Hội nghị công bố kết quả kinh doanh Q3 2026 của First Advantage (FA): Nâng định hướng, thâu tóm DataDiver

Điểm nhấn chính

• First Advantage báo cáo doanh thu quý 3/2026 đạt 466 triệu USD, tăng 14% so với cùng kỳ năm trước, nhờ vào sự tăng trưởng khối lượng trên diện rộng tại khu vực châu Mỹ, các hợp đồng lớn giành được và mùa tuyển dụng cao điểm dịp lễ bắt đầu sớm hơn.
• EBITDA điều chỉnh tăng 15% lên 136,5 triệu USD, trong khi biên EBITDA điều chỉnh đạt 29,3%, tăng 70 điểm cơ bản so với quý trước. EPS pha loãng điều chỉnh tăng 27% lên 0,38 USD.
• Doanh thu kết hợp từ khách hàng mới, bán thêm và bán chéo tăng 12,5%. Tăng trưởng cơ sở đạt 5%, tỷ lệ giữ chân khách hàng duy trì ở mức 96%, và công ty ghi nhận 14 hợp đồng doanh nghiệp mới với giá trị hợp đồng hàng năm dự kiến đạt ít nhất 500.000 USD mỗi hợp đồng.
• First Advantage đã mua lại DataDiver Technologies với giá 125 triệu USD. Doanh nghiệp này đóng góp khoảng 20 triệu USD doanh thu hàng năm và giúp mở rộng năng lực dữ liệu độc quyền về hồ sơ tội phạm và tòa án của công ty.
• Ban lãnh đạo đã nâng dự báo cả năm 2026 cho tất cả các chỉ số chính. Doanh thu hiện dự kiến đạt 1,72 tỷ đến 1,745 tỷ USD, với EPS pha loãng điều chỉnh từ 1,28 đến 1,33 USD.
• Ban lãnh đạo cho biết xu hướng nhu cầu hiện tại sẽ hỗ trợ kết quả kinh doanh vượt mức trung vị của phạm vi dự báo cập nhật, trong khi vẫn duy trì biên độ rộng hơn do những bất ổn về địa chính trị, kinh tế vĩ mô và tính thời vụ.

Kết quả tài chính cốt lõi

Đòn bẩy hoạt động được cải thiện nhờ việc duy trì chi phí bán hàng, tiếp thị và chi phí quản lý doanh nghiệp (G&A) đi ngang so với cùng kỳ năm trước dù doanh thu tăng trưởng. Ban lãnh đạo cũng viện dẫn các khoản tiết kiệm chi phí dữ liệu, cập nhật thuật toán Smart Hub, hiệu ứng cộng hưởng từ Sterling và kỷ luật chi phí.

Hiệu quả kinh doanh và hoạt động

Tăng trưởng tại khu vực châu Mỹ diễn ra trên diện rộng. Các ngành vận tải và logistics, bán lẻ và thương mại điện tử hưởng lợi từ hoạt động tiêu dùng tích cực và đợt tuyển dụng cho mùa lễ hội diễn ra sớm hơn dự kiến. Ngành công nghiệp và sản xuất cũng ghi nhận kết quả khả quan, bao gồm sự gia tăng hoạt động gắn liền với hàng không vũ trụ và quốc phòng. Các lĩnh vực nhân sự tổng hợp, chăm sóc sức khỏe, TMT, khách sạn và kinh tế tự do (gig economy) đều duy trì đà tăng trưởng tích cực.

Hoạt động quốc tế chiếm khoảng 11% doanh số hàng quý. Doanh thu quốc tế giảm 4% so với cùng kỳ năm trước sau chín quý tăng trưởng liên tiếp. Khu vực APAC và Ấn Độ chịu ảnh hưởng bởi những gián đoạn tại Trung Đông cùng sự bất ổn kinh tế vĩ mô liên quan, trong khi khu vực EMEA duy trì ổn định hơn.

Đội ngũ bán hàng doanh nghiệp của First Advantage đã ký được 14 hợp đồng với giá trị hàng năm dự kiến đạt ít nhất 500.000 USD mỗi hợp đồng. Ban lãnh đạo cho rằng sự sụt giảm từ mức 20 hợp đồng trong quý 2 chủ yếu do yếu tố thời điểm và các hợp đồng đa sản phẩm có quy mô lớn hơn, phức tạp hơn. Công ty cho biết tỷ lệ chốt hợp đồng thành công vẫn cao và danh mục cơ hội ở giai đoạn cuối tiếp tục mở rộng.

Phát hiện gian lận danh tính tiếp tục là trọng tâm phát triển sản phẩm và bán hàng. Công ty đã công bố quan hệ đối tác độc quyền với ID.me để phát triển sản phẩm xác minh danh tính kỹ thuật số tuân thủ FCRA, cho phép tích hợp các kết quả phát hiện gian lận danh tính vào báo cáo xác minh lý lịch tuyển dụng.

First Advantage cũng ra mắt Criminal Smart Hub, một nền tảng định tuyến ứng dụng AI do nội bộ phát triển nhằm đánh giá các hồ sơ độc quyền, nguồn công khai và dữ liệu của bên thứ ba để tìm ra các phương thức nhanh hơn và hiệu quả hơn nhằm hoàn tất tra cứu hồ sơ tội phạm.

Thương vụ mua lại DataDiver trị giá 125 triệu USD bổ sung dữ liệu độc quyền, công nghệ tự động hóa và một đội ngũ dữ liệu giàu kinh nghiệm. Theo ban lãnh đạo, DataDiver có doanh thu hàng năm khoảng 20 triệu USD và biên EBITDA điều chỉnh tương đương với cơ cấu hiện tại của First Advantage. Thương vụ mua lại này nhằm mở rộng phạm vi xử lý tự động, cải thiện thời gian phản hồi và tăng cường tiếp cận trực tiếp với dữ liệu nguồn gốc ban đầu.

Dự báo của ban lãnh đạo

Tại mức trung vị, dự báo ngụ ý mức tăng trưởng khoảng 10% về doanh thu, 12% về EBITDA điều chỉnh và 26% về EPS pha loãng điều chỉnh so với cùng kỳ năm trước.

Ban lãnh đạo dự kiến tăng trưởng cơ sở trong quý 4 sẽ ở mức trung tính đến tăng nhẹ, được hỗ trợ bởi các xu hướng nhu cầu của quý 3 tiếp diễn sang tháng 10. Biên EBITDA điều chỉnh quý 4 dự kiến sẽ duy trì gần mức giữa 28% đạt được từ đầu năm đến nay của công ty, trong khi EPS pha loãng điều chỉnh dự kiến nằm ở vùng thấp của khoảng 0,30 USD.

