Sterling Check (STER) 12 Nov 212021 Q3 Earnings call transcript

Hello and welcome to the Sterling Third Quarter 2021 Earnings Call. My name is Emma, and I'll be your operator today. [Operator Instructions] It's now my pleasure to hand the call over to Judah Sokel, Vice President of Investor Relations to begin. Please go ahead, Judah.

Thank you, operator. quarter call. third Sterling's to XXXX earnings Welcome

of presentation made we & News available to website. prepared Joining of Financial remarks, conclusion Sterling; on open are website Josh during slides Officer Investor and on this Executive Officer a questions. Peirez, posted Chief this at reference and will Sterling. slides me be Relations will the The under accessed Sterling's today call, be replay of we will can Peter Walker, call The the Events. this will be After Chief

all Before slide to we discuss risks the our results, explains measures. which non-GAAP the I of on encourage notice of statements and listeners use legal the forward-looking review two, financial

prospectus that from risk for a Additionally, refer statements. please discussion could differ materially actual final factors results these to forward-looking to our filed cause of recently

on and will Our discussions certain measures. slide this non-GAAP financial call presentation include

most the release presentation GAAP reconciliation over measures, comparable measures directly to such morning. Josh this issued in in are turn and will Peirez. I to the For now call the to our the appendix earnings

Good completed Judah. delivering financial on Sterling's adjusted call revenue currency results, EBITDA and quarter growth. for XX% adjusted company. growth, joining We a you, first while XXX% quarterly EPS Thank and earnings thank our as exceptional. was constant organic third our public morning, IPO, successfully you us including record growth, XX%

provide you unique people, guidance In addition XXXX products, also Sterling that to reviewing you with technology and make will these results spend we discussing and some with and differentiated. time the today,

nearly market million. at Select per a and under trading approximately of NASDAQ outstanding, $XX.X we our note my completed providing proceeds proud share the and $XX approximately range priced XX% STER. shares our XX, trading of that symbol first with September the we of net XX.X offering to Before shares, primary core cap $X.X of to of I'm the began million turning day our on Global IPO of ended diluted The above billion market the on presentation,

Sokel was as also take for who sector next partners he IPO opportunity we I as this Relations. joins as for as we're a our like process, our proud President Vice our information of on moment Judah and business. to to from him as have to of services support and thrilled welcome decade well our team Sterling, a us continued a would Morgan, stage want I the Investor Our clients and public nearly Judah supported the for this that JP successful business covered thank where to and join embark company.

role. with Judah new sure hiring Judah, and Our his value investing work place many of with he talent to I'm you a in we in of partnering you the the excited like know demonstrates is community.

Sterling I For and those of company to newer you the like would who industry. to information story, share some are our about

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our percentage XX our addition will provide on advantages. have continues color half our platform to shortly over integrations Over platform to technology in our discuss of revenue I is We today competitive and additional increase. when integrated API. world-class cloud-based the I

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our First global is scale.

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initiative We Ignite. our through called a have Project three-phase technology invested in

involves eliminating related XX% for our that the two cloud we been of running shift to technology consolidation solutions to and availability the our with achieve cloud, to reliable revenue. older clients state-of-the-art where product and decommissioning around This already the is and our our our the for our particularly scalable. enabled Phase both cloud-based to complete. delivery. to migration products. transformed resources also clients next the are their our experience capabilities our of and business, in shift Ignite able involved now We platforms. three building and Phase and for way one and has complexity, resulted has Phase mobile clients. levels over candidates two-thirds infrastructure provide we've the of the offerings of gen modernizing Project are ability highest are our on-premises By

to how Our advantage orders. we technology extends in fulfill

of XX% put the pandemic, year within clients. the of the within our in closed. in completed our were last drives day. XX% courthouses least most jurisdictions, most To industry. over criminal business, have in delivering criminal rate the the leveraging fastest In and we RPA our a than dispute having We the U.S. highest automations, automated the of searches. number hour screens demonstrate the results, times among searches were though bots, how delivering for even with able completed clients at X,XXX APIs country the XX% for for been of are the It's first automations. have are first over to U.S. of and fulfill height goal decade of systems we at it and the U.S. it's XX% in us, representing lowest first quality the not the results with turnaround But investing we more particular,

