Thank you for joining us for the First Advantage First Quarter 2022 Financial Results Conference Call. All participants are currently on mute. After the presentation, there will be a session for questions and answers. Now, I would like to turn the call over to Ms. Stephanie Gorman, Vice President of Investor Relations. Please proceed.

Thank you, Sherri. Good morning everyone and welcome to First Advantage's first quarter 2022 earnings conference call. In the Investors section of our website, you will find the earnings press release and slide presentation to accompany today's discussion. This webcast is being recorded and will be available for replay on our Investor Relations website. Before we begin our prepared remarks, I need to remind everyone that our discussion today will include forward-looking statements. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are discussed in more detail in our filings with the SEC, including our 2021 Form 10-K and our Form 10-Q for the first quarter of 2022 to be filed with the SEC. Such factors may be updated from time to time in our periodic filings with the SEC and we do not undertake any obligation to update forward-looking statements. Throughout this conference call, we will also present and discuss non-GAAP financial measures. Reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures to the extent available without unreasonable effort appear in today's earnings press release and presentation, which are available on our Investor Relations website. I'm joined on our call today by Scott Staples, First Advantage's Chief Executive Officer; and David Gamsey, our Chief Financial Officer. After our prepared remarks, we will take your questions. I will now hand the call over to Scott.

