- Earnings call transcript Q1 2022

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Operator

Good morning or good afternoon, and welcome to the Sterling First Quarter 2022 Earnings Call. My name is Adam, and I'll be your operator today. [Operator Instructions] I'd now hand you over to Judah Sokel to begin.

So Judah, please go ahead when you're ready.

Judah Sokel

Thank you, operator. Quarter Call. First Sterling's to XXXX Earnings Welcome

of presentation made we and News available for website. prepared Joining of Financial remarks, conclusion Sterling; on open are website Josh during slides Officer Investor and on this Executive Officer a questions. Peirez, posted Chief this at reference and will Sterling. files me be Relations will the The under accessed Sterling today call, be replay of we will can Peter Walker, call The the Events. this will be After Chief

all Before Slide to we discuss risks the our results, explains measures. which non-GAAP the I of on encourage notice of statements and listeners use legal the forward-looking review X, financial

XX-K that from risk for a Additionally, refer statements. please discussion could differ materially actual Form factors results these to forward-looking to our filed cause of recently

on and will Our discussions certain measures. slide this non-GAAP financial call presentation include

most the release presentation GAAP reconciliation over measures, comparable measures directly to such morning. Josh this issued in in are turn and will Peirez. I for the For now call the of our the appendix earnings

Joshua Peirez

stellar. Good Starting Judah. currency our XX% Sterling's were revenue XXXX. momentum in reported was revenue saw for the quarter joining growth record and you, quarter as of We growth, laughed X, constant of revenue strong a this Thank and first growth approximately even XXXX including thank organic XX% we of first exceptional our throughout we XX%, with continued morning, Slide the quarter XXXX. you us. results

and XX% international of and XX% during the We for saw proud growth XX% organic in quarter currency been we our we acquisition, of saw growth, has far. the are our long-term X% the of The low XXXX. at revenues verticals, from with digits in Sterling's on strong in constant outperforming particularly UK expectation revenue line one-time from saw and thus when new US double-digit saw grew normalized growth regions EBI also almost all basis, a double growth and quarter. the our results in We business a particularly expectation, first which

on Importantly, we our solely to are drive not strong cyclical results. trends relying

We upsell our outperforming to and product for first-quarter playbook due strong logos our pace These cross-sell, offerings be are Base to our excellent are but our new to winning customer at a results. targets and and growth innovative fast for excellence. executing on a also continues us. service are results contributor not reputation new

revenue seventh X, on have quarter to quarter with of fifth that end our and continue. this sequential dollars. at consistency As the since It's our expect hit been a we double-digit just consecutive Sterling's shown growth consecutive we strategy and launched we momentum and of of XXXX, growth was years in our Slide stride revenue few

outlook first strong the adjusted guidance we of our being full confidence in As while a our revenue and increased year, have result for mindful EBITDA and the quarter macro-environment. of our also full-year

representing year-over-year XX% year-over-year to year-over-year generate adjusted to XXXX, $XXX income revenues EBITDA representing of growth $XXX XX% million, to and million XX.X%, XX.X%, to now to representing $XXX adjusted of growth million, $XXX net to expect million, $XXX XX% For of we XX%. million $XXX million growth of to of of

could the and industry. and the We playbook risks same about economy an overall our on continue execution. cognizant recessionary impacts near-term our and have of to feel At slowdown we great the the time, are economic

new or retention, slowdown through and products identity, cycles. cyclical company from seeing for orders inflationary a different as at pressures upsell We recessionary outlook potential these believe such us and time, are new not that our revenue business, a We success client pressures. our but continued make client this in accounts on from resilient

by executing growth and strategy X, us. refine shareholder opportunities value front to continue in are to Moving on we corporate the our to delivering Slide of committed

utilizing share service, supplement are to a increasing organic trusted are These execution most and market new clients, the X. we focus among of well-positioned differentiated background on growing identity and existing with elements growth and market other on the believe key M&A services data, our seamless deep expertise, our have internationally, revenues We to due competitors acquiring and company world's unrivaled goals. from be achieve number include and our our We areas clients, focused workflows. to to Slide aspiration revenue client help our us best-in-class

now X. Slide to Turning

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start a in verification with proprietary alert and only nationwide identity is Sterling's record technology incarceration innovation. fulfillment ever. fingerprint and innovation has with checks. industry's Let's and always and network, monitoring of combined pioneered improvement part DNA. background culture AI-enhanced capabilities, We Innovation review record been arrest technology, strong as of dynamic validation our single-source criminal US the post-hire a as processes, products,

