Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 23, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | First Advantage Corporation | ||
Entity Central Index Key | 0001210677 | ||
Trading Symbol | FA | ||
Entity File Number | 001-31666 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 771,746,746 | ||
Entity Common Stock, Shares Outstanding | 145,160,557 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Tax Identification Number | 84-3884690 | ||
Entity Address, Address Line One | 1 Concourse Parkway NE | ||
Entity Address, Address Line Two | Suite 200 | ||
Entity Address, City or Town | Atlanta | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30328 | ||
City Area Code | 888 | ||
Local Phone Number | 314-9761 | ||
Title of 12(b) Security | Common Stock, $0.001 par value per share | ||
Security Exchange Name | NASDAQ | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive Proxy Statement relating to its 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2023 are incorporated herein by reference in Part III. | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Location | Atlanta, Georgia | ||
Auditor Firm ID | 34 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 213,774 | $ 391,655 |
Restricted cash | 138 | 141 |
Short-term investments | 0 | 1,956 |
Accounts receivable (net of allowance for doubtful accounts) | 142,690 | 143,811 |
Prepaid expenses and other current assets | 13,426 | 25,407 |
Income tax receivable | 3,710 | 3,225 |
Total current assets | 373,738 | 566,195 |
Property and equipment, net | 79,441 | 113,529 |
Goodwill | 820,654 | 793,080 |
Trade names, net | 66,229 | 71,162 |
Customer lists, net | 275,528 | 326,014 |
Other intangible assets | 2,257 | 0 |
Deferred tax asset, net | 2,786 | 2,422 |
Other assets | 10,021 | 13,423 |
TOTAL ASSETS | 1,630,654 | 1,885,825 |
CURRENT LIABILITIES | ||
Accounts payable | 47,024 | 54,947 |
Accrued compensation | 16,379 | 22,702 |
Accrued liabilities | 16,162 | 16,400 |
Current portion of operating lease liability | 3,354 | 4,957 |
Income tax payable | 264 | 724 |
Deferred revenues | 1,856 | 1,056 |
Total current liabilities | 85,039 | 100,786 |
Long-term debt (net of deferred financing costs) | 558,456 | 556,649 |
Deferred tax liability, net | 71,274 | 90,556 |
Operating lease liability, less current portion | 5,931 | 7,879 |
Other liabilities | 3,221 | 3,337 |
Total liabilities | 723,921 | 759,207 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY | ||
Common stock - $0.001 par value; 1,000,000,000 shares authorized, 145,074,802 and 148,732,603 shares issued and outstanding as of December 31, 2023 and 2022, respectively | 145 | 149 |
Additional paid-in-capital | 977,290 | 1,176,163 |
Accumulated deficit | (49,545) | (27,363) |
Accumulated other comprehensive (loss) | (21,157) | (22,331) |
Total equity | 906,733 | 1,126,618 |
TOTAL LIABILITIES AND EQUITY | $ 1,630,654 | $ 1,885,825 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts Receivable (net of allowance for doubtful accounts) | $ 1,036 | $ 1,348 |
Long term debt (net of deferred financing costs) | $ 6,268 | $ 8,075 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 145,074,802 | 148,732,603 |
Common stock, shares outstanding | 145,074,802 | 148,732,603 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
REVENUES | $ 763,761 | $ 810,023 | $ 712,295 |
OPERATING EXPENSES: | |||
Cost of services (exclusive of depreciation and amortization below) | 386,777 | 408,928 | 352,170 |
Product and technology expense | 49,263 | 51,931 | 45,507 |
Selling, general, and administrative expense | 116,732 | 116,640 | 107,980 |
Depreciation and amortization | 129,473 | 138,246 | 142,815 |
Total operating expenses | 682,245 | 715,745 | 648,472 |
INCOME FROM OPERATIONS | 81,516 | 94,278 | 63,823 |
OTHER EXPENSE, NET: | |||
Interest expense, net | 33,040 | 9,199 | 24,972 |
Loss on extinguishment of debt | 0 | 0 | 13,938 |
Total other expense, net | 33,040 | 9,199 | 38,910 |
Income before provision for income taxes | 48,476 | 85,079 | 24,913 |
Provision for income taxes | 11,183 | 20,475 | 8,862 |
NET INCOME | 37,293 | 64,604 | 16,051 |
Foreign currency translation | 1,174 | (20,694) | (4,121) |
COMPREHENSIVE INCOME | 38,467 | 43,910 | 11,930 |
Net Income (Loss) | $ 37,293 | $ 64,604 | $ 16,051 |
Basic net income per share | $ 0.26 | $ 0.43 | $ 0.11 |
Diluted net income per share | $ 0.26 | $ 0.43 | $ 0.11 |
Weighted average number of shares outstanding - basic | 144,083,808 | 150,227,213 | 140,480,590 |
Weighted average number of shares outstanding - diluted | 146,226,096 | 151,807,139 | 141,687,384 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net Income (Loss) | $ 37,293 | $ 64,604 | $ 16,051 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 129,473 | 138,246 | 142,815 |
Loss on extinguishment of debt | 0 | 0 | 13,938 |
Amortization of deferred financing costs | 1,807 | 1,804 | 5,936 |
Bad debt (recovery) expense | (56) | 207 | (17) |
Deferred taxes | (19,497) | 4,597 | (2,924) |
Share-based compensation | 15,265 | 7,856 | 9,530 |
Loss (gain) on foreign currency exchange rates | 8 | 91 | (575) |
Loss on disposal of fixed assets and impairment of ROU assets | 1,608 | 1,263 | 76 |
Change in fair value of interest rate swaps | 116 | (12,429) | (2,284) |
Changes in operating assets and liabilities: | |||
Accounts receivable | 2,339 | 9,149 | (40,842) |
Prepaid expenses and other assets | 13,440 | 4,892 | (10,502) |
Accounts payable | (8,503) | 2,983 | 7,516 |
Accrued compensation and accrued liabilities | (9,301) | (11,365) | 8,541 |
Deferred revenues | 788 | 91 | 196 |
Operating lease liabilities | (1,378) | (898) | 0 |
Other liabilities | 347 | 4,724 | (87) |
Income taxes receivable and payable, net | (929) | (3,045) | 1,309 |
Net cash provided by operating activities | 162,820 | 212,770 | 148,677 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Acquisitions of businesses, net of cash acquired | (41,122) | (19,052) | (48,934) |
Purchases of property and equipment | (2,085) | (6,165) | (7,313) |
Capitalized software development costs | (25,614) | (22,363) | (16,485) |
Other investing activities | 1,974 | (1,016) | 305 |
Net cash used in investing activities | (66,847) | (48,596) | (72,427) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Cash dividends paid | (217,739) | 0 | 0 |
Share repurchases | (58,990) | (60,530) | 0 |
Proceeds from issuance of common stock under share-based compensation plans | 4,565 | 3,522 | 387 |
Payments on deferred purchase agreements | (938) | (884) | (705) |
Net settlement of share-based compensation plan awards | (350) | (378) | (332) |
Payments on capital and finance lease obligations | (104) | (884) | (1,652) |
Proceeds from issuance of common stock in initial public offering, net of underwriting discounts and commissions | 0 | 0 | 320,559 |
Payments of initial public offering issuance costs | 0 | 0 | (4,034) |
Payments of debt issuance costs | 0 | 0 | (1,257) |
Shareholder distribution | 0 | 0 | (313) |
Capital contributions | 0 | 0 | 241 |
Net cash (used in) provided by financing activities | (273,556) | (59,154) | 63,848 |
Effect of exchange rate on cash, cash equivalents, and restricted cash | (301) | (6,014) | (278) |
(Decrease) increase in cash, cash equivalents, and restricted cash | (177,884) | 99,006 | 139,820 |
Cash, cash equivalents, and restricted cash at beginning of period | 391,796 | 292,790 | 152,970 |
Cash, cash equivalents, and restricted cash at end of period | 213,912 | 391,796 | 292,790 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid for income taxes, net of refunds received | 31,623 | 17,475 | 10,361 |
Cash paid for interest | 45,697 | 27,042 | 23,029 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Property and equipment acquired on account | 118 | 105 | 3,643 |
Excise taxes on share repurchases incurred but not paid | 490 | 0 | 0 |
Dividends declared but not paid | 614 | 0 | 0 |
Successor First Lien [Member] | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Borrowings from First Lien Credit Facility | 0 | 0 | 261,413 |
Repayments of First Lien Credit Facility | 0 | 0 | (363,875) |
Successor Second Lien [Member] | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Repayment of Second Lien Credit Facility | $ 0 | $ 0 | $ (146,584) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive (Loss) [Member] |
Beginning Balance at Dec. 31, 2020 | $ 794,270 | $ 130 | $ 839,148 | $ (47,492) | $ 2,484 |
Share-based compensation | 9,530 | 9,530 | |||
Capital contributions | 241 | 241 | |||
Issuance of common stock in connection with initial public offering, net of offering costs, underwriting discounts and commissions | 316,525 | 23 | 316,502 | ||
Proceeds from issuance of common stock under share-based compensation plans | 387 | 387 | |||
Common stock withheld for tax obligations on restricted stock unit and option settlement | (332) | (332) | |||
Shareholder distribution | (313) | (313) | |||
Foreign currency translation | (4,121) | (4,121) | |||
Net Income (Loss) | 16,051 | 16,051 | |||
Ending Balance at Dec. 31, 2021 | 1,132,238 | 153 | 1,165,163 | (31,441) | (1,637) |
Share-based compensation | 7,856 | 7,856 | |||
Share repurchases | (60,530) | (4) | (60,526) | ||
Proceeds from issuance of common stock under share-based compensation plans | 3,522 | 0 | 3,522 | ||
Common stock withheld for tax obligations on restricted stock unit and option settlement | (378) | 0 | (378) | ||
Foreign currency translation | (20,694) | (20,694) | |||
Net Income (Loss) | 64,604 | 64,604 | |||
Ending Balance at Dec. 31, 2022 | 1,126,618 | 149 | 1,176,163 | (27,363) | (22,331) |
Share-based compensation | 15,265 | 15,265 | |||
Share repurchases | (59,480) | (5) | (59,475) | ||
Cash dividends declared | (218,353) | (218,353) | |||
Proceeds from issuance of common stock under share-based compensation plans | 4,566 | 1 | 4,565 | ||
Common stock withheld for tax obligations on restricted stock unit and option settlement | (350) | 0 | (350) | ||
Foreign currency translation | 1,174 | 1,174 | |||
Net Income (Loss) | 37,293 | 37,293 | |||
Ending Balance at Dec. 31, 2023 | $ 906,733 | $ 145 | $ 977,290 | $ (49,545) | $ (21,157) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2023 $ / shares | |
Statement of Stockholders' Equity [Abstract] | |
Cash dividends declared | $ 1.5 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 37,293 | $ 64,604 | $ 16,051 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Organization, Nature of Busines
Organization, Nature of Business, and Basis of Presentation | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Nature of Business, and Basis of Presentation | Note 1. Organization, Nature of Business, and Basis of Presentation First Advantage Corporation, a Delaware corporation, was formed on November 15, 2019. Hereafter, First Advantage Corporation and its subsidiaries will collectively be referred to as the “Company.” The Company derives its revenues from a variety of background check and compliance services performed across all phases of the workforce lifecycle from pre-onboarding services to post-onboarding and ongoing monitoring services, covering employees, contractors, contingent workers, tenants, and drivers. We generally classify our service offerings into three categories: pre-onboarding, post-onboarding, and adjacent products. Pre-onboarding services are comprised of an extensive array of products and solutions that customers typically utilize to enhance their evaluation process and support compliance from the time a job or other application is submitted to a successful applicant’s onboarding date. This includes searches such as criminal background checks, drug / health screenings, extended workforce screening, biometrics and identity checks, education / workforce verification, driver records and compliance, healthcare credentials, and executive screening. Post-onboarding services are comprised of continuous monitoring and re-screening solutions which are important tools to help keep their end customers, workforces, and other stakeholders safer, more productive, and more compliant. Our post-monitoring solutions include criminal records, healthcare sanctions, motor vehicle records, social media, and global sanctions screening continuously or at regular intervals selected by our customers. Adjacent products include products that complement our pre-onboarding and post-onboarding products and solutions. This includes fleet / vehicle compliance, hiring tax credits and incentives, resident / tenant screening, employment eligibility, and investigative research. Basis of Presentation — The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated. The Company includes the results of operations of acquired companies prospectively from the date of acquisition. The Company has historically experienced seasonality with respect to certain customer industries as a result of fluctuations in hiring volumes and other economic activities. Generally, the Company’s highest revenues have historically occurred between October and November of each year, driven by many customers’ pre-holiday season hiring initiatives. Segments — Operating segments are businesses for which separate financial information is available and evaluated regularly by our chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. During the first quarter of 2022, the Company made organizational changes and modified information provided to its CODM to better align with how its CODM assesses performance and allocates resources. As a result, the Company has two reportable segments, Americas and International: • Americas provides technology solutions for screening, verifications, safety, and compliance in the United States, Canada, and Latin America markets; and • International provides technology solutions for screening, verifications, safety, and compliance outside of the Americas. Prior period results were recast to conform to the current presentation of segments. The Company’s segment disclosure is intended to provide the users of its consolidated financial statements with a view of the business that is consistent with management of the Company. Details of segment results are discussed in Note 17, “Reportable Segments.” Use of Estimates — The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Changes in these estimates and assumptions may have a material impact on the consolidated financial statements and accompanying notes. Significant estimates, judgments, and assumptions, include, but are not limited to, the determination of the fair value and useful lives of assets acquired and liabilities assumed through business combinations, goodwill impairment, revenue recognition, capitalized software, assumptions used for purposes of determining share-based compensation, and income tax liabilities and assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Fair Value of Financial Instruments — Certain financial assets and liabilities are reported at fair value in the accompanying consolidated balance sheets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement . ASC 820 establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques required by ASC 820 are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy: Level 1 — Quoted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 — Significant inputs to the valuation model are unobservable (supported by little or no market activities). These inputs may be used with internally developed methodologies that reflect the Company’s best estimate of fair value from a market participant. The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The carrying amounts of cash and cash equivalents, short-term investments, receivables, and accounts payable approximate fair value due to the short-term maturities of these financial instruments (Level 1). The fair values and carrying values of the Company’s long-term debt are disclosed in Note 6. The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of December 31, 2023 (in thousands): Level 1 Level 2 Level 3 Assets Interest rate collars $ — $ 1,986 $ — Liabilities Interest rate swaps $ — $ 1,576 $ — Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Other intangible assets are subject to nonrecurring fair value measurement as the result of business acquisitions. The fair values of these assets were estimated using the present value of expected future cash flows through unobservable inputs (Level 3). Cash and Cash Equivalents — The Company considers cash equivalents to be cash and all short-term investments that have an original maturity of ninety days or less. Interest income earned on short-term investments and interest bearing accounts is included in interest expense, net in the accompanying consolidated statements of operations and comprehensive income. The Company recorded $ 13.4 million , $ 5.0 million , and $ 0.1 million of interest income for the years ended December 31, 2023, 2022, and 2021, respectively. Outstanding checks in excess of funds on deposit are classified as current liabilities in the accompanying consolidated balance sheets. As of December 31, 2023 and 2022 , the Company had no outstanding checks in excess of funds on deposit. Restricted Cash — Restricted cash represents monies held in trust for a specific purpose as contractually required under the respective arrangement. Short-Term Investments — Short-term investments represents fixed time deposits having a maturity date within twelve months. Accounts Receivable — Accounts receivable are due from customers in a broad range of industries located throughout the United States and internationally. Credit is extended based on evaluation of the customer’s financial condition, and generally, collateral is not required. The allowance for all uncollectible receivables is based on a combination of historical data, cash payment trends, specific customer issues, write-off trends, general economic conditions, and other factors. These factors are continuously monitored by management to arrive at the estimate for the amount of accounts receivable that may be ultimately uncollectible. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, the Company records a specific allowance for doubtful accounts against amounts due in order to reduce the net recognized receivable to the amount it reasonably believes will be collected. The Company believes that the allowance for doubtful accounts at December 31, 2023 and 2022 is reasonably stated. Property and Equipment — Property and equipment are recorded at cost. Property and equipment include computer software for internal uses either developed internally, acquired by business combination or otherwise purchased. Software development costs, including internal personnel and third-party professional services, are capitalized during the application development stage of initial development or during development of new features and enhancements. The Company amortizes purchased software using the straight-line method over the estimated useful life of the software and software acquired by business combination on an accelerated basis over its expected useful life of five years . Software development costs not meeting the criteria for capitalization are expensed as incurred. Depreciation on leasehold improvements is computed on the straight-line method over the shorter of the life of the asset, or the lease term, ranging from one to fifteen years. Depreciation on data processing equipment and furniture and equipment is computed using the straight-line method over their estimated useful lives ranging from three to ten years. Business Combinations — The Company records business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations . Under the acquisition method of accounting, identifiable assets acquired and liabilities assumed are recorded at their acquisition-date fair values. The excess of the purchase price over the estimated fair value is recorded as goodwill. Changes in the estimated fair values of net assets recorded for acquisitions prior to the finalization of more detailed analysis, but not to exceed one year from the date of acquisition, will adjust the amount of the purchase price allocable to goodwill. Measurement period adjustments are reflected in the period in which they occur. In valuing the trade names, customer lists, and software developed for internal use, the Company utilizes variations of the income approach, which relies on historical financial and qualitative information, as well as assumptions and estimates for projected financial information. The Company considers the income approach the most appropriate valuation technique because the inherent value of these assets is their ability to generate current and future income. Projected financial information is subject to risk if estimates are incorrect. The most significant estimate relates to projected revenues and profitability. If the projected revenues and profitability used in the valuation calculations are not met, then the asset could be impaired . Goodwill, Trade Names, Customer Lists, and Other Intangible Assets — The Company tests goodwill for impairment annually as of October 31 or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or indefinite-lived intangible asset below its carrying value. During 2023, the Company changed its annual impairment testing date from December 31 to October 31. The Company believes the new date is preferable because it aligns the impairment test with the budgeting processes. The Company applied the change in accounting principle prospectively. The change in the annual impairment testing date did not delay, accelerate, or avoid an impairment charge. Goodwill is tested for impairment at the reporting unit level using a fair value approach. At October 31, 2023, the Company had two reporting units comprised of the Americas and International. When testing goodwill for impairment, the Company may first perform an optional qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. The Company performs a quantitative impairment test every three years, irrespective of the outcome of the Company’s qualitative assessment. No impairment charges have been required. The Company’s trade names are amortized on an accelerated basis over their expected useful life of twenty years . The Company recorded $ 7.3 million , $ 7.6 million , and $ 7.9 million of amortization expense related to trade names for the years ended December 31, 2023, 2022, and 2021, respectively. Customer lists are amortized on an accelerated basis based upon their estimated useful lives, ranging from thirteen to fourteen years. The Company recorded $ 54.6 million , $ 60.7 million , and $ 65.5 million of amortization expense related to customer lists for the years ended December 31, 2023, 2022, and 2021, respectively. The Company’s other intangible assets are amortized on a straight-line or accelerated basis over their expected useful life of five year s. The Company recorded $ 0.1 million of amortization expense related to other intangible assets for the year ended December 31, 2023 . No amortization expense was recorded for the years ended December 31, 2022 and 2021. The Company regularly evaluates the amortization period assigned to each intangible asset to determine whether there have been any events or circumstances that warrant revised estimates of useful lives. No impairment charges have been required. Income Taxes — The Company is a U.S. domiciled corporation for tax purposes. Accordingly, the Company has followed ASC 740, Income Taxes , which provides for income taxes using the liability method, which requires an asset and liability based approach in accounting for income taxes for all periods presented. Deferred income taxes reflect the net tax effect on future years of temporary differences in the carrying amount of assets and liabilities between financial statements and income tax purposes. Valuation allowances are established when the Company determines that it is more likely than not that some portion or the entire deferred tax asset will not be realized. The Company evaluates its effective tax rates regularly and adjusts them when appropriate based on currently available information relative to statutory rates, apportionment factors and the applicable taxable income in the jurisdictions in which the Company operates, among other factors. The Company calculates additional tax provisions, where applicable, related to accounting for uncertainty in income taxes, which prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company adjusts its estimates of uncertain tax positions periodically because of ongoing examinations by, and settlements with, various taxing authorities, as well as changes in tax laws, regulations, and interpretations. The Company classifies interest and penalties associated with its unrecognized tax benefits as a component of income tax expense (see Note 8). Impairment of Long-Lived Assets — The Company regularly evaluates whether events and circumstances have occurred that indicate the carrying amount of property and equipment, ROU assets, and finite-life intangible assets may not be recoverable. Conditions that could indicate an impairment assessment is needed include a significant decline in the observable market value of an asset or asset group, a significant change in the extent or manner in which an asset or asset group is used, or a significant adverse change that would indicate that the carrying amount of an asset or asset group is not recoverable. When factors indicate that these long-lived assets or asset groups should be evaluated for possible impairment, the Company assesses the potential impairment by determining whether the carrying value of such long-lived assets or asset groups will be recovered through the future undiscounted cash flows expected from use of the asset or asset group and its eventual disposition. If the carrying amount of the asset or asset group is determined not to be recoverable, an impairment charge is recorded based on the excess, if any, of the carrying amount over fair value. Fair values are determined based on quoted market values or discounted cash flows analyses as applicable. The Company regularly evaluates whether events and circumstances have occurred that indicate the useful lives of property and equipment, right of use (“ROU”) assets, and finite-life intangible assets may warrant revision. The Company determined that triggering events occurred for certain leases exited during the years ended December 31, 2023 and 2022 which required an impairment review of ROU assets. Based on the results of the analysis, the Company recorded non-cash impairment charges of $ 1.7 million and $ 0.9 million for the years ended December 31, 2023 and 2022 , respectively, primarily related to office space exited during the year. Write down of abandoned property and equipment no longer in use was $ 0.3 million for the year ended December 31, 2023 . The Company determined the carrying values of its finite-life intangible assets were not impaired during the years ended December 31, 2023, 2022, and 2021 . Leases — The Company accounts for leases in accordance with ASC 842, Leases . The Company measures ROU assets and liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date. Minimum lease payments include the fixed lease and non-lease components of the agreement, as well as any variable rent payments that depend on an index, initially measured using the index at the lease commencement date. ROU assets are adjusted for any initial direct costs incurred less any lease incentives received, in addition to payments made on or before the commencement date of the lease. The Company recognizes lease expense for leases on a straight-line basis over the lease term. As the implicit rate is not readily determinable for most of the Company’s lease agreements, the Company uses its estimated incremental borrowing rate to determine the initial present value of lease payments. The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for office space, data centers, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company enters into lease contracts ranging from 1 to 8 years. Some leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. The exercise of these lease renewal options is at the Company’s sole discretion and typically are not reasonably certain to renew at inception. