Good morning or good afternoon all, welcome to the Sterling Fourth Quarter 2022 Earnings Call. My name is Adam, I'll be your operator for today. If you'd like to ask a question in the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad. I will now hand the floor over to Judah Sokel, Head of Treasury and Investor Relations, to begin. Judah, please go ahead when you are ready. Thank you, operator. Welcome to Sterling's fourth quarter and full year 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 a 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 most recent 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 2022 was a great year, and I am very proud of the accomplishments and results the team delivered. Reflecting on the year, there is a lot to highlight. Slide four shows some of the key 2022 accomplishments I'll talk about today. I'll be discussing our strategy refresh, innovation, M&A, and financial success before ending with our 2023 priorities. I'll then hand it over to Peter for a more detailed analysis of our full year and fourth quarter results and to provide our 2023 guidance. Starting with slide five, this year we completed a strategy refresh and organizational realignment, which we expect to lay the groundwork for the company's continued long-term success. Our strategy includes doubling down on our competitive strengths and increasing our revenues with existing clients, acquiring new clients, growing market share internationally, and utilizing M&A to supplement our organic revenue growth. We also remain at the forefront of industry innovation and are bending our trajectory with newer solutions such as identity verification, concierge services, and post-hire services like monitoring and I-9. Turning to slide six, the next area I'd like to highlight is our innovation. Throughout our history, we have pioneered many industry-leading solutions, such as criminal fulfillment technology, arrest record, and incarceration alert products, and AI-enhanced record review and validation processes. In the past few years, we have only increased our focus on innovation, and Project Ignite has enabled us to launch products more rapidly to meet immediate client needs. In 2022, we had over 300 product releases, nearly 20% more than what we released in 2021. Examples of recent developments include our enhanced global language support capabilities and proprietary core I-9 offering. We released our comprehensive global identity verification solution through our partnership with ID.me in the U.S. and with Yoti internationally. We have been very pleased to see that our identity offerings consistently grew through 2022, with full year transactions up approximately 250% over 2021. Our fingerprinting business also experienced similar growth, with 2022 fingerprint transactions being up by nearly 300% over 2021. Another recent product innovation is the continued enhancement of post-hire monitoring solutions, which track, among other things, healthcare sanctions, medical licenses, recent arrests, and motor vehicle registration monitoring. In 2022, we released our new enhanced industry-leading monitoring solution, providing a fully integrated criminal monitoring experience, including arrests and convictions for our clients. Historically, this industry has delivered monitoring in the form of transactional rescreening orders. Our new solution is subscription-based and enables multi-layered monitoring that will scale globally for our clients around the world. We also made significant progress towards unifying the client experience by moving approximately $140 million in client revenue from legacy platforms onto our single unified platform. We now have over 85% of our global revenues on our core platform. Finally, we increased our automation integrations with well over 3,000 APIs and RPA bots powering our fulfillment platform to deliver high accuracy, low hiring costs, and faster time to hire rates. Over 90% of our U.S. criminal searches are automated, and we now complete 50% of U.S. criminal searches within the first five minutes, 65% within the first 15 minutes, over 70% within the first hour, and 90% within the first day. Turning to slide seven, the next accomplishment I'd like to highlight is M&A. 2022 was also a year of great success on that front, starting with the EBI acquisition at the end of 2021. We completed our integration of EBI ahead of schedule and are pleased that the results exceeded our initial estimates. We realized meaningful cost and revenue synergies from the deal as clients were enthusiastic about switching to the Sterling platform and gaining access to our additional solutions. We employed this strategy in 2018 with the acquisition of National Crime Check to expand in the APAC region, and the Socrates deal now expands our global presence into Latin America to serve the rapidly growing hiring needs of multinational and local clients. With operation centers in Brazil, Colombia, and Mexico, the Socrates team has built a highly reliable operational model and suite of screening services guided by their people first, client-centric values that are a perfect fit with the Sterling culture. We are excited to work with the Socrates team to build on Sterling's proven model of bringing deep regional expertise and localized innovative solutions to deliver growth in the Latin America region. Our other acquisition was of A-Check, a highly complementary deal we just announced yesterday. The purchase of A-Check builds on our successful M&A strategy of growing market share in the U.S. through accretive tuck-in deals. The company possesses a high-quality, enterprise-focused client base diversified across attractive verticals, including healthcare, industrials, and tech media. As with EBI, we expect this deal to yield significant synergies from platform migration, SG&A rationalization, and cross-sell of Sterling products. In particular, we expect an integration period of 12 to 15 months with A-Check's Adjusted EBITDA flow through reaching 45%-50% once clients are integrated onto our platform and technology consistent with our playbook for U.S.-based tuck-in deals. We messaged similar ambitions when we bought EBI and can say now that we achieved those targets ahead of schedule. We aim to do the same with A-Check. Our business and strategic accomplishments throughout 2022 resulted in strong financial results. As shown on slide eight, we set new company records this year for annual revenues, Adjusted EBITDA, and adjusted net income as we continued to execute against the strategy we implemented in 2019. Our 2022 revenues grew by 19%, including 14% on an organic constant currency basis, even while lapping 2021's exceptional 41% revenue growth. Our long-term target for organic revenue growth is 9%-11% per year, and 2022 was the second consecutive year above that range. To our knowledge, our organic revenue growth in 2022 was industry-leading and reflects the investments we have made since 2018 to prioritize profitable organic revenue growth. Our growth in 2022 was driven by all four of our organic revenue drivers, which were each at or above their long-term targets. In particular, our continued focus on new client wins resulted in $57 million or 9% revenue growth in 2022, marking the fourth consecutive year at or above our long-term 7%-8% target. To our knowledge, our growth from new clients is industry-leading. We also increased our wallet share with existing clients through upsell and cross-sell, and prioritized exceptional client service to ensure optimal client satisfaction and revenue retention rates. I'm proud to say that the efforts certainly paid off. Slide nine shows that our strong results in 2022 are a continuation of our strong performance. From the time we launched our strategy in 2019 through 2022, our revenue has grown at a 14% CAGR, including 11% on an organic constant currency basis. We saw a pullback in 2020 due to COVID-19, but otherwise our results have increased each year as we gain market share, increase spend amongst existing clients, and benefit from multiple secular trends driving increased background screening adoption. We believe our trajectory is particularly compelling when viewed over multiple years. 