At the midpoint, this represents approximately 7% year-over-year revenue growth, 9% year-over-year adjusted EBITDA growth, and 21% year-over-year adjusted diluted EPS growth. Our updated and tightened guidance range reflects a balanced posture on our short-term outlook that incorporates the healthy state of our underlying demand trends, as well as the ongoing geopolitical and macro uncertainties. As a result, the continuation of current trends would support performance above the midpoint of our range. However, consistent with our historical approach towards guidance, we believe it is prudent to account for a broader range of outcomes given the factors outside of our control. As we think about the second half of the year, please remember that our 2026 growth rates are being measured against an exceptionally strong second half of 2025, during which we grew a notable 12% year over year in Q4 2025. Notably, in Q3 of this year, we begin to lap the 12-month anniversaries of the large 2025 go-lives we have discussed previously, and by Q4, those wins will be fully annualized. As we progress through the second half of the year, we expect that this will result in moderating growth rates compared to the exceptional start to this year. Zooming out, while growth rates may fluctuate from quarter to quarter, we expect to deliver full-year results above our original expectations and in line with our long-term growth algorithm. Looking specifically at Q3, we saw revenue momentum continuing from Q2 into July, and we expect base to be slightly positive for the full quarter. Taken together with the new logo and upsell-cross-sell trends we've discussed, We expect total revenue growth rates for Q3 in the mid to high single digits, consistent with the expectations we shared last quarter. Looking ahead at Q4, we expect base to be neutral with our overall base momentum continuing into Q4, but partially offset by prior year's Q4 new logo and upsell cross-sell revenue getting more evenly distributed across 2026, a dynamic we've been discussing with you for several quarters. For Q4, we also have a more modest level of expected new logo and upsell-cross-sell contribution models as we comp against the strong Q4 2025 17% growth and navigate some instances of recent win implementations now extending into early 2027. As a result, we expect Q4 total revenue growth rate in the low to mid single digits. Turning to adjusted EBITDA, overall, we expect adjusted EBITDA margins to remain largely consistent with Q2 for the remainder of the year. And similarly, for adjusted diluted EPS, we expect meaningful year-over-year expansion, increasing versus prior year to the low to mid $0.30 range in both Q3 and Q4. Having walked through our updated 2026 guidance, I want to close on slide 13. This slide puts our 2026 guidance in the context of our longer-term growth trend in adjusted diluted EPS. The growth implied by our updated 2026 guidance midpoint is consistent with our track record of adjusted diluted EPS growth of 20% or more since 2024. This is also consistent with the longer-term adjusted diluted EPS growth rate implied by the midpoint of our 2028 target. With that, let me turn it back to Scott for closing remarks before we open the line for your questions.

Thank you, Steven. In closing, Q2 was our strongest quarter yet, and we expect our solid momentum to continue in the second half of 2026. We are focused on winning by providing best-in-class, differentiated solutions for our customers. We remain confident in our ability to deliver consistent financial performance and we are progressing well toward the 2028 financial targets we established during our investor day in May 2025. Thank you to the entire First Advantage team for the work you do to support our customers each day. With that, we will open the line for questions.

Thank you, Mr. Staples. Ladies and gentlemen, at this time, we will begin the question and answer session. If you do have a question, please press star 1 on your telephone. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. To get to as many questions as possible, we ask that you please limit yourself to one question and one follow-up. We'll go first this morning to Shlomo Rosenbaum with Spiegel. Hi. Thank you very much for taking my questions.

I just want to make sure first that I'm understanding the tone on the overall environment. It sounds like the tone is better from your clients and you're seeing a better growth. and you know it sounds like it's more broad-based. I want to make sure I'm understanding that right and then I also want to ask about the detail in those customer initiatives where it's something that was a pull forward or it was an episodic project that kind of came out of the blue. Just trying to understand what that is and maybe you could give us the nature of it. Is that something that's indicative of an improving environment or is it just something else?