turnaround identity and critical set Our terms attributes but remote our in clients service times we that believe during opportunities. as pillar powerful step equal all are verified rather more provider and win for a are with our give candidate which business. data finally, exclusive and access time. to not the differentiated is in of strategic a verification believe ID.me, data and with process. is the pre-hiring any Through process. product, a us to become service the adopted and will should up and verification. over times We're presents in tool in is challenging in the checking excited process. Service our growing before, verification of verification speeds approach hiring to opportunity be we increasing and we to verification our a million a today huge over best-in-class first ability about widely apart employers first a growth majority even as very partnership percentage And the ever With turn of And of we growth view background work, us. this background retain identity of faster not a partnership, as a accurately, identity step XX for more breaches small, screening will Identity employers identity especially revenues. but why identity this users. do We the are reasons Identity than screens We

comment me let Now, on our third briefly quarter.

eight, Looking saw at strong and regions we across performance all industry slide verticals.

our international constant Our XX% U.S. an on basis. organic by XX%, and by business grew business currency grew

the service from also ending and points we market. broadly FINRA, opportunity, services year XX-month strong resignation retention. our environment a the of announced our macroeconomic employee of client XXXX, to client key the yesterday. which XXX third the identity exclusive We in position vertical great continuing in demonstration financial theme September retention verification through trailing remaining exciting basis In by the the for turnover expanding period, to employment continued XX% we and offering quarter, an partnership up finally, prior a approach with remained period our strengthened And with the an experience proactive exceptional positive,

outpaced Our over job the And take will through you the to quarter third U.S. our financial Walker, business now, Peter full in quarter. our I guidance. and hand significantly year to XXXX for results growth CFO, Peter? it

Josh Thank you, good and everyone. morning

I financial on our attributes model want Before to XX. the of results, QX key our diving into slide review

Our resilience and to financial continued organic expansion. strength our model growth deliver drives ability and strong margin

revenues as predictability or and have are We high the and multiyear in with renewal generation have of auto revenue primary exclusivity majority contracts designation.

there with to is pricing of termination the We the in annually, contracts. and convenience for no the period for contract prices fixed have cause ability increase our

revenue very Josh base, strong mentioned earlier. a have We also as recurring

free strong for cash generation results in of All business. flow the this

technology us new cost. platform to add business scalable and with Our incremental clients highly allows minimal of cloud-based books

We dollar outstanding of adjusted every outstanding margins in of business days. favorable Capital with have requirements we XX of And with last, minimal, capital days working approximately capitalized days and incremental to sales days $X.XX are approximately this mostly $X.XX payable have dropping of software. EBITDA dynamics incremental XX to adjusted high EBITDA. revenue comprising

company our continued particularly the compared we saw U.S. impact of quarter healthcare, in growth the its quarter the strong industry of recent the of revenue from demonstrating presence. gig Pacific. grew to generated all of Josh verticals, playbook revenue the attractive. exceptional are million leading We third quarterly of by well quarterly Asia XX. strategy for XXXX. international dynamics large and prior All Turning on we a benefit our industry of growth double-digit during revenue quarter, vertical was driven third mentioned, in XX% as year. XX% reported $XXX.X of outside the that generated in of the to in was for services And a third up-sell, U.S. third an trends quarter of revenues. financial in increase record XX% XX% business This results most continue approximately in growth, the the organic saw overview We Year-over-year, XXXX currency revenue businesses of U.K. to position to Approximately on quarter. and our our the recovery performance million as as slide our included execution of the our U.S. and currency XX% Revenues market revenues third due an by organic base to The XX% growth. XXXX, customer the the and growth revenue executed currency. business from XX% in new in compared the and the third quarter of attrition, There quarter. constant to including economy our cross-sell, and of compared growth of quarter, no international growth basis, XX% our revenue results constant increase the our X% COVID-XX in pandemic. in $XX to with outside including U.S. the foreign impact our acquisitions from grew international of net was part The growing

