FA - Earnings call 3 2023 | First Advantage Corporation

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Operator

Good day, everyone. My name is Ashley and I'll be your conference operator today. I would like to welcome you to the First Advantage Third Quarter 2023 Earnings Conference Call and Webcast. Hosting the call today from First Advantage is Stephanie Gorman, Vice President of Investor Relations.[Operator Instructions] Please note today's event is being recorded. It is now my pleasure to turn the call over to Stephanie Gorman, you may begin.

Stephanie Gorman

Ashley. you, Thank and earnings everyone, First third Advantage's Good call. welcome XXXX conference quarter morning, to In of to Investor press discussion. the section release the will and earnings find slide presentation a today's our company website, you webcast our on Investor remarks, discussion include replay I today This available like to our statements. we our being will will Relations recorded be is remind for begin would website.Before prepared and everyone forward-looking that of guarantees future not are statements forward-looking Such performance. forward-looking expressed results to statements may the differ implied Actual due both variety or factors. from of a in materially factors detail the These with XXXX in filings with of XX-Q are our for quarter filed and be SEC. our including our XXXX discussed in to third the more the Form-XXK form SEC, directly filings obligation of SEC, undertake financial present with do their not Such will update calls, financial to we our measures, our comparable the on reconciliation appear Scott Chief our to and may factors updated and available the are today without GAAP our joined presentation, which call periodic Officer. from and Gamsey, any press be statements.Throughout discuss Executive available non-GAAP to also today's on time our earnings most we in non-GAAP this forward-looking David by financial Relations release Chief website.I'm and conference measures Investor to our time Financial Staples, unreasonable efforts Officer; measures extent in take I now will will question, turn over your we remarks, to call prepared Scott. our After the

Scott Staples

value our continuous our Thank and and their a you quarter, conference third everyone. very joining dedication for had thank in all good on team want XXXX Stephanie, we stakeholders. call.Beginning morning, to I Thank X, you, earnings for to quarter Slide delivering our productive

objectives we achieved goals. many the strategic and quarter, During financial

operating the us to disciplined EBITDA in management communicated, along strong flexible our Our cash line our to we sequentially.Our and enabled revenue with industry-leading to continue expectations third margins previously quarter business cost and adjusted flows. EBITDA maintain improving adjusted results that were generate both model with with

Infinite Our balance around continue our sheet and quarter of taking onetime repurchases a our products and actions data which under ongoing acquisition deployment healthy ID, XXXX.Even allocation cash period.We to our strategy, payment our dividend our December, was with million. and to us creation in evidenced capital just after our committed balance remain existing special centered flow further extended of value industry-leading new X.Xx our execute automation, through this of and as capital allow strategy into growth of with share leverage balanced even remains recently and macroeconomic challenging strong sheet robust cash through to long-term disciplined ownership consideration, program, $XXX

strong customer than of network maintain partners, across to which continue to solutions, our fund business.I retention ample enabled of referral more continue current and to partnerships. liquidity our latest providing our our with range both our and to the expand ongoing our XX% market-leading in of and internationally, investments technology have future diverse team's rate commitment to with proud domestically am and also of integrations customers us XX verticals.We strategic We has

improvement trend highlights throughout first quarter. results.We from year, a down $XXX revenues last third of on robust, month-over-month evidence deals quarter, from in our quarterly business to saw started remains revenue trust which significant both X revenue. modest QX, the improvement booked continued in $XX and us.Turning million, we momentum we representing generate new the upsell/cross-sell including enterprise approximately our This X. of already generated dollars year-over-year half In our and is X.X% annual a now pipeline overall in customer third a is grew Slide sequentially which Our several value, million confidence customers' further contract the and nearly opportunities.During sequential of to

openings into of target Higher XX% the from have remains workforce, positive a of been CAGR by of our benefit consumer and consumer customer year's year trends.In total these unemployment International India. holiday numbers over higher long-term be robust stable revenue segment, partially growth.In to mitigating above are to Americas APAC Hires the revenues continue organic driven were season. confidence and and spending revenue we U.S., experienced quits, growth the remain level our LTM X-year new and decline prior compared XX% our last fully rates XX%, and flat Job as substantially been continues to to than to X% in Additionally, it to remains relates standards. segment, historical high going relatively by upsell and higher also particularly unemployment have decreasing. our salaried cross-sell.In interest