Thanks, Shlomo. I'll take the first part of your question, and then I'll have Joelle answer the second part of your question. Basically, your first part of the question is on the macro. What are we hearing? What are we seeing? Obviously, 6.7% growth in the base is great. Slightly unexpected, but obviously we love it. I think there's a couple of things going on. One, if you just look at job data, you're seeing a lot of stabilization. You're seeing hires and quits. Absolutely flat for the last six months, and that's fine, right? Job openings continue to be really strong. Pre-pandemic, it was about 7 million, and now you're looking at 7.4 million. So that's all really good for base and for our business. Unemployment remains steady at 4.2%, and job openings to unemployment is also favorable. So I think just pure labor statistics, you're seeing good numbers. And also, over the last couple of weeks, there's just been some really great articles in Wall Street Journal and other places around what's really going on in the labor market. And I think the impact of AI was highly overblown. And I think we're seeing, as you used, I'll use your exact term, we are seeing broad-based improvement And I think it would go back to what we said over the last couple of quarters. We are continuing to hear, I would say, neutral to positive. The same comments I've given for the last two quarters. Neutral to positive projections on hiring from our customers. And you know we talk to our customers all the time. So we are in front of literally hundreds and hundreds of our large customers and hearing a very consistent tone. I think when you say broad-based, it's true geographically and it's also true vertical-wise. If you look at our vertical performance, we got really nice growth out of retail and e-com, transportation and logistics, industrials, general staffing, especially the blue-collar staffing. The blue-collar staffers are doing extremely well. But all the other verticals were basically flat or just barely negative. So we're not getting these wide swings in verticals. And I think the only place geographically we're seeing some slowdown is actually in India. And that's a direct reflection of the Iran war. Oil prices, gas prices are definitely affecting India economy and our customers in India. But as you know, it's not a huge piece of our business. So we're definitely seeing a combination of vertical, broad-based vertical, broad-based geographic, you know, really nice stabilization and obviously even improvement in base. I'll turn it over to Joelle to talk about the customers.

Awesome. Thanks, Scott. Hey, Shlomo. Yeah, so the customer initiatives that we saw, which was roughly half of the base growth that was created, it created elevating screening activity. And these were really enterprise-wide labor reshaping programs. These programs created churn in their labor force, and labor churn is always good for our business. We're also seeing a continuation of job stacking. which as a reminder is someone who's working two or more jobs at the same time. And we're seeing this across verticals, which is also good for our business. So these are the things that we've really kind of seen from customers. They're doing a lot of this work because they're large enterprises and large enterprises do these types of changes from time to time.

Okay, so it was not something you were expecting. It was kind of an episodic thing that just came up in the quarter, is the way to understand, just to clarify the customer initiatives.

Yeah, it did accelerate through Q2. We do anticipate it continuing into Q3, but probably will normalize into Q4. But these programs do happen, and it wasn't just one group. It definitely happened across transportation, retail, and e-commerce.

Okay, great. Just to sneak in one other thing, can you just talk a little bit more about what's going on with package density, how that might be helping the growth, and how much of a factor is digital ID in terms of helping to improve the cross-sell and up-sell? I don't know if you have metrics for that, and then I'll pass it off to someone else.

I'll take the package density and then I'll again flip it back to Joelle to talk about digital identity and sort of our tip of spear go-to-market approach with digital identity. Package density continues to be strong. If you look at the numbers, I'll give you sort of the color on it in a second, but if you look even back Go back and look at our results for even the last five years. And we've been public for five years. Upsell cross-sell has been just a really good, consistent driver of growth for us. And package density is the number one driver of that. So if you look at 2025, for example, upsell cross-sell was 7% growth. And in Q1, it's 8%. And now in Q2, it's another 8%. The key component of package density, which is driving a lot of this growth, is this whole focus on risk, risk mitigation, fraud prevention, and again, just unfortunately, the challenging world that we live in. Customers are continuously looking for more protection, more types of screens, deeper searches. There's just, as we've talked about before, AI, what we call bad AI, is enabling fraudsters and basically all levels of fraud to enter into the recruiting process. We're fighting that bad AI with good AI, but that's just a piece of it. It's also, can you go deeper on county searches, state searches, federal searches? Can you add more protection? We're continuously hearing this from our customers, and this is a great thing for our business. It's driving a lot of our cross-sell growth for many years now, and we don't see an end to it. The world, again, keeps getting more and more challenged, not less and less challenged, which is really good for our business. I'll flip it over to Joelle now to talk about digital ID.