2021 and 2022 were not simply recovery from 2020's trough, but rather a natural continuation of the trends we started in 2018 and 2019. As shown on slide 10, our success over the past four years has been notably consistent in the revenue drivers we can control: new client wins, cross-sell, upsell, and retention. We have deployed strategies and tactics focused on these drivers, including setting targets for our vertical and regional teams around these metrics. Our Project Ignite tech transformation has yielded countless benefits across the company. As a result of this sustained focus, we have grown organically at a 10% CAGR since 2018 from the combination of these three drivers, solidly ahead of their 7%-8% combined target. Even during the 2020 COVID downturn, we still hit our long-term target and grew by 7% on this basis as we achieved our new business and upsell/cross-sell targets, and our retention improved by 300 basis points year-over-year. As you can see on the slide, we have improved our gross retention rate through the period, increasing from 88% in 2018 to 91% in 2019 and 94% in 2020, followed by two consecutive years at 96%. 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. Turning now to our strategic focus areas in 2023 on slide 11. Despite an uncertain macro environment, 2023 presents a lot of promise, and we expect to continue the journey we started when I joined in 2018. In particular, we expect, at the midpoint of our guidance, to set new company records again this year, with revenues of $760 million-$800 million, Adjusted EBITDA of $198 million-$218 million, and adjusted net income of $106 million-$121 million. We plan to deliver these results by remaining focused on the long-term strategic elements which have driven our compelling success in recent years. These include organic revenue growth with new and existing clients, expanding our industry-leading identity verification products built around our exclusive ID.me and Yoti workflows, and M&A. Our 2023 priorities also include a laser focus on margin expansion through increased automation, process improvements, and cost reduction measures. Last quarter, we discussed the playbook we implemented when we saw our base growth begin moderating. We removed the surplus in our fulfillment labor that we had been carrying to support our 40% average growth since the beginning of 2021. We also completed a realignment of our senior leadership and functions to elevate our go-to-market strategy and accelerate our technology and product innovation. We launched Project Nucleus, an initiative that we expect to drive long-term meaningful cost savings and efficiency gains by re-engineering processes, driving fulfillment labor cost reductions, and identifying and executing on additional automation opportunities. Some of these initiatives are complete, some are underway, and still others remain on the near-term horizon. The common denominator is that all these actions will position the company in the future for growth and market share gains regardless of the macro environment. They will enable us to expand Adjusted EBITDA margins for full year 2023 and over the long term. In conclusion, I'm really proud of the Sterling team 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 2023's uncertain macro environment as well. With that, I will hand it over to Peter Walker, our CFO, to take you through our financial results and 2023 guidance. Peter? Thank you, Josh. Good morning, everyone. Turning now to an overview of our financial performance, starting with revenues on slide 13. During 2022, we set new company record for annual revenues with approximately $767 million. This was a 19.5% increase over 2021 and included 14.4% organic constant currency revenue growth. We're very proud of these results, which we delivered even while lapping 2021's explosive 41% revenue growth. The year also included a 6.5% contribution from M&A, partially offset by a 140 basis points drag due to foreign currency translation. The organic revenue increase included growth from new clients of approximately $57 million or 9%, and growth from existing clients of approximately 4%, including base growth, cross-sell, upsell, and net of attrition. To our knowledge, our growth from new clients is industry-leading. Our investments in technology and products, coupled with our best-in-class turnaround times and customer-first focus, enabled our gross revenue retention rate to remain strong at approximately 96% for the year, our second consecutive year at that level. Pricing was relatively stable across the periods and not meaningful to the change in revenues. We're encouraged that 2022's strong results were driven by all four of our revenue drivers performing at or above the target range. We are seeing success in the areas of our business most within our control, including strong growth from new clients, cross-sell, upsell, and revenue retention rates. These areas are our greatest focus, and we feel that our momentum in winning market share and wallet share can help offset the unpredictability of base growth over time. Turning to Q4, overall revenue was down 2% year-over-year, driven by a 4% decline on an organic constant currency basis, 140 basis point drag due to foreign currency, partially offset by 4% of inorganic growth. Q4 continued the positive trends in the drivers within our control, including growth from new clients of approximately $12 million or 7%, our ninth consecutive quarter at or above our 7%-8% long-term target. At the same time, revenue from existing clients was down 11%. The revenue shortfall in Q4 was driven by two main items. The first was slower hiring by clients who were cautious to bring on additional headcount before the new year and some return to seasonality. Importantly, we have seen some uptick thus far in 2023 based on these factors. The second item was signed new business implementations pushed out to late Q1 2023. Over time, we expect the current normalization in growth rates and modest pullback in hiring to be followed by return to the historical 2%-3% base rate and for our total organic revenue growth to return to our 9%-11% target. Looking at 2022 revenues by region, our U.S. business grew 23% compared to 2021. We saw broad-based strength in our industry verticals, with particularly strong results in our industrials, healthcare, and FinBiz verticals. As shown on slide 14, we have a diversified and attractive vertical mix. This mix has been instrumental in supporting our compelling revenue growth in recent years, including our industry-leading growth from new