also and results year.We flexing and health experience and Our operations revenue resiliency. It in managing on growth segment last that our is service elaborate cost at are remain very impact direct was shown volumes.Adjusted in QX will our less European hiring e-commerce. first and our David X% perspective, more $XX total little which and expansion. of performance industry-leading shortly.From of proud exposure QX further our seeing EBITDA and noting operations, worth our and driving technology, this EBITDA care adjusted higher revenues, to our on have retail in while experienced decline demand, services business stable than continued Similar also business. and outperforming nearly was with China, demand these our automation sectors have margin significantly quarters both demand transportation a a focused has continued expanding modest of million, X our XXXX are financial of positive and XX.X%, margin increased hiring to to quarter, in on vertical our we efforts than

a XX% progress quality sustainable each portfolio of priorities, competitive proposition, to advantage a full-year, our of allocation margins in while moment our continue Collectively, take earnings.This great we M&A and strategic adjusted organically and for a areas drive our strengthening expect and We objectives.Now quarter, with growth maintaining discuss X strategy. long-term balanced investing enhance greater customer fuel detail. to initiatives our solutions, made these capital including let maintaining products, me our high in these value automation the data our above EBITDA on

continue to we margin our EBITDA data and to competitive AI adjusted our technology, advantage automation grow First, in expansion. and initiatives drive invest

database. and great Chat. Verification are SmartHub, Profile to Our Call, data Employment sits router top we used satisfaction uses are one gen excellent enables API-first of job ground out across responsible these next hire acceleration Click. enable for device.With quickly solutions enabling adoption. SmartHub, technology by of sources mobile the with in portal Verified! This is headcount examples proprietary the search reductions, a we this.With in intelligent rolled savings we Instant AI-driven scores.Additionally, AI on and This the customer has to common technology our user-friendly and speed, us and experience is onboard expand multiple third gen and U.S., a support. growing Advantage that to essentially are intelligence requirements.In an customer predictive initiative leverage with computer, platform tablet early in SmartHub automation seeing continue higher large efforts applicants applicant Click. our determine solutions, operating it while customers to next constantly verification our our globally, Profile interface provides to and from quality innovative data cost evolve AI, a the screening innovative our faster. machine which generative provides driven stages care. delivers interface AI Through or redesigned Call experience for addition rolling smarter also tailored our the cost through personalized customers.Our quarter, a source which out on and technology Chat. ways experience based effectiveness. the up, customers our offering to are Advantage customer process either learning, through we optical looking and and specific built and In user of to this to

reduces easier in and This long-term our and and portfolio and recently continue Instant for see faster we this for Employment checks, the and digital-first, integrated applicant time and in investments onboarding.Through for leading through service reduces to M&A. expand customers, and First our applicants growth. U.K. build are are markets. win-win-win in solutions the Verification technology, that our quicker an benefit we example, customer their solution operate creating fully For upgrades proposition, foundation a on AI, perform process our and the launched to our These required are friction our automation investments to enhance profitable how we we Advantage.Second, as a their major We our of to applicants. customers also value driver solid India

strategy by latest plans successfully X a addition enterprise This These X completed acquisitions to we in solutions value.Taking is allows solutions, services the at serve we including year other Infinite us which and our largest financial is enabling technology our digital Vantage. with care, acquisitions, their health identity to digital customers. strategy. digital state-of-the-art that evidence ID, of ID's including providing look September financial like our markets and customers growth us by First Over offerings, expanding creating X. continuously being closed and identity, outpaced identity capability.Each a provider business prior the U.S.-based our Infinite innovation reach goals and our product our objectives returns digital strategic RightID this on geographic is solutions product acquisitions ID, part to closer identity out have not-for-profit.Infinite align and roll our verification years and vertical and better our supports past exposure, regulated that complements M&A has fraud technology This and outperformed of our plus,

we generate In to greater ratio we special the in our now net through to extending repurchase balance XX% program outlook. are excited portfolio capital on $XXX First million proud are shareholders David onetime our with long-term low third, to approximately and allocation as we our to to and Advantage.And of which third shareholders.We confidence committed our existing continued of recently We of a return capital will to financial flow to to healthy more cash shares details executing X.Xx.I their add represented our we Board David? XXXX, the results turn reflecting dividend, extremely our balanced Infinite and welcome maintain a our and against quarter, strategy. also to for than strong team repurchase returned ID sheet operating to leverage call a remain continue share objectives, December over

David Gamsey

you, and morning, Thank Scott, good everyone.