Client e-verifications. win combination our scalable the of and tools, our necessary base We global reason for to identity checks, our hubs adapt we to since Sterling client and enable and Hub growth information remain XXXX. client and and streamlined and and business modernizing changing platforms candidate to believe are screening, serve mobile-optimized have new us our simplified we client across health drug industries. the experiences. designed flexible base. us Candidate are verifications, help across strong and Sterling's and best-in-class Hub Sterling to process allow The our to any to dynamics to a experiences hubs existing and of are are constantly the These criminal collect and employee Moreover, education big retention

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in fact, mobile X upload around device. use any throughout from with device of provide In Candidates information the documents and ease XX% can and to complete minutes. screening screening candidates process, necessary process candidates their complete the new can

As feature to our constantly current target check, notification. Tool, Status we provides the with to of quarter, recent the their experience. streamlined candidates by for completion dates email a of quick culture several enhancements to Check the background In first including way candidate self-service My part made modernize, have status added check new we which a

tasks candidates We continued also preferred screening have with complete languages to help more ease. adding new

fully and core global our recent while languages now Turkish, of With in Portuguese, supporting support Brazilian additions XX Dutch, the Bulgarian, languages globally. platform, XX Italian, we

will and it continue experience, to We us our to to expansion strategy our languages as add competitors. from international distinguishes integral more candidate is

are a inclusion Web Content continuously wider to audience. with by we experience striving Accessibility feature help Guidelines improve our serving Finally, enhancements meet to that candidate

offer a experience proud to all to people, or are technology We candidate accessible regardless of that's ability.

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updates I thought some today. I would on our share So traction

Sterling we we earnings equal are in screening, our last early call, Identity to very traction. about excited as strategic As our we've and background on discussed pillar footing used a

these opportunities the secular to the globally, on for product increasing services, the and or differentiators, capitalize are macro-trends, number XXXX. and we development hybrid FINRA work focused with identity rise and these to only theft models. strategic competitive of we started demand In on fraud are and on exclusive trends Our significant capitalizing order innovative in of and partnerships including alliances. identity remote Several end continue drive verification ID.me at

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driving increase the services a of In economics, identity with is terms price, greater XX% increasing in addition currently existing margins. to than the of package packages

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pave XXXX will future, and continued hand to focus and the will with over updated I and belief path build take business to innovation organic execute are sustainable you organically come. Peter to to in guidance. now, We that growth CFO, years And for our confident and profitable revenue a our a to new through our for towards financial Walker, on wins it ability our results

Peter Walker

and Josh, everyone. good Thank you, morning,

to Slide an of on performance quarterly our recent now most Turning XX. overview

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XX%. earnings to Due approximately of first-quarter representing first provide that to million EBI compared for year-over-year outlook by our full X-year XXXX. business agency of Adjusted margin XXXX driven non-recurring revenue lower incremental the of by our XX% internationals the rate currency our anticipated, was a our quarter margins incremental prior-year revenue XXXX the by to a I'll some during was organic COVID of margins, call, above solid XX%. X% we company shortly. $XX.X our provided reflects 'XX. quarter retention. November one-time public the online. this strong and color EBITDA investments first of in growth quarter QX included first with it the staff on the constant growth lower from as attractive specifically EBI, anticipated, XXXX company's as first costs, growth EBIs and more growth results pleased EBITDA this client performance new the adjusted We're first balanced results, As We've contribution coming our we top-line total guidance quarter for growth percent was with was with In in were ahead increase contribution revenues. for quarter quarter very a was government expectations, Europe, our revenue line increased of our Normalizing of strong during driven revenues period XX%, the The fourth-quarter base to organic acquisition. XXXX underlying and expectations, item, during in and of a

