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Reportable Segments | 12 Months Ended
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Dec. 31, 2024
Segment Reporting [Abstract] |
Reportable Segments | Note 18. Reportable Segments As discussed in Note 1. “Organization, Nature of Business, and Basis of Presentation,” we have three reportable segments, First Advantage Americas, First Advantage International, and Sterling. Our CODM uses the performance measure of Adjusted EBITDA, on both a consolidated and a segment basis, to allocate resources and assess performance of our businesses. Our CODM also uses Adjusted EBITDA as a performance measure for both segment and corporate management under our incentive compensation plans. The segment financial information below aligns with how we report information to our CODM to assess operating performance and how the Company manages the business. Corporate costs are generally allocated to the segments based upon estimated revenue levels and other assumptions that management considers reasonable. Adjusted cost of services consists of amounts paid to third parties for access to government records, other third-party data and services, our internal processing fulfillment and customer care functions, and other cost of services excluding depreciation and amortization, share-based compensation expenses, transaction expenses, and integration expenses. Other segment items consist of product and technology and selling, general, and administrative expenses, but similarly excludes depreciation and amortization, share based compensation, and other expenses excluded from Adjusted EBITDA. The CODM does not review the Company’s assets by segment as it does not provide additional insights into the performance of our business; therefore, such information is not presented. The accounting policies of the segments are the same as described in Note 1. “Organization, Nature of Business, and Basis of Presentation” and Note 10. “Revenues.” Reconciliations of Segment Adjusted EBITDA to net (loss) income for the years ended December 31, 2024, 2023, and 2022 are as follows (in thousands):
|  | Year Ended December 31, 2024 |
|  | First Advantage Americas |  |  | First Advantage International |  |  | Sterling |  |  | Total |
Total revenues |  | $ | 658,758 |  |  | $ | 96,854 |  |  | $ | 113,068 |  |  | $ | 868,680 |
Intersegment revenues |  |  | (1,867 | ) |  |  | (6,439 | ) |  |  | (169 | ) |  |  | (8,475 | )
External revenues |  | $ | 656,891 |  |  | $ | 90,415 |  |  | $ | 112,899 |  |  | $ | 860,205 |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Adjusted cost of services |  |  | 335,181 |  |  |  | 53,726 |  |  |  | 67,827 |  |  |  |
Other segment items |  |  | 112,587 |  |  |  | 25,934 |  |  |  | 24,123 |  |  |  |
Segment Adjusted EBITDA |  | $ | 210,990 |  |  | $ | 17,194 |  |  | $ | 21,118 |  |  | $ | 249,302 |
Adjustments to reconcile to net loss: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  | 51,848 |
Benefit for income taxes |  |  |  |  |  |  |  |  |  |  |  | (4,342 | )
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  | 145,919 |
Loss on extinguishment of debt |  |  |  |  |  |  |  |  |  |  |  | 383 |
Share-based compensation |  |  |  |  |  |  |  |  |  |  |  | 31,762 |
Transaction and acquisition-related charges (a) |  |  |  |  |  |  |  |  |  |  |  | 128,234 |
Integration, restructuring, and other charges (b) |  |  |  |  |  |  |  |  |  |  |  | 5,771 |
Net loss |  |  |  |  |  |  |  |  |  |  | $ | (110,273 | )
|  | Year Ended December 31, 2023 |
|  | First Advantage Americas |  |  | First Advantage International |  |  | Sterling |  |  | Total |
Total revenues |  | $ | 673,075 |  |  | $ | 96,832 |  |  | $ | — |  |  | $ | 769,907 |
Intersegment revenues |  |  | (970 | ) |  |  | (5,176 | ) |  |  | — |  |  |  | (6,146 | )
External revenues |  | $ | 672,105 |  |  | $ | 91,656 |  |  | $ | — |  |  | $ | 763,761 |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Adjusted cost of services |  |  | 338,797 |  |  |  | 54,892 |  |  |  | — |  |  |  |
Other segment items |  |  | 112,633 |  |  |  | 26,029 |  |  |  | — |  |  |  |
Segment Adjusted EBITDA |  | $ | 221,645 |  |  | $ | 15,911 |  |  | $ | — |  |  | $ | 237,556 |