clients. Our deep market expertise into these industries and geographies we serve has allowed us to develop a client base that is diversified across size, industry, and geography with minimal concentration. In particular, we have intentionally increased our exposure to healthcare, industrials, and financial and business services, which together comprise over 60% of our U.S. revenues and have seen solid demand trends despite the uncertain macro environment. Turning to international, revenue in our international business grew 10% in 2022 on an organic constant currency basis. International growth was led by the APAC region, which exhibited broad-based strength, primarily in Australia and Singapore, due to new client wins and strong underlying performance. International also showed resilience during the fourth quarter, growing by 3% on an organic constant currency basis and demonstrating the benefit of our global scale, with 17% of our revenues generated outside of the U.S. during the quarter. In 2022, we delivered 6.5% of inorganic revenue growth from EBI, our November 2021 acquisition. We were very pleased with EBI's performance in 2022, with results solidly above our expectations, both on the top and bottom line. We delivered this outperformance by completing the deal integration ahead of schedule and delivering client retention above our initial expectations through proactive strategies. The resounding success of the EBI deal has increased our confidence to pursue additional synergistic M&A, and we were excited to close on two more deals so far in 2023. I will touch on the impact of those deals shortly. Turning to slide 16, in 2022, we set a company record for Adjusted EBITDA with $199 million, an 11% year-over-year increase compared to 2021, reflecting an Adjusted EBITDA margin of approximately 26%. We continue to invest in organic revenue growth while also focusing on cost discipline, automation, and process improvements to drive long-term margin expansion. 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. 2022's margins were below the expectations we shared on our Q3 call, primarily because of the greater-than-expected moderation in December revenues. We were able to achieve a significant amount of our cost savings in the quarter. This was partially offset by higher fulfillment headcount costs in the quarter due to lower revenue and higher non-class settlement costs. With our revenue and Adjusted EBITDA, our 2022 adjusted net income set a new company record of $29 million or $1.08 per diluted share, representing a year-over-year increase in adjusted earnings per share of 11%. This year-over-year increase was slightly higher than our Adjusted EBITDA growth due to lower D&A. For the fourth quarter, our adjusted net income was $20 million or $0.20 per diluted share. Q4's year-over-year decline in adjusted EPS was primarily driven by the base revenue moderation discussed earlier. Turning to slide 18, our cash flow from operations in 2022 was $104 million, an increase of 52% over 2021. Higher operating income and positive trends in cash collections was partially offset by higher cash interest and tax payments, as well as significant cash outflows to complete Project Ignite and M&A diligence and integration. On November 30th, our board authorized a $100 million share repurchase program as we continuously seek to increase shareholder return while taking advantage of attractive equity valuations. As of February 28, 2023, we have used approximately $22 million to repurchase Sterling shares, leaving us with approximately $78 million of capacity to continue executing the program. We ended the year with total debt of $505 million and cash and cash equivalents of $103 million. Our net leverage at quarter end was two times net debt to Adjusted EBITDA, at the low end of our two-three times net leverage target. Our net leverage continues to decline due to our strong cash flow generation and Adjusted EBITDA growth. As a result of our rising cash position, we were well-positioned to use cash on hand for our two M&A deals in 2023 at a combined net purchase price of approximately $50 million. Socrates is an asset that we've been working with and looking at acquiring for a long time, we were pleased to see the price return to attractive levels. We expect this acquisition to drive growth for us with both global and local clients. In the case of A-Check, we paid approximately four times Adjusted EBITDA on a pro forma synergized basis, solidly within our M&A pricing framework and even lower than the multiple we paid for EBI. Following these two deals, we are well-positioned to continue pursuing M&A to supplement our organic revenue growth and make further compelling investments. In addition to our ongoing cash generation, we have ample capacity under our new credit facility, including approximately $195 million available under our revolver at year-end. During the fourth quarter, we completed a successful debt refinancing with a new term loan and revolver, which extended our maturity profile to 2027, increased our credit capacity to $700 million, and reduced our interest expense spread. The new five-year credit facility was oversubscribed despite a challenging environment for many borrowers, a point which we believe reflects the credit market's recognition of our successful growth strategy and maturation as a public company. We also recently implemented an interest rate hedging instrument to fix approximately 60% of our floating rate debt. Our capital allocation priorities remain investing in organic revenue growth, pursuing M&A, and maintaining a healthy balance sheet. This includes opportunistic share buybacks under our previously announced share repurchase program. We see macro instability as an opportune time to build the foundation for success. On slide 19, we provide our guidance for 2023. For 2023, we expect to generate revenues of $760 million-$800 million, representing year-over-year growth of -1% to +4%. Adjusted EBITDA of $198 million-$218 million, representing year-over-year growth of 0%-10%. Adjusted net income of $106 million-$121 million, representing year-over-year growth of 0%-14%. Our guidance includes full-year organic constant currency revenue growth of -3% to +1%. As we discussed earlier, we continue to see solid growth in items within our control, including new client wins. These are being offset by base revenue declines. Based on what we have seen in the first two months of 2023, December 2022 appears to be the low point for negative base growth, with an uptick so far in January and February. We are not assuming a material change in the macro environment over the course of the year. If there is a material shift for the better or worse, we would reflect those changes in updates to our guidance. For total organic revenue growth, we expect year-over-year declines during the first half of the year. This will likely include 8%-10% organic constant currency revenue declines in Q1, marking the low point for 2023, followed by narrower declines in Q2. We expect the second half to show year-over-year growth with improvement each quarter. Our guidance is based on several items. One, new clients onboarding through the year. Two, ramping client hiring plans. Three, upsell and cross-sell based on our pipeline. Four, easing year-over-year comps. Our industry and regional diversification is providing us some protection against