First Advantage Corp (FA) 2024 Q1 法說會逐字稿

Good day, everyone. My name is Todd, and I will be your conference operator today. I would like to welcome you to the First Advantage first-quarter 2024 earnings conference call and webcast.

今天是個好日子。我叫托德，今天我將擔任你們的會議操作員。歡迎您參加首優諮詢 2024 年第一季財報電話會議及網路廣播。

Hosting the call today from First Advantage is Stephanie Gorman, Vice President of Investor Relations. At this time, all participants have been placed in a listen-only mode to prevent any background noise. After the speakers’ remarks there will be a question-and-answer session. (Operator instructions) Please note, today's event is being recorded.

今天主持 First Advantage 電話會議的是投資者關係副總裁 Stephanie Gorman。此時，所有參與者都已置於僅聽模式，以防止任何背景噪音。演講者發言後將進行問答環節。（操作員說明）請注意，今天的活動正在錄製中。

It is now my pleasure to turn the call over to Stephanie Gorman. You may begin.

現在我很高興將電話轉給史蒂芬妮戈爾曼。你可以開始了。

Thank you, Todd. Good morning, everyone and welcome to First Advantage's first-quarter 2024 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.

謝謝你，托德。大家早安，歡迎參加首優諮詢 2024 年第一季財報電話會議。在我們網站的投資者部分，您將找到伴隨今天討論的收益新聞稿和幻燈片簡報。該網路廣播正在錄製中，並將在我們的投資者關係網站上重播。

Before we begin our prepared remarks, I would like 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 2023 Form 10-K and our Form 10-Q for the first quarter of 2024 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.

在我們開始準備好的發言之前，我想提醒大家，我們今天的討論將包括前瞻性陳述。此類前瞻性陳述並非對未來績效的保證。由於多種因素，實際結果可能與前瞻性陳述中明示或暗示的結果有重大差異。這些因素在我們向 SEC 提交的文件中進行了更詳細的討論，包括我們向 SEC 提交的 2023 年 10-K 表和 2024 年第一季的 10-Q 表。這些因素可能會在我們向美國證券交易委員會提交的定期文件中不時更新，我們不承擔更新前瞻性聲明的任何義務。

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 efforts appear in today's earnings press release and presentation, which are available on our Investor Relations website.

在整個電話會議中，我們還將介紹和討論非公認會計準則財務指標。今天的收益新聞稿和簡報中顯示了我們的非公認會計準則財務指標與其最直接可比較的公認會計準則財務指標的調節，而無需做出不合理的努力，這些資訊可以在我們的投資者關係網站上找到。

I'm joined on our call today by Scott Staples, our Chief Executive Officer; and David Gamsey, our Chief Financial Officer. After our prepared remarks, they will take your question.

我們的執行長 Scott Staples 也參加了今天的電話會議。以及我們的財務長 David Gamsey。在我們準備好發言後，他們將回答您的問題。

I will now hand the call over to Scott.

我現在將把電話轉給斯科特。

Thank you, Stephanie, and good morning, everyone. Thank you for joining our call.

謝謝斯蒂芬妮，大家早安。感謝您加入我們的通話。

It has been exciting and productive few months since announcing our agreement to acquire Sterling. I am incredibly proud of what our team has accomplished thus far and for the dedication in keeping everything moving forward. This morning I will provide an update on our first-quarter results, our strategic initiatives, and the Sterling acquisition. David will then provide a deeper dive into our results and additional color on our expectations for the year.

自從宣布我們同意收購 Sterling 以來，這幾個月是令人興奮且富有成效的。我對我們團隊迄今為止所取得的成就以及推動一切向前發展的奉獻精神感到無比自豪。今天早上，我將提供有關我們第一季業績、策略性舉措和 Sterling 收購的最新資訊。然後，大衛將更深入地探討我們的業績，並進一步闡述我們對今年的期望。

Turning to an overview of our first-quarter results on slide 5. For the first quarter, we delivered financial results at or above what we communicated on our last earnings call, giving us additional confidence in achieving our full-year 2024 guidance, which we are reaffirming today. From a verticals perspective, in the first quarter we saw increased order volumes from five major verticals including transportation, healthcare, industrials, staffing, and hospitality, with the remaining verticals down year over year. Importantly, we continue to maintain a strong customer retention rate of approximately 97%. In fact, our top five largest renewals for 2024 have already successfully renewed.

轉向幻燈片 5 上我們第一季業績的概述。第一季的財務表現達到或高於我們在上次財報電話會議上傳達的業績，這讓我們對實現我們今天重申的 2024 年全年指引更有信心。從垂直行業角度來看，第一季度，我們看到運輸、醫療保健、工業、人員配備和酒店等五個主要垂直行業的訂單量有所增加，其餘垂直行業同比下降。重要的是，我們繼續保持約 97% 的強勁客戶保留率。事實上，我們2024年最大的前五名續約已經成功續約。

Our upsell, cross-sell, new logos, and attrition rates continued to perform in line with our historical revenue growth algorithm, while our base growth continues to be more sensitive to changes in the macroenvironment and our mix of clients. While most macro indicators that we track are still down year over year, they have shown signs of stabilizing in recent months. As a reminder, our long-term organic revenue growth target of 8% to 10% anticipates a normalized base growth rate of 2% to 4% compared to the negative base performance we have been experiencing.

我們的追加銷售、交叉銷售、新商標和流失率繼續與我們的歷史收入成長演算法保持一致，而我們的基礎成長仍然對宏觀環境和客戶組合的變化更加敏感。儘管我們追蹤的大多數宏觀指標仍同比下降，但近幾個月已顯示出穩定跡象。提醒一下，我們的長期有機收入成長目標為 8% 至 10%，與我們一直經歷的負基數表現相比，預計正常化基數成長率為 2% 至 4%。

Let me now update you on the significant progress our team continues to make on our strategic initiatives. We have long subscribed to the philosophy of building high-quality proprietary databases, data models, and algorithms as well as innovative technology to drive our business. Now, with the insurgence of GenAI, we are poised to accelerate innovation across our portfolio and deliver even greater value for our customers. We are excited to have announced our proprietary next generation RightID identity fraud solution, specifically designed for the US market to help alert customers to potential applicant fraud in the pre-hire process. This complements the success we have seen with the expansion of our digital identity products in the UK, India, Australia, and Canada. Employers leverage RightID as an initial step to flag inconsistencies and recognize potential errors in identity information submitted before a background screen, thus moving our products upstream in the applicant onboarding cycle.

