HireRight Holdings Corporation (HRT), a workforce background check and screening services firm, reported its first GAAP profit in four years thanks to a reserve reversal. In releasing its U.S. deferred tax asset (DTAs) valuation allowance, HireRight explained:

“In making the determination to release the valuation allowance, the Company considered its movement into a cumulative income position for the most recent three-year period, the significant decrease in interest expense from the paydown of debt in the fourth quarter of 2021 using IPO proceeds, its seventh consecutive quarter of operating income, forecasts for future earnings for its U.S. operations, and other factors.”

The release resulted in a non-cash DTA benefit of $96.6 million, or the equivalent of 66.8% of HireRight’s net income in 2022.