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Reportable Segments
 12 Months Ended
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