FIRST ADVANTAGE CORP
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
FA$23.53+1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0001193125-25-175442
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001193125-25-269602
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 190 previous paragraphs and 190 current paragraphs.
100 unchanged; 78 reworded; 12 added; 10 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Current macroeconomic conditions—including elevated interest rates, persistent inflation, and fluctuations in job openings and hiring activity—continue to impact portions of the global economy. Geopolitical tensions—including ongoing conflicts in Ukraine and the Middle East—and recent trade policy actions, such as newly imposed tariffs between the U.S. and China, have further disrupted global supply chains and heightened market volatility. These factors have led to increased operating costs and reduced business confidence for companies, particularly in globally exposed sectors.
Current report
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted into law in the United States, introducing substantial changes to the U.S. Corporate tax regime. Key provisions of the OBBBA include the reinstatement of 100% bonus depreciation, restoration of immediate expensing for domestic research or experimental (“R&E”) expenditures, an elective acceleration of deduction for unamortized domestic R&E expenditures, revised limitations on the deductibility of business interest expense, and modifications to the Global Intangible Low-Tax Income (“GILTI”) and Foreign-Derived Intangible Income (“FDII”) regimes. The OBBBA includes multiple effective dates, with certain provisions effective for tax years beginning after December 31, 2024 and others phased in through 2027. In accordance with ASC 740, Income Taxes, the Company has reflected the impacts of OBBBA in the interim period that includes the enactment date. The resulting effects have been incorporated into the Company’s income tax provision for the nine months ended September 30, 2025, including adjustments to deferred tax assets and liabilities where applicable. The Company continues to evaluate the broader implications of the OBBBA, including potential impacts on future taxable income, the estimated annual effective tax rate, and potential effects of future regulatory guidance issued by the Internal Revenue Service or other relevant tax authorities. Additional impacts, if any, will be recognized in subsequent periods as appropriate.
Current report
Additionally, on October 1, 2025, the U.S. federal government entered a partial shutdown, resulting in widespread furloughs and delays in the release of key economic data. If prolonged, the shutdown may contribute to increased economic uncertainty, potentially affecting customer demand, hiring activity, regulatory timelines, and overall business sentiment. We continue to monitor the situation and assess any potential impacts on our operations and financial performance.
Current report
Loss on Extinguishment of Debt: Represents non-operating expense incurred when we repay or refinance debt prior to maturity. This includes the write-off of unamortized debt issuance costs and early repayment penalties, if any.
Current report
$12.1 million of personnel expenses recognized after the Sterling Acquisition;
Current report
$1.2 million increase in bad debt expense as certain groups of customers have experienced longer than normal payment cycles;
Current report
$0.8 million related to cash compensation expense due to the conversion of Sterling equity awards to cash awards as part of the transaction.
Current report
$43.8 million of personnel expenses recognized after the Sterling Acquisition;
Current report
$4.8 million related to cash compensation expense due to the conversion of Sterling equity awards to cash awards as part of the transaction.
Current report
Net income (loss) was $2.6 million for the three months ended September 30, 2025, compared to $(8.9) million for the three months ended September 30, 2024. Net income for the three months ended September 30, 2025 increased by $11.5 million compared to the three months ended September 30, 2024.
Current report
Net income (loss) margin was 0.6% for the three months ended September 30, 2025, compared to (4.4)% for the three months ended September 30, 2024. The improvement in our net income margin is attributable to our ability to leverage operational efficiencies to control overall expenses, while increasing revenues. These improvements were offset by increases in depreciation and amortization and interest costs, primarily as a result of the Sterling Acquisition.
Current report
Non-GAAP Financial Measures
Removed paragraphs (10)
Previous report
Current macroeconomic conditions—including elevated interest rates, persistent inflation, and fluctuations in job openings and hiring activity—continue to impact portions of the global economy. Additionally, global economic volatility driven by geopolitical tensions, ongoing conflicts, including in the Ukraine and Middle East, and uncertainty around monetary policy has led to increased caution across our customer base. Emerging and ongoing trade disputes between major global economies have also contributed to supply chain disruptions, increasing costs and reducing business confidence, particularly in sectors with global exposure. These trade tensions can slow economic activity, impact cross-border hiring trends, and reduce demand for certain customer verticals that rely on international talent and operations. Furthermore, the current U.S. presidential administration continues to signal its intention to implement significant changes to U.S. trade policy, the size of the federal government and the enforcement of various regulations, which has increased economic uncertainty. These policy shifts could introduce additional market instability and reduce investor confidence and could negatively affect our business, financial condition, and operating results.
