First Advantage Corp (FA) 2024 Q3 法說會逐字稿

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

大家好。我叫阿什利，今天我將擔任你們的會議操作員。歡迎您參加首優諮詢 2024 年第三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. (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。（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斯蒂芬妮·戈爾曼（Stephanie Gorman），您可以開始了。

Thank you, Ashley. Good morning, everyone, and welcome to First Advantage's third 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，阿什利。大家早安，歡迎參加首優諮詢 2024 年第三季財報電話會議。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 third 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 年第三季的 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; Steven Marks, our Chief Financial Officer; and David Gamsey, our outgoing Chief Financial Officer. After our prepared remarks, we will take your questions. I will now hand the call over to Scott.

我們的執行長 Scott Staples 也參加了今天的電話會議。史蒂文‧馬克斯，我們的財務長；以及即將離任的財務長 David Gamsey。在我們準備好發言後，我們將回答您的問題。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. This morning, I am pleased to provide you with an update on our business and our planned path forward with the addition of Sterling. We are thrilled to have closed our $2.2 billion acquisition of Sterling on October 31, what a tremendous opportunity for all of us.

謝謝斯蒂芬妮，大家早安。感謝您加入我們的通話。今天早上，我很高興向您介紹我們業務的最新情況以及我們在 Sterling 加入後計劃的前進方向。我們很高興在 10 月 31 日完成了對 Sterling 的 22 億美元收購，這對我們所有人來說都是一個巨大的機會。

Now nearly twice as large, we have over 10,000 highly skilled, motivated and excited employees. On an LTM basis, as of September 30, 2024, we have combined revenues of approximately $1.5 billion and adjusted EBITDA of approximately $407 million or $457 million to $477 million, including our targeted run rate synergies of $50 million to $70 million, which we expect to action within two years post-closing.

現在，我們的規模擴大了近兩倍，擁有超過 10,000 名技術精湛、積極主動且充滿熱情的員工。截至2024 年9 月30 日，以LTM 計算，我們的合併收入約為15 億美元，調整後EBITDA 約為4.07 億美元或4.57 億至4.77 億美元，其中包括我們預計的5000 萬至7000 萬美元的目標運行率綜效交割後兩年內採取行動。

I would like to thank our combined team for the great work they have done over the past several months to get us to this point. Since closing the acquisition, we have hit the ground running, focused on our products and customers while endeavoring to conduct a smooth integration, maintain customer continuity, action synergies and reduce net leverage.

我要感謝我們的聯合團隊在過去幾個月中所做的出色工作，讓我們走到了這一步。自收購完成以來，我們立即開始行動，專注於我們的產品和客戶，同時努力進行順利整合，保持客戶連續性、行動協同效應並降低淨槓桿。

We have also unveiled our new logo and branding for our unified company, which you will see in our presentation materials today. We were pleased to deliver another quarter of strong financial performance. And today, we are maintaining our full year 2024 First Advantage standalone guidance ranges and providing new combined company guidance. David and Steven will cover this in greater detail in the financial section.

我們還公佈了我們統一公司的新徽標和品牌，您將在今天的演示材料中看到。我們很高興又一個季度實現了強勁的財務業績。今天，我們維持 First Advantage 2024 年全年獨立指導範圍，並提供新的合併公司指導。大衛和史蒂文將在財務部分更詳細地介紹這一點。

Turning to slide 5. I'm excited to show the strong profile of our combined company and reiterate why Sterling is such an outstanding strategic fit and benchmarks First Advantage well among our technology-based info services peers.

轉到投影片 5。我很高興能夠展示我們合併後公司的強大形象，並重申為什麼 Sterling 具有如此出色的策略契合度，並且在我們基於技術的資訊服務同行中很好地對首優諮詢進行了基準測試。

Our combined capabilities position us as a leader offering differentiated technology platforms and a broad range of innovative solutions. With the Sterling acquisition completed, we have essentially doubled in size by most measures, including the size of our combined sales forces and customer success organizations.

我們的綜合能力使我們成為提供差異化技術平台和廣泛創新解決方案的領導者。隨著對 Sterling 的收購完成，我們的規模在大多數方面基本上都增加了一倍，包括我們的銷售團隊和客戶成功組織的合併規模。

Combined, we conduct over 200 million background screens annually for customers across more than 200 countries and territories, and we have a robust average retention rate of over 96%. We have been an early adopter of AI and utilized the strong tool throughout multiple areas of our organization. We believe that our large proprietary data sets and AI-driven intelligent routing allow us to reduce our reliance on third-party vendors and deliver cost-effective solutions to our customers. We expect that our now larger and more extensive network of automated and integrated third-party data providers will continue to enable us to address each customer's unique requirements with leading solutions.

我們每年為 200 多個國家和地區的客戶進行超過 2 億次背景篩選，平均保留率高達 96% 以上。我們是人工智慧的早期採用者，並在我們組織的多個領域中利用了這個強大的工具。我們相信，我們的大型專有資料集和人工智慧驅動的智慧路由使我們能夠減少對第三方供應商的依賴，並為客戶提供具有成本效益的解決方案。我們期望，我們現在更大、更廣泛的自動化和整合第三方資料提供者網路將繼續使我們能夠透過領先的解決方案滿足每個客戶的獨特需求。

With additional customers and capabilities from Sterling, we have increased the diversification of our verticals and geographies, reducing customer concentration and seasonality and increasing resilience. This helps to support our extremely diversified, focused vertical go-to-market strategy centered around enterprise clients and specific industries, all supported by exceptional technology.

憑藉 Sterling 的更多客戶和能力，我們增加了垂直行業和地理的多元化，減少了客戶集中度和季節性，並提高了彈性。這有助於支持我們以企業客戶和特定行業為中心的極其多元化、專注的垂直進入市場策略，所有這些策略都得到卓越技術的支持。

Going forward, with increased resources dedicated to our targeted verticals, we believe that we will be able to provide deeper and more comprehensive industry-level expertise to customers across the globe.

展望未來，隨著專用於目標垂直行業的資源不斷增加，我們相信我們將能夠為全球客戶提供更深入、更全面的行業級專業知識。

Leveraging our complementary footprints, we have expanded both our US and international presence and see tremendous opportunities to advance our growth outside the US in attractive geographies like EMEA, APAC, LatAm and India. Our enhanced reach and diversification set us up to deliver a stronger, more comprehensive value proposition to customers in a large, growing and highly fragmented $13 billion total addressable market.

憑藉我們互補的足跡，我們擴大了美國和國際業務，並看到了在歐洲、中東和非洲、亞太地區、拉丁美洲和印度等有吸引力的地區推動我們在美國以外發展的巨大機會。我們擴大的覆蓋範圍和多元化使我們能夠在規模達 130 億美元的龐大、不斷增長且高度分散的潛在市場中為客戶提供更強大、更全面的價值主張。

On top of this, with greater capacity for investment, we anticipate that the go-forward company will further accelerate innovation, focus on artificial intelligence and machine learning, robotic process automation and next-generation digital identification technologies, building on our already robust foundation. All of these factors enable First Advantage's position as a leading provider of critical high-technology, digitally enabled info services.

除此之外，隨著投資能力的增強，我們預計未來公司將在我們已經堅實的基礎上進一步加速創新，專注於人工智慧和機器學習、機器人流程自動化和下一代數位識別技術。所有這些因素都使 First Advantage 成為關鍵高科技、數位化資訊服務的領先提供者。

Turning to slide 6. Now that we are post close, our focus is on delivering the strategic and financial benefits we have been discussing with you since we announced the planned acquisition. We have begun executing our detailed integration plan focused on a seamless process for our customers and employees, actioning our synergy targets and deleveraging our balance sheet while retaining customers and ensuring that they do not experience disruptions remains our top priorities.

轉到投影片 6。現在我們已經完成交易，我們的重點是提供自宣布計劃收購以來我們一直在與您討論的戰略和財務利益。我們已經開始執行詳細的整合計劃，重點是為我們的客戶和員工提供無縫流程，實現我們的協同目標並去槓桿化我們的資產負債表，同時留住客戶並確保他們不會受到干擾仍然是我們的首要任務。

We are also uncovering ways to enhance our customer value proposition and unlock cross-sell and upsell opportunities. At the same time, we will continue to drive innovation and foster the high-performing culture we are known for. In tandem with our work on the transaction, we have been developing an updated strategy that incorporates the Sterling acquisition and is heavily focused on rapidly growing and innovating our business through new technology, AI and product initiatives. We are calling this FA 5.0, and I'm excited to share the organizational part of this strategy with you today.

