Slide 1: Q2 2023 Earnings Presentation
Q2 2023 EARNINGS PRESENTATION August 9, 2023
Slide 2: Forward-Looking Statements; Non-GAAP Financial Information
FORWARD-LOOKING STATEMENTS This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, our operations and financial performance. For
Slide 3: Company Overview & Q2 2023 Highlights
COMPANY OVERVIEW & Q2 2023 HIGHLIGHTS Scott Staples Chief Executive Officer
Slide 4: Company Snapshot & Highlights
COMPANY OUR CUSTOMERS SNAPSHOT & HIGHLIGHTS 33K 100M+ 50%+ 97% 13 Year Customers Screens of Fortune 100 Gross Retention Average Tenure and ~33% Fortune 500 Rate for Top 100 Customers LEADING GLOBAL PROVIDER OF EMPLOYMENT BACKGROUND SCREENING AND VERIFICATION SOLUTIONS OUR TECHNOLOGY OUR MARKET 1 935
Slide 5: Key Business Highlights
Q2 2023 Capital Allocation • Board of Directors declared a one-time special dividend of $1.50 per share; represents a greater KEY BUSINESS than 10% return of capital to shareholders HIGHLIGHTS • Continued share repurchases using cash to buy back ~$27M of common stock, or ~2M shares, in Q2 • Committe
Slide 6: Financial Results & Outlook
FINANCIAL RESULTS & OUTLOOK David Gamsey EVP, Chief Financial Officer
Slide 7: Q2 2023 Financial Results
Q2 2023 FINANCIAL RESULTS ($ in millions, except per share data and percentages) REVENUES ADJUSTED EBITDA AND MARGIN 1 ADJUSTED DILUTED EARNINGS PER SHARE 1 $201.6 $60.8 40% $0.25 $0.24 -8.1% $185.3 -4.0% 38% -8.0% $56.0 36% 34% -7.5% 32% Constant 30% Currency 30.2% 30.2% 28% Basis 1 26% 24% 22% 20%
Slide 8: Balance Sheet Strength Provides Flexibility
BALANCE SHEET STRENGTH PROVIDES FLEXIBILITY CLEAR AND CONSISTENT CAPITAL SIGNIFICANT CASH FLOW GENERATION MODEST NET LEVERAGE ALLOCATION PRIORITIES Pursue Strategic M&A Opportunities • YoY cash flow from operations declined due to • Net leverage1 of 0.7x at 6/30/23 • Vertical capabilities lower Q2
Slide 9: Reaffirming Full Year 2023 Guidance
REAFFIRMING FULL YEAR 2023 GUIDANCE • Expect results at lower end of guidance ranges given current hiring environment and expectations that existing macroeconomic conditions and similar labor market trends will continue through the remainder of 2023 without significant changes. • Adjusted Net Income
Slide 10: Closing Remarks
CLOSING REMARKS Scott Staples Chief Executive Officer
Slide 11: Key Strategic Focus Areas Driving Growth & Industry Leadership
KEY STRATEGIC FOCUS AREAS DRIVING GROWTH & INDUSTRY LEADERSHIP Verticalized Go-To-Market 11 Purposeful Strategy Flexible Cost Growth Through Structure to M&A Enhance Margins Accelerate Sustainability Organic Embedded in Growth Our Culture 11
Slide 12: Investment Highlights
INVESTMENT HIGHLIGHTS 1 A global leader in a large, fragmented, and growing market Diversified enterprise-focused customer base across attractive industry 2 verticals with focus on high volume hiring Digital technology, automation, and machine learning enabling 3 customers to hire smarter and onboar
Slide 13: Appendix
APPENDIX Supplemental Materials and Reconciliations to GAAP Measures
Slide 14: FY 2022 Revenue Breakdown by Vertical
FY 2022 REVENUE BREAKDOWN BY VERTICAL Technology Transportation Small Business 3% 22% 4% Manufacturing and Other Industrials 7% High Volume Business and 11% Hiring Retail and Professional Services Focused 20% E-Commerce Verticals 12% 4% 12% Financial 5% Services Healthcare Hospitality General Staffi
Slide 15: Dedicated to Our Sustainability Efforts
DEDICATED TO OUR SUSTAINABILITY EFFORTS Our commitments to advancing sustainability are through a lens of enhancing stakeholder value while continuing to be a responsible corporate citizen, an employer of choice, and a leader in the ethical treatment of a diverse employee base Key Focus Areas 2022 H
Slide 16: Long-Term Organic Growth Targets
LONG-TERM ORGANIC GROWTH TARGETS 1 Long-Term Organic Targets Key Drivers • Proven growth formula • Existing customer base growth • Upsell / cross-sell to existing customers • New customer wins Revenues Growth 8 – 10% • Net of existing customer attrition • Performance track record • Identified market
Slide 17: Proven Formula for Above-Market Long-Term Revenues Growth
PROVEN FORMULA FOR ABOVE-MARKET LONG-TERM REVENUES GROWTH Existing Customers New Customers • Significant whitespace • New product launches • Fragmented industry • Increased package • $13B Total Addressable Market density • Leading value proposition • New geographies • High retention • Track record o
Slide 18: Adjusted EBITDA
ADJUSTED EBITDA (a) Represents charges incurred related to acquisitions and similar transactions, primarily consisting of change in control-related costs, professional service fees, and other third-party costs. Additionally includes incremental professional service fees incurred related to the initi
Slide 19: Constant Currency Revenues; Constant Currency Adjusted EBITDA
CONSTANT CURRENCY REVENUES CONSTANT CURRENCY ADJUSTED EBITDA (a) Constant currency revenue is calculated by translating current period amounts using prior-year period exchange rates. (a) Constant currency Adjusted EBITDA is calculated by translating current period amounts using prior-year period exc
Slide 20: Adjusted Net Income; Adjusted Diluted Earnings Per Share
ADJUSTED NET INCOME ADJUSTED DILUTED EARNINGS PER SHARE (a) Represents non-cash interest expense related to the amortization of debt issuance costs for the Company’s First Lien Credit Facility. Beginning in 2022, this adjustment also includes the impact of the change in fair value of interest rate s