現在讓我向您介紹我們團隊在策略舉措方面持續取得的重大進展的最新情況。我們長期以來一直秉承建立高品質專有資料庫、資料模型和演算法以及創新技術來推動我們業務的理念。現在，隨著 GenAI 的崛起，我們準備好加速整個產品組合的創新，並為我們的客戶提供更大的價值。我們很高興宣布推出專有的下一代 RightID 身分詐欺解決方案，該解決方案專為美國市場設計，可協助提醒客戶在聘用前過程中註意潛在的申請人詐欺行為。這補充了我們在英國、印度、澳洲和加拿大擴展數位身分產品所取得的成功。雇主利用 RightID 作為第一步來標記不一致的情況並識別在後台螢幕之前提交的身份資訊中的潛在錯誤，從而將我們的產品推向申請人入職週期的上游。

Additionally, we continue to roll out our next-gen profile advantage applicant portal, featuring a new user interface and using API first technology to deliver a consistent experience from screen to hire. By leveraging GenAI and human in the loop processes, we have access to intelligence that allows us to enhance the applicant experience. Our customers can hire faster with several products in one place, including fraud prevention, tax credit information, and background screening details. These initiatives complement our other solutions; for example, we expect our investments in AI related to US criminal data to increase the efficiency, turnaround times, and consistency of our criminal screening.

此外，我們繼續推出下一代個人資料優勢申請人門戶，採用新的使用者介面並使用 API 優先技術來提供從螢幕到招募的一致體驗。透過利用 GenAI 和人機互動流程，我們可以獲得情報，從而增強申請人的體驗。我們的客戶可以在一個地方使用多種產品更快地招聘，包括詐欺預防、稅收抵免資訊和背景篩選詳細資訊。這些舉措補充了我們的其他解決方案；例如，我們期望與美國犯罪數據相關的人工智慧的投資能夠提高犯罪篩檢的效率、週轉時間和一致性。

We also continue to see increased customer adoption of SmartHub, which can determine the optimal data source for each verification and help reduce certain third-party pass through fees for our customers for employment verifications. And through our Customer Care Click. Chat. Call program, we can scale our support up or down quickly in response to volume changes.

我們也看到越來越多的客戶採用 SmartHub，它可以確定每次驗證的最佳資料來源，並有助於減少客戶進行就業驗證的某些第三方傳遞費用。並透過我們的客戶服務點擊。聊天。呼叫程序，我們可以根據交易量的變化快速擴大或縮小我們的支援。

All of our solutions help support our customers and their screening priorities which are highlighted in our Global Trends report just released in April. This annual report provides worldwide perspectives based on over 100 million anonymized screening data records and hundreds of survey responses from our customers. We have been publishing our Annual Global Trends report for the past six years and have seen trends change and evolve alongside the global labor market. Notably, for the second year in a row, managing risk ranked as the most important factor in background screening programs over cost and speed. This indicates an increased interest in background screening results that support informed decision making as part of the overall hiring process and has consistently driven upsell and cross-sell opportunities for us across our customer base, ultimately increasing package density.

我們所有的解決方案都有助於支持我們的客戶及其篩選優先事項，這在我們四月剛發布的全球趨勢報告中得到了強調。該年度報告基於超過 1 億筆匿名篩選數據記錄和數百份客戶調查回复，提供了全球視角。過去六年來，我們一直在發布年度全球趨勢報告，並看到趨勢隨著全球勞動力市場而變化和發展。值得注意的是，管理風險連續第二年成為背景篩檢計畫中比成本和速度更重要的因素。這表明人們對背景篩選結果越來越感興趣，這些結果支持在整個招聘流程中做出明智的決策，並持續為我們整個客戶群帶來追加銷售和交叉銷售機會，最終提高包裝密度。

Additionally, I want to highlight our annual background screening conference, Collaborate, which was held in April with record attendance. As the only background screening user conference of its kind, Collaborate brings together customers, new business prospects, partners, and thought leaders to discuss timely and relevant trends, technologies, and best practices. During the conference, we discussed our new and evolving products and solutions and had fantastic customer engagement. Additionally, we were pleased to have Johnny C. Taylor, Jr. join us for a second year as our keynote speaker where he led a dynamic session on embracing AI and HR. Mr. Taylor is the President and CEO of the Society for Human Resources Management and is highly regarded as a leading industry expert in human resources.

此外，我想強調我們的年度背景調查會議 Collaborate，該會議於 4 月舉行，出席人數創歷史新高。作為同類中唯一的背景篩選使用者會議，Collaborate 匯集了客戶、新業務前景、合作夥伴和思想領袖，及時討論相關趨勢、技術和最佳實踐。在會議期間，我們討論了我們不斷發展的新產品和解決方案，並獲得了出色的客戶參與度。此外，我們很高興小約翰尼泰勒 (Johnny C. Taylor, Jr.) 第二年加入我們，擔任我們的演講者，他主持了一場關於擁抱人工智慧和人力資源的充滿活力的會議。泰勒先生是人力資源管理協會的主席兼首席執行官，被高度評價為人力資源領域領先的行業專家。

Turning to slide 7, let me now provide an update on the Sterling acquisition. Preparations for the transaction are progressing as planned. We have formed an integration management committee led by our product and operations leaders with dedicated teams that are developing plans across all functional departments in preparation for the post-closing integration process. At the end of April, we filed our S-4 with the SEC which has additional detailed information pertaining to the transaction. At this point, there have been no changes to our closing time expectations. The transaction is still expected to close in approximately the third quarter of 2024, with the closing and timing thereof subject to required regulatory approvals, clearances, and other customary closing conditions.

前往投影片 7，現在讓我提供有關 Sterling 收購的最新情況。交易準備工作正在按計劃進行。我們成立了一個由產品和營運領導者領導的整合管理委員會，並設有專門的團隊，為所有職能部門制定計劃，為交割後的整合流程做好準備。4 月底，我們向 SEC 提交了 S-4，其中包含與交易相關的更多詳細資訊。目前，我們對結束時間的預期並沒有改變。該交易仍預計將在 2024 年第三季左右完成，其完成和時間取決於所需的監管批准、許可和其他慣例成交條件。

Strategically, the addition of Sterling further strengthens our high-quality and cost-effective background screening, identity, and verification solutions for the benefit of customers of all sizes across industry verticals and geographies. We view this as a win for our customers, as they will benefit from having more options to meet their evolving needs and improve solutions to help manage risk, hire smarter, and onboard faster. First Advantage’s and Sterling's highly complementary product offerings further enhance our customer value proposition and are expected to unlock upsell and cross-sell opportunities and reduce certain third-party pass through fees.