Triển vọng cập nhật chỉ bao gồm phần đóng góp khiêm tốn từ DataDiver trong hai tháng cuối năm 2026. Ban lãnh đạo lưu ý rằng mức nền so sánh của quý 4 sẽ thách thức hơn do công ty từng tăng trưởng 12% trong quý 4/2025 và các hợp đồng lớn triển khai năm 2025 sẽ được tính đủ một năm.

Rủi ro và các điểm cần theo dõi

• Ban lãnh đạo đã đề cập đến tình trạng bất định địa chính trị và kinh tế vĩ mô đang tiếp diễn khi đưa ra triển vọng quý 4.
• Thời lượng của các đợt cao điểm tuyển dụng theo mùa có sự thay đổi, tạo ra sự bất định về khối lượng công việc trong tháng 11 và tháng 12.
• Hiệu quả hoạt động quốc tế đối mặt với áp lực ngắn hạn do những gián đoạn tại Trung Đông và tình trạng bất định diện rộng hơn đang ảnh hưởng đến khu vực APAC và Ấn Độ.
• Tăng trưởng quý 4 sẽ được đo lường dựa trên mức nền cao của cùng kỳ năm trước, trong khi các đợt triển khai khách hàng lớn năm 2025 hiện đã được tính đủ cả năm.
• Các hợp đồng doanh nghiệp đa sản phẩm có quy mô lớn hơn có thể đòi hỏi thời gian ký kết hợp đồng, tích hợp và triển khai kéo dài hơn.

Điểm nhấn phiên hỏi đáp với chuyên gia phân tích

Ban lãnh đạo cho biết quá trình tích hợp Sterling về cơ bản đã hoàn tất và kỳ vọng sẽ kết thúc năm 2026 ở mức gần hoặc đạt mức trần của phạm vi mục tiêu hiệp đồng. Các công việc còn lại chủ yếu liên quan đến quy trình chi phí bán hàng và nghiệp vụ hoàn tất đơn hàng.

Về DataDiver, ban lãnh đạo mô tả thương vụ này là chiến lược “kết hợp tự xây dựng và mua lại” thay vì thay thế hoạt động tự phát triển nội bộ. Nền tảng được mua lại sẽ bổ trợ cho dữ liệu hiện có của First Advantage, mở rộng phạm vi khu vực pháp lý được tự động hóa và hỗ trợ các sản phẩm trong tương lai. Thương vụ mua lại được tài trợ chủ yếu bằng lượng tiền mặt trên bảng cân đối kế toán và một phần nhỏ hơn từ hạn mức tín dụng quay vòng. Ban lãnh đạo dự kiến sẽ hoàn trả các khoản vay phục vụ thương vụ mua lại bằng dòng tiền tự do trong ngắn hạn và cho biết các mục tiêu đòn bẩy năm 2028 vẫn không thay đổi.

Ban lãnh đạo cho biết AI được tích hợp trong nhiều sản phẩm và quy trình công việc, khiến cho việc tách riêng doanh thu từ AI độc lập trở nên khó khăn. Dù vậy, ban lãnh đạo khẳng định năng lực AI đã giúp gia tăng sự hài lòng của khách hàng, tỷ lệ giữ chân khách hàng, tỷ lệ thắng thầu, hiệu quả xử lý đơn hàng và hiệu quả biên lợi nhuận.

Tăng trưởng từ bán thêm và bán chéo tiếp tục được thúc đẩy bởi mảng phát hiện gian lận danh tính, giám sát và nhu cầu sàng lọc chuyên sâu hơn. Ban lãnh đạo nhận định phát hiện gian lận danh tính là một cơ hội kéo dài nhiều năm và hiện vẫn ở giai đoạn đầu. Trong nền kinh tế làm việc tự do (gig economy), nhu cầu cũng đang được hỗ trợ bởi xu hướng làm nhiều việc cùng lúc (job stacking), các đợt sàng lọc lặp lại và sự chú trọng lớn hơn đến mức độ an toàn và đáng tin cậy của nền tảng.

Toàn văn biên bản cuộc gọi báo cáo kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good morning, everyone. My name is Beau, and I will be your conference operator for today. I would like to welcome you to the First Advantage Third Quarter 2026 Earnings Conference Call and Webcast. Hosting the call today from First Advantage is Stephanie Gorman, Vice President of Investor Relations.

[Operator Instructions]

And please note today's event is being recorded. It is now my pleasure to turn the call over to Stephanie Gorman. Please go ahead, ma'am.

Stephanie Gorman

Thank you, Beau. Good morning, everyone, and welcome to First Advantage's third quarter 2026 earnings call. In the Investor section of our website, you will find the earnings press release and slide presentation to accompany today's discussion. This webcast is being recorded and will be available for replay on our Investor Relations website.

Before we begin our prepared remarks, I would like to remind everyone that our discussion today will include forward-looking statements. These forward-looking statements are not guarantees of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are discussed in more detail in our filings with the SEC, including our 2025 Form 10-K and our Form 10-Q for the third quarter of 2026 to be filed with the SEC. Such factors may be updated from time to time in our periodic filings with the SEC, and we do not undertake any obligation to update forward-looking statements.

Throughout this conference call, we will also present and discuss non-GAAP financial measures. Reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures, to the extent available without unreasonable effort, appear in today's earnings press release and presentation, which are available on our Investor Relations website.

Thank you. I am joined on our call today by Scott Staples, our Chief Executive Officer, Joelle Smith, our President, and Steven Marks, our Chief Financial Officer. After our prepared remarks, we will take your questions. So now, I'm going to turn the call over to Scott.

Scott Staples

Thank you, Stephanie, and good morning, everyone. Thank you for joining our call. Today, we have 4 key messages. First, we delivered yet another quarter of outstanding results in the third quarter with revenue growth of 14% year-over-year, adjusted EBITDA margins of 29.3%, and year-over-year adjusted diluted EPS growth of 27%. We continue to demonstrate consistent go-to-market performance, the strength of our leading AI-driven technology platform and proprietary data, sustained operating efficiency, and the durability of our diverse enterprise customer base and vertical mix.

Second, we are making strong progress on our FA 5.0 growth strategy. Our focus on product innovation, platform capabilities, AI and automation, and go-to-market execution is translating into tangible results. Just a few days ago, we were very proud to have celebrated the 2-year anniversary of closing the Sterling acquisition, which has been a critical element supporting and accelerating our growth.

