First Advantage (FA) investor relations material

Macroeconomic and employment market trends

• Job market remains flat with minimal peaks or valleys, as indicated by client order volumes and hiring patterns.

• Companies are maintaining just-in-time hiring and backfilling, avoiding both mass layoffs and growth hiring.

• International demand has rebounded, especially after a previous downturn, with international now contributing 14% of business.

• Vertical performance is more consistent post-acquisition, with less volatility and tighter performance bands across sectors.

• Healthcare and transportation verticals are performing well, with healthcare staffing and compliance products driving growth.

Growth strategy and financial outlook

• Base growth is expected to be slightly negative for the year, with minor headwinds due to policy uncertainty and tariffs.

• Longer-term, base growth is projected at 2–3% annually, but neutral conditions are expected through 2025–2026.

• International growth exceeded 7% last quarter, with optimism for broader business growth as macro conditions stabilize.

• New logo growth is targeted at 4–5% annually, supported by strong brand, technology, and vertical expertise.

• Cross-sell and upsell are driven by increased client demand for deeper risk management and digital identity solutions.

Technology, AI, and product innovation

• AI is expected to create jobs in the short term, with significant industry impact anticipated in 2–3 years.

• AI-driven automation has already reduced customer care headcount by 30%, with savings reinvested in product and sales.

• AI strategy focuses on quality and customer experience, aiming to increase automation to 90% of checks within a few years.

• Digital identity and fraud prevention products are in high demand due to increased risks from AI-enabled fraud.

• Dedicated AI development teams and significant technology investment ($130 million/year) provide a competitive edge.