Third Quarter 2026
Filed Nov 5, 2026First Advantage Reports Third Quarter 2026 Results Delivers Double-Digit Revenue Growth and Raises Full Year 2026 Guidance
Third-quarter revenue grew 13.8%, Adjusted EBITDA increased 15.2%, Adjusted Diluted Earnings Per Share rose 26.7%, and the company raised every full-year guidance range.
Actuals vs. the company’s prior outlook
from its previous release| Metric | Guided | Reported | Verdict |
|---|---|---|---|
| Revenues | $1,670 million – $1,710 million | $465.8 million for the three months ended September 30, 2026 | n/a |
| Adjusted EBITDA | $472 million – $486 million | $136.5 million for the three months ended September 30, 2026 | n/a |
| Adjusted Net Income | $214 million – $225 million | $67.3 million for the three months ended September 30, 2026 | n/a |
| Adjusted Diluted Earnings Per Share | $1.23 – $1.29 | $0.38 for the three months ended September 30, 2026 | n/a |
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $465.8M | – | 13.8% |
| Cost of services, three months ended September 30, 2026GAAP | $253.9M | – | – |
| Product and technology expense, three months ended September 30, 2026GAAP | $27.30M | – | – |
| Selling, general, and administrative expense, three months ended September 30, 2026GAAP | $57.58M | – | – |
| Depreciation and amortization, three months ended September 30, 2026GAAP | $66.87M | – | – |
| Total operating expenses, three months ended September 30, 2026GAAP | $405.7M | – | – |
| Income from operations, three months ended September 30, 2026GAAP | $60.11M | – | – |
| Interest expense, net, three months ended September 30, 2026GAAP | $30.44M | – | – |
| Loss on extinguishment of debt, three months ended September 30, 2026GAAP | $615K | – | – |
| Income before provision for income taxes, three months ended September 30, 2026GAAP | $29.05M | – | – |
| Provision (benefit) for income taxes, three months ended September 30, 2026GAAP | $8.57M | – | – |
| Net income, three months ended September 30, 2026GAAP | $20.5M | – | NM |
| Net income margin, three months ended September 30, 2026GAAP | 4.4% | – | NA |
| Comprehensive income (loss), three months ended September 30, 2026GAAP | $22.24M | – | – |
| Basic net income per share, three months ended September 30, 2026GAAP | $0.12 | – | – |
| Diluted net income per share, three months ended September 30, 2026GAAP | $0.12 | – | NM |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $136.5M | – | 15.2% |
| Adjusted EBITDA Margin, three months ended September 30, 2026non-GAAP | 29.3% | – | NA |
| Adjusted Net Income, three months ended September 30, 2026non-GAAP | $67.3M | – | 28.6% |
| Adjusted Diluted Earnings Per Share, three months ended September 30, 2026non-GAAP | $0.38 | – | 26.7% |
| Cash Flows from Operations, three months ended September 30, 2026GAAP | $63.8M | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | $186.8M | – | – |
| Net cash used in investing activities, nine months ended September 30, 2026GAAP | −$56.61M | – | – |
| Net cash used in financing activities, nine months ended September 30, 2026GAAP | −$126.9M | – | – |
Full Year 2026 outlook
- Revenue$1,720 million – $1,745 million
- NoteAdjusted EBITDA: $488 million – $498 million
- NoteAdjusted Net Income: $227 million – $232 million
- NoteAdjusted Diluted Earnings Per Share: $1.30 – $1.33
Capital returns
- Share repurchases of $38,381 thousand during the nine months ended September 30, 2026.
- Repayments of First Lien Credit Facility of $95,000 thousand during the nine months ended September 30, 2026.
- $45 million debt prepayment during the quarter.
What drove it
- Management cited continued excellent base growth, solid new logo contribution, successful upsell and cross-sell activity, and consistently high retention.
- Management cited broad-based growth across diverse, balanced verticals and strong performance from nearly every vertical in the Americas business.
- The company said its AI-enabled products continue to be key differentiators.
- The company said it continued to progress on the Sterling acquisition synergy program and expects to finish the year near or at the top end of its run rate synergy target range.
- The company announced the acquisition of Data Diver Technologies, LLC, a data platform leveraging AI and automation.
Concerns
- GAAP net income was $20.5 million and the GAAP net income margin was 4.4%, versus Adjusted EBITDA of $136.5 million and an Adjusted EBITDA Margin of 29.3%.
- Long-term debt remained $1,990,857 thousand at September 30, 2026.
