The following discussion and analysis of First Advantage Corporation's financial
condition and results of operations is provided as a supplement to the condensed
consolidated financial statements for the three and nine months ended September
30, 2022, and should be read in conjunction with the audited consolidated
financial statements for the year ended December 31, 2021, our "Risk Factors,"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2021.

Forward-looking statements

This Quarterly Report on Form 10-Q contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements reflect our current views with respect to, among
other things, our operations and financial performance. Forward-looking
statements include all statements that are not historical facts. These
forward-looking statements relate to matters such as our industry, business
strategy, goals and expectations concerning our market position, future
operations, margins, profitability, capital expenditures, liquidity and capital
resources and other financial and operating information. In some cases, you can
identify these forward-looking statements by the use of words such as
"anticipate," "assume," "believe," "continue," "could," "estimate," "expect,"
"intend," "may," "plan," "potential," "predict," "project," "future," "will,"
"seek," "foreseeable," the negative version of these words, or similar terms and
phrases.

These forward-looking statements are subject to various risks, uncertainties,
assumptions, or changes in circumstances that are difficult to predict or
quantify. Such risks and uncertainties include, but are not limited to, the
following: the impact of COVID-19 and related continuously evolving risks to our
results of operations, financial position and/or liquidity; our operations in a
highly regulated industry and the fact that we are subject to numerous and
evolving laws and regulations, including with respect to personal data and data
security; our reliance on third-party data providers; negative changes in
external events beyond our control, including our customers' onboarding volumes,
economic drivers which are sensitive to macroeconomic cycles, such as interest
rate volatility and inflation, geopolitical unrest, and the COVID-19 pandemic;
potential harm to our business, brand, and reputation as a result of security
breaches, cyber-attacks or the mishandling of personal data; liability and
litigation due to the sensitive and privacy-driven nature of our products and
solutions, which could be costly and time-consuming to defend and may not be
fully covered by insurance; the continued integration of our platforms and
solutions with human resource providers such as applicant tracking systems and
human capital management systems as well as our relationships with such human
resource providers; risks relating to public opinion, which may be magnified by
incidents or adverse publicity concerning our industry or operations; our
contracts with our customers, which do not guarantee exclusivity or contracted
volumes; our reliance on third-party vendors to carry out certain portions of
our operations; disruptions, outages, or other errors with our technology and
network infrastructure, including our data centers, servers and third-party
cloud and internet providers and our migration to the cloud; disruptions at our
Global Operating Center and other operating centers; operating in a penetrated
and competitive market; our ability to obtain, maintain, protect, and enforce
our intellectual property and other proprietary information; our indebtedness
could adversely affect our ability to raise additional capital to fund our
operations, limit our ability to react to changes in the economy or our
industry, and prevent us from meeting our obligations; Silver Lake's control of
us and the potential conflict of its interest with ours or those of our
stockholders; our ability to maintain, protect, and enforce the confidentiality
of our trade secrets; the use of open-source software in our applications; the
indemnification provisions in our contracts with our customers and third-party
data suppliers; our ability to identify attractive targets or successfully
complete such transactions; our international business; our dependence on the
service of our key executive and other employees, and our ability to find and
retain qualified employees; seasonality in our operations from quarter to
quarter; failure to comply with anti-corruption laws and regulations; the
timing, manner and volume of repurchases of common stock pursuant to our share
repurchase program; and changing interpretations of tax laws.

For additional information on these and other factors that could cause First
Advantage's actual results to differ materially from expected results, please
see our Annual Report on Form 10-K for the year ended December 31, 2021, filed
with the Securities and Exchange Commission (the "SEC"), as such factors may be
updated from time to time in our periodic filings with the SEC, which are
accessible on the SEC's website at www.sec.gov. The forward-looking statements
included in this Quarterly Report on Form 10-Q speak only as of the date of this
Form 10-Q, and we undertake no obligation to publicly update or review any
forward-looking statement, whether as a result of new information, future
developments, or otherwise, except as required by law.

                                       25
--------------------------------------------------------------------------------

Glossary of selected terminology

The following terms are used in this Form 10-Q unless otherwise specified or the context requires:

“Americas” in relation to our business means United States, Canadaand
Latin America;

“Corporate Clients” means our clients who contribute $500,000 or more to our earnings in a calendar year;

"First Advantage," the "Company," "we," "us," and "our" mean the business of
First Advantage
Corporation and its subsidiaries;

“International” in relation to our business, means all geographic regions outside of United States, Canadaand Latin America;

“Revenue attributable to acquisitions of the Company” means revenue recognized in the first year following each acquisition; and

Silver Lake” means Silver Lake Group, LLCand its affiliates, successors and assignees.

Certain monetary amounts, percentages, and other figures included in this
Quarterly Report on Form 10-Q have been subject to rounding adjustments.
Percentage amounts included in this Quarterly Report on Form 10-Q have not in
all cases been calculated on the basis of such rounded figures, but on the basis
of such amounts prior to rounding. For this reason, percentage amounts in this
Quarterly Report on Form 10-Q may vary from those obtained by performing the
same calculations using the figures in our consolidated financial statements
included elsewhere in this Quarterly Report on Form 10-Q. Certain other amounts
that appear in this Quarterly Report on Form 10-Q may not sum due to rounding.

Website and Social Media Disclosure

We use our websites (https://fadv.com/ and https://investors.fadv.com/) to
distribute company information. We make available free of charge a variety of
information for investors, including our Annual Report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and any amendments to those
reports, as soon as reasonably practicable after we electronically file that
material with or furnish it to the Securities and Exchange Commission ("SEC").
The information we post on our websites may be deemed material. Accordingly,
investors should monitor our websites, in addition to following our press
releases, filings with the SEC, and public conference calls and webcasts. In
addition, you may opt in to automatically receive email alerts and other
information about First Advantage when you enroll your email address by visiting
the "Email Alerts" section of our investor website at
https://investors.fadv.com/. The contents of our websites and social media
channels are not, however, a part of this Quarterly Report on Form 10-Q.

Insight

First Advantage is a leading global provider of HR technology solutions for
screening, verifications, safety, and compliance. We deliver innovative
solutions and insights that help our customers manage risk and hire the best
talent. Enabled by our proprietary technology, our products and solutions help
companies protect their brands and provide safer environments for their
customers and their most important resources: employees, contractors, contingent
and extended workers, drivers, tenants, and volunteers.

Our comprehensive product suite includes criminal background checks, drug /
health screening, extended workforce screening, biometrics and identity,
education / work verifications, resident screening, fleet / driver compliance,
executive screening, data analytics, continuous monitoring, social media
monitoring, and hiring tax incentives. We derive a substantial majority of our
revenues from pre-onboarding screening and perform screens in over 200 countries
and territories, enabling us to serve as a one-stop-shop provider to both
multinational companies and growth companies. Our more than 33,000 customers are
global enterprises, mid-sized companies, and small companies, and our products
and solutions are used by personnel in recruiting, human resources, risk,
compliance, vendor management, safety, and/or security.

Our products are sold both individually and bundled. The First Advantage
platform offers flexibility for customers to specify which products to include
in their screening package, such as Social Security numbers, criminal records,
education and work verifications, sex offender registry, and global sanctions.
Generally, our customers order a bundled background screening package or
selected combination of screens related to a single individual before they
onboard that individual. The type and mix of products and solutions we sell to a
customer vary by customer size, their screening requirements, and industry
vertical. Therefore, order volumes are not comparable across both customers and
periods. Pricing can also vary considerably by customer depending on the product
mix in their screening packages, order volumes, screening requirements and
preferences, pass-through and third-party out of pocket costs, and bundling of
products.