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Advertising Costs — Advertising costs are expensed as incurred and are included in selling, general and administrative expense in the accompanying consolidated statements of operations and comprehensive income. Advertising costs were $ 1.9 million , $ 2.9 million , and $ 1.4 million for the years ended December 31, 2023, 2022, and 2021 , respectively. Derivative Instruments — The Company is exposed to certain risks relating to its ongoing business operations and mitigates interest rate risk through the use of derivative instruments. Interest rate swaps have been entered into to manage a portion of the interest rate risk associated with the Company’s variable-rate borrowings. In accordance with ASC 815, Derivatives and Hedging , the derivative instruments are recognized and subsequently measured on the balance sheet at fair value. The Company reviewed its interest rate swaps and determined they do not meet the definition of cash flow hedges. Therefore, the guidance requires that the change in fair value of the interest rate swaps be recognized as a component of income or expense in the consolidated statements of operations and comprehensive income (see Note 7). Concentrations of Credit Risk — Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Cash is deposited with major financial institutions and, at times, such balances with each financial institution may be in excess of insured limits. The Company has not experienced, and does not anticipate, any losses with respect to its cash deposits. Accounts receivable represent credit granted to customers for services provided. The Company performs ongoing credit evaluations of its customers’ financial condition and generally does not require collateral on accounts receivable. The Company had one customer which represented approximately 12 % , 10 %, and 10 % of its consolidated revenues for the years ended December 31, 2023, 2022, and 2021 , respectively. No other customer represented 10% or more of its revenue for these periods. The Company had one customer which represented approximately 17 %, of its consolidated accounts receivable, net as of December 31, 2023 . No other customers represented 10 % or more of its consolidated accounts receivable, net for any period presented. The Company has entered into interest rate derivative agreements with a counterparty bank to reduce its exposure to interest rate volatility. The Company has determined the counterparty bank to be a high credit quality institution. The Company does not enter into financial instruments for trading or speculative purposes. Revenue Recognition — Revenues are recognized when control of the Company’s services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. In accordance with ASC 606, Revenue from Contracts with Customers , which was adopted as of January 1, 2019 using the modified retrospective method, revenues are recognized based on the following steps: a) Identify the contract with a customer b) Identify the performance obligations in the contract c) Determine the transaction price d) Allocate the transaction price to the performance obligations in the contract e) Recognize revenue when (or as) the entity satisfies a performance obligation A substantial majority of the Company’s revenues are derived from pre-onboarding and related services to our customers on a transactional basis, in which an individual background screening package or selection of services is ordered by a customer related to a single individual. Substantially all of the Company’s customers are employers, staffing companies, and other businesses or organizations. The Company’s revenues are mostly comprised of a significant volume of low-dollar services fulfilled by multiple highly automated, proprietary systems and applications. The processing of transactions and recording of revenue is based on contractual terms with the Company’s customers. The Company satisfies its performance obligations and recognizes revenues for services rendered as the orders are completed and the completed reports are transmitted, or otherwise made available. The Company’s remaining services, substantially consisting of tax consulting, fleet management, and driver qualification services, are delivered over time as the customer simultaneously receives and consumes the benefits of the services delivered. To measure the Company’s performance over time, the output method is utilized to measure the value to the customer based on the transfer to date of the services promised, with no rights of return once consumed. In these cases, revenues on transactional contracts with a defined price but an undefined quantity are recognized utilizing the right to invoice expedient resulting in revenues being recognized when the service is provided and becomes billable. Additionally, under this practical expedient, the Company is not required to estimate the transaction price. The Company considers negotiated and anticipated incentives and estimated adjustments, including historical collections experience, when recording revenues. The Company’s contracts with customers generally include standard commercial payment terms acceptable in each region, and do not include any financing components. The Company does not have any significant obligations for refunds, warranties, or similar obligations. The Company records revenues net of sales taxes. Due to the Company’s contract terms and the nature of the background screening industry, the Company determined its contract terms for ASC 606 purposes are less than one year. As a result, the Company uses the practical expedient which allows it to expense incremental costs of obtaining a contract, primarily consisting of sales commissions, as incurred. The Company records third-party pass-through fees incurred as part of screening related services on a gross revenue basis, with the related expense recorded as a cost of services expense, as the Company has control over the transaction and is therefore considered to be acting as a principal. The Company records motor vehicle registration and other tax payments paid on behalf of the Company’s fleet management customers on a net revenue basis as the Company does not have control over the transaction and therefore, is considered to be acting as an agent of the customer. Amounts received from fleet management customers are recorded in cash and cash equivalents in the accompanying consolidated balance sheets as the funds are not legally restricted. Contract balances are generated when the revenues recognized in a given period varies from billing. A contract asset is created when the Company performs a service for a customer and recognizes more revenues than what has been billed. Contract assets are included in accounts receivable in the accompanying consolidated balance sheets. A contract liability is created when the Company transfers a good or service to a customer and recognizes less than what has been billed. The Company recognizes these contract liabilities as deferred revenues when the Company has an obligation to perform services for a customer in the future and has already received consideration from the customer. Contract liabilities are included in deferred revenues in the accompanying consolidated balance sheets. Foreign Currency — The functional currency of all of the Company’s foreign subsidiaries is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenues and expense accounts using average exchange rates prevailing during the fiscal year. Adjustments resulting from the translation of foreign currency financial statements are accumulated net of tax in a separate component of equity. Currency translation income (loss) included in accumulated other comprehensive income (loss) were approximately $ 1.2 million , $( 20.7 ) million , and $( 4.1 ) million , for the years ended December 31, 2023, 2022, and 2021, respectively. Gains or losses resulting from foreign currency transactions are included in the accompanying consolidated statements of operations and comprehensive income, except for those relating to intercompany transactions of a long-term investment nature, which are captured in a separate component of equity as accumulated other comprehensive income (loss). Currency transaction (loss) income included in the accompanying consolidated statements of operations and comprehensive income was approximately $( 0.1 ) million , $ 2.3 million , and $( 0.1 ) million , for the years ended December 31, 2023, 2022, and 2021 , respectively. Share-based Compensation — Prior to the Company’s Initial Public Offering (“IPO”), all share-based awards were issued by a parent of the Company under individual grant agreements and the partnership agreement (collectively the “2020 Equity Plan”). Following the IPO, share-based awards are issued to employees and non-employee directors under the 2021 Omnibus Incentive Plan (as amended by the First Amendment, dated as of May 10, 2023, the “2021 Equity Plan”). Both plans were designed with the intention of promoting the long-term success of the Company by attracting, motivating, and retaining key employees of the Company. The Company accounts for awards issued under both plans in accordance with ASC 718, Compensation — Stock Compensation . Management expects to allow its employees granted awards under the 2020 Equity Plan and 2021 Equity Plan to bear the risks and rewards normally associated with equity ownership for a reasonable period of time when all requisite vesting requirements have been rendered. No outstanding awards are callable, and therefore, the related share-based awards are classified as equity. The calculation of share-based employee compensation expense involves estimates that require management’s judgment. These estimates include the fair value of each of the share-based awards granted, which is estimated on the date of grant using a Black-Scholes option-pricing model. There are four inputs into the Black-Scholes option-pricing model: expected volatility, risk-free interest rates, expected term, and estimated fair value of the underlying unit. The Company estimates expected volatility based on an analysis of guidelines of publicly traded peer companies’ historical volatility. The risk-free interest rate is based on the treasury constant maturities rate based on data published by the U.S. Federal Reserve. The expected term of share-based awards granted is derived from historical exercise experience under the Company’s share-based plans and represents the period of time that awards granted are expected to be outstanding. Because of the limitations on the sale or transfer of our equity as a privately held company and a lack of historical option exercises as a public company, the Company does not believe our historical exercise pattern is indicative of the pattern we will experience in future periods. The Company has consequently used the simplified method to calculate the expected term, which is the average of the contractual term and vesting period, and plans to continue to use the simplified method until we have sufficient exercise and pricing history. Finally, prior to the IPO, the estimated fair value of the underlying equity was determined using either a transaction valuation or a blend of income and market approaches. After the IPO, the estimated fair value of the underlying equity was based on the observable market price of the Company’s equity. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, share-based compensation expenses could be materially different in the future. In addition, for awards with a service condition, the Company has elected to account for forfeitures as they occur. Therefore, the Company will reverse compensation costs previously recognized when an unvested award is forfeited. For awards with a performance condition, the Company is required to estimate the expected forfeiture rate, and only recognize expenses for those shares expected to vest. The Company estimates the expected forfeiture rate based on the Company’s historical data, grant terms, and anticipated plan participant turnover. If the Company’s actual forfeiture rate is materially different from its estimate, the share-based compensation expense could be significantly different from what the Company has recorded in the current period. Comprehensive Income — Comprehensive income includes gains and losses from foreign currency translation adjustments, net. Net Income Per Share of Equity — Basic net income per share are computed by dividing net income by the weighted average number of common shares outstanding during the period. Basic weighted-average shares outstanding excludes nonvested restricted stock. Diluted net income per share is computed by dividing net income by the weighted average number of shares outstanding during the period after adjusting for the impact of securities that would have a dilutive effect on net income per share. Diluted weighted average shares outstanding, is similar to basic weighted-average shares outstanding, except that the weighted-average number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common share had been issued, including the dilutive impact of nonvested restricted stock. The Company uses the treasury stock method to incorporate potentially dilutive securities in diluted net income per share. The potentially dilutive securities outstanding during the years ended December 31, 2023, 2022, and 2021 had a dilutive effect and were included in the calculation of diluted net income per share for the period. Recent Accounting Pronouncements — In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”), Disclosure Improvements - Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative . The ASU incorporates several disclosure and presentation requirements currently residing in the SEC Regulations S-X and S-K. The amendments are to be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments not removed by the SEC by June 30, 2027 will not be effective. The Company does not expect ASU 2023-06 to have a material effect on its consolidated financial statements or related disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segments Disclosures . The amendments improve reportable segment disclosure requirements through enhanced disclosures over significant segment expenses regularly provided to the CODM, extending certain annual disclosures to interim periods, and through permitting more than one measure of segment profit or loss to be reported under certain conditions. This guidance is effective for annual reporting periods beginning after December 15, 2023 and interim reporting periods beginning after December 31, 2024. Early adoption of the amendment is permitted, including adoption in any interim periods for which financial statements have not been issued. The Company is currently evaluating the guidance and its impact to the financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires a public business entity to disclose specific categories in its annual effective tax rate reconciliation and disaggregated information about significant reconciling items by jurisdiction and by nature. The ASU also requires entities to disclose their |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Acquisitions | Note 3. Acquisitions 2023 Acquisition On September 1, 2023, the Company acquired 100 % of the equity interest of a digital identity and biometrics solutions company headquartered in New York for $ 41.0 million. The acquired company operates under the trade name Infinite ID. The acquisition expands the Company’s network and portfolio of identity solutions in the United States. The acquired company was determined to constitute a business and the Company was deemed to be the acquirer under ASC 805. As a result, the Company has recorded the related purchase accounting as of September 1, 2023. The allocation of the purchase price is based on the fair value of assets acquired and liabilities assumed as of the acquisition date. The following table summarizes the consideration paid and the amounts recognized for the assets acquired and liabilities assumed (in thousands): Consideration Cash purchase price $ 41,000 Other transaction adjustments 122 Total fair value of consideration transferred $ 41,122 Current assets $ 1,335 Property and equipment, including software developed for internal use 5,959 Trade name 2,300 Customer lists 3,800 Other intangible assets 2,400 Other assets 236 Total liabilities ( 1,427 ) Total identifiable net assets $ 14,603 Goodwill $ 26,519 Goodwill recognized is not expected to be deductible for tax purposes. Results of operation have been included in the consolidated financial statements of the Company’s Americas segment since the date of acquisition. As of the date these consolidated financial statements were issued, the purchase accounting related to this acquisition was incomplete as the valuation of certain working capital balances, deferred taxes, and certain customary transaction adjustments were not yet finalized. The Company has reflected the provisional amounts in these consolidated financial statements. As such, the above balances may be adjusted in a future period as the valuation is finalized and these adjustments may be material to the consolidated financial statements. 2022 Acquisition On January 1, 2022, the Company completed its asset purchase of Form I-9 Compliance, a U.S.-based technology solution and consulting service provider for I-9 and E-Verify compliance, for cash consideration of approximately $ 19.8 million. The Company recognized $ 9.1 million of goodwill. Identifiable intangible assets related to this acquisition totaled $ 8.5 million, of which $ 6.1 million was attributable to a customer related intangible asset with an estimated useful life of thirteen years and $ 2.4 million was attributable to developed technology with a useful life of five years . Goodwill recognized is deductible for tax purposes. Results of operations have been included in the consolidated financial statements of the Company’s Americas segment since the date of the acquisition. 2021 Acquisitions On March 31, 2021, the Company completed its acquisition of selected assets and specified liabilities comprising the United Kingdom background screening business unit of a United Kingdom based company for cash consideration of $ 7.6 million. The Company recognized $ 3.1 million of goodwill and $ 3.0 million of intangible assets subject to amortization. Goodwill recognized is primarily attributable to assembled workforce and the expected growth of the Company and is deductible for tax purposes. Results of operations have been included in the consolidated financial statements of the Company’s International segment since the date of the acquisition. On November 30, 2021, the Company completed its acquisition of a background screening and verification provider based in Mexico. Goodwill recognized as result of this acquisition was not deductible for tax purposes. Results of operations have been included in the consolidated financial statements of the Company’s Americas segment since the date of the acquisition. On November 30, 2021, the Company, through one of its wholly-owned subsidiaries in the United States, entered into an agreement to acquire 100 % of the outstanding equity of Corporate Screening Services, LLC (“Corporate Screening”), a U.S.-based screening and compliance solutions provider which strengthened the Company’s healthcare and higher education solutions by adding technology and expertise tailored to those customers for cash consideration of $ 39.4 million. The acquisition was considered an acquisition of assets for tax purposes and, accordingly, a significant portion of the $ 22.2 million of goodwill recognized was deductible for tax purposes. Identifiable intangible assets related to this acquisition totaled $ 15.5 million, of which $ 11.8 million was attributable to a customer related intangible asset with an estimated useful life of thirteen years and $ 3.6 million was attributable to developed technology with a useful life of five years . In addition, the Company acquired current assets of $ 2.9 million and assumed liabilities of $ 1.6 million. Results of operations have been included in the consolidated financial statements of the Company’s Americas segment since the date of the acquisition . |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 4. Property and Equipment, net Property and equipment, net as of December 31, 2023 and 2022 consisted of the following (in thousands): December 31, 2023 2022 Furniture and equipment $ 26,576 $ 23,422 Capitalized software for internal use, acquired by business combination 232,505 227,405 Capitalized software for internal use, developed internally or otherwise purchased 86,704 60,187 Leasehold improvements 2,275 2,957 Total property and equipment 348,060 313,971 Less: accumulated depreciation and amortization ( 268,619 ) ( 200,442 ) Property and equipment, net $ 79,441 $ 113,529 Depreciation and amortization expense of property and equipment was approximately $ 67.4 million , $ 70.0 million , and $ 69.4 million , for the years ended December 31, 2023, 2022, and 2021 , respectively. |
Goodwill, Trade Name, and Custo
