FIRST ADVANTAGE CORP

Previous wording

The following discussion and analysis of First Advantage Corporation’s financial condition and results of operations is provided as a supplement to the condensed consolidated financial statements for the three and six months ended June 30, 2024, and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023, our “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

The following discussion and analysis of First Advantage Corporation’s financial condition and results of operations is provided as a supplement to the condensed consolidated financial statements for the three and nine months ended September 30, 2024, and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2023, our “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. All discussions and information in this Quarterly Report on Form 10-Q regarding our business and financial results relate solely to our operations prior to the acquisition of Sterling, unless otherwise indicated.

Previous wording

These forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Such risks and uncertainties include, but are not limited to, the following: negative changes in external events beyond our control, including our customers’ onboarding volumes, economic drivers which are sensitive to macroeconomic cycles, such as interest rate volatility and inflation, geopolitical unrest, uncertainty in financial markets; our operations in a highly regulated industry and the fact that we are subject to numerous and evolving laws and regulations, including with respect to personal data, data security, and artificial intelligence; inability to identify and successfully implement our growth strategies on a timely basis or at all; potential harm to our business, brand, and reputation as a result of security breaches, cyber-attacks, or the mishandling of personal data; operating in a penetrated and competitive market; our reliance on third-party data providers; due to the sensitive and privacy-driven nature of our products and solutions, we could face liability and legal or regulatory proceedings, which could be costly and time-consuming to defend and may not be fully covered by insurance; our international business exposes us to a number of risks; real or perceived errors, failures, or bugs in our products could adversely affect our business, results of operations, financial condition, and growth prospects; our ability to identify attractive targets or successfully complete such transactions; the timing, manner and volume of repurchases of common stock pursuant to our share repurchase program; failure to comply with anti-corruption laws and regulations; disruptions at our Global Operating Center and other operating centers; our contracts with our customers, which do not guarantee exclusivity or contracted volumes; disruptions, outages, or other errors with our technology and network infrastructure, including our data centers, servers, and third-party cloud and internet providers and our migration to the cloud; the continued integration of our platforms and solutions with human resource providers such as applicant tracking systems and human capital management systems as well as our relationships with such human resource providers; risks relating to public opinion, which may be magnified by incidents or adverse publicity concerning our industry or operations; our reliance on third-party vendors to carry out certain portions of our operations; our dependence on the service of our key executive and other employees, and our ability to find and retain qualified employees; our ability to obtain, maintain, protect and enforce our intellectual property and other proprietary information; our ability to maintain, protect, and enforce the confidentiality of our trade secrets; the use of open-source software in our applications; the indemnification provisions in our contracts with our …

Excerpt shortened here; the source contains the full paragraph.

Current wording

These forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Such risks and uncertainties include, but are not limited to, the following: the failure to realize the expected benefits of our acquisition of Sterling, negative changes in external events beyond our control, including our customers’ onboarding volumes, economic drivers which are sensitive to macroeconomic cycles, such as interest rate volatility and inflation, geopolitical unrest, uncertainty in financial markets; our operations in a highly regulated industry and the fact that we are subject to numerous and evolving laws and regulations, including with respect to personal data, data security, and artificial intelligence; inability to identify and successfully implement our growth strategies on a timely basis or at all; potential harm to our business, brand, and reputation as a result of security breaches, cyber-attacks, or the mishandling of personal data; operating in a penetrated and competitive market; our reliance on third-party data providers; due to the sensitive and privacy-driven nature of our products and solutions, we could face liability and legal or regulatory proceedings, which could be costly and time-consuming to defend and may not be fully covered by insurance; our international business exposes us to a number of risks; real or perceived errors, failures, or bugs in our products could adversely affect our business, results of operations, financial condition, and growth prospects; our ability to identify attractive targets or successfully complete such transactions; the timing, manner and volume of repurchases of common stock pursuant to our share repurchase program; failure to comply with anti-corruption laws and regulations; disruptions at our Global Operating Center and other operating centers; our contracts with our customers, which do not guarantee exclusivity or contracted volumes; disruptions, outages, or other errors with our technology and network infrastructure, including our data centers, servers, and third-party cloud and internet providers and our migration to the cloud; the continued integration of our platforms and solutions with human resource providers such as applicant tracking systems and human capital management systems as well as our relationships with such human resource providers; risks relating to public opinion, which may be magnified by incidents or adverse publicity concerning our industry or operations; our reliance on third-party vendors to carry out certain portions of our operations; our dependence on the service of our key executive and other employees, and our ability to find and retain qualified employees; our ability to obtain, maintain, protect and enforce our intellectual property and other proprietary information; our ability to maintain, protect, and enforce the confidentiality of our trade secrets; the use of open-source software i…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

