Despite cumulative GAAP losses, operating cash flow reached $73.6M in 2026Q2 (OCF/NI 4.35x), with FCF margin at 15.4%, while buybacks resumed ($38.2M over two quarters) despite high leverage.
First Advantage Corporation (FA) cash flow statement — 13-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 |
|---|
| Cash from Operations | 261.34M | 195.13M | 28.2M | 162.82M | 212.77M | 148.68M | 52.24M | 71.58M | 66.3M | 134.6M | 93.3M | 72.31M | 23.96M | 1.79M |
| Operating CF Margin % | - | 12.39% | 3.28% | 21.32% | 26.27% | 20.87% | 10.26% | 14.86% | 8.5% | 15.97% | 11.41% | 11.23% | 8.99% | 1.08% |
| Operating CF Growth % | 494.32% | 592.03% | -82.68% | -23.48% | 43.11% | 184.61% | -27.02% | 7.97% | -50.74% | 44.26% | 29.04% | 201.73% | 1238.02% | - |
| Net Income | 25.14M | -34.82M | -110.27M | 37.29M | 64.6M | 16.05M | -84.02M | 34.25M | 39.1M | 138.11M | 66.16M | 58.43M | 10.68M | 2.8M |
| Depreciation & Amortization | 124.69M | 248.58M | 145.92M | 129.47M | 138.25M | 142.81M | 137.16M | 25.95M | 42.59M | 42.12M | 39.15M | 27.61M | 12.54M | 8.43M |
| Stock-Based Compensation | 7.42M | 24.46M | 31.76M | 15.27M | 7.86M | 9.53M | 5.85M | 1.22M | 9.12M | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | -11.95M | -31.01M | -31.42M | -19.5M | 4.6M | -2.92M | 0 | 2.08M | 2.63M | -5M | 6.19M | -1.84M | -59M | 0 |
| Other Non-Cash Items | 95.33M | 15.06M | -7.63M | 3.48M | -9.06M | 17.07M | -815K | 3.13M | 25.32M | -97.83M | 16.51M | -10.41M | 59M | 1.74M |
| Working Capital Changes | -17.03M | -27.14M | -168K | -3.2M | 6.53M | -33.87M | -5.94M | 4.95M | -52.46M | 57.2M | -28.73M | -1.48M | 741K | -11.18M |
| Change in Receivables | -30.13M | -29.67M | 20.77M | 2.34M | 9.15M | -40.84M | -19.16M | -10.96M | 18.93M | 0 | 0 | 0 | 0 | 0 |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | -10.59M | 0 | 11.16M | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 12.5M | -16.02M | -25.45M | -8.5M | 2.98M | 7.52M | 7.66M | 12.76M | -6.43M | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -63.83M | -54.13M | -1.65B | -66.85M | -48.6M | -72.43M | -17.61M | -17.79M | -92.6M | 78.26M | -64.13M | -154.08M | -62.96M | -12.99M |
| Capital Expenditures | -21.31M | -54.25M | -1.72M | -2.08M | -28.53M | -23.8M | -17.71M | -16.7M | -35.28M | -40.35M | -33.23M | -19.1M | -6.75M | -1.87M |
| CapEx % of Revenue | 1.28% | 3.45% | 0.2% | 0.27% | 3.52% | 3.34% | 3.48% | 3.47% | 4.52% | 4.79% | 4.06% | 2.97% | 2.53% | 1.12% |
| Acquisitions | 0 | 0 | -1.62B | -41.12M | -19.05M | -48.93M | 11.36M | 34K | -59.04M | -33.77M | -30.9M | -153.6M | -58.45M | -10.93M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -42.51M | 122K | -30.46M | -23.64M | -1.02M | 305K | -11.36M | -1.09M | 1.72M | 24.32M | 0 | 18.63M | 2.24M | -189K |
| Cash from Financing | -134.89M | -70.76M | 1.58B | -273.56M | -59.15M | 63.85M | 36.68M | -3.18M | 3.05M | -167.88M | -25.6M | 100.16M | 40.94M | 10.32M |