$XX.X of our per cost will of driven revenue realized during integrate year-over-year public expect the We We impact will by over the the moderate as had and and $X.XX the operating adjusted we September EBI XX%. as income. IPO, diluted first per net acquisition course company XXXX, EBI continue primarily we income or and share lap of growth quarter growth as synergies. is well XXXX, year-over-year costs margins year million This of from in the growth of adjusted earnings strong representing share and

due first for in to to and Our item, rate XXXX. of the in XX% a of adjusted the to for XX% tax be the XX% expect balance tax approximately the the to quarter including full year, was range rate XX% we effective discrete XX%

bonus free Turning usage was in our This first to a expectations payments well the normal flow XXXX payments return Slide in of million. cadence cash first by line the lower tax to XX, in as internal including quarter the payments, significantly was our of of for the quarter. driven and overperformance 'XX in versus with timing interest in of cash $X quarter as

full-year to We of expect continue cash XXXX. of XX% XX% conversion similar the rate to EBITDA flow in achieved adjusted to free

was net leverage at squarely to our net target. EBITDA, debt adjusted net quarter-end X Our inside X.Xx to leverage Xx

quarter Our million, and cash M&A. strategy us with organic approximately pursuing growth to into revenue capacity our ample growth equivalents under providing $XXX execute continues of continue revolver, and growth We the with reinvesting our million, strong and to debt and $XX cash available $XXX due total M&A. net poised leverage decline to to is absent future any declining of EBITDA our adjusted ended million

of a pursuing and organic healthy changed have our IPO, our terms revenue capital balance allocation, M&A, investing In since maintaining not sheet. into time of the priorities growth,

organic priority and see a strong we growth top a our opportunity disciplined to to growth M&A. approach strategic compelling share through our remains While market gains with complement revenue share, targeted,

that the accelerate a years, in moment. and of We to years, a including version history is pause today. why to completing a several our player Sterling groundwork to consolidation I from these key After expect are well-positioned in coming be M&A for active speak XX XXXX player order M&A, again to in there on in Sterling be healthy you focus an on M&A. Many a transformation, EBI Sterling over the XX in of X-year market successful taking has we strategic in will to now that the transactions plan dynamic. laid reasons deals that see once

business is firing growth cylinders First, in strategy, very demonstrating are our customer our core all with organic engine class. Sterling belief on and revenue operations that service, and strong EBITDA best

M&A integrate us, pipeline Second, our tech has XXXX API mostly to transformation to deals with market is automation the And targets expanded post-pandemic. exit re-entered enabling us the with EBI. through and third, our We integration. deal behind rapidly some acquisition of November looking

even deal's far, from successful a And we so the been than business both perspective. and more financial expected

the to new us for are in we and provide quickly access and Slides move EBI the on deal our deal capabilities, and XX, integration in encouraged to and success platform that are the XXXX. to well-prepared midst very order confidence pursue updated integration by we M&A. our additional of this enthusiasm guidance to are provide clients from to On We benefit of products. The enhanced with XX

to EBITDA of XX% to Adjusted revenues expect of to million income and $XXX of net year-over-year $XXX growth representing growth million representing to of representing generate to $XXX XX.X%. to year-over-year $XXX For $XXX million of XX% adjusted million million, of year-over-year XX% XX%. $XXX to now XX.X%, million XXXX, we growth

previous XX.X% increase guidance full-year to XX% XX%. currency growth our shown to As a of XX, includes organic revenue guidance on constant from our XX.X% substantial of Slide

remainder XX are towards the increased quarter our from to X.X%. excellent drag from reflect organic of constant full-year contribution the outlook an the no assuming our assuming the the guidance. EBI, acquisition year. basis currency least just For fluctuation we our in impact guidance increase previous a confidence currency of for we the guidance high are reported in end point previous trending And foreign our of compared revenue X% we We've in to of to at

a mentioned, have As way, incorporated guidance. failed If being impact of around fears forecasts, significant any some not represent and our XXXX thoughtful Josh slowdown we upside our to macroeconomic meaningful have our that seen recession economic thus guidance. ultimately in but from would into to materialize we're slowdown possibility in