從策略上講，Sterling 的加入進一步加強了我們高品質且經濟高效的背景篩選、身份和驗證解決方案，為跨行業垂直和地理的各種規模的客戶帶來利益。我們認為這對我們的客戶來說是一場勝利，因為他們將受益於擁有更多選擇來滿足他們不斷變化的需求，並改進解決方案以幫助管理風險、更明智地招募和更快地入職。First Advantage 和 Sterling 高度互補的產品進一步增強了我們的客戶價值主張，預計將釋放追加銷售和交叉銷售機會，並減少某些第三方轉手費。

Collectively, we will diversify our vertical mix, as there is limited overlap across our customer industries. Sterling's largest verticals are more focused on regulated industries including healthcare, industrials and financial services. This balances First Advantage’s focus on verticals including transportation, retail and e-commerce. We have complemented international businesses which provide the opportunity for us to build a deeper local presence and expand in attractive markets.

總的來說，我們將實現垂直組合的多元化，因為我們的客戶產業之間的重疊有限。Sterling 最大的垂直行業更關注受監管的行業，包括醫療保健、工業和金融服務。這平衡了 First Advantage 對運輸、零售和電子商務等垂直行業的關注。我們補充了國際業務，這為我們提供了建立更深入的本地業務並拓展有吸引力的市場的機會。

Based on our preliminary diligence, we have also found no significant overlap amongst the top customers of both First Advantage and Sterling. We believe that combined, we will have a more balanced revenue mix, less customer concentration and more vertical diversification. This will help to de-risk the transaction with regard to potential attrition, improve resource planning and operational efficiency, reduce our seasonal exposure and create a more resilient business model. The transaction will enable us to drive innovation in key development areas of our business including AI, next-gen digital identification technology and automation. This will enhance the applicant experience and at the same time reduce certain third-party pass through costs contributing to long-term margin expansion.

根據我們的初步調查，我們還發現 First Advantage 和 Sterling 的頂級客戶之間不存在重大重疊。我們相信，綜合起來，我們將擁有更平衡的收入組合、更少的客戶集中度和更多的垂直多元化。這將有助於降低潛在消耗方面的交易風險，提高資源規劃和營運效率，減少我們的季節性風險並創建更具彈性的業務模式。此次交易將使我們能夠推動業務關鍵發展領域的創新，包括人工智慧、下一代數位識別技術和自動化。這將增強申請人的體驗，同時減少某些第三方轉手成本，有助於長期利潤擴張。

Looking at cost synergies, we remain confident in achieving at least 50 million in run rate synergies within 18 to 24 months post closing of the transaction. We anticipate executing approximately half within the first 12 months post closing, of which a portion will be actioned immediately upon closing. These synergies will come from removing duplicative public company costs, merging back office functions and resources, and ultimately merging our tech back ends and fulfillment functions. We anticipate identifying further upside synergy opportunities upon closing this transaction, as we work through the integration process.

考慮到成本協同效應，我們仍然有信心在交易完成後的 18 至 24 個月內實現至少 5,000 萬美元的運行率綜效。我們預計大約一半將在交割後的前 12 個月內執行，其中一部分將在交割後立即執行。這些協同效應將來自消除重複的上市公司成本、合併後台職能和資源，以及最終合併我們的技術後端和履行職能。我們預計在完成本次交易後，在整合過程中會發現進一步的上行協同機會。

Additionally, we anticipate net leverage at close to be in the range of 4.2 times to 4.4 times. We have line of sight to bring net leverage toward approximately 3 times run rate adjusted EBITDA within 24 months of closing on the transaction and then ultimately returning to our long term target net leverage range of 2 to 3 times. David will go into further detail on this shortly.

此外，我們預計淨槓桿率將接近 4.2 倍至 4.4 倍。我們的目標是在交易結束後 24 個月內將淨槓桿率提高到運行率調整後 EBITDA 的約 3 倍，然後最終恢復到 2 至 3 倍的長期目標淨槓桿率範圍。大衛很快就會對此進行更詳細的介紹。

Upon closing the transaction, we will immediately nearly double our revenue and adjusted EBITDA profile. We expect to generate double-digit EPS accretion on a run rate basis and to continue compounding EPS at a teens growth rate over time through the combination of top line growth, ongoing synergy capture and significant deleveraging enabled by our strong free cash flow generation. As we look ahead, our priorities after closing the transaction will be focused on our customers, successful integration, achieving synergies and deleveraging our balance sheet. Overall, we expect that this strategic and accretive acquisition will benefit customers and investors, accelerate and advance our strategic priorities, and drive long-term value creation.

交易完成後，我們的收入和調整後的 EBITDA 狀況將立即增加近一倍。我們預計，在運行率的基礎上，每股收益將實現兩位數的增長，並隨著時間的推移，透過營收成長、持續的協同效應捕獲和強大的自由現金流產生所帶來的顯著去槓桿化，繼續以十幾歲的成長率實現每股盈餘的複合成長。展望未來，交易完成後我們的首要任務將是我們的客戶、成功整合、實現綜效和去槓桿化我們的資產負債表。整體而言，我們預期此次策略性增值收購將使客戶和投資者受益，加速和推進我們的策略重點，並推動長期價值創造。

I will now turn the call over to David for more details on our first-quarter results.

我現在將把電話轉給大衛，以了解有關我們第一季業績的更多詳細資訊。

Thank you, Scott, and good morning, everyone.

謝謝你，斯科特，大家早安。

Turning to our first-quarter results on slide 9. Our first quarter revenues were $169.4 million, a decrease of 3.5% from the prior year. Currency had nearly no impact on results. For the quarter, Infinite ID contributed approximately $2.8 million. In our Americas segment, revenues of $149 million or 87% of consolidated revenues were down just 2% from the prior year, driven primarily by base weakness and substantially offset by strength in new business revenues and upsell cross-sell. In our international segment, revenues of $22 million or 13% of consolidated revenues were down 11% from the prior year.

轉向幻燈片 9 上的第一季業績。我們第一季的營收為 1.694 億美元，比去年同期下降 3.5%。貨幣對結果幾乎沒有影響。Infinite ID 本季貢獻了約 280 萬美元。在我們的美洲部門，營收為1.49 億美元，佔合併收入的87%，僅比上年下降2%，這主要是由於基礎疲軟造成的，但新業務收入和追加銷售交叉銷售的強勁抵消了這一影響。在我們的國際部門，營收為 2,200 萬美元，佔合併收入的 13%，比前一年下降了 11%。

Macro factors impacting international base growth continue to be a headwind. For the total company, adjusted EBITDA was nearly $47 million, and our adjusted EBITDA margin was 27.5% which aligns with our historical first-quarter performance trends. As a reminder, our first-quarter adjusted EBITDA margin is typically the lowest quarter of the year. Adjusted EBITDA on an LTM basis has grown at a compounded annual growth rate of 14.7% over the last three years. Our adjusted effective tax rate was 24.4%. GAAP net loss was $2.9 million and is after $11.1 million in Sterling acquisition-related costs that we have added back on an adjusted basis. Adjusted net income was approximately $25 million. Adjusted diluted EPS was $0.17 for the quarter.

