First Advantage Corp (FA) 2024 Q2 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 second quarter of 2024 earnings conference call and webcast. Hosting the call today from First Advantage is Stephanie Gorman, Vice President of Investor Relations.

大家好。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 年第二季財報電話會議及網路廣播。今天主持 First Advantage 電話會議的是投資者關係副總裁 Stephanie Gorman。

(Operator Instructions) Please note today's event is being recorded.

（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 second-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，歡迎參加第一優諮詢 2024 年第二季財報電話會議。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.

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聲明中明示或暗示的結果有重大差異。

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 second 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.

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 年第二季的 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 the 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.

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。我們的非GAAP 財務指標與最直接可比較的GAAP 財務指標的調節（在無需不合理努力的情況下）出現在今天的收益新聞稿和演示文稿中，這些資訊可以在我們的投資者關係網站上找到。

I am joined on our call today by Scott Staples, our Chief Executive Officer; and David Gamsey, our Chief Financial Officer. After our prepared remarks, we will take your questions.

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，我們將回答您的問題。

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. We are proud to announce another quarter of solid results while continuing to progress toward the closing of the Sterling acquisition. Our team is executing well in a dynamic environment by leveraging our capabilities and innovations to deliver continued value for our customers and our shareholders.

謝謝斯蒂芬妮，大家早安。感謝您加入我們的通話。我們很自豪地宣布又一個季度取得了穩健的業績，同時繼續朝著完成 Sterling 收購的目標邁進。我們的團隊在充滿活力的環境中表現良好，並利用我們的能力和創新為我們的客戶和股東提供持續的價值。

This morning, I will provide an overview of our second-quarter results along with updates on the Sterling acquisition and our strategic initiatives. David will then provide a deeper dive on our results and additional color on our expectations for the remainder of the year.

今天早上，我將概述我們第二季的業績以及 Sterling 收購和我們的策略舉措的最新情況。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剩餘時間的期望。

Turning to slide 5. In the second quarter, we delivered revenues of $185 million, adjusted EBITDA of $56 million, and adjusted EBITDA margin of 30.2%, all of which were in line with what we communicated on our last earnings call and nearly flat on a year-over-year basis. This gives us additional confidence in achieving our full-year 2024 guidance, which we are reaffirming today.

轉到投影片 5。第二季度，我們實現了1.85 億美元的收入，調整後的EBITDA 為5,600 萬美元，調整後的EBITDA 利潤率為30.2%，所有這些都與我們在上次財報電話會議上傳達的內容一致，與上年同期幾乎持平。這讓我們更有信心實現我們今天重申的 2024 年全年指引。

Our upsell/cross-sell, new logos, and attrition rates continued to perform in line with our historical revenue growth algorithm. Our base growth remained negative but improved from Q1. We also had two very large upsell bookings worth a combined $13.5 million in the second quarter. In total, we had 15 bookings in the second quarter and 47 in the last 12 months, each with $500,000 or more of expected annual contract value. We are pleased that our sales engine continues to deliver consistent results.

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。我們的基數成長仍為負，但較第一季有所改善。第二季我們還有兩筆非常大的追加銷售預訂，總價值為 1,350 萬美元。總的來說，我們在第二季度收到了 15 份訂單，在過去 12 個月收到了 47 份訂單，每份訂單的預期年度合約價值為 50 萬美元或更多。我們很高興我們的銷售引擎繼續提供一致的結果。

Second-quarter results reflect a macroeconomic picture of normalization and stabilization within our business. From a vertical perspective, volatility has decreased with no single verticals revenue volumes up or down beyond single digits. We feel this narrowing of the gaps between verticals reflects an overall normalization of the business, which we welcome.

第二季業績反映了我們業務正常化和穩定的宏觀經濟狀況。從垂直角度來看，波動性有所下降，沒有任何一個垂直行業的收入增幅或下降超過個位數。我們認為垂直行業之間差距的縮小反映了業務的整體正常化，我們對此表示歡迎。

In terms of the macro environment, we are seeing normalization and stabilization of key labor metrics, including quits, hires, and openings, as job trends stabilize from the pandemic years. Additionally, our customers continue to hire, albeit at a more modest level.

就宏觀環境而言，隨著就業趨勢從大流行時期趨於穩定，我們看到關鍵勞動力指標（包括辭職、僱用和空缺職位）的正常化和穩定。此外，我們的客戶仍在繼續招募員工，儘管規模較小。

Our business continues to be propelled by the fundamental long-term drivers we have spoken about in the past, including the increasing importance of risk management, compliance, and turnaround times for our customers. We have made investments in specific products and geographies to strengthen our business, including highly automating our technology. We are also an early mover in our approach to verticals and proactively picked what we felt were going to be high volume turnover verticals.

我們的業務繼續受到我們過去談到的基本長期驅動因素的推動，包括風險管理、合規性和客戶週轉時間日益重要。我們對特定產品和地區進行了投資，以加強我們的業務，包括高度自動化我們的技術。我們也是垂直行業的先行者，並主動選擇了我們認為將是高成交量垂直行業。

As such, we are skewed more toward the hourly worker, who is still in very strong demand and tends to change jobs more frequently. This strategy enables us to win in the marketplace and deliver value for our customers by offering vertical subject matter expertise, compliance, speed, and accuracy so that our customers can hire and onboard their new employees quickly.

因此，我們更傾向於小時工，他們的需求仍然非常強勁，而且往往會更頻繁地換工作。這項策略使我們能夠在市場上獲勝，並透過提供垂直主題專業知識、合規性、速度和準確性來為客戶創造價值，以便我們的客戶可以快速僱用和入職新員工。

In this environment, we also continue to successfully control the controllables. We have previously demonstrated our strong operating discipline and ability to act quickly to control cost to preserve margins, and we will continue to do so in the future.

在這樣的環境下，我們也不斷成功地控制了可控因素。我們之前已經展示了我們強大的營運紀律和快速採取行動控製成本以保持利潤的能力，未來我們將繼續這樣做。

As a reminder, we have a highly flexible cost structure that allows us to adjust to changing conditions. Over 70% of our cost of sales are third-party costs and those costs are 100% variable. The remainder of our cost of sales consists of operation and customer care, which are variable in the way we manage scheduling and backfill open positions.

提醒一下，我們擁有高度靈活的成本結構，使我們能夠適應不斷變化的條件。我們 70% 以上的銷售成本是第三方成本，而這些成本 100% 是可變的。我們銷售成本的其餘部分包括營運和客戶服務，這在我們管理調度和回補空缺職位的方式上是可變的。

We also have the ability to modulate our investments if needed. We evaluate all of these considerations on an ongoing basis to ensure that we are operating efficiently to match the demand of the current environment.

