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Reportable Segments
 6 Months Ended
Jun. 30, 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 income (loss) for the three and six months ended June 30, 2025 and 2024 is as follows (in thousands):

 

 

Three Months Ended June 30, 2025

 

 

 

First Advantage Americas

 

 

First Advantage International

 

 

Sterling

 

 

Total

 

Total revenues

 

$

163,504

 

 

$

25,920

 

 

$

203,743

 

 

$

393,167

 

Intersegment revenues

 

 

(643

)

 

 

(1,553

)

 

 

(338

)

 

 

(2,534

)

External revenues

 

$

162,861

 

 

$

24,367

 

 

$

203,405

 

 

$

390,633

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted cost of services

 

 

82,994

 

 

 

14,530

 

 

 

112,621

 

 

 

 

Other segment items

 

 

29,250

 

 

 

7,050

 

 

 

32,776

 

 

 

 

Segment Adjusted EBITDA

 

$

51,260

 

 

$

4,340

 

 

$

58,346

 

 

$

113,946

 

Adjustments to reconcile to net income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

44,785

 

Benefit for income taxes

 

 

 

 

 

 

 

 

 

 

 

(7,610

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

254

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

61,906

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

5,742

 

Transaction and acquisition-related charges (a)

 

 

 

 

 

 

 

 

 

 

 

2,390

 

Integration, restructuring, and other charges (b)

 

 

 

 

 

 

 

 

 

 

 

6,171

 

Net income

 

 

 

 

 

 

 

 

 

 

$

308

 

 

 

 

 

Three Months Ended June 30, 2024

 

 

 

First Advantage Americas

 

 

First Advantage International

 

 

Sterling

 

 

Total

 

Total revenues

 

$

162,378

 

 

$

24,187

 

 

$

—

 

 

$

186,565

 

Intersegment revenues

 

 

(416

)

 

 

(1,603

)

 

 

—

 

 

 

(2,019

)

External revenues

 

$

161,962

 

 

$

22,584

 

 

$

—

 

 

$

184,546

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted cost of services

 

 

81,120

 

 

 

13,217

 

 

 

—

 

 

 

 

Other segment items

 

 

29,664

 

 

 

6,803

 

 

 

—

 

 

 

 

Segment Adjusted EBITDA

 

$

51,594

 

 

$

4,167

 

 

$

—

 

 

$

55,761

 

Adjustments to reconcile to net income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

7,353

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

689

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

29,978

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

5,048

 

Transaction and acquisition-related charges (a)

 

 

 

 

 

 

 

 

 

 

 

9,873

 

Integration, restructuring, and other charges (b)

 

 

 

 

 

 

 

 

 

 

 

959

 

Net income

 

 

 

 

 

 

 

 

 

 

$

1,861

 

 

 

 

Six Months Ended June 30, 2025

 

 

 

First Advantage Americas

 

 

First Advantage International

 

 

Sterling

 

 

Total

 

Total revenues

 

$

308,857

 

 

$

49,695

 

 

$

391,261

 

 

$

749,813

 

Intersegment revenues

 

 

(1,134

)

 

 

(2,816

)

 

 

(642

)

 

 

(4,592

)

External revenues

 

$

307,723

 

 

$

46,879

 

 

$

390,619

 

 

$

745,221

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted cost of services

 

 

157,177

 

 

 

28,378

 

 

 

217,423

 

 

 

 

Other segment items

 

 

60,113

 

 

 

13,611

 

 

 

67,053

 

 

 

 

Segment Adjusted EBITDA

 

$

91,567

 

 

$

7,706

 

 

$

106,785

 

 

$

206,058

 

Adjustments to reconcile to net loss:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

91,365

 

Benefit for income taxes

 

 

 

 

 

 

 

 

 

 

 

(5,379

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

254

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

123,572

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

13,709

 

Transaction and acquisition-related charges (a)

 

 

 

 

 

 

 

 

 

 

 

6,386

 

Integration, restructuring, and other charges (b)

 

 

 

 

 

 

 

 

 

 

 

17,037

 

Net loss

 

 

 

 

 

 

 

 

 

 

$

(40,886

)

 

 

 

Six Months Ended June 30, 2024

 

 

 

First Advantage Americas

 

 

First Advantage International

 

 

Sterling

 

 

Total

 

Total revenues

 

$

311,505

 

 

$

46,210

 

 

$

—

 

 

$

357,715

 

Intersegment revenues

 

 

(731

)

 

 

(3,022

)

 

 

—

 

 

 

(3,753

)

External revenues

 

$

310,774

 

 

$

43,188

 

 

$

—

 

 

$

353,962

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted cost of services

 

 

157,190

 

 

 

26,054

 

 

 

—

 

 

 

 

Other segment items

 

 

59,052

 

 

 

13,100

 

 

 

—

 

 

 

 

Segment Adjusted EBITDA

 

$

95,263

 

 

$

7,056

 

 

$

—

 

 

$

102,319

 

Adjustments to reconcile to net loss:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

10,923

 

Benefit for income taxes

 

 

 

 

 

 

 

 

 

 

 

(699

)

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

59,800

 

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

9,799

 

Transaction and acquisition-related charges (a)

 

 

 

 

 

 

 

 

 

 

 

21,865

 

Integration, restructuring, and other charges (b)

 

 

 

 

 

 

 

 

 

 

 

1,678

 

Net loss

 

 

 

 

 

 

 

 

 

 

$

(1,047

)
(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 and six months ended June 30, 2025 include approximately $2.3 million and $6.1 million of expense, respectively, associated with the Sterling Acquisition. The three and six months ended June 30, 2024 include approximately $9.2 million and $20.3 million of expense, respectively, associated with the Sterling Acquisition, primarily consisting of legal, regulatory, and diligence professional service fees. The three and six months ended June 30, 2024 also include insurance costs incurred related to the Company's initial public offering.
(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 and six months ended June 30, 2025 include approximately $3.7 million and $11.6 million of expense, respectively, 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 June 30,

 

 

Six Months Ended June 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

334,907

 

 

$

158,871

 

 

$

638,696

 

 

$

305,077

 

All other countries

 

 

55,726

 

 

 

25,675

 

 

 

106,525

 

 

 

48,885

 

Total revenues

 

$

390,633

 

 

$

184,546

 

 

$

745,221

 

 

$

353,962

 

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

 

June 30, 2025

 

 

December 31, 2024

 

Long-lived assets, net

 

 

 

 

 

 

United States

 

$

2,907,711

 

 

$

2,996,933

 

All other countries

 

 

448,077

 

 

 

436,741

 

Total long-lived assets, net

 

$

3,355,788

 

 

$

3,433,674