XX.X% slightly adjusted to be guidance. EBITDA which Adjusted profitability, of and our our at midpoint, a end Turning of guidance XXXX includes XX% XX.X% implies growth our levels of XXXX the to EBITDA lower previous at and below the margin would

the integration. than few margins quarter, XXXX being underlying last muted of items. said prior Moreover, quarters margin costs least revenue is at lower we balanced organic benefits margin X absorption being expansion EBI basis As company and growth from public of the by to XXX of of expected better by the points a is full acquisition from

seeing contribution we're revenues First, more forecasted. from margin the than EBI lower originally

our earlier while Second, the our this we business historic And market related we hired plus should inflation felt online. steadily labor picked lapping go hiring, staff to has of lines. through cost since coming on challenging call. the but beginning year, EBI margins time alleviate recently onboarding benefit will This IPO incremental synergies. EBI than staff wage public entry-level can workers from be company the up costs find for as we've the at supporting XXXX additional most earnings impact for the year-over-year third, The and incremental ensures and March in

impact coming hiring the normalized. online, our revenues from Additionally, new be advanced will the

of As line our QX improve half with year. in for back to margins sequentially margins a and the result, we expect margins, in the QX

our to net income Finally, to growth turning of guidance XX%. XX% adjusted

growth. to the even EBITDA increased growth page Adjusted remain Adjusted revenue strong in during line help into we've benefit we X included by closing, roughly of million, will expense XXXX, encouraged drive in which further adjusted net your year bottom margin X-year reduced of macroeconomic of appendix and in our our environment absence expansion. by our from a targets EBITDA We've interest In growth. financial leverage or net XX. excess We DNA, points should the modeling, in long-term the on income and taken our assumption income We Slide for our this well with adjusted reaffirming strong $X model, assumptions the with To growth XXXX. driving the are account

annual growth we Over XX% years, growth of rate targeting as XX% adjusted per to more of revenue an adjusted X% are XX% operator, as year. thrilled We're the XX% time with next the business margins, net to over annual X income resilient lines well period, to or the organic to trajectory X expanding for the prepared remarks. with XX% even to the of that model At of ultimately That please our and questions. concludes company built. we open this

Operator

[Operator first is George Instructions] Goldman today And Sachs. from our Tong from question

George Tong

you're I relative to So you some reversion in of if elaborate expecting or if continue any drove initial the on to at Sterling upside year. reversal of strong expectations, the the or sort some a guess, upside trench is mean a the the factors that start those quarter? your of can in And drivers.

Joshua Peirez

you, it's Thank Josh. George,

double-digit results. last, coming quarter you and growth our think, that why quarters actually you is the a continuation trend sequential high couple is X is for than seen growth particularly And I of we quarter which end the at QX growth. last know, or So It quarters straight X which the we've all, year, our our better the know, know, each of first over we've very beating saw of straight with ourselves, pleased years, the of of had the what we're into year. expectations you drivers, were

are really we We're we the to look to call, macro the for to hearing any trend not of out over as we we're the us. said no changes in you that plans. So environment year, know, continuing rest hiring as clients seeing see the from change their

rate, for, report at, future kind know, elevated example, you know, of rates, You Gartner a churn those over expected churn pre-pandemic XX% long look for I recent know, levels if you know, a are at and from foreseeable basis. to it increased Gardner, the estimated the a you you think term on be

our continue So to from all we to favor in those continue trends be those. benefit and

the of view as which, said, year. I look little a And and you our in environment and for pullback, to for of at guidance. the know, that, the $XX year, bit we to year, in X-point our, the macro we comps you of of and overall rest is a the we the get that making there but revenue raise know, if think result last any great do tougher know, have we our first conservative of revenue just you the just sure also of rest all, guidance terms are year room taking that's million our is raise

in So know, ones metrics. to feel continue of new our about control. very see feel terms good about the the good beating you trends year, we guidance and, expect those Certainly, the that we

George Tong

the are those impact how trending offset then business. costs? at seeing the input inflationary passing some elaborate on input currently Can Sterling customers do pricing increases And the fully increases environment? through current about And secondly, Got to in of of you helpful. talked type it, inflationary impact you on are very you what costs and

Joshua Peirez

George. Thanks, Great.