如果需要，我們還有能力調整我們的投資。我們持續評估所有這些考慮因素，以確保我們有效率地運作以滿足當前環境的需求。

Turning to slide 6, let me now provide an update on the Sterling acquisition. We are making good progress toward closing. As we announced in late May, we received a second request from the DOJ. We are currently working through that process and continue to anticipate closing after we receive HSR clearance, which we currently expect in the fourth quarter of this year. In the meantime, we are continuing to advance our pre-closing integration planning efforts.

轉到幻燈片 6，現在讓我提供有關英鎊收購的最新情況。我們正在接近關閉方面取得良好進展。正如我們在 5 月底宣布的那樣，我們收到了司法部的第二次請求。我們目前正在完成流程，並繼續預計在獲得 HSR 許可後完成交易，目前預計在今年第四季完成。同時，我們正持續推進交割前的整合規劃工作。

Our integration management committee is leading dedicated teams from First Advantage and Sterling, who are working daily to create plans that will allow us to deliver a seamless, post-close integration and achieve our synergies.

我們的整合管理委員會領導著 First Advantage 和 Sterling 的專門團隊，他們每天都在努力製定計劃，使我們能夠實現無縫的後期整合並實現協同效應。

The Sterling business is highly complementary and will extend our high-quality and cost-effective background screening, identity, and verification technology solutions for the benefit of both company's customers. From a vertical perspective, Sterling focuses primarily on verticals that are salaried white-collar workers, while First Advantage focuses primarily on verticals serving blue-collar hourly employees.

Sterling 業務具有高度互補性，將擴展我們高品質且經濟高效的背景篩選、身份和驗證技術解決方案，以造福兩家公司的客戶。從垂直領域來看，Sterling主要關注受薪白領的垂直行業，而First Advantage主要專注於為藍領小時工服務的垂直行業。

We also expect to benefit from complementary geographic reach and the ability to expand. While both parties have a global presence, Sterling is larger in Latin America and Australia, while we have deeper presence in India, Hong Kong and Singapore.

我們也期望從互補的地理覆蓋範圍和擴張能力中受益。雖然雙方都在全球開展業務，但 Sterling 在拉丁美洲和澳洲的業務規模更大，而我們在印度、香港和新加坡的業務則更深入。

In terms of cost synergies, we have expanded our target to a range of $50 million to $70 million as we have progressed our integration planning work and have identified additional synergy opportunities. We are confident in our ability to action this goal within the first 18 to 24 months post-closing. We see opportunities from combining back-office functions and resources, eliminating overlapping public company costs, and rationalizing insurance programs.

在成本綜效方面，隨著整合規劃工作的進展並確定了額外的協同機會，我們已將目標擴大到 5,000 萬至 7,000 萬美元。我們對在交割後 18 至 24 個月內實現這一目標的能力充滿信心。我們看到了合併後台職能和資源、消除重疊的上市公司成本以及合理化保險計劃的機會。

We also see the potential to reduce our cost of serving customers and bring our existing automation capabilities to Sterling's business to increase efficiencies and productivity. We are focused on a seamless transition for Sterling customers while also allowing us to unlock valuable operational and third-party efficiencies.

我們也看到了降低客戶服務成本並將我們現有的自動化功能引入 Sterling 業務以提高效率和生產力的潛力。我們專注於為 Sterling 客戶實現無縫過渡，同時也讓我們能夠釋放寶貴的營運和第三方效率。

As we have been delving deeper into our pre-closing integration planning work, we are uncovering opportunities that we expect will further enhance our customer value proposition, unlock upsell, and cross-sell opportunities, and reduce certain third-party pass-through fees. As an example, we can bring to Sterling's customers our full suite of I-9, tax, and transportation products.

隨著我們深入研究交割前的整合規劃工作，我們正在發現一些機會，我們預計這些機會將進一步增強我們的客戶價值主張，釋放追加銷售和交叉銷售機會，並減少某些第三方轉手費。例如，我們可以為 Sterling 的客戶提供全套 I-9、稅務和運輸產品。

Sterling has a recovery management service and a further developed digital identity product in the US, which we could potentially sell to our install base. We believe opportunities such as these would benefit customers by providing more options to meet their evolving needs and improve solutions to help manage risk, hire smarter, and onboard faster.

Sterling 在美國擁有恢復管理服務和進一步開發的數位身分產品，我們可能會將其出售給我們的安裝基地。我們相信，此類機會將為客戶帶來更多選擇，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，從而使客戶受益。

Additionally, culture is an important focus area for us and both companies have high-performing cultures and motivated employees. We are being very thoughtful in how we approach this post-close integration work stream and have brought in leading third-party experts to assist. I am really excited about our opportunities and what our combined teams will be able to accomplish.

此外，文化是我們一個重要的關注領域，兩家公司都擁有高績效的文化和積極主動的員工。我們在如何處理這個後期整合工作流程方面非常深思熟慮，並聘請了領先的第三方專家來提供協助。我對我們的機會以及我們的聯合團隊將能夠取得的成就感到非常興奮。

Upon closing the transaction, we will immediately almost double our revenues to nearly $1.5 billion on a pro forma basis. We expect to generate double-digit adjusted EPS accretion on a run rate basis and to continue compounding adjusted 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.

交易完成後，預計我們的收入將立即幾乎翻倍，達到近 15 億美元。我們預計在運行率的基礎上產生兩位數的調整後每股收益增長，並透過我們強大的自由能實現的營收成長、持續的協同效應捕獲和顯著去槓桿化的結合，隨著時間的推移，繼續以十幾歲的複合增長率實現調整後每股收益的複合增長。

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 in advance our strategic priorities and drive long-term value creation.

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，加速推進我們的策略重點並推動長期價值創造。

Turning to slide 7 in an update on our AI efforts. We have been early adopters of integrating responsible generative AI into our business, and we are continuing to leverage AI to deliver value to our customers. One way we are doing this is through the expanded use of our proprietary SmartHub technology and Verified! database.

請參閱投影片 7，以了解我們人工智慧工作的最新情況。我們一直是將負責任的生成式人工智慧融入我們業務的早期採用者，並且我們將繼續利用人工智慧為我們的客戶創造價值。我們實現這一目標的方法之一是擴大使用我們專有的 SmartHub 技術和 Verified！資料庫.

As a reminder, SmartHub is our AI-driven intelligent router that sits on top of our large Verified! database, which as of the end of 2023 is made up of nearly 110 million education and work history records, up from 36 million in 2021. SmartHub enables us to quickly search across multiple data sources to determine the optimal verification source based on speed, data quality, and cost effectiveness.

