First Advantage (FA) Q4 2025 earnings summary

Executive summary

• Delivered record Q4 and full-year 2025 results, with Q4 revenue up 12%, adjusted EBITDA up 17%, and adjusted diluted EPS up 67% year-over-year, exceeding all updated guidance metrics.

• Completed core integration of Sterling acquisition, realizing $55 million in run-rate synergies by year-end 2025 and maintaining high customer retention rates of 96–97%.

• Announced $25 million voluntary debt prepayment and a new $100 million share repurchase authorization, with cumulative debt repayments since Sterling acquisition reaching $95.5 million.

• Maintained strong go-to-market momentum, with robust upsell, cross-sell, and new logo activity, and introduced 2026 guidance with continued top-line momentum and a two-year adjusted EPS CAGR of 20% from 2024 to 2026 midpoint.

• Introduced full year 2026 guidance, progressing toward 2028 long-term targets.

Financial highlights

• Q4 2025 revenues reached $420 million (up 12% YoY), adjusted EBITDA $117 million (up 17% YoY, 27.8% margin), and adjusted diluted EPS $0.30 (up 67% YoY).

• Full-year 2025 revenues were $1,574.4 million, adjusted EBITDA $441.4 million (28.0% margin), and adjusted diluted EPS $1.04 (up 27%).

• Adjusted operating cash flows for 2025 were $231.9 million, up 41% year-over-year; year-end cash balance was $240 million.

• Adjusted net income for Q4 was $51.9 million (12.4% margin); for FY 2025, $181.7 million (11.5% margin).

• Adjusted EBITDA margin improved to 27.8% in Q4 and 28.0% for the full year.

Outlook and guidance

• 2026 revenue guidance: $1,625–$1,700 million (approx. 6% YoY growth at midpoint).

• 2026 Adjusted EBITDA: $460–$485 million (margin ~28.4%); adjusted diluted EPS: $1.15–$1.25 (11–20% YoY growth).

• 2026 Adjusted Net Income: $200–$220 million.

• Free cash flow expected in the range of $160–$190 million for 2026.

• Customer retention expected to remain at 96–97%; base growth anticipated to be modestly negative (0% to -2%).