Previous report
On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the U.S. Significant provisions of the OBBBA include the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented periodically through 2027. We are currently assessing the impact of the OBBBA on our consolidated financial statements.
Previous report
Loss on Extinguishment of Debt: Reflects losses on the extinguishment of debt.
Previous report
$1.2 million related to post-combination restructuring costs;
Previous report
$1.1 million related to cash compensation expense due to the conversion of Sterling equity awards to cash awards as part of the transaction.
Previous report
$3.0 million related to post-combination restructuring costs.
Previous report
Net income was $0.3 million for the three months ended June 30, 2025, compared to $1.9 million for the three months ended June 30, 2024. Net income for the three months ended June 30, 2025 decreased by $1.6 million compared to the three months ended June 30, 2024.
Previous report
Key Operating and Financial Metrics
Previous report
In connection with the Sterling Acquisition, on October 31, 2024, the Company refinanced its existing First Lien Credit Agreement and all related Sterling debt (the “2024 First Lien Credit Agreement”). The 2024 First Lien Credit Agreement provides for a term loan of $2.185 billion due October 31, 2031, carrying an interest rate of 3.00% to 3.25%, based on the first lien ratio, plus SOFR (“Amended First Lien Credit Facility”) and a $250.0 million revolving credit facility due October 31, 2029 (“Amended Revolver”).
Previous report
The 2024 First Lien Credit Agreement is unconditionally guaranteed by Fastball Parent, Inc., a wholly-owned subsidiary of the Company and the direct parent of the borrower, and material wholly owned domestic restricted subsidiaries of Fastball Parent, Inc. The 2024 First Lien Credit Agreement and the guarantees of such obligations, are secured, subject to permitted liens and other exceptions, by (1) a first priority security interest in certain tangible and intangible assets of the borrower and the guarantors and (2) a first-priority pledge of 100% of the capital stock of the borrower and of each wholly-owned material restricted subsidiary of the borrower and the guarantors (which pledge, in the case of any non-U.S. subsidiary of a U.S. subsidiary, does not include more than 65% of the voting stock of such non-U.S. subsidiary).
Reworded paragraphs (78)
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, 2025, and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2024, 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, 2024. All discussions and information in this Quarterly Report on Form 10-Q regarding our business and financial results in 2024 relate solely to our operations prior to the acquisition of Sterling Check Corp. (“Sterling” and such acquisition, the “Sterling Acquisition”), unless otherwise indicated.
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, 2025, and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2024, 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, 2024. All discussions and information in this Quarterly Report on Form 10-Q regarding our business and financial results in 2024 relate solely to our operations prior to the acquisition of Sterling Check Corp. (“Sterling” and such acquisition, the “Sterling Acquisition”), 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: the failure to realize the expected benefits of the Sterling Acquisition, 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, global trade disputes, and 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 (“AI”); 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; our sales to government entities and higher-tier contractors to governmental customers which involve unique competitive, procurement, budget, administrative and contractual risks; 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; 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 executives 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 …
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 the Sterling Acquisition; 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, global trade disputes, uncertainty in financial markets, and changes in tax laws; 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 (“AI”); 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; our sales to government entities and higher-tier contractors to governmental customers which involve unique competitive, procurement, budget, administrative and contractual risks; 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; 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 executives 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 info…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
Together, 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. Our 80,000 customers are global enterprises, mid-sized companies, and small companies, and our products and solutions are used by personnel in recruiting, human resources, risk, compliance, vendor management, safety, and/or security.
Current wording
Together, we derive a substantial majority of our revenues from pre-onboarding screening and perform services across over 200 countries and territories, enabling us to serve as a one-stop-shop provider to both multinational companies and growth companies. Our 80,000 customers are global enterprises, mid-sized companies, and small companies, and our products and solutions are used by personnel in recruiting, human resources, risk, compliance, vendor management, safety, and/or security.
Previous wording
We generated revenues of $390.6 million for the three months ended June 30, 2025, as compared to $184.5 million for the three months ended June 30, 2024 and generated revenues of $745.2 million for the six months ended June 30, 2025, as compared to $354.0 million for the six months ended June 30, 2024. Approximately 86% of our revenues for the three and six months ended June 30, 2025 was generated in the United States, while the remaining 14% was generated abroad. 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, 2025. Please refer to “Results of Operations” for further details.
