Hello, everyone, and welcome to the Sterling Third Quarter 2022 Earnings Call. My name is Seb, and I'll be the operator for your call today. There will be an opportunity to ask a question on the call today, and you can submit your question by pressing star one on your telephone keypad, or press star two if you wish to withdraw your question. I will now hand the floor over to Judah Sokel to begin. Thank you, operator. Welcome to Sterling's Third Quarter 2022 Earnings Call. Joining me today are Josh Peirez, Chief Executive Officer of Sterling, and Peter Walker, Chief Financial Officer of Sterling. The slides we will reference during this presentation can be accessed on Sterling's investor relations website under news and events. The slides have been posted to our website, and the replay will be made available on the website. After prepared remarks, we will open this call to questions. Before we discuss our results, I encourage all listeners to review the legal notice on slide two, which explains the risks of forward-looking statements and the use of non-GAAP financial measures. Additionally, please refer to our Form 10-K filed with the Securities and Exchange Commission for a discussion of risk factors that could cause actual results to differ materially from these forward-looking statements. Our slide presentation and discussions on this call will include certain non-GAAP financial measures. For such measures, reconciliations to the most directly comparable GAAP measures are in the appendix to the presentation and in our earnings release issued this morning. I'll now turn the call over to Josh Peirez. Thank you, Judah. Good morning, and thank you for joining us. Sterling's third quarter of 2022 was another great quarter and continued the strong results we saw throughout our record 2021 and the first half of 2022. As you can see on slide four, this represents our seventh straight quarter of double-digit organic constant currency revenue growth. Our sustained excellence in new business growth, client service, and innovation drove year-over-year revenue growth of 18%, including 12% organic constant currency revenue growth, even as we lapped last year's third quarter growth of 44%. We also saw approximately 7% growth from EBI, which has consistently outperformed our initial expectations and gives us great confidence for future M&A. We are very encouraged that the quarter's strong results were driven by all four of our revenue drivers performing at or above our long-term targets. Our product innovation and technology excellence continue to resonate with prospective clients, helping drive third quarter growth from new business of 9%, the eighth consecutive quarter of growth from new business above our long-term target of 7%-8%. We continue to win new logos from competitors of all sizes and in all regions due to our competitive differentiators such as innovative product offerings, client service excellence, and cloud-based technology. Our pipeline of recent wins and new prospects remains very strong, giving us confidence in our ability to continue to deliver best-in-class new business revenues. Clients are also deepening their spend with us through our upsell, cross-sell strategy as we expand package density and sell innovative and unique new products. One such unique product is identity verification, where we are a global market leader with highly differentiated and proprietary solutions. In the third quarter, we signed an exclusive workflow partnership with U.K.-based Yoti, expanding our digital identity solutions to international markets by building on the same vision and best-in-class identity verification offerings we have in place in the U.S. with ID.me. I'll discuss this partnership and our identity solutions shortly. Our other two revenue drivers, revenue retention and base growth, also performed in line with our long-term targets. Our revenue retention rate of 96% is fueled by our ongoing commitment to customer service excellence, which includes customer tools that have been completely redesigned in recent years and a cloud-based platform providing best-in-class innovation and network availability. Turning to slide five, the third quarter of 2022 marks our seventh consecutive quarter of double-digit year-over-year organic revenue growth, and we have now delivered an average sequential quarter-over-quarter revenue growth of 10% since the second quarter of 2020. We are very proud of our consistency in new business generation as Q3 was the eighth consecutive quarter delivering above our 7%-8% target range, and we expect to continue outperforming the market over the long term. We are particularly proud that we accomplished double-digit organic revenue growth in the third quarter, which we believe is best in class. Slide six illustrates this point further, showing that we have been delivering strong results in the growth drivers we control. From the combination of new business, cross-sell, upsell, and gross retention, our organic revenue growth has averaged 15% since the first quarter of 2021, double our combined 7%-8% target for those items. Even during the 2020 COVID downturn, we still achieved our upsell, cross-sell, and new business targets, and our retention improved by 300 basis points over this period. This demonstrates that our solid strategy and execution have enabled us to perform well in the areas most within our control, even during challenging economic times. As we discussed on our last earnings call, we saw our base growth moderating in the back half of the year to our long-term 2%-3% target. This moderation happened a bit earlier than we expected, as many clients tempered their hiring due to macroeconomic uncertainty and are now operating in a holding pattern as they assess the macro environment and establish their plans for next year. Despite this, we still grew 18% in the quarter, including 12% on an organic constant currency basis, while lapping our stellar 44% growth from the third quarter of 2021. We expect fourth quarter revenues to grow year-over-year on both a total and organic constant currency basis. While we continue to see strong performance on the growth drivers within our control, given the uncertain macro environment, we have acted quickly to execute on our growth playbook, taking steps to rightsize our business from the extremely high growth environment we've been operating in for nearly two years. As we shared on our Q1 call, we have been hiring ahead of our revenue needs and running a roughly 10% surplus in our fulfillment labor this year to support our 40% average growth since the beginning of 2021. This strategy served us well, enabling us to maintain very high service