margin line was our from adjusted prior year-to-date. to point second our consecutive net reflecting the margins, a a proving quarter for year revenue adjusted third basis XX.X%, compared quarter XXXX. EBITDA. September third scale. results XX% EBITDA adjusted of EBITDA with was million, of and margins as quarter record record company incremental the XX% incremental year-over-year was a EBITDA Adjusted quarter a that scales period, third of EBITDA profitability quarter As result company's the $XX.X strong expansion XXXX and the represents in XXX XX.X% of XX% top for attractive quarterly of in This This increase third adjusted margins, the

quarter of This by driven of share in in rate year-over-year of was of in or quarter per represents share $X.XX Looking EBITDA XXXX. adjusted triggered $X.XX and primarily effective income had ahead, per tax improved revenues revenue low cost adjusted growth take XXXX $XX.X the change and expansion or to the our tax earnings third expect due This net streamline automation model growth our related other was XXX%. transfer third margin XXXX of I we per and to a leverage. global $XX QX, policies. adjusted The operating growth year-over-year should share to QX optimization cost to pricing in and return by as We XXXX. compared million elections base. estimate to year million adjusted continue to initiatives income advantage full rate of drive diluted XX% to for grow, net further our strong the diluted

touch to model. of on resilience the financial performance Now, I'd historical like and our

As year-over-year most including has been QX, XXXX QX, significantly to organic from our XX%, QX XXXX. during impacted business drag revenue the from XX, average slide our which seen QX, on and XXXX, COVID-XX, growth

the up Our bounced that very to $XXX back million. broad strong revenue revenues in in XXXX quickly as well QX, for The us set return period, reflect in growth opened XXXX back LTM during QX, based resulting performance up. economy slowdown of XXXX the macroeconomic but September performance

strong Looking year-over-year strong XXXX EBITDA trends slide you on momentum EBITDA a had million. XXXX, see at in recovery, We September profitability has been followed of XXXX XX, similar interrupted in adjusted that revenues. adjusted by Since $XXX XX%. adjusted our to has COVID-XX path can resulting was EBITDA average growth our QX, in by followed a LTM

implemented normalized million slide was during the Year-to-date, cash XXXX. was growth, to and of period flow as strong prior generated charges This to expense well IPO. $XX over one-time the we've as due revenue related XX. cash for reduction free to $XX.X million, Turning permanent of non-operating increase an

third of and times total EBITDA, target. net inside million. quarter Our the net debt with three squarely to $XXX million We leverage two cash our $XXX.X to was times adjusted QX cash X.X of equivalents XXXX and debt ended net leverage

our Our IPO On facility. this gross credit we increased to of our With together cash net balance debt used $XXX received by reduced primary in of interest paydown we November proceeds have borrowings million facility is capacity QX, and connection was revolving our maturity inclusive XXXX. on net lien million with Also, under outstanding, credit proceeds million. we from cash we've $XXX to first of in connection of facility, X, to $XX million from At expense $X.X the we the extended XXXX hand million, million the prepayment, $XX.X XXXX, $XXX date with IPO. million letters least revolving of with of and credit available credit our $XXX.X IPO, at August annually. June under the borrowing

Let's touch on our now slide turn to allocation XX capital to priorities.

on operating investment other product robotics, we leverage in automation, focused and network opportunities, process, optimization. vendor organic projects would internal continued and increase and First, improvement remain development new growth that through

have of Second, robust a acquisition opportunities. we pipeline

existing adjusted the On of acquisitions. now We long-term are result provide new us three momentum expand are focused times quarters in slide markets XX, U.S. international potential as continued full maintaining which is ratio leverage for on targets fourth balance with year any targeted sheet small three quarter. tuck-ins, two with future with or to finally, far increased our of in to we variations absent are committed that a XXXX, net strong so scale complete debt into EBITDA geographies. And temporary strong we to a guidance either a provide