影響國際基地成長的宏觀因素仍然是一個阻力。對於整個公司來說，調整後的 EBITDA 接近 4,700 萬美元，調整後的 EBITDA 利潤率為 27.5%，這與我們第一季的歷史業績趨勢相符。提醒一下，我們第一季調整後的 EBITDA 利潤率通常是一年中最低的季度。過去三年，以 LTM 計算的調整後 EBITDA 的複合年增長率為 14.7%。我們調整後的有效稅率為 24.4%。GAAP 淨虧損為 290 萬美元，這是在我們經過調整後加回的 1,110 萬美元 Sterling 收購相關成本之後產生的。調整後淨利約2500萬美元。本季調整後攤薄每股收益為 0.17 美元。

On slide 10, you will see our revenue growth algorithm which is based on our historical performance and future expectations and supports our long-term revenue growth target. Revenue on an LTM basis has grown at a compounded annual growth rate of 12.6% over the last three years and remains above our long-term growth target of 8% to 10%.

在投影片 10 上，您將看到我們的收入成長演算法，該演算法基於我們的歷史績效和未來預期，支持我們的長期收入成長目標。過去三年，以 LTM 計算的收入以 12.6% 的複合年增長率增長，仍然高於我們 8% 至 10% 的長期成長目標。

On slide 11, you can see that our historical performance for upsell, cross-sell, new customer logos, and attrition has been largely consistent with our growth algorithm and demonstrates that we are managing and delivering on what we can control with the variation being driven by the base. Revenues from upsell and cross-sell contributed $7.7 million or 4.4% to our performance in Q1. New customer logos contributed an additional $8.9 million or 5.1% in Q1. Base declined by $19.6 million or 11% on a consolidated basis in Q1. We anticipate base revenues improving throughout the remainder of the year.

在投影片11 上，您可以看到我們在追加銷售、交叉銷售、新客戶徽標和流失方面的歷史表現與我們的成長演算法基本一致，並表明我們正在透過驅動變化來管理和交付我們可以控制的內容由基地。追加銷售和交叉銷售收入為我們第一季的業績貢獻了 770 萬美元，即 4.4%。第一季新客戶標誌額外貢獻了 890 萬美元，即 5.1%。第一季合併基數下降了 1,960 萬美元，即 11%。我們預計今年剩餘時間的基本收入將有所改善。

Turning now to our balance sheet and capital allocation on slide 12. For the first quarter we generated strong operating cash flows of $38 million. During the quarter, we used cash of $6 million for purchases of property and equipment and capitalized software development cost. As we mentioned last quarter, given the pending Sterling acquisition, we have suspended share repurchases as we continue to build cash. Our primary areas of focus upon closing the transaction will be on our customers, on integration, on achieving synergies, and on deleveraging.

現在轉向投影片 12 上的資產負債表和資本配置。第一季我們產生了 3,800 萬美元的強勁營運現金流。本季度，我們使用 600 萬美元現金購買財產和設備以及資本化軟體開發成本。正如我們上季度提到的，考慮到英鎊收購尚未完成，我們已暫停股票回購，因為我們繼續累積現金。完成交易後，我們的主要關注點將是我們的客戶、整合、實現協同效應和去槓桿化。

In addition to our existing $565 million of First Advantage debt, we anticipate raising approximately $1.6 billion of new-term debt to fund the Sterling acquisition. This results in approximately $2.15 billion of gross debt, or approximately $2 billion of net debt when considering the approximately $125 million of balance sheet cash expected at close. Additionally, at close, we expect net debt-to-adjusted EBITDA leverage in the range of 4.2 times to 4.4 times. As part of our financing agreement, we will upsize our revolver from $100 million to $250 million and extend the maturity date to five years after the closing date of the transaction, which will provide additional liquidity for our business.

除了我們現有的 5.65 億美元 First Advantage 債務之外，我們預計還籌集約 16 億美元的新定期債務來為 Sterling 收購提供資金。這導致總債務約為 21.5 億美元，考慮到交易結束時預計的資產負債表現金約為 1.25 億美元，淨債務約為 20 億美元。此外，截至收盤，我們預計淨債務與調整後 EBITDA 槓桿在 4.2 倍至 4.4 倍之間。作為融資協議的一部分，我們將把左輪手槍規模從 1 億美元擴大到 2.5 億美元，並將到期日延長至交易結束後五年，這將為我們的業務提供額外的流動性。

We have a proven track record of managing leverage, and we remain committed to our long-term net leverage target of 2 times to 3 times. Over the four years since Silver Lake invested in us, we de-levered from 6 times as a private company to less than 2 times prior to the announced Sterling acquisition. This is also after repurchasing approximately $120 million in shares, paying a $218 million one-time special dividend, and acquiring five businesses. Our goal within 24 months of closing is to reduce net leverage toward approximately 3 times run rate adjusted EBITDA. Our path to de-lever will be driven by high-margin topline growth of the combined businesses, productivity efficiencies, cost synergies, and the continued strong cash flow generation.

我們在管理槓桿方面擁有良好的記錄，並且仍然致力於實現 2 倍至 3 倍的長期淨槓桿目標。自從 Silver Lake 投資我們以來的四年裡，我們的槓桿率從作為一家私人公司的 6 倍降到了宣布收購 Sterling 之前的不到 2 倍。這也是在回購約 1.2 億美元的股票、支付 2.18 億美元的一次性特別股息以及收購五項業務之後。我們的目標是在交易結束後 24 個月內將淨槓桿率降低至運行率調整後 EBITDA 的約 3 倍。我們的去槓桿之路將由合併後業務的高利潤收入成長、生產力效率、成本協同效應以及持續強勁的現金流產生所驅動。

Now moving to slide 13. Today, we are reaffirming our 2024 annual guidance. Our first-quarter results, coming in at or above our expectations, positions us well to achieve our full-year midpoint guidance targets. We still expect sequential quarter-over-quarter growth for revenues, adjusted EBITDA, and adjusted EBITDA margins similar to 2023. For 2024, we expect to generate full-year revenues in the range of $750 million to $800 million. Based on the midpoint of $775 million, this results in slightly positive year-over-year organic revenue growth. This includes revenues related to Infinite ID, which is expected to contribute approximately $7 million in the first eight months of the year as we cycle over the anniversary of that acquisition.