Goodwill, Trade Name, and Customer Lists | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, Trade Name, and Customer Lists | Note 5. Goodwill, Trade Names, Customer Lists, and Other Intangible Assets The changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022 by reportable segment were as follows (in thousands): Americas International Total Balance – December 31, 2021 $ 668,048 $ 125,844 $ 793,892 Acquisitions 9,116 — 9,116 Adjustments to initial purchase price allocations ( 35 ) — ( 35 ) Foreign currency translation 42 ( 9,935 ) ( 9,893 ) Balance – December 31, 2022 $ 677,171 $ 115,909 $ 793,080 Acquisition 26,519 — 26,519 Foreign currency translation 107 948 1,055 Balance – December 31, 2023 $ 703,797 $ 116,857 $ 820,654 The following summarizes the gross carrying value and accumulated amortization for the Company’s trade names, customer lists, and other intangible assets as of December 31, 2023 and 2022 (in thousands): December 31, 2023 Gross Accumulated Net Carrying Useful Life Trade names $ 96,321 $ ( 30,092 ) $ 66,229 20 years Customer lists 520,105 ( 244,577 ) 275,528 13 - 14 years Other intangible assets 2,400 ( 143 ) 2,257 5 years Total $ 618,826 $ ( 274,812 ) $ 344,014 December 31, 2022 Gross Accumulated Net Carrying Useful Life Trade names $ 93,959 $ ( 22,797 ) $ 71,162 20 years Customer lists 515,762 ( 189,748 ) 326,014 13 - 14 years Total $ 609,721 $ ( 212,545 ) $ 397,176 Amortization expense of trade names, customer lists, and other intangible assets was approximately $ 62.1 million , $ 68.3 million , and $ 73.5 million , for the years ended December 31, 2023, 2022, and 2021, respectively. Amortization expense relating to trade names, customer lists, and other intangible assets is expected to be as follows (in thousands): Years Ending December 31, 2024 $ 57,413 2025 51,031 2026 44,006 2027 37,325 2028 32,697 Thereafter 121,542 $ 344,014 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Note 6. Long-term Debt The fair value of the Company’s long-term debt obligation approximated its book value as of December 31, 2023 and 2022 and consisted of the following (in thousands): December 31, 2023 2022 First Lien Credit Facility $ 564,724 $ 564,724 Less: Deferred financing costs ( 6,268 ) ( 8,075 ) Long-term debt, net $ 558,456 $ 556,649 In February 2020, a new financing structure was established consisting of a new First Lien Credit Agreement (“First Lien Agreement”) and a new Second Lien Credit Agreement (“Second Lien Agreement”) (collectively, the “Credit Agreements”). The First Lien Agreement provided financing in the form of a $ 670.0 million term loan due January 31, 2027 , carrying an interest rate of 3.25 % to 3.50 %, based on the first lien leverage ratio, plus LIBOR (“First Lien Credit Facility”) and a new $ 75.0 million revolving credit facility due January 31, 2025 (“Revolver”). The First Lien Credit Facility required mandatory quarterly repayments of 0.25 % of the original loan balance commencing September 30, 2020. Beginning with the year ending December 31, 2021, the First Lien Credit Facility required mandatory payments based on calculated excess cash flow, as defined within the First Lien Credit Agreement. The Second Lien Agreement provided financing in the form of a $ 145.0 million term loan due January 31, 2028 , carrying an interest rate of 8.50 % plus LIBOR (“Second Lien Credit Facility”). The Credit Agreements are collateralized by substantially all assets and capital stock owned by direct and indirect domestic subsidiaries and are governed by certain restrictive covenants including limitations on indebtedness, liens, and other corporate actions such as investments and acquisitions. In the event the Company’s outstanding indebtedness under the Revolver exceeds 35% of the aggregate principal amount of the revolving commitments then in effect, it is required to maintain a consolidated first lien leverage ratio no greater than 7.75 to 1.00 . In February 2021, the Company refinanced its First Lien Credit Facility at an increased principal amount of $ 766.6 million due January 31, 2027 , carrying a reduced interest rate of 3.00 % to 3.25 %, based on the first lien leverage ratio, plus LIBOR. No changes were made to the associated revolving credit facility due January 31, 2025. In connection with the refinancing of the First Lien Credit Facility, the Company fully repaid its Second Lien Credit Facility. As a result of these transactions the Company recorded a total loss on extinguishment of debt of $ 13.9 million, composed of the write-off of unamortized deferred financing costs plus a prepayment premium, accrued interest, and other fees. In connection with the closing of the Company’s IPO, on June 30, 2021, the Company repaid $ 200.0 million of its First Lien Credit Facility outstanding, of which $ 44.3 million was applied to the remaining quarterly principal payments due under the First Lien Agreement. As a result of the IPO, the Company’s interest rate under the First Lien Credit Facility was reduced by 0.25 % to a range of 2.75 % to 3.00 %, based on the first lien ratio, plus LIBOR. The remaining $ 564.7 million term loan is scheduled to mature on January 31, 2027 . As a result of the prepayment, the Company recorded additional interest expense of $ 3.7 million associated with the accelerated amortization of the related deferred financing costs. Additionally, in connection with the closing of the IPO, the Company entered into an amendment that increased the borrowing capacity under the Revolver from $ 75.0 million to $ 100.0 million and extended the maturity date from January 31, 2025 to July 31, 2026 . In June 2023, the Credit Agreement was amended to transition the reference rate from LIBOR to SOFR (the Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York), with the addition of an applicable margin. As of December 31, 2023 , the Company had no outstanding amounts under the Revolver, and therefore, was not subject to the consolidated first lien leverage ratio covenant. The Company was compliant with all other covenants under the agreement as of December 31, 2023 . Scheduled maturities of long-term debt as of December 31, 2023, are as follows (in thousands): Years Ending December 31, 2024 $ — 2025 — 2026 — 2027 564,724 2028 — Thereafter — $ 564,724 |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Note 7. Derivatives To reduce exposure to variability in expected future cash outflows on variable rate debt attributable to the changes in one-month LIBOR, the Company has historically entered into interest rate derivative instruments to economically offset a portion of this risk and may do so in the future. In June 2023, the Company transitioned the reference rate for its interest rate derivative agreements from one-month LIBOR to one-month SOFR. As of December 31, 2023, the Company had the following outstanding derivatives that were not designated as a hedge in qualifying hedging relationships: Product Effective Date Maturity Date Notional Rate Interest rate collars (a) June 30, 2023 February 29, 2024 $ 300.0 million 0.48 % floor/ 1.47 % cap Interest rate swap (b) June 30, 2023 February 28, 2026 $ 100.0 million 4.32 % Interest rate swap December 29, 2023 December 31, 2026 $ 150.0 million 3.86 % Interest rate swap March 1, 2024 December 31, 2026 $ 150.0 million 3.76 % (a) In conjunction with the June 2023 transition of the reference rate from LIBOR to SOFR, the fixed cap rate was reduced from 1.50 % to 1.47 %. (b) In conjunction with the June 2023 transition of the reference rate from LIBOR to SOFR, the fixed rate was reduced from 4.36 % to 4.32 % . Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements; however, the Company has not elected to apply hedge accounting for these instruments. The following is a summary of location and fair value of the financial positions recorded related to the derivative instruments (in thousands): Fair Value As of December 31, Derivatives not designated Balance Sheet Location 2023 2022 Interest rate collars Prepaid expenses and other current assets $ 1,986 $ 11,570 Interest rate swaps Accrued liabilities $ 1,576 $ — The following is a summary of location and amount of gains and (losses) recorded related to the derivative instruments (in thousands): Gain/(Loss) Year Ended December 31, Derivatives not designated Income Statement Location 2023 2022 2021 Interest rate collars Interest expense, net $ 865 $ 12,429 $ 2,284 Interest rate swaps Interest expense, net $ ( 981 ) $ — $ — |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8. Income Taxes The Company is a U.S. domiciled corporation for tax purposes. The Company’s income tax expense and balance sheet accounts reflect the results of the Company and its subsidiaries. The domestic and foreign components of income before provision for income taxes for the years ended December 31, 2023, 2022, and 2021, respectively, were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Income (loss) before provision for income taxes from United States operations $ 25,250 $ 46,766 $ ( 7,791 ) Income before provision for income taxes from foreign operations 23,226 38,313 32,704 Income before provision for income taxes $ 48,476 $ 85,079 $ 24,913 The domestic and foreign components of the provision for income taxes for the years ended December 31, 2023, 2022, and 2021, respectively, were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Current: Federal $ 18,486 $ 179 $ 58 State 5,772 4,593 4,003 Foreign 6,480 9,817 7,618 Total Current $ 30,738 $ 14,589 $ 11,679 Deferred: Federal $ ( 16,857 ) $ 1,773 $ 549 State ( 2,313 ) 5,030 ( 4,495 ) Foreign ( 385 ) ( 917 ) 1,129 Total Deferred $ ( 19,555 ) $ 5,886 $ ( 2,817 ) Total $ 11,183 $ 20,475 $ 8,862 The following table reconciles the U.S. statutory federal tax rate of 21 % to the Company’s effective income tax rate of 23.07 % , 24.07 % , and 35.57 % , for the years ended December 31, 2023, 2022, and 2021, respectively: Year Ended December 31, 2023 2022 2021 U.S. statutory federal tax rate 21.00 % 21.00 % 21.00 % State and local income taxes – net of federal tax benefits 3.89 2.85 ( 5.32 ) Foreign rate difference 0.59 0.67 3.25 Change in valuation allowances 0.83 ( 1.06 ) ( 2.72 ) GILTI inclusion — 1.41 7.92 Transaction cost 0.31 — 5.21 Share-based compensation 3.36 0.62 5.82 Rate change impact ( 0.66 ) ( 0.43 ) 2.23 US research and development credit ( 3.96 ) ( 1.44 ) ( 7.15 ) Withholding tax 0.65 0.38 5.34 Return-to-provision adjustment ( 3.56 ) — — Other 0.62 0.07 ( 0.01 ) Effective tax rate 23.07 % 24.07 % 35.57 % As of December 31, 2023, the Company had approximately $ 56.2 million of accumulated unremitted earnings generated by its foreign subsidiaries. Under the U.S. Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”), a portion of these earnings was subject to U.S. federal taxation with the one-time transition tax. With the exception of certain unremitted earnings in India, the Company asserted indefinite reinvestment on its unremitted earnings as well as any other additional outside basis differences of its foreign subsidiaries at December 31, 2023. Any future reversals could be subject to additional foreign withholding taxes, U.S. state taxes, and certain tax impacts relating to foreign currency exchange effects on any future repatriations of the unremitted earnings. The primary components of temporary differences that give rise to the Company’s net deferred tax liability as of December 31, 2023 and 2022 consist of the following (in thousands): December 31, 2023 2022 Deferred tax assets: Federal net operating loss carryforwards $ — $ 2,304 State net operating loss carryforwards 5,101 6,782 Foreign net operating loss carryforwards 5,653 4,888 Deferred revenues 394 205 Bad debt reserves 276 297 Employee benefits 1,237 1,563 Share-based compensation 660 546 Accrued expenses and loss reserves 2,460 1,802 Section 267 adjustment 3,742 — Other deferred tax assets 653 5,890 Less: Valuation allowances ( 1,863 ) ( 1,467 ) Total deferred tax asset $ 18,313 $ 22,810 Deferred tax liabilities: Trade names $ ( 16,420 ) $ ( 17,632 ) Goodwill ( 12,929 ) ( 11,703 ) Depreciable and other amortizable assets ( 55,028 ) ( 77,127 ) Other deferred liabilities ( 2,424 ) ( 4,482 ) Total deferred tax liability $ ( 86,801 ) $ ( 110,944 ) Net deferred tax liability $ ( 68,488 ) $ ( 88,134 ) Based upon the weight of all available evidence, the Company does not maintain a valuation allowance against its deferred tax assets in the United States. As of December 31, 2023 and 2022 , the Company believes that federal, state, and foreign net operating loss carryforwards will be available to reduce future taxable income after taking into account various federal and foreign limitations on the utilization of such net operating loss carryforwards. The net operating loss carryforward balances as of December 31, 2023 and 2022, are as follows (in thousands): December 31, 2023 2022 Federal $ — $ 10,970 State 97,659 125,989 Foreign 24,980 24,207 $ 122,639 $ 161,166 If not utilized, certain foreign net operating losses will begin to expire in 2024 and certain state net operating loss carryforwards will begin to expire in 2026 . The Company has fully utilized the research and development credit carryforward as of December 31, 2023. The Company had $ 4.4 million of research and development credit carryforwards as of December 31, 2022. After consideration of all of the evidence, the Company has determined that a valuation allowance of approximately $ 1.9 million and $ 1.5 million is necessary as of December 31, 2023 and 2022, respectively, for certain foreign net operating loss carryforwards. The increase in the valuation allowance in 2023 is primarily due to the additional loss generated during the year in jurisdictions with full valuation allowance and revaluation of certain net operating loss carryforwards at December 31, 2023. The Company is no longer subject to U.S. federal examinations by tax authorities for years before 2012, and state, local, and non-U.S. income tax examinations by tax authorities before 2005. The aggregate changes in the balance of our gross unrecognized tax benefits, excluding accrued interest, for the years ended December 31, 2023, 2022, and 2021, were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Balance, beginning of period $ 972 $ 1,399 $ 1,341 Increases for tax positions related to prior years 39 28 58 Decreases for tax positions related to prior years — ( 455 ) — Balance, end of period $ 1,011 $ 972 $ 1,399 An income tax benefit of approximately $ 1.0 million would be recorded if these unrecognized tax benefits are recognized. The Company believes it is reasonably possible that its liability for unrecognized tax benefits will decrease in the next twelve months. The Company recognizes accrued interest related to unrecognized tax benefits in interest expense and penalties in income tax expense. On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law in the U.S. Some of the key provisions included in the IRA include implementation of a new alternative minimum tax, an excise tax on stock buybacks, and significant tax incentives for energy and climate initiatives. The Company incurred $ 0.5 million of excise tax on stock buybacks in 2023 as a result of IRA. The Company has determined that the other provisions in the IRA had no impact on the Company as of and for the year ended December 31, 2023. On December 15, 2022, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15 %, as established by the Organization for Economic Co-operating and Development (OECD) Pillar Two Framework. The EU effective dates are January 1, 2024, and January 1, 2025, for different aspects of the directive. A significant number of other countries are expected to also implement similar legislation with varying effective dates in the future. While the Company is not currently subject to Pillar Two due to not meeting the revenue threshold, it will continue to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries. |
Revenues
Revenues | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Note 9. Revenues Performance obligations Substantially all of the Company’s revenues are recognized at a point in time when the orders are completed and the completed reports are reported, or otherwise made available. For revenues delivered over time, the output method is utilized to measure the value to the customer based on the transfer to date of the services promised, with no rights of return once consumed. In these cases, revenues on transactional contracts with a defined price but an undefined quantity is recognized utilizing the right to invoice expedient resulting in revenues being recognized when the service is provided and becomes billable. Additionally, under this practical expedient, the Company is not required to estimate the transaction price. Accordingly, in any period, the Company does not recognize a significant amount of revenues from performance obligations satisfied or partially satisfied in prior periods and the amount of such revenues recognized for the years ended December 31, 2023, 2022, and 2021, were immaterial. Contract assets and liabilities The contract asset balance was $ 4.8 million and $ 6.5 million as of December 31, 2023 and 2022, respectively, and is included in accounts receivable, net in the accompanying consolidated balance sheets. The contract liability balance was $ 1.9 million and $ 1.1 million as of December 31, 2023 and 2022 , respectively, and is included in deferred revenues in the accompanying consolidated balance sheets. An immaterial amount of revenue was recognized in the current period related to the beginning balance of deferred revenues. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | Note 10. Share-based Compensation Share-based compensation expense is recognized in cost of services, product and technology expense, and selling, general, and administrative expense, in the accompanying consolidated statements of operations and comprehensive income as follows (in thousands): Year Ended December 31, 2023 2022 2021 Share-based compensation expense Cost of services $ 1,279 $ 1,103 $ 163 Product and technology expense 2,246 1,351 459 Selling, general, and administrative expense 11,740 5,402 8,908 Total share-based compensation expense $ 15,265 $ 7,856 $ 9,530 Prior to the IPO, all share-based awards were issued by Fastball Holdco, L.P., the Company’s previous parent company, under individual grant agreements and the partnership agreement of such parent company under the 2020 Equity Plan. In connection with the IPO, the Company adopted the 2021 Equity Plan. In May 2023, the Company’s Board of Directors approved a modification of the vesting terms of outstanding unvested and unearned performance-based options, restricted stock units, and restricted stock (collectively, “Performance Awards”) previously issued under its equity plans. The modification, effective May 10, 2023, allowed for unvested and unearned Performance Awards outstanding as of the date of the modification, to vest based on time on the fourth, fifth, and sixth anniversaries of the relevant vesting commencement date, as set forth in each grant agreement (the “Vesting Commencement Date”), while preserving the eligibility to vest upon the Company’s investors receiving a targeted money-on-money return, subject to continued service. As of the modification date, unrecognized pre-tax non-cash compensation expense related to the Performance Awards, after accounting for the modification, was $ 28.8 million. The Company is recognizing pre-tax non-cash compensation expense related to the modification of Performance Awards prospectively from the date of modification, on a straight-line basis. The fair value of the modified restricted stock units and restricted stock was estimated using the closing stock price on the date of modification. The fair value of the modified stock options was estimated on the date of modification using the Black-Scholes option-pricing model with the following weighted average assumptions: Options Expected stock price volatility 37.43 % Risk-free interest rate 3.40 % Expected term (in years) 4.67 Fair-value of the underlying unit $ 12.61 In connection with the Company’s declared one-time special cash dividend in August 2023, the exercise price of outstanding stock option awards and stock purchases under the Company’s employee stock purchase plan (“ESPP”) was reduced by $ 1.50 , in accordance with the non-discretionary anti-dilution provisions of the equity and stock purchase plans. Historical exercise prices noted in the below tables have not been adjusted. 2020 Equity Plan Awards issued under the 2020 Equity Plan consist of options and profits interests and vest based on two criteria: (1) Time — awards vest over five years at a rate of 20 % per year; and (2) Performance — awards vest based upon a combination of the five-year time vesting, subject to the Company’s investors receiving a targeted money-on-money return. Options issued under the 2020 Equity Plan generally expire ten years after the grant date. No awards were issued under the plan during the years ended December 31, 2023, 2022, and 2021. A summary of the profits interest unit activity under the 2020 Equity Plan for the year ended December 31, 2021 is as follows: Class C Units December 31, 2020 Grants outstanding 3,858,048 Exchanged for common stock in the Company ( 411,720 ) Exchanged for restricted stock in the Company ( 3,446,328 ) December 31, 2021 Grants outstanding — A summary of the option unit activity under the 2020 Plan for the year ended December 31, 2021 is as follows: Options Weighted Average Exercise Price December 31, 2020 Grants outstanding 2,733,734 $ 10.06 Exercised ( 24,112 ) $ 10.00 Forfeited ( 107,168 ) $ 10.00 Exchanged for options in the Company ( 2,602,454 ) $ 10.07 December 31, 2021 Grants outstanding — $ — In connection with the Company’s IPO, the Company’s parent was dissolved. Awards issued by the Company’s parent were converted in accordance with non-discretionary anti-dilution provisions of the 2020 Equity Plan grants as follows: • All vested outstanding profits interest grants issued by the Company’s parent were converted to common stock in the Company and all unvested outstanding profits interest grants issued by the Company’s parent were converted to restricted stock in the Company under the 2021 Equity Plan. The number of common stock and restricted stock shares issued to each profits interest holder was ratably adjusted to preserve the fair value of the awards. Additionally, the vesting conditions and equity classification of the awards remained unchanged as a result of the conversion. • All outstanding stock option grants issued by the Company’s parent were converted into stock options issued by the Company under the terms of the individual grant agreements. The number of options granted and the strike price of the options was ratably adjusted using an exchange ratio calculated to preserve the fair value of the awards. Additionally, the vesting, vesting conditions, and equity classification of the awards remained unchanged as a result of the conversion. A summary of the option activity for the year ended December 31, 2023 is as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value December 31, 2022 Grants outstanding 2,843,342 $ 6.66 Grants exercised ( 394,375 ) $ 6.06 Grants cancelled/forfeited ( 533,715 ) $ 6.68 December 31, 2023 Grants outstanding 1,915,252 $ 5.15 6.2 Years $ 21.9 million December 31, 2023 Grants vested 518,455 $ 5.13 6.1 Years $ 5.9 million December 31, 2023 Grants unvested 1,396,797 $ 5.16 The total intrinsic value of options exercised during the years ended December 31, 2023, 2022, and 2021 was $ 3.0 million, $ 3.1 million, and $ 1.1 million, respectively. A summary of changes in outstanding options and the related weighted-average exercise price per share for the years ended December 31, 2022 and 2021 is as follows: December 31, 2022 2021 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Grants outstanding at the beginning of the year 3,519,563 $ 6.66 — $ — Grants issued in exchange for options in the Company’s Parent — $ — 3,938,491 $ 6.65 Grants exercised ( 372,254 ) $ 6.68 ( 58,552 ) $ 6.61 Grants cancelled/forfeited ( 303,967 ) $ 6.61 ( 360,376 ) $ 6.61 Grants outstanding at the end of the year 2,843,342 $ 6.66 3,519,563 $ 6.66 Grants vested 648,926 $ 6.65 681,227 $ 6.66 Grants unvested 2,194,416 $ 6.67 2,838,336 $ 6.66 2021 Equity Plan The 2021 Equity Plan is intended to provide a means through which to attract and retain key personnel and to provide a means whereby our directors, officers, employees, consultants, and advisors can acquire and maintain an equity interest in us, or be paid incentive compensation, including incentive compensation measured by reference to the value of our common stock, thereby strengthening their commitment to our welfare and aligning their interests with those of our stockholders. The 2021 Equity Plan provides for the grant of awards of stock options, stock appreciation rights, restricted shares, restricted stock units, and other equity-based or cash-based awards as determined by the Company’s Compensation Committee. The 2021 Equity Plan initially had a total of 17,525,000 shares of common stock reserved. The number of reserved shares automatically increases on the first day of each calendar year commencing on January 1, 2022 and ending on January 1, 2030, in an amount equal to the lesser of (x) 2.5% of the total number of shares of common stock outstanding on the last day of the immediately preceding calendar year and (y) a number of shares as determined by the Board of Directors. As of December 31, 2023, 16,713,654 shares were available for issuance under the 2021 Equity Plan. Stock Options Stock options issued immediately prior to the IPO vest based on two criteria: (1) Time — awards vest annually over five years ; and (2) Performance — awards vest based upon a combination of the five-year time vesting, subject to the Company’s investors receiving a targeted money-on-money return. Stock options issued after the IPO vest annually, generally over four or five years . Stock options generally expire ten years after the grant date. The fair value for stock options granted for the years ended December 31, 2023, 2022, and 2021 was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighed average assumptions: Year Ended December 31, 2023 2022 2021 Expected stock price volatility 32.99 % 34.66 % 38.67 % Risk-free interest rate 4.00 % 2.77 % 1.06 % Expected term (in years) 6.78 6.23 5.91 Fair-value of the underlying unit $ 12.56 $ 14.68 $ 15.33 A summary of the option activity for the year ended December 31, 2023 is as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value December 31, 2022 Grants outstanding 4,311,662 $ 15.24 Grants issued 579,745 $ 12.56 Grants exercised ( 22,402 ) $ 12.55 Grants cancelled/forfeited ( 182,346 ) $ 13.81 December 31, 2023 Grants outstanding 4,686,659 $ 13.61 7.8 Years $ 13.9 million December 31, 2023 Grants vested 1,600,529 $ 13.76 7.6 Years $ 4.5 million December 31, 2023 Grants unvested 3,086,130 $ 13.53 The total intrinsic value of options exercised during the year ended December 31, 2023 was $ 0.1 million. No options were exercised during the years ended December 31, 2022 and 2021. A summary of changes in outstanding options and the related weighted-average exercise price per share for the years ended December 31, 2022 and 2021 is as follows: December 31, 2022 2021 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Grants outstanding at the beginning of the year 3,714,540 $ 15.33 — $ — Grants issued 608,122 $ 14.68 3,714,540 $ 15.33 Grants cancelled/forfeited ( 11,000 ) $ 17.52 — $ — Grants outstanding at the end of the year 4,311,662 $ 15.24 3,714,540 $ 15.33 Grants vested 1,054,302 $ 15.20 644,556 $ 15.00 Grants unvested 3,257,360 $ 15.25 3,069,984 $ 15.40 Restricted Stock Units Restricted stock units (“RSU”) generally vest annually over three to five years . A summary of the RSU activity for the years ended December 31, 2023, 2022, and 2021 is as follows: Shares Weighted Average Grant Date Fair Value December 31, 2020 Nonvested RSUs — $ — Granted 340,875 $ 17.19 December 31, 2021 Nonvested RSUs 340,875 $ 17.19 Granted 203,032 $ 14.36 Vested ( 67,175 ) $ 16.96 Forfeited ( 4,400 ) $ 17.52 December 31, 2022 Nonvested RSUs 472,332 $ 16.00 Granted 235,903 $ 13.46 Vested ( 150,724 ) $ 15.42 Forfeited ( 50,368 ) $ 14.90 December 31, 2023 Nonvested RSUs 507,143 $ 15.10 Restricted Stock The following table summarizes the restricted stock issued by the Company. These include grants of unvested 2020 Equity Plan profits interests grants that were converted into restricted stock as described above, as well as restricted stock issued to new recipients. The restricted stock granted as a result of the conversion of 2020 Equity Plan profits interests retain the vesting attributes (including original service period vesting start date) of the original award. A summary of the restricted stock activity for the years ended December 31, 2023, 2022, and 2021 is as follows: Shares Weighted Average December 31, 2020 Nonvested restricted stock — $ — Grants issued in exchange for unvested profits interests in the Company’s Parent 2,918,084 $ 3.85 Vested ( 304,725 ) $ 3.85 December 31, 2021 Nonvested restricted stock 2,613,359 $ 3.85 Vested ( 332,059 ) $ 3.85 December 31, 2022 Nonvested restricted stock 2,281,300 $ 3.85 Vested ( 326,670 ) $ 3.85 December 31, 2023 Nonvested restricted stock 1,954,630 $ 8.50 As of December 31, 2023, the Company had approximately $ 37.6 million of unrecognized pre-tax non-cash compensation expense, comprised of approximately $ 13.9 million related to restricted stock, $ 6.3 million related to RSUs, and approximately $ 17.4 million related to stock options, which the Company expects to recognize over a weighted average period of 1.2 years. 