levels during a time of explosive growth. As we now transition into a lower growth or recessionary environment, we are acting quickly to rightsize the company, a strategy that will drive cost of revenue and OpEx savings starting in the fourth quarter and increasing in 2023. We have been planning a number of initiatives for the last few quarters while we managed our tremendous growth. We are now accelerating these initiatives as part of our growth playbook, including four key parts summarized on slide seven. First, expanding our margins through additional automation and cost reduction measures. These actions will be aimed at streamlining the business in connection with the refresh strategy we launched earlier this year. Second, executing on the revenue drivers in our control with an even greater focus on new business and cross-sell/upsell initiatives. Third, driving our market-leading identity solutions to gain scale in the market. Fourth, accretive M&A as multiples for tuck-ins and geographic expansion opportunities become more attractive. We believe these actions will position the company to invest for growth and market share gains regardless of the macro environment, and will allow us to expand adjusted EBITDA margins year over year in Q4 by over 250 basis points. We also expect to realize significant run rate cost savings by the end of this year, which will fuel our ability to expand margins substantially in the future, while also gaining market share. One of the key reasons we win and excel in the drivers within our control is our product innovation. Turning to slide eight, identity continues to be a great example of our innovation-led approach and first-to-market solutions. I thought I would share some updates on how things are developing. As we have discussed in previous earnings calls, we view Sterling Identity as a strategic pillar on equal footing to background screening, and we are very excited about our early traction. We believe that the future is not built on transactional identity verification, but instead on trusted digital identity networks. To the best of our knowledge, Sterling is the only provider that offers a solution built upon this principle. Our exclusive partnership with FINRA and ID.me are significant competitive differentiators, and have put Sterling in a leadership position to deliver identity services for employers in the U.S. We are excited to now expand our exclusive trusted digital identity offerings to international markets in partnership with Yoti, a market leader in the portable identity space. Sterling and Yoti have created a new, fully integrated exclusive workflow that we believe provides us a significant competitive advantage outside the U.S., just as our ID.me partnership does in the U.S. The exclusive workflow will allow candidates to seamlessly create a reusable digital identity where they can verify their identity once and share their details with other businesses in seconds. Individuals will be able to use their digital identity for future job opportunities, age verification, and any process requiring identity verification. In Q1 2023, we expect to start deploying our new solution with Yoti in the U.K. and have planned rollouts in various international markets throughout 2023. In terms of our ID.me partnership, the identity rollout has continued to be successful with client adoption across all of our verticals. Clients and prospects are responding positively to our Identity-First messaging and focus on product innovation. The themes that have resonated the most with clients are reducing fraud, ensuring data integrity, and streamlining the candidate experience. When ID.me is used, we are now seeing more than 1/3 of all candidates come in pre-verified, a testament to ID.me's network and the power of reusable identity. We are also starting to see the impact to screening outcomes when identity is in place. One of our largest financial services customers experienced a 22% increase in records found during the six months following ID.me implementation as compared to the six months prior due to enhanced data integrity. Better screening, better candidate experience, and reduced fraud all contribute to our vision to start every screen with identity. This is just the beginning of our identity journey. We look forward to continuing to provide updates as we innovate and change the way background screening works. Turning to slide nine, our achievements in automated fulfillment are another key competitive differentiator, helping us drive strong organic revenue growth. Time to hire is a critical measure for our clients, and we are committed to accelerating that time while not compromising on compliance or accuracy. Automation across our global businesses for all our product areas has been a critical investment area at Sterling for many years. Investments into machine learning, artificial intelligence, APIs, and robotic process automation, combined with owning our captive offshore fulfillment centers, have given us greater control over collecting data with faster speed and increased accuracy. These benefits extend to all parts of our workflow, including data collection, data analysis, and report generation. Today, we have well over 3,000 automations leveraging APIs and RPA, representing 90% of our U.S. criminal searches. These automations enable us to easily access data through seamless integrations and perform the most cost-efficient searches that allow for deeper analysis while searching more jurisdictions in less time. It's not simply the number of automations that matters, it's the results it drives for our clients. Over 60% of our U.S. criminal screens are now completed within the first 15 minutes, over 70% within the first hour, and over 90% within the first day. To our knowledge, these turnaround time figures are best in class in our industry and are key characteristics that differentiate us from competitors. Automation also drives cost reductions throughout our business. We have realized millions of dollars of net savings thus far by reducing our manual footprint and vendor costs. We expect significant future savings as we continue to implement and optimize our strategy, with continued investments yielding additional gross margin expansion and cash flow. As part of the growth playbook i discussed earlier, we have launched Project Nucleus to drive meaningful cost savings and efficiency gains by, first, reengineering processes, second, driving fulfillment labor cost reduction, and third, identifying and executing on additional automation opportunities with a focus on international screens as well as U.S. incremental opportunities. Automation is one of several exciting