First Advantage is a leading provider of employment background screening, identity, and verification solutions. We deliver innovative services and insights that help our customers manage risk and hire the best talent. Enabled by our proprietary technology, we help companies protect their brands and provide safer environments for their customers and their most important resources: employees, contractors, contingent workers, tenants, and drivers.

Current wording

First Advantage is a leading global provider of employment background screening, identity, and verification solutions. Enabled by its proprietary technology, First Advantage delivers innovative services and insights that help customers mitigate risk and hire the best talent: employees, contractors, contingent workers, tenants, and drivers.

Previous wording

We generated revenues of $184.5 million for the three months ended June 30, 2024, as compared to $185.3 million for the three months ended June 30, 2023 and generated revenues of $354.0 million for the six months ended June 30, 2024, as compared to $360.8 million for the six months ended June 30, 2023. Approximately 87% of our revenues for the six months ended June 30, 2024 was generated in the Americas, predominantly in the United States, while the remaining 13% was generated internationally. Other than the United States, no single country accounted for 10% or more of our total revenues for the three and six months ended June 30, 2024. Please refer to “Results of Operations” for further details.

Current wording

We generated revenues of $199.1 million for the three months ended September 30, 2024, as compared to $200.4 million for the three months ended September 30, 2023 and generated revenues of $553.1 million for the nine months ended September 30, 2024, as compared to $561.2 million for the nine months ended September 30, 2023. Approximately 87% of our revenues for the nine months ended September 30, 2024 was generated in the Americas, predominantly in the United States, while the remaining 13% was generated internationally. Other than the United States, no single country accounted for 10% or more of our total revenues for the three and nine months ended September 30, 2024. Please refer to “Results of Operations” for further details.

Previous wording

Pending Acquisition of Sterling Check Corp.

Current wording

Acquisition of Sterling Check Corp.

Previous wording

On February 28, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among First Advantage, Sterling Check Corp., a Delaware corporation (“Sterling”), and Starter Merger Sub, Inc., a Delaware corporation and an indirect, wholly owned subsidiary of First Advantage (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will be merged with and into Sterling, with Sterling continuing as the surviving corporation in such merger and becoming an indirect, wholly owned subsidiary of First Advantage. The cash-and-stock transaction (the “Acquisition”) valued Sterling at approximately $2.2 billion as of the date of the Merger Agreement.

Current wording

On February 28, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among First Advantage, Sterling Check Corp., a Delaware corporation (“Sterling”), and Starter Merger Sub, Inc., a Delaware corporation and an indirect, wholly owned subsidiary of First Advantage (“Merger Sub”).

Previous wording

Macroeconomic factors, including inflation, interest rates, variability in hiring activity and job openings, and global economic and geopolitical developments, have negatively impacted significant portions of the global economy, and created volatility in the financial markets.

Current wording

Macroeconomic factors, including inflation, interest rates, consumer spending, variability in hiring activity and job openings, and global economic and geopolitical developments, have negatively impacted significant portions of the global economy, and created volatility in the financial markets.

Previous wording

Selling, General, and Administrative Expense: Consists of sales, customer success, marketing, and general and administrative expenses. Sales, customer success, and marketing expenses consist primarily of employee compensation such as salaries, bonuses, sales commissions, share-based compensation, and other employee benefits for our verticalized sales and customer success teams. General and administrative expenses include travel expenses and various corporate functions including finance, human resources, legal, and other administrative roles, in addition to certain professional service fees and expenses incurred in connection with our IPO and our pending acquisition of Sterling. We expect our selling, general, and administrative expenses to increase in the short-term, primarily as a result of additional public company related reporting and compliance costs. Over the long-term, we expect our selling, general, and administrative expenses to decrease as a percentage of revenues as we leverage our past investments. We do not allocate depreciation and amortization to selling, general, and administrative expenses.