                                       26
--------------------------------------------------------------------------------

We enter into contracts with our customers that are typically three years in
length. These contracts set forth the general terms and pricing of our products
and solutions but generally do not include minimum order volumes or committed
order volumes. Accordingly, contracts do not provide guarantees of future
revenues. Due to our contract terms and the nature of the background screening
industry, we determined our contract terms for ASC 606 purposes are less than
one year. Through our ongoing dialogue with our customers, we have visibility
into their expected future order volumes, although these can be difficult to
accurately forecast due to the dynamic nature of forecasting hiring and business
needs. We typically bill our customers at the end of each month and recognize
revenues as completed orders are reported or otherwise made available to our
customers. Over 90% of the criminal searches performed in the United States are
completed the same day they are submitted.

We generated revenues of $206.0 million for the three months ended September 30,
2022, as compared to $192.9 million for the three months ended September 30,
2021 and generated revenues of $597.4 million for the nine months ended
September 30, 2022, as compared to $499.8 million for the nine months ended
September 30, 2021. Approximately 84% of our revenues for the nine months ended
September 30, 2022 was generated in the Americas, predominantly in the United
States, while the remaining 16% was generated internationally. Other than the
United States, no single country accounted for 10% or more of our total revenues
for the three and nine months ended September 30, 2022. Please refer to "Results
of Operations" for further details.

segments

During the first quarter of 2022, the Company made organizational changes and
modified additional information provided to its chief operating decision maker
("CODM") to better align with how its CODM assesses performance and allocates
resources. As a result, the Company now has two reportable segments, Americas
and International:

Americas. This segment performs a variety of background check and compliance
services across all phases of the workforce lifecycle from pre-onboarding
services to post-onboarding and ongoing monitoring services, covering employees,
contractors, contingent and extended workers, drivers, tenants, and volunteers.
We generally classify our service offerings into three categories:
pre-onboarding, post-onboarding, and adjacent products. We deliver our solutions
across multiple vertical industries in the United States, Canada, and Latin
America markets.

International. The International segment provides services similar to our
Americas segment in regions outside of the Americas. We primarily deliver our
solutions across multiple vertical industries in the Europe, India, and Asia
Pacific markets.

Seasonality

We experience seasonality with respect to certain industries due to fluctuations
in hiring volumes and other economic activity. For example, pre-onboarding
revenues generated from our customers in the retail and transportation
industries are historically highest during the months of October and November
leading up to the holiday season and lowest at the beginning of the new year,
following the holiday season. Certain customers across various industries also
historically ramp up their hiring throughout the second quarter of the year as
winter concludes, commercial activity tied to outdoor activities increases, and
the school year ends, giving rise to student and graduate hiring. We expect that
further growth in e-commerce, the continued digital transformation of the
economy, and other economic forces may impact future seasonality, but we are
unable to predict these potential shifts and how our business may be impacted.

Recent Developments

M&A

The Company completed its asset purchase of Form I-9 Compliance, a U.S.-based
technology solution and consulting service provider for I-9 and E-Verify
compliance. The acquisition is effective as of January 1, 2022 and strategically
expands the Company's product suite offerings through the addition of new I-9
and employment eligibility solutions. The results of Form I-9 Compliance, which
were not material, have been included in our Americas segment from the effective
date of the acquisition.

                                       27
--------------------------------------------------------------------------------

Impact of COVID-19 and current economic conditions

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, and created significant volatility and disruption in financial markets. In addition, other recent macroeconomic events, including rising inflation, WE Federal Reserve rising interest rates and the Russian invasion of Ukraine led to further economic uncertainty.

Despite the continuing uncertainty associated with these events, we are
confident in the long-term overall health of our business, the strength of our
product offerings, and our ability to continue to execute on our strategy and
help our customers hire smarter and onboard faster. Our ability to deliver
innovative products and solutions that enhance workplace safety and address
compliance risks has contributed to the durability of our financial results.

In 2022, COVID-19 continues to affect different parts of the world to different
degrees. In our continued response to the COVID-19 pandemic, we have implemented
operational changes to ensure the safety of our workforce and to ensure that we
continue to provide high quality products and services to our customers. We have
successfully adopted a highly distributed, hybrid workforce model which has not
significantly affected our operations.

While our overall productivity has not been materially adversely impacted by the
events described above, if the economic uncertainty is sustained or increases,
we may experience a negative impact on new business, customer renewals and
demand levels, sales and marketing efforts, revenues growth rates, customer
deployments, customer collections, product development, or other financial
metrics. Any of these factors could harm our business, financial condition, and
operating results. For additional information, see our "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2021.

Recently issued accounting standards

See Note 2 to the condensed consolidated financial statements for information on the impact that recent accounting pronouncements may have on the condensed consolidated financial statements.

Components of our operating results

Revenue

The Company derives revenues from a variety of background screening and adjacent
products that cover all phases of the workforce lifecycle from pre-onboarding
screening services to post-onboarding and ongoing monitoring services, covering
employees, contractors, contingent and extended workers, drivers, tenants, and
volunteers. We generally classify our products and solutions into three major
categories: pre-onboarding, post-onboarding, and adjacent products, each of
which is enabled by our technology, proprietary databases, and data analytics
capabilities. Pre-onboarding products, which comprise the substantial majority
of our revenues, span an extensive array of products that customers typically
utilize to enhance their applicant evaluation process and ensure compliance with
their workforce onboarding criteria from the time an application is submitted to
an applicant's successful onboarding. Post-onboarding products are comprised of
continuous monitoring, re-screening, and other solutions to help our customers
keep their end customers, workforces, and other stakeholders safer, productive,
and compliant. Adjacent products include products that complement our
pre-onboarding and post-onboarding solutions such as fleet / vehicle compliance,
hiring tax credits and incentives, resident / tenant screening, employment
eligibility, and investigative research.

Our suite of products is available individually or through bundled solutions
that can be configured and tailored according to our customers' needs. We
typically bill our customers at the end of each month and recognize revenues
after completed orders are reported or otherwise made available to our
customers, with a substantial majority of our customers' orders completed the
same day they are submitted. We recognize revenues for other products over time
as the customer simultaneously receives and consumes the benefits of the
products and solutions delivered.

                                       28
--------------------------------------------------------------------------------

Functionnary costs

We incur the following expenses related to our cost of revenue and operating expenses:

Cost of Services: Consists of amounts paid to third parties for access to
government records, other third-party data and services, and our internal
processing fulfillment and customer care functions. In addition, cost of
services includes expenses from our drug screening lab and collection site
network as well as our court runner network. Third-party cost of services are
largely variable in nature and are typically invoiced to our customers as direct
pass-through costs. Cost of services also includes our salaries and benefits
expense for personnel involved in the processing and fulfilment of our screening
products and solutions, as well as our customer care organization and robotics
process automation implementation team. Other costs included in cost of services
relate to allocations of certain overhead costs for our revenue-generating
products and solutions, primarily consisting of certain facility costs and
administrative services allocated by headcount or another related metric. We do
not allocate depreciation and amortization to cost of services.