investments and cost savings initiatives we slowed or paused while our revenue growth was so robust during 2021 and this year. We are excited to ramp up our work on this front, improving further on our already best-in-class capabilities while also enhancing our financial results. In conclusion, I am really proud of the Sterling team for delivering a great third quarter and for continuing to deliver through uncertain times. We navigated successfully through COVID and the subsequent recovery while building for the future, and I strongly believe we will deliver on share gains and margin improvements in the current macro environment as well. With that, I will hand it over to Peter Walker, our CFO, to take you through our financial results and updated 2022 guidance. Peter? Thank you, Josh, and good morning, everyone. Turning now to an overview of our most recent quarterly performance on slide 12. During the third quarter of 2022, we reported revenue of approximately $199 million, an 18% increase compared to the third quarter of 2021, with 12% organic constant currency revenue growth. As Josh mentioned, this was Sterling's seventh consecutive quarter of double-digit year-over-year organic revenue growth, an accomplishment we are very proud of and believe is unique in this industry. The third quarter also included a 7% contribution from M&A, partially offset by a 160 basis point drag due to foreign currency translation. The organic revenue increase included new client growth of approximately 9% and existing client growth of approximately 2%, including base growth, cross-sell and upsell, and net of attrition. Our investments in technology and products, coupled with our best-in-class turnaround times and customer-first focus, enable our gross retention rate to remain strong at approximately 96% for the last 12 months. Additionally, pricing was relatively stable across the period and not meaningful to the change in revenues. We are encouraged that our quarter's strong results were driven by all four of our revenue drivers performing at or above the target range. We are seeing significant success in the areas of our business most within our control, including strong growth from new clients and cross-sell upsell, as well as maintaining industry-leading revenue retention rates. We are most focused on these areas, and we feel that our momentum in winning market share and expanding wallet share with clients can help offset any unpredictability of base growth. As Josh described, our base growth moderated a bit earlier than expected in Q3, which drove approximately $6 million less in revenue and approximately 100 basis points less in adjusted EBITDA margin versus our expectations. Looking at revenues by region, revenue in our U.S. business grew 21% compared to the third quarter of 2021, including 7% from the EBI acquisition. We saw broad-based strength across our industry verticals with particularly exceptional results in our healthcare, industrials, and FinBiz verticals as we executed growth playbook. revenue in our international business grew 11% on an organic constant currency basis. International growth was led by the APAC region, which continues to exhibit broad-based strength, including Australia and Singapore, due to new client wins and strong underlying performance. In the third quarter, we delivered 7% of inorganic revenue growth from EBI, our November 2021 acquisition. We were very pleased with this performance as it was a third consecutive quarter above our expectations. The deal integration is almost complete, ahead of schedule, and our EBI client retention has solidly outperformed our initial expectations. The success of this deal and integration provides us with confidence that we are well prepared to pursue additional synergistic M&A. Turning to Slide 13, our third quarter adjusted EBITDA was $53 million, a 4% year-over-year increase compared to the third quarter of 2021, and adjusted EBITDA margin for the third quarter of 2022 was 26.6%. Last quarter, we indicated that margins should increase in the third and fourth quarters. As I mentioned, the faster moderation in base growth impacted our third quarter margin by around 100 basis points. While we are growing, the macro environment is unclear, and as such, we are implementing our growth playbook. as a result, we expect more than 250 basis points of year-over-year expansion of margin in Q4. Our focus on cost discipline, healthy growth, and innovation will drive long-term margin expansion even as we continue investing in organic revenue growth. As a reminder, our cost structure is highly variable. With 80% of our cost of revenues tied directly to third-party data costs, we only incur as revenue is recognized. An additional 16% of our cost of revenues are tied to labor costs we can quickly scale up and down as required. In the third quarter of 2022, we had adjusted net income of $29 million or $0.29 per diluted share, representing a year-over-year decline in adjusted earnings per share of 12%. This year-over-year decline was primarily driven by a much lower tax rate in the third quarter of 2021, when a provision adjustment brought our adjusted effective tax rate to 13% compared to this quarter's adjusted effective tax rate of 26.5%. For the fourth quarter, we expect an adjusted effective tax rate in the range of 26%-27%. Turning to Slide 14, free cash flow in the third quarter was $35 million, an increase of 65% from the prior year period. Q3's free cash flow was in line with our internal expectations and driven by the growth in operating income and an acceleration in collections. We expect the fourth quarter's free cash flow conversion of adjusted EBITDA to be similar to the third quarter's conversion rate. Our net leverage at quarter end was 2x net debt to adjusted EBITDA at the low end of our 2-3x net leverage target. Our net leverage continues to decline due to our growing cash balance and adjusted EBITDA growth and is poised to continue declining absent any future M&A. That said, our M&A pipeline remains robust, and we expect multiples to start to moderate. We ended the quarter with total debt of $505 million, cash and cash equivalents of $99 million, and approximately $140 million available under our revolver, providing us with ample capacity to execute our growth strategy of reinvesting in organic revenue growth and pursuing M&A. Our capital allocation priorities have not changed since the time of our IPO. Investing in organic revenue growth, pursuing M&A, and maintaining a healthy balance sheet. This remains true in our growth playbook as well as we see macro instability as opportune times to build the foundation for future success. On Slides 15 and 16, we