Current wording

Selling, General, and Administrative Expense: Consists of sales, customer success, marketing, and general and administrative expenses. Sales, customer success, and marketing expenses consist primarily of employee compensation such as salaries, bonuses, sales commissions, share-based compensation, and other employee benefits for our verticalized sales and customer success teams. General and administrative expenses include travel expenses and various corporate functions including finance, human resources, legal, and other administrative roles, in addition to certain professional service fees and expenses incurred in connection with our IPO and our acquisition of Sterling. We expect our selling, general, and administrative expenses to increase in the short-term, primarily as a result of additional public company related reporting and compliance costs. Over the long-term, we expect our selling, general, and administrative expenses to decrease as a percentage of revenues as we leverage our past investments. We do not allocate depreciation and amortization to selling, general, and administrative expenses.

Previous wording

Comparison of Results of Operations for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023

Current wording

Comparison of Results of Operations for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023

Previous wording

Revenues were $184.5 million for the three months ended June 30, 2024, compared to $185.3 million for the three months ended June 30, 2023. Revenues for the three months ended June 30, 2024 decreased by $0.8 million, or 0.4%, compared to the three months ended June 30, 2023.

Current wording

Revenues were $199.1 million for the three months ended September 30, 2024, compared to $200.4 million for the three months ended September 30, 2023. Revenues for the three months ended September 30, 2024 decreased by $1.2 million, or 0.6%, compared to the three months ended September 30, 2023.

Previous wording

The decrease in revenues was primarily due to a net decrease of $29.7 million, or 8.2%, in existing customer revenues, primarily driven by the impact of macroeconomic factors affecting the hiring industry which have resulted in reduced demand from our customers and the impact of lost accounts. These consolidated decreases were partially offset by ongoing strength in upselling and cross-selling to existing customers, contributing $16.3 million, or 4.5%, of additional revenues, and increased revenues from certain existing customers that were impacted by macroeconomic conditions, to a lesser extent, as compared to other existing customers.

Current wording

The decrease in revenues was primarily due to a net decrease of $9.3 million, or 4.7%, in existing customer revenues, primarily driven by the impact of macroeconomic factors affecting the hiring industry, particularly in our Americas segment, which have resulted in reduced demand from our customers and the impact of lost accounts. These consolidated decreases were partially offset by ongoing strength in upselling and cross-selling incremental services to existing customers, contributing $14.7 million, or 7.3%, of additional revenues.

Previous wording

revenues of $7.8 million, or 4.2%, from new customers, primarily attributable to our Americas segment; and

Current wording

revenues of $5.8 million, or 2.9%, from new customers, primarily attributable to our Americas segment; and

Previous wording

revenues of $3.3 million, or 1.8%, attributable to the Infinite ID acquisition in the Americas segment.

Current wording

revenues of $2.3 million, or 1.1%, attributable to the Infinite ID acquisition in the Americas segment.

Previous wording

Revenues were $354.0 million for the six months ended June 30, 2024, compared to $360.8 million for the six months ended June 30, 2023. Revenues for the six months ended June 30, 2024 decreased by $6.9 million, or 1.9%, compared to the six months ended June 30, 2023.

Current wording

Revenues were $553.1 million for the nine months ended September 30, 2024, compared to $561.2 million for the nine months ended September 30, 2023. Revenues for the nine months ended September 30, 2024 decreased by $8.1 million, or 1.4%, compared to the nine months ended September 30, 2023.

Previous wording

The decrease in revenues was primarily due to a net decrease of $11.9 million, or 6.4%, in existing customer revenues, primarily driven by the impact of macroeconomic factors affecting the hiring industry which have resulted in reduced demand from our customers and the impact of lost accounts. These consolidated decreases were partially offset by ongoing strength in upselling and cross-selling to existing customers, contributing $8.6 million, or 4.7%, of additional revenues, and increased revenues from certain existing customers that were impacted by macroeconomic conditions, to a lesser extent, as compared to other existing customers.

Current wording

The decrease in revenues was primarily due to a net decrease of $39.0 million, or 7.0%, in existing customer revenues, primarily driven by the impact of macroeconomic factors affecting the hiring industry which have resulted in reduced demand from our customers and the impact of lost accounts. These consolidated decreases were partially offset by ongoing strength in upselling and cross-selling to existing customers, contributing $31.0 million, or 5.5%, of additional revenues, and increased revenues from certain existing customers that were impacted by macroeconomic conditions, to a lesser extent, as compared to other existing customers.