Product and Technology Expense: Consists of salaries and benefits of personnel
involved in the maintenance of our technology and its integrations and APIs,
product marketing, management of our network and infrastructure capabilities,
and maintenance of our information security and business continuity functions. A
portion of the personnel costs are related to the development of new products
and features that are primarily developed through agile methodologies. These
costs are partially capitalized, and therefore, are partially reflected as
amortization expense within the depreciation and amortization cost line item.
Product and technology expense also includes third-party costs related to our
cloud computing services, software licensing and maintenance,
telecommunications, and other data processing functions. We do not allocate
depreciation and amortization to product and technology expense.

Selling, General, and Administrative Expense: Consists of sales, customer
success, marketing, and general and administrative expenses. Sales, customer
success, and marketing expenses consist primarily of employee compensation such
as salaries, bonuses, sales commissions, stock-based compensation, and other
employee benefits for our verticalized Sales and Customer Success teams. General
and administrative expenses include travel expenses and various corporate
functions including finance, human resources, legal, and other administrative
roles, in addition to certain professional service fees and expenses incurred in
connection with our IPO and now as a public company. We expect our selling,
general, and administrative expenses to increase in the short-term, primarily as
a result of additional public company related reporting and compliance costs.
Over the long-term, we expect our selling, general, and administrative expenses
to decrease as a percentage of revenues as we leverage our past investments. We
do not allocate depreciation and amortization to selling, general, and
administrative expenses.

Depreciation and Amortization: Property and equipment consisting mainly of
capitalized software costs, furniture, hardware, and leasehold improvements are
depreciated or amortized and reflected as operating expenses. We also amortize
the capitalized costs of finite-life intangible assets acquired in connection
with business combinations.

We have a flexible cost structure that allows our business to adjust quickly to
the impacts of macroeconomic events and scale to meet the needs of large new
customers. Operating expenses are influenced by the amount of revenues, customer
mix, and product mix that contribute to our revenues for any given period. As
revenues grow, we would generally expect cost of services to grow in a similar
fashion, albeit influenced by the effects of automation, productivity, and other
efficiency initiatives as well as customer and product mix shifts and
third-party pass-through costs. We regularly review expenses and investments in
the context of revenues growth and any shifts we see in the business in order to
align with our overall financial objectives. While we expect internal operating
expenses to increase in absolute dollars to support our continued growth, we
believe that, in the long term, operating expenses will decline gradually as a
percentage of total revenues in the future as our business grows and our
operating efficiency and automation initiatives continue to advance.

Other expenses, net

Our other expenses, net, consist of the following items:

Interest Expense, Net: Relates primarily to our debt service costs, the
interest-related unrealized gains and losses of our interest rate swaps and, to
a lesser extent, the interest on our capital lease obligations and the
amortization of deferred financing costs. Additionally, interest expense, net
includes interest income earnings on our cash and cash equivalent balances held
in interest-bearing accounts. We also earn interest income on our short-term
investments which are fixed-time deposits having a maturity date within twelve
months.

Loss on extinguishment of debt: reflects losses on the extinction of certain debts.

                                       29
--------------------------------------------------------------------------------

Provision for income taxes

Provision for income taxes consists of domestic and foreign corporate income
taxes related to earnings from our sale of services, with statutory tax rates
that differ by jurisdiction. Our effective tax rate may be affected by many
other factors including changes in tax laws, regulations or rates, new
interpretations of existing laws or regulations, shifts in the allocation of
income earned throughout the world, and changes in overall levels of income
before tax. For example, there are several proposals to change the current tax
law, including changes in GILTI. If any or all of these (or similar) proposals
are ultimately enacted into law, in whole or in part, they could increase our
effective tax rate.

Results of Operations

The information contained below should be read in conjunction with our accompanying condensed historical consolidated financial statements and accompanying notes.

Comparison of operating results for the three and nine months ended
September 30, 2022 compared to the three and nine month periods ended September 30, 2021

                                       Three Months Ended September 30,             Nine Months Ended September 30,
(in thousands, except
percentages)                              2022                   2021                 2022                   2021
Revenues                            $        205,986       $        192,867     $        597,428       $        499,763

Operating Expenses:
Cost of services (exclusive of
depreciation and amortization
below)                                       104,300                 94,151              301,023                244,964
Product and technology expense                13,250                 11,313               39,969                 33,546
Selling, general, and
administrative expense                        28,034                 27,203               87,715                 76,256
Depreciation and amortization                 34,744                 35,812              103,185                106,493
Total operating expenses                     180,328                168,479              531,892                461,259
Income from operations                        25,658                 24,388               65,536                 38,504

Other Expense, Net:
Interest expense, net                          1,740                  4,706                4,002                 21,875
Loss on extinguishment of debt                     -                      -                    -                 13,938
Total other expense, net                       1,740                  4,706                4,002                 35,813
Income before provision for
income taxes                                  23,918                 19,682               61,534                  2,691
Provision for income taxes                     6,709                  3,397               17,076                  2,025
Net income                          $         17,209       $         16,285     $         44,458       $            666
Net income margin                                8.4 %                  8.4 %                7.4 %                  0.1 %




                                       30
--------------------------------------------------------------------------------

Revenue

                                        Three Months Ended September 30,             Nine Months Ended September 30,
(in thousands)                             2022                   2021                 2022                   2021
Revenues
Americas                             $        176,091       $        158,972     $        506,770       $        421,795
International                                  31,628                 35,595               96,413                 82,237
Eliminations                                   (1,733 )               (1,700 )             (5,755 )               (4,269 )
Total revenues                       $        205,986       $        192,867     $        597,428       $        499,763

The revenues were $206.0 million for the three months ended September 30, 2022compared to $192.9 million for the three months ended September 30, 2021. Turnover for the three months ended September 30, 2022 increased by $13.1 millionor 6.8%, compared to the three months ended September 30, 2021.

The increase in income is mainly explained by:

increase in income from $9.3 million attributable to new customers both in the
Americas and international segments; and

income from $8.4 million attributable to the Company’s acquisitions in
Americas segment.

The increase in revenue was offset by:

a net decrease of $4.6 million in existing customer revenues, primarily driven
by the effects of changes in foreign currencies on our International segment.
The remaining net change within our existing customer revenues primarily relates
to macro-economic driven declines in our International segment.

The revenues were $597.4 million for the nine months ended September 30, 2022compared to $499.8 million for the nine months ended September 30, 2021. Revenue for the nine months ended September 30, 2022 increased by $97.7 millionor 19.5%, compared to the nine months ended September 30, 2021.

The increase in income is mainly explained by:

a net increase of $39.0 million in existing customer revenues, primarily driven
by strength across our business in the first half of the year, which was
supported by positive jobs market trends including sustained job switching and
churn. These existing customer increases were offset by the impact of lost
accounts and the effects of changes in foreign currencies;

income from $31.6 million attributable to the Company’s acquisitions in
Americas and international segments; and

increase in income from $27.1 million attributable to new customers both in the
Americas and international segments.

In 2022, the Company has experienced high demand among customers across numerous
industry verticals and account sizes in both its Americas and International
segments. However, in the third quarter of 2022, certain industry verticals and
International segment markets experienced reduced revenues volumes as a result
of macro-economic headwinds and negative foreign currency impacts due to
strengthening of the U.S. Dollar. Pricing remained relatively stable across all
periods.