provide our updated guidance for 2022. For 2022, we now expect to generate revenues of $769 million-$779 million, representing year-over-year growth of 20%-21.5%. Adjusted EBITDA of $204 million-$210 million, representing year-over-year growth of 14%-17%. Adjusted net income of $109 million-$113 million, representing year-over-year growth of 18%-22.5%. As shown on Slide 16, our guidance includes full year organic constant currency revenue growth of 15%-16.5%, implying low single-digit organic constant currency growth in the fourth quarter. We continue to see good performance from the revenue drivers in our control, including new business, upsell, cross-sell, and retention. Our industry diversification is providing us some protection against the verticals most impacted by the current environment. In particular, our healthcare, industrials, and APAC region are all showing growth so far in Q4, helping offset declines in U.K. gig, retail, contingent, and technology. For the contribution from the acquisition of EBI, we now expect the deal to contribute 6.5 points of inorganic revenue in 2022, ahead of our previous 6% estimate. During the fourth quarter, we expect the inorganic contribution to be approximately 4% as EBI revenues will flip to organic in December. For the impact of foreign currency fluctuation, our full year 2022 guidance assumes 170 basis points drag compared to 100 basis points in our previous guidance. This includes a headwind during the fourth quarter of approximately 300 basis points. Turning now to profitability. Our updated 2022 guidance includes adjusted EBITDA growth of 14%-17% and implies a full year adjusted EBITDA margin of 26.7% at the midpoint. Our margins are lower for the year from previous expectations, driven by lower revenue guidance, fulfillment labor surplus to support extraordinary growth, higher inflationary costs, and higher third-party verification costs in the U.S. We expect fourth quarter adjusted EBITDA margins to expand substantially, both year-over-year and on a sequential basis as we execute on the growth playbook that Josh mentioned earlier. The midpoint of our guidance implies a fourth quarter margin of approximately 28% over 250 basis points higher year-over-year, reflecting the speed at which we are shifting our organization for the unclear macro environment. Looking ahead, the moves we are making should yield continued margin expansion. Finally, turning to adjusted net income growth guidance of 18%-22.5%, we will benefit this year from reduced D&A, which should drive growth to the bottom line in excess of our adjusted EBITDA growth. We remain encouraged by the leverage in our financial model, driving strong adjusted net income growth during 2022, even in the absence of adjusted EBITDA margin expansion. To further help with your modeling, we've included a page in the appendix with our assumptions for 2022. In closing, we are reaffirming our long-term targets on slide 16. We are encouraged by our continued ability to execute on the revenue drivers in our control and are confident in our plans to improve the profitability of our business as we move forward in the year. That concludes our prepared remarks. At this time, operator, please open the line for questions. Thank you. As a reminder to ask a question, please press star one on your telephone keypad or press star two to withdraw your question. Our first question comes from Shlomo Rosenbaum from Stifel. Please go ahead. Hi. Thank you very much for taking my questions. I just want to ask you if you can just dig in a little bit more into the environment that you're seeing right now and kind of, you know, you're expecting growth, organic growth in the fourth quarter. From what you're seeing with your clients in discussions, do you think that it's fair to assume that you could still generate organic growth going into 2023? I know that no one wants to get too far ahead of themselves, but, you know, generally the company has said that they think that the, you know, the growth drivers in terms of new clients and upsell and things like that should be able to give them growth even in tough environments. I'm wondering if you still expect that to happen in 2023. Hey, Shlomo. Good morning. It's Josh. Thanks for the question. In terms of what we're seeing now, and again, we don't like to comment on any given month, but you should assume that our Q4 guidance is reflective of what we're seeing and our expectation to grow both on a total and on an organic constant currency revenue basis. Obviously, the headwinds from foreign currency exchange are higher than our expectations. Peter laid that out in terms of our expectations of a 300 basis point headwind in the quarter. As we think about next year, you know, I think we're not in a position to give guidance, obviously, as you reflected in your question, Shlomo, and it is a cloudy macro out there. Our expectation is that if the macro remains as we're seeing it now, we expect to grow next year on both the total, and obviously at this point, we don't have any inorganic that we'd be counting next year. On a organic constant currency basis, we would be expecting growth next year. Obviously, the first half as we lap our stellar 38% and 29% growth rates in the first and second quarter, which were in turn lapping 80% and 44% growth rates of last year, will be a little bit more challenging, but we would expect to be able to grow as long as the macro does hold. More importantly, I think we expect to expand our margins next year. We believe this is a great time for us to actually take the actions that we could not take over the last, call it three to four quarters while we were growing at such an exponential rate for our business. It was very hard to actually do some of the work that we wanted to do to expand margins. We're gonna use this low growth period to do that work, be more profitable while also planning to grow. Great. If you don't mind giving me one follow-up over here. You called out APAC as an international area of strength. One of your competitors called it out as an area of weakness. I was wondering if you can kinda talk about the verticals that you're in the APAC region and maybe a little bit more generally internationally to, you know, kinda give us a contrast as to why you're stronger in one region versus another in terms of the growth. Yeah. We don't really break down our international business into verticals, but you should think of our Asia-Pacific business as being heavy in financial services and also in gig in Australia in particular. Those are areas that, you know, we're continuing to see good performance. I think, you know, in Europe, we also have heavy financial