Current wording
We generated revenues of $409.2 million for the three months ended September 30, 2025, as compared to $199.1 million for the three months ended September 30, 2024 and generated revenues of $1,154.4 million for the nine months ended September 30, 2025, as compared to $553.1 million for the nine months ended September 30, 2024. Approximately 86% of our revenues for the nine months ended September 30, 2025 was generated in the United States, while the remaining 14% was generated abroad. 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, 2025. Please refer to “Results of Operations” for further details.
Previous wording
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 demand for healthcare workers, 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.
Current wording
We experience seasonality with respect to certain industries as a result of fluctuations in hiring volumes and other economic activities. 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 anticipate that evolving consumer trends, labor market dynamics, technological advancements, and broader macroeconomic conditions may impact future seasonality, but we are unable to predict these potential shifts and how our business may be impacted.
Previous wording
The Company derives revenues from a variety of background screening and adjacent products that cover all phases of the workforce lifecycle from pre-onboarding screening services to post-onboarding and ongoing monitoring services, covering employees, contractors, contingent workers, tenants, and drivers. We generally classify our products and solutions into three major categories: pre-onboarding, post-onboarding, and adjacent products, each of which is enabled by our technologies, proprietary internal databases, and data analytics capabilities. Pre-onboarding products, which comprise the substantial majority of our revenues, span an extensive array of products that customers typically utilize to enhance their candidate evaluation process and support compliance with their workforce onboarding criteria from the time an application is submitted to a candidate’s successful onboarding. Post-onboarding products are comprised of continuous monitoring, re-screening, and other solutions to help our customers keep their end customers, workforces, and other stakeholders safer, more productive, and more compliant. Adjacent products include products that complement our pre-onboarding and post-onboarding solutions such as fleet and vehicle compliance, hiring tax credits and incentives, resident and tenant screening, employment eligibility, and investigative research.
Current wording
The Company derives revenues from a variety of background screening and adjacent products performed across all phases of the workforce lifecycle from pre-onboarding screening services to post-onboarding and ongoing monitoring services, covering employees, contractors, contingent workers, tenants, and drivers. We generally classify our products and solutions into three major categories: pre-onboarding, post-onboarding, and adjacent products, each of which is enabled by our technologies, proprietary internal databases, and data analytics capabilities. Pre-onboarding products, which comprise the substantial majority of our revenues, span an extensive array of products that customers typically utilize to enhance their candidate evaluation process and support compliance with their workforce onboarding criteria from the time an application is submitted to a candidate’s successful onboarding. Post-onboarding products are comprised of continuous monitoring, re-screening, and other solutions to help our customers keep their end customers, workforces, and other stakeholders safer, more productive, and more compliant. Adjacent products include products that complement our pre-onboarding and post-onboarding solutions such as fleet and vehicle compliance, hiring tax credits and incentives, resident and tenant screening, employment eligibility, and investigative research.
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 the Sterling Acquisition. We expect selling, general, and administrative expenses to increase in the short-term, primarily as a result of additional Sterling integration costs. Over the long-term, we expect 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 the Sterling Acquisition. We do not allocate depreciation and amortization to selling, general, and administrative expenses.
Previous wording
Provision for income taxes consists of domestic and foreign corporate income taxes related to earnings from our sale of products and services, with statutory tax rates that differ by jurisdiction. Our effective tax rate may be affected by many other factors including changes in tax laws, regulations or rates, new interpretations of existing laws or regulations, shifts in the allocation of income earned throughout the world, and changes in overall levels of income before tax.
Current wording
Provision for income taxes consists of domestic and foreign corporate income taxes related to earnings from our sale of products and services, with statutory tax rates that differ by jurisdiction. Our effective tax rate may be affected by various factors including changes in tax laws, regulations, credits or rates, new interpretations of existing laws or regulations, shifts in the allocation of income earned throughout the world, and changes in overall levels of income before tax.
Previous wording
Comparison of Results of Operations for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024
Current wording
Comparison of Results of Operations for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024
Previous wording
Revenues were $390.6 million for the three months ended June 30, 2025, compared to $184.5 million for the three months ended June 30, 2024. Revenues for the three months ended June 30, 2025 increased by $206.1 million, or 111.7%, compared to the three months ended June 30, 2024.
Current wording
Revenues were $409.2 million for the three months ended September 30, 2025, compared to $199.1 million for the three months ended September 30, 2024. Revenues for the three months ended September 30, 2025 increased by $210.0 million, or 105.5%, compared to the three months ended September 30, 2024.