我們也正在探索增強客戶價值主張並釋放交叉銷售和追加銷售機會的方法。同時，我們將繼續推動創新，培養我們聞名的高績效文化。在我們的交易工作的同時，我們一直在製定更新的策略，其中納入了對 Sterling 的收購，並專注於透過新技術、人工智慧和產品計劃來快速發展和創新我們的業務。我們稱之為 FA 5.0，我很高興今天與您分享該策略的組織部分。

On slide 7, you'll see the senior management team who is responsible for executing our FA 5.0 strategy. As recently announced, Joel Smith has been promoted to the role of President. Joel knows our company very well, having held leadership roles within First Advantage since 2017, most recently as President, Data, Technology and Experience.

在投影片 7 上，您將看到負責執行 FA 5.0 策略的高階管理團隊。正如最近宣布的那樣，喬爾史密斯已晉升為總裁。Joel 非常了解我們公司，自 2017 年以來一直在 First Advantage 擔任領導職務，最近擔任數據、技術和體驗部門總裁。

In this new role, Joel will continue to strategically lead the product data and technology organizations and will also take on responsibility for our go-to-market teams, including sales, customer success and marketing. Our new structure, which aligns product and technology organizations globally includes the introduction of general manager positions strategically aligned to verticals or regions reporting to Joel.

在這個新職位上，喬爾將繼續策略性地領導產品數據和技術組織，並將負責我們的市場推廣團隊，包括銷售、客戶成功和行銷。我們的新結構在全球範圍內協調產品和技術組織，包括引入與垂直行業或地區策略一致的總經理職位，向喬爾報告。

We have combined the capabilities of our go-to-market teams, including our direct sales and customer success functions under our GMs. This organization is a blend of First Advantage and Sterling's incredible talent and is focused on customer retention and satisfaction, along with new business sales and upsell cross-sell.

我們結合了行銷團隊的能力，包括總經理領導下的直接銷售和客戶成功職能。該組織融合了 First Advantage 和 Sterling 令人難以置信的人才，專注於客戶保留和滿意度，以及新業務銷售和追加銷售交叉銷售。

Additionally, Doug Nairne, who joined First Advantage in 2021 as International Chief Operations Officer, following his time as CEO of an international screening company, has been named to the expanded role of Chief Operating Officer, in which he is overseeing all of our US and international operations, customer care, and customer onboarding teams.

此外，Doug Nairne 於 2021 年加入 First Advantage，擔任國際首席營運官，此前他曾擔任一家國際放映公司的首席執行官，現已被任命為首席營運官，負責監督我們在美國和美國的所有業務。國際營運、客戶服務和客戶引導團隊。

As we noted last quarter, this will be David's last earnings call as he is retiring with Steven Marks taking over the role of CFO. Steven is an accomplished finance professional and respected leader. He joined First Advantage 8.5 years ago and has served as our Chief Accounting Officer since February 2022. Our Board composition is unchanged post-acquisition.

正如我們上個季度指出的那樣，這將是大衛的最後一次財報電話會議，因為他即將退休，史蒂文馬克斯將接任財務長。史蒂文是一位卓有成就的金融專業人士和受人尊敬的領導者。他於 8.5 年前加入首優諮詢，並自 2022 年 2 月起擔任我們的首席會計官。收購後，我們的董事會組成沒有變動。

Overall, we believe that our new organizational structure will improve the applicant and customer experience through enhanced operational efficiency, improve how we partner with and sell to our customers and set us up for success as we commence our FA 5.0 journey. We will share more about the FA 5.0 strategy as we move into 2025.

總體而言，我們相信，我們的新組織結構將透過提高營運效率來改善申請人和客戶的體驗，改善我們與客戶的合作和銷售方式，並為我們開啟 FA 5.0 之旅取得成功奠定基礎。進入 2025 年，我們將分享更多有關 FA 5.0 策略的資訊。

Turning to slide 8. The closing of our acquisition of Sterling not only provides a great opportunity to update our strategy, but to also rebrand the company. This is an excellent example of our pre-integration teamwork coming to life as it represents a joint effort between the Sterling and First Advantage teams over many months.

轉到投影片 8。我們對 Sterling 的收購的完成不僅為更新我們的策略提供了絕佳的機會，而且還為我們重塑了公司品牌。這是我們預先整合團隊合作的一個很好的例子，因為它代表了 Sterling 和首優諮詢團隊數月來的共同努力。

Our new logo gives us a clean, modern look and feel that represents our commitment to leading-edge technology and the use of responsible AI and also symbolizes the joining of the two companies. The racetrack logo represents the interconnectivity of speed and quality, which is what separates us in the market.

我們的新標誌為我們帶來了乾淨、現代的外觀和感覺，代表了我們對領先技術和使用負責任的人工智慧的承諾，也像徵著兩家公司的合併。賽道標誌代表了速度和品質的互聯性，這也是我們在市場上的獨特之處。

The continuous line that makes up the abstract FA of the logo reinforces the strength of the two companies coming together as one. We are very excited to time to launch of our new branding with the close of this transaction.

構成標誌抽象 FA 的連續線條增強了兩家公司合而為一的力量。我們非常高興能夠在此次交易完成後推出我們的新品牌。

Turning to slide 9. As part of the Sterling acquisition, we are committed to delivering $50 million to $70 million of run rate cost synergies. We have already made significant progress towards this target with over $10 million of run rate cost synergies actioned on day 1. These savings consist primarily of reductions from combining executive teams, removing duplicative public company costs and combining insurance programs.

轉到投影片 9。作為 Sterling 收購的一部分，我們致力於提供 5,000 萬至 7,000 萬美元的營運成本綜效。我們已經在實現這一目標方面取得了重大進展，第一天就實現了超過 1000 萬美元的運行成本協同效應。這些節省主要包括合併執行團隊、消除重複的上市公司成本、合併保險計畫所帶來的減少。

We have also already identified additional synergy opportunities that are expected to approximately double the action synergies within the next 100 days. We have a detailed plan in place to capture the full extent of synergies available. Key categories that we plan to address over time include international operations, fulfillment, product development and commercial costs with the objective of actioning our targeted run rate within 24 months.

我們也已經確定了額外的協同機會，預計在未來 100 天內將行動協同效應增加約一倍。我們制定了詳細的計劃來充分發揮可用的協同效應。我們計劃隨著時間的推移解決的關鍵類別包括國際營運、履行、產品開發和商業成本，目標是在 24 個月內實現我們的目標運行率。

In addition to these cost synergies, we believe there is also opportunity to uncover potential revenue synergies. We will continue to execute and plan to update you on our synergy progress on future earnings calls.

除了這些成本協同效應之外，我們相信還有機會發現潛在的收入綜效。我們將繼續執行並計劃在未來的財報電話會議上向您通報我們的協同進展。

Finally, to summarize our position post-closing on the Sterling acquisition, we have a go-forward organization with outstanding leadership, a fresh new brand identity that excites the future of First Advantage, a tremendous combination of growth-related resources and product offerings, strong customer relationships, diversified across verticals and geographies, resulting in lower customer concentration, ambitious and achievable synergy targets and detailed integration plans, which are in place and being executed. We have a lot of work to do in the coming months and years, and we are energized by our opportunities to accelerate growth and deliver value.

最後，總結我們在 Sterling 收購完成後的立場，我們擁有一個具有傑出領導力的進取型組織、一個激發 First Advantage 未來的全新品牌標識、與增長相關的資源和產品組合的巨大組合，強大的客戶關係、跨行業​​和地域的多元化，從而降低客戶集中度、雄心勃勃且可實現的協同目標以及詳細的整合計劃，這些計劃已經到位並正在執行。在未來的幾個月和幾年裡，我們還有很多工作要做，我們對加速成長和創造價值的機會充滿活力。

Turning to slide 10. Before I turn the call over to David, I'd like to briefly comment on our standalone third quarter results and the progress we have made on sustainability.

轉到投影片 10。在將電話轉給大衛之前，我想先簡單評論一下我們第三季的獨立業績以及我們在永續發展方面取得的進展。

We are very pleased to report that First Advantage's combined upsell, cross-sell and new logo rates are as well as retention rate again performed in line with our historical revenue growth algorithm. First Advantage had 16 total enterprise bookings in the third quarter and 53 in the last 12 months, each with $500,000 or more of expected annual contract value.

我們非常高興地報告，First Advantage 的合併追加銷售、交叉銷售和新徽標率以及保留率再次符合我們的歷史收入成長演算法。第一優勢公司第三季共有 16 家企業預訂，過去 12 個月有 53 家企業預訂，每家企業的預期年度合約價值為 50 萬美元或更多。

Our sales engine continues to deliver consistent results. From a vertical perspective, First Advantage's transportation and staffing verticals saw positive growth versus the prior year, while financial services was flat. Our other verticals were down in the single digits year-over-year, except for technology which while down slightly more, only represents 2% of our standalone business.

