FIRST ADVANTAGE CORP

Our Company

First Advantage Corporation (“First Advantage” or the “Company”) 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.

On October 31, 2024, we completed our acquisition of Sterling Check Corp. (“Sterling”), a global provider of technology-enabled background and identity verification services. This strategic acquisition enhances our capabilities and expands our service offerings, allowing us to deliver a comprehensive hiring and risk management solution that begins with identity verification and extends through criminal background screening, credential verification, drug and health screening, and ongoing risk monitoring.

We manage one of the earliest and most important interactions between an applicant and our customer. Most applicants view their screening experience as a reflection of the hiring organization and its onboarding process. Our comprehensive product suite includes criminal background checks, drug and health screening, extended workforce screening, biometrics and identity, education and work verifications, resident screening, fleet and driver compliance, executive screening, data analytics, continuous monitoring, social media monitoring, and hiring tax incentives. We derive a substantial majority of our revenues from pre-onboarding screening and perform screens in over 200 countries and territories, enabling us to serve as a one-stop-shop provider to both multinational companies and growth companies. In 2024, as a combined company, we performed nearly 190 million screens on behalf of 80,000 customers spanning the globe and all major industry verticals, including more than two-thirds of the Fortune 100 and approximately half of the Fortune 500.

We often have multiple stakeholders within our customers, including Executive Management, Human Resources, Talent Acquisition, Compliance, Risk, Legal, Safety, and Vendor Management, who rely on our products and solutions. Our expertise and resources position us to grow market share by focusing on high-volume hiring industries and companies, increasing our share with existing customers, upselling and cross-selling new products and solutions, and winning new customers.

Our verticalized go-to-market strategy delivers highly relevant solutions for targeted industry sectors. This approach enables us to build a diversified customer portfolio and effectively serve many of the largest, most sophisticated, and fastest-growing companies in the world. We have built a powerful and efficient customer-centric sales model fueled by frequent engagement with our customers and deep subject matter expertise in industry-specific compliance and regulatory requirements, which allows us to create tailored solutions and drive consistent upsell and cross-sell opportunities. We believe the combination of our deep market expertise from our sales and support teams combined with the flexibility of our proprietary technology platforms enable us to deliver industry-relevant, highly specialized solutions to our customers in a scalable manner, driving growth and differentiating us from our competitors. This has allowed us to develop long-standing relationships and a highly trusted brand with our customers as evidenced by our industry-leading customer satisfaction scores, average 12-year tenure of our top 100 customers, and gross retention rate of approximately 96% as of December 31, 2024.

Our technology is designed to be highly configurable, scalable, and extensible. Our platform is embedded in our customers’ core enterprise workflows and interfaces with more than 100 third-party Human Capital Management (“HCM”) software platforms and Applicant Tracking Systems (“ATS”), providing us with real-time visibility and input into our customers’ human resources processes. We leverage our proprietary internal databases—which include over 900 million criminal, education, and work history records as of December 31, 2024—and an extensive and highly curated network of thousands of automated and/or integrated third-party data providers and robotic process automation (“RPA”) bots.

Our focus on innovative products and technologies has been critical to our growth. Using agile software development methodologies, we have consistently enhanced existing products and been early to market with new and innovative products, including offerings for biometrics and identity, continuous criminal monitoring, extended workforce screening, and instant oral drug testing. The integration of Sterling’s advanced identity verification solutions, including its partnership with ID.me, further strengthens our position in the market.

The acquisition of Sterling marks a significant milestone in First Advantage's growth trajectory. We plan to combine our expertise and resources to deliver unparalleled screening solutions to our customers, with a focus on remaining at the forefront of innovation in the background screening industry.

Our Market Opportunity

The importance of human capital and its associated risks to brand, reputation, safety, and compliance are ever-increasing in today’s interconnected, fast-paced world. Along with broader sustainability considerations, these issues have become priorities at the highest executive and oversight levels of our customers worldwide. Key constituents, including C-Suite executives, boards of directors, external auditors, business owners, property managers, educators, volunteer organizations, and franchisors, all face a heightened level of public scrutiny and accountability. Significant technological and societal trends, including fraud and cyber-attacks, sexual harassment, workplace violence, regulatory compliance, and the prevalence of social media, are impacting companies’ brands and driving a significant increase in the need for screening, verifications, and ongoing monitoring. Our products and solutions are critical tools that companies depend on to assist them with their workplace safety programs as well as in some cases, assist them with maintaining compliance with regulatory requirements.

We believe several key trends are generating significant growth opportunities in our markets and increasing demand for our products and solutions:

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Elevated voluntary employee churn: Generational and structural shifts in the workforce have led to elevated levels of voluntary employee churn, particularly with younger workers. Millennials and Gen-Z represent a large, growing portion of the U.S. workforce and are more likely to change jobs than other generations in pursuit of earning higher wages, faster career development, and better workplace culture fit. Moreover, the generational movement away from unions and defined benefit plans reduces contractual and financial incentives to stay in a particular role, reducing switching costs for employees. The ongoing structural shift from in-office to remote work further reduces the historical geographic matching challenge employers and employees faced, further reducing switching costs for employees and expanding talent pools for employers. These trends support increasing demand for global, fast and efficient employment screening and identity verification services that only providers of scale, like First Advantage, can sufficiently address.