Previous wording
revenues of $391.3 million, or 110.5%, attributable to Sterling as a result of the Sterling Acquisition completed on October 31, 2024; and
Current wording
revenues of $199.4 million, or 100.1%, attributable to Sterling as a result of the Sterling Acquisition completed on October 31, 2024;
Previous wording
revenues of $8.7 million, or 2.4%, from new customers, primarily attributable to our First Advantage Americas segment.
Current wording
revenues of $7.0 million, or 3.5%, from new customers, primarily attributable to our First Advantage Americas segment; and
Previous wording
These revenue increases were offset by a net decrease of $8.7 million, or 2.4%, in revenues from existing customers, primarily due to macroeconomic pressures across a number of our customer verticals that led to reduced overall existing customer demand, as well as the impact of lost customers. These decreases in existing customer revenues were partially mitigated by continued strength from upselling and cross-selling initiatives, which contributed an additional $16.3 million, or 4.6%, in revenue growth.
Current wording
revenues of $3.6 million, or 1.8% from existing customers, primarily driven by continued strength from upselling and cross-selling initiatives. These increases were partially offset by declines in existing customer revenues across several verticals, largely due to macroeconomic pressures that contributed to reduced demand and the impact of lost customers.
Previous wording
Revenues were $745.2 million for the six months ended June 30, 2025, compared to $354.0 million for the six months ended June 30, 2024. Revenues for the six months ended June 30, 2025 increased by $391.3 million, or 110.5%, compared to the six months ended June 30, 2024.
Current wording
Revenues were $1,154.4 million for the nine months ended September 30, 2025, compared to $553.1 million for the nine months ended September 30, 2024. Revenues for the nine months ended September 30, 2025 increased by $601.3 million, or 108.7%, compared to the nine months ended September 30, 2024.
Previous wording
revenues of $203.7 million, or 110.4%, attributable to Sterling as a result of the Sterling Acquisition completed on October 31, 2024; and
Current wording
revenues of $590.6 million, or 106.8%, attributable to Sterling as a result of the Sterling Acquisition completed on October 31, 2024; and
Previous wording
revenues of $4.7 million, or 2.5%, from new customers, primarily attributable to our First Advantage Americas segment.
Current wording
revenues of $15.7 million, or 2.8%, from new customers, primarily attributable to our First Advantage Americas segment.
Previous wording
These revenue increases were offset by a net decrease of $2.3 million, or 1.2%, in revenues from existing customers, primarily due to macroeconomic pressures across a number of our customer verticals that led to reduced overall existing customer demand, as well as the impact of lost customers. These decreases in existing customer revenues were partially mitigated by continued strength from upselling and cross-selling initiatives, which contributed an additional $9.1 million, or 4.9%, in revenue growth.
Current wording
These revenue increases were offset by a net decrease of $5.0 million, or 0.9%, in revenues from existing customers, primarily due to macroeconomic pressures across a number of our customer verticals that led to reduced overall existing customer demand, as well as the impact of lost customers. These decreases in existing customer revenues were partially mitigated by continued strength from upselling and cross-selling initiatives, which contributed an additional $27.0 million, or 4.9%, in revenue growth.
Previous wording
Cost of services was $207.8 million for the three months ended June 30, 2025, compared to $92.3 million for the three months ended June 30, 2024. Cost of services for the three months ended June 30, 2025 increased by $115.5 million, or 125.1%, compared to the three months ended June 30, 2024.
Current wording
Cost of services was $222.0 million for the three months ended September 30, 2025, compared to $100.9 million for the three months ended September 30, 2024. Cost of services for the three months ended September 30, 2025 increased by $121.2 million, or 120.1%, compared to the three months ended September 30, 2024.
Previous wording
The increase in cost of services was primarily due to $113.2 million of Sterling costs of services recognized after the Sterling Acquisition.
Current wording
The increase in cost of services was primarily due to $113.1 million of Sterling costs of services recognized after the Sterling Acquisition.
Previous wording
Cost of services as a percentage of revenues was 53.2% for the three months ended June 30, 2025, compared to 50.0% for the three months ended June 30, 2024. The cost of services percentage of revenues for the second quarter of 2025 was impacted by Sterling’s higher relative cost of services due to the segment’s product and customer mix and other variations in customer ordering mix.
Current wording
Cost of services as a percentage of revenues was 54.3% for the three months ended September 30, 2025, compared to 50.7% for the three months ended September 30, 2024. The cost of services percentage of revenues for the third quarter of 2025 was impacted by Sterling’s higher relative cost of services due to the segment’s product and customer mix and other variations in customer ordering mix.
