All right. Good morning, everyone, and thanks for joining us here today. My name is Andrew Nicholas, and I'm the Business Services Analyst here at William Blair. Before getting started, I'm required to inform you that for a complete list of research disclosures or potential conflicts of interest, please visit our website at williamblair.com. With that out of the way, I'm very pleased to welcome First Advantage CEO Scott Staples and CFO Steven Marks here to the 45th Annual Growth Stock Conference. Really excited to have both of you here again this year. We're going to do a fireside chat format. I'll start with just a very high-level question on kind of the business for those of you that a ren't familiar, and then we'll get into some of what I consider to be the most important topics for the space and the company. So maybe that's my segue, Scott. If you could just speak a little bit about what First Advantage is, what you do, who it's for, and we'll kind of go from there. That's awesome. Thanks for having us. You also cover HR tech. I do. Business service, I include HR tech within that umbrella. I saw that one, great. I saw that when I was having breakfast this morning, yeah, HR tech. First Advantage is a global software, data, and services company catering to the HR tech space. Our platforms and our data and our services are used by talent acquisition departments, HR departments, security, and compliance. We do business all around the globe in 200 countries and territories. We do 190 million background screens per year. Our platforms and technology are used in the onboarding cycle to check criminal history, verification of employment, education, digital identity, I-9 services, et cetera, and then post-employment for ongoing monitoring and things like that. We tend to focus on the enterprise business space. To us, that is a customer that would do $500,000 of annual contract value ACV with us or higher. We also service the mid-market and the SMB space, but we do that in a slightly different model. We are primarily enterprise-focused. We are vertically aligned. Being vertically aligned is very important in our industry to be able to talk about the compliance and the regulations that are specific to certain industries is an important differentiator in the space. We have been around for many years, but we are a little bit of a transformation story in that we came from being a background screener eight years ago to being a software data and services company today, and we went public on NASDAQ about four years ago. Awesome. I would say doubling down on all of the above from a vertical strategy, from a data and information services company, kind of ties into the announced acquisition of Sterling. Obviously, I think we talked about that this time last year, you're 12 months later. Can you maybe refresh everyone in the room on the rationale there, what it's done for your business, and how things are going to this point? Yeah. It's been a great acquisition. We're smiling every day around this acquisition. In the space, we think Sterling and First Advantage were the two best companies. We were certainly two of the three largest players in the space. Now that we're together, we're by far the largest in the space, certainly from a market cap standpoint or a public company standpoint. We think our nearest competitor is about half our size. The rationale was when we looked at the space and we looked at the importance of verticalization and the technology stories that come with each vertical, when we looked at Sterling compared to First Advantage, it was such a complementary fit on verticals. First of all, we felt that First Advantage and Sterling had the best two tech platforms in the space, so that was good news. Second thing is when you look at what the verticals we were strong in, for example, transportation, retail, e-com, healthcare was our third largest. You looked at Sterling, it was like inverse, where healthcare was their largest. They had a very small transportation business. When we started mapping the verticals, we were like, wow, we could have a great, we could increase our story in the verticals we're strong in, and we can fill some gaps in the verticals that we play in, but not as strong as Sterling. When you put it together, we love using the dovetail analogy. We really dovetailed nicely from a vertical standpoint. We've had the ability to then leverage the best-in-breed technologies from each company's strengths in verticals to then offer that to the install base of the other customer. But also to be able to buy it at a good valuation and then the benefit of generating a lot of extra value out of synergies. From a financial model, it was very beneficial as well. Yeah, I want to hit that as well, Steven, but maybe before going into the financial rationalization, just in terms of scale, I think this is an industry where bigger is generally better, more capital to invest in technology, automation, AI, all those things. Can you maybe speak to that benefit or those benefits and also just like from a market structure perspective, how different you expect it to look over the next couple of years versus what you've historically competed in and what that enables you to do from like a new logo or upsell perspective as well? Yeah, so I think to answer your question, let's first paint the