would in revenue. job we're been board, need those the people we the to of think market of than hiring we that I to have. made that all, people expectation And is normally that business, our has main the hiring of actually getting is the presentation strong people which our we're in helping making growth first be given how sooner that sure revenue our because our challenging actually terms and Peter So strong, comment support growth on revenue we're that continues

that that that's we're biggest doing. is So the driver actually on hiring just our versus lines, ahead inflation actual cost

which that is We those but of we're are of normally expect bringing short-term on inflation, bit a business by long-term those on a seeing the in is months advance a We to wage we're have. be for don't a what of. revenue that as being it of than entry-level little the we jobs, impact would aware factor people also more couple

along those increases seeing through In pass-through that cost. extent to straight the particular costs, a terms cost of we're pass raise we from a input with vendor,

through there, So it just getting XXX%. it's passed

think don't wait-and-see considering in rise, been however, significant back as at pass that's price to a CPI decided a we'll taking you to increases. costs done that. we're that if things seeing cover more approach be in and seeing we year. we do what the level on be We've we sometime given be increase a past, come more the to to are we've look through, and I expect with later through that the that, Obviously, share we price we're overall happy careful. Typically, But the able increase. environment, we details would know, macro current increases number to those and cost a

Operator

next Steinerman question from from JPMorgan. The is Andrew

Alexander Hess

This Steinerman. is want And view? quarter. more of in to there for Can improve your you Andrew growth logo the still or the where's the down drill on room the then on the on from? XX% sectors I domestic about coming Alex that's where that new side some and international Hess to maybe maybe in there talk is

Joshua Peirez

Sure.

do first [Indiscernible] XX% really that So growth. and continue of you we logo we're all, know, excited

X%. know, long-term As is to you algorithm our X%

seeing to regions. new broad-based logo dollars our continue logo overperform it, first were for across and that of and And to about So seeing the XQ. quarter higher across question verticals your actual where growth answer we're new than the we're

So really business. strong performance the across

Alexander Hess

is transports that's integration versus how Great. all EBI me. weighing And of you're from the us provide And on Project follow-up Ignite? then some the a color on left you what's process and maybe of sort can how going quick that acquisition,

Joshua Peirez

Josh. Alex. Thanks, It's Great.

before acquisition, them, of were terms excited we we're XX the this platform. ability that particularly terms changed EBI to our integration. the moved get is do to know, very getting we responses, some we synergy in think makes the that wanted available expected, upsell to pleased really we've at the first, at accelerating our But them, customers, look work move getting about offerings and once we not really the we our acquisition. run-rate transport client and have to move able in EBI on We just continued of quickly they're early the QX, those So you those completed Most QX. you whether do down should you bring have, they've our as sense. our for continue plans them. customers we've with what And XX be to not to the thus know, benefits. the finishing far, and seen then, that in to workflows where some very What versus technical tools in of than to on point and to I know, transport full more move path But started months were in the overall of we're EBI gave earlier based to we

to and we get want then to update finish we that we'll customers first So it's and that QX into revisit that. when as we work which just about move,

Operator

from next question is Morgan The Toni from Kaplan Stanley.

Gregory Parrish

talk Toni. results. all the XX% I is on for appreciate on this XX% strong to margin, I the Congrats Adjusted you Parrish about This called want Greg long-term out factors to your year. and EBITDA impacting

to should of about sort to target end get that? how think straight we expecting to those we you broadly, now X year bottom the maybe, kind about hit think the pacing of the in As from are know, line, you to

Joshua Peirez

to that, so where Adjusted I expect about about [Indiscernible] this XX% targets, going move Yes, up from you XX% through in you to we projected to terms that's we've be talked us flow in plus. what we EBITDA can as revenue be achieve which know, we to forward year to XX%. the incremental And XX.X% to the of

out, guidance giving, We with margin to Project. out year fully closing but can integrated for So Ignite the being sometime looking know, opportunities expansion. continue EBI we're XXXX, point not see by this we're in you at of

Gregory Parrish

owning and, maybe that's how you that why And and competitive know, you think about that is you strategy I was Josh like to competitors you or, you wanted then you of a a have the about, why just in from Do no? But know, you versus can data kind is competitor? the industry a Great. answer your that you talk the approach. taking know, strategy do do of maybe you the you maybe talk different one to follow-up, know, your and, advantage have

Joshua Peirez

Thanks, Sure. Greg.