2021 Employee Stock Purchase Plan On June 25, 2021, in connection with the IPO, the Company adopted the First Advantage Corporation 2021 Employee Stock Purchase Plan (“ESPP”) that allows eligible employees to voluntarily make after-tax contributions of up to 15 % of such employee’s cash compensation to acquire Company stock during designated offering periods. Each offering period consists of one six-month purchase period. During the holding period, ESPP purchased shares are not eligible for sale or broker transfer. The Company recorded an associated expense of approximately $ 0.8 million and $ 0.4 million for the years ended December 31, 2023 and 2022, respectively. Excess Tax Benefits The Company recognized excess tax benefits of approximately $ 0.3 million, $ 0.5 million, and $ 0.2 million associated with equity award exercises and vesting in its income tax expense for the years ended December 31, 2023, 2022, and 2021 , respectively. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Defined Contribution Plan | Note 1 1. Defined Contribution Plan The Company sponsors a defined contribution plan that principally consists of a contributory 401(k) savings plan. The Company makes discretionary matching contributions to the 401(k) savings plan based on a percentage of employee contributions. The expense recognized related to the Company’s contributions to the 401(k) savings plan for the years ended December 31, 2023, 2022, and 2021 was approximately $ 1.2 million , $ 1.3 million , and $ 1.2 million , respectively. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Equity | Note 12. Equity Common and Preferred Stock On June 25, 2021, the Company completed its IPO of 29,325,000 shares of the Company common stock, $ 0.001 par value per share at an offering price of $ 15.00 per share, pursuant to the Company’s IPO Registration Statement. The Company sold 22,856,250 shares, including 2,981,250 shares that were sold pursuant to the full exercise of the underwriters’ option to purchase additional shares. Certain existing stockholders sold an aggregate of 6,468,750 shares, including 843,750 shares that were sold pursuant to the full exercise of the underwriters’ option to purchase additional shares. The Company received aggregate net proceeds of $ 316.5 million after deducting underwriting discounts and commissions of $ 22.3 million and other offering costs of $ 4.0 million. Immediately prior to the completion of the IPO, the Company filed an Amended and Restated Certificate of Incorporation, which authorized a total of 1,000,000,000 shares of Common Stock, $ 0.001 par value per share and 250,000,000 shares of Preferred Stock, par value $ 0.001 per share. After filing the Amended and Restated Certificate of Incorporation, certain redemptions, exchanges, and conversions were made in connection with the dissolution of Fastball Holdco, L.P., the Company’s parent, which occurred prior to the completion of the IPO. On November 15, 2021, the Company completed a follow-on offering (“November 2021 Follow-On”) where certain existing stockholders sold an aggregate of 15,000,000 shares, plus an additional 2,250,000 shares that were sold pursuant to the full exercise of the underwriters’ option to purchase additional shares. The Company did not sell any shares of its common stock in the November 2021 Follow-On Offering and did not receive any of the proceeds from the sale of shares. As of December 31, 2023 , no preferred stock had been issued. Share Repurchase Program On August 2, 2022, the Company’s Board of Directors authorized the repurchase of up to $ 50.0 million of the Company’s common stock over the 12-month period ending August 2, 2023 (the “Repurchase Program”). On November 8, 2022, the Company’s Board of Directors authorized an increase to the total available amount under its Repurchase Program to $ 150.0 million and extended the program through December 31, 2023. On February 28, 2023, the Company’s Board of Directors authorized an increase to the total available amount under its Repurchase Program to $ 200.0 million. On September 14, 2023, the Company announced that its Board of Directors approved a one-year extension of its share repurchase authorization, extending the previously authorized $ 200.0 million program through December 31, 2024. Stock repurchases may be effected through open market repurchases at prevailing market prices, including through the use of block trades and trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, privately-negotiated transactions, through other transactions in accordance with applicable securities laws, or a combination of these methods on such terms and in such amounts as the Company deems appropriate and will be funded from available capital. The Company is not obligated to repurchase any specific number of shares, and the timing, manner, value, and actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price and liquidity requirements, other business considerations and general market and economic conditions. No shares will be purchased from SLP Fastball Aggregator, L.P. and its affiliates. The Company may discontinue or modify purchases without notice at any time. A summary of the stock repurchase activity under the Repurchase Program, is summarized as follows (in thousands, except share and per share amounts): Year Ended December 31, 2023 2022 Shares repurchased 4,372,879 4,670,975 Average price per share $ 13.49 $ 12.94 Costs recorded to accumulated deficit Total repurchase costs $ 58,903 $ 60,438 Additional associated costs 572 92 Total costs recorded to accumulated deficit $ 59,475 $ 60,530 As of December 31, 2023, the remaining authorized value of shares available to be repurchased under the Repurchase Program was approximately $ 80.5 million . Repurchased shares of common stock are retired. The par value of repurchased shares is deducted from common stock and the excess repurchase price over par value is reflected as a reduction to accumulated deficit. Additional associated costs include the related brokerage commissions and excise taxes on share repurchases. Dividend On August 8, 2023 , the Company’s Board of Directors declared a one-time special cash dividend of $ 1.50 per share to stockholders of record at the close of business on August 21, 2023 . An aggregate cash dividend of $ 217.7 million was paid on August 31, 2023. Dividends accrued for unvested RSUs are contingent and payable upon vesting of the underlying award. The Company recorded dividend related liabilities of $ 0.2 million and $ 0.4 million in accrued liabilities and other liabilities, respectively, in the accompanying consolidated balance sheets as of December 31, 2023. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13. Commitments and Contingencies Litigation The Company is involved in litigation from time to time in the ordinary course of business. At times, the Company, given the nature of its background screening business, could become subject to lawsuits, or potential class action lawsuits, in multiple jurisdictions, related to claims brought primarily by consumers or individuals who were the subject of its screening services. For all pending matters, the Company believes it has meritorious defenses and intends to defend vigorously or otherwise seek indemnification from other parties as appropriate. However, the Company has recorded a liability of $ 5.2 million and $ 4.4 million at December 31, 2023 and 2022, respectively, for matters that it believes a loss is both probable and estimable. This is included in accrued liabilities in the accompanying consolidated balance sheets as of December 31, 2023 and 2022, respectively. In June 2014 and September 2015, two separate class action cases were filed against the Company in the State of California. The two cases were coordinated together under a single judge and a single settlement agreement for both cases as coordinated together was approved by the court in December 2021. As a result, the Company recorded a total liability of $ 5.5 million for this settlement agreement at December 31, 2021. This liability represented the settlement amount and related class action administrative fees, less certain payments made in December 2021. The remaining settlement amount was paid in February 2022. Additionally, the Company maintains liability insurance programs to manage its litigation risks and the Company’s insurers had agreed to a single deductible to be applied to the two cases. As a result, the Company recorded a total insurance receivable of $ 2.1 million for this settlement agreement at December 31, 2021, which represented the portion of the legal settlement and legal fees incurred by the Company which were recovered from the Company’s insurers in March 2022. The Company will continue to evaluate information as it becomes known and will record an estimate for losses at the time when it is both probable that a loss has been incurred and the amount of the loss is reasonably estimable. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Note 14. Leases The Company has operating and finance leases for office facilities and equipment. Certain of our leases include rental payments that will adjust periodically for inflation or certain adjustments based on step increases. An insignificant number of our leases contain residual value guarantees and none of our agreements contain material restrictive covenants. Variable rent expenses consist primarily of maintenance, property taxes, and charges based on usage. The Company rents or subleases certain real estate to third parties. The Company’s sublease portfolio consists of operating leases. The components of lease costs are as follows (in thousands): Year Ended December 31, 2023 2022 Operating lease costs Fixed $ 5,330 $ 7,102 Short-term 345 247 Variable 23 28 Sub-leases ( 50 ) ( 56 ) Total operating lease costs $ 5,648 $ 7,321 Finance lease costs Amortization of leased assets $ 78 $ 713 Interest on lease liabilities 2 29 Total finance lease costs $ 80 $ 742 Total lease cost $ 5,728 $ 8,063 Supplemental balance sheet information related to leases is as follows (in thousands): December 31, Classification 2023 2022 Assets Operating leases Right of use operating lease assets Other assets $ 7,277 $ 10,674 Finance leases Property and equipment, gross Property and equipment, net 5,860 5,094 Accumulated depreciation Property and equipment, net ( 5,860 ) ( 5,017 ) Property and equipment, net Property and equipment, net — 77 Total lease assets $ 7,277 $ 10,751 Liabilities Operating leases Other current Current portion of operating lease liability $ 3,354 $ 4,957 Non-current Operating lease liability, less current portion 5,931 7,879 Total operating liabilities 9,285 12,836 Finance leases Other current Accrued liabilities — 104 Total finance liabilities — 104 Total lease liabilities $ 9,285 $ 12,940 Maturities of lease liabilities are as follows (in thousands): Years Ending December 31, Operating Leases 2024 $ 3,844 2025 2,659 2026 1,903 2027 873 2028 815 Thereafter 909 Total minimum lease payments $ 11,003 Less: Imputed interest ( 1,473 ) Present value of minimum lease payments $ 9,530 Lease term and discount rates are as follows: Year Ended December 31, 2023 2022 Weighted average remaining lease term Operating leases 3.4 Years 2.7 Years Finance leases — 0.7 Years Weighted average discount rate Operating leases 6.85 % 5.06 % Finance leases — 5.72 % Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2023 2022 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 6,825 $ 7,738 Operating cash flows from finance leases 2 29 Financing cash flows from finance leases 104 884 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,084 $ 19,972 Amortization: Amortization of right-of-use operating lease assets (1) $ 4,766 $ 6,343 (1) Amortization of right of use operating lease assets during the period is reflected in operating lease liabilities on the consolidated statements of cash flows. Rent expense under fixed operating leases was $ 6.1 million for the year ended December 31, 2021. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 15. Related Party Transactions The Company had no material related party transactions. |
Net Income Per Share
Net Income Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 16. Net Income Per Share Basic and diluted net income per share was calculated as follows: Year Ended December 31, (in thousands, except share and per share amounts) 2023 2022 2021 Basic net income per share $ 0.26 $ 0.43 $ 0.11 Diluted net income per share $ 0.26 $ 0.43 $ 0.11 Numerator: Net income 37,293 64,604 16,051 Denominator: Weighted average number of shares outstanding - basic 144,083,808 150,227,213 140,480,590 Add options and restricted stock units to purchase units 2,142,288 1,579,927 1,206,794 Weighted average number of shares outstanding - diluted 146,226,096 151,807,139 141,687,384 For the years ended December 31, 2023, 2022, and 2021, 4,725,584 , 2,669,162 , and 14,488 stock options and RSUs, respectively, were excluded from the calculation of diluted net income per share because their effect was anti-dilutive. |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Reportable Segments | Note 17. Reportable Segments We have two reportable segments, Americas and International. Our CODM uses the profit measure of Adjusted EBITDA, on both a consolidated and a segment basis, to allocate resources and assess performance of our businesses. We use Adjusted EBITDA as our profit measure because it eliminates the impact of certain items that we do not consider indicative of operating performance, which is useful to compare operating results between periods. Our CODM also uses Adjusted EBITDA as a compensation measure for both segment and corporate management under our incentive compensation plans. Adjusted EBITDA is also a measure frequently used by securities analysts, investors, and other interested parties in their evaluation of the operating performance of companies similar to ours. We define Adjusted EBITDA as net income before interest, taxes, depreciation, and amortization, and as further adjusted for loss on extinguishment of debt, share-based compensation, transaction and acquisition-related charges, integration and restructuring charges, and other non-cash charges. We exclude the impact of share-based compensation because it is a non-cash expense and we believe that excluding this item provides meaningful supplemental information regarding performance and ongoing cash generation potential. We exclude loss on extinguishment of debt, transaction and acquisition related charges, integration and restructuring charges, and other charges because such expenses are episodic in nature and have no direct correlation to the cost of operating our business on an ongoing basis. The segment financial information below aligns with how we report information to our CODM to assess operating performance and how the Company manages the business. Corporate costs are generally allocated to the segments based upon estimated revenue levels and other assumptions that management considers reasonable. The CODM does not review the Company’s assets by segment; therefore, such information is not presented. The accounting policies of the segments are the same as described in Note 2, “Summary of Significant Accounting Policies” and Note 9, “Revenues.” The following is a description of our two reportable segments: Americas. This segment performs a variety of background check and compliance services across all phases of the workforce lifecycle from pre-onboarding services to post-onboarding and ongoing monitoring services, covering employees, contractors, contingent workers, tenants, and drivers. We generally classify our service offerings into three categories: pre-onboarding, post-onboarding, and adjacent products. We deliver our solutions across multiple industry verticals in the United States, Canada, and Latin America markets. International. The International segment provides services similar to our Americas segment in regions outside of the Americas. We primarily deliver our solutions across multiple industry verticals in the Europe, India, and Asia Pacific markets. A reconciliation of Segment Adjusted EBITDA to net income for the years ended December 31, 2023, 2022, and 2021 is as follows (in thousands): Year Ended December 31, 2023 2022 2021 Adjusted EBITDA Americas $ 221,645 $ 221,655 $ 198,473 International 15,911 27,255 27,821 Total $ 237,556 $ 248,910 $ 226,294 Adjustments to reconcile to net income: Interest expense, net 33,040 9,199 24,972 Provision for income taxes 11,183 20,475 8,862 Depreciation and amortization 129,473 138,246 142,815 Loss on extinguishment of debt — — 13,938 Share-based compensation 15,265 7,856 9,530 Transaction and acquisition-related charges (a) 4,364 6,018 9,314 Integration, restructuring, and other charges (b) 6,938 2,512 812 Net income $ 37,293 $ 64,604 $ 16,051 (a) Represents charges incurred related to acquisitions and similar transactions, primarily consisting of change in control-related costs, professional service fees, and other third-party costs. Also includes incremental professional service fees incurred related to the initial public offering, subsequent one-time compliance efforts, and the registered common stock offering by certain selling stockholders in November 2021. The years ended December 31, 2022 and 2021 include a transaction bonus expense related to one of the Company’s 2021 acquisitions. (b) Represents charges from organizational restructuring and integration activities, non-cash, and other charges primarily related to nonrecurring legal exposures, foreign currency (gains) losses, and (gains) losses on the sale of assets. Geographic Information The Company bases revenues by geographic region in which the revenues and invoicing are recorded. Other than the United States, no single country accounted for 10 % or more of our total revenues during these periods. The following summarizes revenues by geographical region (in thousands): Year Ended December 31, 2023 2022 2021 Revenues Americas $ 673,075 $ 694,865 $ 604,413 International 96,832 122,599 114,009 Eliminations ( 6,146 ) ( 7,441 ) ( 6,127 ) Total revenues $ 763,761 $ 810,023 $ 712,295 The following table sets forth net long-lived assets by geographic area (in thousands): December 31, 2023 2022 Long-lived assets, net United States, country of domicile $ 1,083,318 $ 1,134,201 All other countries 168,068 180,258 Total long-lived assets, net $ 1,251,386 $ 1,314,459 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 18. Subsequent Events On February 28, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among First Advantage, Sterling Check Corp., a Delaware corporation (“Sterling”), and Starter Merger Sub, Inc., a Delaware corporation and an indirect, wholly owned subsidiary of First Advantage (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will be merged with and into Sterling, with Sterling continuing as the surviving corporation in such merger and becoming an indirect, wholly owned subsidiary of First Advantage. The cash-and-stock transaction (the “Acquisition”) values Sterling at approximately $ 2.2 billion. In connection with the execution of the Merger Agreement, First Advantage Holdings, LLC, a subsidiary of the Company (the “Borrower”), entered into a commitment letter with certain financial institutions that committed to provide, subject to the terms and conditions of the commitment letter, an incremental term loan in an aggregate principal amount of $ 1.820 billion and incremental revolving commitments in an aggregate principal amount of $ 150 million, in each case, under the Borrower’s existing credit agreement. Such financial institutions also agreed to extend the maturity date of the Borrower’s revolving credit facility from July 31, 2026 to the date that is the fifth anniversary of the closing date of the Acquisition. The Acquisition is subject to satisfaction or waiver of customary closing conditions, including, among others, adoption of the Merger Agreement by Sterling stockholders, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act of 1976 (the “HSR Act”) and clearance under the antitrust or foreign direct investment laws of certain other jurisdictions, and the effectiveness of a registration statement on Form S-4 to be filed by First Advantage in connection with the Acquisition. |
Condensed Financial Information
Condensed Financial Information of Registrant | 12 Months Ended |
Dec. 31, 2023 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Information Of Registrant | Note 19. Condensed Financial Information of Registrant FIRST ADVANTAGE CORPORATION (PARENT COMPANY ONLY) CONDENSED BALANCE SHEETS (in thousands, except share and per share data) As of December 31, 2023 2022 ASSETS Investments in subsidiaries $ 872,206 $ 1,107,356 LIABILITIES AND EQUITY Liabilities $ — $ — EQUITY Common stock - $ 0.001 par value; 1,000,000,000 shares authorized, 145,074,802 and 148,732,603 shares issued and outstanding as of December 31, 2023 and 2022, respectively 145 149 Additional paid-in-capital 942,763 1,156,901 Accumulated deficit ( 49,545 ) ( 27,363 ) Accumulated other comprehensive income ( 21,157 ) ( 22,331 ) Total equity 872,206 1,107,356 TOTAL LIABILITIES AND EQUITY $ 872,206 $ 1,107,356 The accompanying note is an integral part of these condensed financial statements. FIRST ADVANTAGE CORPORATION (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) (in thousands, except share and per share data) For the Year Ended December 31, 2023 2022 2021 Equity in net income of subsidiaries $ 37,293 $ 64,604 $ 16,051 NET INCOME 37,293 64,604 16,051 Foreign currency translation adjustments 1,174 ( 20,694 ) ( 4,121 ) COMPREHENSIVE INCOME $ 38,467 $ 43,910 $ 11,930 NET INCOME $ 37,293 $ 64,604 $ 16,051 Basic net income per share $ 0.26 $ 0.43 $ 0.11 Diluted net income per share $ 0.26 $ 0.43 $ 0.11 Weighted average number of shares outstanding - basic 144,083,808 150,227,213 140,480,590 Weighted average number of shares outstanding - diluted 146,226,096 151,807,139 141,687,384 A statement of cash flows has not been presented as First Advantage Corporation (parent company) did not have any cash as of, or at any point in time during, the years ended December 31, 2023, 2022 or 2021. The accompanying note is an integral part of these condensed financial statements. Note to Condensed Financial Statements of Registrant (Parent Company Only) Basis of Presentation Fastball Intermediate, Inc. was formed on November 15, 2019. In March 2021, Fastball Intermediate, Inc. changed its name to First Advantage Corporation. These condensed parent company-only financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X, as the restricted net assets of the subsidiaries of First Advantage Corporation (as defined in Rule 4-08(e)(3) of Regulation S-X) exceed the specified threshold amount of the consolidated net assets of the Company. Because we have a consolidated accumulated deficit, the 25 % threshold described in Rule 4-08 does not apply and any restrictions of net assets at our subsidiaries trigger the requirement to present parent company-only financial information. The ability of First Advantage Corporation’s operating subsidiaries to pay dividends may be restricted due to the terms of the subsidiaries’ outstanding term loan and revolving credit facility borrowings under the Credit Agreements, as described in Note 6 to the audited consolidated financial statements. These condensed parent company-only financial statements have been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements, with the only exception being that the parent company accounts for its subsidiaries using the equity method. These condensed parent company-only financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of Presentation — The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated. The Company includes the results of operations of acquired companies prospectively from the date of acquisition. The Company has historically experienced seasonality with respect to certain customer industries as a result of fluctuations in hiring volumes and other economic activities. Generally, the Company’s highest revenues have historically occurred between October and November of each year, driven by many customers’ pre-holiday season hiring initiatives. |
Segments | Segments — Operating segments are businesses for which separate financial information is available and evaluated regularly by our chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. During the first quarter of 2022, the Company made organizational changes and modified information provided to its CODM to better align with how its CODM assesses performance and allocates resources. As a result, the Company has two reportable segments, Americas and International: • Americas provides technology solutions for screening, verifications, safety, and compliance in the United States, Canada, and Latin America markets; and • International provides technology solutions for screening, verifications, safety, and compliance outside of the Americas. Prior period results were recast to conform to the current presentation of segments. The Company’s segment disclosure is intended to provide the users of its consolidated financial statements with a view of the business that is consistent with management of the Company. Details of segment results are discussed in Note 17, “Reportable Segments.” |