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Increasing Use of Contingent and Flexible Workforces: Contingent workers, including freelancers, independent contractors, and consultants, comprise a significant portion of the U.S. workforce as corporations increasingly adopt flexible workforce models. Companies face greater demand for employees than available talent, leading to a rise in the use of contingent workers. When these individuals have access to sensitive information or directly interact with customers, it is crucial for companies to diligently screen, verify, and monitor such personnel. The integration of Sterling’s expertise in this area enhances our ability to meet the unique needs of customers utilizing contingent labor.

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C-Suite Focus on Safety and Reputational Risks: Screening, verifications, and compliance are becoming mission-critical and boardroom priorities for many companies due to the brand risks and potential legal liabilities associated with hiring high-risk workers. High-profile human capital-related issues have led to significant brand damage, litigation, and negative media coverage. These events reinforce the importance of our products and solutions. Companies are increasingly focusing on offerings that help mitigate potential risks and improve safety, directly addressing important social factors affecting their operations.

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Heightened Regulatory and Compliance Scrutiny: Businesses today are under intense scrutiny to comply with an ever-expanding and evolving set of global regulatory requirements that can vary by geography, industry vertical, and use case. Examples include the Fair Credit Reporting Act (“FCRA”), the EU and UK General Data Protection Regulation (“GDPR”), the Foreign Corrupt Practices Act (“FCPA”), the United Kingdom Bribery Act, and other US state privacy laws. These requirements that govern the delivery and use of background checks result in businesses needing background screening companies to perform more extensive checks. As a result, businesses seek to partner with screening providers that have the scale, scope, and compliance standards necessary to meet their needs. Our products and solutions help strengthen corporate governance by bolstering compliance and risk management practices.

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Development of International Markets: Background screening penetration remains low in many international geographies, with a significant portion of screens conducted by local providers. Multinational companies are increasingly focused on systematizing and elevating their human resources policies and screening procedures globally, driving demand for technology-driven, high-quality, compliant screening providers. Many international companies are initiating screening programs for the first time and are seeking reliable, compliant, and high-quality providers, positioning First Advantage, especially now with Sterling’s additional scale, to capture this growing demand.

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Growth in Post-Onboarding Solutions: Companies are expanding their screening programs beyond the traditional “one-and-done” pre-onboarding measures. Our investments in post-onboarding products and solutions, enhanced by Sterling’s capabilities, position us to capture share in this growing market, allowing organizations to mitigate ongoing risk effectively.

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Investment in Enterprise Software: As companies increasingly invest in enterprise software solutions, including next-generation software-as-a-service for HCM, we anticipate a rise in demand for screening, verification, and compliance solutions that can interface with these systems in an automated fashion. Our product suite is designed to provide a seamless applicant and user experience, delivering valuable insights through data analytics.

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Proliferation of Relevant Data Sources: U.S. government agencies, third-party vendors, and professional organizations are improving the quality and digitization of data in areas such as criminal records, education, healthcare credentials, and motor vehicle records (“MVRs”). This increasing availability of data drives customers to rely on large-scale, sophisticated providers like First Advantage, who can efficiently access and create insights from diverse data sources.

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Advances in Analytics to Increase Value of Data: The growing accessibility of robust datasets, supplemented by machine learning technologies, is driving demand for integrated screening insights and analytics. Customers often lack the internal resources to develop analytical and visualization tools, increasing the need for providers like First Advantage that offer cutting-edge integrated data analytics capabilities.

Our Growth Strategy

We intend to continue to grow our business profitably by pursuing the following strategies:

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Continue to Win New Customers: We are focused on acquiring new customers across various industry verticals, particularly those high-volume, high-velocity hirers with attractive long-term hiring outlooks, such as e-commerce, essential retail, healthcare, transportation, and home delivery. We are also prioritizing sectors that increasingly require deeper, more frequent checks with high compliance standards, such as healthcare. Our emphasis on Enterprise customers, who are well-positioned for durable, long-term growth and have complex global operations, drives the highest demand for our products and solutions. We believe our innovative and differentiated offerings, high-performing Sales and Customer Success teams, operational excellence, and industry-leading reputation will enable us to successfully expand our customer base.

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Growth within Our Existing Customer Base through Upselling and Cross-selling: Our customers often begin their relationship with us by implementing a few core products and subsequently expand their usage of our solutions platform over time to build a more comprehensive approach to screening and risk management. We drive upsell as customers extend our products and solutions to new divisions and geographies, perform more extensive screens, and purchase additional complementary pre- and post-onboarding products. We also cross-sell additional risk mitigation and compliance solutions, such as hiring tax credits and fleet solutions. Our deeply entrenched, verticalized Customer Success teams work closely with our customers to develop robust compliance and risk management programs. We believe that our total revenue opportunity with current customers can substantially increase the size of our current revenue base when considering cross-selling and upselling opportunities. Revenues from cross-sell and upsell added approximately five, five, and four percentage points to our revenue growth rate in 2024, 2023, and 2022, respectively. We will continue to focus on our sales and marketing efforts to increase product penetration within our existing customer base.

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Continue to Innovate Our Product Offerings: We plan to continue expanding our data solutions and adjacent product revenues. For example, we are investing in criminal and verification data products and identity services. We are also developing innovative solutions utilizing automation that align with our capabilities in areas such as biometric verification, fraud mitigation, and remote drug testing. The integration of Sterling’s advanced identity verification solutions, including its partnership with ID.me, enhances our ability to deliver cutting-edge offerings. We will continue to invest significantly in our technology to sustain and advance our product leadership.