                                       31
--------------------------------------------------------------------------------

Cost of services

                                        Three Months Ended September 30,             Nine Months Ended September 30,
(in thousands, except percentages)         2022                   2021                 2022                   2021
Revenues                             $        205,986       $        192,867     $        597,428       $        499,763
Cost of services                              104,300                 94,151              301,023                244,964
Cost of services as a % of revenue               50.6 %                 48.8 %               50.4 %                 49.0 %


Cost of services was $104.3 million for the three months ended September 30,
2022, compared to $94.2 million for the three months ended September 30, 2021.
Cost of services for the three months ended September 30, 2022 increased by
$10.1 million, or 10.8%, compared to the three months ended September 30, 2021.

The increase in the cost of services is mainly explained by:

an increase in variable third-party data expenses of $7.2 million as a direct
result of increased revenues, increases in the prices of certain third-party
data usage, and variation in customer ordering mix;

a $3.0 million increased personnel expenditures in our operations and customer service functions due to increased operational support staff to process and meet the Company’s growing order volume; and

a number of cost of services related operating expense increases attributable to
insurance, travel, and other expenses related to the increased revenue volumes
experienced in 2022.

The increase in the cost of services was partially offset by:

exchange gains of $0.9 million due to the impact of exchange rate volatility.

Cost of services as a percentage of revenues was 50.6% for the three months
ended September 30, 2022, compared to 48.8% for the three months ended September
30, 2021. The cost of services percentage of revenues in the third quarter 2022
was impacted by increases in certain third-party data costs, variation in
customer ordering mix to lower margin products, and acquisitions having a larger
mix of third-party data expenses. This increase was partially offset by cost
savings from the Company's continued implementation of automation and other
process efficiencies.

Cost of services was $301.0 million for the nine months ended September 30,
2022, compared to $245.0 million for the nine months ended September 30, 2021.
Cost of services for the nine months ended September 30, 2022 increased by $56.1
million, or 22.9%, compared to the nine months ended September 30, 2021.

The increase in the cost of services is mainly explained by:

an increase in variable third-party data expenses of $41.3 million as a direct
result of increased revenues, increases in the prices of certain third-party
data usage, variation in customer ordering mix, and acquisitions having a larger
mix of third-party data expenses;

a $13.6 million increase in personnel related expenses in our operations and
customer care functions as a result of additional operational support headcount
to process and fulfill the Company's order volume growth; and

a number of increases in operating expenses related to the cost of services attributable to insurance, travel, software licenses and other expenses related to the increase in revenue volumes recorded in 2022.

The increase in the cost of services was partially offset by:

exchange gains of $1.7 million due to the impact of exchange rate volatility.

Cost of services as a percentage of revenues was 50.4% for the nine months ended
September 30, 2022, compared to 49.0% for the nine months ended September 30,
2021. The cost of services percentage of revenues for the nine months ended
September 30, 2022 was impacted by increases in certain third-party data costs,
variation in customer ordering mix to lower margin products, and acquisitions
having a larger mix of third-party data expenses. This increase was partially
offset by cost savings from the Company's continued implementation of automation
and other process efficiencies.


                                       32
--------------------------------------------------------------------------------

Product and technology expenses

                                       Three Months Ended September 30,           Nine Months Ended September 30,
(in thousands)                            2022                  2021                2022                  2021

Product and technology expenses $13,250 $11,313

$39,969 $33,546


Product and technology expense was $13.3 million for the three months ended
September 30, 2022, compared to $11.3 million for the three months ended
September 30, 2021. Product and technology expense for the three months ended
September 30, 2022 increased by $1.9 million, or 17.1%, compared to the three
months ended September 30, 2021.

The increase in product and technology expenses is mainly explained by:

a $1.6 million increased spending on software licenses.

Product and technology expense was $40.0 million for the nine months ended
September 30, 2022, compared to $33.5 million for the nine months ended
September 30, 2021. Product and technology expense for the nine months ended
September 30, 2022 increased by $6.4 million, or 19.1%, compared to the nine
months ended September 30, 2021.

The increase in product and technology expenses is mainly explained by:

a $4.2 million increased spending on software licenses; and

a $1.6 million increase in personnel-related expenses as a result of additional
investments made to enhance our product, solutions, and technology platform and
certain reorganization expenses.


                                       33
--------------------------------------------------------------------------------

Selling, general and administrative expenses

                                       Three Months Ended September 30,           Nine Months Ended September 30,
(in thousands)                            2022                  2021                2022                  2021
Selling, general, and
administrative expense               $        28,034       $        27,203     $        87,715       $        76,256


Selling, general, and administrative expense was $28.0 million for the three
months ended September 30, 2022, compared to $27.2 million for the three months
ended September 30, 2021. Selling, general, and administrative expense for the
three months ended September 30, 2022 increased by $0.8 million, or 3.1%,
compared to the three months ended September 30, 2021.

Selling, general and administrative expenses increased primarily due to:

a $1.5 million increased personnel-related expenses primarily due to additional investments made in the Company’s Sales and Customer Success functions and additional headcount related to the Company’s growth and operation as a public company;

a $1.0 million increased expenses related to litigation activities in the normal course of business; and

a number of other head office expenses which increased primarily due to the Company becoming a publicly traded company and the Company’s merger and acquisition activities.

The increase in selling, general and administrative expenses was partially offset by:

a $1.8 million lower commissions and bonus expenses due to lower performance-based variable commissions compared to internal targets; and

a $0.9 million decrease in professional service fees incurred related to the Company’s preparation for its 2021 IPO and secondary offering which did not reoccur in 2022.

Selling, general, and administrative expense was $87.7 million for the nine
months ended September 30, 2022, compared to $76.3 million for the nine months
ended September 30, 2021. Selling, general, and administrative expense for the
nine months ended September 30, 2022 increased by $11.5 million, or 15.0%,
compared to the nine months ended September 30, 2021.

Selling, general and administrative expenses increased primarily due to:

a $6.4 million increased personnel-related expenses primarily due to additional investments made in the Company’s Sales and Customer Success functions and additional headcount related to the Company’s growth and operation as a public company;

a $1.9 million increase in expenses related to liability insurance;

a $1.9 million increased expenses related to litigation activities in the normal course of business;

a $1.2 million increased marketing expenses; and

a number of other head office expenses which increased primarily due to the Company becoming a publicly traded company and the Company’s merger and acquisition activities.

The increase in selling, general and administrative expenses was partially offset by:

a $4.1 million decrease in professional service fees incurred related to the Company’s preparation for its 2021 IPO and secondary offering which did not reoccur in 2022.

                                       34
--------------------------------------------------------------------------------

Depreciation and amortization

                                       Three Months Ended September 30,            Nine Months Ended September 30,
(in thousands)                            2022                  2021                 2022                   2021

Depreciation and amortization $34,744 $35,812

$103,185 $106,493


Depreciation and amortization was $34.7 million for the three months ended
September 30, 2022, compared to $35.8 million for the three months ended
September 30, 2021. Depreciation and amortization for the three months ended
September 30, 2022 decreased by $1.1 million, or 3.0%, compared to the three
months ended September 30, 2021. This decrease was partially offset by increases
in depreciation related to assets placed in service during the three months
ended September 30, 2022.

Depreciation and amortization was $103.2 million for the nine months ended
September 30, 2022, compared to $106.5 million for the nine months ended
September 30, 2021. Depreciation and amortization for the nine months ended
September 30, 2022 decreased by $3.3 million, or 3.1% compared to the nine
months ended September 30, 2021. This decrease was partially offset by increases
in depreciation related to assets placed in service during the nine months ended
September 30, 2022.

