First Advantage Corporation reported fourth‑quarter 2025 results that surpassed expectations, with revenue reaching $420 million, a 12% year‑over‑year increase from $307.1 million in Q4 2024. Adjusted diluted earnings per share rose to $0.30, beating the consensus estimate of $0.26 and representing a 67% increase from $0.18 in the same quarter last year. The company’s adjusted EBITDA margin expanded to 27.8% from 27.0% in Q4 2024, reflecting disciplined cost management and a favorable mix of higher‑margin contracts.
The earnings release also detailed progress on the Sterling Check Corp. acquisition, which closed on October 31 2024. First Advantage has realized $55 million of the targeted $50‑$70 million in synergies by year‑end, and it reports a 96% customer retention rate for the full year, with 97% retention in Q4. The $2.2 billion deal has already begun to strengthen the company’s product portfolio and market reach.
Looking ahead, management guided 2026 revenue to $1.625 billion–$1.700 billion and adjusted diluted EPS to $1.15–$1.25, a range that remains consistent with prior guidance. The company also announced a $100 million share‑repurchase program and a $25 million voluntary debt prepayment, underscoring a balanced capital‑allocation strategy.
"In 2025, we delivered exceptional financial results with meaningful success across all pillars of our FA 5.0 growth strategy. Our targeted go‑to‑market approach enabled us to grow revenues and expand margins, resulting in revenue, Adjusted EBITDA, and Adjusted Diluted EPS growth in line with or above our long‑term targets," said CEO Scott Staples. "We closed 2025 with outstanding performance in the fourth quarter, again demonstrating our ability to deliver positive results in a relatively flat hiring environment. We generated impressive combined upsell, cross‑sell, and new logo growth of 17%, exceeding our long‑term revenue growth algorithm, alongside excellent customer retention of 97% in Q4." CFO Steven Marks added, "Our full year 2026 guidance reflects confidence in our ability to continue to deliver positive results powered by disciplined execution, go‑to‑market excellence, and a relentless focus on our customers."
Investor sentiment has been mixed. While the earnings beat and revenue growth were well received, the 2026 guidance sits slightly below analyst expectations for both revenue and EPS, leading to a cautious response from the market.
The results underscore First Advantage’s ability to accelerate growth through upsell, cross‑sell, and new‑logo acquisition, while maintaining margin expansion and a high retention rate. The successful integration of Sterling and the company’s disciplined capital allocation position it for continued value creation in the coming years.
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