現在轉到投影片 13。今天，我們重申 2024 年年度指引。我們第一季的業績達到或高於我們的預期，使我們能夠很好地實現全年中點指導目標。我們仍預期營收、調整後 EBITDA 和調整後 EBITDA 利潤率將較上季成長，與 2023 年類似。2024 年，我們預計全年營收將在 7.5 億至 8 億美元之間。基於 7.75 億美元的中位數，這導致有機收入同比略有增長。其中包括與 Infinite ID 相關的收入，預計今年前 8 個月將貢獻約 700 萬美元，因為我們將在該收購週年紀念日期間進行循環。

We expect customer retention to remain in line with our strong historical performance of around 97%. We also expect continued execution of upsell, cross-sell, and new logo growth consistent with historical trends and long term targets. We expect to maintain full-year adjusted EBITDA margins of approximately 31% at the midpoint and adjusted EBITDA in the range of $228 million to $248 million. This reflects the strength of our flexible model, disciplined cost management, and investments in automation.

我們預計客戶保留率將與我們 97% 左右的強勁歷史表現保持一致。我們也預期追加銷售、交叉銷售和新標誌的成長將繼續與歷史趨勢和長期目標保持一致。我們預計全年調整後 EBITDA 利潤率將維持在約 31% 的中點，調整後 EBITDA 範圍在 2.28 億美元至 2.48 億美元之間。這反映了我們靈活的模式、嚴格的成本管理和自動化投資的優勢。

As a reminder, our adjusted EBITDA guidance includes increases in annual employee wages, normalization of management incentive plans, and increases in benefit costs totaling approximately $10 million. It also includes new investments in product, technology and sales of approximately $7 million. At the midpoint, we expect 2024 adjusted net income of approximately $134 million and adjusted EPS of $0.93.

提醒一下，我們調整後的 EBITDA 指導包括員工年度薪資的增加、管理層激勵計劃的正常化以及福利成本的增加，總計約 1000 萬美元。它還包括約 700 萬美元的產品、技術和銷售額方面的新投資。我們預計 2024 年調整後淨利潤約為 1.34 億美元，調整後每股收益為 0.93 美元。

Looking at the quarterly phasing, we expect sequential topline improvement as we move through 2024. We expect second-quarter revenues to trend from negative toward relatively flat year over year with positive overall growth in the second half of the year more heavily weighted toward Q4. The midpoint of our guidance range also assumes continued macro-driven base declines, with base remaining negative in Q2 down in the mid-to-high single digits, though improving from Q1 which was down 11%. We still expect base growth to improve sequentially through the year, turning positive in Q4. We continue to expect adjusted EBITDA margins of approximately 30% in the second quarter, with further improvement in the second half of the year.

從季度階段來看，我們預計 2024 年營收將持續改善。我們預計第二季營收將從負值趨向於年比相對持平，而下半年整體正成長將更集中在第四季。我們指引範圍的中點也假設宏觀驅動的基數持續下降，第二季基數仍為負數，下降至中高個位數，但較第一季下降 11% 有所改善。我們仍預計全年基數成長將較上季改善，並在第四季轉正。我們繼續預期第二季調整後 EBITDA 利潤率約為 30%，下半年將進一步改善。

In closing, I would like to share Scott's sentiment and thank our team for the progress we continue to make in achieving our objectives and for their resilience and dedication as we work through the Sterling transaction.

最後，我想表達 Scott 的觀點，並感謝我們的團隊在實現目標方面不斷取得的進展，以及他們在 Sterling 交易過程中的堅韌和奉獻精神。

With that, let me turn it back to Scott for closing remarks before we open the line for questions.

說到這裡，在我們開始提問之前，讓我把它轉回斯科特做結束語。

Thank you, David. We have made significant progress on our strategic initiatives over the last several years, as evidenced by our verticalized go to market approach, tech enablement, investments in automation, AI and machine learning, strategic partnerships, and tuck-in acquisitions. We are seeing the return on our investments flow through our impressive adjusted EBITDA margin and cash flow generation. The acquisition of Sterling is another significant step forward in our value creation playbook, and we are excited to continue to shape the future of First Advantage and to better serve our customers.

謝謝你，大衛。過去幾年，我們的策略性舉措取得了重大進展，我們的垂直市場進入方式、技術支援、自動化投資、人工智慧和機器學習、策略合作夥伴關係以及收購就證明了這一點。我們透過令人印象深刻的調整後 EBITDA 利潤率和現金流產生看到了我們的投資回報。收購 Sterling 是我們在價值創造方面向前邁出的又一重要一步，我們很高興能夠繼續塑造首優諮詢的未來並更好地服務我們的客戶。

With that, we will open the line for questions.

至此，我們將開通提問專線。

Thank you. (Operator instructions) Shlomo Rosenbaum, Stifel.

謝謝。（操作員指示）Shlomo Rosenbaum，Stifel。

First, I just want to start out with Scott. Would you say that the environment is improving along the lines that you expected? A little bit faster, a little bit slower, and then I have one follow up after that?

首先，我想從斯科特開始。您認為環境正在按照您的預期改善嗎？快一點，慢一點，然後我有一個跟進？

Yes, I'd say from a macro standpoint, it's exactly where we thought it would be, so I wouldn't say it's faster or slower. I would say it's still a choppy macro. We are seeing our customers higher, obviously look at our results for the quarter, but we're still seeing some cautiousness out of them. So they're not hiring ahead of time, they're not over hiring, but they certainly are hiring. And I think this is exactly as we sort of planned it would go, and we're pretty happy where it is.

是的，我想說，從宏觀角度來看，這正是我們所認為的，所以我不會說它更快或更慢。我想說這仍然是一個不穩定的宏觀。我們看到我們的客戶走高，顯然是在看我們本季的業績，但我們仍然看到他們有些謹慎。因此，他們並沒有提前招聘，也沒有過度招聘，但他們確實在招聘。我認為這正是我們計劃的那樣，我們對目前的情況感到非常滿意。

And then the other one is just, you know, Sterling put out their results this morning, obviously the same time as you guys, and very good revenue, but the EBITDA was clearly below what the Street was expecting. Now, obviously Sterling didn't give out any guidance or anything like that, but I want to ask you, once you acquire the company, how long does it take you to really cut them over onto your own kind of cost structure? In other words, migrating things over operationally, quickly cutting over to your own sources of information and being able to leverage kind of the scale that you have. If you could talk a little bit about that and then also just kind of merging the cultures, how do you think about that?

然後另一個就是，你知道，斯特林今天早上公佈了他們的業績，顯然是和你們同時發布的，而且收入非常好，但 EBITDA 顯然低於華爾街的預期。現在，顯然斯特林沒有給出任何指導或類似的東西，但我想問你，一旦你收購了這家公司，你需要多長時間才能真正將它們切入你自己的成本結構？換句話說，在操作上遷移內容，快速切換到您自己的資訊來源，並能夠利用您擁有的規模。如果你可以談談這一點，然後也只是融合文化，你對此有何看法？

Yeah, so obviously we're doing a lot of planning, but we can't really get under the hood for post close. We did mention in the earnings script how fast we expect to get synergies and, as part of those synergies, that's obviously eliminating the duplicative corporate overhead and public company expenses but also starting to leverage our automation. It's really hard for me to sit here today and give you a specific timeline because we're not at that point yet where we can get into detailed planning and stuff like that, but we will continue to provide updates as we get closer and closer to close date. But again, we're feeling very confident about the synergies number and the strategy and approach that we take into overall post-merger integration.