提醒一下，SmartHub 是我們的人工智慧驅動的智慧路由器，位於我們大型 Verified! 之上。截至 2023 年底，該資料庫由近 1.1 億筆教育和工作歷史記錄組成，高於 2021 年的 3,600 萬筆。SmartHub 讓我們能夠快速搜尋多個資料來源，根據速度、資料品質和成本效益確定最佳驗證來源。

By optimizing verification sources, we have been able to provide our customers with alternative options and decrease the third-party costs they incur. We are currently diverting up to 60% of verifications away from the most expensive third-party sources. Our customers love SmartHub because in many cases, it generates results quickly and helps them save money.

透過優化驗證來源，我們能夠為客戶提供替代選擇並降低他們產生的第三方成本。目前，我們正在將多達 60% 的驗證工作從最昂貴的第三方來源轉移出去。我們的客戶喜歡 SmartHub，因為在許多情況下，它可以快速產生結果並幫助他們節省金錢。

Additionally, we are continuing to expand our next-gen Profile Advantage platform in the US, rolling it out to new customers each week. This API-first technology interface is used by applicants through either a computer, tablet, or mobile device. With its embedded AI and machine learning, Profile Advantage drives significant time savings for both applicants and customers and enables fast time to hire. Our technology also complies with web content accessibility guidelines, and our user experience is receiving very favorable reviews.

此外，我們將繼續在美國擴展下一代 Profile Advantage 平台，每周向新客戶推出。申請人可以透過電腦、平板電腦或行動裝置使用此 API 優先的技術介面。憑藉其嵌入式人工智慧和機器學習，Profile Advantage 可以為申請人和客戶節省大量時間，並實現快速招聘。我們的技術也符合網路內容可訪問性指南，並且我們的用戶體驗受到了非常好評。

We are also continuing to see success in utilizing AI for customer and applicant support with our Click. Chat. Call initiative. This has brought increased speed and accuracy to our customer care program, improving overall customer satisfaction. It has also allowed for continued headcount leverage in our call center after having achieved an additional headcount reduction of approximately 20%. Overall, we are continuing to make advancements in our use of AI and are rolling out multiple new AI pilots within the organization to improve our processes and support our employees as they conduct business.

我們也繼續看到我們的 Click 在利用人工智慧為客戶和申請人提供支援方面取得了成功。聊天。呼籲倡議。這提高了我們客戶服務計劃的速度和準確性，並提高了整體客戶滿意度。在額外削減約 20% 的員工人數後，我們的呼叫中心還可以繼續發揮員工槓桿作用。總體而言，我們將繼續在人工智慧的使用方面取得進展，並在組織內推出多個新的人工智慧試點，以改善我們的流程並在員工開展業務時為他們提供支援。

Before I turn the call over to David, as you saw in our press release this morning, we announced that David has decided to retire later this year. On behalf of the entire Board of Directors, I want to express our sincere gratitude for David's many contributions to First Advantage over the past eight-plus years.

正如您在今天早上的新聞稿中看到的那樣，在我將電話轉給大衛之前，我們宣布大衛決定在今年晚些時候退休。我謹代表整個董事會，對 David 在過去八年多的時間裡為首優諮詢做出的眾多貢獻表示誠摯的謝意。

He has been a critical member of our team and we have substantially grown the business, executed our IPO and M&A strategies, and most recently announced our acquisition of Sterling. David has been an outstanding leader and an exceptional colleague, and we all wish him well in his retirement.

他一直是我們團隊的重要成員，我們大幅發展了業務，執行了 IPO 和併購策略，最近也宣布收購 Sterling。大衛是一位傑出的領導者和傑出的同事，我們都祝他退休後一切順利。

Part of David's legacy is having created a high-performing finance team inside our organization. Accordingly, we're fortunate to announce that David will be succeeded by our Chief Accounting Officer, Steven Marks. Steven has been with First Advantage for over eight years. He has tremendous experience; he knows the company well, and he has worked closely with David during that period.

大衛的部分遺產是在我們的組織內創造了一支高績效的財務團隊。因此，我們很幸運地宣布，大衛將由我們的首席會計官史蒂文·馬克斯接任。Steven 在首優諮詢工作了八年多。他擁有豐富的經驗；他對公司很了解，並且在那段時期他與 David 密切合作。

David and Steven will continue to work together to ensure a smooth transition through the beginning of December. But it's not time for us to say goodbye to David just yet. David will continue to lead our finance function for the next several months and of course, he is here today to discuss our performance in the quarter.

David 和 Steven 將繼續共同努力，確保 12 月初順利過渡。但現在還不是我們告別大衛的時候。大衛將在接下來的幾個月繼續領導我們的財務部門，當然，他今天在這裡討論我們本季的業績。

And with that, I will now turn the call over to David.

現在，我將把電話轉給大衛。

Thank you, Scott and good morning, everyone. As Scott discussed, after a 45-year career in accounting and finance and given the timing of the pending Sterling acquisition, I have decided to retire later this year. It has been a privilege to have had the opportunity to work with our outstanding Board of Directors, the excellent professionals at Silver Lake, and to have been a part of the First Advantage team.

謝謝你，斯科特，大家早安。正如 Scott 所討論的，在從事了 45 年的會計和金融職業生涯之後，考慮到即將進行的 Sterling 收購的時機，我決定在今年晚些時候退休。我很榮幸有機會與我們傑出的董事會、銀湖的優秀專業人士一起工作，並成為首優諮詢團隊的一員。

Scott has developed a great culture and a tremendous team and together, we have built an outstanding company. I am very proud of what we have accomplished, but there is still a lot of exciting work yet to be done.

斯科特發展了一個偉大的文化和一支優秀的團隊，我們一起建立了一家傑出的公司。我對我們所取得的成就感到非常自豪，但仍有許多令人興奮的工作有待完成。

I hired Steven in 2016, and he and I have worked together very closely over the past eight years. He has always demonstrated strong leadership skills and excellent business judgment. Steven has been an essential partner in executing our strategy and building the exceptional finance team we have today. I have no doubt that he will do an excellent job as Chief Financial Officer of First Advantage and the combined companies moving forward.

我於 2016 年聘請了史蒂文，在過去的八年裡，我和他合作得非常密切。他始終表現出強大的領導能力和出色的商業判斷力。史蒂文一直是執行我們策略和建立我們今天擁有的卓越財務團隊的重要合作夥伴。我毫不懷疑，作為 First Advantage 的首席財務官，他將會出色地完成工作，並推動合併後的公司向前發展。

Now back to business. Turning to our second-quarter results on slide 9. In line with our previously communicated expectations, our results for the second quarter improved sequentially over our first quarter results. Our second-quarter revenues were $184.5 million, flat compared to the prior year and $15.1 million greater than in Q1. Currency had nearly no impact on results. For the quarter, Infinite ID contributed approximately $3.3 million.