to Slide X. Turning

quarter prior and Infinite revenues.In third and Currency a with communicated third the expectations and acquisition, ID to results of had year $XXX.X ID navigating macroenvironment into continue delivering month Infinite closed peak. it our and quarter executed services market were and well, prior to regions and which of base components our consistent X.X% This revenues revenues identity based X APAC with due and their XX%, in with financial future will APAC.In on constant to headwinds the $XX our upsell/cross-sell, easier India growth managing for from our enterprise customers digital contributing demonstrates and X, results were from was the last the $XX long-term existing resilient you historical base, account sector proven new our attrition we lowered believe for each modest delivering with attrition. the their at growth which see decline margins, just consolidated all year. our of uncertain additional X from we productive and weakness you that are represent and of consolidated and we in algorithm year. QX over partially provided our have broad-based, driven or is resume We to the products expected, XXXX, which our have Revenues Revenues constant each the still will results.Turning basis, shares comps see $X.X considering cross-sell, macroenvironment quarter. resiliency decrease attrition and over of line algorithm. new quarter.Our currency to contributed $XXX approximately can third demand. quarter more X our $XXX.X sensitive experienced response, customers million, which to continued owned from cost been of little overall targets very customers XX%, stabilizes, our these QX the India our within can X the segment see, X% million, its out The the quarter, our year-over-year. may it strong our million the negative, upsell driven in We million prior approximately our million. regional to the customers more performance. X% results, when mentioned, revenues October during Slides total, nearly XX% Scott and a to have As these This and we macro had revenues On dynamics. currency that the the quarters improved still was results We X% attributable to of shift by and over repurchase dividend, XXXX.Our EBITDA European and year. components business, component. and the were on now industry-leading the new in what reference performance we quarters.As heading In impact rate a growth QX year-to-date, from of face will this million X.X% first the This was expectations, of we their X%.The have X the businesses, revenue much million table In the revenue in have we the or by prior compared that adjusted quarter.Adjusted bottomed contributions or quarter have $XX.X India down our which third Americas in segment, these modest are on before variation control this special X%.Across positive upsell/cross-sell, support weakness growth was base to expanded onetime down down that algorithm. XX% XX% operations, being upsell/cross-sell $XX.X services-related is revenues historical with the when quarter. revenue for geographies primarily contributed include were recall, million of while approximately base declining held our results or Base for presentation, XX% revenues International and the certainly of each the exposure EBITDA in of to you flat given down algorithm XX%.As last other a at base.In to an customer macroeconomic retention base $X.X approximately a in grew from to to the offset in the In sequentially month year. BPO the $XXX,XXX our X% increase up million which was believe continue base resilient APAC, be contributed or growth QX offset we by environment.While IT primarily of compared structure revenues in segment, In declined to of coming quarter X.X%. grow we growth an for the third the decrease or by third Americas segment, to customer was XX.X% of

growth seen was declines that adjusted EBITDA in you LTM noting and It X-year India year-over-year adjusted worth EBITDA we the if is Our CAGR back would have out for APAC, the XX.X%. points and and EBITDA be prior a on points XXX of and industry-leading adjusted to an company basis year-to-date in over XX.X% basis year basis sequentially. improvement XXX QX.Our margin continues represented of

be third resilient year. EBITDA product our of expansion the align footprint, facilities' adjusted our was to lower selectively quarter, reducing our in the to recognize highly was demand.For million quarter, structure net SG&A and few our $XX our was last customer with diluted proven operations, income Adjusted compared has headcount effective from and tech rate supported to the adjusted expenses.We continue adjusting top EPS benefits third care, leveraging $X.XX. was efforts managing usage-based our line by business the over quarters, and savings was XX.X%. manage face adjusted including headwinds.In costs and tax controllable the in around procurement by and to variable cost discipline This continued Our margin enabled costs last very

EPS $XXX,XXX onetime of income.Turning capital both quarter a dividend, Slide interest As sheet reduced by and because adjusted balance third paying net the $X.XXX, special adjusted income result were in our now approximately and XX. and our allocation respectively, to on lower of

drive between profile. discussed, our our and attractive internal net balanced and investments profitable Scott M&A, to disciplined growth, As shareholders returning maintaining organic capital allocation remains approach to leverage capital

purchases net strong bringing million to operating property capital-related the year and strategic leverage the development for and Our capitalized software we in and investments. our $X.X on flow cash quarter, $XX.X low total initiatives.During of spent costs, our million support equipment

interest September on enhance million.Taking Infinite the valuable on from into the balance impact cash sheet. adjusted impact from on this to acquisition, will is third brings profitable quarter.Our net Infinite and we position. integrated. adjusted no our we market on income the EBITDA, once dividend, over EPS return onetime our for X, the This annual growth It Additionally, value using ID ID with income reinforce diluted shareholders. adjusted net ongoing is transaction to $XX funding of basis capabilities be accretive along meaningful in to commitment million expect $XX income expected adjusted is to buybacks, expected acquired or that slightly and account revenues generate our share special business a had net