competitive landscape, and then I think the answer becomes a little more clear. If you look at the competitive landscape in our space, we feel we're a category leader. There are really two other buckets. There are what we call mid-sized players, and they're companies with revenue between $100 million and $700 million. Let's say there are 8, 9, 10 of them. Then there are literally dozens and dozens of mom-and-pops, which are sub-$100 million. We feel that we've got a pretty nice competitive moat ahead of the mid-markets and certainly a large one ahead of the mom-and-pops, but we feel that only accelerates with what's going on in the technology space. We spend $120 million-$130 million a year on R&D. As you can see, that spend in R&D is actually bigger than all those mom-and-pops in revenue standpoint. Those mom-and-pops actually surprisingly still have a number of enterprise customers in their fold. Each mom-and-pop typically will have two, three, four, or five enterprise customers and a lot of SMB. We're not as interested in the SMB, but we'd love to have those two, three, four, or five enterprise customers. We think that we can get that market share without M&A with R&D spend coming. We're investing in places like better user experience. We've rolled out a complete new Applicant Portal, which is loaded with AI, which is a really cool piece of technology that's when you do a background check, most applicants can do it right from their phone or choose to do it right from their phone. That's a really nice experience because a lot of the data is pre-populated coming in from the ATS system, like a Workday or an SAP SuccessFactors. It makes for a really nice experience. We are also using AI in service areas. For example, in this day and age, everybody likes to talk via chat. We have a really nice chat feature that we have built out with Salesforce around how applicants and customers can chat with us to get status of background checks, change their passwords, et cetera. We are using AI and machine learning in a lot of our data applications. We do have proprietary databases, and these are fed through proprietary algorithms and using AI and machine learning to evolve almost on a daily basis. When we sit back and think about it, when we're sitting in front of our customers, we're talking about AI, we're talking about machine learning, we're talking about facial recognition, we're talking about digital identity, we're talking about algorithms, we're talking about proprietary databases. There's no way in the world any mom-and-pop is talking about that stuff. Most of the mid-markets probably aren't either. We feel that that type of dialogue with our customers gives us a competitive advantage in the fact that, one, our technology is better, but two, they get trust in us that we're going to be solving the future problems for them, not only the current problems. Very helpful. Thank you. I think, and correct me if I'm mistaken, but I think in the past you've talked about a relatively even split of new logo growth from several of the different buckets that you just described. Is there between SMB and competitive takeaways and those that may be insourced, or did it manually in the past? I can't recall exactly, but is that relatively consistent with what you're seeing post-Sterling acquisition? Is there some shift there that you would expect to come from kind of the dynamics you just described? Yeah. No, we are definitely seeing a little bit of a shift. In the past, when there were three publicly traded companies, mid-market and then SMB, as you alluded to, we were taking business really in equal thirds, third, third, third. Now we have obviously reshuffled the deck to two buckets instead of three. We tend to get most of our market share from the mid-market. It's incredible. When we win deals from mom-and-pops, it's incredible that that brand was with a mom-and-pop, where it's a head-scratcher. I'd say we're probably more of like a 60/40 split right now. As you can tell from our Q4 and Q1 results in terms of wins, we had a record number of units won in Q4 and a record number of ACV value in Q1. We feel that's a great signal and a great sign to where we are with the sales engine and also where the market perceives the acquisition. Sure. I guess you couldn't be doing all that if the market wasn't large, it wasn't growing. Yeah. That is going to be my segue into talking about the TAM. Yep. You had an investor day last week where you outlined your estimate of the addressable market, which is a little bit higher than what you had outlined when you IPO'd several years ago. Can you kind of talk through that TAM and digital identity, I think, is becoming a bigger and bigger part of that? We can go on that topic next. Yeah. So from a TAM standpoint, when we looked at this space around the IPO and pre-IPO, it was about a $13 billion TAM. Today, that's grown to about a $14 billion TAM, and that's a global number. That's about 50/50 between vended and non-vended, so there's a lot of white space. Particularly in places like APAC, for example, internationally, about 50% of our new logo wins in APAC are from companies that have never screened before, so first-time screeners. We're starting to get big regional companies in APAC starting to act like the multinationals do in Europe and in the U.S. That's a good sign for