我們的銷售引擎繼續提供一致的結果。從垂直角度來看，第一優勢的運輸和人力資源垂直產業與前一年相比出現了正成長，而金融服務則持平。我們的其他垂直產業年減了個位數，但技術除外，雖然下降幅度稍大，但僅占我們獨立業務的 2%。

Third quarter standalone results reflect a macroeconomic picture of continued normalization and stabilization within our business. We are also seeing this play out with key labor metrics including quits, hires and openings as job trends returned to pre-pandemic levels.

第三季的獨立業績反映了我們業務持續正常化和穩定的宏觀經濟狀況。隨著就業趨勢恢復到疫情前的水平，我們也看到這種情況在關鍵勞動力指標上發揮作用，包括辭職、僱用和空缺職位。

Overall, our customers continue to hire, albeit at a more modest level. Before switching gears, I want to call attention to the recent release of First Advantage's third annual sustainability report. This report reiterates our commitment to our core values and demonstrates the progress we are making across ethical governance, climate, employee engagement and inclusion and bolstering the resilience of our company.

總體而言，我們的客戶仍在繼續招聘，儘管招聘水平較低。在轉換話題之前，我想提請大家注意首優諮詢最近發布的第三份年度永續發展報告。本報告重申了我們對核心價值的承諾，並展示了我們在道德治理、氣候、員工敬業度和包容性以及增強公司復原力方面所取得的進展。

I encourage you to review the full report on our website. As this is David's last earnings call, I would like to sincerely thank him for his distinguished service to First Advantage and for his partnership over the past eight-plus years. We wish you the very best in his next chapter, David. And with David's well-earned retirement, we are very excited to welcome Steven who has now taken over as our CFO.

我鼓勵您在我們的網站上查看完整的報告。由於這是 David 的最後一次財報電話會議，我衷心感謝他為首優諮詢提供的傑出服務以及過去八年多來的合作夥伴關係。大衛，我們祝福你在他的下一章一切順利。隨著 David 的退休，我們非常高興地歡迎 Steven 接任我們的財務長。

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 mentioned, this will be my last earnings call prior to my retirement, but I promise you that I will be carefully following First Advantage's future success going forward. It has been an honor to have been a part of the First Advantage management team.

謝謝你，斯科特，大家早安。正如史考特所提到的，這將是我退休前的最後一次財報電話會議，但我向您保證，我將仔細關注首優諮詢未來的成功。我很榮幸能成為首優諮詢管理團隊的一員。

We have achieved much together, and there is still much more to be accomplished. This quarter, Steven and I will be providing color on First Advantage standalone results, Legacy Sterling results and a combined view to give you a clearer picture of our new profile before concluding with thoughts around our full year guidance.

我們共同取得了很多成就，而且還有很多事情有待完成。本季度，史蒂文和我將提供 First Advantage 獨立業績、Legacy Sterling 業績和綜合視圖的詳細信息，以便讓您更清楚地了解我們的新概況，然後再對我們的全年指導進行總結。

Turning to our standalone third quarter results on slide 12. In line with our previously communicated expectations, First Advantage's results for the third quarter improved sequentially over our second quarter results. Our quarter revenues were $199.1 million, roughly in line with the prior year and $14.6 million or 8% greater than in Q2.

轉向投影片 12 上我們的獨立第三季業績。根據我們先前傳達的預期，第一優勢第三季的業績比第二季的業績連續改善。我們的季度營收為 1.991 億美元，與去年同期大致持平，比第二季增加 1,460 萬美元，即 8%。

For comparison purposes, note that Q3 of 2023 includes a onetime specific customer project representing approximately $4 million. Our Americas segment was roughly flat as base growth was lower than anticipated, primarily due to a later start and normal holiday hiring.

出於比較目的，請注意 2023 年第三季包括一個價值約 400 萬美元的一次性特定客戶項目。我們的美洲業務基本上持平，因為基數成長低於預期，這主要是由於較晚的開工和正常的假期招聘。

International performed better than anticipated, increasing 0.2% with green shoots across all regions. For the total standalone company, adjusted EBITDA was $64 million also roughly the same as in the prior year, but sequentially up $8.2 million or 15% greater than Q2.

國際市場的表現優於預期，成長了 0.2%，所有地區都出現了復甦。對於整個獨立公司來說，調整後的 EBITDA 為 6,400 萬美元，也與去年大致相同，但比第二季度增長了 820 萬美元，即 15%。

Adjusted EBITDA margin improved sequentially 200 basis points to 32.2% due to our highly variable, flexible cost structure and disciplined approach to managing costs. We continue to carefully manage our business to match the current demand environment. As a reminder, our cost structure is highly flexible and over 70% of our cost of sales are third-party costs, which are volume variable.

由於我們高度變動、靈活的成本結構和嚴格的成本管理方法，調整後的 EBITDA 利潤率環比提高了 200 個基點，達到 32.2%。我們繼續謹慎管理我們的業務，以適應當前的需求環境。需要提醒的是，我們的成本結構高度靈活，超過 70% 的銷售成本是第三方成本，且數量可變。

We are constantly reviewing and adjusting our spending and modulating our investments to ensure that we are operating optimally and delivering results. Adjusted diluted earnings per share was $0.26.

我們不斷審查和調整我們的支出並調整我們的投資，以確保我們以最佳方式運作並交付成果。調整後攤薄每股收益為 0.26 美元。

Legacy Sterling results for the third quarter are shown on slide 13. Revenue for the quarter was $195.5 million, up $14.9 million or 8.3% versus prior year. Revenue growth was led by the Americas, which grew on an organic constant currency basis and also benefited from the impact of the Vault acquisition. International sales, excluding Canada, were overall flattish in the quarter with strength in EMEA, offset by softness in APAC.

傳統英鎊第三季的業績如投影片 13 所示。該季度營收為 1.955 億美元，比去年同期成長 1,490 萬美元，成長 8.3%。營收成長由美洲地區帶動，該地區在固定貨幣基礎上實現有機成長，並受益於 Vault 收購的影響。本季除加拿大外的國際銷售整體持平，歐洲、中東和非洲地區強勁，但被亞太地區疲軟所抵銷。

In terms of verticals, health care, retail, tech media and Industrials delivered growth year-over-year, while staffing and government saw declines. Adjusted EBITDA of $45.3 million was down $2.3 million versus the prior year comparable quarter, resulting in a margin of 23.2%. Adjusted EBITDA margins for the third quarter were impacted by base declines and some attrition of higher-margin customers as well as new business sales of lower-margin products such as drug and health care testing. Additionally, overall margins were impacted by inorganic Vault revenues with margins in the teens, which is the legacy Sterling management team did not yet address through the execution of their initial synergy plans. Adjusted net income of $22.7 million declined approximately $2 million versus Q3 of the prior year, driven by lower adjusted EBITDA.

在垂直產業方面，醫療保健、零售、科技媒體和工業較去年同期成長，而人員配置和政府部門則出現下降。調整後 EBITDA 為 4,530 萬美元，比去年同期下降 230 萬美元，利潤率為 23.2%。第三季調整後的 EBITDA 利潤率受到基數下降、高利潤率客戶的部分流失以及低利潤率產品（如藥物和醫療保健檢測）的新業務銷售的影響。此外，整體利潤率也受到 Vault 收入的影響，利潤率只有十幾歲，這是 Sterling 管理團隊尚未透過執行最初的協同計畫來解決的問題。由於調整後 EBITDA 下降，調整後淨利潤為 2,270 萬美元，較上年第三季下降約 200 萬美元。

Now turning to combined LTM results on slide 14. Giving effect to the acquisition of Sterling, we have essentially doubled our revenues and adjusted EBITDA, which reflects the significant scale we have added to the business.

現在轉向幻燈片 14 上的綜合 LTM 結果。收購 Sterling 後，我們的收入基本上翻了一番，並調整了 EBITDA，這反映了我們業務規模的顯著增加。

While combined adjusted EBITDA margins of approximately 27% are lower than First Advantage standalone, we are confident that once our cost synergies are achieved and we execute on our integration plan, over time, we will be able to return combined adjusted EBITDA margins back to above 30% with potential for future upside.

雖然合併調整後EBITDA 利潤率約為27%，低於首優諮詢的獨立利潤率，但我們有信心，一旦實現成本協同效應並執行整合計劃，隨著時間的推移，我們將能夠將合併調整EBITDA利潤率恢復到上述水準30%，未來有上漲潛力。

On slide 15, you can see that our First Advantage standalone historical performance for upsell cross-sell, new customer logos and attrition has been consistent and demonstrates that we are managing and delivering on what we can control with the variation being driven by the base.