Thank you Stephanie, and good morning everyone. Thank you for joining our first quarter 2022 conference call. We are extremely proud of our outstanding results from the first quarter, surpassing even our own high growth expectations. This excellent performance by our First Advantage team members across the globe demonstrates that we are doing an incredible job helping our customers hire smarter and onboard faster, which is our rallying cry and how we win. And given the extremely strong finish to the quarter and our positive outlook for sustained momentum in our business today, we are raising our full year guidance. Looking at the last 12 months ended March 31, we had extremely high growth, with revenues up 45%, adjusted EBITDA up 56%, and superior adjusted EBITDA margins of 32%. Now more than ever, our customers depend on product innovation, speed and quality to help them navigate this dynamic and fast-moving macro environment. At First Advantage, we leverage automation, machine learning, artificial intelligence and integrations to do things better, faster and more cost effectively. With an impressive gross retention rate of over 96%, our customers include more than half of the Fortune 100 companies and more than one-third of Fortune 500 companies, who typically have immense hiring volumes and high standards for risk management and compliance. Some key highlights of our excellent quarter are summarized on Slide 5, and I am very proud of our team and what we have accomplished. We delivered outstanding financial performance across key verticals and geographies, growing revenues for the quarter by 44%. This was our seventh consecutive quarter of double-digit revenue and adjusted EBITDA growth. We are thrilled to have closed the quarter in such a strong fashion. And of note, we accomplished this impressive growth even in a quarter where the overall GDP in the U.S. was reported to have contracted, demonstrating the resiliency and growth profile of our business. Strong momentum from our existing customers continued along with additions from new customers and upsell/cross-sell wins. We also maintained our very high customer retention during the quarter. Our differentiated verticalized go-to-market strategy, innovative solutions and automation, and global capabilities are driving customers to expand their relationship with us. Customers continue to depend on First Advantage to help them hire smarter and onboard faster in a macroeconomic and hiring backdrop that shows no signs of abating. Driven by the great onboarding as well as high sustained job switching and churn, we expect these trends to continue through 2022, as they usher in a new era of high velocity hiring. In addition to the top line momentum, we also grew Q1 adjusted EBITDA by 46% and expanded our adjusted EBITDA margins on a year-over-year basis. This reflects our continuing efforts to drive operational efficiencies and automation, grow the usage of our proprietary databases and leverage our G&A infrastructure. We remain focused on these initiatives to deliver ongoing superior margins. As previously announced, effective January 1, we acquired Form I-9 Compliance, which added Form I-9 and E-Verify employment eligibility compliance solutions to our product suite and offer strong cross-sell opportunities to our existing clients. We have also lapped one year since our screening business acquisition in the UK as of March 31. These acquisitions, along with the acquisitions of Corporate Screening and MultiLatin, are performing ahead of our expectations. And we are extremely pleased as they drive impressive upsell and cross-sell business and new customer pipelines. We will continue to seek acquisitions that align with the needs of our customers, our M&A strategy and that are accretive to our business. And finally, we are excited to have published our inaugural ESG report on May 4. Our commitment to ESG is an extremely important priority for the company and I will share more about our efforts in a few moments. Now on slide six, I would like to provide some perspectives on the compelling macro trends that are driving sustained churn and hiring and ultimately creating strong tailwinds behind our long-term revenue growth outlook, despite any near-term challenges in the global macro environment. First, the composition of the workforce is evolving to the benefit of our business and industry. One of the most important drivers of increased churn and hiring is the shifting demographics of the American workforce. Millennial and Gen Z representation has grown significantly, now approaching half of the workforce and representing the largest group of job seekers. With the rise of these generations in the job market, we are seeing compression in the average job tenure of workers. Millennials and Gen Z on average are characterized by much shorter job tenures, as they change jobs frequently in search of opportunities for growth and development, greater pay, new experiences and alignment with their values. More broadly, the preferences of workers across generations has accelerated towards flexibility, nontraditional working arrangements and more frequent job changes. Now workers will consider leaving jobs if they do not meet demands for flexibility and work-life balance. A recent Gartner study shows that US total annual employee turnover will likely jump by nearly 20% from the pre-pandemic annual average. Another powerful statistic is that 29% of employees are actively looking for new jobs right now with a different company; and that 51% are not actively looking, but would consider a switch if the opportunity arose, according to a survey recently conducted by Grant Thornton. Another trend continuing to increase hiring, which touches on the themes of flexibility and the changing nature of the workforce, is the growing number of retirees who are unretiring and returning to work, as reported recently by the Wall Street Journal. Economists believe a major contributing factor is inflation. Rising cost of living, plus rising wages is pushing more people, including retirees, back into the labor force. One survey indicated, 79% of workers age 57 to 75, prefer to continue to work, rather than leave the workforce entirely and in a capacity that is flexible or has reduced hours. We believe these factors and more are lasting trends that contribute to a long-term elevated rate of hiring. Building upon this, on slide seven, we have highlighted structural tailwinds that we believe support sustainable growth and resiliency in our industry. Looking at long-term job hires and quits data, there has been a consistent upward trend. This bodes well for our industry, which is largely connected to job turnover and hiring. Additionally, we expect these high ongoing rates of churn and backfill to moderate some of the historical seasonal trends in the industry. From overall macroeconomic growth, due to generational shifts and the changing nature of how we work, the factors I discussed a few moments ago underpin these incredibly positive long-term trends and we see significant runway ahead. Additionally, we believe the attractive long-term jobs growth trends are even more pronounced in our key