the verticals most impacted by the current environment. For example, our healthcare vertical and our APAC region are showing resilience so far in Q1, helping offset declines in some other verticals and regions. From the combination of our two M&A deals, we expect two-three points of inorganic revenue growth in 2023. Note that the EBI acquisition anniversary during Q4 2022 and the revenues became fully organic starting in December. For the impact of foreign currency fluctuation, our full-year 2023 guidance assumes 40 basis points of benefit. Turning to profitability, our 2023 guidance implies Adjusted EBITDA growth of 0%-10%. The midpoint of this range implies a full-year Adjusted EBITDA margin of 26.7%, reflecting a notable margin expansion over 100 basis points versus 2022, muted by approximately 30 basis points drag from our two M&A deals. We expect margin expansion for the full year, even in the absence of robust organic revenue growth, through the cost measures we've put in place, as well as the variability of our cost structure. We expect margins to contract in the first quarter of 2023, followed by improvement through the year, with healthy margin expansion in the second half as our revenue trends improve and the benefit from our cost actions ramp. I mentioned earlier, we have several initiatives, both completed and underway, designed to automate our workflow, improve processes, and optimize our cost structure. These are expected to drive margin expansion during 2023 and set up Sterling to scale more profitably over the long term. Finally, turning to our adjusted net income growth guidance of 0%-14%, 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 Adjusted EBITDA growth during 2023 ahead of our revenue growth and driving adjusted net income growth ahead of our Adjusted EBITDA growth. To further help with your modeling, we've included a page in the appendix with our assumptions for 2023 and a detailed breakdown of our revenue guidance. We are reaffirming our long-term targets on slide 20. We have significantly outperformed our top-line targets during the past two years and are reaffirming our long-term target of 9%-11% organic revenue growth levels. With margins expanding toward 29%-32+% and adjusted net income growth of 15%-20% per year. That concludes our prepared remarks. At this time, operator, please open up the line for questions. Thank you. As a reminder, if you'd like to ask a question today, please press star followed by one on your telephone keypad now. When preparing to ask your question, please ensure your headset is fully plugged in and unmuted locally. Star one to ask a question. The first question today goes to Mark Marcon from Baird. Mark, your line is open. Please go ahead. Good morning. Wondering if you can give us a little bit more color with regards to what you're hearing from some of your key clients with regards to, you know, their plans for the year, given the, you know, uncertainty in the, in terms of the macro, and any sort of additional color that you might provide with regards to just the differences that you're seeing in terms of the vertical areas? Thank you. Thanks, Mark. It's Josh. Let me go first, Peter, if you wanna add to it. First let me just start with, you know, we continue to hear from our clients in our strategic growth verticals like healthcare and industrials, that they're continuing to hire as they have been. They've been growing throughout last year, including in the fourth quarter. These are, you know, verticals where we expect to continue to see our clients on the trajectories they've been on and maybe even improve. In terms of, you know, some of the other verticals where we saw the slowdown in Q4, what we heard from them at the time, and now we're hearing this year, is that they sort of put things on pause, as I mentioned in our last call for Q4, as they waited to get through the year, get their budget set. Now, even with the macro as it is, they have their hiring plans for the year in place, and they're starting to post those jobs, ramp those hiring positions and expect to hire those. We have today baked into our plan and our guidance, the view from clients on what their hiring is gonna be in the current macro with its current uncertainty. Again, that's why Peter shared that we expect Q1 to be the lowest point in the year as they're starting to get those positions rolling now, and ramp that up through the year. We also expect them to continue to, you know, buy new products in our cross-sell and up-sell efforts and to see that continue to grow through the year. Also for our new client onboarding to ramp up through the year as we would typically see, but we saw that pause a little bit in Q4 as well, notwithstanding that we did hit our long-term target in the quarter for new growth. Great. Can you give us a little bit more color with regards to just the specifics with regards to Socrates and A-Check with regards to revenue and margin profiles that they currently have? You know, the plans for integrating them. You know, you obviously did a great job with EBI. Just thinking through like, you know, over the 10-15-month integration period, you know, where the margin improvement could come on those two acquisitions. Thanks. Sure. Thanks, Mark. I'll go first and then Peter maybe will give you some more specific on the numbers. Let's just start with A-Check. I think that you should think about this as being very similar to EBI, and we've incorporated what they've been seeing in the macro into the price we paid and into our expectations for the year. That's part of why we were able to make this acquisition at four times of pro forma, you know, adjusted, synergized Adjusted EBITDA, which is cheaper than what we paid for EBI. We expect the cadence to be somewhat similar, in terms of how we're able to improve, the profitability for those clients as we migrate them over, to our platform and our systems and our fulfillment. Again, you should think about that happening sort of starting to happen around the middle of the year and then the benefit from that ramping through the end of the year. Our goal is by, you know, the end of Q1 really to have fully synergized the asset in terms of A-Check. You should think of its current profitability in buying it, and I think this is where, you know, Peter shared a little bit about this, as having a 30 basis point margin drag combined with what we see in Socrates. While we're not breaking them out separately, they're obviously at a lower margin than what we're expecting in our core business until we synergize them, at which point we would expect them to actually be margin accretive, given the drop-through rates that Peter discussed. In terms of Socrates, you know, this was very important for us. It's something we've had our eyes on for a long time. We've worked with them as a provider, over time, we think the Latin America region provides us with significant growth opportunities, really both from, U.S. clients in particular, but some other global clients who have business in Latin America and wanna have, you know, a consistent screening experience. We think that that provides us with significant opportunities to win business and grow with existing clients, by expanding into the region. Additionally, we think that it provides us with a real opportunity over time to win global clients who want one provider everywhere, because we