first, there we about strategy. is you'll out So strategy best-in-class our in that would we slight in differentiators we note of a And call I presentation Slide refinement that you I do the where think, to data. point one the to the talk have

is to quality source vendor. proprietary. the in we And reliable if what most might be cases, so the that's primary to criminal, to, it's source always It and whatever most data is, our of best doesn't in like class And in the the delivered be or going most data, wherever, means you which a data, us, up-to-date a majority many courthouse that to mean you the client. know, know, can going do, overwhelming

statement, think could is we it's longer we is also can. is, were, that we're a know, you'll valuable saying in clients about, But a us that in you very new we business, have which proprietary from be leveraging we're them very, used and we're skimping, the we because where reason not know what strategy in best we that adaptation that talk necessarily data even result screening. note we background So data our really part possibly that not giving slight to that of key term, do and contexts, there just other win

very have We meaning clients. what of terms competitors just very We our that similar give don't real our about. our numbers have data, very, value in today to large don't records, of specific talk investors to or numbers very,

improve you start road. core of have we're in actually what that and terms we'll what have the down So use we you as more use of being able in margins more talk as part you value be we data records, of about we'll when know, excited the larger to know, that appropriate, terms to what can it's But frequently and in becomes, that'll that, a certainly, of something the some And believe at & another be time. I opportunity is margin. where data our managed about much is that revenue know, really outside could MasterCard, and business those create over valuable of stream to and my higher unique Dun could and we assets, data Bradstreet we be from monetize experience, with a

as of to monetize really refine as can find benefit going as think So we that time now shareholders over that public that's a forward to that. X-year our opportunity a we ways we think X something we and company, see strategy something as that

you So happy I that, you future. you think, talk I point know, know, more just to it, about in would the to

Operator

next from question of comes [Operator Andrew Instructions] William The Blair. Nicholas

Andrew Nicholas

I slow-down obviously, there I wondering, little the a deals. had strategy second backdrop? aggressive and of that, was the of First materialize on in extent to the protect how does M&A. on follow-up some I'm like you the macro just interest kind pipeline's to think, the year, hesitant the more thoughts just doing question your seems know to acquired? would any Just bit being over targets and it large does half the change balance strategy all with a the I capacity become in because have contemplates Peter, evolve comments you of sheet? you a to the that there? are Are Do less more how a constructive openness outlook more that

Peter Walker

Yes.

more of see for prices know, softer. it and to some the would stronger it to because perspective that players It does probably is make we that economy as smaller our now. hit turn, cause exit the an those if recession, opportunity want So you of are a, us, exit will players, there's and lot them to currently will really is as of a and looking

targets. We've evaluating then around integrating know, targets and discipline you a As got great very have we strong those balance sheet.

that's I'd say us. So upside for

Andrew Nicholas

Got it.

Peter Walker

M&A. From an

Andrew Nicholas

Yes. identity in add Slide, background I the screen to helpful. wanting And you offerings. and standalone identity-based noted create then, every think, to That's

kind first I thinner the know, start an to point. just there? pick the identity would I'm adoption on do curious goal. make adding the verticals make good expect of you years, every kind background part, most kind most that's be first. with? to we evolving ambitious a which starting relationship over get of screen, how you up and the see would how What that of just where curious, Just of obviously, sense, the and materializing verticals couple would next sense you But to imagine

Joshua Peirez

Great. Thanks, Andrew. Josh. It's

all, happen that and think haven't as sense enterprise know, currently there, I shared the a we're think, you and from expect have, now know, obviously started and a something know, And what aspiration, interest our good educating to long-term of is that you for rich growing pipeline unique, competitive the few interest. out market we yet it's And I first And X a So the it's teaching market. go script, have our and that clients, few makes go well from have we days, of have perspective. a that we bold seeing alliance to but it's FINRA in the year, there's have ID.me, and relationships terms with we can of started, signed one onboard an we're later in and early we and advantages you in in as industry. contracts to that think others plan

examples. shared selling And of those teaching motions those points, to so starting why the this is really and just proof see, I having clients, which X is of which we're

