First Advantage Beats Q3 Estimates, Lifts FY21 Outlook; To Buy Two Screening Providers

First Advantage Corp FA reported third-quarter revenue growth of 41% year-over-year to $192.9 million, beating the consensus of $171.62 million.
Adjusted EPS improved to $0.28 from $0.17 in 3Q20, beating the consensus of $0.19.
The company reported income from operations of $24.4 million, compared to $5.3 million a year ago.
Adjusted EBITDA was $63.94 million (+47.7% Y/Y), and the margin expanded by 160 bps to 33.2%.
First Advantage generated $27.8 million of cash flow from operating activities during Q3. The company ended the Q3 with cash and equivalents of $276.6 million.
FY21 Outlook: First Advantage expects revenues of $680 million–$686 million vs. consensus of $649.25 million (prior expectation $640 million –$650 million). It sees Adjusted EBITDA of $208 million–$211 million (prior view $186 million–$190 million), and Adjusted net income of $125 million–$128 million (prior $110 million – $113 million).
First Advantage also issued a press release that it agreed to purchase Corporate Screening Services, Inc., a healthcare and higher education-focused screening and compliance solutions provider in North America. Additionally, signed a definitive purchase agreement to buy MultiLatin Advisors, S.A. de C.V., a screening and verifications provider in Latin America.
Financial terms were not disclosed for both the transactions and are expected to close in the fourth quarter of 2021.
Price Action: FA shares closed higher by 3.09% at $21.05 on Friday.

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