million acquisition. million, revenue XX% to XX% million, to foreign XX%, is benefit fluctuation organic and our generate full of expect XX%. growth contribution growth representing XXX of EBITDA currency representing no XXXX in Thus, to XX% for million to implied we from constant This to of points currency assumes of growth adjusted to a basis XXXX, $XXX to from guidance XX%. $XXX XXX $XXX year-over-year year $XXX of For revenues year-over-year and

leading will of guidance displayed that tailwinds, be XXXX notice, will that driven growth continue cross-sell. XXXX. base have growing XXXX stronger we continued the a industry be by over growth, and client a XXXX, more favorable up-sell, strong implies notable will albeit client months macroeconomic the you QX, first QX, robust at will through given As QX, wins, the strength pace moderated new retention, revenue we nine

the cost adjusted EBITDA to of XXXX. cost cost an of to leverage benefit through base and XXXX which operating XX%, be we estate our discipline, ways for XXX would a footprint. and implies continue from optimization consolidation guidance our strong point margin savings to expansion optimize and Our should continue real QX, additional initiatives, from basis look our including

Finally, modeling, $XX $XX your interest our approximately XXXX of and assuming $XX compensation to with to a now, hand it close long-term back share I we're of approximately count help a Josh to of million, million. approximately with expense of CapEx And million, review stock-based of XX.X will expense targets. million,

in the M&A. to Thanks and new our these, opportunities already growing Peter. winning summarizes exploring Slide XX continue including thriving on in clients, markets. identity some background strategic We've compelling our growth in many touched geographic of expansion momentum

large In of addition a to these, services increase opportunity we significant new clients. existing to adoption of base our see within

We added have package our increase minimal a flexible with operating model density that allows products up-selling and us cross-selling cost. by to

clients In over line of we in than more purchasing product one increase fact, successful density new with and our identity U.S. we to package fingerprinting. the XX% see opportunity such cross-selling and are as further very products the clients, to in with

continue in a the vaccination such is solution launched to we third also products One market. the verification new quarter. new to introduce COVID-XX We innovative example

verification FINRA serve work to partnership by as the to and securing us. is The to recently our strong partnership their for live identity collection agency's us, fingerprint soon. with yet results with opportunity not is and transition as offering expanding fingerprint also has wallet provider. are go We an our channeling and FBI exciting an designated has FINRA identity This to contributed both outsourced our in exclusive

our long-term X% year, targeted for X% X% to by with margins our to of up-sell, as that into my we and target The QX adjusted over our when XX% close XX% confident XX% what beyond the to X% Longer growth to X% base of we growth, guidance has to or slide expanding ultimately momentum to a X% February, a remarks to more from and to our in EBITDA our X% from very revenue XX%, targets. feel with to our includes cross-sell Let's profitability next we offset of XXXX X% in in period. annual our X% to organic fourth trajectory plan close XXXX, record quarter prepared provide with revenue turn are XX term, discussion to business, attrition. comments, been heading but report are X% results. we results We about new we far of XXXX. thus and To out year close company thrilled good rate

We drive have further runway existing for growth on with expand business and and client as we our continue our clients, to strategy enhance wins, client execute new retention.

incredible our place. the That line remarks. up truly Sterling At qualities, concludes which this to with focus, for industry want and geographic a make the I continue people And global special entire team comprehensive clients, questions. differentiated care will our We operator approach, our the can-do prepared and lead delivery solutions. the your finally, to for verticalized and please for model Sterling attitude, first and such thank time, open scale,

George Thank Tong Goldman you. Please from George. go [Operator Instructions] Sachs. Our question from first comes ahead,

Your open. now line is

Hi. Thanks. morning public on release earnings first company. a as and your congrats Good

year-over-year. do separately, So, customer in what wins, And attrition cross-sell, the if the growth APAC? up-sell Can existing XX% customers from from into this among that report revenue much customer came how quarter base much you you growth, growth new of how came grew deconstruct then, was? and

Sure.

in numbers going I'm morning, cover. so address consolidated, good be this to It's George. included will I you APAC to Peter. talk this So, the nice morning. It's to

low that's growth of that in And about net we XX% base think we target the think you the X% if to X%. the of end should at So, of about attrition attrition. our disclosed range to call,

think components base there there's XX%. growth is say, other up-sell. then One the in let's you and And should So, cross-sell, of volume two growth that is about.