back quarter, the per cash pay to greater shareholders.We of XX% shares $X.XX repurchased continue August using million to represented share November special cash approximately a inception approximately buyback buy year, have capital dividend stock of the than and we we QX. $XXX of During approximately X approximately share which of shares $XXX million repurchase X to Since onetime our million of used also a $X.X of program in million. to through for in this return XXXX common our

a third declined and remaining peers. will lowest of cash We capital operations year-over-year million public which in QX on continued largest in Cash amongst We a with through $XX.X $XXX ended have approximately current have ratio authorization, is environment working Infinite and recall, we our you increase strong us under for untapped our the $XXX no before we This of X.Xx. we quarter half have were hedge rate our has Further, the our generated facility.As million approximately flows million, XXXX. acquisition. net the XXXX.Cash been debt year-to-date maintain of structure due quarter, special a after approximately paid dividend debt ID February the extended due and capacity the revolving million approximately our total of expect normalize may taxes million the $XX position and the maturities with higher cash well QX, short-term XXXX.In onetime $XXX $XXX million $XXX approximately to operating interest positions through in and borrowing December leverage $XX QX.We debt to credit and debt long-term leverage in cash payout temporary that we from in million for primarily investments basis. flow net million and on

million verticals during seasonality, of adjusted fourth adjusted we and our Additionally, holiday end long-term ranges $XXX our the changes.Based Slide customers the the To to are QX. the low Today, year the retail, expect $X.This hiring environment market guidance hiring will without on this and upcoming macroeconomic increase transportation through these labor existing and to conditions $XXX season of previous of significant represent duration perform seasonal of the low revenues peak income expecting of million, in million we in that adjusted for continue and we at of QX EBITDA remainder expectations typical of quarter ranges. to our our trends, reflects compared of remind of including hedged end the the $XXX EPS the another similar ranges current diluted as moving and and ramp-up $XXX e-commerce our outlook. debt seasonal to strategically these you, year.Now million, net of XX reaffirming

at year. as more pattern revenues, last in we play highest seasonal we the typical a so this than October our as seen at have is rate far experienced We year are modest the of October, but out anticipated.

our base resilient this fourth model we remain EBITDA on negative been our that EBITDA million be to expected adjusted approximately and acquired decline margins and adjusted is the expect those ID. of a negative, revenue we our onetime due approximately performance. income have adjusted has the we special $X.X slightly expect quarter, business September have from guidance to continue of Please on of note to in XXXX, dividend $X.XX basis.For anticipate maintain our for year-over-year not to margins remain segment All will or was full-year onetime have quarterly and from EPS, full-year a impact confident captured guidance.We X, our to results. resulting or QX expected our The our still control. ability within above income.Infinite adjusted ranges special downward dividend on full-year Accordingly, measures our We been Infinite effectively is to the a net basis interest take upward sequential impact on XX%. growth the adjusted the to manage already XX% in growth, contribution on nominal lower which a to impact revenue adjusted improving.Additionally, international but the ID, level factors effective EBITDA

income Specifically, to on disciplined basis, ID well EPS currently of controllable the Overall, our in EBITDA ability parts the you as be year-over-year share contribute see over it's the some impact a our combined we costs comps QX factored look remain can provided.These a forward factors, with of we of will adjusted have business which as no environment. interest results full-year easier into total of call focused guidance. early provide in is XXXX diluted it adjusted delivering the for on early for and revenues us biggest thoughts here offset manage QX to productive We adjusted metrics been employment Infinite at First net our the both confident a or quarter not approximately change year.To us guidance results income, executing has We We on anticipated highly quarter expect Advantage. to which results, our sharing meaningful to during next this about in do $XXX,XXX, on were loss more Infinite year.While QX year. preliminary around our in ID from expected our summarize, year. contribution to expect the we revenue we will remain and by resulting the formal the next substantially The wanted in million too be XXXX. on XXXX, in $X for

to continue as maintain growth as our adjusted for will margins. industry-leading business EBITDA well long-term We to invest manage the

We deliver over back what navigating now an increasingly we the say to to environment.I'll Scott. call continue turn in on while dynamic

Scott Staples

areas like Thank strategic to conclude our David. priorities. prepared you, focus today creation of our value I and remarks would reiterating by

model Our enables and manage invest flexible optimization. us to business continue for costs, we to automation further in