Third, our strong cash flow generation continues to provide flexibility to execute our balanced and disciplined capital allocation strategy. As we have previously mentioned, we are constantly evaluating opportunities to create shareholder value and remain focused on deploying capital where it can have the greatest impact. Along with our earnings release today, we are excited to announce that we have further invested in our proprietary data and technology strategy with the tuck-in acquisition of DataDiver Technologies, a data platform leveraging AI and automation, which Joelle and I will discuss shortly.

And finally, we are again raising our full-year 2026 guidance across all key metrics to reflect our strong year-to-date performance, continuing go-to-market success, stable labor market trends, and our confidence in our growth outlook for the remainder of the year. In fact, the low end of our revised full-year guidance ranges now exceeds the high end of our previous guidance ranges across every metric.

Now, turning to Slide 5. We delivered outstanding results in the third quarter across the board, continuing our strong performance from the second quarter. Our results exceeded our stated expectations, benefiting from sustained broad-based momentum across our Americas business, continued contribution from our recent large contract wins, peak holiday hiring progressing earlier than expected, and modest carryover from Q2 customer initiatives. We are also encouraged by the healthy pace of order volumes in October and the continued stability within the broader hiring environment.

We believe the strengths of our business, including our focus on high-volume enterprise customers, diverse vertical mix, global footprint, and balance across blue-collar and white-collar hiring continue to position us well in the market. These attributes provide stability and reinforce our confidence in delivering durable growth across a variety of macro environments. In this rapidly evolving environment, our customers continue to place a high value on our AI-driven product innovation, leadership in identity fraud detection, and our combination of regulatory expertise, risk management, and focus on compliance. This enables First Advantage to deliver high-quality, highly automated, and high-volume screening globally at scale.

One recent milestone I would like to highlight is the 2-year anniversary of closing the Sterling acquisition on October 31. We are executing well and realizing benefits well ahead of our original expectations. Today, we are a larger, stronger, and more diversified company, offering customers a broader portfolio of best-of-breed technologies and products, backed by greater scale and innovation capabilities. As a result, we have strengthened our market position, expanded our growth opportunities, and enhanced our ability to create long-term value for shareholders. With Sterling, we demonstrated our capability and discipline in executing our M&A strategy, integrating the business and delivering growth and synergies. As we announced today, we are applying our M&A playbook again with the tuck-in acquisition of DataDiver.

Turning to Slide 6. DataDiver is a company we know very well and have worked with for a number of years as a key third-party data provider to First Advantage. Over the past couple of decades, DataDiver has built a proprietary data platform powered by an automated fulfillment engine that collects, aggregates, retains, and delivers high-volume criminal and court records. As a reminder, First Advantage has been a product innovator in this space for years, investing in data and automation such as our national criminal records file and our verified proprietary databases. DataDiver builds on that foundation by adding incremental proprietary data, proven technology, and an experienced data team, creating a unique opportunity to accelerate our data and technology strategy with over 1 billion data records already in our proprietary databases.

The combination will expand our existing databases, grow our automated fulfillment coverage across U.S. jurisdictions, enhance our existing solutions, and accelerate development of new capabilities. The DataDiver acquisition also adds resources and capabilities that support faster turnaround times, high-quality results for our customers, and further differentiate First Advantage in the market. The acquisition is centered on DataDiver's proprietary data assets and technology and also includes a small employment background screening component.

The acquisition adds annual revenues of approximately $20 million and adjusted EBITDA margins in line with our existing profile, with upside synergy opportunities. Overall, this $125 million acquisition represents an important investment in our strategic data asset. With that, I will now turn the call over to Joelle, our President, who will share more on our outstanding third quarter, including our go-to-market execution, vertical performance, product innovation, and further details on our acquisition of DataDiver.

Joelle Smith

Thank you, Scott, and good morning, everyone. Turning to Slide 8 and an update on our go-to-market performance and the underlying dynamics behind our outstanding results this quarter. Our robust 14% year-over-year revenue growth for Q3 exceeded our previously stated expectations and our long-term growth algorithm target. Combined upsell, cross-sell, and new logo revenues again delivered robust growth, achieving 12.5% growth in the quarter. We continue to benefit from the large go-lives from the end of 2025 that we have discussed on previous calls, as well as the contribution from the many other enterprise deals we have won in prior quarters.

We had excellent base growth in the quarter, coming in at 5%. Underlying base trends remained strong and broad-based, and we saw some continuing benefits from customer initiatives started during the second quarter, which contributed a little more than 1% to this quarter's base growth. Retention remains solid at 96%, in line with our long-term model. Our sales teams delivered a solid 14 enterprise bookings in Q3, with each deal having an expected annual contract value of at least $500,000. These wins, combined with the continued strength and expansion of our late-stage pipeline, reinforce our confidence in the durability of our new logo and upsell, cross-sell execution and support our positive outlook for the fourth quarter.

Turning to our verticals on Slide 9, we yet again outperformed broader labor market headlines and data trends in Q3, reflecting our strong market position and our strategic execution. Throughout the quarter, the tones from our enterprise customers regarding their hiring plans remained neutral to positive, which you can see reflected in our Q3 base performance. Our balanced and resilient customer mix, focused on high-volume hires, and verticalized go-to-market strategy drove broad-based revenue growth across almost every vertical in our Americas business.

We saw sustained strength in transportation and logistics as well as retail and e-commerce. This was supported by ongoing healthy consumer activity driving labor demand, along with an earlier-than-expected start to the peak holiday season hiring toward the end of the quarter. We saw standout performance in industrials and manufacturing, resulting in increased screening activity for this vertical, driven by strong demand for their products and services and increased economic activity in aerospace and defense. We also saw positive momentum in general staffing, healthcare, TMT, hospitality, and the gig economy. As you can tell, the outstanding performance in the quarter was truly broad-based across most verticals.

Turning to our international business, which represented approximately 11% of our total sales in the quarter, Q3 revenues were down 4% year-over-year, following 9 consecutive quarters of growth, with performance in APAC and India having been impacted by disruptions in the Middle East and the related broader macroeconomic uncertainty. Our EMEA business performance remained more stable. Despite the near-term headwinds in certain countries, we continue to be a partner of choice for managing our multinational customers' expanded screening needs across geographies, and we remain confident in our long-term international opportunities.

Turning now to our product update, identity fraud remains a critical topic with our customers and prospects, with 45% of hiring professionals having experienced candidate identity misrepresentation, as reported in our 2026 Global Workforce Trends Report earlier this year. In fact, the subject continues to be the tip of the spear in our discussions as customers and prospects fight growing recruitment and onboarding fraud in the workplace. Our "Trust in a Changing World" message has landed right on point as we help our customers answer an increasingly important question: Are my candidates who they say they are?