Use of Estimates | Use of Estimates — The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Changes in these estimates and assumptions may have a material impact on the consolidated financial statements and accompanying notes. Significant estimates, judgments, and assumptions, include, but are not limited to, the determination of the fair value and useful lives of assets acquired and liabilities assumed through business combinations, goodwill impairment, revenue recognition, capitalized software, assumptions used for purposes of determining share-based compensation, and income tax liabilities and assets. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments — Certain financial assets and liabilities are reported at fair value in the accompanying consolidated balance sheets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement . ASC 820 establishes a framework for measuring fair value and expands disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques required by ASC 820 are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy: Level 1 — Quoted prices for identical instruments in active markets. Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 — Significant inputs to the valuation model are unobservable (supported by little or no market activities). These inputs may be used with internally developed methodologies that reflect the Company’s best estimate of fair value from a market participant. The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The carrying amounts of cash and cash equivalents, short-term investments, receivables, and accounts payable approximate fair value due to the short-term maturities of these financial instruments (Level 1). The fair values and carrying values of the Company’s long-term debt are disclosed in Note 6. The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of December 31, 2023 (in thousands): Level 1 Level 2 Level 3 Assets Interest rate collars $ — $ 1,986 $ — Liabilities Interest rate swaps $ — $ 1,576 $ — Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Other intangible assets are subject to nonrecurring fair value measurement as the result of business acquisitions. The fair values of these assets were estimated using the present value of expected future cash flows through unobservable inputs (Level 3). |
Cash and Cash Equivalents | Cash and Cash Equivalents — The Company considers cash equivalents to be cash and all short-term investments that have an original maturity of ninety days or less. Interest income earned on short-term investments and interest bearing accounts is included in interest expense, net in the accompanying consolidated statements of operations and comprehensive income. The Company recorded $ 13.4 million , $ 5.0 million , and $ 0.1 million of interest income for the years ended December 31, 2023, 2022, and 2021, respectively. Outstanding checks in excess of funds on deposit are classified as current liabilities in the accompanying consolidated balance sheets. As of December 31, 2023 and 2022 , the Company had no outstanding checks in excess of funds on deposit. |
Restricted Cash | Restricted Cash — Restricted cash represents monies held in trust for a specific purpose as contractually required under the respective arrangement. |
Short-Term Investments | Short-Term Investments — Short-term investments represents fixed time deposits having a maturity date within twelve months. |
Accounts Receivable | Accounts Receivable — Accounts receivable are due from customers in a broad range of industries located throughout the United States and internationally. Credit is extended based on evaluation of the customer’s financial condition, and generally, collateral is not required. The allowance for all uncollectible receivables is based on a combination of historical data, cash payment trends, specific customer issues, write-off trends, general economic conditions, and other factors. These factors are continuously monitored by management to arrive at the estimate for the amount of accounts receivable that may be ultimately uncollectible. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, the Company records a specific allowance for doubtful accounts against amounts due in order to reduce the net recognized receivable to the amount it reasonably believes will be collected. The Company believes that the allowance for doubtful accounts at December 31, 2023 and 2022 is reasonably stated. |
Property and Equipment | Property and Equipment — Property and equipment are recorded at cost. Property and equipment include computer software for internal uses either developed internally, acquired by business combination or otherwise purchased. Software development costs, including internal personnel and third-party professional services, are capitalized during the application development stage of initial development or during development of new features and enhancements. The Company amortizes purchased software using the straight-line method over the estimated useful life of the software and software acquired by business combination on an accelerated basis over its expected useful life of five years . Software development costs not meeting the criteria for capitalization are expensed as incurred. Depreciation on leasehold improvements is computed on the straight-line method over the shorter of the life of the asset, or the lease term, ranging from one to fifteen years. Depreciation on data processing equipment and furniture and equipment is computed using the straight-line method over their estimated useful lives ranging from three to ten years. |
Business Combinations | Business Combinations — The Company records business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations . Under the acquisition method of accounting, identifiable assets acquired and liabilities assumed are recorded at their acquisition-date fair values. The excess of the purchase price over the estimated fair value is recorded as goodwill. Changes in the estimated fair values of net assets recorded for acquisitions prior to the finalization of more detailed analysis, but not to exceed one year from the date of acquisition, will adjust the amount of the purchase price allocable to goodwill. Measurement period adjustments are reflected in the period in which they occur. In valuing the trade names, customer lists, and software developed for internal use, the Company utilizes variations of the income approach, which relies on historical financial and qualitative information, as well as assumptions and estimates for projected financial information. The Company considers the income approach the most appropriate valuation technique because the inherent value of these assets is their ability to generate current and future income. Projected financial information is subject to risk if estimates are incorrect. The most significant estimate relates to projected revenues and profitability. If the projected revenues and profitability used in the valuation calculations are not met, then the asset could be impaired |
Goodwill, Trade Names, Customer Lists, and Other Intangible Assets | Goodwill, Trade Names, Customer Lists, and Other Intangible Assets — The Company tests goodwill for impairment annually as of October 31 or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit or indefinite-lived intangible asset below its carrying value. During 2023, the Company changed its annual impairment testing date from December 31 to October 31. The Company believes the new date is preferable because it aligns the impairment test with the budgeting processes. The Company applied the change in accounting principle prospectively. The change in the annual impairment testing date did not delay, accelerate, or avoid an impairment charge. Goodwill is tested for impairment at the reporting unit level using a fair value approach. At October 31, 2023, the Company had two reporting units comprised of the Americas and International. When testing goodwill for impairment, the Company may first perform an optional qualitative assessment. If the Company determines it is not more likely than not the reporting unit’s fair value is less than its carrying value, then no further analysis is necessary. If the Company determines that it is more likely than not that the fair value of its reporting unit is less than its carrying amount, then the quantitative impairment test will be performed. Under the quantitative impairment test, if the carrying amount of the Company’s reporting unit exceeds its fair value, the Company will recognize an impairment loss in an amount equal to that excess but limited to the total amount of goodwill. The Company performs a quantitative impairment test every three years, irrespective of the outcome of the Company’s qualitative assessment. No impairment charges have been required. The Company’s trade names are amortized on an accelerated basis over their expected useful life of twenty years . The Company recorded $ 7.3 million , $ 7.6 million , and $ 7.9 million of amortization expense related to trade names for the years ended December 31, 2023, 2022, and 2021, respectively. Customer lists are amortized on an accelerated basis based upon their estimated useful lives, ranging from thirteen to fourteen years. The Company recorded $ 54.6 million , $ 60.7 million , and $ 65.5 million of amortization expense related to customer lists for the years ended December 31, 2023, 2022, and 2021, respectively. The Company’s other intangible assets are amortized on a straight-line or accelerated basis over their expected useful life of five year s. The Company recorded $ 0.1 million of amortization expense related to other intangible assets for the year ended December 31, 2023 . No amortization expense was recorded for the years ended December 31, 2022 and 2021. The Company regularly evaluates the amortization period assigned to each intangible asset to determine whether there have been any events or circumstances that warrant revised estimates of useful lives. No impairment charges have been required. |
Income Taxes | Income Taxes — The Company is a U.S. domiciled corporation for tax purposes. Accordingly, the Company has followed ASC 740, Income Taxes , which provides for income taxes using the liability method, which requires an asset and liability based approach in accounting for income taxes for all periods presented. Deferred income taxes reflect the net tax effect on future years of temporary differences in the carrying amount of assets and liabilities between financial statements and income tax purposes. Valuation allowances are established when the Company determines that it is more likely than not that some portion or the entire deferred tax asset will not be realized. The Company evaluates its effective tax rates regularly and adjusts them when appropriate based on currently available information relative to statutory rates, apportionment factors and the applicable taxable income in the jurisdictions in which the Company operates, among other factors. The Company calculates additional tax provisions, where applicable, related to accounting for uncertainty in income taxes, which prescribe a recognition threshold and measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company adjusts its estimates of uncertain tax positions periodically because of ongoing examinations by, and settlements with, various taxing authorities, as well as changes in tax laws, regulations, and interpretations. The Company classifies interest and penalties associated with its unrecognized tax benefits as a component of income tax expense (see Note 8). |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets — The Company regularly evaluates whether events and circumstances have occurred that indicate the carrying amount of property and equipment, ROU assets, and finite-life intangible assets may not be recoverable. Conditions that could indicate an impairment assessment is needed include a significant decline in the observable market value of an asset or asset group, a significant change in the extent or manner in which an asset or asset group is used, or a significant adverse change that would indicate that the carrying amount of an asset or asset group is not recoverable. When factors indicate that these long-lived assets or asset groups should be evaluated for possible impairment, the Company assesses the potential impairment by determining whether the carrying value of such long-lived assets or asset groups will be recovered through the future undiscounted cash flows expected from use of the asset or asset group and its eventual disposition. If the carrying amount of the asset or asset group is determined not to be recoverable, an impairment charge is recorded based on the excess, if any, of the carrying amount over fair value. Fair values are determined based on quoted market values or discounted cash flows analyses as applicable. The Company regularly evaluates whether events and circumstances have occurred that indicate the useful lives of property and equipment, right of use (“ROU”) assets, and finite-life intangible assets may warrant revision. The Company determined that triggering events occurred for certain leases exited during the years ended December 31, 2023 and 2022 which required an impairment review of ROU assets. Based on the results of the analysis, the Company recorded non-cash impairment charges of $ 1.7 million and $ 0.9 million for the years ended December 31, 2023 and 2022 , respectively, primarily related to office space exited during the year. Write down of abandoned property and equipment no longer in use was $ 0.3 million for the year ended December 31, 2023 . The Company determined the carrying values of its finite-life intangible assets were not impaired during the years ended December 31, 2023, 2022, and 2021 . |
Leases | Leases — The Company accounts for leases in accordance with ASC 842, Leases . The Company measures ROU assets and liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date. Minimum lease payments include the fixed lease and non-lease components of the agreement, as well as any variable rent payments that depend on an index, initially measured using the index at the lease commencement date. ROU assets are adjusted for any initial direct costs incurred less any lease incentives received, in addition to payments made on or before the commencement date of the lease. The Company recognizes lease expense for leases on a straight-line basis over the lease term. As the implicit rate is not readily determinable for most of the Company’s lease agreements, the Company uses its estimated incremental borrowing rate to determine the initial present value of lease payments. The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for office space, data centers, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company enters into lease contracts ranging from 1 to 8 years. Some leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. The exercise of these lease renewal options is at the Company’s sole discretion and typically are not reasonably certain to renew at inception. The depreciable life of assets and leasehold improvements are limited by the expected lease term. |
Advertising Cost | Advertising Costs — Advertising costs are expensed as incurred and are included in selling, general and administrative expense in the accompanying consolidated statements of operations and comprehensive income. Advertising costs were $ 1.9 million , $ 2.9 million , and $ 1.4 million for the years ended December 31, 2023, 2022, and 2021 , respectively. |
Derivative Instruments | Derivative Instruments — The Company is exposed to certain risks relating to its ongoing business operations and mitigates interest rate risk through the use of derivative instruments. Interest rate swaps have been entered into to manage a portion of the interest rate risk associated with the Company’s variable-rate borrowings. In accordance with ASC 815, Derivatives and Hedging , the derivative instruments are recognized and subsequently measured on the balance sheet at fair value. The Company reviewed its interest rate swaps and determined they do not meet the definition of cash flow hedges. Therefore, the guidance requires that the change in fair value of the interest rate swaps be recognized as a component of income or expense in the consolidated statements of operations and comprehensive income (see Note 7). |
Concentrations of Credit Risk | Concentrations of Credit Risk — Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. Cash is deposited with major financial institutions and, at times, such balances with each financial institution may be in excess of insured limits. The Company has not experienced, and does not anticipate, any losses with respect to its cash deposits. Accounts receivable represent credit granted to customers for services provided. The Company performs ongoing credit evaluations of its customers’ financial condition and generally does not require collateral on accounts receivable. The Company had one customer which represented approximately 12 % , 10 %, and 10 % of its consolidated revenues for the years ended December 31, 2023, 2022, and 2021 , respectively. No other customer represented 10% or more of its revenue for these periods. The Company had one customer which represented approximately 17 %, of its consolidated accounts receivable, net as of December 31, 2023 . No other customers represented 10 % or more of its consolidated accounts receivable, net for any period presented. The Company has entered into interest rate derivative agreements with a counterparty bank to reduce its exposure to interest rate volatility. The Company has determined the counterparty bank to be a high credit quality institution. The Company does not enter into financial instruments for trading or speculative purposes. |
Revenue Recognition | Revenue Recognition — Revenues are recognized when control of the Company’s services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. In accordance with ASC 606, Revenue from Contracts with Customers , which was adopted as of January 1, 2019 using the modified retrospective method, revenues are recognized based on the following steps: a) Identify the contract with a customer b) Identify the performance obligations in the contract c) Determine the transaction price d) Allocate the transaction price to the performance obligations in the contract e) Recognize revenue when (or as) the entity satisfies a performance obligation A substantial majority of the Company’s revenues are derived from pre-onboarding and related services to our customers on a transactional basis, in which an individual background screening package or selection of services is ordered by a customer related to a single individual. Substantially all of the Company’s customers are employers, staffing companies, and other businesses or organizations. The Company’s revenues are mostly comprised of a significant volume of low-dollar services fulfilled by multiple highly automated, proprietary systems and applications. The processing of transactions and recording of revenue is based on contractual terms with the Company’s customers. The Company satisfies its performance obligations and recognizes revenues for services rendered as the orders are completed and the completed reports are transmitted, or otherwise made available. The Company’s remaining services, substantially consisting of tax consulting, fleet management, and driver qualification services, are delivered over time as the customer simultaneously receives and consumes the benefits of the services delivered. To measure the Company’s performance over time, the output method is utilized to measure the value to the customer based on the transfer to date of the services promised, with no rights of return once consumed. In these cases, revenues on transactional contracts with a defined price but an undefined quantity are recognized utilizing the right to invoice expedient resulting in revenues being recognized when the service is provided and becomes billable. Additionally, under this practical expedient, the Company is not required to estimate the transaction price. The Company considers negotiated and anticipated incentives and estimated adjustments, including historical collections experience, when recording revenues. The Company’s contracts with customers generally include standard commercial payment terms acceptable in each region, and do not include any financing components. The Company does not have any significant obligations for refunds, warranties, or similar obligations. The Company records revenues net of sales taxes. Due to the Company’s contract terms and the nature of the background screening industry, the Company determined its contract terms for ASC 606 purposes are less than one year. As a result, the Company uses the practical expedient which allows it to expense incremental costs of obtaining a contract, primarily consisting of sales commissions, as incurred. The Company records third-party pass-through fees incurred as part of screening related services on a gross revenue basis, with the related expense recorded as a cost of services expense, as the Company has control over the transaction and is therefore considered to be acting as a principal. The Company records motor vehicle registration and other tax payments paid on behalf of the Company’s fleet management customers on a net revenue basis as the Company does not have control over the transaction and therefore, is considered to be acting as an agent of the customer. Amounts received from fleet management customers are recorded in cash and cash equivalents in the accompanying consolidated balance sheets as the funds are not legally restricted. Contract balances are generated when the revenues recognized in a given period varies from billing. A contract asset is created when the Company performs a service for a customer and recognizes more revenues than what has been billed. Contract assets are included in accounts receivable in the accompanying consolidated balance sheets. A contract liability is created when the Company transfers a good or service to a customer and recognizes less than what has been billed. The Company recognizes these contract liabilities as deferred revenues when the Company has an obligation to perform services for a customer in the future and has already received consideration from the customer. Contract liabilities are included in deferred revenues in the accompanying consolidated balance sheets. |
Foreign Currency | Foreign Currency — The functional currency of all of the Company’s foreign subsidiaries is the applicable local currency. The translation of the applicable foreign currencies into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenues and expense accounts using average exchange rates prevailing during the fiscal year. Adjustments resulting from the translation of foreign currency financial statements are accumulated net of tax in a separate component of equity. Currency translation income (loss) included in accumulated other comprehensive income (loss) were approximately $ 1.2 million , $( 20.7 ) million , and $( 4.1 ) million , for the years ended December 31, 2023, 2022, and 2021, respectively. Gains or losses resulting from foreign currency transactions are included in the accompanying consolidated statements of operations and comprehensive income, except for those relating to intercompany transactions of a long-term investment nature, which are captured in a separate component of equity as accumulated other comprehensive income (loss). Currency transaction (loss) income included in the accompanying consolidated statements of operations and comprehensive income was approximately $( 0.1 ) million , $ 2.3 million , and $( 0.1 ) million , for the years ended December 31, 2023, 2022, and 2021 , respectively. |
Share-based Compensation | Share-based Compensation — Prior to the Company’s Initial Public Offering (“IPO”), all share-based awards were issued by a parent of the Company under individual grant agreements and the partnership agreement (collectively the “2020 Equity Plan”). Following the IPO, share-based awards are issued to employees and non-employee directors under the 2021 Omnibus Incentive Plan (as amended by the First Amendment, dated as of May 10, 2023, the “2021 Equity Plan”). Both plans were designed with the intention of promoting the long-term success of the Company by attracting, motivating, and retaining key employees of the Company. The Company accounts for awards issued under both plans in accordance with ASC 718, Compensation — Stock Compensation . Management expects to allow its employees granted awards under the 2020 Equity Plan and 2021 Equity Plan to bear the risks and rewards normally associated with equity ownership for a reasonable period of time when all requisite vesting requirements have been rendered. No outstanding awards are callable, and therefore, the related share-based awards are classified as equity. The calculation of share-based employee compensation expense involves estimates that require management’s judgment. These estimates include the fair value of each of the share-based awards granted, which is estimated on the date of grant using a Black-Scholes option-pricing model. There are four inputs into the Black-Scholes option-pricing model: expected volatility, risk-free interest rates, expected term, and estimated fair value of the underlying unit. The Company estimates expected volatility based on an analysis of guidelines of publicly traded peer companies’ historical volatility. The risk-free interest rate is based on the treasury constant maturities rate based on data published by the U.S. Federal Reserve. The expected term of share-based awards granted is derived from historical exercise experience under the Company’s share-based plans and represents the period of time that awards granted are expected to be outstanding. Because of the limitations on the sale or transfer of our equity as a privately held company and a lack of historical option exercises as a public company, the Company does not believe our historical exercise pattern is indicative of the pattern we will experience in future periods. The Company has consequently used the simplified method to calculate the expected term, which is the average of the contractual term and vesting period, and plans to continue to use the simplified method until we have sufficient exercise and pricing history. Finally, prior to the IPO, the estimated fair value of the underlying equity was determined using either a transaction valuation or a blend of income and market approaches. After the IPO, the estimated fair value of the underlying equity was based on the observable market price of the Company’s equity. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and the Company uses different assumptions, share-based compensation expenses could be materially different in the future. In addition, for awards with a service condition, the Company has elected to account for forfeitures as they occur. Therefore, the Company will reverse compensation costs previously recognized when an unvested award is forfeited. For awards with a performance condition, the Company is required to estimate the expected forfeiture rate, and only recognize expenses for those shares expected to vest. The Company estimates the expected forfeiture rate based on the Company’s historical data, grant terms, and anticipated plan participant turnover. If the Company’s actual forfeiture rate is materially different from its estimate, the share-based compensation expense could be significantly different from what the Company has recorded in the current period. |
