First Advantage is a global technology and data company that sells background screening, identity verification, and continuous workforce monitoring services to employers. The defining event of the past year is the October 2024 acquisition of Sterling Check, which roughly doubled revenue, added significant goodwill and intangible assets to the balance sheet, and pushed leverage higher. First Advantage now reports in three segments: First Advantage Americas, First Advantage International, and Sterling. The combined company generated $1.57 billion in revenue for 2025, and in the most recent quarter revenue rose to $448.8 million, up 14.9% year over year on a reported basis and reflecting a mix of organic growth and the full inclusion of Sterling. Adjusted EBITDA increased 12.8% to $128.5 million in the second quarter of 2026, while adjusted EBITDA margin compressed modestly to 28.6% from 29.2% in the prior-year quarter as integration expenses and product mix continued to normalise.
The investment case today rests on whether First Advantage can extract the cost and revenue synergies promised by the Sterling deal while growing organically in a labour market that remains uneven. Net income turned positive in the second quarter of 2026 at $16.9 million, or $0.10 per diluted share, compared with just $0.3 million in the year-ago quarter. Adjusted net income increased 30.8% to $61.4 million, and adjusted diluted earnings per share rose from $0.27 to $0.35. Free cash flow generation improved dramatically in the first half of 2026, with net cash provided by operating activities reaching $123.0 million versus $56.8 million in the first half of 2025. The company used part of that cash to make voluntary debt prepayments and, in February 2026, the board authorised a new $100 million share repurchase programme.
At the market price of $20.32 on August 25, 2026, First Advantage carries a market capitalisation of approximately $3.49 billion and trades at around 13.5 times forward earnings and roughly 7.5 times trailing adjusted EBITDA. The 52-week range of $8.82 to $25.15 reflects a significant re-rating since last autumn, but the shares have pulled back from highs as investors weigh the durability of synergy realisation, the heavy debt load, and macroeconomic sensitivity. The bull case is that scale, cross-selling, and integration savings create a structurally more profitable business; the bear case is that screening volumes are cyclical, leverage is elevated, and the premium paid for Sterling leaves little room for operational missteps.