As employers face growing risks from hiring fraud, synthetic identities, fraudulent or AI-generated documents, and other emerging threats, demand for identity fraud detection products, like our digital identity solution, continues to grow and drive meaningful differentiation in the market. We believe it is helping to expand our pipeline, improve win rates, and support retention as customers and prospects increasingly view fraud detection products as key components of a modern screening program. And we continue to use our good AI to fight the bad AI.

Building on that momentum, we recently announced an exclusive strategic partnership with ID.me to launch a purpose-built, FCRA-compliant digital identity verification product, specifically designed for making employment decisions. Historically, digital identity verification has been outside the scope of the Fair Credit Reporting Act, or FCRA, which is the federal framework that governs background screening. Our new product brings digital identity into the FCRA framework, allowing us to incorporate the identity fraud results into the background screening report.

This means customers can now make critical employment decisions based on the combined results of the digital identity verification and the traditional background screening report, enabling their screening program to be more comprehensive and compliant. Customers have told us that this increases both their willingness to adopt digital identity and expand its use within their screening programs. As the only large-scale background screener providing this level of compliance, it's a meaningful differentiator that can help support retention, strengthen our pipeline, and help us win new business.

Turning to Slide 10, our Smart Hub AI routing technology has been a game changer in our employment and education verification businesses. And now we are extending that same technology to how we source criminal records data. We have officially launched Criminal Smart Hub, which was developed entirely in-house by our data science and engineering team. Criminal Smart Hub uses proprietary AI to evaluate thousands of potential data sources to fulfill customer orders. In seconds, Criminal Smart Hub scans our proprietary criminal records, public data sources, and third-party data sources to intelligently identify the fastest, highest-quality, and most efficient way to fulfill the order.

The result is faster turnaround times and greater efficiency for our customers. We believe Criminal Smart Hub is another great example of our technology leadership in the industry, the power of our proprietary AI, the value of our proprietary data, and our continued commitment to delivering best-in-class products to our customers.

The value of technology like Criminal Smart Hub is amplified by the quality, breadth, and accessibility of the data it consumes. As we continue to invest in automation and AI-driven fulfillment, expanding our proprietary data assets remains a strategic priority. And that is why we are so excited to announce our acquisition of DataDiver. A meaningful benefit to our customers will be accelerated screening turnaround times, as expectations continue to shift from days to hours and increasingly toward near real-time results.

By expanding our data and fulfillment capabilities, we can deliver faster, more efficient screening outcomes for one of our highest-volume product lines, while enhancing our existing solutions and creating new opportunities for product innovation. Ownership of these proprietary data assets also gives us greater control over an important part of our fulfillment ecosystem, further enhancing our differentiation in the market. With that, I'll now turn the call over to Steven.

Steven Marks

Thank you, Joelle, and good morning, everyone. I'll start with our third quarter results on Slide 12. Our third quarter revenues were up an impressive 14% year-over-year, coming in at $466 million. This exceptional performance exceeded our stated expectations and our long-term growth algorithm target range. Results were driven by broad-based volume acceleration in our Americas business, an earlier-than-expected start to peak holiday season hiring, and the continuation of some customer initiatives from Q2, which alone contributed slightly more than 1% to base growth this quarter.

Adjusted EBITDA for the third quarter was $136.5 million, up 15% year-over-year. Our adjusted EBITDA margin of 29.3% came in above our stated expectations and reflects sequential quarterly improvement of 70 basis points, driven by our broad-based revenue growth and our strong operating leverage as we were able to keep sales and marketing and G&A flat year-over-year, even as revenue grew. Margins also benefited from data cost savings driven by the increased use of incremental data partners and algorithm updates to our Smart Hub for Verifications product, as well as our strong executional synergies and cost discipline, all while flexing to adapt to the product mix changes as a result of the large deals we have previously discussed.

Our adjusted diluted EPS was $0.38, a 27% increase year-over-year. Our per share earnings growth was supported by our overall performance in the quarter, year-to-date share buybacks, and synergy realization. Earnings growth also benefited from our disciplined expense and capital management and lower interest expense as a result of our voluntary debt repayment to date and our July 2025 debt repricing.

We have continued actioning cost synergies from our Sterling acquisition, reflecting our disciplined execution and strong integration process. At 2 years post-closing, we are proud to say that we have meaningfully exceeded our initial synergy thesis. By year end, when we formally conclude our integration process, we expect to finish near, if not at the top, of our synergy target range. We are also proud that we have achieved these synergies very thoughtfully, with essentially no impact on customer retention. Our product, technology, and customer service approach was received very favorably across our customer base and enabled us to achieve our goals.

Now, turning to cash flow, net leverage, and capital allocation on Slide 13. During the quarter, we generated operating cash flows of $63.8 million. Year-to-date, this brings our operating cash flows to $186.8 million, a substantial increase of $57.6 million, or 45% on a year-over-year basis. Year-to-date operating cash flows were driven by the larger scale of our business, our overall focus on cash flow, and the natural working capital impacts of our revenue growth outperformance.

Our cash balance as of September 30, 2026 was $241 million. Our synergized adjusted EBITDA net leverage ratio at quarter end was 3.5x and represents a 0.9x decrease from when we closed the Sterling acquisition 2 years ago. Regarding acquisitions, given the strategic importance of DataDiver, we view this tuck-in as a highly compelling use of capital that preserves our flexibility to execute our long-term capital allocation strategy. We funded the $125 million acquisition using mostly cash from our balance sheet and, to a much lesser extent, our revolver. We expect to pay off the acquisition borrowings in the near term using free cash flow. The acquisition does not change our overall deleveraging strategy and provides incremental tax benefits to the company. We remain fully committed to our 2028 leverage targets.

Our use of capital for share repurchases during the quarter was not material, and going forward, we will continue to be disciplined with our capital allocation approach to ensure we are executing a plan that maximizes ROI and shareholder value.

Moving to Slide 14, our updated 2026 guidance. Today, we are again raising our previously announced full-year guidance, supported by our outstanding performance in the first 3 quarters of the year and our outlook for stability in the hiring markets for the remainder of the year. We now expect 2026 total revenues in the range of $1.72 billion to $1.745 billion, adjusted EBITDA of $488 million to $498 million, adjusted net income of $227 million to $232 million, and adjusted diluted EPS of $1.28 to $1.33 per share. At the midpoint on a year-over-year basis, this represents approximately 10% revenue growth, 12% adjusted EBITDA growth, and 26% adjusted diluted EPS growth.