在投影片15 上，您可以看到我們的First Advantage 在追加銷售、交叉銷售、新客戶標誌和流失方面的獨立歷史業績一直保持一致，這表明我們正在管理和交付我們可以控制的內容，並由基礎驅動的變化。

Looking specifically at First Advantage. Revenues from upsell and cross-sell alone nearly offset our base decline for the quarter and contributed 7% to our Q3 growth. New customer logos contributed an additional 3%, which was impacted by some delayed customer go-lives, which have already partially cleared in the fourth quarter.

特別關注首優諮詢。僅來自追加銷售和交叉銷售的收入就幾乎抵消了本季基數下降的影響，並為第三季的成長貢獻了 7%。新客戶標誌貢獻了額外的 3%，這是受到一些客戶上線延遲的影響，這些客戶上線已在第四季度部分清除。

Attrition improved to 3.6%. Base results, driven primarily by our Americas segment declined 8%, which was below our expectations and was driven by continued uncertainty in the macro related to inflation, interest rate cuts, the recent election and prolonged uncertainty in the geopolitical environment. We also experienced a delayed start to seasonal hiring in September, but based on October results, we have seen seasonal hiring pick up.

員工流動率提高至 3.6%。主要由我們的美洲業務推動的基本業績下降了8%，低於我們的預期，並且受到與通貨膨脹、降息、最近的選舉和地緣政治環境的長期不確定性相關的宏觀經濟持續不確定性的推動。我們在 9 月也經歷了季節性招募的延遲開始，但根據 10 月的結果，我們看到季節性招募有所回升。

Looking at legacy Sterling. Overall, new and upsell cross-sell growth drivers were strong offset by continued base headwinds. Upsell, cross-sell contributed 10% to growth in Q3 with new logos contributing another 7%. Both of these growth rates reflected some acceleration compared to Q2. Gross retention remained stable with attrition of less than 4%.

看看傳統的英鎊。總體而言，新的和追加銷售的交叉銷售成長動力被持續的基本阻力所抵消。追加銷售、交叉銷售為第三季的成長貢獻了 10%，新商標又貢獻了 7%。這兩個成長率都反映出與第二季相比有所加速。總保留率維持穩定，流失率低於 4%。

Base growth remained negative at approximately 12%, though improving versus prior quarters. Base growth at legacy Sterling has lagged first advantages as their verticals have been more impacted by the normalization of hiring patterns.

基數成長仍為負值，約 12%，但較前幾季有所改善。傳統 Sterling 的基礎成長落後於第一優勢，因為其垂直產業受到招募模式正常化的影響更大。

I will now turn the call over to Steven to discuss our cash flow, net leverage profile and outlook for the remainder of the year.

我現在將把電話轉給史蒂文，討論我們的現金流、淨槓桿狀況和今年剩餘時間的前景。

Thank you, David, and good morning, everyone. I'd like to first take a moment to express my sincere gratitude to David. I have had the honor to work with him for over eight years and have been able to learn from his exceptional leadership and dedication. His contributions have laid a strong foundation for our success, and First Advantage is a far better company today, thanks to his contributions.

謝謝大衛，大家早安。首先我想花一點時間向大衛表達我誠摯的謝意。我有幸與他共事八年多，並從他卓越的領導和奉獻中學到了很多。他的貢獻為我們的成功奠定了堅實的基礎，由於他的貢獻，首優諮詢如今已成為一家更好的公司。

I would also like to thank Scott and our Board of Directors for their trust as I step into this role. I'm excited about the opportunity to work alongside such a talented team and to continue driving our company's growth. And certainly to our investors, I look forward to continuing to engage with you in the future as we work together to achieve our shared goals.

我還要感謝斯科特和我們的董事會在我擔任這一職位時給予我的信任。我很高興有機會與這樣一個才華橫溢的團隊一起工作並繼續推動我們公司的發展。當然，對於我們的投資者來說，我期待未來繼續與您合作，共同努力實現我們的共同目標。

Now turning to cash flow and net leverage on slide 17. In Q3 2024, First Advantage standalone generated strong adjusted operating cash flows of $45.3 million, a robust 32% increase versus prior year, driven by expense management, cash tax planning and year-over-year decreases in our receivables.

現在轉向幻燈片 17 上的現金流和淨槓桿率。2024 年第三季度，在費用管理、現金稅收規劃和應收帳款年減的推動下，First Advantage 獨立公司產生了 4,530 萬美元的強勁調整後營運現金流，較上年強勁增長 32%。

Sequentially, adjusted operating cash flow increased 11% from Q2. First advantage of cash balance at September 30, 2024, was $307.4 million as we're building cash to help fund the Sterling close.

隨後，調整後的營運現金流較第二季增加了 11%。截至 2024 年 9 月 30 日，現金餘額的第一個優勢為 3.074 億美元，因為我們正在累積現金以幫助為英鎊結算提供資金。

Over the last 12 months, we generated adjusted operating cash flows of $181.8 million a 3% increase on a year-over-year basis. During the quarter, First Advantage used $7.9 million for purchases of property and equipment and capitalized software development costs.

在過去 12 個月中，我們產生了 1.818 億美元的調整後營運現金流，年增 3%。本季度，First Advantage 使用 790 萬美元購買財產和設備以及資本化軟體開發成本。

Legacy Sterling generated adjusted operating cash flows of $30.9 million in Q3 and at $75 million at September 30, having repaid $20 million of its outstanding debt in Q3. Year-over-year trends in cash flow exceeded the trend in adjusted EBITDA due to Sterling's working capital management, especially related to cash collections. We are actively on ways to further enhance cash flow from the Sterling business.

Legacy Sterling 在第三季償還了 2,000 萬美元的未償債務，第三季調整後的營運現金流為 3,090 萬美元，截至 9 月 30 日為 7,500 萬美元。由於 Sterling 的營運資本管理，特別是與現金回收相關的業務，現金流的同比趨勢超過了調整後 EBITDA 的趨勢。我們正在積極尋找進一步增強 Sterling 業務現金流的方法。

Turning to slide 18. In support of the Sterling acquisition, we successfully secured amended financing of a $2.185 billion -- amended financing of $2.185 billion in the form of a seven-year term loan due in October 2031, of which approximately $1.1 billion was used to fund the Sterling acquisition and the balance was used to refinance the existing debt of both companies.

轉到投影片 18。為了支持 Sterling 收購，我們成功獲得了 21.85 億美元的修正融資——21.85 億美元的修正融資以 2031 年 10 月到期的七年期貸款形式提供，其中約 11 億美元用於為 Sterling 收購提供資金餘額用於為兩家公司的現有債務進行再融資。

We were very pleased that the company was able to maintain its existing credit ratings with the rating agencies on our refinanced debt underscoring the strength of our business post-closing. After considering our cash at close, we have approximately $2 billion of net debt and a pro forma synergized net leverage ratio of approximately 4.4x in line with the expectations we shared last quarter.

我們非常高興該公司能夠維持評級機構對我們再融資債務的現有信用評級，這突顯了我們在交割後業務的實力。考慮到我們截至收盤時的現金，我們擁有約 20 億美元的淨債務，預計協同淨槓桿率約為 4.4 倍，與我們上季度的預期一致。

As part of our financing agreement, we upsized our revolver availability to $250 million to provide additional liquidity, and we extended the maturity date through October 2029. And there are no amounts currently outstanding under the revolver. We remain committed to our goal of reducing net leverage towards approximately 3 times run rate adjusted EBITDA within 24 months post close and to our long-term net leverage target range of 2 to 3 times.

作為融資協議的一部分，我們將左輪手槍的可用資金增加到 2.5 億美元，以提供額外的流動性，並將到期日延長至 2029 年 10 月。目前左輪手槍項下沒有未清金額。我們仍致力於實現在交割後 24 個月內將淨槓桿率降低至運行率調整後 EBITDA 約 3 倍的目標，並實現 2 至 3 倍的長期淨槓桿率目標範圍。

We believe that continued interest rate cuts will help us accomplish this goal. Additionally, in August, First Advantage entered into a new $160 million swap agreement through the end of 2026. And just last week, we added an additional $275 million swap agreement through October 2027.

我們相信，持續降息將有助於我們實現這一目標。此外，8 月，First Advantage 簽訂了一項新的價值 1.6 億美元的互換協議，有效期至 2026 年底。就在上週，我們又增加了一項到 2027 年 10 月為止的 2.75 億美元互換協議。

As a result, about 40% of our post-acquisition debt have now had a fixed rate.