是的，顯然我們正在做很多計劃，但我們無法真正了解關閉後的情況。我們確實在收益腳本中提到了我們期望以多快的速度獲得協同效應，並且作為這些協同效應的一部分，這顯然消除了重複的公司管理費用和上市公司費用，但也開始利用我們的自動化。今天我真的很難坐在這裡給你們一個具體的時間表，因為我們還沒有到那個階段，我們還可以進行詳細的規劃和類似的事情，但隨著我們越來越接近，我們將繼續提供更新關閉日期。但我們再次對協同效應的數字以及我們在整體合併後整合中採取的策略和方法非常有信心。

Oh, Shlomo, sorry, I did not answer the last part of your question, which was on the culture. We're pretty excited about the two companies' cultures coming together because even though there's obviously going to be some differences, both companies are a high-performing organization. So I think it's a lot easier when you're merging two high-performance cultures together. Obviously, there'll be some subtle differences, and we will have a special track in our PMI integration plan just on culture to make sure that we nail it, we communicate it, we treat it like it's just as important as anything else. So I think we don't have any concerns at this point.

哦，什洛莫，抱歉，我沒有回答你問題的最後一部分，這是關於文化的。我們對兩家公司的文化融合感到非常興奮，因為儘管顯然存在一些差異，但兩家公司都是高績效組織。因此，我認為將兩種高績效文化融合在一起會容易得多。顯然，會有一些微妙的差異，我們將在我們的 PMI 整合計劃中專門針對文化製定一個特殊的軌道，以確保我們確定它、我們溝通它、我們對待它就像它和其他任何事情一樣重要。所以我認為我們目前沒有任何擔憂。

And I think the other thing that as you could -- you've probably seen from both companies, we're very much aligned on the go-to-market and the product strategies. I think we're the two companies that are out there talking about digital identification the most, and we really are sort of, I think, at the forefront of the technology changes in this market, so that makes it a bit easier as well.

我認為另一件事，你可能已經從兩家公司看到了，我們在進入市場和產品策略方面非常一致。我認為我們是談論數位識別最多的兩家公司，而且我認為我們確實處於這個市場技術變革的最前沿，因此這也讓事情變得更容易一些。

Ashish Sabadra, RBC Capital Markets.

Ashish Sabadra，加拿大皇家銀行資本市場。

Thanks for taking my question. So the sequential growth in the base that you've mentioned, I was wondering what's -- how much visibility do you have there? What have you seen in April, any early indications on that front? You obviously mentioned five verticals which have been growing, but I was just wondering, the verticals which have been declining, have you seen any progress on those fronts? And then even on the international front that 11% decline, I was just wondering if you could comment on what we are seeing on that front?

感謝您提出我的問題。所以你提到的基數的連續增長，我想知道你在那裡有多少可見度？您在四月看到了什麼，這方面有什麼早期跡象嗎？您顯然提到了五個一直在成長的垂直領域，但我只是想知道，那些一直在下降的垂直領域，您在這些方面看到了任何進展嗎？即使在國際方面下降了 11%，我只是想知道您是否可以對我們在這方面看到的情況發表評論？

Thanks. Yeah, thanks, Ashish, a lot there, so hopefully I catch it all. I may work backwards on your question. So, yeah, obviously international is still down, but it's not down as much. We were, in previous quarters, talking about year-on-year declines of 20 plus percent. We're not there anymore, we're half of that.

謝謝。是的，謝謝 Ashish，非常感謝，所以希望我能全部明白。我可能會倒著回答你的問題。所以，是的，顯然國際市場仍在下跌，但下跌幅度沒有那麼大。在前幾個季度中，我們談論的是同比下降 20% 以上。我們已經不在那裡了，我們已經是一半了。

So we are starting to see some stability in India and APAC. EMEA, if you recall, has always been you know, performing, but India and APAC were the concerns over the last 18 months or so. And we really felt, and I think we mentioned this on our earnings call for Q4 of 2023, and we kind of felt that India was bottoming out and we're starting to realize that. So we're starting to see some improvement in both India and APAC.

因此，我們開始看到印度和亞太地區出現了一些穩定性。如果你還記得的話，歐洲、中東和非洲地區一直表現出色，但印度和亞太地區在過去 18 個月左右的時間裡一直令人擔憂。我們確實感覺到了，我想我們在 2023 年第四季的財報電話會議上提到了這一點，我們感覺印度正在觸底反彈，我們開始意識到這一點。因此，我們開始看到印度和亞太地區的情況有所改善。

I think also what gives us some enthusiasm is the US was only down 2% this quarter, so we're starting to see a little bit of stability there as well. And you asked about April, and April, I would say, is exactly in line with what we thought it would be, so no surprises from April. And then your first part of the question was around the verticals, so we mentioned the five verticals that were up.

我認為讓我們感到興奮的是美國本季僅下跌 2%，因此我們也開始看到那裡有一點穩定性。你問到四月的情況，我想說，四月與我們的預期完全一致，所以四月沒有什麼意外。然後你的問題的第一部分是圍繞垂直領域，所以我們提到了五個垂直領域。

Obviously there are still some verticals that are down, most notably financial services and a few others, but they're not down as much. They certainly are still down, but they're just not down as much. So, all of that kind of paints a little bit of a brighter picture for us but obviously there's still a lot of caution in the background.

顯然，仍有一些垂直產業出現下降，最明顯的是金融服務和其他一些產業，但下降幅度並不大。他們當然仍然在下跌，但只是跌幅沒有那麼嚴重。因此，所有這些都為我們描繪了一幅更光明的圖景，但顯然背景中仍然存在著許多謹慎之處。

That's great color. And if I could ask, a quick follow up on the technology front. Thanks for providing those details on the new initiatives on the GenAI front. I was wondering, as you think about over the midterm, the next three to five years, how do we think about the efficiencies that these newer technologies can bring in? Thanks.

那顏色真棒。如果我可以問的話，請快速跟進技術方面的情況。感謝您提供有關 GenAI 方面新舉措的詳細資訊。我想知道，當您考慮未來三到五年的中期時，我們如何考慮這些新技術可以帶來的效率？謝謝。

Yeah, no, we're very bullish on the efficiencies that the new technologies can bring, and I would add that it's not only efficiencies, but it's also quality improvement. And so we -- I think I mentioned this last earnings call, we are in the process of running multiple AI pilots across multiple components of our operations, and early signs are an increase in quality but also an increase in efficiency. And it's not only in the actual fulfillment of a background check, we actually have just launched AI at Work, and AI at Work is our internal AI tool for helping all functional organizations use AI to improve their efficiency and their quality.