Our raised guidance range reflects a balanced posture on our Q4 outlook that incorporates the healthy state of our underlying demand trends, specifically those impacting U.S. seasonal hiring, as well as the ongoing geopolitical and macro uncertainty. As a result, the continuation of current trends would support performance above the midpoint of our range. However, consistent with our approach towards guidance, we believe it is prudent to account for a broader range of outcomes given the factors outside of our control.

It is also important to remind you that our fourth quarter 2026 growth rates are being measured against an exceptionally strong fourth quarter last year, during which we grew a notable 12% year-over-year. More specifically, in Q3 of this year, we started to lap the 12-month anniversaries of the large 2025 go-lives we previously discussed, and for Q4, these wins will now be fully annualized. As we have shared in the past, for Q4, we expect a more modest level of growth with revenues being more evenly distributed this year as we grow over last year's strong 17% new logo and upsell, cross-sell growth.

We also expect base to be neutral to slightly positive for Q4, supported by the strong demand trends from Q3, which continued into October. Q4 adjusted EBITDA margins are expected to remain in line with our mid-28% year-to-date performance. So, for adjusted diluted EPS, we expect year-over-year expansion in Q4, reaching the low $0.30 range. Please note that our updated guidance includes the very modest impact of the DataDiver acquisition in the last 2 months of the year. We have provided additional full-year 2026 guidance assumptions in the appendix of our presentation, which, again, are not meaningfully impacted by the acquisition.

With that, let me turn it back to Scott for closing remarks before we open the line for your questions.

Scott Staples

Thank you, Steven. In closing, Q3 was another quarter of outstanding execution and performance. And we are pleased with the solid momentum we are seeing in the fourth quarter so far. We remain focused on driving long-term value creation by providing best-in-class, differentiated products that address our customers' evolving needs.

The acquisition of DataDiver is another example of how we are investing to enhance our data and technology offerings to continue to position First Advantage for profitable growth over the long term. We remain confident in our ability to deliver consistent financial performance and continue to progress well toward the 2028 financial targets we established during our May 2025 Investor Day. I would like to recognize and thank the entire First Advantage team for their hard work and dedication to supporting our customers every day. With that, we will open the line for questions.

Operator

[Operator Instructions]

We'll go first this morning to Andrew Nicholas with William Blair.

Phần hỏi đáp

Daniel Maxwell

This is Daniel Maxwell. I'm here with Andrew this morning. Maybe just start off on the synergy front, if you can maybe frame what's left to go on synergies on Sterling's side as we think through what to layer on top of core incremental margins for next year, as well as any color you can give on expected synergies from the DataDiver acquisition.

Steven Marks

Yes, good morning. Look, there's really not a whole lot left to do, I would say, on the Sterling acquisition front. As we shared on the call, we're kind of effectively weeks away from really saying that the acquisition is done. We've shared throughout the year that a lot of the remaining 2026 synergy capture is going to be done by the end of the year coming from more of the cost of sales lines, as we just work through and finalize the alignment of fulfillment practices and workflows. I think, A, that's where the synergies are coming from. I think, B, you're really seeing the value of that come through. We saw the revenue outperformance and broad-based growth that we talked about in Q3. And our ability to fulfill that volume, as we shared last quarter, within the workforce management structure that we already had in place is one of the key drivers for the margin outperformance in Q3.

So I think there's really not a whole lot left to do. We just have a few more programs to finalize in action. And as we shared in the remarks, we think we'll end the year at effectively the top end of our range. Most of that's in cost of sales. In terms of DataDiver, I think there are some real synergies there. It's a combination of being able to—very similar to a Sterling mindset—balance out our data acquisition methodologies between the new tech that we're buying, which is really good tech, and I'll let Scott or Joelle share some remarks there. And at the same time, leverage those resources for new product capabilities and the product enhancements that Joelle was talking about in her remarks.

Scott Staples

Steven, the only thing I would add is on the Sterling side, as Steven was saying, we're basically done. We actually, as we head into 2027, don't really plan on talking about this going forward because it's been a huge success. In fact, we're kind of taking a victory lap here and saying we integrated it perfectly. We had no impact really to attrition. It's actually helped our growth engine. We're at the top, if not potentially exceeding, our synergy targets. Everything that we need to action is already in flight. So there are no new things to do. So I think we're really closing a chapter on a really nice part of our journey here and pretty proud of what the team has accomplished.

Daniel Maxwell

Great. That's helpful. Sticking with the DataDiver side of things, maybe you guys can talk to the build versus buy decision and how difficult it would be for a competitor to replace this technology. And then if you could also sort of rank the attractive aspects of the deal between the technology, the data asset, and the—I'm assuming the small and medium business screening component was kind of third in that list, but correct me if I'm wrong there.

Scott Staples

Yes, so I'll hand it over to Joelle on this one a little bit. So you're absolutely right in the fact that when you look at these things, you look at build versus buy. In our prepared remarks, we mentioned that DataDiver has been at this for decades. So they've done a really nice job of building out their tech platform, their automation, their algorithms. There's a little bit of overlap obviously with what we do, but this actually fills a lot of gaps for us. They covered some jurisdictions that we hadn't yet automated to and some other jurisdictions that we like their automation better than ours. It gives us access to bulk data.

There are some really nice things here. It also gives us a really nice data team. The entire team is coming over to help us drive future endeavors as to what we can do with this. So this will, again, drive faster turnaround times for our customers, better automation, and even new product ideas. Now that we've got a larger team here, access to more data, we can launch more products and really help our customers with this critical element of their screening. I will let Joelle kind of fill in a little more color here.

Joelle Smith

Yes, thanks, Scott. Yes, it's not really a build versus buy. It's build and buy. We've been building this and it just goes to the complexity and size and scale of just how wide and big all of the jurisdictions are across the United States. There's state, there's county, there are a lot of complexities to it. So the combination of these two things, and as Scott said, we've been working with them for a really long time, it really amplifies our ability to have a more complete product offering and it accelerates the speed for us to be able to do it. So it's a force multiplier. So we are very happy with it. The technology that they have and the data that they have is a great complement to what we do, and we're excited to see where this goes. Thanks a lot.

Operator

Thank you. We'll go next now to Shlomo Rosenbaum with Stifel.

Unknown Speaker

I'm actually covering for Shlomo Rosenbaum. This is Aadit Shrestha. Just in terms of the revenue raise and EBITDA raise, I think revenue was up $42.5 million and EBITDA was $14 million. Could you just kind of break it out between what was the 3Q beat versus the DataDiver addition, and then maybe what you sort of expect the outperformance in 4Q to be?