因此，我們約 40% 的收購後債務現已採用固定利率。

Moving to slide 19. I want to talk about our combined company guidance, which maintains our previously provided First Advantage standalone guidance and include the expected Sterling contributions for November and December, including the benefit of action synergies and the capital structure impacts from the transaction.

轉到投影片 19。我想談談我們的合併公司指引，該指引維持了我們先前提供的 First Advantage 獨立指引，並包括 11 月和 12 月的預期英鎊貢獻，包括行動協同效應的好處以及交易對資本結構的影響。

For the combined company, we expect total revenues in the range of $858 million to $918 million and adjusted EBITDA of $250 million to $274 million. After accounting for the impact of the transaction financing and the new shares issued at close, we expect adjusted diluted EPS to be in the range of $0.83 to $0.95 for 2024.

對於合併後的公司，我們預計總營收在 8.58 億美元至 9.18 億美元之間，調整後的 EBITDA 為 2.5 億美元至 2.74 億美元。考慮到交易融資和交割時發行的新股的影響後，我們預計 2024 年調整後稀釋後每股收益將在 0.83 美元至 0.95 美元之間。

While our FA standalone guidance ranges are unchanged in light of the current macro conditions and base growth coming in lower than we had previously anticipated in the third quarter, we anticipate First Advantage standalone 2024 revenues and adjusted EBITDA to come in above the low end of the standalone range, but below the standalone midpoint. Looking at the fourth quarter on a standalone basis for First Advantage, we still expect sequential quarter-over-quarter growth for revenues and adjusted EBITDA. The lower half of our standalone guidance range also assumes macro-driven base declines of around 2% to 4% in Q4, representing an improvement over the trends we saw in the third quarter. Our early read on standalone October results gives us confidence in the fourth quarter shaping up, as I have outlined. Looking closer at our expectations for Sterling's contributions in Q4, we are expecting full fourth quarter revenues to come in between $170 million and $185 million.

儘管鑑於當前宏觀狀況和第三季基數增長低於我們先前的預期，我們的FA 獨立指導範圍保持不變，但我們預計First Advantage 2024 年獨立收入和調整後EBITDA 將高於2024 年的低端水平。單獨來看第一優勢第四季度，我們仍然預期營收和調整後 EBITDA 會較上季成長。我們獨立指導範圍的下半部分還假設第四季度宏觀驅動的基數下降約 2% 至 4%，這比我們在第三季度看到的趨勢有所改善。正如我所概述的，我們對 10 月獨立業績的早期解讀讓我們對第四季的發展充滿信心。仔細觀察我們對 Sterling 第四季貢獻的預期，我們預計第四季度的整體營收將在 1.7 億美元至 1.85 億美元之間。

Of this, only November and December are included in our combined company guidance range and are expected to deliver between $108 million and $118 million of revenue. Monthly results are influenced by the typical seasonality of the business and holiday timing. We are expecting November and December adjusted EBITDA for Sterling between $2.2 million and $26 million and adjusted diluted EPS between $0.05 to $0.07.

其中，只有 11 月和 12 月包含在我們的合併公司指導範圍內，預計將帶來 1.08 億至 1.18 億美元的收入。每月結果受到典型的業務季節性和假期時間的影響。我們預計 11 月和 12 月英鎊調整後 EBITDA 將在 220 萬美元至 2,600 萬美元之間，調整後攤薄每股收益將在 0.05 美元至 0.07 美元之間。

Moving to slide 20, which illustrates our bridge from First Advantage standalone adjusted diluted EPS guidance to our full year combined guidance. First Advantage standalone adjusted diluted EPS guidance is maintained at $0.88 to $0.98 with a midpoint of $0.93. To that, we add Sterling's expected contribution for November and December and then account for the impact of additional issuance and transaction financing resulted in our updated guidance midpoint of $0.89.

轉向幻燈片 20，它說明了我們從首優諮詢獨立調整稀釋每股收益指導到全年綜合指導的橋樑。First Advantage獨立調整稀釋後每股收益指引維持在0.88美元至0.98美元之間，中間值為0.93美元。為此，我們加上了英鎊 11 月和 12 月的預期貢獻，然後考慮了額外發行和交易融資的影響，導致我們更新的指導中點為 0.89 美元。

On slide 21, we illustrate a double-digit adjusted diluted EPS accretion we expect from the acquisition on a synergized pro forma LTM September 30 basis. On this basis, we estimate accretion of approximately 15% plus. As a reminder, we expect to action our run rate synergy targets within two years post close, of which only a portion is expected to be actioned in the balance of 2024 and during 2025. On this note, as you model your future projections, please keep in mind that as we consolidate Sterling's results and the capital structure impact of the acquisition as well as account for the pacing of synergy capture and achievement adjusted diluted EPS accretion in our actual reported results for 2025 will be more neutral. As the synergies are fully achieved, we anticipate the expected adjusted diluted EPS accretion will be attained.

在幻燈片 21 中，我們展示了預計在 9 月 30 日 LTM 協同預計的基礎上，此次收購將帶來兩位數的調整後攤薄每股收益成長。在此基礎上，我們估計增加量約為 15% 以上。提醒一下，我們預計在交易完成後兩年內實現運行率協同目標，預計只有一部分在 2024 年剩餘時間和 2025 年期間實現。在這一點上，當您對未來的預測進行建模時，請記住，當我們合併Sterling 的業績和收購對資本結構的影響，以及在我們的實際報告業績中考慮協同效應捕獲和成就調整稀釋每股收益成長的節奏時2025 年將更加中立。隨著綜效的充分實現，我們預計將實現預期的調整後稀釋每股盈餘成長。

We plan to provide more reporting on this as part of our 2025 guidance, including a framework to understand synergy attainment over time, which will be discussed on our next earnings call. We are incredibly proud of the results produced by First Advantage in Q3 and are looking forward to the opportunity to create additional shareholder value as we execute our Sterling integration plans and the FA 5.0 strategy. With that, let me turn it back to Scott for closing remarks before we open the line for questions.

作為 2025 年指導的一部分，我們計劃提供更多相關報告，包括了解隨著時間的推移實現協同效應的框架，這將在我們的下一次財報電話會議上討論。我們對 First Advantage 在第三季度取得的成果感到無比自豪，並期待在執行 Sterling 整合計劃和 FA 5.0 策略時有機會創造額外的股東價值。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, Steven. We continue to deliver solid results and execute on our priorities. Most notably, we closed the Sterling acquisition and are moving ahead quickly to integrate and capture the benefits and synergies. 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，史蒂文。我們繼續交付紮實的成果並執行我們的優先事項。最值得注意的是，我們完成了對 Sterling 的收購，並正在迅速推進整合並獲取收益和協同效應。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.

這樣，我們將開通提問熱線。

(Operator Instructions) Shlomo Rosenbaum, Stifel.

（操作員說明）Shlomo Rosenbaum，Stifel。

I just wanted to ask you a little bit about the comment that you made about on Sterling, some attrition of higher-margin customers, the biggest risk, you and I have discussed this is the retention or the potential churn of some of these customers. Maybe you can give us a little bit more clarity as to what happened over there? Are you expecting that to continue? Or is there -- was that kind of anomalous? And just how should we think about that?

我只是想問您對 Sterling 的評論，高利潤客戶的一些流失，最大的風險，您和我已經討論過，這是其中一些客戶的保留或潛在流失。也許你可以讓我們更清楚地了解那裡發生了什麼？你期待這種情況會持續下去嗎？或者有——有那種異常嗎？我們該如何思考這個問題？

And after that, I have a follow-up.

之後，我有一個後續行動。

Yes. Shlomo, I mean nothing, I would say, notable in terms of a change from historical trends. Sterling retention in the last few quarters has actually been high in a historical perspective, 97%, 96%, was 96% in Q3. It was really just a mixed item.

是的。什洛莫，我想說，就歷史趨勢的變化而言，我沒有什麼意思。從歷史角度來看，過去幾季的英鎊保留率實際上很高，97%、96%，第三季是96%。這實際上只是一個混合項目。

Lately, they've been having a lot of upsell success in that drug and health care space, which is bringing margins down. And the margin -- and the couple of attrition, which, again, I would categorize as normal course happened to be more in that traditional screening space, which is higher margin relatively speaking, which just pulled down a handful of bps, if you will, of margin.

最近，他們在藥品和醫療保健領域取得了許多追加銷售的成功，這導致了利潤率下降。利潤率和損耗，我再次將其歸類為正常過程，恰好更多地發生在傳統的放映空間中，相對而言，這是更高的利潤率，如果你願意的話，它只是拉低了幾個基點，保證金。

You're saying it's not -- there was not a change in the attrition, it's just the reading of where the attrition came from? I just want to clarify before I go to the next one.

