Share-based compensation expense is recognized in cost of services, product and technology expense, and selling, general, and administrative expense, in the accompanying consolidated statements of operations and comprehensive (loss) income as follows (in thousands):


	Year Ended December 31,
	2024		2023		2022
Share-based compensation expense
Cost of services	$	1,643	$	1,279	$	1,103
Product and technology expense		3,343		2,246		1,351
Selling, general, and administrative expense		26,776		11,740		5,402
Total share-based compensation expense	$	31,762	$	15,265	$	7,856

Prior to the IPO, all share-based awards were issued by Fastball Holdco, L.P., the Company’s previous parent company, under individual grant agreements and the partnership agreement of such parent company under the 2020 Equity Plan. In connection with the IPO, the Company adopted the 2021 Omnibus Incentive Plan (as amended by the First Amendment, dated as of May 10, 2023, the “2021 Equity Plan”).

In May 2023, the Company’s Board of Directors approved a modification of the vesting terms of outstanding unvested and unearned performance-based options, restricted stock units, and restricted stock (collectively, “Performance Awards”) previously issued under its equity plans. The modification, effective May 10, 2023, allowed for unvested and unearned Performance Awards outstanding as of the date of the modification, to vest based on time on the fourth, fifth, and sixth anniversaries of the relevant vesting commencement date, as set forth in each grant agreement (the “Vesting Commencement Date”), while preserving the eligibility to vest upon the Company’s investors receiving a targeted money-on-money return, subject to continued service. As of the modification date, unrecognized pre-tax non-cash compensation expense related to the Performance Awards, after accounting for the modification, was $28.8 million. The Company is recognizing pre-tax non-cash compensation expense related to the modification of Performance Awards prospectively from the date of modification, on a straight-line basis.

The fair value of the modified restricted stock units and restricted stock was estimated using the closing stock price on the date of modification. The fair value of the modified stock options was estimated on the date of modification using the Black-Scholes option-pricing model with the following weighted average assumptions:


	Options
Expected stock price volatility		37.43	%
Risk-free interest rate		3.40	%
Expected term (in years)		4.67
Fair-value of the underlying unit	$	12.61

In connection with the Company’s declaration of a one-time special dividend in August 2023, the exercise price of outstanding stock option awards and stock purchases under the Company’s employee stock purchase plan (“ESPP”) was reduced by $1.50, in accordance with the non-discretionary anti-dilution provisions of the equity and stock purchase plans.

In August 2024 and September 2024, the Company modified the equity award agreements for its Chief Financial Officer and President, Americas, respectively, as part of each executive’s retirement agreement. The modifications allowed for accelerated vesting of certain unvested equity awards that would have otherwise been forfeited at retirement and modified certain provisions of the outstanding stock option agreements. As a result of the modifications, the related awards were revalued, resulting in an incremental $4.2 million of compensation expense recognized in 2024. Historical exercise prices noted in the below tables have not been adjusted.

In October 2024, as part of the acquisition of Sterling, unvested Sterling restricted stock, restricted stock units, and net option shares underlying in-the-money stock option awards were converted to an unvested cash award , an unvested First Advantage restricted stock award, or a First Advantage restricted stock unit at the holder’s election. Converted awards are subject to the same terms and conditions (including vesting) as applied to the replaced Sterling equity award. All out-of-the-money Sterling stock options, whether vested or unvested, were canceled for no consideration. See Note 3. “Acquisitions”.

As of December 31, 2024, the Company had approximately $37.3 million of unrecognized pre-tax non-cash compensation expense, comprised of approximately $12.8 million related to restricted stock, $11.1 million related to RSUs, and approximately $13.4 million related to stock options, which the Company expects to recognize over a weighted average period of 1.0 year.

Awards issued under the 2020 Equity Plan consist of options and profit interests and vest based on two criteria: (1) Time — awards vest over five years at a rate of 20% per year; and (2) Performance — awards vest based upon a combination of the five-year time vesting, subject to the Company’s investors receiving a targeted money-on-money return. Options issued under the 2020 Equity Plan generally expire ten years after the grant date. No awards have been issued under the plan since the Company’s IPO.