Steven Marks

Yes, really good question. So certainly, I mean, we had an amazing 3Q, and that's obviously a material component of the computation to raise guidance. When you think about the impact of DataDiver, it's very modest. That deal closed this week, so you get 60 days contribution on a business that's running roughly $20 million, so it's roughly a 1% lift to Q4 if you're kind of just doing really simple math. And it's really not a major computation into the guidance raise at all.

So really, when you think about what gave us confidence to raise by that much, A, an incredibly strong Q4, as we shared on the call, good momentum into October. And if the current trends continue, we feel good about ending above the midpoint, as we shared on the call in the prepared remarks. We have a little bit of a wider range. We've seen the last couple of seasonal peaks go long or go short, and obviously a lot of fast-moving, major geopolitical and macro-oriented items in the market these days. So we feel like we've got a very appropriately sized range. And then obviously, if the current trends continued as we shared, we expect to be at the upper end of that metric.

Unknown Speaker

Great, thank you. And just in terms of DataDiver, you know, there's $20 million annual revenue that you're expecting. Does that include any sort of revenue that may be going away since you were using them and maybe just moved back in-house?

Steven Marks

It is. Yes, it's a small component. I mean, you're talking about fractions of that revenue that go away. Obviously, that also means part of our cost of sales goes away, and it's a very immaterial wash on the P&L.

Unknown Speaker

Okay, great. And just in terms of background for DataDiver, how is the growth trending in that business? And I guess, I mean, of course, we can see the strategy behind it, and we would expect a stronger lift in that growth would be our guess.

Steven Marks

Yes, I mean, look, we obviously were very bullish on the business. We wouldn't have bought it if we weren't. They've had some good growth trends. Again, when you compare that to the size of First Advantage, it gets washed out very quickly just because of the materiality of the difference between First Advantage that's running at a $1.7 billion pace based on our latest guidance. But we do feel very good about the business we acquired. And obviously, as Scott and Joelle shared in their remarks, we're strong believers in data and having strategies around data. And that's really the core reason for getting into the business is great tech, great data, and great ability to build incrementally on top of that.

Scott Staples

And, Steven, we also have a really good track record of doing M&A. We think we have a great process of finding the right companies, integrating them, and getting greater growth out of them than they would as a standalone. And obviously, you can look at the success we've had with Sterling. But even before that, we've had multiple tuck-ins which we have exponentially accelerated their growth and gotten value out of it. So we feel like this asset under our umbrella, we can do a lot with it.

Unknown Speaker

Great. Thanks for taking the questions.

Operator

Thank you. We'll go next now to Jeff Silber with BMO Capital Markets.

Unknown Speaker

Ryan on for Jeff. Just wondering how we should be interpreting the implied 4Q guide versus what was embedded in there previously for 4Q. I think the refined outlook, it just may be a softer view, though I know you're thinking you end up near the higher end of the range if things continue as is. Thank you.

Steven Marks

Yes, good question. If we kind of think about maybe where we started the year and the originating guidance we gave out in February, the commentary that we shared there was we kind of expected base to be maybe neutral to slightly below neutral. We're obviously feeling a little better about base given the trends the last couple of quarters, the strength within the verticals that Joelle shared within her remarks, and obviously a good October. So I would say the real evolution there is probably just feeling a little better about base today than we did 8 months ago when we started the year.

Now, with all that said, obviously, we still feel really good about the parts of our algorithm that we control and influence. So our new logo and upsell, cross-sell being within our long-term guidance range there. Retention's been delivering at that 96% rate, and there's no reason to think that that doesn't continue. So certainly I think there's a little bit of just feeling better towards base and obviously a lot of demand for talent out there right now.

So if you think about that evolution, certainly that's a key component of it in terms of Q4 growth rate. I mean, I think obviously, with the only caveat being, as I shared on one of the previous answers, a lot of moving factors impacting macro and we want to make sure that we've got a little bit of coverage, if you will, in the range. But again, as I shared in the remarks, if things continue the way they are, we expect to be at that upper half of the guidance range.

Unknown Speaker

I appreciate it. And then on the continuing benefits, rescreening that was strong again in the quarter, do you think that's becoming more of a durable trend in how companies have the risk mitigation framework?

Scott Staples

I think that's a bit hard to predict. We definitely—the broader picture is that we're definitely seeing a major trend toward risk mitigation and especially companies are very in tune and their antennas are up big time to fraud detection. So I think, in general, the overall trend is to utilize more and more of our products. And I think it's a combination of seeing more rescreening, also seeing ongoing—we're seeing a nice uplift in our monitoring business as well, which I think I mentioned last quarter is starting to really become meaningful revenue for us.

So I think, in general, the risk profile of companies has changed with all the stuff that's going on in the world. So it's possible that that becomes more of a durable trend. But I think we've seen really like 2 quarters of it, so we're kind of wait and see. But certainly, conversations with customers have changed over the last 12 months.

Operator

Thank you.

[Operator Instructions]

We'll go next now to Manav Patnaik with Barclays.

Unknown Speaker

Ronan Kennedy on for Manav. I think you had 14 enterprise bookings in 3Q versus 20 in 2Q. You described the late-stage pipeline as continuing to strengthen and expand. Is there an element of normal quarter variability there or anything to note with regards to change in conversion rates, sales cycles, or customer decision-making?

Scott Staples

I'm going to let Joelle give you some details here. Just to look at the bigger picture, you have 14 bookings this quarter, which we're pretty happy with. And Joelle will give you the reasons why, 20 last quarter. But then we had like 3 quarters in a row of 17. We're kind of just within our range. We are seeing a little bit of change when it comes to deal sizes, go-lives, things like that. But I'll have Joelle give you the color.

Joelle Smith

Sure. Thanks, Scott. Yes, so a little bit, the 20 last quarter, 14 this quarter, it's a little bit of a timing thing, but it's also, as Scott alluded to, we have larger and a little bit more complex deals that we're closing. So the revenue for the enterprise deal is $500,000 annually or more. And so we're seeing that expand and grow as we're continuing to expand all of the growth opportunities that we have. So upsell, cross-sell, and new logos still continue to come in and outperform. But I think that the 14 and the 20 respectively is just a timing thing. We still feel really good about Q4. We still feel really good about the pipeline. Late stages are large and growing. And we have larger deals. So all in all, we're still feeling really good.

Scott Staples

Yes, I think, Ronan, if you go back like a year or two in our business, most of our contracts started sort of like single product line. We start with background screening and then we add drug testing and all these other things on as we engage with the customer. That drives a lot of upsell, cross-sell. But what we're seeing is customers are actually buying multiple products right out of the gate. So it takes a little longer to contract that integration to go live with that. But at the end of the day, the benefit is that those are larger ACV deals.