We with are first-mover in in building space, inorganically. industry-leading innovator advantage EBITDA remain this our flow sheet strong margins, an metrics generation.We cash focused a on resulting and and and on organically balance adjusted our long-term foundation, growth opportunities

leverage becoming look relationships our best continue our to We mitigation. want to the risk verticalized to are solutions product and more to team more brand, commitment enterprise increasingly offerings solutions customers' resilient the They provide solutions, the customers go-to-market focused help and to employees screening meet keep and on and their our have our safe.We the providing us to needs. enhance strategy long-term customers with automated faster, customers.Our

value and and to as We customer our continue profitable technology solutions to investments recovers. particularly us long-term our competitive positions the macroenvironment invest enhance capture well share, market in maintain to drive advantage, proposition our growth.Our

ask retention offerings.Thank you this with XXX for very team will questions. the we is your for for operator further gross At to outstanding call and XX% your open support. of long-standing the ongoing Our your rate tenure top our time, time and our evidence much customers product and

Operator

ISI. [Operator from Instructions] Togut is Evercore Our first with question coming David

David Togut

overall. control expense Good

SG&A on between incurred a year-over-year Is being mismatch was in X% being is down SG&A, versus revenue international callout currency incurred one there in revenue foreign up USD? X%. which currencies the Just and

David Gamsey

real comp. there No, it's David, really the That's answer a driver. change in stock the is

David Togut

Got it.

going while? outgrowing a Okay. for be Will And think how should SG&A that we forward? revenue about

David Gamsey

program that we'll be which of XXXX, had comp, the a to Only in stock May modification continuing. we in

David Togut

then come selling a just all a cost out focus JOLTS are bit for And the Is as there to Scott, the customers you economy a bit? modifying down slows, the more of you final my numbers reach as clients? question. when proposition at

Scott Staples

lot We're and I more good solutions, players before. companies can seeing got actually I our we've innovative saving deals are at go-to-market And of when so our solutions, through focusing our procurement-led and helping products, companies, fast product "hire we're totally because tagline procurement-led type development strategies, money clearly look is. talk mentioned there customer there's helps. -- our and but money, actually on on I our faster" but think money lot deals are our SmartHub help like a onboard companies also Verified! we've improving these offerings.We automated this think of a very think scale smarter says, us about as also and our verifications. save experience.So for also we and you And are obviously, the large turnaround saving and

Operator

our take Capital next with question from Markets. Ashish RBC Sabadra We'll

Ashish Sabadra

the much number that? versus the is, do lower and seen you pretty the verification? wanted SmartHub SmartHub providers have shift continue some XXX you do improvement reference How plan traditional on which and plan significant there of We've of number to or to in just to -- in of from increase on your you terms Verified! to happen cost there I how how drill down seen your records?And Verified! and further question verifications question increase the database, last to using databases. those My now other any has million the more increase of records.

Scott Staples

data is cetera. new companies space are Yes, Ashish, our through space and that. what a alternatives our But of going sauce for of in I the acquisition looking high-level fintechs offerings -- own thanks and our customers in some do -- et I this absolutely provide think to new for the it's providers, database secret think combination many sort the companies, question. a new tech don't the you in most things.So there. away and is this answer will give alternatives increasing verification general, customers and give strategy would But efforts, the I that partnerships, I'm on in

don't it's strategy, to a of So a want which very give this but I is away area today, us. detailed for high focus

Ashish Sabadra

wins, as color helpful, on And we that's wins next X mentioned wins, How color provide public enterprise it possible the also you those -- the much on can peer there. those understand. get how the were completely to the any very on year? No, from on And tail? I more new you then because deal pipeline long your into of is versus provide

Scott Staples

Yes. Also, question reverse. I'll take the in

it. I buckets has divided a interesting think the well before, year consider data. months mentioned been we've And over literally happening competition. we as think XX X for to what it's been be wins this we or maybe this continue the tracking even of and between equally I've very But

coming are large sort is wins a space, market companies the X/X know, from of fragmented many large have this X/X a players XX% X you players. and many XX from in only of share. the X/X with a roughly So as from the the another you large know, the public and market pops the mid-market competitive -- And and peers.As field maybe very roughly mom it's probably

