First Advantage reported 13.8% year-over-year revenue growth in the third quarter and raised its full-year 2026 outlook. The background to the results includes continued integration of Sterling, a $45 million debt prepayment and the announced acquisition of Data Diver Technologies, a platform that supplies criminal and court records using data, AI and automation.
The company said its updated full-year guidance is higher across every measure, with each new range’s low end above the previous range’s high end.
Third-quarter results
- Revenue was $465.8 million, up 13.8% from $409.2 million a year earlier.
- Net income was $20.5 million, or $0.12 per diluted share, compared with $2.6 million and $0.01 per share in the year-ago quarter. Net margin was 4.4%, versus 0.6%.
- Adjusted EBITDA was $136.5 million, up 15.2%, with a 29.3% margin compared with 29.0% a year earlier.
- Adjusted net income rose 28.6% to $67.3 million. Adjusted diluted earnings per share increased 26.7% to $0.38. These adjusted figures are non-GAAP measures.
- Cash flow from operations was $63.8 million.
Acquisition and capital allocation
- First Advantage announced its acquisition of Data Diver Technologies, which collects, aggregates, retains and delivers high volumes of criminal and court records. The company said the platform will strengthen its data and automation capabilities and support faster, more automated screening for customers. The announcement did not provide a purchase price or other transaction terms.
- The acquisition fits the company’s stated strategy of investing in data and technology to improve screening and risk-management products.
- First Advantage made a $45 million debt prepayment during the quarter. CFO Steven Marks said reducing debt remains a capital-allocation priority, while cash generation also allows for strategic investment.
- The company said it expects to finish 2026 near or at the top of its run-rate synergy target range from the Sterling acquisition. It did not provide the target range in the announcement. CEO Scott Staples said the company has realized benefits from Sterling that have exceeded its original expectations.
Raised 2026 outlook
- Revenue: $1.720 billion to $1.745 billion
- Adjusted EBITDA: $488 million to $498 million
- Adjusted net income: $227 million to $232 million
- Adjusted diluted earnings per share: $1.30 to $1.33
Management cited results through the first three quarters and its expectations for the fourth quarter in raising the ranges.
What changes for investors: The updated outlook raises expectations for both growth and adjusted profitability for the year; the company says the low end of each new range exceeds the high end of its prior range. The quarter also showed adjusted earnings growing faster than revenue, while the reported GAAP net income comparison was against a much lower year-ago figure.