So Joelle's right in that we're seeing larger contract values, win rates continue to remain strong and even improve, pipeline is phenomenal, and a lot of it's driven by this whole trend as you've heard us talk about for the last couple of years of identity fraud detection and all these other things that companies are worrying about. It's just leading to better contracts for us in terms of more products right out of the gate versus having to upsell and cross-sell those things downstream.

Unknown Speaker

Very good. Thank you both for that. And as a follow-up, if I may, base growth was 5% in 3Q, and a little more than 1% from the customer initiatives. As those roll off and given healthy trends, what's the best way to think about underlying base growth entering '27? And then, Scott, you gave me comments in response to my first question. How should we think about the composition of growth—new logo, upsell, cross-sell—given all those factors you've discussed, the composition of '27 growth, without looking for a formal guide, just how to contextualize how to think about the composition of growth for '27?

Scott Staples

Steven, why don't you take the first part, and I'll take the second part.

Steven Marks

Yes, I think certainly, obviously, we have a healthy base environment. I think you're seeing that commentary from all over the place. Even I was listening to the Visa CEO a couple of days ago and talking about how that's contributing to their success. I think the hiring velocity right now, which is broad market, is really good. Obviously, the comps start getting much more difficult, Ronan. I know you've been following for a while. The beginning part of the year, even 3Q, had some easier comps.

We had a phenomenal Q4 last year, so we're benchmarking. And then when we get into '27, we'll obviously have higher comps. But the pace of the market right now feels really good. We'll give out more color on 2027 and obviously need to account for some recent events and making sure that we have a good point of view on the updated macro and get some latest customer feedback and making sure that hasn't modified plans, but certainly over the short duration we feel good about how our customers have been responding to the macro and the needs of the market right now.

Scott Staples

Hey, Ronan, on the second part of your question, yes, we don't really see a lot of change in the algorithm. So if you look back at the company, even over the last couple of years, we've been super consistent on the 3 things that we control: upsell, cross-sell; new logo; and retention. Obviously, the wildcard has been base, but you've seen that not only stabilize, but recover into the positives in the last 2 quarters: flat in Q1, 7% in Q2, 5% in Q3. But if you look at upsell, cross-sell, you know we've always been so steady, and that's across several ranges. New logo, I mean, I can't remember a quarter where it wasn't 4% or 5%. And retention, I can't remember a quarter where it wasn't either 96% or 97%.

So I think we don't think that algorithm changes too much going into 2027. So even though customers might be buying more up front, there's still a tremendous amount of upsell opportunities because of all the changes that you see in identity fraud detection. Because of the potential opportunities we have with more database services now that we have DataDiver and our proprietary data records, we just keep adding to product innovation, and customers are still wanting deeper and deeper searches to protect themselves. So we don't see any slowing down of those algorithms and no major changes to those algorithms.

Operator

Thank you very much. We'll go next now to Stephanie Moore with Jefferies.

Harold Antor

This is Harold. I'm on for Stephanie Moore. So I just wanted to double-click on the AI capabilities. You spoke about it at Analyst Day and you've spoken about it a lot on the call today. So I just wanted to get a sense for, I guess, if you look at the revenue growth and how I guess as to how from the AI products how fast you've seen the revenue growth from those products. And then, like, are these products, you know, you talk about them being a differentiator, are these helping with retention? Are these helping with you winning new business? Or is it a little bit of both? Is there anything to get a sense for how the AI revenue profile growing from AI has been over the last 12 months?

Scott Staples

Yeah, I'll answer that. And, Joelle, if I've missed anything, please jump in at the end. I think it's actually getting more difficult for us to talk about AI individually or singularly because there's so much of it in the company right now, and there's so much of it embedded across almost all of our products. So whether it's the AI we're using to enhance the candidate experience, or whether it's the AI we're using for the routers that we use in our verifications products or in our criminal search products, there's just so much AI that we've got deployed in the company. It's hard to say like, yes, there's a specific revenue that's been driven particularly from this given AI because it's so embedded.

But I think what you are seeing is basically a holistic lift from all the AI. You're seeing higher customer satisfaction, you're seeing strong retention. We do feel it's a factor in our win rates because when you demo these kind of things and you show what the AI is doing, customers and prospects really like what they're seeing and really like the investments that we've made in AI. And then obviously there's a margin benefit as well, but again it's hard to just like carve out and say that's just because of AI because it's so embedded.

But we've talked to you in the past about using AI in our customer care with chatbots and our customers and candidates interacting with us through AI chatbots and how that's enabled us to use less heads in our call centers and things like that. So really hard question to answer, but I would say the whole sea has risen for us because of all the AI that we've deployed and we're certainly seeing great benefits from it. But I also think it's just part of the story. As Joelle and Steven have both mentioned, the sales team continues to crush it. I mean, they're just really humming. The big picture here is that we just had the best quarter in company history. So there's not one thing that points to that. It's everything sort of coming together. It's the products we've rolled out, the sales team humming, the AI efficiencies that we've gained, the impact that has on pipeline and customer wins and retention, everything. We're seeing, as we mentioned in the script, broad-based growth across virtually all of our verticals, leading to the best quarter in company history. There's a lot of reasons that go into that.

Harold Antor

Thank you. That was helpful. And then I guess my last question just would be on capital allocation. Just between share repurchases, debt, and tuck-in acquisitions, how would you rank those initiatives? Just given DataDiver, should we expect you to get a little bit more aggressive on the acquisition front or just anything on the other half?

Steven Marks

Thank you. Yeah, and Harold, look, I think we don't look at it as a deviation. We've always said from the get-go after Sterling that we were going to be obviously focused on deleveraging, but obviously disciplined and opportunistic if there are times to be able to go—you know, when the stock price was at a good valuation, start to hit on some share repurchases, create shareholder value. Obviously, we had a very unique opportunity to buy a data asset that's very, very key and we can create a lot of value out of. So I think nothing's changed in the playbook. We haven't changed the priorities. We'll keep a very disciplined approach, review the market. But obviously, we borrowed a little bit of cash out to make sure we could fund the acquisition. We feel like we'll be able to easily repay that debt. And by the time we talk to you guys on our next earnings call in February, we don't think that'll be on our balance sheet anymore. So I think our approach remains unchanged, and obviously we'll be leveraged and then also make sure that we can create value and keep persevering on all cylinders.

Operator

Thank you. We'll go next now to Kyle Peterson with Needham.

Kyle Peterson

I wanted to start out particularly on upsell, cross-sell. You guys continue to have a lot of success there. So I guess, what are some of the drivers of that? And I guess what inning are we in roughly in terms of how long that can continue to supplement and be a big part of the growth story?

