First Advantage (FA) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $449 million, up 15% year-over-year, with Adjusted EBITDA margin of 28.6% and Adjusted Diluted EPS up 30%, surpassing expectations and reflecting strong go-to-market execution and technology leadership.

• Net income for Q2 2026 was $16.9 million (3.8% margin), a significant increase from the prior year; adjusted net income was $61.4 million, with adjusted diluted EPS of $0.35.

• Celebrated fifth IPO anniversary, added to S&P SmallCap 600 Index, and recognized by TIME as a top background screening provider.

• Raised full-year 2026 guidance across all key metrics, reflecting strong first-half performance and positive labor market trends.

• Continued momentum from large contract wins, robust enterprise bookings, and high upsell/cross-sell activity, especially in Digital Identity products.

Financial highlights

• Q2 2026 revenue reached $449 million, up 15% year-over-year, with Adjusted EBITDA of $128.5 million (28.6% margin), and Adjusted Diluted EPS of $0.35, up 30% year-over-year.

• Net income margin improved to 3.8% in Q2 2026; adjusted net income margin was 13.7%.

• Operating cash flow for Q2 was $73.6 million, up 97% year-over-year; cash balance at quarter-end was $238 million.

• Interest expense dropped 29.4% in Q2 2026, reflecting lower debt and interest rates after refinancing.

• Customer retention rate remained strong at 96%.

Outlook and guidance

• Full-year 2026 guidance raised: revenue $1.67–$1.71 billion, Adjusted EBITDA $472–$486 million, Adjusted Diluted EPS $1.23–$1.29.

• At midpoint, this implies 7% revenue growth, 9% Adjusted EBITDA growth, and 21% Adjusted Diluted EPS growth year-over-year.

• 2028 targets reaffirmed: $1.8–$2.0 billion revenue, $560–$630 million Adjusted EBITDA, 31–32% margin, $1.65–$2.00 EPS, net leverage 2.0x–3.0x.

• Q3 revenue growth expected in mid to high single digits; Q4 growth in low to mid single digits due to tough comps.

• Adjusted EBITDA margin expected to remain consistent with Q2 for the rest of the year.