Scott Wurtzel: Great. Thanks, guys. Appreciate it.
Operator: Thank you. We’ll take our next question from Shlomo Rosenbaum with Stifel. Please go ahead.
Shlomo Rosenbaum: Sorry. Thank you for taking my questions. Sorry, I didn’t realize I was muted. Hey, Scott, can you comment a little bit about kind of the trends through the quarter and maybe what you’re seeing are – is the hiring cadence? You know, if you adjusted for seasonality, are you seeing a little bit more stability? Just – maybe just some comments about where kind of the trajectory work through the quarter?
Scott Staples: Yes, I think you’ve had the exact word we’ve been using, which is stability. You know, first of all, it’s great to see that each month, we have sequentially grown. And I think, you know, that’s obviously great heading into the season. And David mentioned, you know, October revenue being the highest of the year, so that’s four months of sequential growth. And I would say seasonal hiring is about right where we thought it would be. You know, we’re getting, you know, some good signals from customers. And you know, you – again, the predictability of that isn’t, you know, what it’s been in past years. But you know, the order volumes, obviously, you know, are looking good. And you even have some large companies, I’m not saying these are customers, because we’re never going to specifically talk about a customer, but you’ve got large logistic and transportation companies announcing, you know, 60,000 to 100,000 hires in a weekend, you know, that kind of stuff.
And obviously, again, I’m not saying that’s a customer, that’s not a customer, but those are the kinds of things that we love to hear.
Shlomo Rosenbaum: Okay, great. And then, David, can you remind us what the working capital headwinds in the quarter was the, you know, the cash flow that impacted the cash flow and why you expect it to reverse just give us the core of what’s going on over there.
David Gamsey: Yes, it was pretty simple. Our DSOs went up by a couple of days. We had a couple of large payments that came in the first week in October as opposed to the end of September.
Shlomo Rosenbaum: Okay, great. And if I could just squeeze in one more, Scott, maybe talk a little bit about what the Infinite I.D. acquisition added to your existing capabilities and identity and you know, why you’re excited about that.
Scott Staples: Yes, I think, you know, you’ve heard from us and others, you know, how bullish we are on the whole digital identity and even fraud, you know, areas. We think these are high growth areas of the future, these are areas that are important to our customers. And this also then maps really nicely to our product roadmaps around becoming more digital and more automated. So, when we looked at Infinite I.D., you know, this is basically an identity fraud and biometric company that focuses, you know, on creating an actual physical network of third-party locations. So, think of it as like fingerprint collection and biometric collection via state-of-the-art kiosk. So, similar to that you go to the airport and you see the clear machines at the airport.
So, a similar type experience around capturing, you know, that data, this company was – we – already a partner with us. And in fact, I think we were their largest customer, so we knew them and their technology really well. And we just saw it as a great fit for expanding, you know, our physical footprint around, you know, locations where we could, you know, collect that data. And then, we also saw it as, you know, a really important piece of our future roadmap. As we see a lot of these products sort of merging together in the future, assuming you think about digital identity, think about overall fraud protection and you – and then, you map that to the onboarding process. If you can have just like the great sort of candidate applicant experience you could have if that’s all done seamlessly across multiple products.
So, you know, you get the biometric data. You’re triggering fraud protection. You’re triggering the actual start of a background check on the criminal side. You can even loop in the I9 process and all that stuff and all kinds of commingles together into what we think would be an eloquent candidate experience in the future as all these products and technologies come together.
Shlomo Rosenbaum: Great. Thank you.
Operator: Thank you. We’ll take our next question from Andrew Steinerman with J.P. Morgan. Please go ahead.
Andrew Steinerman: Hi, Scott, if you take our First Advantage’s clients current hiring volumes and they stayed at kind of current levels going into ’24, of course, adjusting for typical seasonal patterns but without any kind of cyclical pickup. In that kind of stable environment, would First Advantage have, you know, positive base revenue growth in ’24 for the course of the year over year comps?
Scott Staples: Yes. Again, I don’t think we’re ready to go to 2024. But you answered a big piece of that, which is the comps gets so much easier in 2024. We’ll obviously give you more color on that when we talk next quarter, but you know, we’re thinking the same thing. The comps get easier. We’ve got a stable, you know, hiring environment. And then, we just need to, you know, control or fire on the things that we – you know, fire on the – all cylinders on the things that we can control, which is, you know, new logo, upsell, cross- sell, retention, stuff like that. So, we can’t predict 2024 right now. But your thinking is in line with what we’re thinking but we haven’t actually, you know, gotten to a point where we’ve modelled it yet. And we’re still talking to customers and trying to figure out what their 2024 plans are. And it’s still a little cloudy as to, you know, what they can tell us right now. So, it’s probably best that we wait a little bit on that.
Andrew Steinerman: Yes. Can I just ask one quick follow up. When he talked about recent stability in hiring patterns, the reason stability and hiring patterns, were you referring to total company, meaning U.S and non-U.S., or perhaps you were just referring to U.S.?
Scott Staples: No. You know, international’s still down and still struggling. With the exception of AMEA as we mentioned. AMEA is, you know, what I would say, holding its own. But APAC and India are really down. And you know, again, you know, roughly about 18%, you know, the decline in base through international. So, that’s still a big number. And again, it’s really just APAC and India, which we don’t expect to bounce back for a while, although we do believe they bottomed out. But we think they’re, at least, a couple of quarters away from bouncing back. And China will be a big piece of that when it comes to APAC, you know, when China, you know, reopens and you know – and starts, you know, influence in the region, APAC should bounce back.
India, we don’t think will bounce back until the U.S. has fully bounced back because our customer base in India is really a lot of the BPO and IT services companies that serve the multinationals of U.S. and Europe. And in the U.S., again, we think it’s very vertical specific. So, again, transportation, healthcare, definitely showing increasing demand, retail, e-comm, you know, kind of holding its own. But financial services, business services, tech, staffing, all those things are still down. And although as you mentioned, you know, our America’s numbers are our – we think, you know, pretty stable right now.
Andrew Steinerman: Okay, great. Scott, thanks for the details.
Operator: Thank you. We’ll take our next question from Manav Patnaik with Barclays. Please go ahead.
Ronan Kennedy: Hi, good morning. This is Ronan Kennedy out for Manav. Thank you for taking my question. Just wanted to cover margins and your take on the margin dynamics when there is the return to the long-term growth algo, you know, and base returns and assuming that, you know, there’s an upsell, cross-sell also expand? Can you talk about kind of the dynamics of margins? You know, will they will they expand further? Is there going to be a potential pop there? Or could they be potentially offset by further investments in automation, AI, et cetera, as you return to growth?