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Grow Internationally: We believe we are well-positioned to continue to grow internationally. As multinational corporations increasingly systematize and elevate their human resources policies and screening providers globally, while navigating a growing set of local requirements, we are uniquely positioned to address their global risk management and compliance needs. The majority of Enterprise customers do not currently have a single global provider but are actively evaluating opportunities to consolidate their screening programs. We will continue to invest internationally to win these expansion opportunities and drive broader industry adoption, including leveraging Sterling’s established presence in certain international markets.

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Leverage Proprietary Data: With over 45 years of industry experience, we have the know-how to obtain data from robust and trusted sources, access to historical data, and the resources to put data to work. We will explore opportunities to develop, augment, and acquire proprietary data sets that could be used to fuel our existing core business and create new opportunities in various ways, including improving the speed and quality of our services, creating cost efficiencies, and building unique products.

Our Differentiated Technology

Background screening involves complex workflows, disparate internal and external data sources, and numerous integrations with third-party software providers. We believe our differentiated technology provides us with a strong competitive advantage. Our front-end technology, including our powerful UI/UX design, creates a superior applicant and customer experience, leveraging artificial intelligence (“AI”) and machine learning to optimize workflows and minimize applicant data capture errors and missing information. Our back-end technology and processing engines seamlessly integrate interactions with customer HCM platforms and other software, government, and third-party data sources, as well as internal Operations and Customer Care teams. We have been, and will continue to be, pioneers in using automation and intelligent routing technologies to optimize turnaround times, quality, and touchless end-to-end screening. Our compliance functionality governs all aspects of our technology and is designed to meet ever-changing global regulatory and compliance requirements.

Legacy First Advantage’s Technology and Operating Platform

The Legacy First Advantage background screening experience allows customers and their applicants to access our technology through intuitive, easy-to-use user interfaces, including Profile Advantage, Enterprise Advantage, and Insight Advantage, which are complemented by Sterling’s robust technology offerings.

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Profile Advantage: Our applicant-facing technology, available in 19 languages, offers intuitive design with chatbot and AI support, liveness detection techniques, and ID verification for a streamlined applicant experience. Profile Advantage provides a modern, easy-to-use experience, which is critical to accelerating time to hire. It is often the first and one of the most important early interactions between an applicant and our customers. Profile Advantage can be accessed through a computer, tablet, or mobile device and is built for Web Content Accessibility Guidelines (“WCAG”) 2.1 to be easily accessed by everyone. We believe that applicants view this experience as an important reflection of the customer. As such, customers can extend their branding to Profile Advantage to help improve applicant engagement. With its embedded AI, machine learning, and powerful features, Profile Advantage drives significant time savings for both applicants and customers and enables fast time-to-hire.

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Enterprise Advantage: Our core, proprietary, global end-to-end customer ordering and processing technology, Enterprise Advantage, enables our customers to order any of our products and solutions at scale. It has an average of 99.9% uptime due to our robust architecture design and seamlessly integrates with our customers’ business processes and workflows, third-party enterprise software systems such as HCM and ATS platforms, and third-party data sources. Through Enterprise Advantage, our customers can easily manage their screening programs, either through centralized processes or by region or division, create customized screening packages, manage screening criteria, and administer adverse action letters. The integration of Sterling’s technology enhances our capabilities, providing additional flexibility and scalability to meet diverse customer needs.

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Insight Advantage: Our innovative, dynamic data visualization tool offers our customers data analytics, dashboards, and near real-time reporting to assess their screening programs’ underlying drivers and make data-driven decisions. We leverage the customer’s unique applicant and screening data collected through Profile Advantage and Enterprise Advantage to create insights presented in dynamic dashboards. Customers have the ability to customize their dashboards and perform scenario analysis with our intuitive and flexible tools. Customers can also overlay key metrics from industry peer groups to discover and benchmark leading practices, optimizing their screening programs to deliver best-in-class performance.

We have designed the Legacy First Advantage technology architecture for extensibility. We receive data directly from the applicant through Profile Advantage and from our customers through their third-party HCM and ATS software platforms. This data is supplemented by our proprietary internal databases and external data sources as we perform screenings and verifications. Our proprietary internal databases of over 900 million records include our National Criminal Records File, which includes more than 780 million criminal records with thousands of new records added daily, and Verified!, our repository of over 120 million records, primarily consisting of prior employment and education verification records. These proprietary internal databases allow us to complete our processes quickly and cost-effectively, which accelerates the onboarding process for our customers and improves the applicant experience. We also obtain data directly from federal, state, and local government entities, laboratories and collection sites, credit bureaus, and education and work history verification providers, as well as from third-party, independent compilers of public records. Our API integrations, either through our Standard API or our REST API, allow for real-time, bidirectional, and secure data flows between us and our customers’ software platforms and external data sources, creating a seamless and integrated screening process.

Background screening and verification requirements vary from customer to customer, depending on the size and geographic footprint of the business as well as the industry vertical in which the customer operates. For example, customers in the transportation, logistics, and home delivery industry may have screening requirements relating to transportation regulatory bodies, including the DOT, FMCSA, FAA, and IFTA, that customers in other industries do not require. In addition, the laws and regulations on the use of certain information vary significantly from jurisdiction to jurisdiction and are constantly evolving. We have designed our technology to be highly configurable, allowing us to provide our customers with tailored solutions that meet their specific needs.