think we're really the only player now who's a leader in all of the key regions with this acquisition, and it really helps us to stand apart. That was much more of a strategic purchase. Mark, I would just add, as we shared on the last earnings call, our M&A pipeline was full. We were really excited that we were able to get these two very high-quality assets at what we view as very affordable prices. There were several other deals we walked away from, either because of price or either because of the client base and how that's being impacted in the current economic environment. If we think about A-Check specifically, you know, their leading verticals are healthcare, industrials. That leads really well, right, with where we're focused and growing overall. We think this is just, you know, a terrific win-win for us to pick up the A-Check business. Socrates, as Josh mentioned, you know, we believe it's got leading capabilities in LATAM, which will help us grow locally and with our global clients. Great. The, the last one, just you've done a great job in terms of like adding new clients. How are you thinking about the pipeline, you know, in terms of the new client additions? Also, what are you thinking about what are you most excited about with regards to, you know, all of your multiple cross-selling opportunities? When I think about identity and post-hire monitoring, seems like you've got really good traction there. Just wondering, you know, what are some of the ones that you're most excited about as it relates to this year? Sure. Why don't I start with the second one, and then we can see if Peter wants to answer your first question. I think, I continue to be most excited about identity because I really do think that it changes the game for us in terms of something that we believe we can upsell to almost every background screen over time. We're seeing the growth rate. We put in place those products throughout the year. We had the chance to really enhance the offerings late in the year, and we have our Yoti offering for international, which we think is also gonna be, you know, a game changer for us, as we look to, you know, rolling that out through the year. That's probably the one I'm most excited about because it is a very straightforward upsell that increases the package density, and we have some standalone identity opportunities that we continue to pursue. I think the growth rates that we shared on the call and in the slides, you know, show that that traction is really starting. We tried to give you some color on that. In terms of post-hire monitoring, you know, we continue to see some of these specialized areas that we've talked about before and I discussed in the script, you know, the sanctions monitoring, the MVR monitoring as being really attractive. Now we're really excited that we do have a true monitoring solution on the criminal side, that we have clients who actually are on and excited about versus just doing these package re-screens that can be unpredictable, and can be, you know, something that clients, you know, easily can choose to walk away from or move in a given year. This is a much more stable, consistent stream as we're successful in getting clients on there. I think we expect to see more from identity this year and more from monitoring kinda later in the year as we really get those clients going. Then your other question, which was on sort of the new business, which I'll let, you know, Peter give real color on. What I would say is we continue to see very consistent trends in our advanced pipeline, in our closed deals, in our revenue expectations from new clients. Peter, I don't know if you wanna give a little color on it through the year? Yeah, so, you know, we are really proud that we believe we've got industry-leading new client growth. I think, you know, the numbers speak to that, right? For full year, $57 million of revenue from new clients, which is 9% growth. For the quarter, that was $12 million, which is 7% growth. If it hadn't been for some of the clients kind of pushing their onboarding of new business from the end of Q4 to Q1, you would have seen that higher. When we think about 2023, we believe we're gonna hit our new growth target of 7%-8%. We don't believe that's gonna be uniform over the year. As we mentioned, we expect to see a contraction in Q1 of organic constant currency revenue of 8%-10%, with that improving over the year. We do believe for full year 2023, we're gonna be in that 7%-8% range for new client growth. The next question comes from Andrew Steinerman from JP Morgan. Andrew, please go ahead. Your line is open. Yes. Hi, this is Alex Hassan for Andrew Steinerman. Hope you're all well. A quick question just for, you know, the record. It seems that the revenue from existing clients, so base growth, upsell, cross-sell minus churn was something like - 13% in 4Q. Any color there? I wanna follow up with a question on base growth. It seems like you're implying for the full year 2023 that that will be somewhat better than in 4Q 2022. You know, that seems to be somewhat at odds with what we're hearing from some of your peers and laterals. If you could maybe elaborate on that as well, it'd be great. Thank you. Yeah, sure. Good morning. Reflecting back on Q4, what we shared was new client growth was 7%. Existing client was a decline of 11%. The way you should think about that 11% is cross-sell, upsell of approximately 4%, offset attrition of approximately 4%, you kinda get to a net zero. That - 11% is all attributable to base growth. We also shared in our prepared remarks that December, we believe is a trough of base growth and that we're seeing improvement in January and February. When you think about kind of our full year 2023 drivers, as I just shared, we believe new business will be 7%-8%. We believe that cross-sell, upsell, and attrition will both be around a + 4% and a - 4% netting each other, and the base growth will be 8%-9%. There will be seasonality in 2023. When I'm providing those 2023 revenue drivers, I'm speaking to the full year, where we're gonna see negative organic constant currency revenue growth in Q1, improving in Q2, moving into positive organic constant currency revenue growth 3Q and 4Q. Hopefully that's helpful. Very. Then as a follow-up on pricing, have you had any success pushing through price beyond the passthrough of rising third-party data costs? You know, like for like, are you taking more price? How should we think about your ability to maybe take price in 2023? Sure. As we've shared on previous calls, we do have the ability to take pricing increases through on our contracts. We typically take an annual price increase every year, which we did this year, about mid-year. Think of that price increase as, you know, CPI-type levels, albeit we muted it this year, given CPI was so out of control, so, you know, a little bit more reasonable. You know, call that adding, you know, $3 million-$5 million in terms of revenue for the current year. We'll look to do a similar type of price increase in 2023. The next question is from Manav Patnaik from Barclays. Manav, your line is open. Please go ahead. Hi. Good morning. This is Ronan Kennedy in for Manav. Thank you for taking the question. May I just confirm or sorry, rather, could you unpack 4 Q margins in terms of the benefit from the low-growth playbook articulated on the 3 Q call, Project Nucleus, and also the hit