services and other general broad-based industries. We do have a very heavy gig business in the U.K., which has actually had a pretty tough year after stellar growth last year and the headwinds from currency on the pound. You know, Peter shared the 11% organic constant currency growth rate for our international businesses, but the impact of currency actually wipes out almost all that growth in the quarter. Hey, good morning, Shlomo. It's Peter. I just wanted to add too, and, you know, when we think about APAC, right, what countries are we in is gonna be kind of a differentiator probably between us and the other calls we've heard recently. I mean, Australia and Singapore are, you know, where we're continuing to see strong performance. Great. Thank you. Thanks, Shlomo. Our next question is from Manav Patnaik from Barclays. Please go ahead. Hi, good morning. This is actually Ronan Kennedy for Manav. May I please ask, with regards to what you've seen with the pace moderation coming quicker than expected, you know, can you assess your visibility, in terms of your line of sight into that from what you're seeing from your leading indicators, conversations with clients, et cetera, and your visibility, you know, for the next turn, should it worsen from a slowing environment to potentially recessionary? Yeah. Thanks, Ronan. It's Josh. I'll jump in, and if Peter, you know, wants to follow up. I think first what I'll say is what we're seeing and hearing from clients is reflected in our revised guidance for Q4. It's why we brought it down. But we do still expect to see growth both, you know, organic constant currency and total in the quarter. That is reflective of what we're seeing and hearing. In terms of our visibility, you know, while we won't share the specifics at any given time with you, we do see our revenues on an hourly basis in our platform on a daily basis in terms of our billings and have very good visibility into changes and trends in what we're seeing. What, you know, we wanted to share was more that in Q3, we saw that reversion to our long-term 2%-3% target on base growth happen a little bit earlier than we had expected. It impacted the quarter by about $6 million in revenue, which we would've expected to have a flow-through that would've impacted margin by 100 basis points. We thought it was important to share that in terms of visibility, in terms of why the margin was where it was and why the guide is. When you think about our revised guidance at the midpoint, which is lowered by $16 million, six of that already happened in Q3, and the rest is what we're reflecting based on what we're seeing. Good morning, Ronan. I would just add to that, you know, we've not seen an additional, any kind of step down from what we saw kind of in that moderation of base growth at the end of Q3. The businesses continue to perform based on that run rate, and that's what gives us confidence in sharing Q4 guidance that we will grow revenue in totality and that we will grow organic constant currency revenue in Q4 and also the 2023, you know, high-level comments Josh just provided. That's very helpful. Thank you. May I just confirm what the other drivers for the year-over-year decline in adjusted EBITDA margins were outside of the 100 basis points from the moderation in base growth? Yeah. I think very consistent with what we've been talking about all year, the first three quarters of 2022 had public company costs, so we needed to absorb those costs. We also have EBI operating, you know, not at its fully synergized EBITDA margin in Q3, even though we're ahead of schedule, and we will be there, you know, call it, 2023. Those would be the two drivers to think about, along with the fact that there's about $6 million of revenue that we didn't see in Q3 because of base growth moderating sooner than we expected, and that would've had 100 basis points flow through, which would've expanded margins quarter-over-quarter, which was our commitment in our last earnings call. Okay, thank you. Appreciate it. Our next question is from Toni Kaplan from Morgan Stanley. Please go ahead. Thanks so much. Wanted to ask, you know, I know you mentioned the base growth being a little bit lighter than expected. How about new business? You know, and I know you mentioned a little bit on this earlier, but maybe just a little bit more color on the pipeline and what you saw in new business this quarter. Sure. Thanks, Toni. It's Josh. Again, it was our eighth consecutive quarter of year-over-year growth from new business above our long-term target range, which we're very proud of. Of course, our explosive growth last year means that the denominator in that equation keeps going up. Actually, just to give a little more color, our raw dollars of new business in Q3 of 2022 were higher than our raw dollars of new business in Q3 of 2021. We continue to see a strong pipeline, both of deals that have already closed and just not started to onboard yet, and in deals that are in our pipeline that we would expect to win our ordinary percentage of, that gives us confidence to continue to perform at least at our long-term targets, if not higher. Terrific. Wanted to ask, Peter, I know you mentioned the M&A pipeline's robust and you're expecting valuations to come down. I guess, when you're sort of thinking of a challenging environment, potentially, like, I guess, just because in the long term, you know, you're still solid within your targets, et cetera, like, I guess, is it tough to pull the trigger on M&A in a challenging environment, or do you feel like this is when I really need to do it because valuations are down? Just anything on that and capital priorities and stuff that'd be helpful. Thanks. Yeah. When we think about our growth playbook, right? Focusing on M&A is a key part of that, and we are seeing multiples moderating in the market. We are also seeing sellers kind of being more flexible about how to structure you know, payments for acquiring those M&A deals. I would say our pipeline is very robust and full. We do think this is an opportunity for us to pick up some great quality assets during a lower growth environment. Terrific. Thank you. Our next question is from Andrew Nicholas from William Blair. Please go ahead. Hi, good morning. Thanks for taking my question. I wanted to follow up on one of Toni's questions actually, just in terms of the non-base growth items. Seems like momentum has obviously been very good despite tougher and tougher comps. Generally speaking, I'm not speaking to fourth quarter or even the first half of next year, but would you expect that piece of the growth algorithm to have some cyclical risk? Would you expect over a cycle for a