is we for that outperformed up-sell target for well the And Our target. cross-sell, X% X%. to quarter,

to we by Our post-COVID. X% target volume that rebound and growth outperformed the driven a base for significantly target, X%, is lot

revenues you're contributed a third you then it. to gig gig Got how to what results U.S., the The tailwind U.S. and broadly Can much Okay. us remind in and economy revenues quarter. outside vertical? in gig of within the trends was significant the seeing the

Sure.

as disclose additional XX%. But our do a three APAC, share and discussions. you results a and third. that internationally information XQ would with some and at from sits what at not we XX%, third, can XX%, So, I of should a printed, prior you EMEA information I publicly. Canada, Canada is that our EMEA, regions, third, at We APAC with now think say talked

seeing you're EMEA in with in by So, the driven growth being along APAC. gig

the it's George, very Pacific excited with continuing into starting add just about Continental Europe Josh. gig focuses Asia I'll in in global our and Europe. seeing And Pacific, just to we're in move And particularly business, we're what Asia region. throughout we're now

growth, are don't good the continue future. the into that specific driven and gig regions. of So, significantly the number, we seeing if but by you gig it's disclose to international in growth and think going combination both enterprise of our U.S., we expect clients, growing really the across our And in

you. Thank Great.

Thank you.

Nicholas Our Please next William question today comes from go from Blair. ahead, Andrew Andrew.

is line open. now Your

I appreciate and good that could FINRA my you questions. and taking one, morning. the bit contract I a little expand was Thanks on hoping first you more relationship. My

financial relative to terms incremental new And believe, relationship pre-contract? this to could that perspective the this your services particular? think pitch, client the effects you'd strategy, ability that. I or could what companies, be growth from number if go-to-market of within expect your a impact or in financial revenue relationship to the maybe, the client are new you from logos, of questions from in One, two, follow-on two size what I more that impact relationship? importantly, And

Thanks, for the morning. Josh. Andrew. Thanks Good question. It's

soon it been partnership. nailing two phase FINRA the expect in exactly time the implementation this now. about for the to you're and we excited do quite very we're I think we're It's works parts. And as So, in go right some live

be every another fingerprint collected is through to fingerprint competitors. it's of or collect going first, the the whether to that processed provider, by will that including of that So, FBI FINRA we for all the directly and channel works relationship if single way is go Sterling regardless our

like the tollbooth all we're perspective that to FINRA sense, be processed from to that have and So, a channel for a in FBI. for revenue fingerprints

does won't the and financial as be figures, this fingerprints disclose be a financial regular processing us, FINRA into the through disclosed is seven single growth but all pipeline any haven't mind pipeline our institutions We background deal, provider. since for to from part to seen vertical you already practice a think is in then should year. from seeing going will Sterling grow and reason second their their into the next that And expect for institutions. impact great sure. about great our our has financial we've services them as And strong financial really And give a screening

some Thank easy then on get might be. But Great. for now, And the what was kind like. M&A on your how That's it reasonable and or of more I could could opportunity any very in in areas to color provide you those follow-up, know I of market? me time if is could prepared other my what the some potential price or a interest of know right hoping provide you. didn't Or right disclosed you -- environment spend little set you looks included you bit good outlook. the in on how M&A just remarks slides helpful. excuse your a competitiveness now, this processes -- color

Great. the follow-up. Thanks for

we're prospects. So, excited the M&A about

also from to larger, And the as as players, organic industry the the players as U.S. large players. than organically continue deals we consolidate, globally. only from less both are again, three and inorganically to midsized expect but alone the of other market, let probably win We smaller large well XX% continue to

is exciting us. that to So

and have. we we're those in significant other we those a a can In and presence great today focus share In But to is looking at. profitability strong terms out see our have on markets there. where see already, would we things pipeline and as that for where be scaled to to have or are opportunity of synergies have inorganic, of smaller we we -- tuck-ins. the there improve going the actually nothing U.S. Obviously, players, us of number those a that a of we