verticals. This is an important linchpin of our verticalized go-to-market strategy and why we prioritize these verticals in particular. We believe these verticals have the highest needs for the speed, quality and candidate experience we deliver with our products and solutions and have some of the strongest outlooks for overall long-term growth. Our support of virtually every major high-growth industry, through our verticalized go-to-market strategy, differentiates us in the background screening market. Further building upon this, in April, we hosted our annual user conference called Collaborate, which brings together customers, partners and thought leaders. During the conference, our team spent a lot of time talking with our great customers, discussing our tech and solutions and listening to their feedback. We heard that our customers are currently navigating a very competitive job market. They are valuing speed, quality and candidate experience more than ever, due to the challenges of attracting talent in the current environment. Candidates today have many choices and often act fast when accepting a new job offer. This puts a heavy burden on employers to complete background screens as quickly and easily as possible while balancing the needs for risk management and compliance. All of this creates an incredible opportunity for First Advantage, and we believe we are well positioned to capitalize on these lasting trends. Turning to Slide 8. At First Advantage, we are focused on staying on the leading edge of product and technology innovation, to best serve our customers' needs. In support of these efforts, I am pleased to announce that we have promoted Joelle Smith, from Chief Experience Officer to President Data Technology and Experience. Throughout her career, Joelle has built a reputation for leading transformative growth initiatives, fueled by innovation with an unrelenting focus on customer experience. Joelle has been instrumental in accelerating our technology and product leadership. In her expanded role, she will lead our efforts in data, product and technology and continue to further enhance our already outstanding applicant and customer experience, as we continue to strategically invest in our growth. And along these lines, we are excited to share the next chapter of our applicant experience. First Advantage was a first mover in mobile applicant experience within the background screening industry, and the latest evolution of Profile Advantage continues to raise the bar versus our competitors. Its superior user interface reduces application time by half, while improving quality. On the back end, this technology leverages AI, machine learning, APIs and a robust partner ecosystem. Together these provide ease of use, intelligent workflows and timely results. On top of this, our agnostic design allows for rapid plug-in plug-out of strategic partners within the ecosystem, enabling us to take full advantage of the latest technologies and innovative sources of data and analytics as they evolve over time. These updates are the result of the feedback loops we have with our customers and our ongoing investments in product and technology. Another powerful aspect of the versatility and flexibility of our technology is our ability to deliver innovative, integrated solutions with newly acquired businesses. For example, following last year's acquisition in the UK, we have launched new innovative products and identified partnership opportunities that expand market coverage and enhance our offerings. One such technology partnership is with the digital identity company Yoti, which we have brought together with our proprietary KnowYourPeople solution. This timely partnership is directly aligned with the UK's introduction of digital identity verification by the Disclosure and Barring Service, which manages criminal record search services in England and Wales. We deliver this solution through a seamless experience, which enables UK employers to offer job applicants remote digital identity services to carry out ID checks. With our innovative new solution, we are optimally positioned as a first mover in this important and attractive market. These are both great examples of being highly responsive to the needs of our customers and using their direct feedback to make the hiring process faster and easier, while enhancing compliance and risk mitigation. Ultimately, our deep customer relationships and the product innovation they unlock are what continue to differentiate us in the marketplace. Moving to Slide 9. We are excited to have published our inaugural ESG report. People are at the heart of everything we do at First Advantage. Our expertise in human capital is essential for our customers and is driving our tremendous growth. Our commitment to ESG is fundamental to our corporate culture and how we run our business. As we work to deliver value to our stakeholders, we focus on certain key themes, including a responsibility to protect the environment. We run our business with a sustainable mindset. Culturally, we have a deep commitment to the environment and are working continuously to expand our strategies around sustainability. While our business operations inherently have a modest carbon footprint, we continue to look for ways to reduce and minimize our impact. From a social perspective, we believe the strength of our business ties directly to our team members, who support it in the communities in which we operate. Our culture is the foundation of our success and people are at the center of everything we do. Even as we continue to grow on an international scale, employees will remain our most important assets. Our company culture is a big contributor to why we win as a business and have strong Net Promoter Scores. Building upon this, our volunteer program called FA Cares helps mobilize our employees across the US to give back to our communities both through in-person volunteerism as well as virtual engagement. Also, each and every year, First Advantage donates to support the Boys & Girls Club of America. Additionally, we would like to express our deep concern for the people of Ukraine and the growing humanitarian crisis there. While we continue to have minimal exposure in that region, this is a humanitarian crisis. As a result, we have donated to UNICEF as they deliver aid to children and families in Ukraine in need of safe water, health care, nutrition and protection. We are also committed to strong governance on behalf of our stakeholders. We take our responsibilities to our shareholders, our customers and the people they seek to hire very seriously. These obligations require robust governance principles and practice. We are committed to a strong Board as evidenced by our well-qualified directors of diverse backgrounds who oversee the audit, compensation and nominating and corporate governance committees. We're excited about the collective efforts to embrace ESG at First Advantage. Our work will continue to evolve as we identify relevant metrics and goals to monitor and measure our ESG performance and progress in the future. I will now turn the call over to our CFO, David Gamsey for more details on our financial results.