Previous wording
Cost of services was $400.4 million for the six months ended June 30, 2025, compared to $179.5 million for the six months ended June 30, 2024. Cost of services for the six months ended June 30, 2025 increased by $220.9 million, or 123.0%, compared to the six months ended June 30, 2024.
Current wording
Cost of services was $622.4 million for the nine months ended September 30, 2025, compared to $280.4 million for the nine months ended September 30, 2024. Cost of services for the nine months ended September 30, 2025 increased by $342.0 million, or 122.0%, compared to the nine months ended September 30, 2024.
Previous wording
The increase in cost of services was primarily due to $219.0 million of Sterling costs of services recognized after the Sterling Acquisition.
Current wording
The increase in cost of services was primarily due to $332.0 million of Sterling costs of services recognized after the Sterling Acquisition.
Previous wording
Cost of services as a percentage of revenues was 53.7% for the six months ended June 30, 2025, compared to 50.7% for the six months ended June 30, 2024. The cost of services percentage of revenues for the second quarter of 2025 was impacted by Sterling’s higher relative cost of services due to the segment’s product and customer mix and other variations in customer ordering mix.
Current wording
Cost of services as a percentage of revenues was 53.9% for the nine months ended September 30, 2025, compared to 50.7% for the nine months ended September 30, 2024. The cost of services percentage of revenues for the third quarter of 2025 was impacted by Sterling’s higher relative cost of services due to the segment’s product and customer mix and other variations in customer ordering mix.
Previous wording
Product and technology expense was $25.7 million for the three months ended June 30, 2025, compared to $13.7 million for the three months ended June 30, 2024. Product and technology expense for the three months ended June 30, 2025 increased by $12.0 million, or 87.7%, compared to the three months ended June 30, 2024.
Current wording
Product and technology expense was $25.1 million for the three months ended September 30, 2025, compared to $12.9 million for the three months ended September 30, 2024. Product and technology expense for the three months ended September 30, 2025 increased by $12.2 million, or 94.7%, compared to the three months ended September 30, 2024.
Previous wording
$7.0 million of Sterling personnel expenses recognized after the Sterling Acquisition
Current wording
$5.3 million of Sterling personnel expenses recognized after the Sterling Acquisition
Previous wording
a $4.2 million increase in Legacy First Advantage personnel expenses as a result of additional investments made to enhance our products, solutions, and technology platform.
Current wording
$3.5 million increase in Legacy First Advantage personnel expenses as a result of additional investments made to enhance our products, solutions, and technology platforms; and
Previous wording
a $6.3 million increase in professional service fees related to continued investments in our technology platform; and
Current wording
$3.2 million increase in professional service fees related to continued investments in our technology platforms.
Previous wording
Product and technology expense was $52.8 million for the six months ended June 30, 2025, compared to $26.1 million for the six months ended June 30, 2024. Product and technology expense for the six months ended June 30, 2025 increased by $26.7 million, or 102.1%, compared to the six months ended June 30, 2024.
Current wording
Product and technology expense was $78.0 million for the nine months ended September 30, 2025, compared to $39.1 million for the nine months ended September 30, 2024. Product and technology expense for the nine months ended September 30, 2025 increased by $38.9 million, or 99.6%, compared to the nine months ended September 30, 2024.
Previous wording
$14.5 million of Sterling personnel expenses recognized after the Sterling Acquisition, of which approximately $0.9 million related to cash compensation expense due to the conversion of Sterling equity awards to cash awards as part of the transaction;
Current wording
$19.8 million of Sterling personnel expenses recognized after the Sterling Acquisition, of which approximately $1.2 million related to cash compensation expense due to the conversion of Sterling equity awards to cash awards as part of the transaction;
Previous wording
a $2.5 million increase in professional service fees related to continued investments in our technology platform; and
Current wording
$9.4 million increase in professional service fees related to continued investments in our technology platforms; and
Previous wording
a $1.8 million increase in Legacy First Advantage personnel expenses as a result of additional investments made to enhance our products, solutions, and technology platform.
Current wording
$7.7 million increase in Legacy First Advantage personnel expenses as a result of additional investments made to enhance our products, solutions, and technology platforms.
Previous wording
Selling, general, and administrative expense was $57.5 million for the three months ended June 30, 2025, compared to $38.6 million for the three months ended June 30, 2024. Selling, general, and administrative expense for the three months ended June 30, 2025 increased by $18.8 million, or 48.7%, compared to the three months ended June 30, 2024.