getting that white space. Thirteen has grown to fourteen, but I think the new phenomenon, which is what we're all excited about, is the addition of the digital identity TAM. Digital identity is the hottest topic, fastest-growing product discussion in our space. This is really all around AI-enhanced fraud in the recruitment and applicants' journey. What that means is more and more applicants are getting jobs fraudulently, especially within the U.S., by using AI. They're using deepfakes on Zoom and on Teams when they're interviewing. Many of our customers are telling us the person that they think they interviewed over Zoom is not the same person that showed up for the job and maybe not the same person that signed the I-9. There's a Gartner report out that says by 2028, one in four applicants will be fraudulent. That's the negative aspect of AI. There's even a Wall Street Journal article that was out a few weeks ago. It actually just hit, again, this morning, where North Korean agents are infiltrating U.S. companies. They feel that they've infiltrated over 300 U.S. companies already. This is where a North Korean agent has illegally entered the U.S., got a job fraudulently, now has access to that company's corporate systems, and is sending that paycheck back to cash-strapped North Korea to help the motherland. This has Boards and C-suites in a panic right now. Digital identity is a series of products that can help solve that. That TAM is about a $10 billion TAM. We add that to the $14 billion, we're now sitting in a $24 billion market. We're very early, early, early days on the $10 billion TAM digital identity. I think that TAM is growing high teens, or at least that was the messaging last week. I mean, can you talk just very briefly about your right to win there? Why does First Advantage make most sense to solve that problem for clients? Yeah, in today's world, size and scale matter. I'll give you the example I'll give you is, or the analogy I'll give you is what sort of happened in the cybersecurity space. If you go back in cybersecurity five, six, seven years ago, it was just starting to be new, and this was on the radar of B oards and C-suites. Obviously, nobody wants to get hacked. This had very high elevation status within organizations. They would question, when you get to Boards and C-suites, they question policies, they question procedures, and they question partners. They want to be very comfortable that they've got the best in class of all of that. The same thing now is starting to happen in background screening. Background screening is no more just embedded in HR departments. Because of what I just walked you through with digital identity and because of the world that we live in, which is becoming more and more complicated, and if you just turn the news on at night, risks keep coming up on a daily basis. Boards and C-suites want protection from that. The concept of background screening has really bubbled up to a higher level where now they are questioning policies, procedures, and partners. Typically then, they would also get procurement involved because the spend is starting to increase because they want more and more protection. Normally, when you hear procurement involved, you're thinking, "Oh, there's issues. They're going to beat you down on price and margin." That's not actually what we've seen. Procurement departments have become our best friends because when procurement steps in, our market is a very fragmented market. They come in and they say, "There's no way we're going to continue doing business with this mom-and-pop. Too much risk." They are looking at a global and saying, "We need to consolidate with larger vendors who have better technology and we can have partnership-type discussions with us." A lot of our upsell, cross-sell, and growth has come from procurement-led RFPs where they are looking for vendor consolidation with bigger players with better technology to help them avoid risk. These are a lot of good things that are in our favor. Absolutely. You take it all together and you published or messaged 2028 targets last week for the long-term kind of growth opportunity of the business. Maybe you could spend some time for the audience kind of outlining what those targets look like and maybe some of the assumptions embedded in there. Yeah, I mean, we were, obviously, as you know, in New York last week with all of our investors, but we have an outlook of getting to about $1.8 billion- $2 billion in revenue by 2028. When you look at our revenue growth algorithm that kind of powers that revenue growth, kind of break it down into two areas. Kind of the base, which is the macro, which I'll come back to in a second. What gives us good confidence in that is the ability to influence growth through generating growth out of upsell, cross-sell. Leveraging those trends Scott just talked about, risk management, package density, cross-selling more into digital identity. That's going to be a consistent 4%-5% contributor to growth. It's been very consistent, as you know, through the macro cycles, leveraging our go-to-market, leveraging our product and tech. Likewise, another 4%-5% growth just through new logos, so through taking market share in a competitive market, also leveraging international as well. One of the more positive things that has come out of the acquisition