Interest Expense, Net

                                         Three Months Ended September 30,               Nine Months Ended September 30,
(in thousands)                             2022                     2021                2022                     2021
Interest expense, net                $          1,740         $          4,706     $         4,002         $          21,875


Interest expense, net was $1.7 million for the three months ended September 30,
2022, compared to $4.7 million for the three months ended September 30, 2021.
Interest expense for the three months ended September 30, 2022 decreased by $3.0
million, or 63.0%, compared to the three months ended September 30, 2021.

The decrease in interest cost was primarily attributable to $4.0 million of
unrealized gains on the interest rate swap as a result of the increased interest
rate volatility that continued in the third quarter of 2022. This decrease was
further impacted by $1.6 million of interest income earned on cash held within
interest bearing accounts. These decreases were offset by higher interest
expense on the Successor First Lien Credit Facility as a result of rising
interest rates.

Interest expense, net was $4.0 million for the nine months ended September 30,
2022, compared to $21.9 million for the nine months ended September 30, 2021.
Interest expense for the nine months ended September 30, 2022 decreased by $17.9
million, or 81.7%, compared to the nine months ended September 30, 2021.

The decrease in interest cost was primarily attributable to $11.4 million of
unrealized gains on the interest rate swap as a result of the increased interest
rate volatility observed in 2022. This decrease was further impacted by the
Company's February 2021 refinancing of the Successor First Lien Credit Facility,
early repayment of the Successor Second Lien Credit Facility, and the prepayment
of $200.0 million of the Successor First Lien Credit Facility in June 2021,
resulting in interest rate savings due to lower principal and more favorable
interest rate margins and interest income earned on cash held within interest
bearing accounts. These decreases were partially offset by higher interest
expense on the Successor First Lien Credit Facility as a result of rising
interest rates in 2022.

Loss on extinguishment of debt

                                            Three Months Ended September 30,             Nine Months Ended September 30,
(in thousands)                            2022                           2021               2022                 2021
Loss on extinguishment of debt       $             -               $        

-$- $13,938

Loss on extinguishment of debt for the nine months ended September 30, 2021
relates to expenses related to the cancellation of debt issuance costs related to the February 2021 refinancing of the successor senior credit facility.


                                       35
--------------------------------------------------------------------------------

Provision for income taxes

                                         Three Months Ended September 30,               Nine Months Ended September 30,
(in thousands)                             2022                     2021                 2022                     2021
Provision for income taxes           $          6,709         $          3,397     $          17,076         $         2,025


Our provision for income taxes was $6.7 million for the three months ended
September 30, 2022, compared to $3.4 million for the three months ended
September 30, 2021. Our provision for income taxes for the three months ended
September 30, 2022 increased by $3.3 million, or 97.5%, compared to the three
months ended September 30, 2021.

The increase in our provision for income taxes was primarily due to the increase
of income before income taxes during the three months ended September 30, 2022,
as compared to the three months ended September 30, 2021, due to higher levels
of pre-tax income.

Our provision for income taxes was $17.1 million for the nine months ended
September 30, 2022, compared to $2.0 million for the nine months ended September
30, 2021. Our provision for income taxes for the nine months ended September 30,
2022 increased by $15.1 million, or 743.3%, compared to the nine months ended
September 30, 2021.

The increase in our provision for income taxes was primarily due to the increase
of income before income taxes during the nine months ended September 30, 2022,
as compared to the nine months ended September 30, 2021, due to higher levels of
pre-tax income.

Net profit and net profit margin

                                       Three Months Ended September 30,         Nine Months Ended September 30,
(in thousands, except percentages)        2022                  2021               2022                  2021
Net income                           $        17,209       $        16,285     $      44,458         $        666
Net income margin                                8.4 %                 8.4 %             7.4 %                0.1 %


Net income was $17.2 million for the three months ended September 30, 2022,
compared to $16.3 million for the three months ended September 30, 2021. Net
income for the three months ended September 30, 2022 increased by $0.9 million
compared to the three months ended September 30, 2021.

Net profit margin was 8.4% for the three months ended September 30, 2022consistent with the three months ended September 30, 2021as overall improvements in the Company’s operating results were impacted by increases in our provision for income taxes due to increased profitability.

Net income was $44.5 million for the nine months ended September 30, 2022,
compared to a net income of $0.7 million for the nine months ended September 30,
2021. Net income for the nine months ended September 30, 2022 increased by $43.8
million compared to the nine months ended September 30, 2021.

Net income margin was 7.4% for the nine months ended September 30, 2022,
compared to 0.1% the nine months ended September 30, 2021. The improvement in
our net income margin is attributable to our ability to leverage operating
efficiencies to control our overall expenses while increasing revenues and
reducing interest and other debt related expenses incurred as a result of the
February 2021 refinancing.

                                       36
--------------------------------------------------------------------------------

Main operational and financial indicators

In addition to our results determined in accordance with GAAP, we believe
certain measures are useful in evaluating our operating performance. Management
believes these non-GAAP measures are useful to investors in highlighting trends
in our operating performance, while other measures can differ significantly
depending on long-term strategic decisions regarding capital structure, the tax
jurisdictions in which we operate, and capital investments. Management uses
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted
Diluted Earnings Per Share to supplement GAAP measures of performance in the
evaluation of the effectiveness of our business strategies, to make budgeting
decisions, to establish discretionary annual incentive compensation, and to
compare our performance against that of other peer companies using similar
measures. Management supplements GAAP results with non-GAAP financial measures
to provide a more complete understanding of the factors and trends affecting the
business than GAAP results alone.

The presentations of these measures have limitations as analytical tools and
should not be considered in isolation or as a substitute for analysis of our
results as reported under GAAP. Because not all companies use identical
calculations, the presentations of these measures may not be comparable to other
similarly titled measures of other companies and can differ significantly from
company to company. A reconciliation is provided below for each non-GAAP
financial measure to the most directly comparable financial measure stated in
accordance with GAAP.

Adjusted EBITDA and Adjusted EBITDA margin

Management believes that Adjusted EBITDA is a strong indicator of our overall
operating performance and is useful to management and investors as a measure of
comparative operating performance from period to period. We define Adjusted
EBITDA as net income before interest, taxes, depreciation, and amortization, and
as further adjusted for loss on extinguishment of debt, share-based
compensation, transaction and acquisition-related charges, integration and
restructuring charges, and other non-cash charges. We exclude the impact of
share-based compensation because it is a non-cash expense and we believe that
excluding this item provides meaningful supplemental information regarding
performance and ongoing cash generation potential. We exclude loss on
extinguishment of debt, transaction and acquisition related charges, integration
and restructuring charges, and other charges because such expenses are episodic
in nature and have no direct correlation to the cost of operating our business
on an ongoing basis.

Adjusted EBITDA was $64.2 million for the three months ended September 30, 2022
and represented an Adjusted EBITDA Margin of 31.2%. Adjusted EBITDA was $63.9
million for the three months ended September 30, 2021 and represented an
Adjusted EBITDA Margin of 33.2%. Adjusted EBITDA for the three months ended
September 30, 2022 increased by $0.2 million, or 0.4%, compared to the three
months ended September 30, 2021.