Our flexible, scalable, and highly integrated technology, enhanced by our investments in automation and AI, has driven significant operational efficiencies and enabled us to achieve one of the highest customer satisfaction ratings among our competitors for quality, accuracy, and turnaround times. We will continue to innovate using agile software development methodologies, focusing on user-centered design, to bring leading products and solutions to the market.

Sterling’s Technology and Operating Platform

Sterling’s technology platform complements Legacy First Advantage’s existing capabilities, providing a robust set of cloud-based, proprietary tools that enhance our service offerings. These tools provide access to court records, expedite workflows, and deliver fast accurate results. The outputs of these technology tools are seamlessly integrated into Sterling’s customer and applicant interfaces and Sterling’s customers’ HCM systems, enabling a simple, fast, and unified applicant hiring experience. Sterling’s systems cannot easily be replicated and have enabled Sterling to achieve some of the fastest turnaround times in the industry while maintaining the quality its customers expect.

Customer and Applicant Interfaces

At the center of the Sterling background screening experience are the Sterling Candidate Hub, Sterling Client Hub, and Sterling Analytics Hub, each purpose-built to meet the needs of specific end users.

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Sterling Candidate Hub: The Sterling Candidate Hub is one of the first interactions applicants have with Sterling customers and positive first impressions can lead to improved job acceptance rates, employee satisfaction, and productivity. In response to these needs, Sterling developed an intuitive, frictionless, and mobile-first applicant experience. The Sterling Candidate Hub provides a streamlined process for applicants to interact with Sterling and manage their entire screening process. The platform allows applicants the flexibility to provide information from any device in multiple languages and enables them to save time with mobile document uploads and e-signature capabilities. The platform is intelligent, customizing the information requested based on the specific package of services ordered, ensuring applicants need not waste time providing extraneous information. Progress is managed through text notifications and reminders.

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Sterling Client Hub: The Sterling Client Hub consolidates applicant orders and data into a single, unified workflow, allowing customers to easily place orders, manage tasks, monitor statuses, and view consumer reports. Results are easy to read with intuitive displays and collapsible/expandable search details. The platform is flexible by design, allowing customers to configure permissions, access control by role, invitation and task workflows, packages, and adjudication rules. Single-sign-on capabilities allow customers to manage their programs consistent with security best practices. The Sterling Client Hub is designed to be easily augmented with new services, and regularly updated to meet evolving compliance standards.

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Sterling Analytics Hub: Sterling Analytics Hub provides customers with a customizable, powerful data analytics platform to display a comprehensive view of their screening programs. This robust suite of dashboards provides customers with the information they need to gain better insights and make data-driven decisions as they seek to manage, streamline, and optimize their programs. The Sterling Analytics Hub puts comprehensive program management one click away while providing drill-down capabilities and underlying data.

Fulfillment Technology

Sterling has continually invested, innovated, and iterated on fulfillment technology and data acquisition. The Sterling fulfillment platform leverages thousands of proprietary and AI-driven automation integrations, including APIs and RPA bots, which enables Sterling to complete 55% of U.S. criminal searches within the first five minutes, 64% of U.S. criminal searches within the first 15 minutes, over 70% of U.S. criminal searches within the first hour, and 90% within the first day.

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CourtDirect Technology: This technology automates a historically manual and time-consuming process by integrating with jurisdictions throughout the U.S. With access to millions of criminal records, CourtDirect provides faster turnaround times while decreasing human data entry errors. Because CourtDirect is a proprietary technology, Sterling uses vendors to retrieve county court records on a limited basis, unlike many of our competitors.

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SmartData Technology: This technology operationally assists with criminal records matching and reportability using proprietary AI matching algorithms. The technology also standardizes criminal charges, conviction codes, and disposition codes among the thousands of courts within the U.S. Through years of work, Sterling has standardized thousands of permutations of state, charge, and disposition combinations. The standardization work that SmartData performs also allows Sterling to administer a customer’s customized adjudication matrix at their direction more easily.

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Verifications Portal: The Verifications Portal is a proprietary fulfillment platform that delivers increased efficiencies, higher productivity, improved quality, and faster turnaround times for customers. The Verifications Portal’s functionality removes the need for manual work assignment by queuing up the next available work for a verifier based on the employee’s skill set. Additionally, it leverages algorithms to intelligently group and map work. The Verifications Portal is used in conjunction with direct APIs to our vendor partners and our proprietary Verifications Contact Database that tracks known entities and their preferred mode of fulfillment, decreasing the verifier’s research time. This database is a proprietary asset compiled over many years and updated daily, providing a strong competitive advantage in enabling us to fulfill verifications more efficiently.

Legacy First Advantage’s Product Suite

Legacy First Advantage’s comprehensive product suite enables our customers across all industry sectors to perform pre-onboarding screening and post-onboarding monitoring of employees, contractors, contingent workers, tenants, and drivers. We generally classify our products and solutions into three categories: pre-onboarding, post-onboarding, and adjacent products, each of which is enabled by our technology, proprietary internal databases, and data analytics capabilities.

Pre-Onboarding

We offer an extensive array of products and solutions that customers utilize to enhance their applicant evaluation process, support compliance from the time applicant information is initially requested and submitted to an applicant’s successful onboarding, and enhance workplace safety. Our technology is flexibly tailored to each customer’s requirements, which could include a wide array of search categories such as Social Security number verification, education and employment verification, federal criminal checks, statewide criminal checks, country criminal checks, sex offender registry, and global sanctions. Our pre-onboarding products include:

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Criminal Background Checks: Utilizes our proprietary National Criminal Records File database, along with court and other public records, to help identify relevant matching and reportable criminal record histories.

