First Advantage Q3 revenue beats on broad-based growth, lifts 2026 outlook
Overview
US background screening firm's Q3 revenue rose 13.8%, beating analyst expectations
Adjusted net income and adjusted EBITDA for Q3 both beat analyst expectations
Company acquired Data Diver Technologies and raised full-year 2026 guidance
Outlook
First Advantage raises 2026 revenue guidance to $1.72 bln–$1.745 bln
Company lifts 2026 adj EBITDA forecast to $488 mln–$498 mln
First Advantage now sees 2026 adj EPS at $1.30–$1.33
Result Drivers
BROAD-BASED GROWTH - Co said revenue growth was driven by strong performance across nearly every vertical in its Americas business and sustained positive momentum in base growth, new logo contribution, upsell and cross-sell activity, and high retention
AI-ENABLED PRODUCTS - Co said AI-enabled products were key differentiators supporting customer demand and helping mitigate human capital risks and prevent fraud
STERLING ACQUISITION SYNERGIES - Co said ongoing integration of the Sterling acquisition delivered benefits exceeding original expectations, strengthening market position and expanding growth opportunities
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Beat | $465.80 mln | $437.59 mln (9 Analysts) |
Q3 Adjusted Net Income | Beat | $67.30 mln | $57.68 mln (8 Analysts) |
Q3 Net Income | $20.50 mln | ||
Q3 Adjusted EBITDA | Beat | $136.50 mln | $125.08 mln (9 Analysts) |
Q3 Cash Flow from Operations | $63.80 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the employment services peer group is "buy"
Wall Street's median 12-month price target for First Advantage Corporation is $25.00, about 11.3% above its November 4 closing price of $22.47
The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 15 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)