Previous wording

revenues of $16.7 million, or 4.6%, from new customers, primarily attributable to our Americas segment; and

Current wording

revenues of $22.5 million, or 4.0%, from new customers, primarily attributable to our Americas segment; and

Previous wording

revenues of $6.1 million, or 1.7%, attributable to the Infinite ID acquisition in the Americas segment.

Current wording

revenues of $8.4 million, or 1.5%, attributable to the Infinite ID acquisition in the Americas segment.

Previous wording

Cost of services was $179.5 million for the six months ended June 30, 2024, compared to $184.1 million for the six months ended June 30, 2023. Cost of services for the six months ended June 30, 2024 decreased by $4.5 million, or 2.5%, compared to the six months ended June 30, 2023.

Current wording

Cost of services was $100.9 million for the three months ended September 30, 2024, compared to $101.4 million for the three months ended September 30, 2023. Cost of services for the three months ended September 30, 2024 decreased by $0.5 million, or 0.5%, compared to the three months ended September 30, 2023. The decrease in cost of services was primarily due to a decrease in variable third-party data expenses as a result of decreased revenue volumes and increased automation.

Previous wording

Cost of services as a percentage of revenues was 50.0% for the three months ended June 30, 2024, compared to 50.2% for the three months ended June 30, 2023. The cost of services percentage of revenues for the second quarter of 2024 was impacted by cost savings from the Company’s continued implementation of automation and other process efficiencies. These decreases were partially offset by slight increases in certain third-party data costs.

Current wording

Cost of services as a percentage of revenues was 50.7% for the three months ended September 30, 2024, compared to 50.6% for the three months ended September 30, 2023. The cost of services percentage of revenues for the third quarter of 2024 was impacted by a variation in customer ordering mix.

Previous wording

Cost of services was $92.3 million for the three months ended June 30, 2024, compared to $93.0 million for the three months ended June 30, 2023. Cost of services for the three months ended June 30, 2024 decreased by $0.6 million, or 0.7%, compared to the three months ended June 30, 2023.

Current wording

Cost of services was $280.4 million for the nine months ended September 30, 2024, compared to $285.5 million for the nine months ended September 30, 2023. Cost of services for the nine months ended September 30, 2024 decreased by $5.0 million, or 1.8%, compared to the nine months ended September 30, 2023.

Previous wording

a $3.0 million decrease in variable third-party data expenses as a result of decreased revenue volumes, variation in customer ordering mix, and increased automation; and

Current wording

a $3.9 million decrease in variable third-party data expenses as a result of decreased revenue volumes, variation in customer ordering mix, and increased automation; and

Previous wording

a $1.3 million decrease in personnel expenses in our operations and customer care functions as a result of productivity efficiencies from the implementation of additional automation programs.

Current wording

a $1.7 million decrease in personnel expenses in our operations and customer care functions as a result of productivity efficiencies from the implementation of additional automation programs.

Previous wording

Cost of services as a percentage of revenues was 50.7% for the six months ended June 30, 2024, compared to 51.0% for the six months ended June 30, 2023. The cost of services percentage of revenues for the six months ended June 30, 2024 was impacted by cost savings from the Company’s continued implementation of automation and other process efficiencies. These decreases were partially offset by slight increases in certain third-party data costs.

Current wording

Cost of services as a percentage of revenues was 50.7% for the nine months ended September 30, 2024, compared to 50.9% for the nine months ended September 30, 2023. The cost of services percentage of revenues for the nine months ended September 30, 2024 was impacted by cost savings from the Company’s continued implementation of automation and other process and facilities efficiencies. These decreases were partially offset by slight increases in certain third-party data costs.

Previous wording

Product and technology expense was $13.7 million for the three months ended June 30, 2024, compared to $12.6 million for the three months ended June 30, 2023. Product and technology expense for the three months ended June 30, 2024 increased by $1.0 million, or 8.2%, compared to the three months ended June 30, 2023.

Current wording

Product and technology expense was $12.9 million for the three months ended September 30, 2024, compared to $13.1 million for the three months ended September 30, 2023. Product and technology expense for the three months ended September 30, 2024 decreased by $0.2 million, or 1.5%, compared to the three months ended September 30, 2023.

Previous wording

Product and technology expense increased primarily due to a $2.1 million increase in personnel expenses as a result of increased share-based compensation expense and additional investments. Product and technology expense was incrementally impacted by increases in professional service fees that were partially offset by savings in software license fees.