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Drug / Health Screening: Offers various drug screening products, including saliva, urine, hair, and blood testing options, physical exams, and instant oral drug screening products performed by mouth swab collection.

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Extended Workforce Screening: Enables our customers to efficiently screen large numbers of contingent, contract, and temporary workers across various search types.

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FBI Channeling: As an approved Federal Bureau of Investigation (“FBI”) channeler, handles submissions of fingerprints to the FBI National Criminal Records database and returns Criminal Record Information from the FBI to authorized recipients, including through a secure connection to the Financial Industry Regulatory Authority (“FINRA”) and the Nationwide Multi-state Licensing System (NMLS).

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Identity Checks and Biometric Fraud Mitigation Tools: Includes government ID validation, liveness detection techniques, digital fingerprint collection, and identity and fraud mitigation tools, now enhanced by Sterling’s advanced identity verification solutions.

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Education / Work History Verification: Verifies work history and education of applicants, leveraging our proprietary Verified! Database and SmartHub technology fueled by AI, internal fulfillment, or through relationships with other data providers.

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Driver Records and Compliance: Collection and storage of driver qualification files, as well as drug screening and background checks to assist with compliance with the requirements of the U.S. Department of Transportation (“DOT”), Federal Motor Carrier Safety Administration (“FMCSA”), Federal Aviation Administration (“FAA”), International Fuel Tax Agreement (“IFTA”), and other regulatory agencies across the entire U.S.

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Healthcare Credentials: Through our extensive Healthcare Exclusions Actions and Licensures (“HEAL”) product, verifies and documents the educational background, training, experience, and other credentials of healthcare employees, contractors, volunteers, and vendors, including identifying exclusions and sanctions by medical boards, Medicaid and Medicare, the Office of Inspector General, and the General Services Administration.

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Executive Screening: Provides in-depth investigative reports to confirm various aspects of credentials not typically covered by most background checks, such as civil litigation and bankruptcies, negative media searches, controversies and inconsistencies in business dealings, corporate and regulatory history, and potential conflicts of interest.

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Others: Includes screening products such as global sanctions, professional licenses and credentials verification, and social media checks.

Post-Onboarding

Companies face a heightened responsibility to ensure safety and comply with laws, regulations, and licensing requirements after the initial screening and onboarding of an applicant. To assist those needs, we provide our customers with continuous monitoring and re-screening solutions that are important tools to help keep their end customers, workforces, and other stakeholders safe, productive, and compliant. Continuous monitoring solutions allow customers to be proactively alerted as soon as relevant information, which may require immediate attention and action, becomes available. Our post-onboarding solutions include:

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Criminal Records Monitoring: Provides background screening reports on an ongoing basis post-onboarding of any reportable criminal records of their employees, contractors, contingent workers, and drivers.

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I-9 Verification: Enables our customers to simplify and manage the process of onboarding new hires by streamlining employment eligibility verification through the convenience of digital workflows.

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Healthcare Sanctions: Our HEAL product provides ongoing healthcare-related compliance monitoring, which helps our customers comply with their obligations as employers of doctors, nurses, other employees, and vendors, reporting any changes in the status of required licenses.

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Motor Vehicle Records: Provides customers with a streamlined process to establish an initial driver file and enroll drivers into the continuous monitoring program, which reports any driver records changes.

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Global Sanctions and Licenses: Continuously monitors more than 2,500 source lists and searches a broad range of individual watchlists and key sanctions sources.

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Social Media: Offers ongoing post-onboarding social media background screening reports tailored to a customer’s specific criteria.

Adjacent Products

We also offer adjacent products that complement our pre-onboarding and post-onboarding products and solutions:

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Fleet and Vehicle Compliance: Comprehensive solutions for fleet managers to support compliance with various state and federal requirements, including licenses, titles, registrations, and gas taxes.

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Hiring Tax Credits and Incentives: Identifies and processes U.S. employment tax credits and economic incentive programs, including the Federal Work Opportunity Tax Credit (“WOTC”) program and other federal, state, and local incentives. Uses data collected from applicants during their background screen to increase quality and efficiency.

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Resident and Tenant Screening: Enables property managers, landlords, owners, and leasing agents to screen prospective tenants.

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Investigative Research: Provides in-depth investigative reports, similar to our Executive Screening products, used in performing due diligence of investment managers and senior executives before a major investment commitment or M&A transaction.

Our suite of products is available individually or through packaged solutions configured and tailored according to our customers’ needs. For example, through our RoadReady solution, we provide comprehensive driver and fleet solutions to assist with compliance and asset management. Our driver compliance products include pre-onboarding background checks, MVRs, drug tests, driver files, and post-onboarding monitoring. Our asset management products related to vehicle compliance include title management, registration, fuel and gas tax, permits, transponder management, and ongoing data analytics.

Sterling’s Suite of Services

In addition to Legacy First Advantage’s offerings, Sterling enhances our product suite with a range of identity verification and background check solutions that are critical in today’s hiring landscape. Sterling’s identity verification services provide our customers with real-time information about an applicant to help validate and verify who they are hiring before they begin a background check. With the continued movement toward remote work, the prevalence of digitized identification information, and the increase in data breaches, there is an ever-growing risk that an applicant may be using a stolen identity when applying for a job and completing a background check. Our comprehensive set of solutions helps customers mitigate that risk through the following services:

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Online Identity-as-a-Service Suite: Sterling’s exclusive partnership with ID.me provides an identity solution recognized as best-in-class and adopted by numerous U.S. federal agencies and states. This suite includes telecom and device verification, identification document verification, facial recognition with biometric matching, Social Security number verification, and live video chat identification proofing.