是的，不，我們非常看好新技術能帶來的效率，我想補充一點，這不僅是效率的提高，而且是品質的提高。因此，我想我提到了上次的財報電話會議，我們正在運營的多個組成部分運行多個人工智慧試點，早期跡像是品質提高，效率也提高。這不僅僅是在實際完成背景調查方面，我們實際上剛剛推出了AI at Work，AI at Work是我們內部的人工智慧工具，用於幫助所有職能組織使用人工智慧來提高效率和品質。

As you know, when you use a public AI product like ChatGPT or whatever, whatever you put into that is available for all public to see. So we've created our own private AI tool, and it's basically AI at Work and we're in the process now of educating our marketing teams, our sales teams, even our finance teams, HR teams on to how to use this internally to find ways to do work better, faster, cheaper. So we think that the effect of AI across our internal functions and the processing of background checks over the next (technical difficulty) plus years will have a pretty dramatic effect.

如您所知，當您使用 ChatGPT 等公共人工智慧產品時，您輸入的任何內容都可供所有公眾查看。因此，我們創建了自己的私人人工智慧工具，它基本上是工作中的人工智慧，我們現在正在教育我們的行銷團隊、銷售團隊，甚至我們的財務團隊、人力資源團隊如何在內部使用它來找到更好、更快、更便宜地完成工作的方法。因此，我們認為人工智慧對我們內部職能的影響以及未來（技術難度）多年的背景調查處理將產生相當戲劇性的影響。

Andrew Steinerman, JPMorgan.

安德魯‧史坦納曼，摩根大通。

Hi. I wanted to get a sense for how your team is doing market sizing of the US screening market. If you could mention what solutions are included in your market sizings, such as drug testing and id and stuff besides for criminal. How are you approaching market sizing? What market share do you think First Advantage will have post merger with Sterling?

你好。我想了解你們的團隊如何進行美國放映市場的市場規模評估。您能否提及您的市場規模中包含哪些解決方案，例如藥物測試和識別以及除犯罪之外的其他解決方案。您如何確定市場規模？您認為 First Advantage 與 Sterling 合併後將佔據多少市佔率？

You know, we have been leveraging third parties. We haven't been doing the market sizing ourselves, Andrew. So we've been leveraging third parties who have been doing that, and we're really seeing sort of consistent results in numbers. I mean, there's -- multiple sources have pegged -- this industry has a $13 billion TAM, so it's a large space, and as you know, it's a very fragmented space with so many competitors. So we haven't looked at the market sizing ourselves, but the third-party data is so consistent that we're pretty confident that it's fairly accurate.

你知道，我們一直在利用第三方。安德魯，我們還沒有自己進行市場規模評估。因此，我們一直在利用一直在這樣做的第三方，我們確實看到了一些一致的數字結果。我的意思是，多個消息來源表明，這個行業擁有 130 億美元的 TAM，所以這是一個很大的空間，而且如您所知，這是一個非常分散的空間，有如此多的競爭對手。因此，我們自己沒有研究過市場規模，但第三方數據非常一致，我們非常有信心它相當準確。

The one thing that we have not been able to do, really, any market sizing on is digital identity, because it's really a new space. It's really the creation of a new revenue stream in a new space, and it's very hard to measure that. But what we are really going on is customer discussions.

事實上，我們無法做到的一件事是數位身份，因為它確實是一個新的領域。這實際上是在新領域創造新的收入來源，而且很難衡量。但我們真正正在進行的是客戶討論。

Customers are really loving the digital identity solution because they're seeing so much fraud in the recruiting cycle. People that they are hiring for, let's say, home-based jobs, and they're interviewing over Zoom or something like that, and they're claiming that their camera doesn't work and then doesn't seem like the person they hired is the same person that shows up to do the work, and so digital identity can really take that fraud out of the equation for them.

客戶非常喜歡數位身分解決方案，因為他們在招募週期中看到瞭如此多的詐騙行為。他們正在招募的人，比如說，在家工作的人，他們透過 Zoom 或類似的東西進行面試，他們聲稱他們的相機不能用，然後看起來不像他們僱用的人是同一個人來完成這項工作，因此數位身分確實可以讓他們擺脫詐欺的困擾。

And we're hearing those stories, almost nightmare stories from so many customers. So there's not an official market sizing going on, but that sector is really driven by customer conversations and customer demand, and we're seeing very good demand in that sector.

我們從許多客戶那裡聽到了這些故事，幾乎是噩夢般的故事。因此，目前還沒有官方的市場規模評估，但該行業確實是由客戶對話和客戶需求驅動的，我們看到該行業的需求非常好。

Thank you. (Operator instructions) Heather Balsky, Bank of America.

謝謝。 （操作員指示）Heather Balsky，美國銀行。

Hi. Good morning. Thank you for taking my question. I wanted to ask, David, you mentioned your opportunity once you closed the deal with Sterling about your ability to reduce some of the third-party pass through costs. And I'm just curious if you can talk about your thoughts around the opportunity you have on the expense side, as well as using kind of your own internal resources once you're a larger organization.

你好。早安.感謝您回答我的問題。我想問，大衛，你提到了與斯特林完成交易後你有能力減少一些第三方轉手成本的機會。我只是好奇你是否可以談談你對費用方面的機會的想法，以及一旦你成為一個更大的組織就使用你自己的內部資源。

David, do you want that one?

大衛，你想要那個嗎？

Sure. Heather, they're really -- it's a multifaceted approach to that. So, yes, there are third-party costs. We will be able to leverage volume from a procurement perspective to get more favorable pricing. We will be able to run more verifications through our own proprietary database. We will also be looking at other third-party costs like insurance and public company costs. So we're going to look at everything top to bottom, every single expense. As we said, we think we can go get $50 million. We're highly confident in that number and think it can be greater than that, and we're going to go get it as quickly as we can.

當然。希瑟，他們真的是——這是一種多方面的方法。所以，是的，存在第三方成本。我們將能夠從採購角度利用數量來獲得更優惠的價格。我們將能夠透過我們自己的專有資料庫進行更多驗證。我們還將考慮其他第三方成本，例如保險和上市公司成本。因此，我們將從上到下審視一切，每一項支出。正如我們所說，我們認為我們可以獲得 5000 萬美元。我們對這個數字非常有信心，並認為它可以比這個數字更大，我們將盡快得到它。

Thank you. I appreciate that. And then just a follow up, you also talked about Sterling's international business. Can you just lay out for us what their business is focused on internationally in their key markets? And then, I mean, we know your international business kind of where maybe there might be similarities or where they're providing some new opportunities. Thanks.