現在回到正題。轉向幻燈片 9 上的第二季業績。根據我們先前傳達的預期，我們第二季的業績比第一季的業績連續改善。我們第二季的營收為 1.845 億美元，與去年同期持平，比第一季增加 1,510 萬美元。貨幣對結果幾乎沒有影響。本季度，Infinite ID 貢獻了約 330 萬美元。

In our Americas segment, revenues of $162.4 million or 87% of consolidated revenues were flat to the prior year. Similarly, our international segment revenues were also flat compared to the prior year at $24.2 million, or 13% of consolidated revenues. We believe that our international operations have now stabilized, with India and APAC producing consistent, sequential base revenue volumes.

在美洲部門，營收為 1.624 億美元，佔合併收入的 87%，與前一年持平。同樣，我們的國際部門收入也與去年持平，為 2,420 萬美元，佔合併收入的 13%。我們相信，我們的國際業務現已穩定，印度和亞太地區產生了持續、連續的基本收入量。

For the total company, adjusted EBITDA was $55.8 million, also flat compared to the prior year. Our adjusted EBITDA margin was 30.2%, a 270-basis-point improvement over Q1. Our adjusted effective tax rate was 24.6%.

就整個公司而言，調整後的 EBITDA 為 5,580 萬美元，與去年持平。我們調整後的 EBITDA 利潤率為 30.2%，比第一季提高了 270 個基點。我們調整後的有效稅率為 24.6%。

Adjusted net income was $30.8 million for the quarter. Adjusted diluted earnings per share was $0.21. This includes an approximately $0.02 negative impact from our 2023 one-time special dividend, share repurchases and expired interest rate swaps. When taking these into account, adjusted diluted earnings per share would have also been nearly flat on a year-over-year basis.

該季度調整後淨利潤為 3,080 萬美元。調整後攤薄每股收益為 0.21 美元。這包括我們的 2023 年一次性特別股息、股票回購和到期利率掉期帶來的約 0.02 美元的負面影響。考慮到這些因素，調整後的稀釋每股盈餘也將比去年同期幾乎持平。

On slide 10, 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. Base was still negative in Q2, but it did improve by 400 basis points from Q1.

在投影片10 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在很大程度上與我們的成長演算法一致，並表明我們正在管理和交付我們可以控制的內容，變化是由底座驅動。第二季基數仍為負值，但較第一季確實改善了 400 個基點。

Revenues from upsell and cross-sell partially offset our base decline for the quarter and contributed $8.6 million or 4.7% to our performance in Q2. New customer logos contributed an additional $7.8 million or 4.2% in Q2. Base declined by $13 million or 7% in Q2, and attrition was 4%.

追加銷售和交叉銷售的收入部分抵消了本季基本下降的影響，為我們第二季度的業績貢獻了 860 萬美元，即 4.7%。第二季新客戶標誌額外貢獻了 780 萬美元，即 4.2%。第二季基數下降了 1,300 萬美元，或 7%，流失率為 4%。

Turning now to our balance sheet and capital allocation summary on slide 11. In the second quarter, we generated strong operating cash flows of $40.7 million after adjusting for the $8.7 million of cash costs paid directly related to the Sterling acquisition. During the quarter, we used $7.4 million for purchases of property and equipment and capitalized software development costs. As we mentioned previously, given the pending Sterling acquisition, we have suspended share repurchases as we continue to build cash.

現在轉向投影片 11 上的資產負債表和資本配置摘要。在調整與 Sterling 收購直接相關的 870 萬美元現金成本後，我們第二季產生了 4,070 萬美元的強勁營運現金流。本季度，我們使用 740 萬美元購買財產和設備以及資本化軟體開發成本。正如我們之前提到的，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。

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 our balance sheet cash expected at close. Additionally, we expect our net debt to adjusted EBITDA leverage at close to be within the range of 4.2 to 4.4 times.

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，或考慮到我們預計結束時的資產負債表現金，淨債務約為 20 億美元。此外，我們預計調整後的淨債務 EBITDA 槓桿率將接近 4.2 至 4.4 倍。

However, there are still a number of variables that could impact us, including timing, cash generation, synergy estimates and any incremental actions taken before close to further improve margins. Additionally, as part of our financing agreement, we will upsize our revolver from $100 million to $250 million and extend the maturity date to 5 years after the closing date of the transaction, which will provide additional liquidity for our business.

然而，仍有許多變數可能影響我們，包括時機、現金產生、協同效應估計以及在接近進一步提高利潤率之前採取的任何增量行動。此外，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 5 年，這將為我們的業務提供額外的流動性。

We remain committed to our long-term net leverage target of 2 times to 3 times and have a proven track record of managing leverage. Over the four years since Silver Lake invested in us, we delevered from 6 times as a private company to less than 2 times prior to the announced Sterling acquisition. This is after repurchasing approximately $120 million in shares, paying a $218 million one-time special dividend, and completing our acquisitions. Our goal within 24 months of closing is to reduce net leverage toward approximately 3 times run rate adjusted EBITDA.

我們仍然致力於 2 倍至 3 倍的長期淨槓桿目標，並在管理槓桿方面擁有良好的記錄。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 倍降至在宣布收購 Sterling 之前的不到 2 倍。這是在回購約 1.2 億美元的股票、支付 2.18 億美元的一次性特別股息並完成收購之後。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。

Our path to delever will be driven by high-margin top-line growth of the combined businesses, productivity efficiencies, cost synergies, and continued strong cash flow generation. Interest rate cuts would help us accomplish this goal even sooner.

我們的去槓桿化之路將受到合併後業務的高利潤頂線成長、生產力效率、成本協同效應以及持續強勁的現金流產生的推動。降息將幫助我們更快實現這一目標。

Now moving to slide 12. Today, we are reaffirming our 2024 annual guidance. Our second-quarter actual results position us well to achieve the midpoint of our full-year guidance. We still expect sequential quarter-over-quarter growth for revenues, adjusted EBITDA and adjusted EBITDA margins similar to 2023.

現在轉到投影片 12。今天，我們重申 2024 年年度指引。我們第二季的實際業績使我們能夠很好地實現全年指導的中點。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。

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.

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 along with the continued execution of upsell/cross-sell and new logo growth to be consistent with historical trends and long-term targets. We expect to maintain adjusted EBITDA margins approaching 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.