from the moderation of base growth that you saw, and then kind of the puts and takes to margins for 2023? Sure. We'll focus first on Q4. At the low end of our guide, we were below on margin dollars by about $4 million. You can think about the main driver of that being the revenue moderation that we saw hit around Thanksgiving that we didn't expect, and I covered the reasons for that in the prepared remarks. What we were thrilled about is that we were able to get out the majority of the savings that we had planned for Q4. We were carrying higher fulfillment headcount because we expected obviously higher revenue in, call it, December. It does take us, you know, call it 30 days to remove that headcount. We were carrying slightly more costs related to that that are now out of the system. We did have higher non-class settlements during the Q4 than we expected. Okay. sorry, for 2023, the puts and takes for margins, please. Yeah. For 2023, you know, our overall view is that margin expansion of, you know, north of 100 basis points, less about 30 for the acquisitions that we're bringing on board, right? You're looking at, you know, call it a 26.7% margin for the full year. you know, also indicating that we expect margins to be down year-over-year in Q1 following revenue being down, call it, 8%-10% in Q1. We expect margin improvement throughout the year. We do expect that to be more pronounced in the back half of the year as we see revenue acceleration in Q3 and Q4, and we expect significant savings from our Project Nucleus to come online in Q3 and Q4. Okay. Thank you. As a follow-up, if I may, please. With regards to the macro and interested in your assessment of your visibility, in terms of, you know, what you had said mid into November on the 3Q call, how you expect the fourth quarter to play out, the assumption of a stable macro. What that had entailed and what ultimately developed versus your expectation and what the outlook is for 2023. Also, in consideration of, you know, the data we're seeing from JOLTS, et cetera. Just some further thoughts on, you know, macro as specifically relates to hiring and trends. Sure. Thanks, Ronan. It's Josh. I'll start off, and Peter can chime in. I think first of all, in Q4, you know, we had messaged that we did see a slowdown in a number of verticals where clients had really, you know, slowed down their hiring, taken a pause, you know, waiting for their budgets to get set to finish their years to really understand what their plans look like for this year. What we saw after our call, really around, you know, Thanksgiving through the end of the year was two things that happened. One, we saw that expand into other vertical or two that we had not seen before that, and that was something that, you know, was not expected at the time that we gave that guidance. Those verticals have again restarted their hiring programs, and that is reflected in Peter's remarks about the improvement we've seen already through January and February and Q1 on that base growth hiring from what we saw in December. The second thing we saw in December, which Peter mentioned, was a return to seasonality in our business that we had not seen in the previous two years, where we had firms like in the staffing and retail space and in international gig, who would typically not do much hiring in the last few weeks of the year. In 2021 and 2022, they did do a lot of hiring. They returned to that seasonality, and then again picked right back up in January. That was something we saw really isolated in the month of December and in the back half, especially, for those verticals and that seasonality. In terms of 2023, you know, we're assuming that it remains a, you know, rocky, somewhat uncertain macro environment like we're seeing. We're at a point now where people have their plans for the year. They've given their guidance for the year. Our clients are moving forward with their revenue plans, hiring plans, et cetera, for the year. At this point, unlike what we saw in Q4, where they sort of, you know, froze a little bit while they were waiting to get their plan set, here we're seeing them now start to ramp exactly as they're saying and move forward. What we're assuming is the macro remains uncertain. We're not expecting an improvement to it, but we are expecting that at least our clients are able to continue operating against the plans they've put in place with the full knowledge of the uncertain macro that they're dealing with. Thanks for the questions. The next question is from Kyle Peterson from Needham. Kyle, your line is open. Please go ahead. Great. Thanks. Good morning, guys. Appreciate you taking the questions. You know, just wanted to, you know, touch on, you know, the competitive dynamics here. I mean, it seems like we're in kind of a more challenging, you know, macro environment, probably for a lot of especially smaller, you know, players giving tougher funding and more difficult labor market. Have the competitive dynamics changed, you know, for you guys at all in the last, you know, whether it's, you know, three to six months, or kinda what are you guys kinda seeing when you're going to market and bidding on new deals? Thanks, Kyle. You know, first let me just start with, I think, and as we shared in our prepared remarks and as we shared in particular, in our slides on slide 10, you know, we believe that we are industry best in winning new business. We think that whether times are good, bad or otherwise, we win more business than others do, as reflected in the $50+ million of new business that we put on, you know, last year, even while lapping, you know, really great, comps in prior years. We start with the assumption that we're positioned to win business based on our based on our client support model, based on our technology, based on our quality of fulfillment, based on the turnaround times we provide, all the things that we've been working on since I came here in 2018. If we use 2020 as an example, we put on a ton of new deals that didn't show up until 2021 in 2020 when people had to pull back and retrench, and we're starting to see a lot of those same dynamics. We are seeing more RFPs for us to go out there and win from those smaller and mid-sized players because they're having their service levels drop, and that's causing anxiety for clients. We would expect to be able to use any downturn and any difficulties this year to win a lot more new business from those small and mid-sized players, but also from our larger competitors who we think we compete very well with as well. Okay. That makes sense and is helpful. I guess just a quick follow-up kind of on the M&A pipeline. I know, one of your competitors was kind of recently saying that the M&A market is, you know, seems pretty challenging and the valuations haven't really come down. I guess, you know, with A-Check at, you know, kind of a 4x EBITDA post synergy multiple, I guess that seems to be a little contradictory of that. I guess, what are you guys seeing in the M&A pipeline? Do you guys think you need to, you know, take a pause here to integrate these two deals? Or do you think there's potential for more M&A later in 2023? Sure. Thanks, Kyle. I think our view on M&A is always that, you know, we're gonna pay a fair price that fits in our model. We're not gonna overpay for deals. We're gonna be patient. It's actually the reason we were not able to close deals