For the three months ended September 30, 2022, Adjusted EBITDA remained flat as
revenues growth attributed to new customers and acquisitions, and cost structure
benefits due to increased automation, operational efficiencies, and operating
leverage were offset by increases in insurance premiums, increases in
third-party data verification costs, additional investments in technology and
sales, the effects of changes in foreign currencies, and lower margin revenues
from our acquisitions.

Adjusted EBITDA was $178.6 million for the nine months ended September 30, 2022
and represented an Adjusted EBITDA Margin of 29.9%. Adjusted EBITDA was $156.9
million for the nine months ended September 30, 2021 and represented an Adjusted
EBITDA Margin of 31.4%. Adjusted EBITDA for the nine months ended September 30,
2022 increased by $21.8 million, or 13.9%, compared to the nine months ended
September 30, 2021.

For the nine months ended September 30, 2022, Adjusted EBITDA increased more
significantly due to revenues growth attributed to new and existing customers,
primarily driven by strength across our business during the first half of the
year.


                                       37
--------------------------------------------------------------------------------

The following table provides a reconciliation of Adjusted EBITDA for the periods presented.

                                       Three Months Ended September 30,            Nine Months Ended September 30,
(in thousands)                            2022                  2021                 2022                   2021
Net income                           $        17,209       $        16,285     $         44,458       $            666
Interest expense, net                          1,740                 4,706                4,002                 21,875
Provision for income taxes                     6,709                 3,397               17,076                  2,025
Depreciation and amortization                 34,744                35,812              103,185                106,493
Loss on extinguishment of debt                     -                     -                    -                 13,938
Share-based compensation                       2,022                 1,343                5,824                  4,569
Transaction and
acquisition-related charges (a)                1,908                 2,144                4,585                  6,510
Integration, restructuring, and
other charges (b)                               (144 )                 257                 (508 )                  780
Adjusted EBITDA                      $        64,188       $        63,944     $        178,622       $        156,856


(a)
Represents charges incurred related to acquisitions and similar transactions,
primarily consisting of change in control-related costs, professional service
fees, and other third-party costs. Additionally includes incremental
professional service fees incurred related to the initial public offering and
subsequent one-time compliance efforts. The three and nine months ended
September 30, 2022 includes a transaction bonus expense related to one of the
Company's 2021 acquisitions.
(b)
Represents charges from organizational restructuring and integration activities,
non-cash, and other charges primarily related to legal exposures inherited from
legacy acquisitions, foreign currency (gains) losses, and (gains) losses on the
sale of assets.

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenues.
The following table presents the calculation of Adjusted EBITDA Margin for the
periods presented.

                                        Three Months Ended September 30,             Nine Months Ended September 30,
(in thousands, except percentages)         2022                   2021                 2022                   2021
Adjusted EBITDA                      $         64,188       $         63,944     $        178,622       $        156,856
Revenues                                      205,986                192,867              597,428                499,763
Adjusted EBITDA Margin                           31.2 %                 33.2 %               29.9 %                 31.4 %


The following table provides a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin by segment for the periods presented.

                                        Three Months Ended September 30,             Nine Months Ended September 30,
(in thousands, except percentages)         2022                   2021                 2022                   2021
Adjusted EBITDA (1):
Americas                             $         57,205       $         53,223     $        156,978       $        136,278
International                                   6,983                 10,721               21,644                 20,578
Adjusted EBITDA                      $         64,188       $         63,944     $        178,622       $        156,856

Revenues
Americas                             $        176,091       $        158,972     $        506,770       $        421,795
International                                  31,628                 35,595               96,413                 82,237
Less: intersegment eliminations                (1,733 )               (1,700 )             (5,755 )               (4,269 )
Total revenues                       $        205,986       $        

192,867 $597,428 $499,763

Adjusted EBITDA Margin
Americas                                         32.5 %                 33.5 %               31.0 %                 32.3 %
International                                    22.1 %                 30.1 %               22.4 %                 25.0 %
Adjusted EBITDA Margin                           31.2 %                 33.2 %               29.9 %                 31.4 %


(1)

See the reconciliation of net income to Adjusted EBITDA above. Segment Adjusted
EBITDA margins are calculated using segment gross revenues and segment Adjusted
EBITDA. Consolidated Adjusted EBITDA margin is calculated using consolidated
revenues and consolidated Adjusted EBITDA.


                                       38
--------------------------------------------------------------------------------

Adjusted net earnings and adjusted diluted earnings per share

Similar to Adjusted EBITDA, management believes that Adjusted Net Income and
Adjusted Diluted Earnings Per Share are strong indicators of our overall
operating performance and are useful to our management and investors as measures
of comparative operating performance from period to period. We define Adjusted
Net Income for a particular period as net income before taxes adjusted for
debt-related costs, acquisition-related depreciation and amortization,
share-based compensation, transaction and acquisition related charges,
integration and restructuring charges, and other non-cash charges, to which we
then apply the related effective tax rate. We define Adjusted Diluted Earnings
Per Share as Adjusted Net Income divided by adjusted weighted average number of
shares outstanding-diluted.

Adjusted Net Income was $40.0 million for the three months ended September 30,
2022, compared to $42.2 million for the three months ended September 30, 2021.
Adjusted Net Income for the three months ended September 30, 2022 decreased by
$2.2 million, or 5.1%, compared to the three months ended September 30, 2021.

Adjusted diluted earnings per share was $0.26 for the three months ended
September 30, 2022 decreased by $0.02i.e. 7.1% compared to the three months ended September 30, 2021.

Adjusted Net Income was $111.5 million for the nine months ended September 30,
2022, compared to $95.9 million for the nine months ended September 30, 2021.
Adjusted Net Income for the nine months ended September 30, 2022 increased by
$15.6 million, or 16.3%, compared to the nine months ended September 30, 2021.

Adjusted Diluted Earnings Per Share was $0.73 for the nine months ended
September 30, 2022, compared to $0.69 for the nine months ended September 30,
2021. Adjusted Diluted Earnings Per Share for the nine months ended September
30, 2022 increased by $0.04, or 5.8% compared to the nine months ended September
30, 2021.

Adjusted Net Income and Adjusted Diluted Earnings Per Share were impacted by
changes in acquisition-related depreciation and amortization and changes in our
capital structure that are captured in interest expense, the impacts of which
were offset by the factors contributing to Adjusted EBITDA growth. The
prepayment of the Company's Successor First Lien and Successor Second Lien debt
and gains or losses on the Company's interest rate swaps impact the
comparability of Adjusted Net Income and Adjusted Diluted Earnings Per Share
across historical periods.

The following tables provide a reconciliation of adjusted net earnings for the periods presented.

                                       Three Months Ended September 30,            Nine Months Ended September 30,
(in thousands)                            2022                  2021                 2022                   2021
Net income                           $        17,209       $        16,285     $         44,458       $            666
Provision for income taxes                     6,709                 3,397               17,076                  2,025
Income before provision for income
taxes                                         23,918                19,682               61,534                  2,691
Debt-related charges(a)                       (3,545 )                 437              (10,029 )               19,703
Acquisition-related depreciation
and amortization(b)                           28,927                31,749               87,071                 95,047
Share-based compensation                       2,022                 1,343                5,824                  4,569
Transaction and
acquisition-related charges(c)                 1,908                 2,144                4,585                  6,510
Integration, restructuring, and
other charges (d)                               (144 )                 257                 (508 )                  780
Adjusted Net Income before income
tax effect                                    53,086                55,612              148,477                129,300
Less: Income tax effect(e)                    13,083                13,443               36,971                 33,431
Adjusted Net Income                  $        40,003       $        42,169     $        111,506       $         95,869



                                       39
--------------------------------------------------------------------------------


The following table presents the calculation of Adjusted Diluted Earnings Per
Share for the periods presented. Prior to the IPO, the equity awards under the
Successor Plan were issued by the Company's Parent. As a result, these awards
are not considered equity awards issued by the Company, and therefore, not
included in the calculation of adjusted weighted average number of shares
outstanding-diluted.