你是說，磨損沒有變化，只是讀取了磨損的來源？我只是想在進入下一個之前澄清一下。

Yes, exactly. The mix of the lost business versus the mix of the added business kind of had a little bit of a market headwind to it.

是的，完全正確。失去的業務與增加的業務的組合對它產生了一些市場阻力。

Okay. And then if you don't mind just -- you talked about some of the base business coming in lower than expected. And maybe you could just talk about the operating environment in general. How is it changed over the last quarter? What are clients telling you about their hiring expectations?

好的。然後，如果您不介意的話，您談到了一些基礎業務的收入低於預期。也許你可以只談談一般的操作環境。上個季度有何變化？客戶告訴您他們的招募期望是什麼？

And importantly, does anything change -- changes in administration? In other words, are you thinking that, that increases the chance of more hiring, decreases or really doesn't make a difference in the way that you're thinking about things?

重要的是，有什麼變化嗎——行政方面的變化嗎？換句話說，您是否認為這會增加、減少或實際上不會對您思考問題的方式產生影響？

Yes, Shlomo. So everybody is obviously focused on the macro. And as you know, we are in constant communication with our customers. So our data points are what we're seeing from government data, but more importantly, what we're hearing from customers. And I don't think we're seeing anything different.

是的，什洛莫。所以顯然每個人都關注宏觀。如您所知，我們與客戶保持持續溝通。因此，我們的數據點是我們從政府數據中看到的，但更重要的是，我們從客戶那裡聽到的。我認為我們沒有看到任何不同。

It's a lot of more of the same. So what we've been talking about maybe for the last couple of quarters, even maybe last year or so is sort of a continued stabilization and normalization, not only in this quarter, but in previous quarters as well. We do believe that now that the US election is behind us and the potential rate cuts are coming up that some of the uncertainty will go away. But it's clear that job openings continue to decline and things are sort of going back to what we see as pre-pandemic levels.

類似的事情還有很多。因此，我們可能在過去幾個季度，甚至可能在去年左右一直在談論的是持續穩定和正常化，不僅在本季度，而且在前幾個季度也是如此。我們確實相信，既然美國大選已經過去，而且潛在的降息即將到來，一些不確定性將會消失。但很明顯，職缺繼續減少，情況在某種程度上回到了我們所認為的大流行前的水平。

But that's sort of a normal thing for us and it sort of helps us with planning. And I think what we're hearing from customers is that -- (technical difficulty)

但這對我們來說是很正常的事情，它可以幫助我們制定計劃。我認為我們從客戶那裡聽到的是——（技術難度）

Alright, we do have our speakers back with us. I do apologize. We will continue on with our question from Shlomo Rosenbaum.

好的，我們的揚聲器回來了。我確實道歉。我們將繼續回答什洛莫·羅森鮑姆的問題。

Shlomo, where were we when I dropped off?

什洛莫，我下車時我們在哪裡？

Andrew Steinerman, JPMorgan.

安德魯‧史坦納曼，摩根大通。

Andrew Nicholas, William Blair.

安德魯尼古拉斯、威廉布萊爾。

Manav Patnaik, Barclays.

馬納夫·帕特奈克，巴克萊銀行。

(Operator Instructions) Scott Wurtzel, Wolfe Research.

（操作員說明）Scott Wurtzel，Wolfe Research。

(technical difficulty) Shlomo Rosenbaum.

（技術難度）什洛莫·羅森鮑姆。

Yes, I can hear you fine. I mean I have a pop-up question to whether some of the cost efficiencies came on the conference call hosting company over.

是的，我聽得很清楚。我的意思是，我有一個彈出問題，即電話會議託管公司是否實現了一些成本效率。

I'm not that expressive Shlomo, I'm sorry.

抱歉，我沒那麼善於表達。

Okay. When you --

好的。當你--

Going forward here, Shlomo.

繼續前進，什洛莫。

All right. I mean you were in the middle of just describing what customers are telling you, and that's where the audio went out.

好的。我的意思是，您正在描述客戶告訴您的內容，這就是音訊消失的地方。

Okay. Great. Yes. So I won't go back over kind of the macro stuff. But customers are telling us the same thing they've been telling us almost all year.

好的。偉大的。是的。所以我不會再討論宏觀的東西。但客戶告訴我們的事情與他們幾乎一年來一直在告訴我們的事情是一樣的。

So almost no change. Again, I mentioned that we believe with the US election behind and some rate cuts coming that the macro will improve. But as of right now, we're still seeing what we've been talking about all year, stabilization and normalization. It just continued.

所以幾乎沒有變化。我再次提到，我們相信隨著美國大選的結束和一些降息的到來，宏觀經濟將會改善。但截至目前，我們仍然看到我們一年來一直在談論的事情：穩定和正常化。它就這麼繼續著。

So most of our customers are still hiring, albeit at modest levels. They're focused largely on backfills, which hasn't changed all year. They are still doing new hire -- hiring, but they're doing it -- I think I've said this for the last couple of quarters, they really turned to a just-in-time hiring model.

因此，我們的大多數客戶仍在招聘，儘管規模不大。他們主要關注回填，這一點全年都沒有改變。他們仍在招募新員工，但他們正在這樣做——我想我在過去幾個季度已經說過了，他們確實轉向了即時招募模式。

So they're not going to hire ahead of the curve. And just-in-time hiring models for us are not an issue because, as you know, our technology and our market position is all around speed. So if our customers want to do just-in-time hiring, that's fine with us. We get a quick turnaround time. So that's --

所以他們不會提前招募。對我們來說，及時招募模式不是問題，因為如您所知，我們的技術和市場地位完全取決於速度。因此，如果我們的客戶想要及時招聘，我們也可以接受。我們的周轉時間很快。所以那就是--

Okay. I think the reason what I was trying to get at is just the midpoint of the guidance was where we reported to last quarter and this quarter, it seemed to come down a little bit, and you talked about the volumes coming in base a little bit lower. So I was just trying to gather whether that's an erosion of what's going on or just bouncing around the bottom. That's the gist that I was trying to get at the question.

好的。我認為我試圖獲得的原因只是指導的中點，即我們向上季度和本季度報告的情況，它似乎有所下降，而且您談到了基礎銷量的下降降低。所以我只是想弄清楚這是對正在發生的事情的侵蝕還是只是在底部反彈。這就是我試圖回答這個問題的要點。

Yes. I think bouncing around a little bit on the bottom is probably the best way to view it. A couple of good data points for you in international is now back two quarter -- but this is really more (technical difficulty) keep also in mind that we still are doing really good on the things we can control. Our cross-sell was great and et cetera. So really the base was a little lower than we thought it would be this quarter and also certain verticals still doing well.

是的。我認為在底部跳動一點可能是觀看它的最佳方式。國際比賽中的一些很好的數據點現在已經回到了兩個季度——但這確實是更多（技術難度），請記住，我們仍然在我們可以控制的事情上做得很好。我們的交叉銷售很棒等等。因此，本季的基數確實比我們預期的要低一些，而且某些垂直領域仍然表現良好。

But yes, a little bit of bouncing around the bottom. I really like that analogy.

但是，是的，在底部有一點反彈。我真的很喜歡這個比喻。

Okay. Thanks. Just giving you a heads up, the audio is still a little choppy.

好的。謝謝。請注意，音訊仍然有點斷斷續續。

Andrew Steinerman, JPMorgan.

安德魯‧史坦納曼，摩根大通。

It's Andrew. The comment about '25 being more neutral in terms of EPS accretion. To me, that sounds like a change. I remember '25 being accretive and kind of given the size of the deals and the opportunity, I just wanted to confirm that, that's a change and what drove that change to be more neutral in '25 for the combined organizations?

是安德魯。關於 25 年 EPS 成長的評論更為中性。對我來說，這聽起來像是一個改變。我記得 25 年是增值的，考慮到交易的規模和機會，我只是想確認，這是一個變化，是什麼推動了合併後的組織在 25 年的變化變得更加中立？

Andrew, not really a change. When we're talking about that, we're talking about what will be realized and reported. And based on when we action the synergies, that obviously, when you action it, you don't realize it all upfront, it takes 12 months to have that fully become part of your reported results. We just wanted to make sure the interest expense is all there today. The dilution is all there today, and we just wanted to help start to build out some of those models.

安德魯，並不是真正的改變。當我們談論這一點時，我們談論的是將會實現和報告的內容。根據我們何時採取協同效應，很明顯，當您採取行動時，您不會預先意識到這一切，需要 12 個月才能完全成為您報告的結果的一部分。我們只是想確保今天的利息支出全部到位。今天稀釋已經全部存在，我們只是想幫助開始建立其中一些模型。

I wouldn't really call it a change at all. We haven't changed our synergy outlook. We really haven't changed really anything. In fact, we've got locked in a couple of swaps to help offset some of those interest expense items for next year. So really not a change.