Yeah, absolutely. We are definitely seeing a lot of activity around digital ID for the same reasons that Scott talked about with regards to just kind of the state of the world that we live in. We are seeing a significant increase in fraud, especially in the hiring market, in workforce, within the interview stage, the hiring stage, and then even day one. So the digital identity offerings that we have that are embedded into our screening process are creating a lot of opportunity for us, which is naturally just making the ACB and the size of the deal larger. So that's also contributing to the package density increase that we're seeing. But it's changing again with regards to how we are going to market. As Scott said, it really is the tip of the spear, and it's opening up all kinds of doors and conversations with people because it's reaching an elevated level within our customers. It's no longer just an HR conversation. The conversation is moving up to the other C-suite and even board levels because of the threat. and some of these bad actors and the risk that it creates within these enterprise organizations. So we're definitely seeing a larger cash rate with the digital identity and it's obviously driving larger deal sizes for us.

Thank you. Thank you. Thank you. Thank you. We'll go next now to Ashish Sabhadra with RBC Capital Markets.

Thanks for taking my question. Congrats on such a strong result. Maybe just a quick follow-up on the base growth. You mentioned the customer initiative, but the other half seems to be pretty broad-based across multiple industries, and it seems like that momentum continued in July. So should we expect that momentum going forward based on what you've seen so far and your conversations with your customers? Thanks.

Steve, do you want that?

Yeah, it's a good question. I think certainly it was broad-race growth in the second quarter, you know, retail, e-com, you know, transportation logistics. But we also saw industrials and defense and those types of sectors that Scott mentioned before, staffing, and certainly on the blue collar, doing really well. You know, July is obviously a good start, but there's still two more months in the quarter and a little bit of unknown. But we certainly think base will be positive for the quarter. Slightly positive, that is. You know, before we were saying negative, you know, zero to negative two, we're probably on the positive side of those numbers, which is a healthy step change in progression. And I think that reflects the customer sentiment and the volumes that we're seeing. Obviously, we've got a range of outcomes, and as Scott mentioned, a sustained kind of conflict in Iran and the Middle East could drag a little bit on consumer confidence and fuel prices. But overall, we're pretty confident in the base, and we like where the momentum started the quarter out in July.

That's great, Keller. And just maybe on the margin front, obviously, really great progress on the cost-takeout initiatives. You mentioned second half margins more in line with the source. As you think about the puts and takes going forward, can you highlight some of the investments that may be weighing on the margins? Thanks.

Yeah, I think a couple things there, Sheesh. I mean, A, we're somewhat expecting our vertical mix to stay constant for the rest of the year, which means you're not going to see that large fluctuation in gross margins that we saw last year where we kind of shifted a little bit heavier towards some of the transportation-type verticals where you just have a different mix of services. Thank you for joining us. Thank you for joining us. But overall, we think margins will be very consistent through the end of the year, which is still good year-on-year positive momentum, which we like in the model.

Ashish, I'll add one more thing. If you remember in last quarter's earnings call, we said that we would put a ribbon and bow on the synergy efforts and integration efforts by December 31st of this year, and we are still on target to do that. So It doesn't mean we will fully realize everything by December 31st, but we will fully action everything by December 31st. So going into 2027, we will be done with all the integration and synergies for the Sterling acquisition, which is almost now approaching a two-year anniversary. We will get some of the realization of those synergies obviously flowing into 2027, but we are definitely on target to wrapping it up December 31st.

Thank you, and congrats on such solid results. Thank you.

Thanks. Thank you. We'll go next now to Andrew Nicholas with William Blair.

Hi, good morning. I appreciate you taking my questions. First, I wanted to just kind of ask on share gains, obviously upsell, cross-sell. New logos all remain pretty impressive. Just curious from a vertical perspective or even a geographic perspective, if there are specific kind of markets where your momentum is pronounced and maybe any thoughts on why that would be if that's the case.