| Debt Issued (Net) | -100M | -70.46M | 1.62B | -104K | -884K | -250.7M | -40.06M | -3.18M | -2.74M | -171.8M | -25.45M | 73.21M | 35.78M | 11.18M |
| Equity Issued (Net) | -32.31M | 3.75M | 14.65M | -58.99M | -57.01M | 320.8M | 100.57M | 0 | 0 | 3.76M | 2.46M | 7.6M | 3.7M | 348K |
| Dividends Paid | -109K | -133K | -255K | -217.74M | 0 | -313K | -23.82M | 0 | 0 | -3.93M | 0 | 0 | 0 | 0 |
| Share Repurchases | -38.18M | 0 | 0 | -58.99M | -60.53M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -2.47M | -3.91M | -53.22M | 3.28M | -1.26M | -5.94M | 0 | 0 | 5.79M | 4.08M | -2.61M | 19.34M | 1.46M | -1.21M |
| Net Change in Cash | 53.66M | 70.6M | -44.43M | -177.88M | 99.01M | 139.82M | 72.22M | 50.49M | -23.7M | 45.04M | 3.56M | 18.38M | 2M | -877K |
| Free Cash Flow | 240.87M | 140.87M | 26.48M | 135.12M | 184.24M | 124.88M | 34.53M | 54.88M | 31.02M | 94.25M | 60.07M | 53.2M | 17.21M | -76K |
| FCF Margin % | 14.48% | 8.95% | 3.08% | 17.69% | 22.75% | 17.53% | 6.78% | 11.39% | 3.98% | 11.18% | 7.35% | 8.26% | 6.46% | -0.05% |
| FCF Growth % | 843.38% | 432.08% | -80.41% | -26.66% | 47.54% | 261.63% | -37.08% | 76.93% | -67.09% | 56.88% | 12.91% | 209.09% | 22748.68% | - |
| FCF per Share | 1.39 | 0.81 | 0.18 | 0.92 | 1.21 | 0.82 | 0.23 | 0.36 | 0.52 | 1.59 | 1.03 | 0.99 | 0.34 | -0.00 |
| FCF Conversion (FCF/Net Income) | 9.58x | -5.60x | -0.26x | 4.37x | 3.29x | 9.26x | -0.62x | 2.09x | 1.90x | 0.97x | 1.41x | 1.24x | 2.24x | 0.64x |
| Interest Paid | 181.7M | 161.8M | 65.77M | 45.7M | 27.04M | 23.03M | 0 | 55.78M | 2.54M | 11.31M | 0 | 0 | 0 | 0 |
| Taxes Paid | 35.84M | 0 | 23.39M | 31.62M | 17.48M | 10.36M | 0 | 5.25M | 84.81M | 30M | 0 | 0 | 0 | 0 |
Quick answers to the most common questions about buying FA stock.
First Advantage Corporation (FA) generated $195.1M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
First Advantage Corporation (FA) generated $140.9M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
First Advantage Corporation (FA) spent $54.3M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, First Advantage Corporation (FA) returned $0.1M to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
Integration and leverage risks
Metrics are mathematically derived from official filings.
Cash Conversion Diverges from GAAP Losses
Despite cumulative GAAP net losses, operating cash flow has been consistently positive, with OCF/NI reaching 4.35x in 2026Q2, indicating strong cash generation before non-cash charges.
The gap between net income and operating cash flow is stark: net income was only $16.9M in 2026Q2 while OCF was $73.6M, a 4.35x multiple. This divergence is primarily driven by large non-cash D&A charges (averaging ~$60M per quarter) from acquisition-related intangibles, which suppress GAAP earnings but do not affect cash. The persistence of this pattern across all quarters suggests that reported net income significantly understates the company's cash-generating ability, a key consideration for valuation.