Comprehensive Income | Comprehensive Income — Comprehensive income includes gains and losses from foreign currency translation adjustments, net. |
Net Income Per Share of Equity | Net Income Per Share of Equity — Basic net income per share are computed by dividing net income by the weighted average number of common shares outstanding during the period. Basic weighted-average shares outstanding excludes nonvested restricted stock. Diluted net income per share is computed by dividing net income by the weighted average number of shares outstanding during the period after adjusting for the impact of securities that would have a dilutive effect on net income per share. Diluted weighted average shares outstanding, is similar to basic weighted-average shares outstanding, except that the weighted-average number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common share had been issued, including the dilutive impact of nonvested restricted stock. The Company uses the treasury stock method to incorporate potentially dilutive securities in diluted net income per share. The potentially dilutive securities outstanding during the years ended December 31, 2023, 2022, and 2021 had a dilutive effect and were included in the calculation of diluted net income per share for the period. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements — In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”), Disclosure Improvements - Codification Amendment in Response to the SEC’s Disclosure Update and Simplification Initiative . The ASU incorporates several disclosure and presentation requirements currently residing in the SEC Regulations S-X and S-K. The amendments are to be applied prospectively and are effective when the SEC removes the related requirements from Regulations S-X or S-K. Any amendments not removed by the SEC by June 30, 2027 will not be effective. The Company does not expect ASU 2023-06 to have a material effect on its consolidated financial statements or related disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segments Disclosures . The amendments improve reportable segment disclosure requirements through enhanced disclosures over significant segment expenses regularly provided to the CODM, extending certain annual disclosures to interim periods, and through permitting more than one measure of segment profit or loss to be reported under certain conditions. This guidance is effective for annual reporting periods beginning after December 15, 2023 and interim reporting periods beginning after December 31, 2024. Early adoption of the amendment is permitted, including adoption in any interim periods for which financial statements have not been issued. The Company is currently evaluating the guidance and its impact to the financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires a public business entity to disclose specific categories in its annual effective tax rate reconciliation and disaggregated information about significant reconciling items by jurisdiction and by nature. The ASU also requires entities to disclose their income tax payments (net of refunds) to international, federal, and state and local jurisdictions. This guidance is effective for fiscal years beginning after December 15, 2024, and requires prospective application with the option to apply it retrospectively. Early adoption is permitted. The Company is currently evaluating the guidance and its impact to the financial statements. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements — In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. Prior to the issuance of this guidance, contract assets and contract liabilities were recognized by the acquirer at fair value on the acquisition date. This guidance is effective for annual reporting periods beginning after December 15, 2022 including interim periods therein. Adoption of this standard on January 1, 2023 did not have a material impact on the consolidated financial statements. However, if the Company acquires material customer contracts in the future, this standard will impact the accounting for those arrangements which may have a material effect on future results. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021 issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope . These ASUs provide temporary optional expedients and exceptions to existing guidance on contract modifications and hedge accounting to facilitate the market transition from existing reference rates, such as the London Inter-bank Offered Rate (“LIBOR”), to alternate reference rates, such as the Secured Overnight Financing Rate (“SOFR”). These standards were effective upon issuance and allowed application to contract changes as early as January 1, 2020. Adoption of this standard in June 2023 did not have a material impact on the consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents information about the Company’s financial assets and liabilities that are measured at fair value on a recurring basis and their assigned levels within the valuation hierarchy as of December 31, 2023 (in thousands): Level 1 Level 2 Level 3 Assets Interest rate collars $ — $ 1,986 $ — Liabilities Interest rate swaps $ — $ 1,576 $ — |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Consideration Paid and Amounts Recognized for Assets Acquired and Liabilities Assumed | The following table summarizes the consideration paid and the amounts recognized for the assets acquired and liabilities assumed (in thousands): Consideration Cash purchase price $ 41,000 Other transaction adjustments 122 Total fair value of consideration transferred $ 41,122 Current assets $ 1,335 Property and equipment, including software developed for internal use 5,959 Trade name 2,300 Customer lists 3,800 Other intangible assets 2,400 Other assets 236 Total liabilities ( 1,427 ) Total identifiable net assets $ 14,603 Goodwill $ 26,519 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net as of December 31, 2023 and 2022 consisted of the following (in thousands): December 31, 2023 2022 Furniture and equipment $ 26,576 $ 23,422 Capitalized software for internal use, acquired by business combination 232,505 227,405 Capitalized software for internal use, developed internally or otherwise purchased 86,704 60,187 Leasehold improvements 2,275 2,957 Total property and equipment 348,060 313,971 Less: accumulated depreciation and amortization ( 268,619 ) ( 200,442 ) Property and equipment, net $ 79,441 $ 113,529 |
Goodwill, Trade Name, and Cus_2
Goodwill, Trade Name, and Customer Lists (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2022 by reportable segment were as follows (in thousands): Americas International Total Balance – December 31, 2021 $ 668,048 $ 125,844 $ 793,892 Acquisitions 9,116 — 9,116 Adjustments to initial purchase price allocations ( 35 ) — ( 35 ) Foreign currency translation 42 ( 9,935 ) ( 9,893 ) Balance – December 31, 2022 $ 677,171 $ 115,909 $ 793,080 Acquisition 26,519 — 26,519 Foreign currency translation 107 948 1,055 Balance – December 31, 2023 $ 703,797 $ 116,857 $ 820,654 |
Summary of Gross Carrying Value and Accumulated Amortization of Finite-Lived Intangible Assets | The following summarizes the gross carrying value and accumulated amortization for the Company’s trade names, customer lists, and other intangible assets as of December 31, 2023 and 2022 (in thousands): December 31, 2023 Gross Accumulated Net Carrying Useful Life Trade names $ 96,321 $ ( 30,092 ) $ 66,229 20 years Customer lists 520,105 ( 244,577 ) 275,528 13 - 14 years Other intangible assets 2,400 ( 143 ) 2,257 5 years Total $ 618,826 $ ( 274,812 ) $ 344,014 December 31, 2022 Gross Accumulated Net Carrying Useful Life Trade names $ 93,959 $ ( 22,797 ) $ 71,162 20 years Customer lists 515,762 ( 189,748 ) 326,014 13 - 14 years Total $ 609,721 $ ( 212,545 ) $ 397,176 |
Schedule of Intangible Assets, Future Amortization Expense | Amortization expense relating to trade names, customer lists, and other intangible assets is expected to be as follows (in thousands): Years Ending December 31, 2024 $ 57,413 2025 51,031 2026 44,006 2027 37,325 2028 32,697 Thereafter 121,542 $ 344,014 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Fair Value of Company’s Long-term Debt Obligations | The fair value of the Company’s long-term debt obligation approximated its book value as of December 31, 2023 and 2022 and consisted of the following (in thousands): December 31, 2023 2022 First Lien Credit Facility $ 564,724 $ 564,724 Less: Deferred financing costs ( 6,268 ) ( 8,075 ) Long-term debt, net $ 558,456 $ 556,649 |
Schedule of Future Maturities of Long-term Debt | Scheduled maturities of long-term debt as of December 31, 2023, are as follows (in thousands): Years Ending December 31, 2024 $ — 2025 — 2026 — 2027 564,724 2028 — Thereafter — $ 564,724 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Outstanding Derivatives that were not Designated as a Hedge in Qualifying Hedging Relationships | As of December 31, 2023, the Company had the following outstanding derivatives that were not designated as a hedge in qualifying hedging relationships: Product Effective Date Maturity Date Notional Rate Interest rate collars (a) June 30, 2023 February 29, 2024 $ 300.0 million 0.48 % floor/ 1.47 % cap Interest rate swap (b) June 30, 2023 February 28, 2026 $ 100.0 million 4.32 % Interest rate swap December 29, 2023 December 31, 2026 $ 150.0 million 3.86 % Interest rate swap March 1, 2024 December 31, 2026 $ 150.0 million 3.76 % (a) In conjunction with the June 2023 transition of the reference rate from LIBOR to SOFR, the fixed cap rate was reduced from 1.50 % to 1.47 %. In conjunction with the June 2023 transition of the reference rate from LIBOR to SOFR, the fixed rate was reduced from 4.36 % to 4.32 % . |
Summary of Location and Fair Value of Financial Position and Location of Derivative Instruments | The following is a summary of location and fair value of the financial positions recorded related to the derivative instruments (in thousands): Fair Value As of December 31, Derivatives not designated Balance Sheet Location 2023 2022 Interest rate collars Prepaid expenses and other current assets $ 1,986 $ 11,570 Interest rate swaps Accrued liabilities $ 1,576 $ — The following is a summary of location and amount of gains and (losses) recorded related to the derivative instruments (in thousands): Gain/(Loss) Year Ended December 31, Derivatives not designated Income Statement Location 2023 2022 2021 Interest rate collars Interest expense, net $ 865 $ 12,429 $ 2,284 Interest rate swaps Interest expense, net $ ( 981 ) $ — $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Summary of (Loss) Income Before Income Tax Benefits | The domestic and foreign components of income before provision for income taxes for the years ended December 31, 2023, 2022, and 2021, respectively, were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Income (loss) before provision for income taxes from United States operations $ 25,250 $ 46,766 $ ( 7,791 ) Income before provision for income taxes from foreign operations 23,226 38,313 32,704 Income before provision for income taxes $ 48,476 $ 85,079 $ 24,913 |
Summary of Current and Deferred Portions of Income Tax Benefits | The domestic and foreign components of the provision for income taxes for the years ended December 31, 2023, 2022, and 2021, respectively, were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Current: Federal $ 18,486 $ 179 $ 58 State 5,772 4,593 4,003 Foreign 6,480 9,817 7,618 Total Current $ 30,738 $ 14,589 $ 11,679 Deferred: Federal $ ( 16,857 ) $ 1,773 $ 549 State ( 2,313 ) 5,030 ( 4,495 ) Foreign ( 385 ) ( 917 ) 1,129 Total Deferred $ ( 19,555 ) $ 5,886 $ ( 2,817 ) Total $ 11,183 $ 20,475 $ 8,862 |
Summary of Reconciliation of U.S. Federal Statutory Income Tax Rate and Effective Income Tax Rate | The following table reconciles the U.S. statutory federal tax rate of 21 % to the Company’s effective income tax rate of 23.07 % , 24.07 % , and 35.57 % , for the years ended December 31, 2023, 2022, and 2021, respectively: Year Ended December 31, 2023 2022 2021 U.S. statutory federal tax rate 21.00 % 21.00 % 21.00 % State and local income taxes – net of federal tax benefits 3.89 2.85 ( 5.32 ) Foreign rate difference 0.59 0.67 3.25 Change in valuation allowances 0.83 ( 1.06 ) ( 2.72 ) GILTI inclusion — 1.41 7.92 Transaction cost 0.31 — 5.21 Share-based compensation 3.36 0.62 5.82 Rate change impact ( 0.66 ) ( 0.43 ) 2.23 US research and development credit ( 3.96 ) ( 1.44 ) ( 7.15 ) Withholding tax 0.65 0.38 5.34 Return-to-provision adjustment ( 3.56 ) — — Other 0.62 0.07 ( 0.01 ) Effective tax rate 23.07 % 24.07 % 35.57 % |
Summary of Net Deferred Tax Assets | The primary components of temporary differences that give rise to the Company’s net deferred tax liability as of December 31, 2023 and 2022 consist of the following (in thousands): December 31, 2023 2022 Deferred tax assets: Federal net operating loss carryforwards $ — $ 2,304 State net operating loss carryforwards 5,101 6,782 Foreign net operating loss carryforwards 5,653 4,888 Deferred revenues 394 205 Bad debt reserves 276 297 Employee benefits 1,237 1,563 Share-based compensation 660 546 Accrued expenses and loss reserves 2,460 1,802 Section 267 adjustment 3,742 — Other deferred tax assets 653 5,890 Less: Valuation allowances ( 1,863 ) ( 1,467 ) Total deferred tax asset $ 18,313 $ 22,810 Deferred tax liabilities: Trade names $ ( 16,420 ) $ ( 17,632 ) Goodwill ( 12,929 ) ( 11,703 ) Depreciable and other amortizable assets ( 55,028 ) ( 77,127 ) Other deferred liabilities ( 2,424 ) ( 4,482 ) Total deferred tax liability $ ( 86,801 ) $ ( 110,944 ) Net deferred tax liability $ ( 68,488 ) $ ( 88,134 ) Based upon the weight of all available evidence, the Company does not maintain a valuation allowance against its deferred tax assets in the United States. |
Summary of Net Operating Loss Carryforwards | The net operating loss carryforward balances as of December 31, 2023 and 2022, are as follows (in thousands): December 31, 2023 2022 Federal $ — $ 10,970 State 97,659 125,989 Foreign 24,980 24,207 $ 122,639 $ 161,166 |
Summary of Income Tax Contingencies | The aggregate changes in the balance of our gross unrecognized tax benefits, excluding accrued interest, for the years ended December 31, 2023, 2022, and 2021, were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Balance, beginning of period $ 972 $ 1,399 $ 1,341 Increases for tax positions related to prior years 39 28 58 Decreases for tax positions related to prior years — ( 455 ) — Balance, end of period $ 1,011 $ 972 $ 1,399 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Recognition of Share-Based Compensation related to Employees | Share-based compensation expense is recognized in cost of services, product and technology expense, and selling, general, and administrative expense, in the accompanying consolidated statements of operations and comprehensive income as follows (in thousands): Year Ended December 31, 2023 2022 2021 Share-based compensation expense Cost of services $ 1,279 $ 1,103 $ 163 Product and technology expense 2,246 1,351 459 Selling, general, and administrative expense 11,740 5,402 8,908 Total share-based compensation expense $ 15,265 $ 7,856 $ 9,530 Prior to the IPO, all share-based awards were issued by Fastball Holdco, L.P., the Company’s previous parent company, under individual grant agreements and the partnership agreement of such parent company under the 2020 Equity Plan. In connection with the IPO, the Company adopted the 2021 Equity Plan. |
Summary of Assumptions Applied to Establish Fair Value of Options Granted Using Black-Scholes Option Pricing Model | The fair value of the modified stock options was estimated on the date of modification using the Black-Scholes option-pricing model with the following weighted average assumptions: Options Expected stock price volatility 37.43 % Risk-free interest rate 3.40 % Expected term (in years) 4.67 Fair-value of the underlying unit $ 12.61 |
Summary of outstanding stock option grants issued | Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value December 31, 2022 Grants outstanding 2,843,342 $ 6.66 Grants exercised ( 394,375 ) $ 6.06 Grants cancelled/forfeited ( 533,715 ) $ 6.68 December 31, 2023 Grants outstanding 1,915,252 $ 5.15 6.2 Years $ 21.9 million December 31, 2023 Grants vested 518,455 $ 5.13 6.1 Years $ 5.9 million December 31, 2023 Grants unvested 1,396,797 $ 5.16 A summary of changes in outstanding options and the related weighted-average exercise price per share for the years ended December 31, 2022 and 2021 is as follows: December 31, 2022 2021 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Grants outstanding at the beginning of the year 3,519,563 $ 6.66 — $ — Grants issued in exchange for options in the Company’s Parent — $ — 3,938,491 $ 6.65 Grants exercised ( 372,254 ) $ 6.68 ( 58,552 ) $ 6.61 Grants cancelled/forfeited ( 303,967 ) $ 6.61 ( 360,376 ) $ 6.61 Grants outstanding at the end of the year 2,843,342 $ 6.66 3,519,563 $ 6.66 Grants vested 648,926 $ 6.65 681,227 $ 6.66 Grants unvested 2,194,416 $ 6.67 2,838,336 $ 6.66 |
2021 Equity Plan [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Assumptions Applied to Establish Fair Value of Options Granted Using Black-Scholes Option Pricing Model | The fair value for stock options granted for the years ended December 31, 2023, 2022, and 2021 was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighed average assumptions: Year Ended December 31, 2023 2022 2021 Expected stock price volatility 32.99 % 34.66 % 38.67 % Risk-free interest rate 4.00 % 2.77 % 1.06 % Expected term (in years) 6.78 6.23 5.91 Fair-value of the underlying unit $ 12.56 $ 14.68 $ 15.33 |
Summary of Option Unit Activity | A summary of the option activity for the year ended December 31, 2023 is as follows: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value December 31, 2022 Grants outstanding 4,311,662 $ 15.24 Grants issued 579,745 $ 12.56 Grants exercised ( 22,402 ) $ 12.55 Grants cancelled/forfeited ( 182,346 ) $ 13.81 December 31, 2023 Grants outstanding 4,686,659 $ 13.61 7.8 Years $ 13.9 million December 31, 2023 Grants vested 1,600,529 $ 13.76 7.6 Years $ 4.5 million December 31, 2023 Grants unvested 3,086,130 $ 13.53 A summary of changes in outstanding options and the related weighted-average exercise price per share for the years ended December 31, 2022 and 2021 is as follows: December 31, 2022 2021 Options Weighted Average Exercise Price Options Weighted Average Exercise Price Grants outstanding at the beginning of the year 3,714,540 $ 15.33 — $ — Grants issued 608,122 $ 14.68 3,714,540 $ 15.33 Grants cancelled/forfeited ( 11,000 ) $ 17.52 — $ — Grants outstanding at the end of the year 4,311,662 $ 15.24 3,714,540 $ 15.33 Grants vested 1,054,302 $ 15.20 644,556 $ 15.00 Grants unvested 3,257,360 $ 15.25 3,069,984 $ 15.40 |
Summary of the RSU activity | A summary of the RSU activity for the years ended December 31, 2023, 2022, and 2021 is as follows: Shares Weighted Average Grant Date Fair Value December 31, 2020 Nonvested RSUs — $ — Granted 340,875 $ 17.19 December 31, 2021 Nonvested RSUs 340,875 $ 17.19 Granted 203,032 $ 14.36 Vested ( 67,175 ) $ 16.96 Forfeited ( 4,400 ) $ 17.52 December 31, 2022 Nonvested RSUs 472,332 $ 16.00 Granted 235,903 $ 13.46 Vested ( 150,724 ) $ 15.42 Forfeited ( 50,368 ) $ 14.90 December 31, 2023 Nonvested RSUs 507,143 $ 15.10 |
2021 Equity Plan [Member] | Restricted Stock | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of Restricted Stock Activity | A summary of the restricted stock activity for the years ended December 31, 2023, 2022, and 2021 is as follows: Shares Weighted Average December 31, 2020 Nonvested restricted stock — $ — Grants issued in exchange for unvested profits interests in the Company’s Parent 2,918,084 $ 3.85 Vested ( 304,725 ) $ 3.85 December 31, 2021 Nonvested restricted stock 2,613,359 $ 3.85 Vested ( 332,059 ) $ 3.85 December 31, 2022 Nonvested restricted stock 2,281,300 $ 3.85 Vested ( 326,670 ) $ 3.85 December 31, 2023 Nonvested restricted stock 1,954,630 $ 8.50 |
Successor Plan [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Summary of the Profits Interest Activity | A summary of the profits interest unit activity under the 2020 Equity Plan for the year ended December 31, 2021 is as follows: Class C Units December 31, 2020 Grants outstanding 3,858,048 Exchanged for common stock in the Company ( 411,720 ) Exchanged for restricted stock in the Company ( 3,446,328 ) December 31, 2021 Grants outstanding — |
Summary of Option Unit Activity | A summary of the option unit activity under the 2020 Plan for the year ended December 31, 2021 is as follows: Options Weighted Average Exercise Price December 31, 2020 Grants outstanding 2,733,734 $ 10.06 Exercised ( 24,112 ) $ 10.00 Forfeited ( 107,168 ) $ 10.00 Exchanged for options in the Company ( 2,602,454 ) $ 10.07 December 31, 2021 Grants outstanding — $ — In connection with the Company’s IPO, the Company’s parent was dissolved. Awards issued by the Company’s parent were converted in accordance with non-discretionary anti-dilution provisions of the 2020 Equity Plan grants as follows: |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Share Repurchase Activity Table Text Block | A summary of the stock repurchase activity under the Repurchase Program, is summarized as follows (in thousands, except share and per share amounts): Year Ended December 31, 2023 2022 Shares repurchased 4,372,879 4,670,975 Average price per share $ 13.49 $ 12.94 Costs recorded to accumulated deficit Total repurchase costs $ 58,903 $ 60,438 Additional associated costs 572 92 Total costs recorded to accumulated deficit $ 59,475 $ 60,530 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Summary of lease cost | The components of lease costs are as follows (in thousands): Year Ended December 31, 2023 2022 Operating lease costs Fixed $ 5,330 $ 7,102 Short-term 345 247 Variable 23 28 Sub-leases ( 50 ) ( 56 ) Total operating lease costs $ 5,648 $ 7,321 Finance lease costs Amortization of leased assets $ 78 $ 713 Interest on lease liabilities 2 29 Total finance lease costs $ 80 $ 742 Total lease cost $ 5,728 $ 8,063 |
Summary of Supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases is as follows (in thousands): December 31, Classification 2023 2022 Assets Operating leases Right of use operating lease assets Other assets $ 7,277 $ 10,674 Finance leases Property and equipment, gross Property and equipment, net 5,860 5,094 Accumulated depreciation Property and equipment, net ( 5,860 ) ( 5,017 ) Property and equipment, net Property and equipment, net — 77 Total lease assets $ 7,277 $ 10,751 Liabilities Operating leases Other current Current portion of operating lease liability $ 3,354 $ 4,957 Non-current Operating lease liability, less current portion 5,931 7,879 Total operating liabilities 9,285 12,836 Finance leases Other current Accrued liabilities — 104 Total finance liabilities — 104 Total lease liabilities $ 9,285 $ 12,940 |
Summary of maturities of lease liabilities | Maturities of lease liabilities are as follows (in thousands): Years Ending December 31, Operating Leases 2024 $ 3,844 2025 2,659 2026 1,903 2027 873 2028 815 Thereafter 909 Total minimum lease payments $ 11,003 Less: Imputed interest ( 1,473 ) Present value of minimum lease payments $ 9,530 |
Summary of weighted average lease term and discount rate operating lease and financing lease | Lease term and discount rates are as follows: Year Ended December 31, 2023 2022 Weighted average remaining lease term Operating leases 3.4 Years 2.7 Years Finance leases — 0.7 Years Weighted average discount rate Operating leases 6.85 % 5.06 % Finance leases — 5.72 % |
Summary of Supplemental cash flow information related to leases | Supplemental cash flow information related to leases was as follows (in thousands): Year Ended December 31, 2023 2022 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 6,825 $ 7,738 Operating cash flows from finance leases 2 29 Financing cash flows from finance leases 104 884 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 5,084 $ 19,972 Amortization: Amortization of right-of-use operating lease assets (1) $ 4,766 $ 6,343 (1) Amortization of right of use operating lease assets during the period is reflected in operating lease liabilities on the consolidated statements of cash flows. |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Net Income (Loss) Per Share | Basic and diluted net income per share was calculated as follows: Year Ended December 31, (in thousands, except share and per share amounts) 2023 2022 2021 Basic net income per share $ 0.26 $ 0.43 $ 0.11 Diluted net income per share $ 0.26 $ 0.43 $ 0.11 Numerator: Net income 37,293 64,604 16,051 Denominator: Weighted average number of shares outstanding - basic 144,083,808 150,227,213 140,480,590 Add options and restricted stock units to purchase units 2,142,288 1,579,927 1,206,794 Weighted average number of shares outstanding - diluted 146,226,096 151,807,139 141,687,384 |