我根本不會稱之為改變。我們沒有改變我們的協同前景。我們真的沒有改變任何事情。事實上，我們已經鎖定了幾次掉期，以幫助抵消明年的一些利息支出項目。所以真的沒有改變。

We really just wanted to make sure we're kind of making the obvious point around when the synergies will hit our actual P&L.

我們真的只是想確保我們能夠在協同效應影響我們的實際損益時明確指出這一點。

Pro forma -- I got you. On a pro forma -- okay. And since you've mentioned '25 here, I know it's in the context of EPS accretion, do you have an underlying assumption for base revenues? Like if, for example, the Sterling side had lower base revenues or higher base revenues than in your model, wouldn't that affect the EPS accretion assumption?

備考——我找到你了。在準備考試中——好吧。既然你在這裡提到了“25”，我知道這是在每股收益增加的背景下，你對基本收入有一個基本假設嗎？例如，如果英鎊方面的基本收入低於或高於您模型中的基本收入，這不會影響每股盈餘增加假設嗎？

We're not -- we're a little early to get into exact science on 2025, Andrew. I think again, we just wanted to make sure we got everyone's models oriented in the right direction. I mean you're right, obviously, Sterling -- the volume and quantum of Sterling results impact that accretion. I think the biggest moving factors that we're trying to help models with today is just on the synergy pacing, obviously some of the interest expense and dilution impacts.

安德魯，我們在 2025 年進入精確科學還為時過早。我再次想，我們只是想確保每個人的模型都朝著正確的方向發展。我的意思是，顯然，你是對的，斯特林——斯特林結果的數量和數量會影響這種增長。我認為我們今天試圖幫助模型的最大推動因素只是協同節奏，顯然是一些利息費用和稀釋影響。

Andrew Nicholas, William Blair.

安德魯尼古拉斯、威廉布萊爾。

I wanted to ask a question on upsell cross-sell, the metrics there for both First Advantage and Legacy Sterling are pretty impressive, accelerating sequentially. Is there anything that you can do to unpack that a little bit more for both entities? And maybe to the extent that there are growth drivers in there that can drive revenue synergies for the combined firm, too, it would be great to hear on that.

我想問一個關於追加銷售交叉銷售的問題，First Advantage 和 Legacy Sterling 的指標都非常令人印象深刻，並且逐年加速。您可以做些什麼來為這兩個實體提供更多的資訊嗎？也許在某種程度上，其中存在的成長動力也可以推動合併後公司的收入協同效應，很高興聽到這一點。

Yes. We're obviously very happy where both companies are in upsell, cross-sell. And if you remember last quarter, we announced two very large deals that we won in the quarter that were both upsell, cross-sell. So those are revenuing now. And in fact, they both revenue within days of closing.

是的。我們顯然對兩家公司進行追加銷售和交叉銷售感到非常高興。如果您還記得上個季度，我們宣布了本季度贏得的兩筆非常大的交易，這些交易都是追加銷售和交叉銷售。所以這些現在正在獲利。事實上，他們在交易結束後幾天內就實現了收入。

So we're riding pretty nicely on those two wins from last quarter. Sterling, we still need to get into more of the details. The deal is only 12 days old but they've had some success with upsell cross-sell as well as you can tell from their results. So I think the highlight here, Andrew, is that customers are still prioritizing safety and compliance and shareholder value and brand protection over cost cutting.

因此，我們在上季度的兩場勝利中表現得非常好。斯特林，我們還需要了解更多細節。該交易僅進行了 12 天，但他們在追加銷售交叉銷售方面取得了一些成功，您可以從他們的結果中看出。因此，安德魯，我認為這裡的重點是，客戶仍然優先考慮安全性、合規性、股東價值和品牌保護，而不是削減成本。

And that is leading to deeper and deeper package density. And we think the upsell, cross-sell numbers will not only continue to perform well in the future with just general package density on digital identity solutions, which we think will be hot sellers in the market. So this is a number that we are -- we think is going to be a strong number for the next couple of quarters for sure.

這導致封裝密度越來越深。我們認為，追加銷售、交叉銷售數量不僅會在未來繼續表現良好，而且數位身分解決方案的封裝密度也將成為市場上的熱門產品。因此，我們認為這個數字在接下來的幾季肯定會是一個強勁的數字。

Great. And I realize it's early to talk about specific '25 numbers. But just as we think about kind of the integration here, how much distraction risk, do you feel that there is with the sales force, in particular, is it fair for us to assume some sort of haircut to new logo growth or upsell,, cross-sell absent the tailwinds that you just described over the first couple of quarters of this combined company? Or how are you thinking about that holistically?

偉大的。我意識到現在談論具體的 25 數字還為時過早。但是，正如我們在這裡考慮某種整合一樣，您認為銷售人員有多少分心風險，特別是，我們對新徽標的增長或追加銷售進行某種削減是否公平？後的公司前幾季的順風車，交叉銷售？還是你是如何整體考慮這個問題的？

Yes. I think we're doing a really good job of coordinating the front-end go-to-market teams. We've got daily standup calls in place. We're mapping joint R&P deals that we're on, we're talking to customers. I think what's really interesting is when the deal was closed, we obviously communicated to all Sterling customers.

是的。我認為我們在協調前端市場團隊方面做得非常好。我們每天都會進行站立通話。我們正在規劃我們正在進行的聯合 R&P 交易，我們正在與客戶交談。我認為真正有趣的是，當交易完成時，我們顯然與所有 Sterling 客戶進行了溝通。

And then we actually spoke in person to all of their large customers.

然後我們實際上親自與他們所有的大客戶進行了交談。

And there was just really good excitement about the deal and customers are feeling really good about it. So you're right in that when you put things together, it does bring in some potential distraction and some risk. I don't think we will see a deterioration of any of those key metrics. They may stay stable for a while. But we actually think in the long run, some of these should improve.

這筆交易確實令人興奮，客戶對此感覺非常好。所以你說得對，當你把事情放在一起時，確實會帶來一些潛在的干擾和風險。我認為我們不會看到任何這些關鍵指標惡化。他們可能會保持穩定一段時間。但我們實際上認為從長遠來看，其中一些應該得到改善。

But I would say you could probably have a period of stabilization around that as we put the front end together.

但我想說，當我們將前端整合在一起時，你可能會經歷一段穩定時期。

(Operator Instructions) Manav Patnaik, Barclays.

（操作員指令）Manav Patnaik，巴克萊銀行。

Scott, I just wanted to touch on your plans around the integration of the platforms. I'm guessing there's multiple platforms here. And so just what are your plans around that? And all this new innovation, front-end integration, et cetera, I'm guessing that's not contingent on those back homes combining to one.

斯科特，我只是想談談您關於平台整合的計劃。我猜這裡有多個平台。那麼您對此有何計劃？所有這些新的創新、前端整合等等，我猜這並不取決於那些家庭的結合。

Manav, great to have you back. And great question. So obviously, this is probably the number one focus area of the company is to make sure that we get this right. And I think you've heard consistently from us since we announced the deal that there -- our goal is to not disrupt the existing client base with their platform selections. And we've been out talking to customers, and we're not going to force migrate customers onto a given platform because we, one, don't need to.

馬納夫，很高興你回來。這是一個很好的問題。顯然，這可能是公司的首要關注領域，即確保我們做到這一點。我想，自從我們宣布這項交易以來，您一直從我們那裡聽到——我們的目標是不透過平台選擇來擾亂現有的客戶群。我們一直在與客戶交談，我們不會強迫客戶遷移到特定平台，因為我們不需要這樣做。

Our synergy numbers don't require that. We are also going to -- as we roll out new features and functionalities and as we figure out which products stay, which products go, we view that as keeping the better of the 2. And -- so ultimately, what our customers -- what our combined customers should feel is an upgrade of service and an upgrade of products. And we're going to be very, very thoughtful and cautious about how we do this. There's no time line.

我們的協同效應數字不需要這樣。我們也打算——當我們推出新的功能和功能時，當我們弄清楚哪些產品留下來、哪些產品離開時，我們認為保留兩者中的更好的產品。最終，我們的客戶—我們的綜合客戶應該感受到的是服務升級和產品升級。我們將對如何做到這一點非常、非常深思熟慮和謹慎。沒有時間軸。

It will take us many months to come up with what those strategies are, because due to the HSR process, we couldn't really get under the cover too much, and now we're starting to do that, and we're obviously liking what we're seeing. But we'll be very thoughtful as to how we roll that out.