                                       Three Months Ended September 30,     

Nine month period ended September 30,

                                           2022                  2021                2022                 2021
Diluted net income per share
(GAAP)                               $            0.11       $        0.11     $            0.29      $        0.00
Adjusted Net Income adjustments
per share
Income taxes                                      0.04                0.02                  0.11               0.01
Debt-related charges (a)                         (0.02 )              0.00                 (0.07 )             0.14
Acquisition-related depreciation
and amortization (b)                              0.19                0.21                  0.57               0.69
Share-based compensation                          0.01                0.01                  0.04               0.03
Transaction and acquisition
related charges (c)                               0.01                0.01                  0.03               0.05
Integration, restructuring, and
other charges (d)                                (0.00 )              0.00                 (0.00 )             0.01
Adjusted income taxes (e)                        (0.09 )             (0.09 )               (0.24 )            (0.24 )
Adjusted Diluted Earnings Per
Share (Non-GAAP)                     $            0.26       $        0.28     $            0.73      $        0.69

Weighted average number of shares
outstanding used in computation
of Adjusted Diluted Earnings Per
Share:
Weighted average number of shares
outstanding-diluted (GAAP)                 152,357,307         152,400,419           152,375,212        138,170,488
Options and restricted stock not
included in weighted average
number of shares
outstanding-diluted (GAAP) (using
treasury stock method)                               -                   -                     -                  -
Adjusted weighted average number
of shares outstanding-diluted
(Non-GAAP)                                 152,357,307         152,400,419           152,375,212        138,170,488


(a)
Represents the loss on extinguishment of debt and non-cash interest expense
related to the amortization of debt issuance costs for the 2021 February
refinancing and repayment of the Company's Successor First Lien Credit Facility
(as defined below) and Successor Second Lien Credit Facility (as defined below),
respectively. Beginning in 2022, this adjustment also includes the impact of the
change in fair value of interest rate swaps. This adjustment, which represents
the fair value gains or losses on the interest rate swaps, was added as a result
of the increased interest rate volatility observed in 2022. The Company
determined that the impact to the previous year, ($0.1) million and $0.8 million
for the three and nine months ended September 30, 2021, respectively, was not
significant and therefore, the previously reported amounts will not be recast.
(b)
Represents the depreciation and amortization expense related to intangible
assets and developed technology assets recorded due to the application of ASC
805, Business Combinations.
(c)
Represents charges incurred related to acquisitions and similar transactions,
primarily consisting of change in control-related costs, professional service
fees, and other third-party costs. Additionally includes incremental
professional service fees incurred related to the initial public offering and
subsequent one-time compliance efforts. The three and nine months ended
September 30, 2022 includes a transaction bonus expense related to one of the
Company's 2021 acquisitions.
(d)
Represents charges from organizational restructuring and integration activities,
non-cash, and other charges primarily related to legal exposures inherited from
legacy acquisitions, foreign currency (gains) losses, and (gains) losses on the
sale of assets.
(e)
Effective tax rates of approximately 24.6% and 24.9% have been used to compute
Adjusted Net Income and Adjusted Diluted Earnings Per Share for the three and
nine months ended September 30, 2022, respectively. Effective tax rates of
approximately 24.2% and 25.9% have been used to compute Adjusted Net Income and
Adjusted Diluted Earnings Per Share for the three and nine months ended
September 30, 2021, respectively. As of December 31, 2021, we had net operating
loss carryforwards of approximately $120.1 million for federal income tax
purposes available to reduce future income subject to income taxes. As a result,
the amount of actual cash taxes we may pay for federal income taxes differs
significantly from the effective income tax rate computed in accordance with
GAAP and from the normalized rate shown above.


                                       40
--------------------------------------------------------------------------------

Cash and capital resources

Liquidity

The Company's primary liquidity requirements are for working capital, continued
investments in software development and other capital expenditures, and other
strategic investments. Income taxes are currently not a significant use of funds
but after the benefits of our net operating loss carryforwards are fully
recognized, could become a material use of funds, depending on our future
profitability and future tax rates. The Company's liquidity needs are met
primarily through cash flows from operations, as well as funds available under
our revolving credit facility and proceeds from our term loan borrowings. Our
cash flows from operations include cash received from customers, less cash costs
to provide services to our customers, which includes general and administrative
costs and interest payments.

As of September 30, 2022, we had $390.3 million in cash and cash equivalents and
$100.0 million available under our revolving credit facility. As of September
30, 2022, we had $564.7 million of total debt outstanding. We believe our cash
on hand, together with amounts available under our revolving credit facility,
and cash provided by operating activities are and will continue to be adequate
to meet our operational and business needs in the next twelve months. To the
extent additional funds are necessary to meet our long-term liquidity needs as
we continue to execute our business strategy, we anticipate that they will be
obtained through the incurrence of additional indebtedness, additional equity
financings, or a combination of these potential sources of funds. In the event
that we need access to additional cash, we may not be able to access the credit
markets on commercially acceptable terms or at all. Our ability to fund future
operating expenses and capital expenditures and our ability to meet future debt
service obligations or refinance our indebtedness will depend on our future
operating performance, which will be affected by general economic, financial,
and other factors that may be beyond our control, including those described
under our "Risk Factors" included in the Company's Annual Report on Form 10-K
for the year ended December 31, 2021.

Share buyback program

On August 2, 2022, the Company's Board of Directors authorized the repurchase of
up to $50.0 million of the Company's common stock over the 12-month period
ending August 2, 2023 (the "Repurchase Program"). Stock repurchases may be
effected through open market repurchases at prevailing market prices, including
through the use of block trades and trading plans intended to qualify under Rule
10b5-1 under the Securities Exchange Act of 1934, as amended,
privately-negotiated transactions, through other transactions in accordance with
applicable securities laws, or a combination of these methods on such terms and
in such amounts as the Company deems appropriate. The Company is not obligated
to repurchase any specific number of shares, and the timing, manner, value, and
actual number of shares repurchased will depend on a variety of factors,
including the Company's stock price and liquidity requirements, other business
considerations and general market and economic conditions. No shares will be
purchased from SLP Fastball Aggregator, L.P. and its affiliates. The Company may
discontinue or modify purchases without notice at any time. The Company plans to
use its existing cash to fund repurchases made under the share repurchase
program.

On November 8, 2022, the Company' Board of Directors authorized an increase to
the total available amount under its Repurchase Program to $150.0 million and
extended the program through December 31, 2023. Through November 4, 2022, the
Company had made $21.6 million of purchases under the Repurchase Program.


