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Reportable Segments
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Reportable Segments

Note 15. Reportable Segments

The Company has three reportable segments:

•
First Advantage Americas. This segment pertains to our Legacy First Advantage business and performs a variety of background check and compliance services across all phases of the workforce lifecycle from pre-onboarding services to post-onboarding and ongoing monitoring services, covering employees, contractors, contingent workers, tenants, and drivers. We generally classify our service offerings into three categories: pre-onboarding, post-onboarding, and adjacent products. We deliver our solutions across multiple industry verticals in the United States, Canada, and Latin America.
•
First Advantage International. The First Advantage International segment pertains to our Legacy First Advantage business and provides services similar to our Americas segment in regions outside of the Americas. We primarily deliver our solutions across multiple industry verticals in the Europe, India, and Asia Pacific.
•
Sterling. This segment is comprised of the acquired entity, Sterling Check Corp., which was acquired on October 31, 2024. The Sterling segment provides similar services as compared to First Advantage’s Americas and International segments on a global basis.

Our chief operating decision maker (“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. 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 2. “Summary of Significant Accounting Policies” included in the Annual Report on Form 10-K for the year ended December 31, 2024.

Reconciliations of Segment Adjusted EBITDA to net loss for the three months ended March 31, 2025 and 2024 is as follows (in thousands):

 

 

Three Months Ended March 31, 2025

 

 

 

First Advantage Americas

 

 

First Advantage International

 

 

Sterling

 

 

Total

 

Total revenues

 

$

145,353

 

 

$

23,775

 

 

$

187,518

 

 

$

356,646

 

Intersegment revenues

 

 

(491

)

 

 

(1,263

)

 

 

(304

)

 

 

(2,058

)

External revenues

 

$

144,862

 

 

$

22,512

 

 

$

187,214

 

 

$

354,588

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted cost of services

 

 

74,183

 

 

 

13,848

 

 

 

104,802

 

 

 

 

Other segment items

 

 

30,863

 

 

 

6,561

 

 

 

34,277

 

 

 

 

Segment Adjusted EBITDA

 

$

40,307

 

 

$

3,366

 

 

$

48,439

 

 

$

92,112

 

Adjustments to reconcile to net loss:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

46,580

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

2,231

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

61,666

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

7,967

 

Transaction and acquisition-related charges (a)

 

 

 

 

 

 

 

 

 

 

 

3,996

 

Integration, restructuring, and other charges (b)

 

 

 

 

 

 

 

 

 

 

 

10,866

 

Net loss

 

 

 

 

 

 

 

 

 

 

$

(41,194

)

 

 

 

Three Months Ended March 31, 2024

 

 

 

First Advantage Americas

 

 

First Advantage International

 

 

Sterling

 

 

Total

 

Total revenues

 

$

149,127

 

 

$

22,023

 

 

$

—

 

 

$

171,150

 

Intersegment revenues

 

 

(315

)

 

 

(1,419

)

 

 

—

 

 

 

(1,734

)

External revenues

 

$

148,812

 

 

$

20,604

 

 

$

—

 

 

$

169,416

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted cost of services

 

 

76,070

 

 

 

12,837

 

 

 

—

 

 

 

 

Other segment items

 

 

29,388

 

 

 

6,297

 

 

 

—

 

 

 

 

Segment Adjusted EBITDA

 

$

43,669

 

 

$

2,889

 

 

$

—

 

 

$

46,558

 

Adjustments to reconcile to net loss:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

3,570

 

Benefit for income taxes

 

 

 

 

 

 

 

 

 

 

 

(1,388

)

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

29,822

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

4,751

 

Transaction and acquisition-related charges (a)

 

 

 

 

 

 

 

 

 

 

 

11,992

 

Integration, restructuring, and other charges (b)

 

 

 

 

 

 

 

 

 

 

 

719

 

Net loss

 

 

 

 

 

 

 

 

 

 

$

(2,908

)
(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 three months ended March 31, 2025 include approximately $3.8 million of expense associated with the Sterling Acquisition. The three months ended March 31, 2024 include approximately $11.1 million of expense associated with the Sterling Acquisition, as well as incremental professional service fees incurred related to the Company's initial public offering and the subsequent one-time compliance efforts.
(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. Integration, restructuring, and other charges for the three months ended March 31, 2025 include approximately $7.8 million of expense associated with the integration of Sterling.

Geographic Information

The Company categorizes 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):

 

 

Three Months Ended March 31,

 

 

 

2025

 

 

2024

 

Revenues

 

 

 

 

 

 

United States

 

$

303,789

 

 

$

146,206

 

All other countries

 

 

50,799

 

 

 

23,210

 

Total revenues

 

$

354,588

 

 

$

169,416

 

The following table sets forth net long-lived assets by geographic area (in thousands):

 

March 31, 2025

 

 

December 31, 2024

 

Long-lived assets, net

 

 

 

 

 

 

United States

 

$

2,951,959

 

 

$

2,996,933

 

All other countries

 

 

435,281

 

 

 

436,741

 

Total long-lived assets, net

 

$

3,387,240

 

 

$

3,433,674