So there -- this industry. to of nature because fragmented of continue the trend, the we expect

attrition for you the revenue So we think to deals it's if and look let's algorithm. to X%, hits X% X%. to are grows base normal this themselves, good our us.On sign if logos healthy before. of and X% at -- you It's times, upsell/cross-sell mean, that's the X% look typically a then given we've and say, back -- X% data out growth I in to at new X% you But X%,

at of at new just stabilization our plus. X%, So on. starting right base. growth to it. that attrition always We're But it's the It's that performance on mentioned, X% we're look the X%, for Upsell/cross-sell been the and as David some we're spot you XX%.If in see gives logos year base, base at QX, you long-term X%. last at a in to

was a very promising quarter. base down for us. So this sign X.X% only That's

Operator

from our Wolfe Scott Wurtzel take will question next We Research. with

Scott Wurtzel

appreciate plans And to expand maybe was we about could year? know this from bit little the wondering how I next and what some little just thoughts you're your with I is had the you if what into preliminary if don't on you've a maybe relative saw hiring and that conversations I year XXXX. of a yet bit. hearing clients them any trending

Scott Staples

Yes.

we're means them. account conversations the on really we our large So constant in them. this and yes, again, having past, said we've enterprise have dedicated manage well this with teams customers And

and customer So on think is conversation depending I in, changes a customer from who what that industry again, macro is. the that --

pretty So there's in upcoming macro hiring in the you when U.S. season.David in down. good are October actually ones customers those those responses.But are transportation, are when Like you ramping seen e-commerce e-comm retail data, growth and map retail quits transportation and and transportation at general, up are quits verticals, if look verticals. are quits variety look top macro already confidence look the for consumer actually good -- we've remaining up, health high. retail, our numbers And when their the you quits mentioned wide that verticals, to those of care pretty in X not verticals holiday seeing Those down. in. care, are think a at at who our I and you Health are

to things keeping of But of So and a over customers uncertainty, close still in first there in of you've for happening uncertainty from definitely plan individual starting seeing for standpoint, indicators got the maybe predict a better.Certainly, don't deal they are demand. lot where and this of hiring they bit there's great pretty because QX year little know. themselves are most was what's time verticals.I for year, even think couldn't their a they're year well last vest a we that largest our good macro to an customer

see to starting a they're better. starting a little we're bit plan of Now that be to changing to able little where

hiring, full-year plan that a not can quarter-by-quarter, they not -- visibility. quarter great we can us because I'm maybe for we're get that's go and Now a that but they and plan expecting of

Scott Wurtzel

as sort of is very obviously ratio on the strong, follow-up of above sub but that have near-term past the we X.Xx allocation. then of And still leverage seen the Look, Xx sort few a capital quarters. obviously, just over

So to Are back just of looking at allocation. get level? capital Xx wondering you you're where sub how thinking to Or of sort are about near-term comfortable sort you now? right you're that

David Gamsey

operating much comfortable all, operations. by still come leverage very But it's low. cash going to because first that. generate We're just we from down at continue definition, flow so to of X.Xx Well, is very

to going buyback continue program. are stock We our

But quarter. We And of at a off to will continue every we're throw again, very cash we comfortable lot pursue X.Xx. M&A.

Operator

with next our We'll Rosenbaum Stifel. Shlomo from question take

Shlomo Rosenbaum

seeing bit some the a about you So you're for of cadence? comment where kind seeing just quarter? of the quarter? maybe And is about the Scott, a what can stability? maybe you seasonality, adjust little through the are bit it Just trends kind you hiring little more through the -- worked if comments trajectory

Scott Staples

Yes.

I think you is had the exact word we've stability. been using, which

great David that's, year. the October the have it's grown. sequentially think season. being each revenue that I obviously, And all, highest into heading great month, mentioned of the of First we to And see

it's we're customers. I it predictability we weekend, a got right not months about and going are that in have are XX,XXX isn't of even again, those from large kind that past volumes, So love to hires getting but hiring years. some obviously, of and good talk things customer. where good because say to that some would never the that's you've customers, again, what we stuff. thought announcing logistic We're is that's X order that's signals you I'm companies companies. And seasonal are specifically the customer, be. looking I'm saying customer, been in a large But to saying growth.And a would sequential transportation about obviously, hear. not these And of the But not of a XXX,XXX kind

Shlomo Rosenbaum

expect you what give cash reverse? why And headwind there? and in over in going the cash the was remind then, on us Just can impacted David, quarter that capital the what's us you color it on to flow the working the flow

David Gamsey

Yes. It pretty simple. was

days. of opposed a end the couple in Our to DSOs had September. week that October couple in went first of up We the of as by large a came payments

Shlomo Rosenbaum

the that? squeeze added little I did about one identity could and what existing excited Infinite you're ID in And about talk Scott, just if maybe your capabilities why to more. bit acquisition in a

Scott Staples

Yes.