                                       41
--------------------------------------------------------------------------------

long-term debt

In February 2020, a new financing structure was established consisting of a new
First Lien Credit Agreement ("Successor First Lien Agreement") and a new Second
Lien Credit Agreement ("Successor Second Lien Agreement") (collectively, the
"Successor Credit Agreements"). The Successor First Lien Agreement provided
financing in the form of a $670.0 million term loan due January 31, 2027
("Successor First Lien Credit Facility") and a $75.0 million new revolving
credit facility due January 31, 2025 ("Successor Revolver"). The Successor
Second Lien Agreement provided financing in the form of a $145.0 million term
loan due January 31, 2028 ("Successor Second Lien Credit Facility").

On February 1, 2021, we amended the Successor First Lien Agreement to fund
$100.0 million of additional first lien term loans and reduce the applicable
margins by 0.25%. The refinancing resulted in a loss on extinguishment of debt
of $5.1 million, composed of the write-off of $4.5 million of unamortized
deferred financing costs and $0.6 million of accrued interest and miscellaneous
fees. In addition, we fully repaid the outstanding Successor Second Lien
Agreement and recorded a loss on extinguishment of debt of $8.9 million,
composed of the write-off of $7.3 million of unamortized deferred financing
costs plus a $1.5 million prepayment premium, and $0.1 million of accrued
interest and other miscellaneous fees.

In connection with the IPO, the Company entered into an amendment to increase
the borrowing capacity under the Successor Revolver from $75.0 million to $100.0
million and extend the maturity date from January 31, 2025 to July 31, 2026.

Borrowings under the Successor First Lien Agreement bear interest at a rate per
annum equal to an applicable margin plus, at our option, either (a) a base rate
or (b) LIBOR, which is subject to a floor of 0.00% per annum. The applicable
margins under the Successor First Lien Agreement are subject to stepdowns based
on our first lien net leverage ratio. In connection with the closing of the IPO,
each applicable margin was reduced further by 0.25%. In addition, the borrower,
First Advantage Holdings, LLC, which is an indirect wholly-owned subsidiary of
the Company, is required to pay a commitment fee on any unutilized commitments
under the revolving credit facility. The commitment fee rate ranges between
0.25% and 0.50% per annum based on our first lien net leverage ratio. The
borrower is also required to pay customary letter of credit fees.

The Successor First Lien Credit Facility amortizes in equal quarterly
installments in aggregate annual amounts equal to 1.00% of the principal amount.
The Successor Revolver has no amortization. The Successor First Lien Credit
Facility requires the borrower to prepay outstanding term loans, subject to
certain exceptions, with certain proceeds from non-ordinary course asset sales,
issuance of debt not permitted by the credit agreement to be incurred and annual
excess cash flows. In addition, any voluntary prepayment of term loans in
connection with certain repricing transactions on or prior to August 1, 2021
were subject to a 1.00% prepayment premium. Otherwise, the borrower may
voluntarily repay outstanding loans without premium or penalty, other than
customary "breakage" costs.

In connection with the closing of the IPO, on June 30, 2021, the Company repaid
$200.0 million of the Successor First Lien Credit Facility outstanding, of which
$44.3 million was applied to all of the remaining quarterly amortizing principal
payments due under the Successor First Lien Agreement. The remaining $564.7
million term loan is scheduled to mature on January 31, 2027. As a result of the
prepayment, the Company recorded additional interest expense of $3.7 million
associated with the accelerated amortization of the related deferred financing
costs.

The Successor First Lien Agreement is unconditionally guaranteed by Fastball
Parent, Inc., a wholly-owned subsidiary of the Company and the direct parent of
the borrower, and material wholly owned domestic restricted subsidiaries of
Fastball Parent, Inc. The Successor First Lien Agreement and the guarantees of
such obligations, are secured, subject to permitted liens and other exceptions,
by (1) a first priority security interest in certain tangible and intangible
assets of the borrower and the guarantors and (2) a first-priority pledge of
100% of the capital stock of the borrower and of each wholly-owned material
restricted subsidiary of the borrower and the guarantors (which pledge, in the
case of any non-U.S. subsidiary of a U.S. subsidiary, does not include more than
65% of the voting stock of such non-U.S. subsidiary).

The credit agreement contains customary affirmative covenants, negative
covenants, and events of default (including upon a change of control). The
credit agreement also includes a "springing" first lien net leverage ratio test,
applicable only to the revolving credit facility, that requires such ratio to be
no greater than 7.75:1.00 on the last day of any fiscal quarter if more than
35.0% of the revolving credit facility is utilized on such date.


                                       42
--------------------------------------------------------------------------------

Cash flow analysis

Comparison of cash flows for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

The following table is a summary of our cash flow activity for the periods
presented:

                                                            Nine Months Ended September 30,
(in thousands)                                                2022                   2021
Net cash provided by operating activities               $        142,842       $         83,860
Net cash used in investing activities                            (40,526 )              (24,992 )
Net cash (used in) provided by financing activities                 (827 )               64,372


Cash flow from operating activities

Net cash provided by operating activities was $142.8 million for the nine months
ended September 30, 2022, compared to $83.9 million for the nine months ended
September 30, 2021. Net cash provided by operating activities for the nine
months ended September 30, 2022 increased by $59.0 million compared to the nine
months ended September 30, 2021. Cash flows from operating activities was
positively impacted by the Company's revenues growth from existing customers,
new customer go-lives, recent acquisitions, and lower accounts receivable driven
by increased cash collections from customers.

Cash flow from investing activities

Net cash used in investing activities was $40.5 million for the nine months
ended September 30, 2022, compared to $25.0 million for the nine months ended
September 30, 2021. Net cash used in investing activities for the nine months
ended September 30, 2022 increased by $15.5 million compared to the nine months
ended September 30, 2021. The cash flows used in investing activities for the
nine months ended September 30, 2022 were impacted by the $19.1 million
acquisition of Form I-9 Compliance, net of cash acquired. The remaining
investing cash flows are driven primarily by capitalized software development
costs and purchases of property and equipment, which increased in 2022 as the
Company continued to make incremental investments in its technology platform.

Cash flow from financing activities

Net cash (used in) provided by financing activities was $(0.8) million for the
nine months ended September 30, 2022, compared to $64.4 million for the nine
months ended September 30, 2021. Cash flows from financing activities for the
nine months ended September 30, 2022 were primarily driven by share-based
compensation activity. These inflows were offset by cash outflows related to
payments on capital lease obligations, deferred purchase of a software platform,
and shares repurchased under the Company's Repurchase Program. During the nine
months ended September 30, 2022, 155,697 shares were repurchased under the
program at a total cost of $2.2 million.

Net cash provided by financing activities for the nine months ended September
30, 2021 was primarily driven by the Company's completion of its IPO on June 25,
2021. Cash inflows related to the IPO were $320.6 million, partially offset by
the use of proceeds which consisted of a $200.0 million repayment of the
Company's Successor First Lien Credit Facility and $1.0 million of offering cost
payments.

Net cash provided by financing activities for the six months ended September 30,
2021 was incrementally driven by the Company's February 2021 debt refinancing
which consisted of a refinancing of the Successor First Lien Credit Facility and
the full repayment of the Successor Second Lien Credit Facility. Cash outflows
related to this refinancing were $308.5 million, partially offset by cash
inflows of $261.4 million. As part of the refinancing, the Company paid $1.3
million related to new debt issuance costs. The remaining outflows primarily
consisted of amortizing principal payments due under the first lien term loan
facility.

                                       43

————————————————– ——————————

© Edgar Online, source Previews

About The Author

Related Posts