fit. again, of terms much it's In about competitiveness, us, for more

win can fit, see make prices those deals sense for at think I the we us. we think where that we

we then those last at, a have We something haven't for certainly asset, the we And XX% we foothold four, a in have already five look a market that. And us. do we to to anything we the that service providers of scale areas tuck-in the and that's a grow other even better. prices there's continue a that scaled U.S. in organically, those much can to And there scaled don't markets look would be that gain would terms exciting the we in that could presence, where changed seen outside given we outpaced then buy around we would chance in if think where world shared to growth, years. the really other

really with in excited So, things to we're share you opportunities the about the have hope future. to and

Great. Thank you.

Thanks Andrew.

you. Thank

today question comes ahead, from Morgan Stanley. next Our Please go from Toni Kaplan Toni.

line Your is now open.

the so you strong much. quarter. Congrats on Thank

there. the Where excited that You drivers you target about What mentioned you you. those the most upside most innovations of got talked for you're see drive you drivers? most XX%. of the sort about three growth? are that to see do to risk? to Thank the do you five-year the revenue Where And to X%

Thanks thanks question. Toni for the And and morning. good

Peter of and of A drivers more then add. I think, year-to-date. and all, maybe So, of the quarter we couple third But Josh. the over-performed on to also for thoughts it's those first has all in

is any think all do of we on So, to at them better there given period. do potential

new to we and control, I retention. the look on improve things think our it's business we up-sell continuing for us, when most cross-sell, at generation the on

think where outpace. potential continue think fair than more faster share, an that's there's to area we metric growing our that's I than we in think So, And the market business, we're new our view. to when a about winning

up-sell, when adding in those identity the on on other cross-sell, upfront we identity solutions think Secondly, about the particularly in monitoring. well as space, background post-hire screens, as adding checks services

up we that clients to in package in right? Again, That's decision. own is not density our in base increasing So, is our that is control. their see whether grow control, our something their

I to So, numbers the future. XX% think the shift being remind have where identity post-hire provide space previously in a into density reflect have the two we have cross-sell, the between XX% the and expect the in upside. shared And with not see on inflection that the I new roughly are faster. those will spaces. that you, don't we we in although do when mix, through revenue screening are other areas over And monitoring to targets improve we the package the grow provided going-forward that and you and of points, our the most able in others control long-term both is would and focused we do in the we really capabilities our where time that split space post-hire see it that those identity monitoring hit customers those up-sell pre-hire we acquiring would those that

add thing I would the to And we George, for is that I unpacked base for growth that the only the think, quarter. Toni,

two that. cross-sell of being of interesting growth if a to So, and the you we’re to gave the and cross-sell, gave as on what’s target up-sell, you is we target, both But think then you components X% to really over-performing significantly XX%. X% we over-performance delivered And base XX% X% at the quarter significant those. X% volume, new clients, of that there

So, shared. Josh what just behind points proof

versus and then, about I hoping might sector where was Terrific. be you or think my follow-up. could talk And underexposed you you over just peers. exposure for

imagine You tailwind potential gig also, a mentioned the being for you. economy And well. as I e-commerce

you wherever think particular feel So, to as areas well, exposed investors or versus to how either do you others like peers? two be you understand you're for helpful might those

think provider. a our we one winning winning geographies chosen will Thanks And focus things is of on We fair we've share. our Great. Toni. think based we've we're We verticals think the formula. say, got we're a our that’s I proposition us. on and best our where And we

of chance And to so, that verticals our in think have we we all win.

we terms little We benefits one a And others some space, to aren't in believe where share which in concentrated being performance. shared we balanced as discussing maybe of we're our the don't of in exact we're we not in bit opening individual any actually in And well vertical. is have are think about take overexposed oversized But we as exposures cycles. Peter advantage saw as remarks, verticals. just I'll our different of

Sure.

for the launched in U.S. and all quarter, year prior double-digit growth over performance So, strategy and But focused in services, we quarter performance of exceptional the we note across the in. with really growing that the were financial beginning when as in we areas XXXX the pleased business we our were did healthcare at shared verticals because those

execution So, strategy. against that the to really pleased see

you. Thank Terrific.