Thank you Scott, and good morning everyone. We are very proud of our results from another excellent quarter. We grew both revenues and adjusted EBITDA by over 40% on a year-over-year basis, which represents our seventh consecutive quarter of double-digit revenue and adjusted EBITDA growth. Now let's take a look at some of those numbers. Turning to slide 11. Our first quarter revenues of $189.9 million represented 43.8% growth from the prior year quarter, of which 32.6% was organic. On a constant currency basis, our revenues would have been approximately $1 million higher. This was a great quarter by any measure, but please remember that we are lapping Q1 2021 before our international business has fully recovered from the pandemic. Our international business began to accelerate from pandemic lows in March 2021 and has since maintained strong performance and growth rates. International revenues in Q1 of 2022 were $31.7 million, up 91.6% from Q1 2021 with 45.5% organic growth and represented 17% of total consolidated revenues in the quarter. In the first quarter, revenues from our existing customer base contributed $33.9 million to our year-over-year growth. Revenues from new customers contributed $9.1 million to our year-over-year growth, showing strong momentum on a sequential quarter-over-quarter basis. Revenues from our acquisitions contributed $14.8 million in total during the quarter. Adjusted EBITDA for the quarter grew 46.5% to $53.6 million, reflecting higher revenues and year-over-year margin expansion from ongoing improvements in operating efficiencies, automation, use of proprietary databases and G&A leverage. Our adjusted EBITDA margin of 28.2% increased 50 basis points year-over-year, a great performance in our softest seasonal quarter. Results are after additional incremental public company costs, increased insurance premiums and new investments in technology and sales. We continue to be pleased with the high quality of earnings and the small number of add-backs included in our results. Inflation is having only a marginal impact on our cost structure. We are seeing some wage inflation, which has already been included in our financial guidance for 2022. Adjusted net income increased 63.4% to $33.5 million from $20.5 million in Q1 2021. Adjusted diluted EPS was $0.22 per diluted share for the quarter, increasing from $0.06 per diluted share in the first quarter of 2021. Note that the prior year quarter was before our IPO and at that time the share count was materially lower. As it relates to our adjusted net income calculation, beginning in 2022 we will now be adjusting for the change in fair value of our interest rate swaps. This decision was made as a result of the increased interest rate volatility observed during Q1, which has resulted in a $5.3 million gain associated with our interest rate swap. While this Q1 gain is extremely favorable to the company, we did not want these non-cash adjustments impacting comparability in future periods. Therefore, we have excluded this $5.3 million gain from our adjusted net income calculation. We have determined that the impact to the previous periods was not significant, and therefore we will not be recasting previously reported amounts. We have determined that the impact to the previous periods was not significant and therefore, we will not be recasting previously reported amounts. We have provided further details within our 10-Q which we expect to file later today. Interest income net was $900,000 for the quarter, benefiting from lower outstanding debt and interest rates as well as a favorable adjustment on our interest rate swaps that I previously mentioned. Utilizing our interest rate collar, approximately 50% of our long-term debt is capped with a 1.5%, one-month LIBOR rate through February 2024, creating resiliency in the current rate environment. The adjusted effective tax rate for the quarter was approximately 25.1% consistent with the 25.7% in the prior year comparable quarter. We are pleased that in our first year as a new public company, we have been able to beat and raise every quarter on revenues, adjusted EBITDA and adjusted net income. On slides 12 and 13, you will see our consistent track record of delivering growth. While we were not immune to the extreme headwinds of the pandemic in 2020, we weathered the related downturn well and continued to grow. We expect these revenue and adjusted EBITDA growth trends to continue. We had positive contributions from base growth, new customer sales, up-sell/cross-sell and acquisitions. We have typically experienced some modest seasonality with revenue and adjusted EBITDA margins, benefiting the most from September through November, from hiring during the holiday season and then, subsequently, moderating in Q1. On slide 13, you can see our track record of growing adjusted EBITDA and margins over time, as we continue to drive operational efficiencies and automation and grow our usage of proprietary databases. These advancements help our margins and just as importantly, improve turnaround times, quality and customer experience which are critical requirements and buying criteria for our customers. As our business further grows and scales, we continue to intensely focus on enhancing operational excellence, controlling operational costs and leveraging G&A while maintaining a variable cost structure that can accommodate demand fluctuations. We employ a disciplined balance between cost efficiencies and strategic investments, as we continue to leverage our efficient G&A infrastructure while investing in product, technology, sales and customer experience. Next, turning to slide 14, in the first quarter, operating cash flows increased 75.4% versus the comparable prior year quarter to $41.6 million. This is a substantial increase driven by our increased profitability and revenue growth, reflecting our strong cash flow conversion which we expect will continue throughout the year. During the quarter, we spent $7.6 million on purchases of property and equipment and capitalized software development cost. We ended the quarter with total debt of $564.7 million and cash of $307.7 million after, fully funding the $19.8 million Form I-9 Compliance acquisition from cash on the balance sheet. Based on our last 12 months adjusted EBITDA of over $243 million, we had a net leverage ratio of 1.1 times at March 31st 2022. We also have $100 million in borrowing capacity under our revolving credit facility, with no outstanding balances under this facility. Our capital allocation priorities include the following. We are constantly evaluating acquisition opportunities that are expected to be accretive and aligned with our strategic priorities including adding vertical capabilities, expanding internationally or adding complementary services data or technologies. We have completed and closed on four strategic and successful acquisitions in the past four quarters. We are seeing a tremendous amount of deal flow, and we are well positioned to capitalize on future M&A opportunities. We have over $300 million of cash on the balance sheet and extremely attractive leverage position, strong cash flow generation and a seasoned leadership team with deep M&A execution experience. We also continue to invest to support and drive organic growth, which includes investments in technology, automation and product innovation as well as initiatives through our sales, solution engineering and customer success functions. We believe it is important to maintain a strong balance sheet with a conservative capital structure and a flexible leverage profile. We expect to fund potential future acquisitions first from available cash on the balance sheet. Our strong cash generation allows us to also consider paying down debt. And our balance sheet strength and flexibility enables us to evaluate possible new alternatives to increase shareholder value. We continue to review all such possibilities on an ongoing basis. Next, slide 15 summarizes our guidance for the full year 2022, which we are raising across the board. We now expect to generate full year 2022 revenues in the range of $820 million to $835 million, representing approximately 15% to 17% year-over-year growth. Like we covered on our last call, we are expecting growth to continue for the rest of the year, keeping in mind our strong second half 2021 performance. This increase in revenue guidance is supported by a robust and expanding new business, upsell and cross-sell pipeline. We anticipate strong flow-through from these increased revenues and as such have increased our 2022 adjusted EBITDA guidance to a range of $253 million to $259 million. This will further expand our superior adjusted EBITDA margins, quality of earnings, and cash flow generation. We expect our margins to increase in the second half of the year as we expand revenues and grow over public company costs with our implied adjusted EBITDA margins above 30% for the balance of the year. You'll recall that during our fourth quarter 2021 earnings call which we held just seven weeks ago, we provided additional color on our Q1 revenue and adjusted EBITDA expectations. The guidance we are providing today not only accounts for our first quarter outperformance, but also includes an additional raise to guidance to reflect a stronger outlook for the remainder of the year. We expect our 2022 adjusted net income to be between $157 million and $161 million due to all the factors previously discussed and taking into account the current rising interest rate environment. There are no material changes to the other guidance assumptions we provided last quarter. Based on current trends in our business close dialogue with our customers regarding their growth plans and hiring forecasts and our internal growth initiatives and outlook, we maintain a high degree of confidence in our full year 2022 guidance ranges. I will now turn the call back over to Scott.

