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Sterling Check Corp. (NASDAQ: STER) is a global leader in providing technology-enabled background and identity verification services. Serving over 50,000 clients, Sterling is pivotal in helping organizations across various industries build trust and safety in their workplace environments through comprehensive background checks, identity verification, and ongoing risk monitoring.
Headquartered in Independence, Ohio, Sterling conducts more than 95 million background checks annually. Their services encompass identity verification, criminal background screening, credential verification, drug and health screening, employee documentation processing for onboarding, and continuous risk assessment, all integrated within a proprietary, cloud-based technology platform. This platform delivers real-time, data-driven insights, empowering organizations to manage their employment screening programs efficiently.
Recent achievements include a series of strategic partnerships and innovations. Notably, Sterling's collaboration with ID.me since 2021 has brought forth a pioneering identity-first solution, enhancing pre-employment screening processes. This collaboration ensures up to 45% more accurate criminal results when identity verification is included in the hiring process. In May 2023, this solution became the first to earn Kantara’s Trustmark for Identity Assurance Level 2 (IAL2), meeting federal digital identity guidelines set by the National Institute of Standards and Technology (NIST). This certification enables federal, state, and local US governments to deliver compliant identity verification through Sterling and ID.me solutions.
Financially, Sterling has shown resilience and strategic growth despite macroeconomic challenges. For the full year ending December 31, 2023, Sterling reported revenues of $719.6 million, a slight decrease from the previous year, primarily due to macro uncertainty impacting base business with existing clients. However, the company achieved significant progress in revenue drivers such as new business acquisition, upselling, and cross-selling, which improved their performance metrics going into 2024.
Sterling's commitment to innovation extends to their partnerships, such as with Konfir, aimed to dramatically speed up employment verification processes and improve candidate experiences. This partnership leverages Konfir’s API-driven employment verification technology, reducing verification times from days to seconds and enhancing security and accuracy.
Looking ahead, Sterling is poised for continued growth and expansion. Their acquisition of Vault Workforce Screening in early 2024 enhances their capabilities in drug and health testing, aligning with their long-term strategy of organic growth and strategic M&A. Sterling’s proactive approach in adapting to market needs and integrating advanced technological solutions continues to solidify their position as a market leader in the background and identity verification industry.
Sterling Check Corp (NASDAQ: STER) reported Q2 2024 results with revenues increasing 5.3% year-over-year to $200.5 million. Organic constant currency revenue decreased 0.9%, while inorganic revenue grew 6.2%. The company saw accelerated growth in new business (7% YoY), up-sell/cross-sell (9% YoY), and strong customer retention (97%). However, GAAP net income decreased to a loss of $6.2 million, or $(0.07) per diluted share. Adjusted EBITDA decreased 7.4% to $46.3 million, with margin contracting 320 bps to 23.1%. The company ended Q2 with a net leverage ratio of 2.8x net debt to Adjusted EBITDA. Sterling's pending merger with First Advantage is expected to close in Q4 2024, promising greater innovation and shareholder value creation.
Sterling Check Corp. (NASDAQ: STER) reported first quarter 2024 results with a 3.8% revenue increase to $186.0 million. The company experienced organic revenue decline of 4.9% but saw 8.7% growth from inorganic sources. GAAP net income declined to a loss of $(8.0) million, and adjusted EBITDA decreased by 15.5% to $38.5 million. CEO Josh Peirez highlighted strong revenue growth from new business, up/cross-sell, and customer attrition, offset by base business revenue declines. The company's profitability was impacted by lower-margin inorganic revenue growth and mix of organic revenue activities. Sterling remains focused on improving margins through cost optimization efforts and synergies from M&A activities.
Sterling Check Corp. (NASDAQ: STER) has been recognized as an HR Tech Award winner for the fourth consecutive year. The company stands out for its tools and technologies used to streamline hiring processes and build strong company cultures. Sterling received two distinctions this year: Talent Acquisition and Best Comprehensive Solution. Judges within the HR technology space have acknowledged Sterling as a top provider in the industry, with a focus on innovation, client-focused commitment, and delivering targeted services.
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