A summary of the stock option activity for the year ended December 31, 2024 is as follows:


		Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
December 31, 2023	Grants outstanding		1,915,252		$	5.15
	Grants exercised		(255,716	)	$	5.22
	Grants cancelled/forfeited		(56,570	)	$	5.28
December 31, 2024	Grants outstanding		1,602,966		$	5.15	5.0 Years	$21.8 million
December 31, 2024	Grants vested		657,192		$	5.14	5.1 Years	$8.9 million
December 31, 2024	Grants unvested		945,774		$	5.15

The total intrinsic value of options exercised during the years ended December 31, 2024, 2023, and 2022 was $3.2 million, $3.0 million, and $3.1 million, respectively.

A summary of changes in outstanding options and the related weighted-average exercise price per share for the years ended December 31, 2023 and 2022 is as follows:


	December 31,
	2023					2022
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Grants outstanding at the beginning of the year		2,843,342		$	6.66		3,519,563		$	6.66
Grants exercised		(394,375	)	$	6.06		(372,254	)	$	6.68
Grants cancelled/forfeited		(533,715	)	$	6.68		(303,967	)	$	6.61
Grants outstanding at the end of the year		1,915,252		$	5.15		2,843,342		$	6.66
Grants vested		518,455		$	5.13		648,926		$	6.65
Grants unvested		1,396,797		$	5.16		2,194,416		$	6.67

The 2021 Equity Plan is intended to provide a means through which to attract and retain key personnel and to provide a means whereby our directors, officers, employees, consultants, and advisors can acquire and maintain an equity interest in us, or be paid incentive compensation, including incentive compensation measured by reference to the value of our common stock, thereby strengthening their commitment to our welfare and aligning their interests with those of our stockholders. The 2021 Equity Plan provides for the grant of awards of stock options, stock appreciation rights, restricted shares, restricted stock units, and other equity-based or cash-based awards as determined by the Company’s Compensation Committee. The 2021 Equity Plan initially had a total of 17,525,000 shares of common stock reserved. The number of reserved shares automatically increases on the first day of each calendar year commencing on January 1, 2022 and ending on January 1, 2030, in an amount equal to the lesser of (x) 2.5% of the total number of shares of common stock outstanding on the last day of the immediately preceding calendar year and (y) a number of shares as determined by the Board of Directors. As of December 31, 2024, 19,216,600 shares were available for issuance under the 2021 Equity Plan.

Stock options issued immediately prior to the IPO vest based on two criteria: (1) Time — awards vest annually over five years; and (2) Performance — awards vest based upon a combination of the five-year time vesting, subject to the Company’s investors receiving a targeted money-on-money return. Stock options issued after the IPO vest annually, generally over four or five years. Stock options generally expire ten years after the grant date.

The fair value for stock options granted for the years ended December 31, 2024, 2023, and 2022 was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighed average assumptions:


	Year Ended December 31,
	2024			2023			2022
Expected stock price volatility		35.43	%		32.99	%		34.66	%
Risk-free interest rate		4.18	%		4.00	%		2.77	%
Expected term (in years)		6.25			6.78			6.23
Fair-value of the underlying unit	$	17.74		$	12.56		$	14.68

A summary of the option activity for the year ended December 31, 2024 is as follows:


		Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
December 31, 2023	Grants outstanding		4,686,659		$	13.61
	Grants issued		819,703		$	17.74
	Grants exercised		(866,864	)	$	13.50
	Grants cancelled/forfeited		(121,601	)	$	14.56
December 31, 2024	Grants outstanding		4,517,897		$	14.38	7.4 Years	$19.8 million
December 31, 2024	Grants vested		1,827,922		$	13.76	6.8 Years	$9.1 million
December 31, 2024	Grants unvested		2,689,975		$	14.80

The total intrinsic value of options exercised during the year ended December 31, 2024 and 2023 was $4.6 million and $0.1 million, respectively. No options were exercised during the year ended December 31, 2022.