is we have still been able to maintain 96% customer retention, even on the heels of the acquisition that we announced now 16 months ago. When you add those up, we can influence a lot of growth out of that. Now that we are starting to exit the anomaly that was the pandemic and obviously the post-pandemic hiring boom and then this normalization cycle we have been in, and as we mentioned on our investor day, we have seen that trend of stabilization continue through Q1 into April and now into May. As that gets towards that neutral state and even becomes a longer-term 2%-3% contributor, we expect revenue growth to resume at that 7%-9% rate, which outpaces the vended market growth, but also that's high single-digits growth, which is really healthy. On the heels of the acquisition, as mentioned, the synergies before, but then just leveraging that growth with gross margins that hover around 50%. Leveraging that new revenue growth. We have had a culture of just generating incremental cost savings, leveraging AI, leveraging automation, leveraging our data assets. We will get our EBITDA. Our expected 2028 range is between $560 million-$630 million. Let's just use $600 million as kind of the North Star there. Call it around a $2 billion revenue company generating $600 million of EBITDA. I think a core part of our culture at First Advantage has been high quality of earnings. Once we get through the integration, getting rid of the add-backs, which then results in good free cash flow conversion, as you know. We are really excited about that outlook. I think we think it is very attainable. We have got the positive trends of digital identity, risk management, continued package density, and a great mix, a diverse mix of customers to help drive us there. Sure. I think at the bottom line there, it was high teens to low 20s type earnings growth over that time frame, which is maybe an excuse to talk about capital allocation, deleveraging. Can you give us just kind of a quick overview of how you guys are spending your cash? Yeah. No, so I mean, the other benefit of the position we're at today when you look forward is, yes, we have a little leverage at the moment. As we deleverage, which not only has this business, but this management team has done a couple of times now. In fact, when we were acquired in 2020, our leverage was almost six times. We got that down enough to be very flexible with our capital allocation over the last couple of years, very rapidly. We're committed to doing that again. We think that outlook's there, which allows us to leverage that to EPS even more rapidly. Actually, our long-term guidance on EPS is $1.65-$2, which is more than double where we were at in 2024 at all parts of the range, almost two and a half times at the upper end. We leverage all those things I just talked about in terms of EBITDA growth, but then get the added benefit of free cash flow conversion, deleveraging. We have already started the debt paydown journey, paid down about 1% last quarter or so. We will continue to take free cash flow and do that until we get into our long-term target range of two to three times. Until then, capital allocation is pretty simple. We are going to integrate these two businesses. We have now $65 million-$80 million of cost synergies, our new synergy target that we rolled out last week. We will continue to deleverage. As we get closer, we can get a little bit more flexible. Until then, we've got a healthy journey for the next 18-24 months of just completing this integration, really making First Advantage by far and away the category leader like Scott was just talking about. In that process, bringing leverage to where we promised for our investors. Great. We'd love to hone in a little bit more on the labor market. It sounds like April and May are consistent with what you saw in the first quarter, which is always exciting to see, particularly given all that we've seen from a geopolitical and macroeconomic perspective. Can you just maybe lay it out a little bit more in a little bit more detail with what you've seen over the past year plus, what you've seen so far this year? And within that, the differences between whether it's verticals or by geography, because I think obviously it's a dynamic environment depending on what area of the market we're talking about. I think it's hard to look at the last year without really looking at maybe the last four or five years because it's been a pretty long journey, if you will, from the pandemic. Obviously, post-pandemic, whatever great resignation, great onboarding, whatever term we want to use, a metric, I know we talked about this last week, but a metric we always look at is the ratio of job openings to those unemployed. A historically comfortable level for that is about one to one, right? One job for every unemployed person. That creates a very nice balanced labor market. Post-pandemic, as if it was a war for labor, everyone got laid off and then brought back to work. That number actually peaked at 2.2 times in early 2022, which is obviously unsustainable for the market, creates excess churn, great for our base revenue back in 2021 and 2022, but clearly not sustainable. It has just taken the market, call it three years, to really get that excess supply of openings back down to a normalized level. If you look at where the BLS data has been