It's back has who come location, anywhere trend, actually places we're is a is anywhere outside background big really to physical You were where want a they know, directly U.S. not really so volume don't is gig. and them, waiting for someone remote a see or if growing employ is days This in they work, they to that seeing with either up high waste important. the person the first global time for you a what take obviously not where a which check hiring, in tend said place. the to

of you retail So we're seeing type that work. know, kind as know, you well with, traction warehouse

do identity. think attractive package XX% So than to a we the actually on see the we when price We're more add it's offering. of very broad-based pleased uplift

that also great a the comes margin time, proof we're in as able in that see to game. that's we're higher to product at at that, when the there. we've said, point So same happy ID.me a And early put

be we background not a that's have but fingerprint where the the we some are check, in that offerings, validation where may FINRA, with doing example case. biometric good know, You standalone doing

the that We background some with IDME, of doing also it. identity we're verification the with just examples where have check without

that point momentum. So it build think fronts, now workflow a is we you We're we think, know, needed We tools And we'll just probably somewhere to in we'll the And XX of got tend gain great. this you and know, and to got good on those in is which year there. traction. built we've call gain the inflection those starting and and XX excited months, a clients that, quarter, next, things update are as coming first certainly an the the we know, it you lot both on you tools to about we management hit traction. in very to

Operator

question from with Marcon next The comes Mark Baird.

Mark Marcon

you that gig U.S., Congratulations new within due regards strong the with I'm strong results. existing logos on industrial in the and regards hiring or to Was with base? to particularly mentioned increase to an wondering, QX. the were

Peter Walker

So U.S. growth Mark, this the rate you mean, at from had to fantastic growth over hear XX% I morning. nice 'XX. XQ

you say, I'd consistent all We're perform across business those the verticals overall, in wins. know, strongly of terms verticals. new So the very and performance

Mark Marcon

there in the seeing consistent terms a trends And sort ended on during basis the of of was then, any fluctuations? great. relatively you up those Okay, that quarter, or monthly year-over-year were

Peter Walker

we typically of kind would a don't the XQ. in you with has I in in of longer peak trends you we monthly for see XQ speak that on seasonality shifted So tell you drop-off business terms call. no know, to the know, the that,

quarters albeit as the growth against And know, year-over-year, look year, should the rest the that we the the that comps. sequential know, continue. we make see, at you you the to fact about assumptions right, just of know, guidance of given you're revenue that model, going you revenue depending consecutive expect think to So on you tougher sequential we we've and in you reminder, had the a should X growth, provided,

Mark Marcon

bit terms then in Great. just that'll Sterling, differential quickly normalize? you about organic can little EBI a margin talk how between and the and And

Peter Walker

Yes.

And it on in we But drag about a overperformance had prior Obviously, the for margins. had-- at of X% you the the EBI inorganic of the thrilled revenue EBI with margin growth the fact difference can to because think X.X%. versus So specific about were overperformance, that adjusted of to quarter, EBITDA bit. we from given our haven't our XX X% guide the

it been higher for, on would EBI. know, been not XX.X had revenue the have that So XX.X you

Mark Marcon

quickly client like it that but the your the and ID.me Okay. early you it that days, what just can enthusiasm with. Great. isn't base, then you we're background sounds check still benefits are? verification included among And identity it companies there sounds educate in in put like How existing is the some

Joshua Peirez

Sales in there like sounds call on educate. listening you telling to it our them were my out and all with Team get now Mark

of I challenge. you of a particular a times a right? think, Like, it be a know, renewal is in a lot it'll lot just has cycles, when buying client or

all clients anchor that really references for we do we seamless and having of When so product, is ID.me had it workflow proof using you're us along points we've know, some and think to few, use it's better it. you for some summer, the know, accelerate get, papers we we when saw by in think not that piloting the last part it's I better some is. you have needed will now, the fixing trend. that now, as you a market as can the even where value you white that of plan know, the some things the And

it's now and the because no that something one think we're at lot I to to that a a of, we're happy doing something going be So that really has is offering. point we're education where competitive do,

nowhere we when clients, for go. is to So educate there them else

Mark Marcon

growth the one, last with there? then great. of to to one variances the with regards That's And international sort any markets, regards

Peter Walker

Mark, one COVID high partner at by call, agencies of So as the their UK actually to We on million 'XX, I revenue. mentioned of large background in about we screening $X.X volume. government hired had trusted of in on the were be XQ the

of kind that definitely we revenue. one-time consider So

that, normalize organic we currency the at growth international look when So to rate, we XQ. for XQ

one-time translate about I the then about this demonstrate it you're with our of not of XX% of large continued the 'XX request a and we right, adjust us albeit a rate, guess growth and for XQ XX% the growth that to think us 'XX if COVID. partnership comparable to more capabilities, then is on long-term, quarter. $X.X should was for And with but XX% that of growth XQ revenue to very great you And one-time revenue that that's has You you had of over million, related client overall 'XX. our the headline XQ if to