Thank you, David. In conclusion today, on slide 17, I will summarize for you the investment highlights for First Advantage and why we are confident about the future of our company. We are a global leader in a large and fragmented market that we believe will continue to grow both in the Americas and internationally. We have a fantastic enterprise-focused customer base that is diversified across resilient and growing industry verticals due primarily to our verticalized go-to-market strategy. Our historical and ongoing investments in automation, artificial intelligence and machine learning are enabling our customers to hire smarter and onboard faster. Our strong cash flow generation is driven by revenue growth and superior margins from our attractive and resilient financial model. Our differentiated and embedded proprietary technology provides customers with mission-critical products and solutions. We continue to expand our proprietary databases, which extend our competitive advantage through product leadership, faster turnaround times, and cost efficiencies. We expect that background screening market growth will continue, fueled partially by macroeconomic tailwinds, structural societal changes, and jobs market trends. We are extremely well-positioned to take advantage of these long-term trends. Thank you very much for your time and your ongoing support. At this time, we will ask the operator to open the call for your questions.

Thank you. Our first question comes from Ashish Sabadra with RBC Capital Markets.

This is John filling in for Ashish. Congratulations on the strong results. Maybe could you just highlight any verticals that are seeing outsized strength? It seems like there's been just a lot of kind of increased momentum since the seven weeks ago. Thanks.

Yes, thanks for the question John.

Well – I'm sorry. Yeah. I think the best way to look at this is that we are actually getting really great results from all verticals and geographies. So it's almost like all pistons are firing at the same time here and there's not really one or two standout verticals. We're getting really consistent good growth across our entire vertical go-to-market strategy.

Great. Thank you. And then maybe just quickly it seems like new customers are really punching over their weight in terms of the long-term targets, maybe around low double digits percent of revenue growth in the quarter. Could you talk more about what you're seeing in the market and how you're winning? Anything also related to the competitive environment would be helpful? Thanks.

Yeah. I think, our message and positioning is absolutely spot on right now, because if you look at the job market everybody is fighting for talent. And we continuously throughout this call and in previous calls keep talking about our positioning of hire smarter onboard faster. This market has turned into a high-velocity hiring market regardless of what industry you're in. Even if the industry or the company was never a high-volume hirer they have to have – in today's world they have to have the mindset of a high-volume hirer, because they'll lose that candidate to someone else. So candidate dropout and candidate fallout in the recruiting process for our customers is massive right now. It's a huge issue. They spend time money effort trying to land talent. And in a lot of cases they will – they could possibly lose that talent if the background check is not done quickly and doesn't have a great candidate experience. So as I mentioned earlier, speed accuracy candidate experience turnaround times are more important now than ever before. And that really falls nicely into our sweet spot of our technology and the automation that we bring within the technology, where we are just returning results extremely quickly.