我們預期客戶保留率以及追加銷售/交叉銷售的持續執行和新商標的成長將與歷史趨勢和長期目標保持一致。我們預計調整後 EBITDA 利潤率將保持在接近 31% 的中點，調整後 EBITDA 保持在 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 capabilities of approximately $7 million.

提醒一下，我們調整後的 EBITDA 指導包括員工年薪的增加、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。它還包括對產品、技術和銷售能力的新投資約 700 萬美元。

Looking at the quarterly phasing, we expect sequential top-line improvement as we move through the remainder of 2024. We expect third-quarter revenues to reflect a modest positive growth with that trend continuing sequentially into Q4. The midpoint of our guidance range also assumes continued macro-driven base declines, though improving sequentially through the year and getting to essentially flat plus or minus in Q4. We continue to expect quarterly EBITDA -- adjusted EBITDA margins of at least 30% in the second half of the year with upside potential.

從季度階段來看，我們預計隨著 2024 年剩餘時間的推移，營收將持續改善。我們預計第三季營收將呈現溫和的正成長，而這趨勢將持續到第四季。我們的指導範圍的中點也假設宏觀驅動的基數持續下降，儘管全年有所改善，並在第四季度基本持平正負。我們繼續預計下半年季度 EBITDA 調整後 EBITDA 利潤率至少為 30%，且具有上升潛力。

Before I hand the call back to Scott, I would like to close by saying that it has been an honor to serve as the Chief Financial Officer of First Advantage, and I would like to thank everyone for their support and confidence over the past eight years. In the coming months, Steven and I will collaborate even more closely to ensure a smooth transition and to continue to deliver the future results that we articulated today.

在我將電話轉回給 Scott 之前，我想最後說，我很榮幸擔任首優諮詢的財務官，並且感謝大家在過去八年中的支持和信任。在接下來的幾個月中，史蒂文和我將更加密切地合作，以確保平穩過渡，並繼續實現我們今天所闡述的未來成果。

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 are delivering solid results and continuing to execute on our strategic initiatives. Most notably, we are progressing toward closing on the Sterling acquisition expected in the fourth quarter, while also leading with innovation and driving productivity through our AI solutions. We remain focused on delivering on our value creation playbook and shaping the future of First Advantage to better serve our customers.

謝謝你，大衛。我們正在取得紮實的成果，並繼續執行我們的策略性舉措。最值得注意的是，我們正在努力完成預期在第四季度完成的 Sterling 收購，同時也透過我們的人工智慧解決方案引領創新並提高生產力。我們仍然專注於實現我們的價值創造手冊並塑造首優諮詢的未來，以更好地為我們的客戶服務。

With that, we will open the line for questions.

至此，我們將開通提問專線。

Thank you. We will now begin the question-and-answer session. (Operator Instructions)

謝謝。我們現在開始問答環節。（操作員說明）

Shlomo Rosenbaum, Stifel.

什洛莫·羅森鮑姆，斯蒂菲爾。

Hi. Thank you very much. I wanted to just ask you a little bit about the macroenvironment and what you're hearing from your customers in terms of hiring plans. Just the commentary you had, Scott, about some stabilization in the context of what seems to be a little bit higher unemployment and a little bit lower -- higher levels of -- maybe lower levels of quits that we're seeing at least in the JOLTS data. So I just want to ask you what you're hearing from your clients really on the ground, and then I'll have a follow-up.

你好。非常感謝。我只想問您一些有關宏觀環境的資訊以及您從客戶那裡聽到的招聘計劃方面的情況。斯科特，您剛才的評論是，在失業率似乎略高一點、失業率略低一點（更高水平）的背景下，可能會出現一些穩定，至少在我們所看到的情況下，顛簸數據。所以我只想問你從客戶那裡聽到的實際情況，然後我會進行跟進。

Yes, obviously the macro is something we're focusing on and trying to see where things would be going on this. But Shlomo, I think what we're hearing from customers is really unchanged for the last couple of quarters. We are still hearing that there's a strong demand for their products and services, but they are really not hiring ahead of the curve. It's more of just-in-time hiring and doing backfilling.

是的，顯然宏觀是我們關注的焦點，並試圖了解事情的發展方向。但是什洛莫，我認為我們從客戶那裡聽到的情況在過去幾季中確實沒有變化。我們仍然聽說人們對他們的產品和服務有強勁的需求，但他們實際上並沒有提前招聘。這更多的是及時招募和回填。

So I think what we're hearing from them is cautious optimism, and that's fine with us. We really like the fact that we're seeing a little bit of normalization and stabilization in the space. We're not getting those kind of wild swings in base that we got during the pandemic years.

所以我認為我們從他們那裡聽到的是謹慎的樂觀態度，這對我們來說很好。我們真的很高興看到該領域的一些正常化和穩定。我們不會像大流行期間那樣出現基礎的劇烈波動。

So this is actually a little easier for us to manage our business. Because again, I think one other thing to remember is, we really focused primarily on enterprise customers, and enterprise customers are fairly resilient, especially in the verticals that we've got.

所以這實際上讓我們更容易管理我們的業務。因為我認為另一件需要記住的事情是，我們實際上主要關注企業客戶，而企業客戶具有相當的彈性，尤其是在我們擁有的垂直領域。

And then just as a follow-up, can you talk a little bit about the breakdown maybe of some of the movements between verticals? In other words, which ones are doing better, which ones are doing, maybe not so well. I know there was commentary that they were more similar. And maybe just talk a little bit about that. And last quarter you had -- you talked a little about staffing, I think went positive, which was a positive side. I wanted to know if that had continued to be positive.

作為後續行動，您能談談垂直領域之間的一些運動的細分嗎？換句話說，哪些做得更好，哪些做得不好。我知道有人評論說他們更相似。也許只是談談這一點。上個季度，您談到了一些關於人員配置的問題，我認為這是積極的，這是積極的一面。我想知道這種情況是否仍然是積極的。

Yeah, this was really interesting, because for the first time in a long time, what we saw from a vertical perspective was what we're seeing is the return to normalization and stabilization. So in Q2, no single vertical's revenue volumes were up or down beyond single digits. So we feel this narrowing of the gaps between the verticals really reflects an overall normalization of the business, which again, we welcome.

是的，這真的很有趣，因為很長一段時間以來，我們第一次從垂直角度看到的是回歸正常化和穩定。因此，在第二季度，沒有任何一個垂直行業的收入增幅或下降超過個位數。因此，我們認為垂直行業之間差距的縮小確實反映了業務的整體正常化，我們再次對此表示歡迎。

So for us specifically, just to give you a sense, transportation is our largest vertical at 24% of our revenue, and it had a good quarter; transportation was up 9%. I think on the bottom of the spectrum was banking and financial services, which were down 7%. So everything else fell in between that.