you've locations. think to also future. when basically We around we areas customers. is company an these are actual our roadmaps this nicely to really on fraud digital others, at And I look automated.So of an network even product and Infinite heard physical high-growth ID, think maps then creating focuses are identity becoming biometric the more third-party important that on are of digital identity fraud and the this from us that and bullish and we our are more areas areas. These how whole

state-of-the-art kiosk. like of So collection it fingerprint think and as collection biometric via

to similar the you CLEAR the you and airport. the see go So airport machines to at

type capturing in of And experience us. a a So think partner customer. were that around we with I fact, largest similar their data.This company was already

So of a physical where it our and see as in future well. a locations as that we piece for future. together sort expanding products And we of lot of around could these really saw we we then just saw really it merging a footprint collect great knew data.And we their as our them map fit technology also important road the

think about map protection to identity, digital that and you process. think the when then So fraud about you overall onboarding

just if candidate If you multiple can the across sort done products. have, of like great could applicant experience have that's all you seamlessly

you biometric data, you're So the triggering protection. fraud get

what an the co-mingled actual into triggering as track all all come kind of I-X together. the eloquent we would in You're even process future that and technologies the loop can stuff.That experience side, background on start in together of all criminal products a the these you and candidate be think

Operator

Steinerman next We'll question JPMorgan. with take Andrew from our

Andrew Steinerman

have of any current stable comps? for in into take First environment, levels of growth patterns, without year-over-year 'XX if of stayed current hiring kind typical kind kind the Advantage's First So, of because seasonal of pickup. would positive adjusting you volumes, but going that cyclical at they and course, revenue clients' Advantage base 'XX, In

Scott Staples

we're can XXXX that to but your things can't environment. just Yes. that point but then thinking, control can you thinking get We've haven't logo, piece give cylinders comps on that, fire got easier like that.So we're obviously thinking are. still XXXX new line what to to talk think their retention, where stuff still which on you right to with the plans we we it more a a answered we're a actually ready and as easier. color get all We'll that on what us next Again, but go or things quarter.But fire of much modeled cloudy is they to predict we control, so tell we XXXX, talking we we've upsell/cross-sell, XXXX. is is hiring what need we The big when out now. now, thing. gotten -- we're the customers the yet, it's in don't in figure the the and I And same to which little And right trying a to on stable comps

a that So that. it's probably best we on wait bit little

Andrew Steinerman

in company, one you the referring total to were meaning ask hiring were non-U.S. in recent and to When or hiring talked you quick just follow-up. you stability U.S. I recent about just Can patterns, stability perhaps patterns, U.S? referring

Scott Staples

is No. down struggling. and still International still

exception in roughly is as With APAC really the EMEA, through India say, base mentioned, own. But what I its are again, of EMEA and decline down. we would about holding XX% And international.

we'll are big bounce back. bouncing from of which do So a at although bottomed it China we back bounce China that of vertical-specific. that's reopens piece again, should multinationals think we a for away APAC India, And we influencing believe to expect because U.S. companies to Europe. and U.S., starts until India, don't and really will comes while, our the serve But back that back the number.And there really BPO very APAC.When bounced the quarters big still we that's fully the lot don't be region, services a out. And it's base of again, back. we a just India least is bounce the they a of couple in when U.S. customer APAC think and has think in IT and

services, all services, increasing we kind e-comm, numbers pretty still transportation, mentioned, staffing, care, financial stable down.I demand, are now. tech, as are mean, right think holding of Americas are already own showing again, definitely what its health those business things retail, So we our by

Operator

Patnaik from Manav question next our take We'll Barclays. with

Ronan Kennedy

Ronan Kennedy on Manav. for

expand. -- dynamics and cetera, margin margins AI, as long-term could of as et pop is of in to kind automation, returns upsell/cross-sell you Just margins? when new potentially biz talk be about wanted and your further you there investments growth dynamics and the on going expand the Is Can be on cover return base that assuming offset in to to return they Or there growth? to also further? there? by a Will the they potential the

David Gamsey

particularly operations. in there's Ronan, international all in certain amount fixed our a of Well, we the have that marketplaces, cost of

going back to revenue and international incremental previously through, operations.As in fall enhance that invest continue we comes to said, will Scott So are as starts the organically. to margins that the

revenue, margins think and continue are far, product in we in invest those We automation look, implying incremental already to of we expand are XX% there's in QX. as well. technology. to driving By and on But We're through through margins. we're industry-leading XX.X%. at room But still

Ronan Kennedy

And but from of to longer-term dividend. and did allocation you in then near-term you're primarily flow a allocation, from then regular a the kind flow through a on you Can of M&A evaluations about capital was for give managing leverage, standpoint talk and very strong low with challenge as of a seeing consideration also terms as question well standpoint follow-up a leverage. it. that pipeline the Got to special liquidity priorities?And Would generation, capital cash dividend? you

David Gamsey

time.From that's a was a are perspective, at the point capital this dividend Well, and was we invest first, to discussed dividend. onetime relative a It Board organically. going disciplined to allocation We'll balanced. something the that's dividend, level. This special remain onetime at in

in We M&A are active marketplace. the

somewhat more comes always at to overpay gotten a reasonable, have side. We deal out. every that bit at on the are for little high deals the in not We'll still marketplace. look but looking Valuations We're going there's to continue them.