Adjustments to reconcile to net income: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  | 33,040 |
Provision for income taxes |  |  |  |  |  |  |  |  |  |  |  | 11,183 |
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  | 129,473 |
Share-based compensation |  |  |  |  |  |  |  |  |  |  |  | 15,265 |
Transaction and acquisition-related charges (a) |  |  |  |  |  |  |  |  |  |  |  | 4,364 |
Integration, restructuring, and other charges (b) |  |  |  |  |  |  |  |  |  |  |  | 6,938 |
Net income |  |  |  |  |  |  |  |  |  |  | $ | 37,293 |
|  | Year Ended December 31, 2022 |
|  | First Advantage Americas |  |  | First Advantage International |  |  | Sterling |  |  | Total |
Total revenues |  | $ | 694,865 |  |  | $ | 122,599 |  |  | $ | — |  |  | $ | 817,464 |
Intersegment revenues |  |  | (1,710 | ) |  |  | (5,731 | ) |  |  | — |  |  |  | (7,441 | )
External revenues |  | $ | 693,155 |  |  | $ | 116,868 |  |  | $ | — |  |  | $ | 810,023 |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Adjusted cost of services |  |  | 355,623 |  |  |  | 64,805 |  |  |  | — |  |  |  |
Other segment items |  |  | 117,587 |  |  |  | 30,539 |  |  |  | — |  |  |  |
Segment Adjusted EBITDA |  | $ | 221,655 |  |  | $ | 27,255 |  |  | $ | — |  |  | $ | 248,910 |
Adjustments to reconcile to net income: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense, net |  |  |  |  |  |  |  |  |  |  |  | 9,199 |
Provision for income taxes |  |  |  |  |  |  |  |  |  |  |  | 20,475 |
Depreciation and amortization |  |  |  |  |  |  |  |  |  |  |  | 138,246 |
Share-based compensation |  |  |  |  |  |  |  |  |  |  |  | 7,856 |
Transaction and acquisition-related charges (a) |  |  |  |  |  |  |  |  |  |  |  | 6,018 |
Integration, restructuring, and other charges (b) |  |  |  |  |  |  |  |  |  |  |  | 2,512 |
Net income |  |  |  |  |  |  |  |  |  |  | $ | 64,604 |
(a) 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 year ended December 31, 2024 include approximately $125.7 million of expense associated with the acquisition of Sterling, primarily consisting of $41.2 million of compensation expense attributable to converted Sterling equity awards, of which $38.9 million related to accelerated vesting for employees terminated after the acquisition, $45.8 million of legal, regulatory, integration, and diligence professional service fees, $16.5 million in debt refinancing costs, $10.7 million in post-combination restructuring expenses, $9.5 million in success-based banking fees, and $2.0 million of other one-time transaction charges. Also includes incremental professional service fees incurred related to the initial public offering and the subsequent one-time compliance efforts. The year ended December 31, 2022 includes a transaction bonus expense related to one of the Company’s 2021 acquisitions. (b) Represents charges from organizational restructuring and integration activities, non-cash, and other charges primarily related to nonrecurring legal exposures, foreign currency (gains) losses, (gains) losses on the sale of assets, and other non-recurring items. Geographic Information The Company bases revenues by geographic region in which the revenues and invoicing are recorded. Other than the United States, no single country accounted for 10% or more of our total revenues during these periods. The following summarizes revenues by geographical region (in thousands):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |  |  | 2022 |
Revenues |  |  |  |  |  |  |  |  |
United States |  | $ | 740,506 |  |  | $ | 660,583 |  |  | $ | 679,037 |
All other countries |  |  | 119,699 |  |  |  | 103,178 |  |  |  | 130,986 |
Total revenues |  | $ | 860,205 |  |  | $ | 763,761 |  |  | $ | 810,023 |
The following table sets forth net long-lived assets by geographic area (in thousands):
|  | December 31, |
|  | 2024 |  |  | 2023 |
Long-lived assets, net |  |  |  |  |  |
United States |  | $ | 2,996,933 |  |  | $ | 1,083,318 |
All other countries |  |  | 436,741 |  |  |  | 168,068 |
Total long-lived assets, net |  | $ | 3,433,674 |  |  | $ | 1,251,386 |

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- Definition The entire disclosure for reporting segments including data and tables. 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