in Q3 last year, Q4 last year, as the macro shifted and the targets that we were looking at, their expectations hadn't changed, so we were unable to move forward. Some of those we were able to keep warm, like Socrates and A-Check, some of them we were not. We had a few othe rs that we moved along with, pretty far down the pike, but we didn't like what we saw on the end in terms of how their client base was performing in this macro, or we didn't like the fact that they weren't resetting their expectations, on price given, the changes that they were seeing in their client base and their macro because they were still being unrealistic. You know, our view is the deals are there. You have to build strong relationships with these targets. You know, in many cases, this is their life's work. This is meaningful to them. They care deeply about the clients and the people, and we are very good at that, and we are very good at making sure people know that when they hand over these treasured assets to us, we're gonna take care of those clients really, really well. In terms of, you know, your question about the future, you know, I would just emphasize that, you know, what we find is we get inbounds from targets who are not even running processes. They want us. They want Sterling. They're not generally out there looking for anyone who will buy it because they know that they can find that good home for folks. In terms of our plans for the year, you know, at this point, you know, we continue to see a lot of potential opportunities that are out there. I would not expect us to do, you know, tuck-in M&A, for at least the next two quarters, would be my expectation. Not so much because we need to take a pause to integrate these couple assets, but just because I think in our minds, you know, we wanna make sure that, you know, some of the companies that we were talking to before, for example, if they change their expectations, on price, we'd be happy to get back engaged with them. We like their businesses generally. You know, we think it may just take a quarter or two for that to happen. Then otherwise for us, I think we do need to spend one to two quarters making sure that we do a great job of retaining and migrating these clients on the A-Check platform of, you know, and of really, you know, putting in place the things we need to do to expand effectively with Socrates in Latin America. I wouldn't expect that pause to be more than two quarters in terms of those integration efforts. You know, never know with M&A because you have to have two to tango, but it is something that we continue to see as attractive, as accretive, and as a really good use of our capital after our first priority, which is the organic revenue growth. The next question comes from Andrew Nicholas from William Blair. Andrew, your line is open. Please go ahead. Hi, good morning. Thanks for taking my questions. You talked quite a bit about your expectations for 2023, also how fourth quarter played out relative to your expectations. I'm just curious. Are there any major distinctions underlying guidance for next year between how you would expect U.S. business and international business to perform, whether it's in terms of base growth or retention or any of the different metrics that you track? Are those two kind of buckets behaving relatively similarly at this point? Hey, Andrew. Good morning. Obviously, FX has been a major headwind for us in 2022. We do expect that to be less of a headwind next year just because of the currencies we currently operate. I would say, you know, going into 2023, our plans for the U.S. business and the international business in terms of base growth and cadence are pretty similar. Understood. Thank you. Then switching gears for my follow-up. You've talked quite a bit about identity as an opportunity for growth. I know you cited on the slide 200% increase in identity transactions this year between ID.me and Yoti. I'm just curious, as we think about the cross and upsell growth target over the medium term, if continued acceleration there would mean upside to those numbers. It certainly seems like at the growth rates that you're targeting there, and as that becomes a bigger and bigger piece of the business, that would be a possibility. Just kinda wondering if that's baked into your long-term target. Thank you. Yeah. Thanks. It's Josh. Let me just start with, again, I think that if you look at our 14% CAGR since 2018, the 19% growth that we put up in 2022 off the 41% that we had put up, the year prior in 2021, you know, a big part of that was our ability to cross-sell and upsell, in addition to all the other, measures that you see. I think that the reason I mention all those growth rates is, with our overall business growing that way, to keep that same mix we've talked about before of 90% of our revenue being driven by the pre-hire screening, and 10% by identity and monitoring, the identity and monitoring obviously need to grow really, really fast in order to keep, you know, just then maintain that 10% given our overall growth rates. We do think over time that identity presents us some really good breakout opportunities. We're not changing our long-term targets today, and our drivers, but it is something that we continue to be excited about, and we think that if we are, you know, really successful with it does provide upside to that cross-sell, upsell number. Great. Thank you. Appreciate the color. The next question is from Toni Kaplan from Morgan Stanley. Toni, please go ahead. Your line is open. Thanks so much. A couple times on the call you've mentioned how your clients slowed post-Thanksgiving and into December, and that it's been better year to date. Is there any way that you could give, maybe it's directionally or any sort of color on how much better the first two months have been? Any reason, like, if January, February is usually, you know, not a sort of large volume, you know, just confidence that this is a sort of sustainable trend upward? Thanks. Thanks, Toni. Again, I think what first, Peter did share our expectations for Q1, being the sort of low point for us in the year with -8% to -10% growth. Just to sort of start with that. What we said was that we saw an improvement in January and February from what we were seeing in December, particularly on that base growth line. I think that that's baked into those numbers. In terms of how you think about it, you know, there's always been seasonality in our business from, you know, the end of the year to the beginning of the year. We're talking about it as in terms of what we're seeing in a year-over-year basis. Year-over-year, December 2022 versus December 2021. Year-over-year, January and February 2023 versus January and February 2022. We've seen an improvement. We've seen it pretty much remain there since January first, right up through the end of February. It's consistent with what our clients told us coming into the year based on the plans they put in place. Yep. Got it. Okay. In the past we've heard, you know, about some increased pricing from some of your suppliers. Have you seen any pricing moderation there, or has that continued sort of full steam? Any update on that would be helpful. Sure. I think what I would say is that there are some providers. Again, a lot of our criminal costs, which are state fees, et cetera, those have not really changed, so that's one big piece. Most of our