Operator

question next Stephanie [Operator Instructions] our Jefferies. take We will from Moore of

Stephanie Benjamin Moore

hoping your closing kind quarters change, seeing you if bit was a this pipeline, little sales the I cycles sales times you're year? versus in if maybe any could change previous of different about talk pipeline the

Scott Staples

probably -- highest pipeline as is ever a Actually, company. total overall Stephanie, is the had pipeline is great. we've pipeline total Yes.

a lot of are deals there there. So out

logo in takes sales any and change We about seeing most months months. deals really cycle take general, new duration.In are not about upsell/cross-sell X X

already there year -- and the we've the on because contracts -- are and there in difference many already this cycle I we're are. think is sales but led of deals think upsell/cross-sell showed that it the how only of more this QX love big last we obviously, stuff.I and So that started, kind the QX deals seen started procurement year, year in of really place

to companies in lot money and And and makes and so sales are so change I think the this stuff said I vendors think the we've seen looking only more earlier, like I I consolidate a just sense.And procurement-led thing And of that and save a to a can you RFPs global scale like because reach that. don't necessarily that's get think deals. chance things gives is process more and into provide bad it we obviously,

Stephanie Benjamin Moore

of kind then guess, And have of follow-up, I more it. clarification. Got a I a

trends of seasonality On quarter the the you've or see at fourth the of expectation guidance you in? in what drove have trying come for little get seen as XXXX, color just kind to year-to-date lower in market the not ranges. those of of noted function in I end maybe you bit some lack of Is you're think panned how of that on Just expecting out? the just to a well a

David Gamsey

reaffirming ultimately really that, we're to their We end So that directed towards a low really accurate in up. reaffirming guidance to the the We're that's And had we where It previously end continues all had is last environment the that along. going previously place. guidance relative place. that of quarter. the to be the reaffirming we had function in that sensitive just we're that variable macroeconomic again, growth.That wildcard operating most base really we're And in was guidance in. we're

Stephanie Benjamin Moore

color. the appreciate I fault. my that's No,

Operator

Kyle our take will Peterson Needham. We Instructions] from [Operator with next question

Kyle Peterson

I IT expectations definitely headwinds quarter, the growth the for of and space bit and the on of we since the a been the up with going wanted off basis to thinking services then But we segment BPO appreciate should I fourth similar to to that it kind in in XQ? quite delta can through. expect of at about saw holding be some have Americas what guess, international seems segment, And start better? fairly the makes segment year-over-year a be least in up on

David Gamsey

international, a be and if to is which of revenue start off. you'll In of from down low by let's the This still will definition, year-over-year. QX will way be guidance, perspective, lot that of it a result total, end continue you in that total. at slightly see look Well, mid-single-digit negative, is

APAC I both So XX%. down and was XX%. India was as Scott said, down

in We as QX continue that well. expect to

Kyle Peterson

of the some new today? a on client And on then color you pretty at verticals broad-based more guys you little fact wins? particular the guys was that are mix least that there revenue on these based of X subset Was have the strong worth won. bit any maybe out calling Or the across base new on deals of some

Scott Staples

across pretty again, yes, So verticals. broad

deal into verticals. as buckets, I detail broad large mentioned, There the in across not than So to -- But one that. want there going to I competitive in across transportation we're more don't space. go was broad

Operator

queue. at back to And the I closing now this over Mr. call will see no further time in questions Staples comments. for turn I

Scott Staples

for pleased everyone, performance recap, are Thank the very your with you, operator, our you, To third quarter. participation. and through we thank

We strategic capture proposition and against initiatives to again, be further the share continue Thanks value our and in and space, to in this great competitive value. and of leader continue enable are to progress pride great make our compelling day. a ourselves to positioned all providing to we stakeholders.Our sustainable advantages a have well us create

Operator

quarter First this earnings Thank webcast. Advantage XXXX time. third call at concludes you you. your and Thank all conference participation the for This

wonderful a have and lines, your day. disconnect may You

First Advantage (FA) 9 Nov 232023 Q3 Earnings call transcript