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Fingerprinting Services: Sterling provides fingerprinting services through a proprietary technology in a single-sourced and convenient national network with locations across the entire U.S. This state-of-the-art digital fingerprint capture technology reduces rejection rates and speeds up processing for faster onboarding.

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Background Checks: Sterling’s background check solutions utilize proprietary automation technology that delivers thorough, fast, and accurate records. This includes criminal record checks, sex offender registries, civil court records, motor vehicle records, executive investigations, credit reports, liens, judgments, bankruptcies, and social media searches.

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Credential Verification: Sterling’s global verification services include employment verification, education verification, credential verification, professional reference checks, and Department of Transportation verifications.

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Drug and Health Screening: Sterling’s U.S. drug and health screening services offer comprehensive pre-and post-hire drug screening with access to an expansive nationwide collection network.

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Onboarding Solutions: Sterling’s onboarding solutions include onboarding forms that ease the burden of processing employee documentation.

Our Customers

We serve a diversified customer base with 80,000 customers globally in 2024. Our customer base varies in size and industry, encompassing healthcare, retail and e-commerce, transportation, manufacturing and industrials, financial services, technology, media and entertainment, hospitality, business and professional services, general staffing, and gig economy. We have executed a concerted go-to-market strategy to target customers with large, complex workforces and have built a leading customer portfolio in this area as a result. Our customers operate in different industries across almost all facets of the global economy, with particular strength in sectors experiencing favorable secular trends such as e-commerce, retail, transportation, warehousing, and healthcare.

We have maintained a gross retention rate of approximately 96% in 2024 and achieved an average tenure of 12 years among our top 100 customers. Our customer relationships are contractual in nature and typically have multiple-year terms. Sterling has supplemented many of their contracts to include exclusivity or primary provider terms and exclude termination for convenience clauses.

For the year ended December 31, 2024, we had one customer that accounted for approximately 12% of our revenues, with no other customer accounting for 10% or more of our total revenues for that period. As of December 31, 2024, we performed screens in over 200 countries and territories, with a major presence in the United States, the United Kingdom, and India. Approximately 86% of our revenues for the year ended December 31, 2024 was generated in the U.S., while the remaining 14% was generated abroad.

Sales and Marketing

We believe our integrated sales and marketing approach, combining the strengths of Legacy First Advantage and Sterling, positions us uniquely in the market and enhances our ability to capture additional market share. Our unified go-to-market team is organized by industry verticals and regions, allowing us to effectively target new accounts and identify additional opportunities within existing accounts. This structure enables our sales professionals to be highly knowledgeable about industry-specific screening requirements, ensuring they can deliver value-added, tailored solutions to both existing and prospective customers.

Our sales representatives are trained to adopt a consultative approach throughout the entire sales process, which includes discovery, demonstration, negotiation, and closing. By understanding the specific challenges and nuances faced by customers in various industries, they can design pursuit strategies and propose solutions that meet the unique needs of each customer. This customer-centric focus ensures that we keep the customer at the center of our process, driving satisfaction and loyalty.

The integration of our Customer Success professionals into the go-to-market team further enhances our ability to deliver exceptional service. These professionals are also organized by verticals and regions, fostering deep relationships with customers and building local expertise in compliance and screening standards. They maintain ongoing interactions with key customer users and program owners, conducting regular formal account reviews to ensure high performance, satisfaction, and retention. Additionally, they organize customer advisory boards and events to gather product insights, drive innovation, and share best practices, which contributes to our industry-leading customer satisfaction scores and high retention rates.

Our relationships with HCM software providers remain a critical aspect of our sales and marketing strategy. Our technology is tightly integrated with major HCM and ATS platforms, offering greater speed and efficiency while enhancing the value of our solutions to our customers. Maintaining strong relationships with these third-party software providers is essential for generating new sales leads and providing market validation for our offerings.

We also employ a variety of marketing strategies to promote our products and solutions through both direct and indirect channels. Our marketing activities include traditional and online initiatives designed to generate sales leads, increase market awareness, and enhance the perception of our brand. We leverage referral partners, channel partnerships, digital advertising, search engine optimization, webinars, social media, thought leadership, and event-based marketing. Our participation in industry conferences and frequent publications in the industry press further bolster our visibility. Additionally, our annual customer conference, Collaborate, features presentations by subject matter experts and our customers on a wide range of industry topics, facilitating discussions and serving as a valuable resource on industry best practices. We believe we are able to capitalize on the network effects as we build goodwill through customer reviews and testimonials, word-of-mouth referrals, and references from other industry participants.

Competition

The global background screening and identity verification industry is highly fragmented and competitive. There are numerous local and single-country companies, but few multinational firms operate with the scale and reach necessary to serve diverse customer needs effectively. Our competitors vary based on customer size, industry vertical, geography, and product focus.

We compete with large players that offer broad capabilities and comprehensive product suites, as well as vertical-focused specialist firms targeting customers in select industries. Additionally, we face competition from mid-sized players and companies that serve small and medium-sized business (“SMB”) customers. Some competitors are aligned with specific products in certain pre- and post-onboarding product lines, such as drug and health screening and executive screening. In our adjacent products market, we compete with companies specializing in fleet and vehicle compliance, hiring tax credits and incentives, resident and tenant screening, employment eligibility, and investigative research.

