First Advantage delivered a quarter that exceeded Wall Street expectations, with the market responding positively to its latest results. Management attributed this outperformance to robust volume acceleration in its Americas business, earlier-than-anticipated peak holiday hiring, and ongoing benefits from recent large contract wins. CEO Scott Staples emphasized the role of the company’s AI-driven technology platform and proprietary data in supporting consistent go-to-market execution and high customer retention. Additionally, the successful integration of the Sterling acquisition has further strengthened First Advantage’s positioning across multiple industry verticals.
Is now the time to buy FA? Find out in our full research report (it’s free for active Edge members).
First Advantage (FA) Q3 2026 highlights:
- Revenue $465.8 million vs S&P analyst consensus of $437.7 million (13.8% year-on-year growth, 6.4% beat)
- Adjusted EPS $0.38 vs S&P analyst consensus of $0.34 (13.3% beat)
- Adjusted EBITDA $136.5 million vs analyst estimates of $125.2 million (29.3% margin, 9.1% beat)
- Revenue guidance The company lifted its revenue guidance for the full year to $1.73 billion at the midpoint from $1.69 billion, a 2.5% increase
- Adjusted EPS guidance Management raised its full-year adjusted EPS guidance to $1.32 at the midpoint, a 4.4% increase
- EBITDA guidance $493 million at the midpoint for the full year, above analyst estimates of $483.3 million
- Operating margin 12.9%, up from 10.3% in the same quarter last year
- Market capitalization $4.05 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our top 5 analyst questions from First Advantage’s Q3 earnings call
- Daniel Maxwell (William Blair): asked about remaining synergy opportunities from the Sterling integration and expected benefits from the Data Diver acquisition. CFO Steven Marks indicated synergy capture is nearly complete for Sterling, with Data Diver expected to provide incremental efficiencies and product enhancements.
- Avi Crespo (Stifel): questioned the revenue impact of the Data Diver deal and its future growth profile. Marks explained the near-term financial contribution is modest, but management expects to accelerate growth and value creation as the business scales within First Advantage.
- Ryan Griffin (BMO Capital Markets): pressed for clarity on the Q4 growth outlook versus earlier guidance. Marks said the revised outlook reflects stronger base trends and healthy demand, but noted a cautious approach given macro uncertainties and tough year-over-year comparisons.
- Ronan Kennedy (Barclays): inquired about variability in enterprise bookings and sales cycles. President Joelle Smith noted the quarter’s lower deal count was timing-related, with larger and more complex deals offsetting volume; the late-stage pipeline remains strong.
- Harold Antor (Jefferies): asked about the role of AI in driving revenue growth and customer retention. CEO Scott Staples responded that AI is deeply embedded in products and processes, making it difficult to isolate its impact, but noted it has supported higher retention, better win rates, and margin improvements.
Catalysts in upcoming quarters
In upcoming quarters, the StockStory team will monitor (1) the pace of integration and product development following the Data Diver acquisition, (2) adoption rates and customer satisfaction for new digital identity and fraud detection solutions, and (3) continued momentum in enterprise bookings and vertical diversification. Additionally, we will track any shifts in hiring trends or macroeconomic headwinds that could impact screening volumes and margin sustainability.
First Advantage currently trades at $24.55, up from $22.47 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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