First Advantage (FA) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01Macroeconomic factors beyond our control, including the state of the economy, could impact demand and the fulfillment costs for our products and solutions44% rewritten
2. 02We operate in a highly regulated industry and are subject to numerous and evolving laws and regulations
3. 03Continued scrutiny of collection, use, and processing of personal data and data security could lead to increased restrictions, loss of revenue opportunity, greater costs of compliance, and lost efficiency
4. 04We may not be able to identify and successfully implement our growth strategies on a timely basis or at all22% rewritten
5. 05Social, ethical, and legal issues relating to the use of new and evolving technologies, such as artificial intelligence and machine learning, in our offerings may result in reputational harm and liability70% rewritten
6. 06Any damage to our reputation or our brand could adversely affect our business, financial condition, and results of operations20% rewritten
7. 07To the extent our customers reduce their operations, downsize their screening programs, or otherwise demand fewer of our products and solutions, our business could be adversely impacted41% rewritten
8. 08We operate in a penetrated and competitive market31% rewritten
9. 09We rely on third-party data and service providers. If they are unable to deliver or perform as expected, our ability to operate effectively may be impaired, and our business may be materially and adversely affected44% rewritten
10. 10Sales to government entities and higher-tier contractors to governmental customers involve unique competitive, procurement, budget, administrative and contractual risks, any of which could materially adversely impact our business, financial condition and results of operationsNew
11. 11federal, state, and local laws and regulations regarding procurement integrity, including gratuity, bribery and anti-corruption requirements, as well as limitations on political contributions and lobbying
12. 12Due to the sensitive and privacy-driven nature of our products and solutions, we could face liability and legal or regulatory proceedings, which could be costly and time-consuming to defend and may not be fully covered by insurance
13. 13Our products entail the collection, use, processing, disclosure, storage, and transmission of personal information, confidential information, and other sensitive and/or regulated information of individuals, including personal data
14. 14Our international business exposes us to a number of risks
15. 15Real or perceived errors, failures, or bugs in our products could adversely affect our business, results of operations, financial condition, and growth prospects
16. 16Failure to realize the expected benefits of our acquisition of Sterling could adversely affect our business and the value of our common stock31% rewritten
17. 17integrating employees and related human resource systems and benefits, maintaining employee morale and retaining key employees27% rewritten
18. 18We may not be able to identify attractive acquisition targets and strategic partnerships or successfully complete such transactions
19. 19Failure to comply with anti-corruption, economic and trade sanctions, and anti-money laundering laws and regulations could have an adverse effect on our business
20. 20Disruptions at our Operation Centers of Excellence and other operational sites could adversely impact our businessNew
21. 21We are not guaranteed exclusivity or volumes in all of our contracts with our customers and our customers may experience major business changes that impact our current or future revenue streams42% rewritten
22. 22Disruptions with our technology and network infrastructure, including our data centers, servers, and third-party cloud and internet providers, and our migration to the cloud, could have an adverse impact on our business
23. 23If we fail to continue to integrate our platforms and solutions with that of human resource software providers or if our relationships with human resource software providers deteriorate, our business could be adversely affected27% rewritten
24. 24We are subject to risks relating to public opinion, which may be magnified by incidents or adverse publicity concerning our industry or operations
25. 25We rely on third-party vendors to carry out certain portions of our operations. If they cannot deliver or perform as expected or if our relationships with them are terminated or otherwise change, our business operations and results of operations could be materially and adversely affected
26. 26In addition, any shift in business strategy, corporate reorganization, or financial difficulties, such as bankruptcy faced by our third-party providers, may have negative effects on our ability to execute our business strategy
27. 27Our continued success depends in large part on the service of our key executives and our ability to find and retain qualified employees
28. 28If we are unable to maintain, protect and enforce the confidentiality of our trade secrets, our business and competitive position would be harmed
29. 29The use of open-source software in our applications may expose us to additional risks and harm our intellectual property rights
30. 30Seasonality may cause our operating results to fluctuate from quarter to quarter
31. 31In addition, customers may elect to complete post-onboarding screening such as workforce re-screens and other products at different periods and intervals during any given year. It is not always possible to accurately forecast the timing and magnitude of these programs35% rewritten
32. 32Our implementation cycles can be lengthy and variable, depend upon factors outside our control, and could cause us unexpected delays in generating revenues or result in lower than anticipated revenues
33. 33The interpretation of tax laws may have a material adverse effect on our business81% rewritten
34. 34Evolving expectations regarding sustainability matters may increase our operational and compliance burdens, expose us to reputational risk, and adversely affect our business, financial condition, or results of operationsNew
35. 35Climate change may have a long-term impact on our business45% rewritten

Risks Related to Our Indebtedness

1. 36Our failure to comply with the agreements relating to our outstanding indebtedness, including as a result of events beyond our control, could result in an event of default that could materially adversely affect our business, results of operations, and financial condition
2. 37We have a significant amount of indebtedness. As of December 31, 2025, we had $2,114.5 million of total debt outstanding
3. 38limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy, or other general corporate purposes
4. 39adversely affect our ability to raise additional debt
5. 40We will require a significant amount of cash to service our debt, and our ability to generate cash depends on many factors beyond our control, and any failure to meet our debt service obligations could materially adversely affect our business, results of operations, and financial condition
6. 41Our debt instruments restrict our current and future operations, particularly our ability to respond to changes or take certain actions
7. 42engage in certain fundamental changes, including changes in the nature of our business

Risks Related to Ownership of Our Common Stock

1. 43Silver Lake controls us and its interests may conflict with yours in the future
2. 44Our stock price may be highly volatile or may decline regardless of our operating performance, and you may not be able to resell shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result
3. 45other events or factors, including those resulting from informational technology system failures and disruptions, cybersecurity incidents, geopolitical instability, natural disasters, war, acts of terrorism or responses to these events
4. 46We do not intend to pay dividends for the foreseeable future
5. 47First Advantage Corporation is a holding company with no operations of its own and, as such, it depends on its subsidiaries for cash to fund all of its operations and expenses, including future dividend payments, if any
6. 48We qualify as a “controlled company” within the meaning of Nasdaq rules and the rules of the SEC and, as a result, qualify for exemptions from certain corporate governance requirements
7. 49the compensation of our executive officers be determined, or recommended to our Board of Directors for determination, by a compensation committee comprised solely of independent directors
8. 50You may be diluted by the future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise
9. 51Future sales, or the perception of future sales, of our common stock, by us or our existing stockholders in the public market could cause the market price for our common stock to decline
10. 52Anti-takeover provisions in our organizational documents could delay or prevent a change of control
11. 53Our Board of Directors is authorized to issue and designate shares of our preferred stock in additional series without stockholder approval