Current wording

These decreases were partially offset by a $0.3 million increase in personnel expenses as a result of increased share-based compensation expense and additional investments made to enhance our product, solutions, and technology platform.

Previous wording

Product and technology expense was $26.1 million for the six months ended June 30, 2024, compared to $25.3 million for the six months ended June 30, 2023. Product and technology expense for the six months ended June 30, 2024 increased by $0.9 million, or 3.5%, compared to the six months ended June 30, 2023.

Current wording

Product and technology expense was $39.1 million for the nine months ended September 30, 2024, compared to $38.4 million for the nine months ended September 30, 2023. Product and technology expense for the nine months ended September 30, 2024 increased by $0.7 million, or 1.8%, compared to the nine months ended September 30, 2023.

Previous wording

Product and technology expense increased primarily due to a $1.0 million increase in personnel expenses as a result of increased share-based compensation expense and additional investments. Product and technology expense was incrementally impacted by increases in professional service fees that were partially offset by savings in software license fees.

Current wording

Product and technology expense increased primarily due to a $2.4 million increase in personnel expenses as a result of increased share-based compensation expense and additional investments made to enhance our product, solutions, and technology platform. The increase was partially offset by a $1.7 million decrease in software license fees.

Previous wording

Selling, general, and administrative expense was $38.6 million for the three months ended June 30, 2024, compared to $30.0 million for the three months ended June 30, 2023. Selling, general, and administrative expense for the three months ended June 30, 2024 increased by $8.7 million, or 28.9%, compared to the three months ended June 30, 2023.

Current wording

Selling, general, and administrative expense was $46.1 million for the three months ended September 30, 2024, compared to $30.2 million for the three months ended September 30, 2023. Selling, general, and administrative expense for the three months ended September 30, 2024 increased by $15.8 million, or 52.4%, compared to the three months ended September 30, 2023.

Previous wording

Selling, general, and administrative expense was $79.3 million for the six months ended June 30, 2024, compared to $58.7 million for the six months ended June 30, 2023. Selling, general, and administrative expense for the six months ended June 30, 2024 increased by $20.6 million, or 35.2%, compared to the six months ended June 30, 2023.

Current wording

Selling, general, and administrative expense was $125.4 million for the nine months ended September 30, 2024, compared to $88.9 million for the nine months ended September 30, 2023. Selling, general, and administrative expense for the nine months ended September 30, 2024 increased by $36.5 million, or 41.0%, compared to the nine months ended September 30, 2023.

Previous wording

a $20.3 million increase in professional service and legal fees incurred related to the Company’s pending acquisition of Sterling;

Current wording

a $29.9 million increase in professional service and legal fees incurred related to the Company’s acquisition of Sterling;

Previous wording

a $3.6 million increase in share-based compensation expense primarily as a result of a modification to the vesting terms of outstanding unvested and unearned performance-based equity awards in May 2023 and incremental awards granted; and

Current wording

a $8.2 million increase in share-based compensation expense primarily as a result of a modification to the vesting terms of outstanding unvested and unearned performance-based equity awards in May 2023 and incremental awards granted and modifications made to the equity award agreements for the Company’s Chief Financial Officer and President, Americas, as part of each executive’s retirement agreement; and

Previous wording

a $1.3 million decrease in personnel expenses due to certain cost savings actions taken by the Company primarily in the second half of 2023; and

Current wording

a $4.4 million decrease in personnel expenses due to certain cost savings actions taken by the Company primarily in the second half of 2023 and the nonrecurring separation costs related to these savings not recurring in 2024; and

Previous wording

a $0.8 million decrease in expenses related to the impairment of certain operating lease assets resulting from office space exited in 2023 that did not reoccur in 2024.

Current wording

a $2.1 million decrease in expenses related to the impairment of certain operating lease assets resulting from office space exited in 2023 that did not reoccur in 2024.

Previous wording

Depreciation and amortization was $30.0 million for the three months ended June 30, 2024, compared to $32.1 million for the three months ended June 30, 2023. Depreciation and amortization for the three months ended June 30, 2024 decreased by $2.1 million, or 6.5%, compared to the three months ended June 30, 2023. This decrease was partially offset by increases in depreciation related to assets placed in service during the three months ended June 30, 2024.