Andrew, we're seeing... Great momentum. Anywhere you can classify something, regardless of vertical, can classify it as high volume hiring. There's still a tremendous demand for blue collar workers, even white collar workers where there's high turnover. It's hard for us to actually break down what's a corporate job versus some other job, but we know what's What's a trucker? What's a warehouse worker? What's a store clerk worker? And those jobs are just still in tremendous demand. So it actually, you know, that lends to transportation. It lends to retail e-comm. It certainly lends to we're seeing great growth out of the healthcare staffers. We're seeing great growth out of blue-collar staffers. and even hospitality, things like that where it's high volume. But even within things like industrials and manufacturing, there's tremendous growth in aerospace and defense right now. So our industrials business is doing extremely well and you would obviously expect that given the results of the industrial companies in the country. They're all doing well and we're benefiting from that as well. But even some of our financial services companies and things like that do have high volume hiring components of them. And so we're getting just really nice growth across a lot of our large verticals. And the key is high volume hiring. And that's our focus, as you know, for years. Going on almost 10 years now, our focus vertically has been on the high-volume hires and the enterprise. And I think we're reaping the benefits of that.

Got it. Thank you. And then for my follow-up, just a quick one on margins. Are there any kind of nuances to the custom initiatives From a margin perspective, are there higher or lower pass-throughs? Are there bulk discounts? Anything for us to think about in terms of that impact on Q2 and it sounds like Q3 as well.

Andrew, no, I mean, those initiatives are really just running more volume through their existing programs. I think the only real growth margin impact would be if it changes kind of the vertical chemistry a little bit. and if there's more volume obviously through a vertical that's more transportation oriented or health care oriented it could be able to move the needle a little bit but overall they're running core packages at normal terms and conditions.

Got it. Thank you. Thank you. We'll go next now to Andrew Steinerman of J.P. Morgan.

Yeah, hey guys, I just wanted to unpack this customer initiatives call out again, you know, maybe we can sort of cut through and, you know, I recognize there's certain things you can say about what your customer is doing and certain things you can't say, you know, the term enterprise reshaping was used, but just in plain English, what did your customers do? What segment was it in? Because as we look at the beat and the guide increase, obviously there's a little gap there. I'm trying to understand that, giving you some more positive, and then I have a follow-up on capital allocation.

Yeah. Hi, Alex. So think of it this way. First of all, it was multiple customers, and it was obviously great news. As Joelle mentioned, about half of the base increase in the quarter was attributed to these customers basically doing large scale, whether it be rescreening or hiring. So it was a combination of both. We had some large customers across multiple verticals launch some large rescreening initiatives. And again, that goes back to Thank you so much for having me. It doesn't mean they'll do it again next year. They may do it two years from now, but we're starting to see rescreening become a little bit more of a factor. We're starting to see monitoring become a little bit more of a factor. Again, it showcases the world that we're living in. and we also had some large customers doing some restructuring. So they were, you know, consolidating divisions or they were, you know, changing things and that led to actually more turnover and more hiring. So again, it's really hard to like say it was one or two things. It was a little bit across multiple customers, across multiple industries, but obviously we're, you know, we're happy to take the business

Understood. Thank you for that. Then maybe peeling back the envelope on capital allocation, this is one for Steven. You mentioned you guys are being very thoughtful around capital allocation going forward. Obviously, your stock price has done well. Obviously, you've been leveraged in a pretty orderly way. Are you planning to to change at all how you're thinking about capital allocation this juncture. Do the priorities change at all? Is there potential for more organic reinvestment, inorganic investment, thinking about other ways to return capital to shareholders? My ears perked up a bit when you said that, so I just wanted to dig in on the capital allocation thoughts that you guys are having with the team.

Yeah, no, Alex, it's a good question. It's not really a change of posture at all. I think we've been saying since we kind of announced the share repurchase program back in February that our plan was always to be opportunistic. You know, certainly we're pleased with the upward momentum in the stock price and obviously still bought back some shares during the quarter and still, you know, Feel that there may be an option there, but certainly, as you can tell by the upside debt pay down we made this week, deleveraging is certainly a top priority and remains the top priority. We've always organically invested in the business, and there's no step change in what our plans are there. We'll continue to put some money behind the products and sales and marketing and making sure that we're successful and continuing the momentum that we have. So I think ultimately we'll keep our eyes on the market. It's obviously very fluid these days, and put our capitals where we believe the highest ROI for our shareholders are. Given where interest rates are heading and things like that, it could change the composition from Q1 to Q2, and Q3 may look a little more different. But certainly we feel good about where cash flow is, upside the debt repayment, and that will remain a priority in terms of getting deleveraging down to have the right interest for our shareholders.