Current wording
Selling, general, and administrative expense was $57.5 million for the three months ended September 30, 2025, compared to $46.1 million for the three months ended September 30, 2024. Selling, general, and administrative expense for the three months ended September 30, 2025 increased by $11.4 million, or 24.8%, compared to the three months ended September 30, 2024.
Previous wording
Selling, general, and administrative expense increased primarily due to $28.2 million of Sterling expenses recognized after the Sterling Acquisition, which include:
Current wording
Selling, general, and administrative expense increased primarily due to $25.6 million of Sterling expenses recognized after the Sterling Acquisition, which include:
Previous wording
$1.0 million related to share-based compensation expense due to the conversion of Sterling equity awards to First Advantage equity awards as part of the transaction; and
Current wording
$0.9 million related to share-based compensation expense due to the conversion of Sterling equity awards to First Advantage equity awards as part of the transaction; and
Previous wording
These increases in selling, general, and administrative expense were partially offset by a $8.2 million decrease in transaction costs attributable to the Sterling Acquisition related to professional service, legal, and other fees, that did not reoccur as the acquisition was completed on October 31, 2024.
Current wording
These increases in selling, general, and administrative expense were partially offset by a $12.2 million decrease in transaction costs attributable to the Sterling Acquisition related to professional service, legal, and other fees, that did not reoccur as the acquisition was completed on October 31, 2024.
Previous wording
Selling, general, and administrative expense was $123.1 million for the six months ended June 30, 2025, compared to $79.3 million for the six months ended June 30, 2024. Selling, general, and administrative expense for the six months ended June 30, 2025 increased by $43.8 million, or 55.2%, compared to the six months ended June 30, 2024.
Current wording
Selling, general, and administrative expense was $180.5 million for the nine months ended September 30, 2025, compared to $125.4 million for the nine months ended September 30, 2024. Selling, general, and administrative expense for the nine months ended September 30, 2025 increased by $55.2 million, or 44.0%, compared to the nine months ended September 30, 2024.
Previous wording
Selling, general, and administrative expense increased primarily due to $61.8 million of Sterling expenses recognized after the Sterling Acquisition, which include:
Current wording
Selling, general, and administrative expense increased primarily due to $87.4 million of Sterling expenses recognized after the Sterling Acquisition, which include:
Previous wording
$4.3 million related to share-based compensation expense due to the conversion of Sterling equity awards to First Advantage equity awards as part of the transaction;
Current wording
$5.2 million related to share-based compensation expense due to the conversion of Sterling equity awards to First Advantage equity awards as part of the transaction; and
Previous wording
These increases in selling, general, and administrative expense were partially offset by a $16.8 million decrease in transaction costs attributable to the Sterling Acquisition related to professional service, legal, and other fees, that did not reoccur as the acquisition was completed on October 31, 2024.
Current wording
These increases in selling, general, and administrative expense were partially offset by a $29.1 million decrease in transaction costs attributable to the Sterling Acquisition related to professional service, legal, and other fees, that did not reoccur as the acquisition was completed on October 31, 2024.
Previous wording
Depreciation and amortization was $61.9 million for the three months ended June 30, 2025, compared to $30.0 million for the three months ended June 30, 2024. Depreciation and amortization for the three months ended June 30, 2025 increased by $31.9 million, or 106.5%, compared to the three months ended June 30, 2024. This increase was primarily due to the impact of the step up in fair value of property and equipment and intangible assets as a result of the application of purchase accounting related to the Sterling Acquisition.
Current wording
Depreciation and amortization was $62.3 million for the three months ended September 30, 2025, compared to $30.2 million for the three months ended September 30, 2024. Depreciation and amortization for the three months ended September 30, 2025 increased by $32.1 million, or 106.4%, compared to the three months ended September 30, 2024. This increase was primarily due to the impact of the step up in fair value of property and equipment and intangible assets as a result of the application of purchase accounting related to the Sterling Acquisition.
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Previous report — wording carried elsewhere
$4.0 million related to cash compensation expense due to the conversion of Sterling equity awards to cash awards as part of the transaction; and
Previous report — wording carried elsewhere
Net income margin was 0.1% for the three months ended June 30, 2025, compared to 1.0% for the three months ended June 30, 2025, as increases in depreciation and amortization, primarily as a result of the Company’s Sterling Acquisition and reduced demand from customers more impacted by macroeconomic factors, contributed to lower profitability.