more challenging time to include that piece of the growth algorithm operating below your long-term targets? Or how should we think about, you know, the willingness of clients to switch vendors or partner up with Sterling when the economic environment is not as supportive? Thanks, Andrew. It's Josh. I'll start, and if Peter wants to jump in. I guess I'll just make two, you know, key points. First of all, during 2020, in the COVID period, when you would think that if anyone was gonna freeze, that's when they would've frozen in terms of switching providers, et cetera, we still grew our new business within our long-term targets. We think that's sort of the best example, kind of over a period. I appreciate your comments on, in any given quarter, it's hard to say 'cause, you know, your new clients could pull back a little, I guess, as well. Our view on the long term is that in a low growth environment, we actually think it's the perfect time for us to take more business, which actually is what happened during 2020 during COVID. While you saw us perform at our long-term targets, in terms of the actual annual client value that we took, it was much higher, and it's something that then benefited us going through last year. We think actually a lot of clients will wanna shop in the market, and we're seeing a lot more RFPs coming our way from competitors, giving us confidence that we'll be able to continue to gain market share, which is why I made those comments in my prepared remarks. Hey, Andrew, it's Peter. I would just add that our cross-sell/upsell also performed within the 4%-5% long-term target during COVID. You know, really proof in the pudding that new business cross-sell/upsell will perform within the target in a recessionary environment. That makes sense. That's helpful. Thank you. For my follow-up, was hoping you could maybe frame or size the cost savings you expect from Project Nucleus, whether it's in the fourth quarter or the run rate exiting the year. Just trying to understand what kind of incremental impact that can have on 2023. Thank you. Yeah. Maybe what I can do is just give you frame up a little bit more of what we're focused on without giving explicit numbers. We'll share, you know, more detail on our year-end earnings call. If we first look at cost of revenue, you know, two levers that we pulled there is first, we've been running at a buffer capacity in our fulfillment, carrying about 10% surplus of the number of people that we need. We've been doing that obviously because we've grown over 40%, you know, from the period of 2021 halfway through 2022, and we needed to make sure that we delivered on our high client level services. Number two, in terms of cost of revenue is Project Nucleus that Josh mentioned. You know, the current automation we have is a significant investment for us. That being said, the business has grown exponentially since 2019, so the opportunity to hover up and really look at what's the next kind of version of automation for our business is really important here. So we've actually engaged an outside firm to assist us with this kind of, you know, showing the proof that we're really committed to this. Then when we go into OpEx, you know, there's various initiatives that are in process right now. We talked to you on the first quarter earnings call about our strategy refresh and organizing around the Americas and International. We've already completed some management layers work in terms of getting more efficient in terms of our go-to-market organization there, which will produce savings. We've looked at other things like our global commissions plan. We've harmonized that. We've eliminated places where we had annuity type commission plans in place for our sales force and really, you know, marked to market those plans to make sure they were competitive, but removed things that, you know, financially weren't aligning with the market. Hopefully, Andrew, that's enough color to kinda give you the places we've been focusing on. As we come back with the year-end call, we'll be able to give you more detail in terms of run rate. I think you should take it back to the comment Josh opened with that, you know, assuming the macro environment holds as it is today, we believe we can grow in 2023 from a revenue perspective, and we believe we can expand margins over 2022. That's very helpful. Thanks again. Our next question comes from Kyle Peterson at Needham. Please go ahead. Hey, good morning, guys. Thanks for taking the questions. Just wanted to, you know, follow up, particularly in the U.K. business. I know you guys called out, you know, some softness, particularly in gig. How is the rest of, you know, that business holding up? I know some of the macro data has been a little choppy over there, so I guess is the rest of that business holding up, and it's purely a gig issue, or are you guys seeing a broader slowdown over there? It is purely a gig issue. We did mention earlier in the year that in the first quarter of 2021, we had some one-time work related to a government agency related to COVID. You know, you take that piece out of the equation, and you take gig out of the equation, you look at the rest of the business doing, you know, performing well. Obviously, when you translate it into the U.S. dollar, that's where you know, the results don't show up as strong just because of the foreign currency headwinds that we're facing as an overall business. Got it. That makes sense and is helpful. You know, just wanted to follow up and see, are you guys seeing any clients, you know, whether it's kind of downsizing or trading down on any of your screens, you know, whether it's running shorter screens or less anything, you know, less comprehensive given some of the macro uncertainty? Or is some of this purely as hiring pauses and stuff are in place, just the base growth is a little lower? Yeah, this is purely as the hiring has slowed, and I wouldn't even say pausing. People say pausing. They're still hiring for essential roles. We don't really have any clients who are not hiring anyone, that's material. It's just that they, the hiring that they were doing, they've slowed on. That happened faster than we expected, as Peter shared. But we are not seeing anybody trading down. We're not seeing anyone stopping doing verifications, doing lesser criminal checks, stopping health screenings if they were doing it. We haven't seen any of those behaviors occur. Got it. That's really helpful and good to hear. Thanks, guys. Our next question is from Andrew Steinerman from JP Morgan. Please go ahead. Hi. Peter, I just wanna start by just confirming something that you said earlier, and then I have a question. I heard