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Sterling Check (STER) investor relations material

Sterling Check Q2 2024 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q2 2024 earnings summary8 Aug, 2024

Executive summary

  • Revenue grew 5.3% year-over-year to $200.5M for Q2 2024, driven by the Vault acquisition and 6.2% inorganic growth, offset by a 0.9% organic constant currency revenue decline.

  • Net loss was $6.2M for Q2 2024, or $(0.07) per diluted share, compared to net income of $0.3M in Q2 2023, with a net loss margin of (3.1)%.

  • Adjusted EBITDA for Q2 2024 was $46.3M, down 7.4% year-over-year, with margin declining to 23.1%.

  • Adjusted Net Income decreased 16.8% to $21.8M; Adjusted EPS (diluted) dropped 17.9% to $0.23.

  • The merger with First Advantage is expected to close in Q4 2024, with Sterling shareholders to receive cash or stock consideration.

Financial highlights

  • Q2 2024 revenue: $200.5M (+5.3% YoY); six months ended June 30, 2024: $386.5M (+4.6% YoY).

  • Q2 2024 net loss: $6.2M; six months net loss: $14.2M.

  • Adjusted EBITDA Q2 2024: $46.3M (23.1% margin); six months: $84.8M (21.9% margin).

  • Adjusted EPS Q2 2024: $0.23 (down from $0.28); six months: $0.43 (down from $0.53).

  • Free cash flow for six months ended June 30, 2024: $8.8M, down from $23.7M YoY.

Outlook and guidance

  • Merger with First Advantage expected to close in Q4 2024, subject to regulatory approvals, and anticipated to drive innovation and shareholder value.

  • Macroeconomic uncertainty and client hiring volumes continue to impact organic growth.

  • Company expects continued cost optimization, integration of recent acquisitions, and margin expansion over the year.

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Frequently asked questions

Sterling Check Corp is a provider of background screening and identity verification services for businesses and organizations. The company offers solutions that include criminal background checks, drug testing, identity authentication, and workforce monitoring. Its services support hiring, compliance, and risk management processes across industries such as healthcare, financial services, technology, and retail. The company is headquartered in Independence, Ohio, and its shares are listed on the NASDAQ.

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