Free Cash Flow Momentum Post-Acquisition
Free cash flow has rebounded from a negative -$96.2M in 2024Q4 to $68.9M in 2026Q2, with FCF margin expanding to 15.4%, indicating strong post-integration cash generation.
The FCF trajectory shows a clear recovery: after the Sterling acquisition caused a cash outflow in 2024Q4, FCF turned positive and has grown steadily, reaching $68.9M in 2026Q2. FCF margins have improved from 5.4% in 2025Q1 to 15.4% in 2026Q2, suggesting that the integration is yielding operational efficiencies. This improvement is notable given that net income remains thin, highlighting that cash flow is a more reliable indicator of underlying performance.
Low Capital Intensity Masks Growth Investments
Capital expenditures remain minimal, averaging under 2% of revenue, with CapEx/Rev at 1.0% in 2026Q2, indicating a highly asset-light model where growth is driven by acquisitions rather than organic capex.
CapEx is consistently low, ranging from -$16.0M to $12.5M per quarter, and as a percentage of revenue it rarely exceeds 4%. This suggests that the company's growth strategy relies on M&A rather than heavy capital investment, which is typical for data-services firms. The low capital intensity supports high FCF conversion, but investors should monitor whether the lack of organic capex limits future growth or if the company can sustain its acquisition-driven model.
Working Capital Swings Reflect Acquisition Timing
Working capital changes have been volatile, swinging from -$37.6M in 2024Q4 to +$21.2M in 2024Q1, indicating that cash flow is sensitive to timing of collections and payables, particularly around acquisition periods.
The working capital line shows significant quarter-to-quarter volatility, with large negative changes in 2024Q4 and 2025Q1, likely due to acquisition-related payments and integration costs. More recent quarters show smaller swings, suggesting stabilization. This volatility can obscure underlying cash generation, but the overall trend is positive, with working capital changes contributing positively in 2026Q2. Investors should monitor whether the company can maintain efficient working capital management as it integrates Sterling.
Capital Deployment Shifts to Buybacks and Debt
Share repurchases have resumed, totaling $38.2M in the last two quarters, while dividends remain minimal, indicating a shift toward returning capital to shareholders despite elevated leverage.
After no buybacks in 2024 and early 2025, the company initiated repurchases of $18.7M and $19.5M in 2026Q1 and Q2, respectively. Dividends are negligible, so the primary capital return is via buybacks. This deployment comes at a time when the balance sheet is leveraged post-Sterling, suggesting management confidence in cash flow stability. However, the sustainability of buybacks depends on maintaining strong OCF, which has been robust.
Cumulative Cash Generation vs. GAAP Losses
Over the last ten quarters, cumulative operating cash flow is approximately $346M despite cumulative net losses of -$126M, highlighting a persistent gap driven by non-cash amortization.
Summing the quarterly data, operating cash flow totals roughly $346M while net income is -$126M, a divergence of over $470M. This gap is primarily due to D&A charges, which averaged ~$60M per quarter, and other non-cash items. This pattern indicates that the company's cash-generating ability is far stronger than GAAP earnings suggest, but it also raises questions about the sustainability of the amortization drag and whether it will eventually subside as intangibles are fully amortized.
What Could Invalidate the Base Case
The cash flow statement obscures the impact of acquisition-related amortization and SBC, which may overstate the sustainability of cash generation if integration costs persist or revenue growth slows.
While operating cash flow is robust, it is heavily supported by non-cash D&A charges that will eventually decline, potentially reducing the gap between net income and OCF. Additionally, SBC, though modest, is a real economic cost not reflected in cash flow. The elevated leverage post-Sterling introduces interest expense and refinancing risk, which could pressure future cash flows if the company's growth decelerates. Investors should monitor whether the company can generate sufficient organic cash flow to service debt and maintain buybacks without relying on acquisition-related accounting benefits.