The market for our products and solutions is subject to constant change, with numerous sources of competition and new entrants frequently emerging.

The principal competitive factors affecting our markets include:

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Reliability of Screening Results: The accuracy and dependability of the information we provide are critical to our customers’ decision-making processes.

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Turnaround Time of Screening Results: Speed is essential in the hiring process, and our ability to deliver timely results is a key differentiator.

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Product, Package, and Solution Pricing: Competitive pricing structures are vital for attracting and retaining customers.

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Applicant and Enterprise User Experience: The ease of use, level of functionality, scalability, and efficiency of our solutions significantly impact customer satisfaction.

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Breadth and Depth of Screening Solutions: A comprehensive suite of offerings allows us to meet diverse customer needs effectively.

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Geographical Reach: Our ability to operate in multiple countries and territories enhances our value proposition to multinational customers.

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Sales and Marketing Relationship History: Strong relationships with key decision-makers can influence purchasing decisions.

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Compliance and Regulation: Our expertise in navigating complex regulatory environments is a competitive advantage.

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Industry Vertical Support: Tailoring our solutions to meet the specific requirements of various industries enhances our appeal.

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Technical and Systems Performance: The ability to integrate seamlessly with customer and third-party systems and applications is crucial for operational efficiency.

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Cybersecurity, Privacy, and Data Protection: As data security becomes increasingly important, our commitment to protecting customer information is a significant competitive factor.

We believe we compete favorably based on these factors. The integration of Sterling’s capabilities further strengthens our competitive position, allowing us to offer specialized and innovative solutions backed by exceptional customer support and deep market knowledge. However, our ability to remain competitive will depend on our continued performance in these areas. For additional information, see “Risk Factors—Risks Related to Our Business—We operate in a penetrated and competitive market.”

Government Regulations

Due to the nature of our business, we are subject to significant and extensive U.S. federal, state, local, and foreign laws and regulations. These laws and regulations include national, international, state, and local cybersecurity, privacy and data protection, health, taxation, anti-corruption and anti-money laundering, antitrust / competition, enterprise credit reporting agencies and environmental, health and safety protection. Taking commercially reasonable steps to comply with such laws and regulations is an important priority for us.

Regulators worldwide have adopted or proposed national, international, state, and local laws that regulate consumer protection, cybersecurity, privacy, data protection, and/or business credit reporting. These laws impact, among other things, the collection, use, disclosure, sale, transfer, receipt, storage, transmission, destruction, and other processing of personal data (collectively, “Processing”). The principal laws and regulations that impact our business include, but are not limited to:

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FCRA, which regulates the use of consumer report information and governs the accuracy, fairness, and privacy of such information;

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Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), which prohibits unfair, deceptive, or abusive acts or practices with respect to consumer financial services practices;

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Gramm-Leach-Bliley Act, which regulates the use of non-public personal financial information held by financial institutions;

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Health Insurance Portability and Accountability Act, which restricts the public disclosure of patient information and applies indirectly to companies that provide services to healthcare-related businesses;

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Drivers’ Privacy Protection Act, which restricts the public disclosure, use, and resale of personal data contained in state department of motor vehicle records;

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U.K. Digital Identity & Attributes Trust Framework, which provides for a set of rules and standards for digital identity products;

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Various U.S. federal, state, and local data protection and consumer reporting agency laws at the state level, state data breach laws, and state privacy laws, such as the California Consumer Privacy Act of 2018 (as amended, the “CCPA”) and the Illinois Biometric Information Privacy Act;

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International data protection, data localization, and similar laws and regulations impacting our services and data suppliers, such as the U.K. and EU GDPR; and

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Oversight by regulatory authorities for engaging in consumer reporting, including the FTC and CFPB in the United States.

These laws and regulations, which are generally designed to protect individuals’ privacy and prevent the misuse of personal data or unauthorized access to data, are complex, subject to ongoing changes in regulations and amendments, and inconsistent between jurisdictions. We proactively manage our compliance with laws and regulations through the use of a number of resources, including our in-house legal and compliance department, external law firms, trade associations, and local suppliers and partners to understand the legal and regulatory requirements and practices that may impact the delivery of our products and solutions as well as our customers’ use of the same in light of employment, privacy and other laws and regulations. Our Chief Legal Officer leads our legal and compliance department. The compliance team consists of regional compliance officers globally, with local compliance officers reporting through that hierarchy. Through the legal and compliance functions, we train our team members with respect to compliance with laws and regulations as well as our policies and procedures, monitor changes to relevant material laws and regulations, and meet with regulators and legislators, as necessary and appropriate, to establish transparency of our operations and build trust.

Public concern is high with respect to the processing of personal data, including Social Security numbers, financial information, and medical information. In the future, additional legislative or regulatory efforts in the United States and internationally could further regulate the processing of personal data that we process in the conduct of our business. For additional information, see the section titled “Risk Factors—Risks Related to Our Business—If regulatory regimes continue to heighten their scrutiny over personal data and data security, it could lead to increased restrictions, loss of revenue opportunity, greater costs of compliance, and lost efficiency” and “— Any damage to our reputation or our brand could adversely affect our business, financial condition, and results of operations.”