Great. Thank you for the color.

Thank you. Our next question will come from David Togut with Evercore. Please go ahead.

Hi. Good morning. And thank for taking the question. This is Millie on for David. Congrats again on the strong quarter. Can you give us more color on your medium-term strategy for international expansion? In particular, geographic targets maybe revenue mix target or normalized inorganic growth contributions?

I think at a high level the first answer is, we're very bullish on the international market in general. We think that there are certainly pockets across the world where jobs are flowing to and we are focused on those geographies. But keep in mind, our first growth strategy in any market or any region is going to be organic. So we are looking to fuel our sales teams and our customer success teams around the globe with better technology, more products to sell, et cetera. I think this also plays into potential M&A strategies as we look to expand in certain regions with potential M&A. But that would always be strategic and depends on the geography. But we feel very confident in our organic growth engines. They have performed extremely well over the last four to five years, and that will be our top priority is growing organically and then strategically looking at alternatives.

Got it. Thank you. Just as a follow-up, can you give us an update on your M&A pipeline in the coming quarters?

Yeah. I would just tell you that the M&A pipeline is very strong. We're getting a lot of inbounds. It's a very active M&A market. We're tending to see the opportunities being in sort of what I would call the midrange to mom-and-pop size. And we'll continue to look at the M&A pipeline with a strategic lens. We certainly don't need M&A for scale we've got that on our own. So our M&A strategy will always be strategic in potentially adding geographic strengths internationally, or vertical strength in the US, or potentially other product lines like we just did with the announcement of the Form I-9 Compliance acquisition in early January. That's a great example of just adding a product to our sales bag so that we could sell more to existing customers.

Perfect. Thank you.

Thank you. Our next question comes from Shlomo Rosenbaum with Stifel. Please go ahead.

Hi. Thank you very much. One just a little more of a housekeeping then another strategic one. Just on the housekeeping side David, just trying to understand a little bit what's going on below the operating margin line. I'm seeing the adjusted EBITDA going up $2 million to $3 million, but the adjusted net income only going up by like $1 million at the low end. Is there – is that an interest expense issue? Is that a tax rate going up a little bit? Maybe you can just fill in a little bit of the blanks over there?

It's really driven by interest rates. So, we've factored in eight increases in our guidance model that started in March.

Can you discuss the interest expense you are anticipating and provide a comparison between what you previously expected and what you are considering now? I also have a question regarding M&A.

Well, as you heard, about 50% of our debt is capped at 1.5% on the one-month LIBOR rate. But we essentially have rates going up from LIBOR rates from almost zero at the beginning of the year to 2% by the end of the year.

Okay. Okay. And then, it seems pretty obvious that you guys would like to make a big acquisition just given the capacity and the ability for you guys to potentially expand into other areas. Could you just talk a little bit about just what are the expectations that are out there for some of the larger assets? Given everything that's going on, is the pricing expectations higher lower, the same as what you've seen over the last several quarters? And you've also alluded to looking for some other things alternatives to maximize shareholder value. Would you consider starting a dividend with the cash flow capabilities that you have?

First of all, from an M&A perspective, we're seeing a tremendous amount of deal flow right now. As Scott said, there are a lot of midsized and mom-and-pop type of companies coming to market and we've really seen that pick up over the last 30 to 45 days. So we're evaluating a number of opportunities. But, also as Scott said, they need to be strategic. They need to make sense and we're certainly not going to overpay for them. So we continue to evaluate those regularly. And there are some interesting deals that are out there that we're evaluating. In regards to other options, there is a possibility we could pay down some debt later in the year, if interest rates continue to go up, which we all think it will, which would fall through to our adjusted net income line. That is one alternative. Outside of that, we regularly have discussions about what some other alternatives are to maximizing shareholder value and we'll continue to have those on an ongoing basis.

Thank you.

Thank you. Our next question will come from Heather Balsky with Bank of America. Please go ahead.

Hi. Thanks for taking my question. I was just hoping you could talk a little bit about your success in upsell/cross-sell. You called that out as one of the reasons for raising your guide. Where are you seeing the most traction right now? That would be great.

We're experiencing momentum in three main areas. It's not limited to just one aspect. Customers are increasingly focusing on risk safety and compliance, which has led to significant upsell and cross-sell opportunities. This is driven by what we refer to as package density, where customers are enhancing their packages to safeguard their brand and workforce. Thanks to our investments in automation, we can increase the density of these packages without impacting timelines. This has made it very appealing to our customers, contributing to the uptick in upsell and cross-sell. Additionally, we continue to launch new products; a prime example is our new Form I-9 Compliance and E-Verify solutions now available within our company. Lastly, we are experiencing geographic expansion as existing customers in one area start utilizing our services in another. Overall, it’s the combination of all three areas that is fueling our upsell and cross-sell growth.