具體來說，對我們來說，交通運輸是我們最大的垂直產業，占我們收入的 24%，而且這個季度表現良好；交通運輸增加了9%。我認為銀行和金融服務處於最底部，下降了 7%。所以其他一切都介於兩者之間。

So you've got a lot of minus 2, minus 3 or plus 2 or flat or whatever it might be. So a lot more narrowing of the vertical. Staffing was still positive for us in the quarter. So we did have -- that was on the positive side. But we love the fact that this is all sort of narrowing.

所以你有很多負 2、負 3 或正 2 或平或任何可能的值。所以垂直方向更加狹窄。本季的人員配置對我們來說仍然是正面的。所以我們確實做到了——這是積極的一面。但我們喜歡這樣一個事實：這一切都在縮小。

I think what's probably the most reflective space that maps to the JOLTS data is what we're seeing in the SMB space. Again, we're an enterprise-focused company. So SMB for us is not a large business. It's about 4% of our revenue. But I think SMB has always been more volatile to the macro swings, either positive or negative, and our SMB business was down 25%. So it's not really a vertical.

我認為映射到 JOLTS 資料的最具反射性的空間可能是我們在 SMB 空間中看到的。再次強調，我們是一家以企業為中心的公司。所以中小企業對我們來說並不是一個大生意。這大約占我們收入的 4%。但我認為中小企業一直更容易受到宏觀波動的影響，無論是積極還是消極，我們的中小企業業務下降了 25%。所以它並不是真正的垂直。

But I think that's where we're seeing the business reflecting what's going on with JOLTS data. Again, it's not a huge impact to us because as we've said over and over again, not only are we enterprise-focused, but we're also more focused on the hourly worker. And if you look at our vertical mix of transportation and retail, and whatever it might be, 71% of our revenue falls into that space, and there's still a strong demand for that type of worker.

但我認為這就是我們看到的業務反映了 JOLTS 數據的情況。再說一遍，這對我們來說影響並不大，因為正如我們一再說過的，我們不僅以企業為中心，而且我們也更關注小時工。如果你看看我們的運輸和零售垂直組合，無論它是什麼，我們 71% 的收入都屬於這個領域，而且對這類工人的需求仍然很強勁。

Andrew Steinerman, JPMorgan.

安德魯‧史坦納曼，摩根大通。

Hi, Scott, you might think this one a little premature, but I'm going to ask about that teens EPS growth that you highlighted again today. I was wondering when you think about that over time comment post-merger, how many years do you feel like the company combined could grow teens EPS, and is the base year going to be '25?

嗨，斯科特，您可能認為這個問題有點為時過早，但我想問您今天再次強調的青少年每股收益增長。我想知道，當您考慮合併後隨著時間的推移發表的評論時，您認為公司合併後的每股收益可以增長多少年，基準年是否為“25”？

David, I'll throw that to you.

大衛，我把它丟給你。

So Andrew, based on all of our modeling, I think what you've seen and the results that we just released is that we've expanded the range of synergies that we think we can go get. We had previously said we thought we could get $50 million-plus. We, now, based on additional integration work that we've done believe that we could be $50 million to $70 million. So therefore, we think on a run rate adjusted basis, we can go get that right away and that can continue as we continue to delever and as interest rates go down.

因此，安德魯，根據我們所有的模型，我認為你所看到的以及我們剛剛發布的結果是，我們已經擴大了我們認為可以獲得的協同效應的範圍。我們之前曾表示，我們認為可以獲得 5,000 萬美元以上的資金。現在，根據我們已經完成的額外整合工作，我們相信我們可以達到 5,000 萬至 7,000 萬美元。因此，我們認為，在運行利率調整的基礎上，我們可以立即實現這一點，並且隨著我們繼續去槓桿化和利率下降，這種情況可以繼續下去。

Did you want to give a time frame of how many years you think the teens growth could be sustained for?

您是否想給一個時間框架，說明您認為青少年的成長可以持續多少年？

At least a couple of years, maybe longer. It's a little bit early and premature to be commenting on the future like that.

至少幾年，也許更長。像這樣評論未來還為時過早。

Thank you.

謝謝。

Andrew, just to clarify, I mean, until we get DOJ approval, we're just really doing a lot of planning. So we haven't really been able to get under the cover -- under the hood and look at these things in more detail to give you a more detailed answer on exact years and that kind of stuff. But we're pretty comfortable with these ballpark estimates that we're giving right now.

安德魯，我想澄清一下，我的意思是，在我們獲得司法部批准之前，我們只是做了很多計劃。因此，我們還沒有真正能夠深入了解這些內容，更詳細地了解這些內容，以便為您提供有關確切年份和此類內容的更詳細答案。但我們對目前給出的這些大致估計感到非常滿意。

Andrew Nicholas, William Blair.

安德魯尼古拉斯、威廉布萊爾。

Hi, good morning. Thanks for taking my questions. And congrats to David and Steven on the news from today. I wanted to ask on international growth. I think it was flat overall year over year. Last quarter, you talked about stabilization there. Scott, you gave a bunch of great color on the vertical level. I'm just wondering if you could give similar commentary in what you're seeing in APAC and maybe in your IT services business in India.

嗨，早安。感謝您回答我的問題。祝賀大衛和史蒂文今天的新聞。我想問有關國際成長的問題。我認為總體上與去年同期持平。上個季度，您談到了那裡的穩定性。斯科特，你在垂直方向上提供了很多很棒的色彩。我只是想知道您是否可以對您在亞太地區以及印度的 IT 服務業務中看到的情況發表類似的評論。

Yeah, we were so happy to look at this data because, as you know, international has been a drag on the business for literally two years. And so now, we had been sort of signaling this, as you know. And so again, think -- when we think of our international business, it's three buckets. It's EMEA, it's India, and its APAC. So we lumped Canada and LATAM in with North America -- I mean, the US, to create the Americas business.

是的，我們很高興看到這些數據，因為如您所知，國際業務實際上已經拖累了我們兩年的業務。所以現在，正如你所知，我們一直在發出這樣的訊號。再次想一想，當我們想到我們的國際業務時，它分為三個部分。這是歐洲、中東和非洲地區、印度和亞太地區。因此，我們將加拿大和拉丁美洲與北美（我的意思是美國）歸為一類，以創建美洲業務。

So if you look at those three regional businesses in our international sector, India and APAC had been really the big drags over the last two years, while EMEA actually was sort of chugging along fairly nicely. So EMEA continues to do that. And it was always really just what's going on in India and APAC.

