Abstract

First Advantage Corp. will report fourth-quarter results on February 26, 2026 Pre-Market, with investors watching top-line trajectory, margins, and earnings leverage following sequential variability in recent quarters.

Market Forecast

Consensus and company guidance point to fourth-quarter revenue of $391.88 million, a year-over-year increase of 28.57%, with an estimated EPS of $0.26 and EBIT of $48.80 million; the year-over-year EPS growth is expected at 16.67%, while EBIT is projected to decline 7.96% year over year. The core verification and screening services remain the primary revenue contributor and are expected to benefit from steady demand across enterprise hiring and risk management workflows, with digital adoption continuing to support product mix. Within the portfolio, verification solutions tied to regulated onboarding show the strongest demand momentum given compliance tailwinds, and are positioned for share gains as large customers consolidate vendors.

Last Quarter Review

In the previous quarter, First Advantage Corp. reported revenue of $409.15 million, a gross profit margin of 45.73%, net profit attributable to the parent of $2.59 million, a net profit margin of 0.63%, and adjusted EPS of $0.30, with revenue up 105.48% year over year and adjusted EPS up 15.38% year over year. The quarter saw solid top-line execution relative to expectations, with revenue modestly above estimates and adjusted EPS beating by $0.02, even as EBIT came in below forecasts. Main business performance was supported by broad-based demand across core screening and verification offerings and continued customer expansion, although detailed revenue breakdown by segment was not disclosed.

Current Quarter Outlook

Main Business: Employment Screening and Verification

The company’s primary business centers on background screening, identity verification, and related compliance-driven solutions embedded in hiring and onboarding. This quarter, hiring stabilization among mid-to-large enterprises and ongoing digitization of verification workflows are likely to underpin transaction volumes, even if macro signals remain mixed. Pricing discipline, product bundling, and analytics-led value are expected to support revenue mix and contribute to a modest uplift in unit economics. The main watch point is conversion from pipeline to closed business in enterprise accounts, as sales cycles have lengthened where customers are rationalizing vendor panels.

A second key dynamic is the balance between volume-sensitive products and subscription-like contracts; the latter can buffer variability when hiring slows, but high-volume offerings still drive incremental growth in robust labor pockets. With the forecast calling for revenue growth of 28.57% year over year, the company’s ability to manage throughput and service levels at scale will be central to sustaining gross margin in the mid-40s. The prior quarter’s net margin of 0.63% highlights the sensitivity of bottom-line outcomes to cost containment and operational efficiency; management’s execution on cost controls and automation will influence earnings quality.

Most Promising Segment: Regulated Onboarding and Compliance Verification

Verification services tailored to regulated industries—financial services, healthcare, and other sectors with stringent onboarding requirements—are positioned for durable growth. Demand drivers include evolving compliance standards, increased scrutiny on identity and fraud risks, and multi-national expansion of digital onboarding. Customers in these segments typically prioritize reliability and auditability, enabling more resilient pricing and deeper wallet share as they consolidate toward fewer vendors. This dynamic can produce a favorable revenue mix shift and smoother renewal cycles.

The forecasted revenue level of $391.88 million implies healthy activity across compliance-intensive use cases, with year-over-year growth at 28.57% suggesting share capture and potentially higher attach rates for premium verification modules. Over time, productization of analytics and risk scoring can widen moats and reduce churn, especially when integrated into customers’ end-to-end onboarding platforms. Execution risk rests in ensuring service uptime, regulatory alignment across jurisdictions, and effective scaling of customer support to maintain satisfaction amid elevated throughput.

Key Stock Price Drivers This Quarter

Margin trajectory is the first determinant of equity reaction, given the contrast between robust gross margin and compressed net margin in the last report. Investors will examine the bridge from gross profit to net income, focusing on operating expense growth, efficiency gains from automation, and any discrete items that affected GAAP profitability. If EBIT performance aligns with the $48.80 million estimate while EPS trends toward $0.26, the market could view the result as consistent with the company’s earnings power, provided revenue mix supports durable margins.

The second driver is booking visibility and commentary on enterprise pipelines. Clear signals around customer renewals, cross-sell momentum, and expansions among regulated verticals can validate the growth narrative and reduce perceived cyclicality. Management’s discussion of macro exposure to hiring cycles, and any updates on pricing or contract terms, will help gauge sustainability of revenue growth near the upper-20s range. A third driver is product innovation, especially identity and trust solutions that enhance onboarding outcomes; evidence of accelerated adoption can be a catalyst for re-rating, whereas setbacks in deployment or customer migration could weigh on sentiment.

Analyst Opinions

The prevailing tone among institutional commentators in recent months has been cautiously constructive, with bullish views modestly outnumbering bearish ones as analysts highlight resilient demand for verification solutions and potential margin improvement from operational initiatives. Supportive notes emphasize the expected 28.57% year-over-year revenue rise to $391.88 million and EPS near $0.26, pointing to stable enterprise demand and incremental pricing benefits despite macro variability. Bearish critiques concentrate on the last quarter’s slim GAAP net margin of 0.63% and EBIT underperformance versus estimates, warning that cost absorption and any mix shift to lower-margin volumes could pressure earnings quality.

Citing broad sell-side commentary, the majority perspective favors a balanced outlook where top-line strength is sustained while cost discipline and automation gradually narrow the gap between gross margin and net margin. Analysts also highlight the durability of compliance-centered verification demand, estimating that share consolidation among large customers supports medium-term growth. In this view, investor focus will rest on management’s commentary around enterprise pipelines, volume trends in regulated verticals, and progress in translating elevated gross margins into consistent EPS delivery.