so Toni. Thanks much,

Jason from Capital ahead, Jason. from Please KeyBanc next Markets. Our comes instructions] [Operator question Celino go

is line Your now open.

think have is seen But Great. Thanks off seen my question, what not nice it Maybe good? fully here. and upside building we seeing not has question areas looks for we're good taking industry potential recovery, further maybe from more very recover of you recovery still morning. like as that previous or yet, some which

It's Josh. I'll see first if wants Peter Jason. Hey, Maybe go add. to and

enter I we but of part of think a of that months first the COVID. trends two our XXXX this this in were is before and view is we is recovery, lot that seeing XXXX

quarter, said our as overall you XX% Peter in by growth of look rate starting I beginning think at you So, the the when XXXX. period for shared,

we kind really expected be. So, where this for to of is us,

to full recovery, like so, terms And we're I think seeing things begin of hospitality up. ramp in

of probably just a that seeing coming there. clients have online. more restaurant, There's back number the type We're in we So, businesses. hotel

seeing you tailwinds shared of of is business recovery back what have and services, were from there But seen there's business hire is as we we guidance And QX general pretty is period we poised year-to-date. our ramp as is to I I strong plenty embedded or and up. all are throughout there verticals the what in think guidance And kind and regions. It even are the think in to assumed think, it. momentum underlies the the what still from that as financial like our whether in it that's in year, again, areas our well those tailwinds, slow call view, good across our it our for the quarter. entities that Peter

could verification. another to most about the about one way, industries And Perfect. that industries here? these be should compelling? adopters think we early identity can then, be the Or the that maybe think how solutions When we find said on

about. So, industries I it's think both to geographies and think

you if warehousing that very the delivery of very role. are see right to both areas think BXC come volume a have those strong of remote And any service key Obviously, a non-gig plays you hire you in-person verification when remote and it high where a identity services, hospitality starting sectors we're But even going all, think be to industries. U.K. in example, work, forward. anywhere that restaurants if need And think gig element you we to about all markets is for Australia, have about outside other in and other U.S., in-person Also, and first key going where work in So, in you're model is too. you true where these when the type person perhaps we that the about hiring be the think maybe this increasingly of we that play. sectors, areas, sectors. has are to or think you work have whether not can time them, up identity meeting strategy our in

identity you're you upfront people happen hire that So, many to save quickly, and you're of lot money verification in so a trying those places time as where people. having trying to can onboard

based. this see that And face-to-face. are really as industries on we to So, then be even broad the going

an a If person, could where upfront. a spent that time you somebody we confirmation you're United check required that think to States, done about that do you've you the to continue. on for all That's expect regulatory have already after money requirement background But starts. the and I-X honestly,

But you earlier. the build where is it on makes that the hopefully, think color view seeing everywhere. adopt sooner gives my we pipeline a sense we're our might and little of bit answer So, it places

Excellent.

quite actually that's you. Now helpful. Thank

Baird. Marcon Mark. ahead, Mark next from Our today comes go Please question from

Your line is open. now

impressive Good wondering terms could talk split if morning terms you of disadvantaged? We And sales. new the Hey. a that? what see of about domestic how and little of quarter. strong from new in come the versus characterize would was had in in those bit some of most Did you be logos? new contribution Or I'm of the the would logos. that naturally international congratulations smaller you terms really of source the on players

Mark. morning. this Yeah. Hey, hear Great from to you

but to or through provide don't we the that really would business, by regions. the growth saw the say new growth I verticals, and contributed in so in the So, split the all revenue verticals we internationally across

performance across healthy really So, the there. globe

Hey. Mark, it's Josh.

think just jump in, I by That's design. I'll right?

have They each new So, general our their have business. business, around cross-sell, and established our targets directors, our targets up-sell. they have vertical of around managers we have growth. around They targets when geographic base have They growth managing go-to-market approach. around we And and managing targets metrics.