- The company identified customer onboarding volumes, macroeconomic cycles, data security, regulation, AI-related issues, third-party data-provider reliance, competition, and indebtedness among risk factors.
What to watch
- Execution and realized benefits from the Sterling acquisition synergy program.
- Integration of Data Diver Technologies and the contribution from its data and automation platform.
- Progress toward the updated full-year revenue guidance of $1,720 million – $1,745 million.
- Progress toward the updated full-year Adjusted EBITDA guidance of $488 million – $498 million.
- Further debt reduction and the pace of share repurchases.
Balance sheet and cash flow
- Cash and cash equivalents were $240,902 thousand at September 30, 2026, compared with $239,998 thousand at December 31, 2025.
- Long-term debt was $1,990,857 thousand at September 30, 2026, compared with $2,080,039 thousand at December 31, 2025.
- Net cash provided by operating activities was $186,828 thousand for the nine months ended September 30, 2026, compared with $129,185 thousand in the prior-year period.
- Capitalized software development costs were $(47,579) thousand for the nine months ended September 30, 2026, compared with $(34,536) thousand in the prior-year period.
- Purchases of property and equipment were $(11,058) thousand for the nine months ended September 30, 2026, compared with $(2,847) thousand in the prior-year period.
Analysis
First Advantage reported third-quarter revenue of $465.8 million, up 13.8% from $409.2 million. Management attributed the growth to base growth, new logos, upsell and cross-sell activity, high retention, and broad-based strength across its Americas verticals. The company also highlighted AI-enabled products as a differentiator in helping customers mitigate human-capital risks and prevent fraud.
Profitability improved on both reported and adjusted measures. Net income was $20.5 million, compared with $2.6 million, while diluted net income per share was $0.12 versus $0.01. Adjusted EBITDA rose to $136.5 million from $118.5 million and Adjusted EBITDA Margin increased to 29.3% from 29.0%. Adjusted Net Income increased to $67.3 million from $52.3 million, and Adjusted Diluted Earnings Per Share increased to $0.38 from $0.30.
Cash generation and capital allocation were central to the release. Third-quarter Cash Flows from Operations were $63.8 million, while nine-month net cash provided by operating activities was $186,828 thousand. During the nine months, the company repaid $95,000 thousand of its First Lien Credit Facility and repurchased $38,381 thousand of shares. Cash and cash equivalents were $240,902 thousand and long-term debt was $1,990,857 thousand at September 30, 2026. Management specifically cited a $45 million debt prepayment during the quarter and described deleveraging as a high capital-allocation priority.
The company raised full-year 2026 guidance across all disclosed metrics. Revenue guidance increased to $1,720 million – $1,745 million from $1,670 million – $1,710 million, while Adjusted EBITDA guidance increased to $488 million – $498 million from $472 million – $486 million. Adjusted Net Income guidance increased to $227 million – $232 million and Adjusted Diluted Earnings Per Share guidance increased to $1.30 – $1.33. Management stated that the low end of each updated range exceeds the high end of the prior range.
The Sterling integration remains an important operating and margin consideration, with management expecting to finish the year near or at the top end of its run rate synergy target range. The announced acquisition of Data Diver Technologies adds a data platform focused on AI and automation, consistent with the company's data and technology investment strategy. Investors should monitor integration execution, the path of debt reduction, and fourth-quarter delivery against the raised full-year ranges.
Management, verbatim
We delivered another quarter of outstanding performance, highlighted by nearly 14% revenue growth, increasing margins, strong cash flow, and robust earnings per share growth.
Scott Staples, Chief Executive Officer
In addition, today we are excited to announce our acquisition of Data Diver Technologies, a data platform leveraging AI and automation that collects, aggregates, retains, and delivers high-volume criminal and court records, further supporting our strategy of delivering fast, accurate, and automated screening results for our customers.
Scott Staples, Chief Executive Officer
We remain confident in our ability to deliver consistent profitable growth. Based on our strong performance through the first three quarters of the year and our expectations for the fourth quarter, we are raising our guidance ranges for the full year, with the low end of our updated guidance ranges now exceeding the high end of our prior guidance ranges across every metric.
Steven Marks, Chief Financial Officer
Not in the filing
stated, not guessed- Segment revenue, segment growth rates, and segment profitability were not reported.
- Gross profit and gross margin were not reported.
- Quarterly free cash flow was not reported.
- A quarterly operating cash flow prior-year comparison was not reported.
- A dividend was not reported.
- Full-year 2026 guidance for gross margin, operating expenses, and tax rate was not reported.
- A same-period full-year actual result is not available to assess performance against prior full-year guidance.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.