Scott Staples

Yes, Kyle, it's interesting. If you look at the last 3 quarters: 8%, 8%, 9%. So pretty steady. If you go back 3, 4, 5 years, it's always been a really good number, upsell, cross-sell. And it goes back to what I kind of said a little earlier. Customers are looking for more protection. Risk has become their number 1 priority. And if you look at things that have been in the press over the last couple of weeks, especially with companies like Binance and things like that, companies are very worried about identity fraud. And so our identity fraud detection products are in high demand.

But it's not just identity fraud. It's also customers doing deeper and deeper searches. So they really want to be protected. They don't want to let bad actors in their companies. They need to protect their brand, their shareholder values. Obviously, we're talking about large companies, large amounts of money when something bad happens to them, so they're turning to us for help and that is driving literally most of the upsell, cross-sell.

Steven Marks

Yeah, and Kyle, just from a modeling perspective, I'd just add in, right, obviously, we had some big wins last year. You're seeing that flow through. We've shared this the last couple of quarters. There are trends that sometimes we'll see that outperformance on our algorithm on new logos, sometimes on upsell, cross-sell. To Scott's point, a lot of trends driving our 80,000 existing customers to want to consume some more incremental services. So we feel really bullish about that, and obviously our long-term algorithm in being able to deliver that controllable growth.

Scott Staples

And Kyle, just to expand on your baseball analogy, I really think the game just sort of changed and restarted. Identity fraud detection is actually a whole new ballpark. So I think we're in sort of the first pitch. Now, we've been doing this for a number of years, but I think the stakes are higher now and the visibility is higher now. So I see a nice multi-year run rate for us here on upsell, cross-sell because of all the things that are happening in the world.

Kyle Peterson

Great. Really appreciate that. And then as a follow-up, I wanted to see if you guys could provide a little more color on the gig economy work that you guys have been doing. It seems like that's growing at a really nice clip. What's the competitive environment in that space like for some of these enterprise deals? And I guess what does it look like in terms of greenfield, newer opportunities that didn't exist before, versus competitive takeaways? Or what's the bigger driver there?

Scott Staples

I will let Joelle take this one. And I think it's not only gig, but we're also seeing—we mentioned this new concept to you a quarter or two ago about job stacking. I'll let Joelle take that question and explain it all.

Joelle Smith

Yes, absolutely. Thanks, Scott. Yes, so gig, and it's not just specific to gig, as Scott said, but there are a couple of factors that are driving a lot of this cross-sell, upsell, and activity in gig. One is certainly job stacking. You've got people working on multiple gig platforms at the same time. So that triggers a screen every single time they enter or exit the platform. You also have—gig is being hit very hard with fraud detection. And so we're seeing a lot of demand from that use case coming through with our gig customers in particular. You think about you have a delivery driver dropping off some type of package or groceries or anything like that. You have people that are going into people's homes from a care or a dog walker or any of those types of things. And so you have to make sure that you have a fully comprehensive risk profile.

And that's expanding the cross-sell, upsell opportunity that we have had across many of our verticals for a long time. But I think gig is a great opportunity. It's maturing and they're really looking at this risk mitigation strategy as a key component. They really look at this as trust and safety. So when we are able to talk to them about the different product lines that we offer and being able to add to that density of their package to protect their end users that are using the platform services, it really helps them to feel better about a lot of the challenges that Scott talked about in this world right now. So it's a maturing of the industry. It definitely is growing. We're seeing a lot of demand across our product portfolio. And it's really being driven by that fraud issue that we're seeing and then also just wanting better risk coverage.

Kyle Peterson

Understood. Thank you.

Operator

Thank you. We'll go next now to Scott Group with Wolfe Research.

Unknown Speaker

Just wanted to ask a follow-up on the base trend and more around what you're seeing in the hiring environment right now. I understand the business has obviously become a lot more diverse over the last couple of years, but just as we approach the holiday season, maybe on the retail side of things, what you're hearing from your customers.

Scott Staples

Yes, Scott. So, our customers still remain neutral to positive. Even as they look into 2027, we haven't had all those discussions with them yet, but their outlooks really haven't changed the entire year. I mean, we told everybody in Q1 that our customers were neutral to positive, where in the media it was probably neutral to negative, so definitely a difference. I think one big reminder is that we really focus on enterprise. So we talk about big customers that hire a lot of people, high volumes and high turnover. And I think what happens in the SMB space may be very different than what happens in the enterprise space. And I think our base results are really the result of our strategy around the verticals that we're in and around the size of company that we're in.

So Q3—and this is just I think the only thing you really need to know about the state of the economy and the labor market—the verticals that crushed it the most were transportation, logistics, retail, and e-commerce. Absolutely crushed it. We had really strong growth out of industrials and manufacturing. If you talk about really strong growth and crushed it, you're talking about double-digit growth. At the same time, we had good single-digit growth in just about all the other verticals: staffing, healthcare, hospitality, professional services, gig, all had really nice growth in the quarter. And as Steven mentioned, we had a really good October as well. So what we saw in Q3 continued into October. Obviously, we can't predict November and December, but signs are strong that the American economy is doing well. The American consumer is spending. The American consumer is traveling. We're seeing such broad-based growth across all verticals that it really just, in our minds, is a great indicator of the strength of our business.

Unknown Speaker

That's helpful. And just a quick follow-up on the DataDiver acquisition. It seems like, based on some of your remarks, that it is sort of both a data and a fulfillment play. Just wondering if you can talk about maybe some of the data gaps that you may be closing with the acquisition.

Scott Staples

I don't think we have gaps that we're closing. I think it's more of enhancements, but I'll let Joelle answer that.

Joelle Smith

Yes, it's definitely an enhancement. So there's thousands of these sources and a billion different ways to go about getting the data. And so this just enhances our ability to go get direct-source data. It also adds to the record data that we have and allows us to enhance our proprietary data. So it's a coming together of—they've been doing this for decades, we've also been doing it for a long time, so there's a mechanism of thickening the historical data, there's a growth in making more complete records. So it's really a complement to what we've already been doing, and it really continues to build that asset that we have been working on for some time now. So it's really just about enhancing what we have. It's not necessarily a gap.

Scott Staples

And we also basically cut out the middleman, too, right? So now we have direct access to primary-source data.

Unknown Speaker

Awesome, thank you.

Operator

Thank you. And ladies and gentlemen, that is all the time we have for questions this morning. So that will bring us to the conclusion of today's call. We'd like to thank you all so much for joining us today and your participation. This will conclude the First Advantage Third Quarter 2026 Earnings Conference Call and Webcast. At this time, we will be closing the call. You may disconnect your line, and please have a wonderful day. Goodbye.

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