the last eight or so months, probably a little bit longer, we are hovering now right at that one to one ratio. Where that comes through, unfortunately, in our financials is year-on-year-based declines as we go from that plateau back down. We have seen that stabilization cycle really continue the last couple of quarters. That is also what we are hearing from our clients, that they are not changing their strategies. Their outlook is to keep operating under the same protocol, which is why we kind of in our 2025 guidance have the back half of the year as we lap those, getting to kind of that third year, that steady year, have base being neutral. Again, as I talked about, base being neutral is okay because we're able to drive growth out of upsell, cross-sell, out of new logo, and been really proud of that 96%+ retention rate. Getting to that neutral state is kind of where we have it for the time being before we return to the long-term growth, which is there's a lot of secular factors that get you to that. Sure. I want to change topics a little bit and maybe dive in a little bit more into international. Scott, you mentioned APAC and some of the pipeline growth and ACV growth there. Can you kind of talk about where the international market is relative to the U.S., why there's such a big kind of opportunity there in white space, and just maybe culturally, what the difference is in how they approach this decision versus what we're kind of accustomed to here? Yeah, I think the first thing is we've had really nice growth out of international for the last three or four quarters. I think international actually went into a choppy macro earlier than the U.S. and has sort of maybe come out of it a little earlier than the U.S. We’ve had pretty good growth opportunities. I mean, we do business around the whole world, but the big areas of potential we see are in the U.K., India, and Australia, particularly because those are primarily those are English common law countries. The governments have also done a real good job of digitizing and centralizing their data sources. It makes our job a lot easier, and we can come in with a fully automated tech solution, which obviously brings us nice margins and good speed for the customer base. It doesn't mean that we don't do business elsewhere. We're still getting pretty good growth out of Hong Kong, ASEAN, and other markets in the space. APAC in particular, we see a lot of growth because we're starting to get those large regional companies that are first-time screeners learning from the multinationals out of the U.S. and Europe. The U.S. and Europe multinationals are all doing business in the APAC region. Over time, those HR people leave and go work for regional companies and then say, "Wait a minute, we're not doing background screening." That ultimately drives some growth for us. The other thing is, if you look at the international landscape, it really was a market, even though it's only 14% of our business, it really was a market that the primary players were Sterling, First Advantage, and HireRight. Now Sterling and First Advantage are together. A lot of business is coming our way because of that international footprint being so much better as combined entity versus standalone. Makes sense. Only have a couple of minutes left. I just want to make sure we've touched on it briefly at various points throughout the conversation, but just cover the AI topic. As a data company, as a data services company, and we've written this quite a bit for our information services companies, there's a huge opportunity with AI and machine learning and all the buzzwords to do things with data that are more efficient than what you were doing five, ten years ago. I think First Advantage has obviously been a leader, particularly within the screening space, but just even broadly on executing on that. Can you just give people a sense of what you're doing now, maybe what the opportunity looks like, and maybe the financial benefits that could come from that as well? I mean, first of all, I think think of us as a sort of a software powerhouse. We have 850 people that are just in product and software engineering and infrastructure. We have 90 development pods around the world. Five of those pods sit in Poland and are our innovation pods. They only work on AI and other innovation. This space needs it. I know we only have a minute left, but the reason we need it is the data is so fragmented. AI can help pull that data together faster, interpret it quicker. For example, we're in the state of Illinois. You would think, "Oh, yeah, go to the state database, you're going to catch all the information here." That's incorrect. Only 50% of the counties in this state actually report their data to the state database. There are counties in here that would never get their data to the state. AI and automation, whether it's APIs, robotic process automation, can go get this data from all these thousands of data sources around the country and around the world and interpret it better, present it better, help us be faster and more automated. Great. That wraps us up. Thank you to everyone for joining us. Thanks to each of you for joining me on stage. For those interested, we will have our breakout session in the Richardson room from here. Look forward to seeing many of you there. Thanks again. Thanks, Anders.