I'm hoping you could discuss your focused growth areas. How are those verticals performing compared to your core business, or is there a significant outperformance?

David, do you want that?

Sure. We operate in six primary verticals. And as we previously mentioned, they're all performing very well right now. We feel very fortunate that they're all firing on all cylinders. And it's not just in the verticals, but also in all of our geographies. So we're seeing good organic growth coming across all verticals and all geographies and they're all contributing to the overall growth.

Thank you.

Thank you. Our next question will come from Andrew Steinerman with JPMorgan. Please go ahead.

Hi, Dave. I know you mentioned organic revenue growth earlier. I think when you refer to organic revenue growth in that context, it doesn't account for constant currency. So just to make sure we have all the same numbers, it would be great if you could mention organic constant currency revenue growth for the first quarter. And then also what's the organic constant currency revenue growth assumed in the 2022 guide?

So in Q1, constant currency had a negative impact on our revenues of $1 million. And in our guidance, constant currency we have baked in a negative $4 million into our guidance.

Okay. That's great. If it's okay I'm just going to ask a second question too. Could you just mention right now – you did that your input cost inflation and wage inflation was manageable. I was just wondering what First Advantage's approach is to price increases this year on their background check packages. And when I say on your background check packages, I mean kind of separate from any pass-through cross-sell to third-party providers.

Right. So as you know and why you made that comment is obviously, all the out-of-pocket, third-party costs are passed through including any increases associated with those. And so we're covered from that perspective. We do evaluate price increases from time to time. Most of our contracts give us the ability to pass on CPI increases. We will selectively do that throughout the year. We do not do it on a blanket basis. But we do look at our different customers in our different verticals and their different packages and we do pass on some selective increases. And we have already built that into our guidance.

Okay. Thank you very much.

Thank you. Our next question comes from Manav Patnaik with Barclays. Please go ahead.

Hi, good morning, everybody. This is Ronan Kennedy on for Manav. May I – so understood that there was broad-based strength across both verticals and regions. And you also obviously delivered strong growth in the face of declining GDP. There wasn't really any mention of a recession. Obviously, you also had strong performance in 2020. So would a downturn or a contraction in economic growth be a non-factor? Can you just kind of further unpack the recession resiliency and the support provided by the verticalized end markets that you're exposed to?

David why don't you start with that and I'll add in.

Okay. So in regards to potential recession or downturn. Yes it creates a certain element of uncertainty but we've dealt with that before. And in fact if you look at 2020, we actually grew during the pandemic. So far there's not – it's not had any impact on the demand for our services. The underlying fundamentals remain strong. In fact inflation from that perspective is contributing to turnover and more high-velocity hiring. So we think that's helping us. We're a mission-critical function. Companies are going to have to continue to use us. And when you think in terms of backfill churn turnover, that's going to occur even in a recessionary or a downturn environment, we don't have any real customer concentration and we have a very variable and flexible cost structure, so we think we're really well positioned to handle any type of downturn.

Yes. I would just add in. I think we're in the middle of a generational switch of the job market here. This is – we're seeing things that we've never seen before. And these aren't trends that will go away in a quarter or two. We think there's long-term trends here that are favorable to the business and the industry.

Very good. Thank you. And then as a follow-up if I may. Apologies, if I missed it. Can you talk about the contribution that came from post-onboarding screening, whether it be continuous monitoring, ID and the outlook for the opportunity there?

So about 90% of our business comes from pre-onboarding screening. The other 10% would be other areas of business or post onboarding. Those are still up-and-coming areas. We are talking to clients, there seems to be interest around it. Today the revenue contribution is still very modest but we're very confident that it will continue to grow in the future.

Okay. Thank you. Appreciate it.

Thank you. Our next question comes from Pete Christiansen with Citi. Please go ahead.

Good morning. Thanks for the question. Scott, David, nice results here. I was just wondering if you could talk a little bit about sales force productivity on the new logo – on the no – sorry. The new logo front. And how are you looking at the landscape for RFP activity this year in that area?

I think you know what – I'm sorry, Dave. Go ahead.

So – I was just going to throw out a number Scott. In Q1, our new logos contributed $9.1 million, other revenue which was about 7%. That's an increase over the prior quarter. So that's kind of the number. Scott, why don't you take it from there?