謝謝。我很感激。接下來，您也談到了斯特林的國際業務。您能否為我們介紹他們在國際主要市場的業務重點？然後，我的意思是，我們了解您的國際業務，其中可能存在相似之處，或者它們提供了一些新的機會。謝謝。

Yeah. So from a footprint standpoint, their international business is almost identical to ours, which makes it very easy to work through synergies and combining the organizations. Obviously, each party will have strengths and weaknesses and what we like about Sterling is they seem to have done very well in the gig space internationally, which is not a business that we've focused on too much. And they've also done extremely well in certain markets like Australia. So we'll have to look at where the strengths and weaknesses of each organization.

是的。因此，從足跡的角度來看，他們的國際業務幾乎與我們相同，這使得透過協同效應和組織合併變得非常容易。顯然，雙方都有優點和缺點，我們喜歡 Sterling 的原因是他們似乎在國際演出領域做得非常好，這不是我們過於關注的業務。他們在澳洲等某些市場也表現得非常好。因此，我們必須了解每個組織的優勢和劣勢。

But from a product standpoint, there's really not a lot of differences and it's really just a matter of go to market in certain regions. But we'll start again planning that as we get closer to close and post close as to you know, we're basically going to -- basically take the best-in-class approach, so whoever's got the best product or offering, that's what we're going to go with.

但從產品的角度來看，確實沒有太大差異，只是在某些地區進入市場的問題。但我們將重新開始計劃，當我們接近關閉並發布關閉時，正如你所知，我們基本上會——基本上採取一流的方法，所以無論誰擁有最好的產品或產品，那就是我們要做什麼。

Thank you again. (Operator instructions) Andrew Nicholas, William Blair.

再次感謝你。（操作員指示）安德魯·尼古拉斯、威廉·布萊爾。

Hi. Good morning. I wanted to follow up on the earlier question around AI efforts and efficiency gains. One of the other things that seems to be a theme as people adopt generative AI or build products internally is the cost. So just curious is that kind of those efforts around bringing AI into your work or even the private AI tool have any kind of negative impact to incremental margins, or is the net-net of all that you're doing on that front expected to improve incremental margins over time?

你好。早安.我想跟進之前有關人工智慧工作和效率提升的問題。當人們採用生成式人工智慧或在內部建立產品時，另一個主題似乎是成本。所以我很好奇的是，圍繞將人工智慧帶入你的工作甚至私人人工智慧工具的那些努力會對增量利潤產生任何負面影響，或者你在這方面所做的所有工作是否有望改善隨著時間的推移，利潤會增加嗎？

Yeah. So the near-term answer is that everything we're doing is in budget, so we're not going to be incurring any additional costs to do what we've got planned for 2024. And I think you've answered the question as to long term, which is we definitely feel that, yeah, there will certainly be a cost of developing a solution, but the benefit and the business case behind it will be higher quality, more efficiency, probably the ability to essentially reduce headcount in certain areas and things like that, so it certainly will offset. But we're taking each product and each project as like a separate business case. So everything that we're doing has to be business case driven and have some sort of defined benefit that we can track and milestones that we can measure. So that's the approach we're taking. And, again, we think there'll be a positive impact to the business over the next couple of years.

是的。因此，近期的答案是，我們所做的一切都在預算之內，因此我們不會為 2024 年的計劃而產生任何額外成本。我認為您已經回答了有關長期的問題，我們肯定認為，是的，開發解決方案肯定會產生成本，但其背後的好處和業務案例將是更高的品質、更高的效率，可能有能力從本質上減少某些領域的人員數量以及類似的事情，所以它肯定會抵消。但我們將每個產品和每個項目視為一個單獨的業務案例。因此，我們所做的一切都必須是業務案例驅動的，並且具有某種我們可以追蹤的明確收益和我們可以衡量的里程碑。這就是我們正在採取的方法。而且，我們再次認為這將對未來幾年的業務產生正面影響。

That's very helpful. And then maybe for my follow-up, just curious what the customer reception has been like to the Sterling announcement thus far. I don't know if you've had a chance to speak to any of their customers, but just curious if your customers have come to you with any concerns, excitement, things of that sort, that'd be helpful.

這非常有幫助。然後也許是我的後續行動，只是好奇迄今為止客戶對英鎊公告的反應如何。我不知道你是否有機會與他們的客戶交談，但只是好奇你的客戶是否帶著任何擔憂、興奮或諸如此類的事情來找你，這會很有幫助。

Yeah, I mean, we can't speak to any of their customers, that's not allowed. But our customers are pretty excited about it. In some ways, it's also a non-event for them. So when we announced it, we proactively reached out to all of our large customers and walked them through it and talked about it. They were very excited. Obviously, they want to see what the Sterling products are like and things like that, which we'll show. But as I mentioned, there's really no impact to them. So although they're excited for us, they don't, they don't really feel like it's going to change.

是的，我的意思是，我們不能與他們的任何客戶交談，這是不允許的。但我們的客戶對此感到非常興奮。從某些方面來說，這對他們來說也不算什麼。因此，當我們宣布這一消息時，我們主動聯繫了所有大客戶，向他們介紹並討論了這個問題。他們非常興奮。顯然，他們想看看 Sterling 產品是什麼樣的以及類似的東西，我們將展示這些。但正如我所提到的，這對他們確實沒有影響。因此，儘管他們為我們感到興奮，但他們並沒有，他們並不真正覺得情況會改變。

It's going to be the First Advantage customer success team. Their customer care is not changing, their product suites aren't changing, and their platforms aren't changing, and potentially there could be additions to them that would benefit them, which also opens up upsell, cross-sell for us. But when we had our customer collaboration event in April, it was almost not even mentioned by any customers. It was that -- they were excited about it obviously when we first reached out, but it's really business as usual.

這將是 First Advantage 客戶成功團隊。他們的客戶服務沒有改變，他們的產品套件沒有改變，他們的平台也沒有改變，並且可能會有一些對他們有利的補充，這也為我們打開了追加銷售、交叉銷售的大門。但當我們四月舉辦客戶合作活動時，幾乎沒有任何客戶提到這一點。當我們第一次聯繫時，他們顯然對此感到興奮，但這確實是一切如常。

Thank you. At this time, we have no further questions in queue. This will conclude today's First Advantage first-quarter 2024 earnings conference call and webcast. Thank you all for your participation. At this time, you may disconnect your line.

謝謝。目前，我們隊列中沒有其他問題。今天的 First Advantage 2024 年第一季財報電話會議和網路廣播到此結束。感謝大家的參與。此時，您可以斷開線路。