Entity-Wide Disclosures (Tables
Entity-Wide Disclosures (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segments, Geographical Areas [Abstract] | |
Summary of Long Lived Assets by Geographical Area | The following table sets forth net long-lived assets by geographic area (in thousands): December 31, 2023 2022 Long-lived assets, net United States, country of domicile $ 1,083,318 $ 1,134,201 All other countries 168,068 180,258 Total long-lived assets, net $ 1,251,386 $ 1,314,459 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Adjusted EBITDA Reconciled to Net Income | A reconciliation of Segment Adjusted EBITDA to net income for the years ended December 31, 2023, 2022, and 2021 is as follows (in thousands): Year Ended December 31, 2023 2022 2021 Adjusted EBITDA Americas $ 221,645 $ 221,655 $ 198,473 International 15,911 27,255 27,821 Total $ 237,556 $ 248,910 $ 226,294 Adjustments to reconcile to net income: Interest expense, net 33,040 9,199 24,972 Provision for income taxes 11,183 20,475 8,862 Depreciation and amortization 129,473 138,246 142,815 Loss on extinguishment of debt — — 13,938 Share-based compensation 15,265 7,856 9,530 Transaction and acquisition-related charges (a) 4,364 6,018 9,314 Integration, restructuring, and other charges (b) 6,938 2,512 812 Net income $ 37,293 $ 64,604 $ 16,051 (a) Represents charges incurred related to acquisitions and similar transactions, primarily consisting of change in control-related costs, professional service fees, and other third-party costs. Also includes incremental professional service fees incurred related to the initial public offering, subsequent one-time compliance efforts, and the registered common stock offering by certain selling stockholders in November 2021. The years ended December 31, 2022 and 2021 include a transaction bonus expense related to one of the Company’s 2021 acquisitions. (b) Represents charges from organizational restructuring and integration activities, non-cash, and other charges primarily related to nonrecurring legal exposures, foreign currency (gains) losses, and (gains) losses on the sale of assets. |
Schedule of Revenues by Geographic Region | The following summarizes revenues by geographical region (in thousands): Year Ended December 31, 2023 2022 2021 Revenues Americas $ 673,075 $ 694,865 $ 604,413 International 96,832 122,599 114,009 Eliminations ( 6,146 ) ( 7,441 ) ( 6,127 ) Total revenues $ 763,761 $ 810,023 $ 712,295 |
Summary of Long Lived Assets by Geographical Area | The following table sets forth net long-lived assets by geographic area (in thousands): December 31, 2023 2022 Long-lived assets, net United States, country of domicile $ 1,083,318 $ 1,134,201 All other countries 168,068 180,258 Total long-lived assets, net $ 1,251,386 $ 1,314,459 |
Condensed Financial Informati_2
Condensed Financial Information of Registrant (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Condensed Balance Sheets | Supplemental balance sheet information related to leases is as follows (in thousands): December 31, Classification 2023 2022 Assets Operating leases Right of use operating lease assets Other assets $ 7,277 $ 10,674 Finance leases Property and equipment, gross Property and equipment, net 5,860 5,094 Accumulated depreciation Property and equipment, net ( 5,860 ) ( 5,017 ) Property and equipment, net Property and equipment, net — 77 Total lease assets $ 7,277 $ 10,751 Liabilities Operating leases Other current Current portion of operating lease liability $ 3,354 $ 4,957 Non-current Operating lease liability, less current portion 5,931 7,879 Total operating liabilities 9,285 12,836 Finance leases Other current Accrued liabilities — 104 Total finance liabilities — 104 Total lease liabilities $ 9,285 $ 12,940 |
Parent [Member] | |
Condensed Balance Sheets | (PARENT COMPANY ONLY) CONDENSED BALANCE SHEETS (in thousands, except share and per share data) As of December 31, 2023 2022 ASSETS Investments in subsidiaries $ 872,206 $ 1,107,356 LIABILITIES AND EQUITY Liabilities $ — $ — EQUITY Common stock - $ 0.001 par value; 1,000,000,000 shares authorized, 145,074,802 and 148,732,603 shares issued and outstanding as of December 31, 2023 and 2022, respectively 145 149 Additional paid-in-capital 942,763 1,156,901 Accumulated deficit ( 49,545 ) ( 27,363 ) Accumulated other comprehensive income ( 21,157 ) ( 22,331 ) Total equity 872,206 1,107,356 TOTAL LIABILITIES AND EQUITY $ 872,206 $ 1,107,356 |
Condensed Statements of Operations and Comprehensive (Loss) | FIRST ADVANTAGE CORPORATION (PARENT COMPANY ONLY) CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) (in thousands, except share and per share data) For the Year Ended December 31, 2023 2022 2021 Equity in net income of subsidiaries $ 37,293 $ 64,604 $ 16,051 NET INCOME 37,293 64,604 16,051 Foreign currency translation adjustments 1,174 ( 20,694 ) ( 4,121 ) COMPREHENSIVE INCOME $ 38,467 $ 43,910 $ 11,930 NET INCOME $ 37,293 $ 64,604 $ 16,051 Basic net income per share $ 0.26 $ 0.43 $ 0.11 Diluted net income per share $ 0.26 $ 0.43 $ 0.11 Weighted average number of shares outstanding - basic 144,083,808 150,227,213 140,480,590 Weighted average number of shares outstanding - diluted 146,226,096 151,807,139 141,687,384 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Interest Rate Collars [Member] | Level 1 [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Fair value of net assets and liabilities | $ 0 |
Interest Rate Collars [Member] | Level 2 [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Fair value of net assets and liabilities | 1,986 |
Interest Rate Collars [Member] | Level 3 [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Fair value of net assets and liabilities | 0 |
Interest Rate Swap [Member] | Level 1 [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Fair value of net assets and liabilities | 0 |
Interest Rate Swap [Member] | Level 2 [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Fair value of net assets and liabilities | 1,576 |
Interest Rate Swap [Member] | Level 3 [Member] | |
Summary Of Significant Accounting Policies [Line Items] | |
Fair value of net assets and liabilities | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) Unit Customer shares | Dec. 31, 2022 USD ($) Unit Customer shares | Dec. 31, 2021 USD ($) Customer shares | |
Summary Of Significant Accounting Policies [Line Items] | |||
Interest income | $ 13,400 | $ 5,000 | $ 100 |
Outstanding funds on deposit | 0 | 0 | |
Write down of abandoned property and equipment | $ 300 | ||
Number of Reporting Units | Unit | 2 | ||
Non cash impairment charges | $ 1,700 | 900 | |
Impairment on carrying values of long-lived assets | $ 0 | 0 | 0 |
Lease term contract | 12 months | ||
Depreciation and amortization | $ 129,473 | 138,246 | 142,815 |
Advertising Costs | 1,900 | 2,900 | 1,400 |
Gain (loss) on foreign currency exchange rates | $ (8) | $ (91) | $ 575 |
Tax Credit Carryforward, Description | For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest benefit that has a greater than 50% likelihood of being realized upon settlement. | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares | 4,725,584 | 2,669,162 | 14,488 |
Present value of minimum lease payments | $ 9,530 | ||
Right-of-Use Asset | $ 7,277 | $ 10,674 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent | |
Revenues | $ 763,761 | $ 810,023 | $ 712,295 |
Operations and comprehensive income (loss) [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Gain (loss) on foreign currency exchange rates | 100 | 2,300 | (100) |
Other Comprehensive Income [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Gain (loss) on foreign currency exchange rates | $ 1,200 | $ (20,700) | $ (4,100) |
Customer Concentration Risk [Member] | Revenue Benchmark | One Customer | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of Accounts Receivable, net | 12% | 10% | 10% |
Number of Customers | Customer | 1 | 1 | 1 |
Customer Concentration Risk [Member] | Accounts Receivable [Member] | No Customers | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Percentage of Accounts Receivable, net | 17% | 10% | |
Number of Customers | Unit | 1 | 0 | |
Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Renewal term | 1 year | ||
Lease term contract | 1 year | ||
Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Renewal term | 5 years | ||
Lease term contract | 8 years | ||
Trade Names [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Useful life | 20 years | 20 years | |
Depreciation and amortization | $ 7,300 | $ 7,600 | $ 7,900 |
Customer Lists [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Depreciation and amortization | $ 54,600 | $ 60,700 | 65,500 |
Customer Lists [Member] | Minimum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Useful life | 13 years | 13 years | |
Customer Lists [Member] | Maximum | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Useful life | 14 years | 14 years | |
Other Intangible Assets [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Amortization method | straight-line or accelerated basis | ||
Useful life | 5 years | 5 years | |
Depreciation and amortization | $ 100 | $ 0 | $ 0 |
Capitalized Software Acquired by Business Combination [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Useful life | 5 years | ||
Goodwill [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Goodwill impairment | $ 0 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jan. 01, 2022 | Sep. 30, 2023 | Nov. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost And Reserve [Line Items] | |||||||
Goodwill | $ 820,654 | $ 793,080 | $ 793,892 | ||||
Revenues | 763,761 | $ 810,023 | $ 712,295 | ||||
Form I-9 Compliance | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Cash, net of cash acquired | $ 19,800 | ||||||
Goodwill | 9,100 | ||||||
Intangible assets Acquired | 8,500 | ||||||
Customer Related Intangible Assets Current | $ 6,100 | ||||||
Useful life | 13 years | ||||||
Form I-9 Compliance | Developed Technology Rights [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Intangible assets Acquired | $ 2,400 | ||||||
Useful life | 5 years | ||||||
March 2021 UK Acquisition | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Cash, net of cash acquired | $ 7,600 | ||||||
Goodwill | 3,100 | ||||||
Intangible assets Acquired | $ 3,000 | ||||||
Corporate Screening [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Cash, net of cash acquired | $ 39,400 | ||||||
Business acquisition, Percentage acquired | 100% | ||||||
Goodwill | $ 22,200 | ||||||
Intangible assets Acquired | $ 15,500 | ||||||
Useful life | 13 years | ||||||
Current assets | $ 2,900 | ||||||
Current liabilities | (1,600) | ||||||
Corporate Screening [Member] | Developed Technology Rights [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Intangible assets Acquired | $ 3,600 | ||||||
Useful life | 5 years | ||||||
Corporate Screening [Member] | Customer [Member] | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Customer Related Intangible Assets Current | $ 11,800 | ||||||
Infinite ID | |||||||
Restructuring Cost And Reserve [Line Items] | |||||||
Fair value of consideration transferred | 41,122 | ||||||
Cash, net of cash acquired | $ 41,000 | $ 41,000 | |||||
Business acquisition, Percentage acquired | 100% | ||||||
Current assets | $ 1,335 | ||||||
Current liabilities | $ (1,427) |
Acquisitions - Summary of Consi
Acquisitions - Summary of Consideration Paid and Amounts Recognized for Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Jan. 01, 2022 | Sep. 30, 2023 | Nov. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Consideration | |||||
Other intangible assets | $ 2,257 | $ 0 | |||
Form I-9 Compliance | |||||
Consideration | |||||
Cash purchase price | $ 19,800 | ||||
Corporate Screening [Member] | |||||
Consideration | |||||
Cash purchase price | $ 39,400 | ||||
Current assets | 2,900 | ||||
Total liabilities | $ (1,600) | ||||
Infinite ID | |||||
Consideration | |||||
Cash purchase price | $ 41,000 | 41,000 | |||
Other transaction adjustments | 122 | ||||
Total fair value of consideration transferred | 41,122 | ||||
Current assets | 1,335 | ||||
Property and equipment, including software developed for internal use | 5,959 | ||||
Trade name | 2,300 | ||||
Customer lists | 3,800 | ||||
Other intangible assets | 2,400 | ||||
Other Assets | 236 | ||||
Total liabilities | (1,427) | ||||
Total identifiable net assets | 14,603 | ||||
Goodwill | $ 26,519 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 348,060 | $ 313,971 |
Less: accumulated depreciation and amortization | (268,619) | (200,442) |
Property and equipment, net | 79,441 | 113,529 |
Furniture and equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 26,576 | 23,422 |
Capitalized software for internal use, acquired by business combination [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 232,505 | 227,405 |
Capitalized software for internal use, developed internally or otherwise purchased [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | 86,704 | 60,187 |
Leasehold improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment | $ 2,275 | $ 2,957 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 67.4 | $ 70 | $ 69.4 |
Goodwill, Trade Name, and Cus_3
Goodwill, Trade Name, and Customer Lists - Schedule of Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Goodwill [Line Items] | ||
Beginning Balance | $ 793,080 | $ 793,892 |
Acquisitions | 26,519 | 9,116 |
Adjustments to initial purchase price allocations | (35) | |
Foreign currency translation | 1,055 | (9,893) |
Ending Balance | 820,654 | 793,080 |
Americas [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 677,171 | 668,048 |
Acquisitions | 26,519 | 9,116 |
Adjustments to initial purchase price allocations | (35) | |
Foreign currency translation | 107 | 42 |
Ending Balance | 703,797 | 677,171 |
International [Member] | ||
Goodwill [Line Items] | ||
Beginning Balance | 115,909 | 125,844 |
Acquisitions | 0 | 0 |
Adjustments to initial purchase price allocations | 0 | |
Foreign currency translation | 948 | (9,935) |
Ending Balance | $ 116,857 | $ 115,909 |
Goodwill, Trade Name, and Cus_4
Goodwill, Trade Name, and Customer Lists - Summary of Gross Carrying Value and Accumulated Amortization of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 618,826 | $ 609,721 |
Accumulated Amortization | (274,812) | (212,545) |
Net Carrying Value | 344,014 | 397,176 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 96,321 | 93,959 |
Accumulated Amortization | (30,092) | (22,797) |
Net Carrying Value | $ 66,229 | $ 71,162 |
Useful life | 20 years | 20 years |
Customer Lists [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 520,105 | $ 515,762 |
Accumulated Amortization | (244,577) | (189,748) |
Net Carrying Value | $ 275,528 | $ 326,014 |
Customer Lists [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 14 years | 14 years |
Customer Lists [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 13 years | 13 years |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 2,400 | |
Accumulated Amortization | (143) | |
Net Carrying Value | $ 2,257 | |
Useful life | 5 years | 5 years |
Goodwill, Trade Name, and Cus_5
Goodwill, Trade Name, and Customer Lists - Additional information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 62.1 | $ 68.3 | $ 73.5 |
Goodwill, Trade Name, and Cus_6
Goodwill, Trade Name, and Customer Lists - Schedule of Intangible Assets, Future Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 57,413 | |
2025 | 51,031 | |
2026 | 44,006 | |
2027 | 37,325 | |
2028 | 32,697 | |
Thereafter | 121,542 | |
Net book value | $ 344,014 | $ 397,176 |
Long-term Debt - Fair Value of
Long-term Debt - Fair Value of Company's Long-term Debt Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 564,724 | |
Less: Deferred financing costs | (6,268) | $ (8,075) |
Long-term debt, net | 558,456 | 556,649 |
Successor First Lien Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 564,724 | $ 564,724 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 USD ($) | Feb. 28, 2021 USD ($) | Feb. 28, 2020 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||
Loss on extinguishment of debt | $ (13,900) | $ 0 | $ 0 | $ (13,938) | ||
Total debt | $ 564,724 | |||||
Description of borrowing capacity not subject to net leverage ratio covenant | In the event the Company’s outstanding indebtedness under the Revolver exceeds 35% of the aggregate principal amount of the revolving commitments then in effect, it is required to maintain a consolidated first lien leverage ratio no greater than 7.75 to 1.00. | the Company had no outstanding amounts under the Revolver, and therefore, was not subject to the consolidated first lien leverage ratio covenant. The Company was compliant with all other covenants under the agreement as of December 31, 2023. | ||||
Additional interest expense related to deferred financing costs | $ 3,700 | |||||
Successor Revolver [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Jan. 31, 2025 | |||||
Current borrowing capacity under successor revolver | $ 100,000 | |||||
Extended maturity date under successor revolver | Jan. 31, 2025 | Jul. 31, 2026 | ||||
Maximum borrowing capacity under successor revolver | $ 75,000 | |||||
Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, net leverage ratio | 7.75 | |||||
Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, net leverage ratio | 1 | |||||
Term Loan due January 31, 2027 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 564,700 | $ 766,600 | $ 670,000 | |||
Maturity date | Jan. 31, 2027 | Jan. 31, 2027 | Jan. 31, 2027 | |||
Repayments of Long-term Debt | $ 200,000 | |||||
Amortizing Principal Payment Repayment | $ 44,300 | |||||
Debt instrument interest rate reduced during period | 0.25% | |||||
Term Loan due January 31, 2027 [Member] | Maximum | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 3% | 3.25% | 3.50% | |||
Term Loan due January 31, 2027 [Member] | Minimum | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 2.75% | 3% | 3.25% | |||
Term Loan due January 31, 2028 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 145,000 | |||||
Maturity date | Jan. 31, 2028 | |||||
Term Loan due January 31, 2028 [Member] | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate | 8.50% | |||||
Successor First Lien [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Revolving credit facility quarterly payments, percentage | 0.25% |
Long-term Debt - Schedule of Fu
Long-term Debt - Schedule of Future Maturities of Long-term Debt (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 0 |
2025 | 0 |
2026 | 0 |
2027 | 564,724 |
2028 | 0 |
Thereafter | 0 |
Total long-term debt | $ 564,724 |
Derivatives - Summary of Outsta
Derivatives - Summary of Outstanding Derivatives that were not Designated as a Hedge in Qualifying Hedging Relationships (Details) - Not Designated as Hedging Instrument [Member] $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) | ||
Interest Rate Collar [Member] | ||
Derivative [Line Items] | ||
Effective Date | Jun. 30, 2023 | [1] |
Maturity date | Feb. 29, 2024 | [1] |
Notional | $ 300 | [1] |
Derivative, Floor Interest Rate | 0.48% | [1] |
Derivative, Cap Interest Rate | 1.47% | [1] |
Interest Rate Swap [Member] | ||
Derivative [Line Items] | ||
Effective Date | Jun. 30, 2023 | [2] |
Maturity date | Feb. 28, 2026 | [2] |
Notional | $ 100 | [2] |
Derivative, Swap Interest Rate | 4.32% | [2] |
Interest Rate Swap 1 [Member] | ||
Derivative [Line Items] | ||
Effective Date | Dec. 29, 2023 | |
Maturity date | Dec. 31, 2026 | |
Notional | $ 150 | |
Derivative, Swap Interest Rate | 3.86% | |
Interest Rate Swap 2 [Member] | ||
Derivative [Line Items] | ||
Effective Date | Mar. 01, 2024 | |
Maturity date | Dec. 31, 2026 | |
Notional | $ 150 | |
Derivative, Swap Interest Rate | 3.76% | |
[1] In conjunction with the June 2023 transition of the reference rate from LIBOR to SOFR, the fixed cap rate was reduced from 1.50 % to 1.47 %. In conjunction with the June 2023 transition of the reference rate from LIBOR to SOFR, the fixed rate was reduced from 4.36 % to 4.32 % |
Derivatives - Summary of Outs_2
Derivatives - Summary of Outstanding Derivatives that were not Designated as a Hedge in Qualifying Hedging Relationships (Parenthetical) (Details) | Jun. 30, 2023 |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Derivative, Swap Interest Rate | 4.32% |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Interest Rate Collar [Member] | |
Derivative [Line Items] | |
Derivative, Cap Interest Rate | 1.47% |
LIBOR [Member] | Interest Rate Swap [Member] | |
Derivative [Line Items] | |
Derivative, Swap Interest Rate | 4.36% |
LIBOR [Member] | Interest Rate Collar [Member] | |
Derivative [Line Items] | |
Derivative, Cap Interest Rate | 1.50% |
Derivatives - Summary of Locati
Derivatives - Summary of Location and Fair Value of Financial Position and Location of Derivative Instruments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivative [Line Items] | |||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Interest Income (Expense), Net | Interest Income (Expense), Net | Interest Income (Expense), Net |
Interest Rate Collar [Member] | Derivatives Not Designated as Hedging Instruments [Member] | |||
Derivative [Line Items] | |||
Gain/(loss) | $ 865 | $ 12,429 | $ 2,284 |
Interest Rate Collar [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Prepaid Expenses and Other Current Assets [Member] | |||
Derivative [Line Items] | |||
Fair Value | 1,986 | 11,570 | |
Interest Rate Swaps [Member] | Derivatives Not Designated as Hedging Instruments [Member] | |||
Derivative [Line Items] | |||
Gain/(loss) | (981) | 0 | $ 0 |
Interest Rate Swaps [Member] | Derivatives Not Designated as Hedging Instruments [Member] | Accrued Liabilities [Member] | |||
Derivative [Line Items] | |||
Fair Value | $ 1,576 | $ 0 |
Income Taxes - Summary of (Loss
Income Taxes - Summary of (Loss) Income Before Income Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Income (loss) before provision for income taxes from United States operations | $ 25,250 | $ 46,766 | $ (7,791) |
Income before provision for income taxes from foreign operations | 23,226 | 38,313 | 32,704 |
Income before provision for income taxes | $ 48,476 | $ 85,079 | $ 24,913 |
Income Taxes - Summary of Curre
Income Taxes - Summary of Current and Deferred Portions of Income Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 18,486 | $ 179 | $ 58 |
State | 5,772 | 4,593 | 4,003 |
Foreign | 6,480 | 9,817 | 7,618 |
Total Current | 30,738 | 14,589 | 11,679 |
Deferred: | |||
Federal | (16,857) | 1,773 | 549 |
State | (2,313) | 5,030 | (4,495) |
Foreign | (385) | (917) | 1,129 |
Total Deferred | (19,555) | 5,886 | (2,817) |
Total | $ 11,183 | $ 20,475 | $ 8,862 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 15, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Tax Credit Carryforward [Line Items] | |||||
Effective tax rate | 23.07% | 24.07% | 35.57% | ||
U.S. statutory federal tax rate | 21% | 21% | 21% | ||
Excise taxes on share repurchases | $ 500 | ||||
Income Tax Examination, Description | The Company is no longer subject to U.S. federal examinations by tax authorities for years before 2012, and state, local, and non-U.S. income tax examinations by tax authorities before 2005. | ||||
Research and development tax credit carryforward, amount | $ 4,400 | ||||
Valuation allowance | $ (1,863) | (1,467) | |||
Accumulated unremitted foreign earnings | 56,200 | ||||
Unrecognized Tax Benefits | $ 1,011 | $ 972 | $ 1,399 | $ 1,341 | |
Foreign | |||||
Tax Credit Carryforward [Line Items] | |||||
Operating loss carryforwards expiration year | 2024 | ||||
State | |||||
Tax Credit Carryforward [Line Items] | |||||
Operating loss carryforwards expiration year | 2026 | ||||
Minimum | European Union (EU) | |||||
Tax Credit Carryforward [Line Items] | |||||
Effective tax rate | 15% |
Income Taxes - Summary of Recon
Income Taxes - Summary of Reconciliation of U.S. Federal Statutory Income Tax Rate and Effective Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. statutory federal tax rate | 21% | 21% | 21% |
State and local income taxes – net of federal tax benefits | 3.89% | 2.85% | (5.32%) |
Foreign rate difference | 0.59% | 0.67% | 3.25% |
Change in valuation allowances | 0.83% | (1.06%) | (2.72%) |
GILTI inclusion | 0% | 1.41% | 7.92% |
Transaction cost | 0.31% | 0% | 5.21% |
Share-based compensation | 3.36% | 0.62% | 5.82% |
Rate change impact | (0.66%) | (0.43%) | 2.23% |
US research and development credit | (3.96%) | (1.44%) | (7.15%) |
Withholding tax | 0.65% | 0.38% | 5.34% |
Return-to-provision adjustment | (3.56%) | 0% | 0% |
Other | 0.62% | 0.07% | (0.01%) |
Effective tax rate | 23.07% | 24.07% | 35.57% |
Income Taxes - Summary of Net D
Income Taxes - Summary of Net Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Federal net operating loss carryforwards | $ 0 | $ 2,304 |
State net operating loss carryforwards | 5,101 | 6,782 |
Foreign net operating loss carryforwards | 5,653 | 4,888 |
Deferred revenues | 394 | 205 |
Bad debt reserves | 276 | 297 |
Employee benefits | 1,237 | 1,563 |
Share-based compensation | 660 | 546 |
Accrued expenses and loss reserves | 2,460 | 1,802 |
Section 267 adjustment | 3,742 | 0 |
Other deferred tax assets | 653 | 5,890 |
Less: Valuation allowances | (1,863) | (1,467) |
Total deferred tax asset | 18,313 | 22,810 |
Deferred tax liabilities: | ||
Trade names | (16,420) | (17,632) |
Goodwill | (12,929) | (11,703) |
Depreciable and other amortizable assets | (55,028) | (77,127) |
Other deferred liabilities | (2,424) | (4,482) |
Total deferred tax liability | (86,801) | (110,944) |
Net deferred tax liability | $ (68,488) | $ (88,134) |
Income Taxes - Summary of Opera
Income Taxes - Summary of Operating Loss Carryforwards (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Loss Carryforwards [Line Items] | ||