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

Jeff Silber Thank you so much. I wanted to go back to the updated guidance for the year. Maybe I'm misreading this a bit, but it seems to be that now the second half may be a little bit more tempered specifically at the top line compared to what you might have expected beforehand. I don't know if that's correct or not. Was there any front running maybe in the second quarter some of these initiatives you thought might have come in the back half of the year came in the second quarter?

Yeah, Jeff, good question. And no, none of it was a pull forward per se. I think we have a little bit, maybe a touch more conservatism towards the second half, you know, the prolonged geopolitical uncertainty, you know, and how that impacts consumer confidence. You know, our retail and transportation segments, we had an exceptional peak, you know, performance last year, and we have to comp against that. You know, as this conflict drags on, as fuel prices remain higher for longer and kind of drain the American consumer, we want to make sure that we can account for that range of outcomes in our base volumes and how we comp against last year. So I think that's the primary driver for, I would say, just a touch of conservatism, maybe more than was there, you know, a quarter or two ago. But Zoom out. We've raised the bottom end of guidance by $45 million, raised the top end as well. I feel really good about where the year is heading.

Okay, that's great. Joelle, in your remarks when you were talking about internationally, you talked about some softer volume trends. Can we just get a little bit more color exactly what's going on there?

Sure, yeah. So that was really focused on India, per se, and it's not really kind of across the broader international numbers. We're actually seeing some good growth in the other regions in the NAPAC. So India is really the one that's being heavily impacted, and that's mostly with the Iran conflict, fuel prices, and just some of the general macro challenges that that region is seeing. We're not losing any large customers. There's not a major change. It's just really about kind of the macro effect with India.

Okay. Can you just remind us how large India is as a relative percentage of revenues?

Jeff, overall international these days, Jeff, international is roughly 12%. India is probably in the neighborhood of a quarter of that. Zoom out to the whole company. It's not a big piece of the picture.

All right, thanks for clarifying that.

Thank you. We go next now to Mananav Patnaik at Barclays.

Hi, good morning. This is Ronan Kennedy. I'm from Manav. Thank you for taking our questions. Combined new logo upsell, cross-sell contribution remained quite strong. I think driven in part by the three large go-lives from late 25 and other enterprise wins. As these become fully annualized in 2H26, how much of the growth rate is being supported by implementations reaching run rate versus your underlying sales productivity from new bookings, pipeline, ongoing share gains? So trying to understand the repeatable sales productivity versus run rate impact and those dynamics, please.

Yeah, Ron, I'll take that. So, you know, again, As Joelle said in her prepared remarks, the sales engine is humming. There's no question about it. You are right in the fact that we had some really nice wins in 2025. So I think the only thing we're saying here is that that creates some large grow-over challenges. It doesn't mean the sales engine is not performing well. In fact, it's performing the best it's probably ever performed. The number of go-lives that we have lined up Thank you for having me. We still expect to have really good performance in Q3 and Q4. It's just comps that we're talking about. And again, sales engine continues to hum. Go-lives for Q3 look amazing. And the pipeline is literally the largest it's ever been, especially with late-stage pipeline. Those are all very promising signs. So again, probably just more of a comp issue.

Got it, thank you. And then from a margin standpoint, I think Q2 demonstrated the ability to absorb that elevated customer volumes within the existing operating structure. Did you learn anything about the normalized incremental margin profile of the business when revenue growth accelerates? And as we move into 27 with integration winding down, can you remind us how we should think about margin expansion from, say, package density, digital ID, Fulfillment, Productivity, other initiatives that you're doing and that mix.