因此，如果你看看我們國際部門的這三個區域業務，印度和亞太地區在過去兩年中確實是最大的拖累，而歐洲、中東和非洲實際上進展得相當不錯。因此，歐洲、中東和非洲地區將繼續這樣做。這始終是印度和亞太地區正在發生的事情。

And we had signaled to you guys in Q4 of 2023 that we thought India had bottomed out and would start growing and that's exactly what we saw in Q1 of this year. And in Q1 of this year, we kind of thought APAC had bottomed out and would start growing.

我們已在 2023 年第四季向大家發出訊號，我們認為印度已經觸底並將開始成長，這正是我們在今年第一季看到的情況。今年第一季度，我們認為亞太地區已經觸底並將開始成長。

What I would say is this is probably the bottoming out for APAC, and we now expect APAC to start growing. Really, APAC is -- the drag on APAC particularly had been China, and China is what it is. But the rest of our APAC business is starting to show some green shoots of life, which is great.

我想說的是，這可能是亞太地區的觸底反彈，我們現在預計亞太地區將開始成長。事實上，亞太地區的拖累尤其是中國，而中國就是如此。但我們亞太地區的其他業務正開始顯現出一些生機，這很棒。

In the India business, we are seeing IT services and BPO customers starting to slowly hire again. Again, I think cautious optimism is what we're hearing out of that. But also remember that our comps are much better. So we're not talking about dramatic changes in the business, we are seeing some positive changes, but we're also now comping against much easier numbers.

在印度業務中，我們看到 IT 服務和 BPO 客戶開始再次緩慢招募。同樣，我認為我們從中聽到的是謹慎樂觀的情緒。但也要記住，我們的比賽要好得多。因此，我們並不是在談論業務的巨大變化，我們看到了一些積極的變化，但我們現在也正在與更簡單的數字進行比較。

Perfect. Thank you. And then switching gears a little bit for my follow-up. The 50% number on employment verification that you cited maybe surprised me a bit in terms of how big that number was. I'm curious if that's up versus maybe this time last year or at any point in '23.

完美的。謝謝。然後為我的後續行動稍微切換一下。你提到的就業核實率為 50% 的數字可能讓我有點驚訝，因為這個數字有多大。我很好奇這個數字與去年這個時候或 23 年的任何時候相比是否有所上升。

And then also, is there any way to quantify or maybe even qualitatively speak to how much of those employment verifications are hitting Verified! versus being directed to other providers? Just trying to get a sense for how much would be a direct margin or even profit benefit to you if it's going to Verified!. Thank you.

還有，有沒有什麼方法可以量化，甚至定性地說明這些就業驗證中有多少是經過驗證的！與被引導至其他提供者？只是想了解一下，如果要經過驗證，您將獲得多少直接利潤，甚至利潤收益！ 。謝謝。

Yeah. And so the actual number is 60% of verifications being diverted. This is the first time we've given a number like this. So I know you're looking for trends and baselines. And we will continue to do this sort of going forward as we get more data on this. But I just think without getting into specifics of numbers, which we're not really ready to do right now and will consider doing going forward, we're just basically seeing a much larger adoption of the concept of SmartHub.

是的。因此，實際數量是 60% 的驗證被轉移。這是我們第一次給出這樣的數字。所以我知道您正在尋找趨勢和基線。隨著我們獲得更多相關數據，我們將繼續進行此類工作。但我只是認為，在不討論具體數字的情況下，我們現在還沒有真正準備好這樣做，並且會考慮繼續這樣做，我們基本上只是看到 SmartHub 概念得到了更廣泛的採用。

Clients really like it, because as we've said multiple times, we believe we’re the only background screener out there that's offering these type of alternatives, and clients are looking for alternatives. One, they want faster turnaround times; but two, it's really driven by cost savings.

客戶真的很喜歡它，因為正如我們多次說過的那樣，我們相信我們是唯一提供此類替代方案的背景篩選機構，而客戶正在尋找替代方案。第一，他們想要更快的周轉時間；但第二，它實際上是由成本節約驅動的。

Verifications in general have become a heavy drag on the budgets of our customers, and it really is getting to an untenable position in terms of cost. And so it's really more, I'd say, of our ability to sell this and to promote it and market it. So the uptake has definitely increased.

總的來說，驗證已經嚴重拖累了我們客戶的預算，而且在成本方面確實已經到了難以維持的地步。所以我想說，這實際上更多的是我們銷售、推廣和行銷它的能力。因此，採用率肯定有所增加。

And the technology gets better and better every quarter. Remember that this is probably our best piece of technology in the company. It's machine learning, and that means it gets better with every verification that it does. It's all the AI that's built into it. It just gets smarter and more sophisticated, and that enables us to keep pointing it in different directions. And again, as we add more and more data records to our database, we expect that number to improve.

而且技術每季都變得越來越好。請記住，這可能是我們公司最好的技術。這是機器學習，這意味著它會隨著每一次驗證而變得更好。這都是內建的人工智慧。它變得更加聰明和複雜，這使我們能夠不斷地將其指向不同的方向。同樣，隨著我們向資料庫添加越來越多的數據記錄，我們預計該數字會有所改善。

(Operator Instructions)

（操作員說明）

Heather Balsky, Bank of America.

希瑟‧巴爾斯基，美國銀行。

Hi. Thank you. I was curious, it was interesting to see you expand the range of synergies and then also you made a comment during the Q&A that you still haven't really gotten out of -- I guess, under the hood as you wait for approvals. I'm just curious, can you talk a little bit about the work you have done to -- that has enabled you to expand the range and how much you've learned while you're waiting for the process to get approved? Thanks.

你好。謝謝。我很好奇，很有趣的是看到你擴大了協同作用的範圍，然後你還在問答中發表了評論，但你仍然沒有真正擺脫——我想，在你等待批准的時候，在幕後。我只是很好奇，您能談談您所做的工作嗎？謝謝。

Yeah. So we've done an incredible amount of work. So let me sort of paint a bigger picture for your first, Heather, and then I'll get more specifically to your question. So one, we're getting great advice from Silver Lake who has done hundreds and hundreds of M&A deals and from other third-party consultants as to how to structure things, how to plan things. And what we've done is we've created dedicated teams that consist of both First Advantage and Sterling leaders, and those teams are literally meeting daily to go through data and do planning.

