First Advantage (FA) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 8.6% year-over-year to $385.2 million, with adjusted EBITDA up 14.3% to $105.3 million and margin expanding to 27.3%, exceeding expectations.

• Net income reached $2.2 million, reversing a $41.2 million loss in the prior year, driven by operational efficiencies and lower interest expense.

• Strong go-to-market execution, AI-driven innovation, and high customer retention (97%) fueled 12% growth from new logo, upsell, and cross-sell revenues.

• Balanced capital allocation with $33.3 million in share repurchases through May 1 and $120.5 million in voluntary debt repayments since the Sterling acquisition.

• Full-year 2026 guidance reaffirmed, maintaining momentum toward 2028 targets and citing robust demand.

Financial highlights

• Q1 2026 revenues reached $385.2 million, up 8.6% year-over-year; constant currency growth was 7.8%.

• Adjusted EBITDA was $105.3 million, margin improved by 130 basis points to 27.3%.

• Adjusted Diluted EPS rose 53% year-over-year to $0.26.

• Operating cash flow for Q1 was $49.4 million, a 154% increase year-over-year; cash balance at quarter end was $226 million.

• Adjusted Net Income was $45.1 million, up 48% year-over-year.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: revenues of $1.625–$1.7 billion, Adjusted EBITDA of $460–$485 million, Adjusted Net Income of $200–$220 million, and Adjusted Diluted EPS of $1.15–$1.25.

• Adjusted EBITDA margin projected to improve to around 29% in the second half of the year.

• Adjusted Diluted EPS expected to expand to the high $0.20 range in Q2 and mid $0.30 range in Q3 and Q4.

• 2028 targets include $1.8B–$2.0B revenues, $560M–$630M Adjusted EBITDA, 31%–32% margin, and $1.65–$2.00 Adjusted Diluted EPS.

• Base growth anticipated to be modestly negative for the year, between 0% and -2%.