A summary of changes in outstanding options and the related weighted-average exercise price per share for the years ended December 31, 2023 and 2022 is as follows:


	December 31,
	2023					2022
	Options			Weighted Average Exercise Price		Options			Weighted Average Exercise Price
Grants outstanding at the beginning of the year		4,311,662		$	15.24		3,714,540		$	15.33
Grants issued		579,745		$	12.56		608,122		$	14.68
Grants exercised		(22,402	)	$	12.55		—		$	—
Grants cancelled/forfeited		(182,346	)	$	13.81		(11,000	)	$	17.52
Grants outstanding at the end of the year		4,686,659		$	13.61		4,311,662		$	15.24
Grants vested		1,600,529		$	13.76		1,054,302		$	15.20
Grants unvested		3,086,130		$	13.53		3,257,360		$	15.25

Restricted stock units (“RSU”) generally vest annually over three to five years.

A summary of the RSU activity for the years ended December 31, 2024, 2023, and 2022 is as follows:


		Shares			Weighted Average Grant Date Fair Value
December 31, 2021	Nonvested RSUs		340,875		$	17.19
	Granted		203,032		$	14.36
	Vested		(67,175	)	$	16.96
	Forfeited		(4,400	)	$	17.52
December 31, 2022	Nonvested RSUs		472,332		$	16.00
	Granted		235,903		$	13.46
	Vested		(150,724	)	$	15.42
	Forfeited		(50,368	)	$	14.90
December 31, 2023	Nonvested RSUs		507,143		$	15.10
	Granted		526,980		$	17.28
	Vested		(192,361	)	$	14.87
	Forfeited		(66,111	)	$	15.98
December 31, 2024	Nonvested RSUs		775,651		$	16.61

The following table summarizes the restricted stock issued by the Company. These include grants of unvested 2020 Equity Plan profits interests grants that were converted into restricted stock, as well as restricted stock issued to new recipients. The restricted stock granted as a result of the conversion of 2020 Equity Plan profits interests retain the vesting attributes (including original service period vesting start date) of the original award.

A summary of the restricted stock activity for the years ended December 31, 2024, 2023, and 2022 is as follows:


		Shares			Weighted Average Grant Date Fair Value
December 31, 2021	Nonvested restricted stock		2,613,359		$	3.85
	Vested		(332,059	)	$	3.85
December 31, 2022	Nonvested restricted stock		2,281,300		$	3.85
	Vested		(326,670	)	$	3.85
December 31, 2023	Nonvested restricted stock		1,954,630		$	8.50
	Vested		(776,887	)	$	9.69
December 31, 2024	Nonvested restricted stock		1,177,743		$	10.01

The following table summarizes the RSUs issued by the Company as part of the acquisition of Sterling. These include Sterling restricted stock units and net option shares underlying in-the-money stock option awards that were unvested at close and converted to unvested First Advantage RSUs. The RSUs granted as a result of the conversion retain the vesting attributes (including the original service period vesting start dates) of the original award.

A summary of the RSU activity for the year ended December 31, 2024 is as follows:


		Shares			Weighted Average Grant Date Fair Value
December 31, 2023	Nonvested RSUs		—		$	—
	Exchanged for RSUs in the Company		92,380		$	18.70
	Vested		(2,674	)	$	18.70
	Forfeited		(33	)	$	18.70
December 31, 2024	Nonvested RSUs		89,673		$	18.70

The following table summarizes the restricted stock issued by the Company as part of the acquisition of Sterling. These include Sterling restricted stock and net option shares underlying in-the-money stock option awards that were unvested at close and converted to unvested First Advantage restricted stock. The restricted stock granted as a result of the conversion retain the vesting attributes (including the original service period vesting start dates) of the original award.

A summary of the restricted stock activity for the year ended December 31, 2024 is as follows:


		Shares			Weighted Average Grant Date Fair Value
December 31, 2023	Nonvested restricted stock		—		$	—
	Exchanged for restricted stock in the Company		929,475		$	18.70
	Vested		(236,734	)	$	18.70
	Forfeited		(27	)	$	18.70
December 31, 2024	Nonvested restricted stock		692,714		$	18.70

On June 25, 2021, in connection with the IPO, the Company adopted the ESPP that allows eligible employees to voluntarily make after-tax contributions of up to 15% of such employee’s cash compensation to acquire Company stock during designated offering periods. Each offering period consists of one six-month purchase period. During the holding period, ESPP purchased shares are not eligible for sale or broker transfer. The Company recorded an associated expense of approximately $0.6 million, $0.8 million, and $0.4 million for the years ended December 31, 2024, 2023, and 2022, respectively.