我們需要花費好幾個月的時間才能想出這些策略，因為由於高鐵流程，我們無法真正隱藏太多內容，現在我們開始這樣做，而且我們顯然很喜歡我們所看到的。但我們會非常慎重地考慮如何推出它。

Okay. Fair enough. And then just you talked about -- I think you mentioned a few times about job trends getting back to pre-pandemic levels. Just wondering how -- like we don't really have the history pre-2021 for you or Sterling for that matter. So just wondering with the combined company, how you think you perform in that kind of a normal environment?

好的。很公平。然後你剛剛談到——我想你多次提到了就業趨勢回到大流行前的水平。只是想知道如何——就像我們並沒有真正了解你或斯特林在 2021 年之前的歷史一樣。所以想知道合併後的公司在那種正常環境下的表現如何？

Like do your long-term algorithms change a little bit?

例如你的長期演算法會改變一點嗎？

Yes. I think the growth algorithm, which I'll cover again just real quickly, so everybody is on the same page. But our growth algorithms are typically where we see base growth of 2% to 4%, upsell, cross-sell of 4% to 5%, new logos of 5% to 6% and then backing out attrition of 3% to 4%, put you -- put us in that 8% to 10% growth range. And really, we are firing on all cylinders, except base right now. So for the last -- literally for the last two-plus years, if you go back and look at the -- I think this is our 14th earnings call.

是的。我認為成長演算法，我很快就會再次介紹，因此每個人都在同一頁上。但我們的成長演算法通常是基數成長 2% 到 4%，追加銷售、交叉銷售 4% 到 5%，新商標 5% 到 6%，然後淘汰 3% 到 4%，讓你——讓我們在8 % 到10% 的成長範圍內。事實上，我們正​​在全力以赴，除了基地之外。因此，在過去的兩年多時間裡，如果你回頭看看，我認為這是我們的第 14 次財報電話會議。

If you go back and look at the data, it's been so consistent on upsell, cross-sell, new logo and attrition. And the only thing that fluctuates really is base. So as we look into future modeling, we don't think, as I mentioned just earlier, we don't think that there will be any change to our growth algorithm on upsell, cross-sell, new logo and attrition. And again, ultimately, there should be improvement there, although it should remain stable, maybe for 2025 and then start to improve as we put things together. So it's just always coming down to base right now.

如果您回頭查看數據，您會發現追加銷售、交叉銷售、新商標和流失的數據非常一致。唯一真正波動的是基礎。因此，當我們展望未來的建模時，正如我之前提到的，我們認為我們的追加銷售、交叉銷售、新徽標和流失方面的成長演算法不會發生任何變化。再說一次，最終，這方面應該會有改進，儘管它應該保持穩定，也許到 2025 年，然後當我們把事情放在一起時開始改進。所以現在總是要回到基地。

And again, we're sort of seeing that stabilization and normalization, which has us in the -- still in the low single-digit declines in base right now.

再次，我們看到了穩定和正常化，這使我們目前的基數仍然處於較低的個位數下降之中。

Scott Wurtzel, Wolfe Research.

史考特‧沃策爾，沃爾夫研究中心。

I wanted to go back to some of the conversations that you're having with customers, specifically the ones that are coming over from Sterling. And maybe would love to just hear kind of -- maybe what they're most excited about being under the combined companies, whether that's products you're looking forward to or features or being able to rationalize costs? Anything there would be very helpful.

我想回顧一下您與客戶的一些對話，特別是來自 Sterling 的對話。也許很想聽聽看——也許他們對合併後的公司最興奮的是什麼，無論是您期待的產品、功能還是能夠合理化成本？那裡的任何事情都會非常有幫助。

Yes. So again, this is fairly a nonevent for First Advantage customers. So we did obviously reach out to talk to all our First Advantage customers, and there's not a lot changed (inaudible) service models aren't changing. So most of the focus has been on the Sterling customers. And again, we wanted to be very proactive here introducing a new leadership team and reinforcing that there'll be no disruption in service and product.

是的。再說一遍，這對首優諮詢客戶來說根本不是什麼大事。因此，我們顯然確實與所有 First Advantage 客戶進行了交談，並且服務模式沒有發生太大變化（聽不清楚）。因此，大部分焦點都集中在 Sterling 客戶身上。再次，我們希望在此非常積極地引入新的領導團隊，並強調服務和產品不會受到干擾。

And I think some of the things that they're extremely excited to hear more about from First Advantage. One, on the automation. As you guys know, we've always felt we're the most automated in the industry and automation brings obviously speed. Speed is a big seller in a space. So they know -- they can lever our robotics and our API and our overall automation and we'll start mapping that as to how we can start bringing that (inaudible).

我認為他們非常高興從首優諮詢獲得更多資訊。一、關於自動化。如你們所知，我們一直認為我們是業界自動化程度最高的，而自動化顯然帶來了速度。速度是某個領域的一大賣點。所以他們知道——他們可以利用我們的機器人技術、我們的 API 以及我們的整體自動化，我們將開始規劃如何開始實現這一點（聽不清楚）。

One of the low-hanging fruits, which they all really want is our chat feature in service. So click chat call, we've been talking about for almost a year now. Sterling did not have a chat feature. So this is something that we will probably be on the number one rollout that we'll do. This is probably the first thing that will bring to Sterling customers is giving their candidates and applicants and the recruiters a chance to just chat with customer care to find out status or whatever it be might.

他們真正想要的唾手可得的成果之一就是我們服務中的聊天功能。所以點擊聊天通話，我們已經討論了快一年了。Sterling 沒有聊天功能。因此，這可能是我們要做的第一個推出的事情。這可能為 Sterling 客戶帶來的第一件事是讓他們的候選人和申請人以及招募人員有機會與客戶服務人員聊天以了解狀態或任何可能的資訊。

So customers are super excited to hear that, that would be a feature that -- we put in their hands within maybe a four to six months at maximum time period. So stuff like that, we'll start rolling out, but there's overall, just general excitement about what this potentially can bring to them.

因此，客戶聽到這個消息非常興奮，這將是我們在最多四到六個月內交付給他們的功能。因此，我們將開始推出類似的東西，但總體而言，人們對這可能為他們帶來的東西感到普遍興奮。

Got it. That's helpful. And just a reminder on the capital allocation side, how you guys are thinking about debt paydown and cadence of that following the closing of the deal?

知道了。這很有幫助。只是在資本配置方面提醒一下，你們如何考慮交易完成後的債務償還和節奏？

Yes, Scott, we don't have a direct debt paydown schedule yet. I mean the new debt agreement does have 1% annual prepayment amortization to it. On a capital allocation approach, your number one priority is finishing the integration. We just closed, as Scott mentioned a few minutes -- barely weeks ago. So integrating the two businesses.

是的，史考特，我們還沒有直接的債務償還時間表。我的意思是，新的債務協議確實有 1% 的年度預付款攤提。在資本配置方法中，您的首要任務是完成整合。正如斯科特在幾分鐘前提到的那樣——就在幾週前，我們剛剛關閉。因此整合兩個業務。

We're going to go get all those synergies. We're going to retain the customers and then we're going to be bringing down that net leverage number to our target range, and that will be done through a combination of debt pay down, cash flow generation, et cetera.

我們將獲得所有這些協同效應。我們將留住客戶，然後將淨槓桿率降低到我們的目標範圍，這將透過債務償還、現金流產生等相結合來完成。

I've got one more thing. This is not (inaudible) Sterling customer base is also extremely excited to be to attend our collaborate event, which we have every April. The Sterling reps have been talking about it. There's -- Sterling never had an annual customer event. And the Sterling customers are just really excited about getting together with other clients in their industry to share best practices and talk about other learnings.

我還有一件事。這不是（聽不清楚）Sterling 客戶群也很高興能夠參加我們每年四月舉辦的合作活動。斯特林的代表一直在談論這個問題。Sterling 從未舉辦過年度客戶活動。Sterling 客戶非常高興能夠與業界的其他客戶聚集在一起，分享最佳實踐並討論其他經驗教訓。

So I think our annual customer event in April in Miami this year is going to be extremely well --

所以我認為今年四月在邁阿密舉行的年度客戶活動將會非常順利--

And I see that there are no further questions in the queue at this time. This will conclude today's First Advantage Third Quarter 2024 Earnings Conference Call and Webcast. Thank you all for your participation. At this time, you may disconnect your lines, and have a wonderful day.

我看到此時隊列中沒有其他問題了。今天的 First Advantage 2024 年第三季財報電話會議和網路廣播到此結束。感謝大家的參與。這時，您就可以斷開線路，度過美好的一天了。