providers with, you know, maybe one exception on the verification side, have generally remained consistent or in some cases even reduced our pricing for competitive reasons. Of course, we do have the one big provider who continues to increase prices. We continue to pass those along and have those baked into our expectations, both on revenue and margin. Great. Just lastly, I'll sneak one more in. Could you talk about how gig has been trending and your view on whether it's a, any update on how it's you look at it as a growth driver more long term? Thanks. Sure. I think for us, you know, I'm gonna separate U.S. and international gig for just a moment. I think U.S. gig performed more or less in line with our expectations. For last year, and we do expect it to be an area of growth for us going into this year. As you see on our chart of verticals that we provided you with an update, it's still a relatively small percentage of our overall U.S. business. Internationally, where we think we really are the leader in gig, we did see a relatively big drop off in 2022 in international gig from where, in particular, U.S. delivery service. I'm sorry, U.K. gig delivery services during COVID in 2020 had huge hiring that they had done for all the delivery, and they slowed that significantly in 2022. That was an effect on our U.K. business. We do continue to see it be a growth driver, and we think that there's a lot of new business out there that we can go in to add to our book. Due to time constraints, participants are asked to limit themselves to one question so we can get through the queue in good time. The next question comes from Scott Wurtzel from Wolfe Research. Scott, please go ahead. Your line is open. Hey, guys. Good morning. Thanks for taking my questions. I guess, going back to the Socrates acquisition, I was wondering if you can maybe touch on the competitive dynamics within the LATAM space, and how it maybe compares to some of the other international geographies you've expanded into. Thanks. Thanks, Scott. I think that, you know, Latin America is an area where it's a very nascent market for background screening, particularly for domestic, you know, local businesses. There really are very few players in Latin America. It's obviously a very big region. There really is only one of our competitors that has a true Latin American business. It's very highly concentrated in Mexico from our understanding. What we really like about Socrates is the significant presence also in Brazil and Colombia, which are important markets where we think we're a clear leader in addition to having a Mexico presence and the opportunity to grow there. Those are three very key markets for us. We were thrilled to see that. Importantly, I will say, you know, Socrates does actually support some of our competitors in terms of some of the business that they've done historically. We see that as a continued opportunity as well in the market. The next question comes from Shlomo Rosenbaum from Stifel. Shlomo, please go ahead. Your line is open. Hi. Thank you very much. Hey, Josh. I just wanted to ask a question in terms of retention. I understand that you know, Sterling has a lot more capabilities, particularly above the, you know, the small end of the market, but there is a tier two, where there's several large firms that are actually, you know, not public and don't have to report their margins to, you know, to Wall Street. Are you concerned about them, particularly low-balling on price? I know net pricing is not the main aspect when it comes to clients selecting a provider, but, you know, it's certainly something that's taken into consideration. Do you think that that could be some kind of impact in terms of retention as we think about it this year? Thanks, Shlomo. I think that, you know, to the extent that that's true, that's always been true, and it's baked into the 96% that we've had for the last two years on a gross retention rate, where it is, you know, it is the case that we do compete with mid and smaller-sized players. What I will tell you is we do not see them really undercutting price to get there. That's not one of the dynamics that we see in terms of losses. I think that, you know, one important thing I would say is I can't remember a single conversation with a client where they told us they chose us or stayed with us because of price. They choose us because of the service, the quality, the tools, the product, the people. The final question today goes to Jason Celino from KeyBanc. Jason, your line is open. Please go ahead. Hey, guys. Thanks for fitting me in. Just maybe a quick one. Sounds like the new business pipeline is holding up, all things considered. Maybe can you talk about the factors which get customers to change or add a background check provider which isn't affected by macro? Thanks. Sorry, Jason. It's Josh. I just want to clarify that last part of your question. The question is about why clients choose to come to us from a new business perspective, or why clients choose to do background screening who weren't doing it before? The first part, why they come to Sterling. You talked, if that makes sense. I can rephrase it if you want. No, that's okay. I think when we are out there pitching business, and I go on many of these, you know, visits myself, for anything over, you know, $100,000 or so, I try to be there if I can. You know, what we hear from clients is a few things. First of all, the moment we show them our products and what the experience looks like for their employees doing their job of ordering background screens, managing the process, you know, being able to do adverse action if it's in the U.S., being able to look at our analytic tools, the experience that their candidates are gonna have in our mobile-first tool, the fact that we are able to collect most of the information, if not all of it, that we need up front, where many of our competitors have to keep going back and having an ongoing dialogue, that almost sells itself. The next piece that really comes into play is that clients always wanna make sure that they're dealing with someone who understands their unique business and our approach to verticals, where we've really developed product capabilities by vertical, the way that we integrate with ATSs and HCM systems by vertical, the way that we're able to work from a professional services standpoint to onboard clients by vertical, really shows them that we're a specialty firm. This positioning that we've had since 2019 of being the only player that can deliver this experience of being a boutique firm that specializes in your industry, that knows you, with people who know your name, who you know to call, while also providing the global scale and benefit of those amazing tools I mentioned, of the turnaround times that we believe are, you know, right up there, if not best in class, in terms of how quickly we can do things. I shared some of those statistics, right? 50% of our U.S. criminal searches being returned in five minutes, like, that is something that people really can't touch. Those are the kinds of things that we hear from clients. As long as we get a chance to talk to them, we feel really confident we're gonna win that deal. We have no further questions in the queue. This concludes today's Q&A session and thus concludes today's call. We thank you very much for your attendance, and you may now disconnect your lines.