Yes, I was going to say that we're seeing pretty consistent and strong deal flow. That I don't think it's any different than previous quarters, or previous years. We've invested in the sales team, so we do actually have a larger sales force. But we are seeing a lot of activity in the market. And I'll go back to this point one more time, is that our messaging is very favorable in this market around helping people with high-volume hiring. So we're very excited about the opportunity to win more RFPs and what it might be. But I would say that, one of the big differentiators of this company over the last four or five years has been the productivity of our sales force and our customer success teams at driving, not only new logo, but upsell/cross-sell.

No, that's really good commentary there. Very helpful. To the point that was just made in the previous question, First Advantage certainly grew during the pandemic. We're starting to see some general unwind of conditions, with some companies benefiting during the pandemic while others have not. I'm curious if you're noticing any shifts among your existing clients, specifically those who thrived during the pandemic compared to those who didn't. Are there any significant changes in the underlying numbers or indications for future hiring? Thank you.

Yes, we're hearing consistent messages from our customers across all sectors, including those that performed well during the pandemic. They are fully engaged in hiring. One significant change we're observing in this industry is the reduction of seasonality. Customers have expressed that they're in a constant hiring mode rather than just ramping up for peaks and then scaling down for lows. This continuous hiring approach is likely to diminish the seasonality we typically experience in our business. We've taken this into account for our planning, but it's an interesting trend that we will continue to monitor.

Constant hire mode. Music to your ears, I'm sure.

Absolutely.

Thank you, guys. Great job.

Thank you. Our next question will come from Hamzah Mazari with Jefferies. Please, go ahead.

Hi, good morning, everybody. This is Ronan Kennedy on for Hamzah. May I – so understood that there was broad-based strength across both verticals and regions. And you also obviously delivered strong growth in the face of declining GDP. There wasn't really any mention of a recession. Obviously, you also had strong performance in 2020. So would a downturn or a contraction in economic growth be a non-factor? Can you just kind of further unpack the recession resiliency and the support provided by the verticalized end markets that you're exposed to?

David why don't you start with that and I'll add in.

Okay. So in regards to potential recession or downturn. Yes it creates a certain element of uncertainty but we've dealt with that before. And in fact if you look at 2020, we actually grew during the pandemic. So far there's not – it's not had any impact on the demand for our services. The underlying fundamentals remain strong. In fact inflation from that perspective is contributing to turnover and more high-velocity hiring. So we think that's helping us. We're a mission-critical function. Companies are going to have to continue to use us. And when you think in terms of backfill churn turnover, that's going to occur even in a recessionary or a downturn environment, we don't have any real customer concentration and we have a very variable and flexible cost structure, so we think we're really well positioned to handle any type of downturn.

Yes. I would just add in. I think we're in the middle of a generational switch of the job market here. This is – we're seeing things that we've never seen before. And these aren't trends that will go away in a quarter or two. We think there's long-term trends here that are favorable to the business and the industry.

Very good. Thank you. And then as a follow-up if I may. Apologies, if I missed it. Can you talk about the contribution that came from post-onboarding screening, whether it be continuous monitoring, ID and the outlook for the opportunity there?

So about 90% of our business comes from pre-onboarding screening. The other 10% would be other areas of business or post onboarding. Those are still up-and-coming areas. We are talking to clients, there seems to be interest around it. Today the revenue contribution is still very modest but we're very confident that it will continue to grow in the future.

Okay. Thank you. Appreciate it.

Thank you. Our next question comes from Shlomo Rosenbaum with Stifel. Please go ahead.

Hi, thank you. Hey David, I'm sorry if I missed it. I know Andrew asked about the organic constant currency growth expected for 2022. You said there was $14.8 million of acquisition revenue in the first quarter. Do you mind telling us how much acquisition growth is embedded in the guidance, maybe on a revenue basis or a growth basis?

Sure. So, the implied guidance for revenues is revenue growth of between 15% and 17%. On an organic basis that would be 11% to 13%.

Perfect. Thank you very much.

Thank you. I would now like to turn the call back over to Mr. Scott Staples for any closing remarks.

Thank you, operator and thanks to everyone for your participation. We are off to a great start in 2022 and we are excited about the opportunities ahead. We think First Advantage is well positioned for continued growth and our focus remains on delivering value for our shareholders. Thank you for your support. Have a great day.

Ladies and gentlemen this concludes today's conference call. Thank you for your participation. You may now disconnect.