Yeah, I mean, I think, you know, we've talked about this a lot over the years, you know, how scalable our fulfillment structure is and how good our ops and our platform is of being able to account for volume increases and decreases and scale up and down. And I think we certainly put that to the test in Q2. And I think, you know, we're incredibly proud of how the platform responded, how our teams responded. And, you know, it's not like we had to go out there and hire a ton of people to handle the volume. It was, you know, as I mentioned in the paramark, we were able to absorb it within the cost structure. probably caused a little stress on some of our departments, but overall performed incredibly well, so we're really excited about that. And I think you're right, we've talked about this too over time, some of the newer products that we've talked about, digital identity and monitoring, do have a slightly different data cost model to them, so it does generate net higher unit profitability percentages. As we get more momentum there, that'll become a part of the story. I think today, obviously, we're We're mainly focused on getting those implemented and getting those customers live on those new tools, and then we'll talk about the upsides to net dollar profitability down the road.

Thank you. Appreciate it. We'll go next now to Stephanie Moore of Jefferies.

Hi. Good morning. Thank you. I wanted to maybe touch a little bit on some of the large contract wins that you've announced. Do you want me to talk a little bit about what you view the TAM to be within that market, your overall share in that market as well? And then I think high level, what are you hearing from your clients as the key reason why they're choosing you to perform these services? Thanks.

Hey, Stephanie. So there's a lot there, so I'll touch on a few things. And if I miss anything, Joelle, please jump in. If you look at our investor date deck from May of 2025, we've spelled out the pretty significant TAM within our core business, but we'll also spell out the additional TAM that digital identity and identity fraud represents, which is another $10 billion on top of our TAM. So the opportunity and the TAM is quite large. We still maintain about a 25% market share in the core business space. And that obviously is an encouraging thing for us because of all the sales momentum we have and our ability to take market share. and even to add a share of wallet within existing customers has been a big driver of growth for us. So I think some of the key drivers of our success, a lot of it is the verticalization. We've always said that verticalization is the secret sauce in this business and it continues to be. And why is verticalization so important? It's because every industry is different Especially in our regulated industries such as financial services, healthcare, and transportation, I think a lot of people don't understand how all these transportation and logistics companies need to adhere to Department of Transportation rules and regulations and work great at it. And a lot of it, the compliance is built, is hard-coded into our platform. So that when a large transportation company is hiring a driver, they can feel safe and secure that First Advantage is doing everything possible to protect them. So I think verticalization is one. The proprietary data is also a big one. We have a billion proprietary records. We have 135 million in our verified database, which is prior work and education backgrounds. And we have 900 million in our national criminal record file, which is prior criminal data. And I think that gives us an advantage, the fact that we can leverage our own proprietary data on a very state-of-the-art user experience. If you recall, over the last year plus, we've been launching a new candidate experience, and we're getting rave reviews on the user experience. So customers are very happy with our state-of-the-art tech platform. They're very happy with our proprietary data. and I think another thing that's been driving a lot of growth and we talked about it earlier around package density you know with the whole world being a very challenging environment that really helps us you know sell more and we've got you know as you know the first advantage story you know we've been leading the charge in automation so we're using you know Automation, APIs, AI to help us get data, make a faster interpretation of data, get results back to our customers with faster times. And that's also really important. All the investments we've literally made over the last 10 years are making a significant difference in our selling ability. And then the last thing I'll add is that there's a pretty strong trend, and this started maybe 18 months ago, maybe two years ago in the industry around vendor consolidation. and Global Expansion. So a lot of these multinationals, these big U.S. and European corporations who do business all over the world have been going under vendor consolidation programs and also looking for vendors like First Advantage who can do global screening. And there's very few of us. And that gives us a significant competitive advantage in the market. And If you look at our upsell, cross-sell, the biggest driver of our upsell, cross-sell is definitely package density. And the second biggest driver is global expansion. We have just done really well in winning more business, more share of wallet within existing customers. So, for example, if we have their U.S. business or their EMEA business, we're now winning their APAC business. We're winning their business in Australia. We're winning their business in India or wherever it might be. That's been a big driver of upsell, cross-sell.

Thank you. We'll go next now to Scott Wurzel of Wolf Research.

Scott Wurzel Hi. Good morning, guys. Thanks for taking my questions. I just wanted to go back to the comments you made around implementations maybe kind of taking a little bit longer and going into 2027. Just wondering if you can give a little bit more color on what might be driving that.