Current wording

Depreciation and amortization was $30.2 million for the three months ended September 30, 2024, compared to $32.4 million for the three months ended September 30, 2023. Depreciation and amortization for the three months ended September 30, 2024 decreased by $2.3 million, or 6.9%, compared to the three months ended September 30, 2023. This decrease was partially offset by increases in depreciation related to assets placed in service during the three months ended September 30, 2024.

Previous wording

Depreciation and amortization was $59.8 million for the six months ended June 30, 2024, compared to $63.9 million for the six months ended June 30, 2023. Depreciation and amortization for the six months ended June 30, 2024 decreased by $4.1 million, or 6.4%, compared to the six months ended June 30, 2023. This decrease was partially offset by increases in depreciation related to assets placed in service during the six months ended June 30, 2024.

Current wording

Depreciation and amortization was $90.0 million for the nine months ended September 30, 2024, compared to $96.3 million for the nine months ended September 30, 2023. Depreciation and amortization for the nine months ended September 30, 2024 decreased by $6.4 million, or 6.6%, compared to the nine months ended September 30, 2023. This decrease was partially offset by increases in depreciation related to assets placed in service during the nine months ended September 30, 2024.

Previous wording

Interest expense, net was $7.4 million for the three months ended June 30, 2024, compared to $3.9 million for the three months ended June 30, 2023. Interest expense, net for the three months ended June 30, 2024 increased by $3.5 million or 89.2%, compared to the three months ended June 30, 2023.

Current wording

Interest expense, net was $17.2 million for the three months ended September 30, 2024, compared to $7.6 million for the three months ended September 30, 2023. Interest expense, net for the three months ended September 30, 2024 increased by $9.6 million or 127.5%, compared to the three months ended September 30, 2023.

Previous wording

Interest expense, net for the six months ended June 30, 2024 was impacted by $9.2 million of unrealized gains on the Company’s interest rate swaps. This decrease was offset by higher interest expense on the First Lien Credit Facility as a result of increasing interest rates and lower interest income earned on cash held within interest bearing accounts as a result of lower cash on hand.

Current wording

The increase in interest expense, net was primarily attributable to a $8.2 million unrealized loss on the Company’s interest rate swaps recorded in 2024 as a result of volatility in the interest rate environment. Interest expense, net for the three months ended September 30, 2024 was further impacted by lower interest income earned on cash held within interest bearing accounts as a result of lower cash on hand due to the Company’s one time, special dividend paid in August 2023.

Previous wording

Interest expense, net was $10.9 million for the six months ended June 30, 2024, compared to $12.6 million for the six months ended June 30, 2023. Interest expense for the six months ended June 30, 2024 decreased by $1.6 million or 13.1% compared to the six months ended June 30, 2023.

Current wording

Interest expense, net was $28.1 million for the nine months ended September 30, 2024, compared to $20.1 million for the nine months ended September 30, 2023. Interest expense for the nine months ended September 30, 2024 increased by $8.0 million or 39.7% compared to the nine months ended September 30, 2023.

Previous wording

The increase in interest expense, net was primarily attributable to higher interest expense on the First Lien Credit Facility as a result of increasing interest rates and lower interest income earned on cash held within interest bearing accounts as a result of lower cash on hand. Interest expense, net for the three months ended June 30, 2024 was further impacted by $2.1 million of unrealized gains on the Company’s interest rate swaps.

Current wording

The increase in interest expense, net was primarily attributable to higher interest expense on the First Lien Credit Facility as a result of increasing interest rates and lower interest income earned on cash held within interest bearing accounts as a result of lower cash on hand. Interest expense, net for the nine months ended September 30, 2024 was further impacted by $1.0 million of unrealized loss on the Company’s interest rate swaps recorded in 2024 as a result of volatility in the interest rate environment.

Previous wording

Our provision for income taxes was $0.7 million for the three months ended June 30, 2024, compared to $4.0 million for the three months ended June 30, 2023. Our provision for income taxes for the three months ended June 30, 2024 decreased by $3.3 million, compared to the three months ended June 30, 2023.

Current wording

Our provision for income taxes was $0.8 million for the three months ended September 30, 2024, compared to $4.9 million for the three months ended September 30, 2023. Our provision for income taxes for the three months ended September 30, 2024 decreased by $4.1 million, compared to the three months ended September 30, 2023.