hours scheduling. Sterling states that this enhances its pre- and post-employment drug and health solutions and helps it in-source key components of its supply chain. The company also notes that this acquisition builds scale within healthcare and industrials verticals.

Technology and platform partnerships

Sterling characterizes its services as tech-enabled, and it has highlighted partnerships that integrate its screening capabilities with other platforms. For example, Sterling has been selected as the preferred background screening partner for Fountain, a platform for hiring and onboarding frontline workers. In this relationship, Sterling’s screening and identity verification services are integrated with Fountain’s hiring platform to streamline the screening process for industries such as hospitality, retail, healthcare, gig economy, and logistics.

Through such integrations, Sterling aims to support employers that process high volumes of applicants and need efficient, technology-driven workflows for background checks and identity verification.

International brand alignment

In the Asia Pacific region, Sterling has announced that Sterling RISQ is being rebranded as Sterling. This brand alignment is accompanied by technology enhancements intended to deliver global background screening and identity programs with local expertise. The company notes that employers in Asia Pacific are increasingly hiring internationally and face varying regulatory obligations and hiring experiences across countries. Sterling positions its global capabilities and local presence as a way to address these complexities.

The company has also referenced specific local differentiators in the region, such as Australian data residency and accreditation with the Ministry of Manpower in Singapore, as part of its background and identity solutions.

Client base and use cases

Sterling reports that it serves over 50,000 clients across all industries and regions. Its services are used by organizations that want to:

• Screen job candidates and employees
• Verify identities as part of onboarding or ongoing workforce management
• Support compliance requirements in regulated sectors
• Improve hiring processes for high-volume or global workforces

The company has highlighted particular relevance for sectors such as healthcare, transportation, industrials, and other regulated industries, as well as high-volume hiring environments supported through partnerships like the one with Fountain.

Financial reporting and corporate developments

Sterling is listed on the NASDAQ under the ticker symbol STER. The company regularly reports its financial results, including revenue, net income or loss, and non-GAAP measures such as Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Earnings Per Share, and Free Cash Flow. These metrics are used by Sterling’s management and board to evaluate business performance and trends.

In its financial communications, Sterling has discussed factors influencing its results, such as:

• Organic constant currency revenue trends
• Inorganic revenue from acquisitions
• Base business performance with existing clients
• New business, up-sell and cross-sell activity
• Cost optimization efforts and margin dynamics

The company has also disclosed a definitive agreement to combine with First Advantage Corporation, a Delaware corporation. Sterling has described this as a pending merger and has noted that, in light of this planned combination, it has not hosted certain earnings conference calls. The transaction is subject to conditions such as regulatory approvals and other customary requirements, and Sterling has provided forward-looking statements and risk factors related to this proposed merger in its public communications.

Corporate governance and leadership

Sterling has reported changes and additions to its governance structure, including the appointment of an independent director to its Board of Directors and membership on the Audit Committee. Such appointments are presented as bringing additional finance and strategy experience to the company’s oversight.

Position within the data processing and hosting industry

Within the broader category of data processing, hosting, and related services, Sterling’s activities focus on background screening and identity services that rely on processing large volumes of data and delivering results through technology platforms. The company’s disclosures emphasize its combination of global reach, local expertise, and technology enhancements to support employers that hire across multiple regions and must navigate different regulatory environments.

According to its public statements, Sterling’s background and identity services are intended to help organizations build trust and safety into their hiring and workforce practices, while its acquisitions and technology integrations aim to broaden its capabilities and improve efficiency for clients.