Mark Marcon

Peter. just in impacts between I you economically Understood, know, given you meant occurring know, energy price-wise. of know, varying, there's, and what's you the countries, terms obviously

If changes you're of countries their seeing internationally terms of any in between the sort different rates. growth

Peter Walker

Yes, good question.

countries and not regions the strongly. have X been And between the to our very and in perform those we continue all that of would by Russia war So I say impacted Ukraine. regions

Operator

from The Jason next is question Celino.

Devin Au

guess, that first and companies Jason customer There's industries for tech within one, within Great. mostly are cost measures control morning. these I any that now I news employees know recently, This on measures, base. more but guess Devin I'll laying these broader start seeing insulated that been exposure or regulated my actually of just to but implementing your more guess, if some curious Sterling the this control within has I large in question. I verticals you're trend control on are of off is And sector. cost cost you said maybe your measures

Joshua Peirez

Thanks, the Devin. It's Josh. for question. Thanks

do on to particular want kind X into question before I your tech. first diving So things of emphasize

well You very know, diversified. we're

strengths. concentrated one think any competitive We our which are of not we one is industry in

X% you have around of you our And verticals. industry, individual mentioned, top of of our than overall. is know, so terms revenue We in exposed any we're less also client not business client tech X% to is our just or know, U.S. you

clients' not impacts that So know, I it's would business, it's also plans. percentage and impact not those our hiring our a necessarily, hiring layoffs don't business. our seeing that trends you huge note we're affect

they're roles, So new need, for know, continuing future. you to for they that level hire entry the extent to that the jobs, things

pull on hiring on know, but deliverers or caretakers. [gig], not back or onboarding their we're them people you pull who seeing they may back as drivers employees are you in know, on W-Xs, So of

You need seeing know, of that and business that at we're trend lifeblood all. change to doing and not that is continue their the they really

plans that don't as yet. we not changes account given to us macro But the their our like our there you that hiring feel and trends, be you come know, and does, said, tell into guidance there of take You could to we're us any know, we we're, really made some overexposed know, they've seeing pressure. clients

And materialize does as you if for so what upside be you said, provided. know, know, us, we've Peter that I not that would think to

Devin Au

[Indiscernible]. I on win is also me. than and no, the better other relatively Are one in in Oh, Maybe holding screening close the better mean, background more great improvement sales doing like just even sectors. rates it it. for seems seeing space you that's Got rates or cycle, quarter?

Joshua Peirez

XX% You new don't but business did know, report QX. what quarterly in had we is, what than and a you those we really QX have in business greater basis, on know, new dollars said we otherwise, we have

that a trend to for accelerate So us. continues good be and

continuing for RFPs and we're for clients us to who see RFP-ed including very out a large long many with there very know, You opportunities business, to haven't win time.

So you excited know, about we're that.

peak versus now seeing historically by clients, year we've, you our just verticals, normalized we're we as has well newer thing trends you is seasons as really hiring other the expanded well. know, in that, that trend The hiring shifting you as normal throughout know, as the saw into which intentionally know, in that mix, cyclicality they're

are. So know, good feel you where we about we very

carefully. we are watching macro-environment know, You very the

contracts. onboard saw, to signed hire I us, one that the thing Peter we it that We know because revenue we is people to is there growth is which need those so on we than we think, bring challenging felt needed would you for earlier people mentioned know, we've support people to have because the historically to board. the

been know, on of which our And the guidance. to. up just expense really has us then area one so that sort to range interest far the so And caused that course you narrow we've the reacted of, A&I going

Operator

management further As back team Instructions] closing have hand for any questions, you to I'll no remarks. [Operator the

Joshua Peirez

we'll all look for you talking next joining Thank quarter. and to forward us, to you

Operator

very concludes attendance. This much for Thank call. you today's your

now disconnect You may your lines.

Sterling Check (STER) 14 May 222022 Q1 Earnings call transcript