Intellectual Property

Our success depends, in part, on developing, maintaining, protecting and enforcing our proprietary technology and intellectual property rights. We own and control various intellectual property rights, such as confidential information, trade secrets, trademarks, service marks, trade names, domain names, copyrights, patents, and U.S. and foreign registrations and applications in the foregoing. We are licensed to use certain technology and other intellectual property rights owned and controlled by others, and certain third parties are licensed to use certain technology and other intellectual property rights owned and controlled by us.

Obtaining, maintaining, protecting and enforcing our intellectual property and proprietary rights is an important aspect of our business. We rely on a combination of statutory (e.g., copyright, trademark, trade secret, patent), contract, and liability safeguards (e.g., confidentiality and invention assignment agreements with our employees and contractors and nondisclosure agreements with our vendors) to protect our intellectual property in the United States, and other jurisdictions. We currently have patent and trademark applications pending in several jurisdictions. Filing these applications does not guarantee patents will be issued or that our trademark applications will proceed to registration without challenge, but may provide us with legal defense and allow us to pursue the protection of our intellectual property to the extent we believe it would be beneficial and cost-effective.

While we believe that our intellectual property, in the aggregate, is generally important to our business and operations, we do not regard any aspect of our business as being dependent upon any single patent, group of patents or other intellectual property right. However, the First Advantage name and related trade names, marks, and logos are of material importance to our business, and their loss could have a significant negative impact on us.

See the section titled “Risk Factors” for a more comprehensive description of risks related to our intellectual property and proprietary rights.

Seasonality

We experience seasonality with respect to certain industries due to fluctuations in hiring volumes and other economic activity. For example, pre-onboarding revenues generated from our customers in the retail and transportation industries are historically highest during the months of October and November, leading up to the U.S. holiday season and lowest in December and at the beginning of the new year, following the U.S. holiday hiring season. Certain customers across various industries also historically increase their hiring throughout the second quarter of the year as winter concludes, and the school year ends, giving rise to student and graduate hiring, and increased commercial activity tied to outdoor activities. We expect that further growth in e-commerce, the continued digital transformation of the economy, and other economic factors may impact future seasonality, but we are unable to predict these potential shifts and how our business may be impacted.

Human Capital

Central to our strategy is attracting, developing and retaining the best talent globally with the right skills to drive our success. The capabilities of the Company’s workforce have continued to evolve along with its business and strategy. Key focus areas of the Company’s human capital management strategy are described below, and additional information can be found in its most current Sustainability Report, available on the Company’s website (which is not incorporated by reference herein).

As of December 31, 2024, we had approximately 10,000 employees in 19 countries. Our workforce also engages third-party contractors as an ongoing part of our business where appropriate. None of our employees are subject to a collective bargaining agreement, and no work stoppages have been experienced. We consider our relationship with our employees to be good.

Global Code of Conduct and Ethics

The quality of our products and operations affects our reputation, productivity, profitability, and market position. Our objective is to create a work environment that allows and encourages all employees to perform their duties in an efficient, effective manner. We have established a Global Code of Conduct and Ethics (“Code”). Compliance with the provisions of the Code is a basic condition of employment at First Advantage.

Equal Employment

We strive for all of our employees to work in an environment where we are treated with dignity and respect. We are an equal opportunity employment employer and are committed to providing a workplace that is free of discrimination of all types from abusive, offensive, or harassing behavior. We are committed to creating such an environment because it brings out the full potential in each of our employees, which, in turn, contributes directly to our business success.

Culture and Inclusion

The success of our company and the value we provide to our customers stem from the strength of our global workforce. We are dedicated to fostering a workplace that values each individual and promotes equal opportunities for all employees. Our active Culture & Inclusion (“C&I”) programs are designed to create an environment that respects differences and encourages collaboration.

Our initiatives include (1) talent attraction strategies that ensure equal employment opportunities for all applicants, (2) employee development and training programs, and (3) efforts to cultivate a supportive business culture through mentoring and engagement initiatives.

We believe that a respectful work environment, where all employees are treated fairly, is essential for attracting a broad pool of qualified candidates. This approach not only enhances innovation and creativity but also strengthens our relationships with stakeholders. Our goal is to attract, develop, and retain top talent from various backgrounds, fostering a culture where everyone feels respected and has the opportunity to excel in their careers.

As we continue to enhance our workplace culture, we are prioritizing our People & Culture processes to support our organizational mission and engage all employees in our goals. By adopting the C&I framework, we emphasize the importance of every employee's voice and contribution, ensuring that all team members feel valued in our decision-making processes. This approach aligns with our sustainability objectives, as engaged employees are crucial for driving innovation and fostering a collaborative culture.

We believe that by concentrating on Culture and Inclusion, we can create a more dynamic and supportive workplace that empowers individuals to thrive and contribute to our collective success. We are committed to building an environment where everyone can excel.

Additional Information

First Advantage Corporation, a Delaware corporation, was incorporated in November 2019. We completed our initial public offering (“IPO”) of our common stock in June 2021.

We use our websites (https://fadv.com/ and https://investors.fadv.com/) to distribute company information. We make available free of charge a variety of information for investors, including our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, as soon as reasonably practicable after we electronically file that material with or furnish it to the Securities and Exchange Commission (“SEC”). The information we post on our websites may be deemed material. Accordingly, investors should monitor our websites, in addition to following our press releases, filings with the SEC, and public conference calls and webcasts. In addition, you may opt in to automatically receive email alerts and other information about First Advantage when you enroll your email address by visiting the “Request Email Alerts” section of our investor website at https://investors.fadv.com/. The contents of our websites and social media channels are not, however, a part of this Annual Report.