是的。所以我們做了大量的工作。因此，讓我先為您描繪一個更大的圖景，希瑟，然後我將更具體地回答您的問題。因此，我們從做過數百筆併購交易的 Silver Lake 以及其他第三方顧問那裡得到了關於如何建立事物、如何規劃事物的很好的建議。我們所做的就是創建了由 First Advantage 和 Sterling 領導者組成的專門團隊，這些團隊實際上每天都會開會，檢查數據並製定計劃。

We're not legally allowed to do any integration work, and there are certain pieces of data we're not able to see at this point. But for what we've done from a planning standpoint and conversation standpoint, we're getting a much better sense of how to put these two businesses together, because basically, they're equal sized companies. And through those conversations and sort of mapping out what we would do in the first 100 days, in the first six months, in the first year, in the first 18 months, all that stuff is being planned. And as we map those things out, we're getting a better sense of timing of synergies as well.

法律不允許我們進行任何整合工作，目前我們無法看到某些數據。但就我們從規劃的角度和對話的角度所做的工作而言，我們對如何將這兩家企業整合在一起有了更好的認識，因為基本上，它們是同等規模的公司。透過這些對話並規劃出我們在前 100 天、前 6 個月、第一年、前 18 個月要做什麼，所有這些事情都在計劃之中。當我們規劃出這些事情時，我們也能更好地掌握綜效的時機。

And so while we don't have specific numbers, we've got a pretty good ballpark numbers of like where we can move things either sooner or later. And so the process has been treated like its own work stream. And we've taken two really senior leaders in First Advantage, and this is their full-time job. And Sterling has done the same on their side. And we've got steering committees and functional teams meeting daily and in-person sessions.

因此，雖然我們沒有具體的數字，但我們有一個相當不錯的大概數字，例如我們可以遲早移動東西。因此，該流程被視為其自己的工作流程。我們在 First Advantage 聘請了兩位真正的高階領導，這是他們的全職工作。斯特林也在他們這邊做了同樣的事情。我們有指導委員會和職能團隊每天舉行會議和麵對面會議。

So a lot of stuff is going on, and that's why we -- it's given us confidence that we could raise that synergy number up not only from a total dollar value, but as David mentioned, even probably moving some of it sooner versus later.

所以很多事情正在發生，這就是為什麼我們——它給了我們信心，我們不僅可以從總美元價值中提高協同效應數字，而且正如大衛提到的，甚至可能提前而不是推遲其中一些。

Kyle Peterson.

凱爾彼得森。

Okay. Thanks, guys. Good morning. I want to start on the upsell/cross-sell, that continues to remain pretty strong here. Just want to see if you guys could provide any more color on what is continuing to drive better package density here.

好的。謝謝，夥計們。早安.我想從追加銷售/交叉銷售開始，這種銷售在這裡仍然相當強勁。只是想看看你們是否可以提供更多關於如何繼續推動更好的封裝密度的資訊。

Yeah. I mean, obviously, as we just announced two really large deals, one in the quarter on the upsell/cross-sell side. And also new logo continues to chug along. We're really happy, as we said, with controlling the things that are controllable. And I'll get to your -- I'll get to the answer to your question in a second.

是的。我的意思是，顯然，我們剛剛宣布了兩項非常大的交易，其中一項是在本季度的追加銷售/交叉銷售方面。新標誌也持續流行。正如我們所說，我們真的很高興能夠控制那些可以控制的事情。我會立即回答你的問題。

But I think one other thing that we really like is the consistency of those things. So if you look back, even going back to 2021 and mapping what we've done with upsell/cross-sell, new logo, and attrition, they've all been just super consistent along those lines. Upsell/cross-sell, 4% to 6%, almost every quarter; new logo, 4% to 5% almost every quarter; retention, 96%, 97%, almost every quarter. It's just sort of the base that's obviously fluctuated.

但我認為我們真正喜歡的另一件事是這些事情的一致性。因此，如果你回顧過去，甚至回到 2021 年並繪製我們在追加銷售/交叉銷售、新徽標和人員流失方面所做的工作，就會發現它們在這些方面都非常一致。追加銷售/交叉銷售，4% 至 6%，幾乎每季；新標誌，幾乎每季4%到5%；幾乎每季的保留率分別為 96%、97%。這只是明顯波動的基礎。

So what's driving -- so again, really happy with the consistency and how we're able to control the controllables. And I think -- and we've mentioned this before -- what's really driving a lot of upsell/cross-sell for us is just this whole, what I'd call, additional awareness of risk management. Our customers are really in tune with what's going on in the world and sort of how crazy the world is and how they need to protect their business, their employees, and their facilities. And they just are continuing to ask us for more and more protection and services. And that's really what's driven upsell and cross-sell.

那麼驅動因素是什麼——再說一次，我們對一致性以及我們如何控制可控因素感到非常滿意。我認為——我們之前已經提到過這一點——真正推動我們進行大量追加銷售/交叉銷售的就是我所說的整體風險管理意識。我們的客戶非常了解世界上正在發生的事情，知道世界有多瘋狂，也了解他們需要如何保護自己的業務、員工和設施。他們只是繼續要求我們提供越來越多的保護和服務。這確實是追加銷售和交叉銷售的動力。

Yes, there's always a new product launch that helps drive that and other things. But in general, it's just this pivot toward wanting more risk management offerings. And companies are willing to spend money to protect the brand, protect shareholders, protect their business, protect their employees, protect their facilities. And that's just been a great tailwind for us for now the last couple of years.

是的，總是會有新產品的發布來幫助推動這一點和其他事情。但總的來說，這只是轉向想要更多的風險管理產品。公司願意花錢來保護品牌、保護股東、保護他們的業務、保護他們的員工、保護他們的設施。在過去的幾年裡，這對我們來說是一個巨大的推動力。

That’s really helpful color. And I appreciate you guys calling out some of the transaction costs related to Sterling that you guys incurred this quarter. I guess, is there anything else notable or at least that you guys have visibility to in terms of transaction costs between now and deal close that you guys are able to disclose or estimate at this time?

這是非常有用的顏色。我感謝你們指出本季發生的一些與英鎊相關的交易成本。我想，還有什麼其他值得注意的事情，或者至少你們可以了解從現在到交易完成之間的交易成本，你們現在可以披露或估計嗎？

So Kyle, we continue to incur costs as we go through the DOJ HSR review. We're not going to share those numbers at this point in time, but it will be further professional fees associated with that until we get the transaction closed.

凱爾，我們在接受司法部 HSR 審查時會繼續產生費用。目前我們不會分享這些數字，但在我們完成交易之前，將收取與此相關的進一步專業費用。

Thank you. This does conclude the First Advantage second-quarter 2024 earnings conference call and webcast. Thank you for your participation at this time, you may disconnect your lines. And have a wonderful day.

謝謝。First Advantage 2024 年第二季財報電話會議及網路廣播到此結束。感謝您此時的參與，您可以斷開線路。祝你有美好的一天。