Total operating loss carryforwards | $ 122,639 | $ 161,166 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Total operating loss carryforwards | 0 | 10,970 |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Total operating loss carryforwards | 97,659 | 125,989 |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Total operating loss carryforwards | $ 24,980 | $ 24,207 |
Income Taxes - Summary of Incom
Income Taxes - Summary of Income Tax Contingencies (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Balance, beginning of period | $ 972 | $ 1,399 | $ 1,341 |
Increases for tax positions related to prior years | 39 | 28 | 58 |
Decreases for tax positions related to prior years | 0 | (455) | 0 |
Balance, end of period | $ 1,011 | $ 972 | $ 1,399 |
Revenues - Additional Informati
Revenues - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Contract asset balance | $ 4.8 | $ 6.5 |
Contract liability balance | $ 1.9 | $ 1.1 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Recognition of Share-Based Compensation related to Employees (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated share based compensation expense | $ 15,265 | $ 7,856 | $ 9,530 |
Cost of Services [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated share based compensation expense | 1,279 | 1,103 | 163 |
Product and Technology Expense [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated share based compensation expense | 2,246 | 1,351 | 459 |
Selling, General and Administrative Expenses [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated share based compensation expense | $ 11,740 | $ 5,402 | $ 8,908 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | May 10, 2023 | Jun. 30, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Employee stock purchase plan expenses | $ 0.8 | $ 0.4 | |||
Unrecognized pre-tax noncash compensation | $ 37.6 | $ 28.8 | |||
Expected weighted average period | 1 year 2 months 12 days | ||||
ESPP percentage | 15% | ||||
Impact of divided to stock option awards and ESPP purchases | $ 1.5 | ||||
Excess Tax Benefits | $ 0.3 | $ 0.5 | $ 0.2 | ||
2021 Equity Plan [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock options plan expiration period | 10 years | ||||
Common stock, reserved for future issuance | 17,525,000 | ||||
Share available for issuance | 16,713,654 | ||||
2021 Equity Plan [Member] | Minimum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
2021 Equity Plan [Member] | Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
2020 Equity Plan | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
Stock options plan expiration period | 10 years | ||||
Number of units, issued | 0 | 0 | 0 | ||
Intrinsic value of options exercised | $ 3 | $ 3.1 | $ 1.1 | ||
Employee Stock Option [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized pre-tax noncash compensation | 17.4 | ||||
Intrinsic value of options exercised | $ 0.1 | $ 0 | $ 0 | ||
Employee Stock Option [Member] | 2021 Equity Plan [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
Employee Stock Option [Member] | Share-based Payment Arrangement, Tranche One | 2021 Equity Plan [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
Employee Stock Option [Member] | 2020 Equity Plan | Share-based Payment Arrangement, Tranche One | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting percentage | 20% | ||||
Vesting period | 5 years | ||||
Restricted Stock | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized pre-tax noncash compensation | $ 13.9 | ||||
Restricted Stock Units [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Unrecognized pre-tax noncash compensation | $ 6.3 | ||||
Restricted Stock Units [Member] | 2021 Equity Plan [Member] | Minimum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Restricted Stock Units [Member] | 2021 Equity Plan [Member] | Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting period | 5 years |
Share-Based Compensation - Su_2
Share-Based Compensation - Summary of Assumptions Applied to Establish Fair Value of Options Granted Using Black-Scholes Option Pricing Model (Details) - $ / shares | 12 Months Ended | |||
May 10, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected stock price volatility | 37.43% | |||
Risk-free interest rate | 3.40% | |||
Expected term (in years) | 4 years 8 months 1 day | |||
Estimated fair-value of the underlying unit | $ 12.61 | |||
2021 Equity Plan [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Expected stock price volatility | 32.99% | 34.66% | 38.67% | |
Risk-free interest rate | 4% | 2.77% | 1.06% | |
Expected term (in years) | 6 years 9 months 10 days | 6 years 2 months 23 days | 5 years 10 months 28 days | |
Estimated fair-value of the underlying unit | $ 12.56 | $ 14.68 | $ 15.33 |
Share-Based Compensation - Su_3
Share-Based Compensation - Summary of the Profits Interest Activity (Details) - Class C Units - Fastball Holdco L P [Member] | 12 Months Ended |
Dec. 31, 2021 shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Number of units, grant outstanding beginning balance | 3,858,048 |
Exchanged for common stock in the Company | (411,720) |
Exchanged for restricted stock In the company | (3,446,328) |
Number of units, grant outstanding ending balance | 0 |
Share-Based Compensation - Su_4
Share-Based Compensation - Summary of the Option Unit Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Weighted Average Remaining Contractual Term, Grants Vested | 1 year 2 months 12 days | ||
2021 Equity Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of units, grant outstanding beginning balance | 4,311,662 | 3,714,540 | 0 |
Number of units, granted | 579,745 | 608,122 | 3,714,540 |
Number of units, exercised | (22,402) | ||
Number of units, cancelled/forfeited | (182,346) | (11,000) | 0 |
Number of units, grant outstanding ending balance | 4,686,659 | 4,311,662 | 3,714,540 |
Number of units, vested | 1,600,529 | 1,054,302 | 644,556 |
Number of units, unvested | 3,086,130 | 3,257,360 | 3,069,984 |
Weighted average exercise price, grant outstanding beginning balance | $ 15.24 | $ 15.33 | $ 0 |
Weighted Average Grants issued in exchange for unvested profits interests in the Company's Parent | 12.56 | 14.68 | 15.33 |
Weighted average exercise price, exercised | 12.55 | ||
Weighted average exercise price, cancelled/forefeited | 13.81 | 17.52 | 0 |
Weighted average exercise price, grant outstanding ending balance | $ 13.61 | 15.24 | 15.33 |
Weighted Average Remaining Contractual Term, Grants Outstanding | 7 years 9 months 18 days | ||
Weighted Average Remaining Contractual Term, Grants Vested | 7 years 7 months 6 days | ||
Aggregate Intrinsic Value, Grants Outstanding | $ 13.9 | ||
Aggregate Intrinsic Value, Grants Vested | $ 4.5 | ||
Weighted average exercise price, grants vested | $ 13.76 | 15.2 | 15 |
Weighted average exercise price, grants unvested | $ 13.53 | $ 15.25 | $ 15.4 |
First Advantage Corporation [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of units, grant outstanding beginning balance | 2,843,342 | 3,519,563 | 0 |
Grants issued in exchange for options in the Companys Parent | 0 | 3,938,491 | |
Number of units, exercised | (394,375) | (372,254) | (58,552) |
Number of units, cancelled/forfeited | (533,715) | (303,967) | (360,376) |
Number of units, grant outstanding ending balance | 1,915,252 | 2,843,342 | 3,519,563 |
Number of units, vested | 518,455 | 648,926 | 681,227 |
Number of units, unvested | 1,396,797 | 2,194,416 | 2,838,336 |
Weighted average exercise price, grant outstanding beginning balance | $ 6.66 | $ 6.66 | $ 0 |
Weighted average exercise price, issued in exchange for options in the company's parent | 0 | 6.65 | |
Weighted average exercise price, exercised | 6.06 | 6.68 | 6.61 |
Weighted average exercise price, cancelled/forefeited | 6.68 | 6.61 | 6.61 |
Weighted average exercise price, grant outstanding ending balance | $ 5.15 | 6.66 | 6.66 |
Weighted Average Remaining Contractual Term, Grants Outstanding | 6 years 2 months 12 days | ||
Weighted Average Remaining Contractual Term, Grants Vested | 6 years 1 month 6 days | ||
Aggregate Intrinsic Value, Grants Outstanding | $ 21.9 | ||
Aggregate Intrinsic Value, Grants Vested | $ 5.9 | ||
Weighted average exercise price, grants vested | $ 5.13 | 6.65 | 6.66 |
Weighted average exercise price, grants unvested | $ 5.16 | $ 6.67 | $ 6.66 |
Fastball Holdco L P [Member] | Class B Awards [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of units, grant outstanding beginning balance | 0 | 2,733,734 | |
Number of units, exercised | (24,112) | ||
Number of units, cancelled/forfeited | (107,168) | ||
Number of units, exchange for options in the company | (2,602,454) | ||
Number of units, grant outstanding ending balance | 0 | ||
Weighted average exercise price, grant outstanding beginning balance | $ 0 | $ 10.06 | |
Weighted average exercise price, exercised | 10 | ||
Weighted average exercise price, cancelled/forefeited | 10 | ||
Weighted average exercise price, exchanged for options in the company | 10.07 | ||
Weighted average exercise price, grant outstanding ending balance | $ 0 |
Share-Based Compensation - Su_5
Share-Based Compensation - Summary of the RSU Activity (Details) - 2021 Equity Plan [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Grants issued in exchange for unvested profits interests in the Company's Parent | 579,745 | 608,122 | 3,714,540 |
Weighted Average Grants issued in exchange for unvested profits interests in the Company's Parent | $ 12.56 | $ 14.68 | $ 15.33 |
Restricted Stock Units [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of units, outstanding beginning balance | 472,332 | 340,875 | 0 |
Number of units, granted | 235,903 | 203,032 | 340,875 |
Number of units, vested | (150,724) | (67,175) | |
Number of units, forfeited | shares | (50,368) | (4,400) | |
Number of units, outstanding ending balance | 507,143 | 472,332 | 340,875 |
Weighted Average Grant Date Fair Value, beginning value | $ / shares | $ 16 | $ 17.19 | $ 0 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 13.46 | 14.36 | 17.19 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 15.42 | 16.96 | |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 14.9 | 17.52 | |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 15.1 | $ 16 | $ 17.19 |
Restricted Stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of units, outstanding beginning balance | 2,281,300 | 2,613,359 | 0 |
Grants issued in exchange for unvested profits interests in the Company's Parent | 2,918,084 | ||
Number of units, vested | (326,670) | (332,059) | (304,725) |
Number of units, outstanding ending balance | 1,954,630 | 2,281,300 | 2,613,359 |
Weighted Average Grant Date Fair Value, beginning value | $ / shares | $ 3.85 | $ 3.85 | $ 0 |
Weighted Average Grants issued in exchange for unvested profits interests in the Company's Parent | 3.85 | ||
Weighted Average Grant Date Fair Value, Vested | $ / shares | 3.85 | 3.85 | 3.85 |
Weighted Average Grant Date Fair Value, Ending balance | $ / shares | $ 8.5 | $ 3.85 | $ 3.85 |
Defined Contribution Plan - Add
Defined Contribution Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Company's total contributions to savings plans | $ 1.2 | $ 1.3 | $ 1.2 |
Equity - Schedule of Share Repu
Equity - Schedule of Share Repurchase Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Shares Repurchased Abstract | ||
Shares repurchased | 4,372,879 | 4,670,975 |
Average price per share | $ 13.49 | $ 12.94 |
Costs recorded to accumulated deficit | ||
Total repurchase costs | $ 58,903 | $ 60,438 |
Additional associated costs | 572 | 92 |
Total costs recorded to accumulated deficit | $ 59,475 | $ 60,530 |
Equity - Additional Information
Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||
Aug. 08, 2023 | Nov. 15, 2021 | Jun. 25, 2021 | Aug. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 14, 2023 | Feb. 28, 2023 | Nov. 08, 2022 | Aug. 02, 2022 | |
Class Of Stock [Line Items] | |||||||||||
Capital contributions | $ 0 | $ 0 | $ 241 | ||||||||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | ||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | ||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Common stock, shares outstanding | 145,074,802 | 148,732,603 | |||||||||
Proceeds from issuance of common stock in initial public offering, net of underwriting discounts and commissions | $ 0 | $ 0 | 320,559 | ||||||||
Preferred Stock Shares Issued | 0 | ||||||||||
Common stock, shares issued | 145,074,802 | 148,732,603 | |||||||||
Cash dividends paid | $ 217,739 | $ 0 | $ 0 | ||||||||
Accrued liabilities | 16,162 | 16,400 | |||||||||
Other liabilities | 3,221 | $ 3,337 | |||||||||
Dividend Declared | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Dividend, declare date | Aug. 08, 2023 | ||||||||||
Cash dividend declared, per share | $ 1.5 | ||||||||||
Dividend, record date | Aug. 21, 2023 | ||||||||||
Cash dividends paid | $ 217,700 | ||||||||||
Accrued liabilities | 200 | ||||||||||
Other liabilities | 400 | ||||||||||
Share Repurchase Program | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Remaining Authorized Repurchase Amount | $ 80,500 | ||||||||||
Authorized stock repurchase program, Initial | $ 200,000 | $ 200,000 | $ 150,000 | $ 50,000 | |||||||
Common Stock [Member] | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Common stock, par value | $ 0.001 | ||||||||||
November Follow-On | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Stock issued during period shares new issues | 15,000,000 | ||||||||||
Option to purchase additional shares of common stock | 2,250,000 | ||||||||||
IPO | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Stock issued during period shares new issues | 29,325,000 | ||||||||||
Shares offering, price per share | $ 15 | ||||||||||
Proceeds from issuance of common stock in initial public offering, net of underwriting discounts and commissions | $ 316,500 | ||||||||||
Underwriting discounts and commissions | 22,300 | ||||||||||
Offering expenses | $ 4,000 | ||||||||||
IPO | First Portion Of Common Stock | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Stock issued during period shares new issues | 22,856,250 | ||||||||||
Option to purchase additional shares of common stock | 2,981,250 | ||||||||||
IPO | Second Portion of Common Stock [Member] | |||||||||||
Class Of Stock [Line Items] | |||||||||||
Stock issued during period shares new issues | 6,468,750 | ||||||||||
Option to purchase additional shares of common stock | 843,750 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Loss Contingencies [Line Items] | |||
Indemnity liability | $ 5.2 | $ 4.4 | |
Total liability | $ 5.5 | ||
Total insurance receivable | $ 2.1 |
Leases - Schedule of components
Leases - Schedule of components of lease cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finance Lease | ||
Lessee, Lease, Description [Line Items] | ||
Amortization of leased assets | $ 78 | $ 713 |
Interest on lease liabilities | 2 | 29 |
Total finance lease costs | 80 | 742 |
Total lease cost | 5,728 | 8,063 |
Operating Lease | ||
Lessee, Lease, Description [Line Items] | ||
Fixed lease cost | 5,330 | 7,102 |
Short-term | 345 | 247 |
Variable | 23 | 28 |
Sub-leases | (50) | (56) |
Total operating lease costs | $ 5,648 | $ 7,321 |
Lease - Supplemental balance sh
Lease - Supplemental balance sheet information related to leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets [Abstract] | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Right of use operating lease assets | $ 7,277 | $ 10,674 |
Property and equipment, gross | 348,060 | 313,971 |
Property and equipment, net | 79,441 | 113,529 |
Total lease assets | 7,277 | 10,751 |
Liabilities [Abstract] | ||
Operating leases other current | 3,354 | 4,957 |
Operating lease liability, less current portion | 5,931 | 7,879 |
Operating Lease Liability Current and Noncurrent, Total | $ 9,285 | $ 12,836 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | Accrued Liabilities, Current |
Finance Lease, Liability, Current | $ 0 | $ 104 |
Finance Lease Liability Current and Noncurrent, Total | 0 | 104 |
Total lease liabilities, Total | 9,285 | 12,940 |
Finance Lease [Member] | ||
Assets [Abstract] | ||
Property and equipment, gross | 5,860 | 5,094 |
Less: accumulated depreciation and amortization | (5,860) | (5,017) |
Property and equipment, net | $ 0 | $ 77 |
Leases - Maturities of lease li
Leases - Maturities of lease liabilities (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
Operating Lease 2024 | $ 3,844 |
Operating Lease, 2025 | 2,659 |
Operating Lease, 2026 | 1,903 |
Operating Lease, 2027 | 873 |
Operating Lease, 2028 | 815 |
Thereafter | 909 |
Total minimum lease payments | 11,003 |
Less: Imputed interest | (1,473) |
Present value of minimum lease payments | $ 9,530 |
Leases - Summary of Cash Flow I
Leases - Summary of Cash Flow Information, Lease Term And Discount Rate of Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Leases [Abstract] | |||
Operating Lease, Weighted Average Remaining Lease Term | 3 years 4 months 24 days | 2 years 8 months 12 days | |
Finance Lease, Weighted Average Remaining Lease Term | 8 months 12 days | ||
Operating Lease, Weighted Average Discount Rate, Percent | 6.85% | 5.06% | |
Finance Lease, Weighted Average Discount Rate, Percent | 5.72% | ||
Operating cash flows from operating leases | $ 6,825 | $ 7,738 | |
Operating cash flows from finance leases | 2 | 29 | |
Financing cash flows from finance leases | 104 | 884 | |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 5,084 | 19,972 | |
Operating Lease, Right-of-Use Asset, Amortization Expense | [1] | $ 4,766 | $ 6,343 |
[1] Amortization of right of use operating lease assets during the period is reflected in operating lease liabilities on the consolidated statements of cash flows. |
Leases (Additional Information)
Leases (Additional Information) (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Rent expense under operating leases | $ 6.1 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Related Party Transaction [Line Items] | |
Related party transactions | $ 0 |
Net Income Per Share - Summary
Net Income Per Share - Summary of Basic and Diluted Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |||
Basic net income per share | $ 0.26 | $ 0.43 | $ 0.11 |
Diluted net income per share | $ 0.26 | $ 0.43 | $ 0.11 |
Numerator: | |||
Net income | $ 37,293 | $ 64,604 | $ 16,051 |
Denominator: | |||
Weighted average number of shares outstanding - basic | 144,083,808 | 150,227,213 | 140,480,590 |
Add options and restricted stock units to purchase units | 2,142,288 | 1,579,927 | 1,206,794 |
Weighted average number of shares outstanding - diluted | 146,226,096 | 151,807,139 | 141,687,384 |
Net Income Per Share (Additiona
Net Income Per Share (Additional Information) (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,725,584 | 2,669,162 | 14,488 |
Reportable Segments - Additiona
Reportable Segments - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2023 Customer Segment | |
Product Information [Line Items] | |
Number of reportable segments | Segment | 2 |
Geographic Concentration Risk [Member] | Non-US [Member] | |
Product Information [Line Items] | |
Number of country, concentration of revenues | Customer | 0 |
Geographic Concentration Risk [Member] | Non-US [Member] | Revenue Benchmark [Member] | |
Product Information [Line Items] | |
Concentration Risk, Percentage | 10% |
Reportable Segments - Schedule
Reportable Segments - Schedule of Adjusted EBITDA Reconciled to Net Income (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Segment Reporting Information [Line Items] | |||||
Interest expense, net | $ 33,040 | $ 9,199 | $ 24,972 | ||
Provision for income taxes | 11,183 | 20,475 | 8,862 | ||
Depreciation and amortization | 129,473 | 138,246 | 142,815 | ||
Loss on extinguishment of debt | $ (13,900) | 0 | 0 | (13,938) | |
Share-based compensation | 15,265 | 7,856 | 9,530 | ||
NET INCOME | 37,293 | 64,604 | 16,051 | ||
Total Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Adjusted EBITDA | 237,556 | 248,910 | 226,294 | ||
Interest expense, net | 33,040 | 9,199 | 24,972 | ||
Provision for income taxes | 11,183 | 20,475 | 8,862 | ||
Depreciation and amortization | 129,473 | 138,246 | 142,815 | ||
Loss on extinguishment of debt | 0 | 0 | 13,938 | ||
Share-based compensation | 15,265 | 7,856 | 9,530 | ||
Transaction and acquisition-related charges | [1] | 4,364 | 6,018 | 9,314 | |
Integration, restructuring, and other charges | [2] | 6,938 | 2,512 | 812 | |
NET INCOME | 37,293 | 64,604 | 16,051 | ||
Americas | Total Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Adjusted EBITDA | 221,645 | 221,655 | 198,473 | ||
International except United States Canada and Latin America [Member] | Total Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Adjusted EBITDA | $ 15,911 | $ 27,255 | $ 27,821 | ||
[1] Represents charges incurred related to acquisitions and similar transactions, primarily consisting of change in control-related costs, professional service fees, and other third-party costs. Also includes incremental professional service fees incurred related to the initial public offering, subsequent one-time compliance efforts, and the registered common stock offering by certain selling stockholders in November 2021. The years ended December 31, 2022 and 2021 include a transaction bonus expense related to one of the Company’s 2021 acquisitions. Represents charges from organizational restructuring and integration activities, non-cash, and other charges primarily related to nonrecurring legal exposures, foreign currency (gains) losses, and (gains) losses on the sale of assets. |
Reportable Segments - Schedul_2
Reportable Segments - Schedule of Revenues by Geographic Region (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | $ 763,761 | $ 810,023 | $ 712,295 |
Eliminations | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | (6,146) | (7,441) | (6,127) |
Americas | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | 673,075 | 694,865 | 604,413 |
International | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Total revenues | $ 96,832 | $ 122,599 | $ 114,009 |
Reportable Segments - Summary o
Reportable Segments - Summary of Long Lived Assets by Geographical Area (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
United States Country of Domicile | ||
Long-lived assets, net | ||
Total long-lived assets, net | $ 1,083,318 | $ 1,134,201 |
All Other Countries | ||
Long-lived assets, net | ||
Total long-lived assets, net | 168,068 | 180,258 |
Operating Segments | ||
Long-lived assets, net | ||
Total long-lived assets, net | $ 1,251,386 | $ 1,314,459 |
Subsequent Events (Additional I
Subsequent Events (Additional Information) (Details) - Subsequent Event [Member] $ in Millions | Feb. 28, 2024 USD ($) |
Subsequent Event [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 150 |
Payments To Acquire Business Gross | 2,200 |
Senior Loans [Member] | |
Subsequent Event [Line Items] | |
Aggregate Principal Amount | $ 1,820 |
Revolving Credit Facility [Member] | Extended Maturity [Member] | |
Subsequent Event [Line Items] | |
Line of Credit Facility, Expiration Date | Jul. 31, 2026 |
Condensed Financial Informati_3
Condensed Financial Information of Registrant - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
LIABILITIES AND EQUITY | ||
Liabilities | $ 723,921 | $ 759,207 |
EQUITY | ||
Common stock | 145 | 149 |
Additional paid-in-capital | 977,290 | 1,176,163 |
Accumulated deficit | (49,545) | (27,363) |
Accumulated other comprehensive income | (21,157) | (22,331) |
Total equity | 906,733 | 1,126,618 |
TOTAL LIABILITIES AND EQUITY | 1,630,654 | 1,885,825 |
Parent [Member] | ||
ASSETS | ||
Investments in subsidiaries | 872,206 | 1,107,356 |
LIABILITIES AND EQUITY | ||
Liabilities | 0 | 0 |
EQUITY | ||
Common stock | 145 | 149 |
Additional paid-in-capital | 942,763 | 1,156,901 |
Accumulated deficit | (49,545) | (27,363) |
Accumulated other comprehensive income | (21,157) | (22,331) |
Total equity | 872,206 | 1,107,356 |
TOTAL LIABILITIES AND EQUITY | $ 872,206 | $ 1,107,356 |
Condensed Financial Informati_4
Condensed Financial Information of Registrant - Condensed Balance Sheets (Parenthetical) (Details) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 25, 2021 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 145,074,802 | 148,732,603 | |
Common stock, shares outstanding | 145,074,802 | 148,732,603 | |
Parent [Member] | |||
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | |
Common stock, shares issued | 145,074,802 | 148,732,603 | |
Common stock, shares outstanding | 145,074,802 | 148,732,603 |
Condensed Financial Informati_5
Condensed Financial Information of Registrant - Condensed Statement Of Operations And Comprehensive (Loss) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net income | $ 37,293 | $ 64,604 | $ 16,051 |
Foreign currency translation adjustments | 1,174 | (20,694) | (4,121) |
COMPREHENSIVE INCOME | 38,467 | 43,910 | 11,930 |
Net Income (Loss) | $ 37,293 | $ 64,604 | $ 16,051 |
Basic net income per share | $ 0.26 | $ 0.43 | $ 0.11 |
Diluted net income per share | $ 0.26 | $ 0.43 | $ 0.11 |
Weighted average number of shares outstanding - basic | 144,083,808 | 150,227,213 | 140,480,590 |
Weighted average number of shares outstanding - diluted | 146,226,096 | 151,807,139 | 141,687,384 |
Parent [Member] | |||
Equity in net income of subsidiaries | $ 37,293 | $ 64,604 | $ 16,051 |
Net income | 37,293 | 64,604 | 16,051 |
Foreign currency translation adjustments | 1,174 | (20,694) | (4,121) |
COMPREHENSIVE INCOME | 38,467 | 43,910 | 11,930 |
Net Income (Loss) | $ 37,293 | $ 64,604 | $ 16,051 |
Basic net income per share | $ 0.26 | $ 0.43 | $ 0.11 |
Diluted net income per share | $ 0.26 | $ 0.43 | $ 0.11 |
Weighted average number of shares outstanding - basic | 144,083,808 | 150,227,213 | 140,480,590 |
Weighted average number of shares outstanding - diluted | 146,226,096 | 151,807,139 | 141,687,384 |
Condensed Financial Informati_6
Condensed Financial Information of Registrant - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Percentage of threshold described in rule 4-08 not applied due to consolidated accumulated deficit | 25% |