it targets add for them to confidence provided provide. And these long-term up hit them, that very us to much of in that we've So, you. given to required part which numbers and beat the we is what what we've gives it's

happening was based. stands great it it's not said, the thing because out to in business. broad that Peter across as is particular that which So, a the see There's good quarter,

that a the IPO of going on there's the the just or scale logos three, wondering, lot Great. then, how And we follow-up big competitors are some about one process, did were most of of technology. through those or from incumbents the fairly when the is, new outside of discussion were I'm or of come a other incumbents, lot breadth disadvantaged in "peers"? the terms of lacking

peers it take midsized did large logos was We and competitors So, Mark. our as peers, our our from both, well. smaller

we on well. us, client not better focusing only we can every they're or provider competitor we another. And not focusing one We're strongly than we for us. serve the believe if on are think that serve with So, We current their clients. can

show try to And opportunity get to that just so, the we them. to

it us spaces outside client on one see from go some white wins the I that is a a using from point make, And they're not does come that particularly the of come would able someone work competitors. U.S., greenfield, where and currently So, of in all and we we're doing, the other replace the from to lot. really

Great. and the And obviously international markets, had a quarter in particularly EMEA you the U.K. then, tremendous

scalability in the of kind how the did. you and an infrastructure was update localized approaching of in wondering that level us You doing the approach. well I'm past can are what same if U.K. terms U.K. highlighted give the of markets and other

scale Mark, So, can same we've three got we're business And believe we we what markets I say, infrastructure from. in today. the the that in of have level the we would that

do can without adding cost. we So, additional that

India. I say Asia-PAC that were was So, two into expansion exciting things and our expansion Zealand business, into would that in pretty New

just our an where example and leveraging of to you we're So, for current footprint new business expand. win

which times, perspective, you is from we your interesting? allocation? Or leverage Should And two an -- to the about expect three should which already we is target then, most markets capital Great. acquisition seem How to so ready think paydown at you're even there. more debt? like

Yeah.

So, we did.

in which We investing When of plan ratio, are product in be strategy, business. at will capital growth, new there, for growth about to the have really priority opportunity invest think a organic leverage X.X%-x three our two to the organic We the allocation first is lot is sit right? right? a times well drive within still target and I and of to

second, be The M&A. we'll focused on

really would there be focused three during U.S. One covered would call, areas tuck-ins. we As in. that the be

dry existing powder $XXX a the to for to geographies. scale forward in the two growth. increased million quite expanding continue then available to other on where We And right and third puts new make and us the million us of the the revolver, maintain of three into have right times. that would we place that we company balance ratio provide the now in going $XXX sure drive can things us international plus investments The of a would to markets. be with evaluate that that be And the sheet, making leverage lastly, do bit about

great. That's Thank you.

other well is this probably upgrade And S&P thing morning. the did mentioning worth us as

plus the Newswire, credit you if saw AB us a but sure not across from So that B watch come positive took stable. to they

follow. thrilled other see sheet of the will rating maybe recognition the of agencies from So, expect really strength agencies the and our rating balance to

today from question final ahead. Rosenbaum go Please Stifel. Shlomo comes Our from

is line now open. Your

quarter, play other EBITDA significant from as gig this all The automation revenue Adam Or well, significant for margin sourcing? like through? there Hi. cost Shlomo. at were This is on expansion or incremental is drop increased in items data the

us say flow-through would and level. purely is I growing OpEx revenues same this grow the ability the nearly to Yeah. for from without

for last quarter had a we quarter year. the XX% to the flow-through prior compared So,

forward Josh. we other through can do it's some to additional future continue over look investments in tactics would to started see based to say that making we and Adam, that, think we drop I in through sharing make those. And automation also have on with to we we've that the And initiatives expect improve we calls. have. and we you and the opportunity And margins expand time

for XX% I would say quarter. adjusted we're thrilled at EBITDA margin a the

we company. is for as the it record So, a mentioned,

Thanks.

no have today. We further questions

you Thank joining So, Please the this XXXX third day. session all Sterling's of rest for also the Q&A earnings enjoy concludes today's call. your quarter and call.

may your lines. now disconnect You