you say we got to the base growth of 2%-3% in the quarter. Was that for the whole quarter, so third quarter was 2%-3% base growth? Did you also say that fourth quarter has started with a similar base growth? That's sort of my confirmations. Now my question. When you say low single-digit organic constant currency revenue growth for the fourth quarter, could you help us break that down between existing clients and new business? Sure. Happy to follow up on those questions. First starting with Q3, we did say the base growth was in the 2%-3% long-term target range, so confirming that you did hear that accurately. What we shared is that it did moderate to that range sooner than we expected to because the original guidance we gave, Andrew, was that over the back half of the year, it would moderate to the 2%-3%. Hopefully that closes that question. When we look at Q4, you know, we do not give guidance around our specific revenue growth drivers, but I think the way you should think about the low single-digit growth rate on organic constant currency revenue in Q4 is that we've got high confidence that we can deliver within the target ranges for new business, cross-sell, upsell, and attrition, and that strong performance there will offset the declines in base growth. Okay. Thank you. Our next question comes from George Tong from Goldman Sachs. Please go ahead. Hi. Thanks. Good morning. I also wanted to dive into the components and drivers of growth. Base growth moderated to the 2%-3% range, long-term range sooner than expected. You mentioned that new business and cross-sell should comfortably operate within the long-term ranges. Are you seeing a second derivative slowdown in new business and cross-sell the same way you're seeing a slowdown in base growth? Just trying to see how the new business and cross-sell, upsell are changing above and beyond whether or not they're operating within the range. Hey, George, it's Josh. I think, you know, what we've said, and hopefully this helps, is we expect to be able to perform at those targets. We have been performing over those targets, so hopefully that sort of answers the question. Part of that is just lapping the really strong growth that we've seen for the last two years. As you think about, you know, Q4, we're lapping a 35% growth from last year and, you know, as Peter shared, kind of 40-ish% for the last six quarters prior to Q3. You know, we continue to have to do even more, you know, new business to stay at our targets, and we are continuing to do more. As I shared for Q3, we had more dollars of new business than we had in Q3 of 2021, so we have to keep doing that. The denominator changes, and of course, the new clients, you know, could be billing at slightly lower levels than they would in a normal environment as well. That's all factored into our revised guidance as elements of what we're thinking about. It is also factored in to the view I gave going into next year of the fact that we would expect to be able to grow, you know, as long as the macro holds. That is something that we consider in terms of the factors in our control versus what might happen with base growth, and, you know, the moderations that might occur within those. We don't break out or guide on our growth drivers. We just tell you about them on these calls from the previous quarter. I think hopefully that gives you a little bit of color of how we're thinking about it. Got it. Yep, that's helpful. With respect to the base growth moderation that you saw, what was the slowdown broad-based, or was it concentrated in the areas that you mentioned, like U.K. gig and retail? In other words, was this a mile wide, inch deep sort of phenomenon or very targeted in the slowdown? Yeah, George, we don't break out individual performance by vertical or by geo, but what I would point you to is, you know, what I shared in opening remarks in terms of when we look at October, you know, we're seeing the, you know, well diversification of our business playing out to a positive in this environment where, you know, healthcare, industrials, and APAC are continuing to perform strong, and then we are seeing some softness in U.K. gig, and then in the U.S. in contingent technology and retail. Great. Thank you. Our next question is from Allan McAvoy from Wolfe Research. Please go ahead. Hey, guys. On for Darrin Peller here. Thanks for having me. I know you guys lightly touched on this, but can you guys kind of further unpack the expected resiliency of your growth algorithm? Specifically, are there any levers that you're willing to pull to further accelerate new logo wins to offset a faster than anticipated base growth deceleration? You know, are you willing to sacrifice some of that expected margin expansion in 2023 to invest in your go-to-market, you know, to offset that top line challenge from the macro? Hey, Allan, it's Josh. First, just, you know, to remind you that we believe that even in our long-term algorithm, if we're performing at the 7%-8%, we believe that would be market leading relative to what you see from our competitors, and we've been outperforming that consistently for the last 7 quarters. I just wanna start there. In terms of, you know, how we think about it going forward, we're not looking at it as a sacrificing of margin question. You know, again, we've said we expect to expand margins next year. We expect to expand margins in Q4 by over 250 basis points at the midpoint of our guidance. You know, our view, though, is there are tactics that we can take to really further accelerate new business growth. I don't necessarily wanna give a roadmap to the competitors who might be listening, who I plan to take that share from, but it worked for us in 2020. We're planning to bring some of those things back in, and of course, there are things clients are gonna want in a low growth environment that they may be more willing to give other things on. That's true on the new business growth. That is also true on cross-sell, upsell, where we think things like identity could actually play very well in terms of helping them to not waste, you know, money on doing background checks they shouldn't be doing if there's fraud or, you know, wrong information being entered. We also think that applies to the retention playbook, where there are things we can do with current clients. I don't wanna give those tactics here publicly and tell our competitors what we do, but we think the proof's in the pudding of how we've performed before on this, where we think that we're best in class on those drivers, and that's why we highlighted the fact that we've been performing at double those long-term targets since the beginning of 2021 with that 