Scott Wurzel Well, I think the good news that's driving it is volume. There's lots of them. It's a good problem to have, and we're obviously working on ways to accelerate that and speed that up. But I think that's the only driver of it is that we've got a lot of goal lives. We've got a lot of business. It's a good problem to have, and we'll figure out a way to revenue faster and automate as much as we can around the implementation and onboarding process.

Got it, that's helpful. And then just a quick follow-up going back to capital allocation around the debt prepayment levels. It's good to see the off-size prepayment that you guys announced. And just wondering if, you know, I know these things can be a little bit fluid, but if, you know, you talked about in your guidance commentary around if, you know, trends remain consistent, you would be towards the higher end of the guide. Could that potentially be indicative of a continued elevated level of debt prepayment going forward?

Yeah, Scott, I mean, I think the good news is we've got a lot of free cash flow and we have the ability to be opportunistic and flexible with our approach. So certainly, you know, if interest rates, you know, trend higher and stock price stays higher, you know, we will obviously probably lean more towards debt repayment. But, you know, we'll keep our options open as it comes around. But You know, we are generating really good free cash flow, and as revenue ramps up, it continues to stay strong. You know, our margins stay strong. We've curtailed a lot of the acquisition expenses. So we're seeing a lot of that cash flow right to the bank account, and then at the end of the quarter, you know, we'll make sure that we have a balanced approach on what to do with it.

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

Great. Good morning, and thanks for squeezing me in. Just one quick follow-up for me on the capital allocation discussion, particularly as it relates to M&A here. It sounds like you guys are getting towards the finish line of at least actioning out a lot of the synergies with Sterling, and that's been a really successful transaction for you guys. So I just wanted to see, sometime next year, would you guys be Open to going back in the market with the balance sheet and the synergies actioned in a good spot or I guess do you guys feel that you largely have everything you guys need from like a capability and platform perspective? Just any more color on how that could potentially fit in the strategy once all of the synergies have been actioned would be really helpful.

Yeah, Kyle, that's a good question. And I'll kind of go back to the last question. We've got the luxury of having good cash flow, and I'll let Scott write some comments here in a second. But the good news is, for now, our focus is taking that cash flow and getting our leverage where it needs to be, being opportunistic if the market creates the right opportunity to buy back shares at a very appreciative amount to first advantage. You know, as we shared at our investor day last year, you know, once our leverage range becomes down, we kind of have a little bit of a wider playbook. Certainly over the short term, you know, our focus is, you know, maximizing shareholder returns, getting leverage down to where it needs to be. I'll let Scott chime in a little bit, but, you know, on where he feels we are from a capability standpoint, but certainly on the short term, that's kind of our core focus is probably going to be on one of those two assets, capital.

Kyle, I would just add, and Steven's spot on, first, let's pivot back to the 2028 Investor Day financials that we put out there. And we put out there revenue ranges of $1.8 to $2.0 billion, $560 to $630 million of EBITDA. 31 to 32% of EBITDA margin, $1.65 to $2 of EPS. Those are phenomenal numbers. And we feel we're on a path to achieve those numbers without any M&A. So that's the good news is that we don't feel like we need help M&A-wise to achieve anything that we want to achieve. And we love the results that we announced today and the guidance that we've given today puts us on the path to achieving those numbers. I will say, though, that we'll always be opportunistic about M&A. If something falls in our lap, if something that looks appealing becomes available, I think it would – giving – Knowing how good our sales team is and the 80,000 customers we have, if we could add on something that would give us more to sell to same buyer, and it's more of like a plug-on or a plug-in, that makes a lot of sense for us. Now, financially, we're not even looking because we're clearly focused on deleveraging. But as we get into 2027 and certainly into 2028, I think we'll be opportunistic. I'm not sure we'll be hunting for stuff, but if something becomes available, we'll take a look. We're just laser focused on delivering those 2028 Investor Day numbers that we had given, and we don't need M&A to get there. Understood. Thank you. Nice quarter.

Thank you, ladies and gentlemen. That will bring us to the conclusion of our question and answer session and also bring us to the conclusion of today's conference call. We'd like to thank you all so much for joining the First Advantage second quarter 2026 earnings conference call and webcast. And again, thank you for joining us and have a great day. Goodbye.