15% that I pointed to on slide six of the presentation. Okay. Great color, guys. Appreciate it. Our next question is from Mark Marcon from Baird. Please go ahead. Hey, good morning, and thanks for taking my questions. Just wanting to understand philosophically, you know, if you're clearly anticipating increasing margins for next year, you know, assuming that things hold up. What philosophically, how would you you know, if we do go into a recession, how should we think about trying to maintain margins versus, you know, maintaining the muscle in the business? Philosophically, how are you thinking about that? How could a mild recession, you know, be different in terms of what we end up seeing relative to what we ended up seeing during the COVID period, you know, in terms of your actions? Nathan, thanks for the question. It's Josh. You know, rather than philosophical, maybe I'll just tell you my personal beliefs relative to my job as CEO of a public company, right? I think my job is to make sure that I'm doing what's right for shareholders, whatever the macro. In a macro that's low growth or if it turns recessionary, wherever it goes, you know, we've instituted our playbook. These are things that we've been planning for some time. They're actions we wanted to take but could not take while we were growing 40% on an average basis over the, you know, the six quarters prior to Q3. As soon as we saw that base growth start to moderate, we pulled the lever to start moving quickly on those. The first thing is, you know, the margin expansion, some of those are very quick actions that we can take. Again, as Peter shared, when you're growing at a rate like 40%, you know, it's very hard to stay ahead of that revenue and support the clients to the levels that they expect from us when we promise them best-in-class client service. As that growth moderates, even to our long-term targets of 9%-11% or lower, then we're in a position where we don't actually have to be running at that kind of a surplus, and we can run at the support rates we think we need. That's like a quick, easy action that we can take, and that's a big part of what you see in the 250 basis point improvement that we expect in Q4. There are more strategic things that we can do, where I can actually spend the time and the effort to really dig in and look at process re-engineering and how do we do things that were designed over a decade ago rather than just automating parts of that existing process. That's where Peter mentioned we've brought in the outside help with experts who are really experienced at that to help us look at it. Those things we think are really, really important. We think it's actually our obligation to shareholders. It's the right thing to do. It's the right thing for our team as well, so that people are able to work on the things that'll be meaningful for us going forward. Our view is any setbacks. Whether that's the low growth environment that we're anticipating and experiencing now, and that if it holds, going into next year where we expect to grow, or if it turns to be a more recessionary environment, in either of those cases, you know, we think that our view is to take care of the clients, make sure they're served really well, make sure we use the time to expand our margins and do a lot of the work that was just hard to do with the explosive growth rates we had, so that we can see that significant margin expansion. We did that in 2020. We exited with more new business, higher client retention, more upsell, cross-sell, and much higher margins. Our plan in any downturn, whether it be to a low growth environment or turn recessionary, is to make sure we focus on the exit velocity coming out of that while also performing during that downturn. The only additional point that I would add, right, is that we have a highly variable cost structure. If you think about our cost of revenues, 80% of those are third-party costs, which we do not incur unless we fulfill the order. About 16% of that is labor costs, which is highly flexible based on the environment. That's kinda the cost of revenues piece. If we look at the OpEx piece, you know, I covered earlier, some significant initiatives we have there in terms of, managing that, down and improving the margins in Q4, as we spoke about, and in 2023. That's really helpful. Thank you. Can you talk a little bit about just the uptake with regards to the identity solutions and particularly you know how you think that may end up going through over the course of the year particularly and which industries would be the ones that would be the most interested in taking advantage of these the solution and expansion internationally? Hey, it's Josh. Happy to provide a little bit of color. You know, we don't give specific numbers of or of clients or revenues. Overall, 90% of our revenues sit in the pre-hire screening, 10% are in the post-hire monitoring and identity space. Our long-term targets assume that that mix stays the same, but we are very optimistic on the identity space, that that's something that can help us actually accelerate upselling and actually expand us into new categories. We're excited about that. We're seeing a good number of new clients who are already on board and using the product. I shared a couple of data points in my prepared remarks that I'll refer you to in terms of that uptake. You know, roughly over a third of the candidates are actually already in the ID database. We would hope to see similar experience with Yoti over time. Really this is on our view relevant to anywhere that's got high velocity hiring, which is really important in places where, you know, any risk of fraud or getting the wrong people in there is a very high risk to the business. In terms of the international expansion, as I mentioned, we're gonna be starting in the U.K. We're really excited about the exclusive workflows that we've built with Yoti. We think it differentiates us versus other players in the market there by providing this portable identity solution where a candidate can actually reuse it multiple times. That's something we think will actually really help us in that gig space, in particular in the U.K., places where people actually work for more than one entity at a time. We think that'll be a big differentiator. In other industries, because you do have the right to work requirements in the U.K. We've been providing a solution on that for a long time, but this is an even better solution for that, and we think that that'll increase the uptake. Great. Thank you. This concludes the Q&A session and the Sterling third quarter 2022 earnings call. Thank you all for dialing in today. You may now disconnect your lines.