PPHC

Overall Financial Performance

• First half 2026 total revenue increased 16.3% year-over-year to $102.3 million, with 4.4% organic growth; Q2 2026 revenue was $52.1 million, up 7% year-over-year with 3.9% organic growth
• First half 2026 adjusted EBITDA increased 9.3% year-over-year to $23.4 million, with a 22.9% margin at the top end of prior guidance ranges; Q2 2026 adjusted EBITDA margin was 23.5%
• GAAP net loss improved 35% year-over-year to $3.7 million in Q2 2026; the large non-cash $30 million annual share-based compensation charge from the 2021 London listing will fully amortize at the end of 2026, boosting future GAAP profitability
• Ended Q2 2026 with $36.9 million in cash and $42 million in total debt, for a net debt position of $5.2 million, down sharply from $42.2 million net debt a year prior, giving PPHC strong balance sheet capacity for continued M&A

AI Positioning

• PPHC is well-positioned for AI adoption: ~90% of revenue is retainer-based (not hourly billing), so there is no junior staff pyramid for AI to compress, unlike hourly billing peer firms
• AI policy is a major growth tailwind: over 1,800 AI-related bills have been introduced across 47 U.S. states (12x growth in three years); PPHC has added ~60 new AI-native clients (model developers, chip designers, hyperscalers) plus AI-related work from existing clients across all sectors
• AI creates internal operating leverage: PPHC uses AI to automate commodity research work, allowing senior advisors to focus on high-value judgment, strategy, and client relationship work

M&A Activity & Strategy

• Closed three acquisitions in 2026 YTD: WPI (London, added economics policy capability), Tancredi (added crisis/litigation/financial communications depth), and Advocacy Partners (long-planned entry into Florida, a critical high-growth political and economic market)
• All acquisitions follow consistent criteria: add differentiated capabilities, are margin-accretive, extend geographic reach to meet client demand, and tie a significant portion of purchase consideration to future performance; targets are typically $10-$30 million in annual revenue
• M&A pipeline remains active across North America, Europe, the Middle East, and Asia; no meaningful client concentration risk: top 10 clients represent only 7.5% of total revenue (down from 9.4% year-over-year), and no single client accounts for more than 2% of revenue

Talent & Operating Model

• Growth strategy remains fundamentally talent-focused; PPHC's multi-branded operating model, public company status, and equity incentive programs attract top talent, with over 200 of 476 employees holding equity instruments, aligning employee and shareholder interests
• Cross-selling between segments and brands is accelerating, with more large integrated client mandates drawing on capabilities across multiple business units, validating the platform model

• PPHC has raised full year 2026 guidance following the completion of three 2026 acquisitions, to a reported revenue range of $213 to $216 million, representing an $8 million increase from prior guidance
• Adjusted EBITDA guidance is raised to $48.5 to $50.5 million, a $2.5 million increase from prior guidance, with an adjusted EBITDA margin range of 22.5% to 23.5%, 50 basis points higher than the prior margin range
• The guidance is based on an expectation of approximately 5% full year organic growth, plus the incremental contribution from closed acquisitions
• PPHC continues to expect strong free cash flow conversion in the second half of 2026, consistent with its historical structural weighting of cash generation to H2, after lower H1 free cash flow driven by annual bonus payments and higher working capital investment

1. Government Relations: This is PPHC's largest segment, representing 58% of total revenue. It achieved 6% organic revenue growth for the first half of 2026, accelerating to 7.4% organic growth in Q2 2026. It maintains PPHC's highest margin profile, consistent with year-ago levels. 2. Corporate Communication and Public Affairs: This segment accounts for approximately 35% of total revenue (remaining share after the other two segments). It posted muted organic growth of -1% for the first half of 2026, with -3% organic growth in Q2 2026. This weak performance is explained by a very strong comparable quarter in Q2 2025, when the segment recorded 22% organic growth driven by exceptional post-election project work. Segment margins remained stable year-over-year. 3. Compliance and Insight Services: This is PPHC's smallest segment, representing 7% of total revenue. It continues to deliver double-digit organic growth in the low-to-mid teens for 2026, with stable margins matching year-ago levels. Overall, the blended operating margin across all three segments was 39.5% in Q2 2026, only 0.5 percentage points lower than Q2 2025, confirming underlying operating performance remains resilient.

• Project work revenue is difficult to forecast, and unexpected swings in project activity could drive results toward either the high or low end of guidance ranges
• Working capital collection (primarily accounts receivable) has taken longer than expected to improve in the first half of 2026, though management expects this headwind to abate as the year progresses
• The post-IPO 6-month share lockup expired at the end of July 2026, and potential selling pressure from early shareholders could impact share price, though management does not expect significant selling volume
• Hourly-billing peer firms face existential pressure from AI, though management notes this does not impact PPHC's retainer-based business model
• Competition for attractive M&A targets remains intense, dominated by private equity platforms

Q: After completing three 2026 deals including the prioritized UK and Florida markets, how has PPHC's M&A priority checklist and geographic target list evolved, and are there AI-related capabilities management wants to add via acquisition rather than building organically? / A: PPHC's core M&A criteria remain unchanged: prioritize complementary capabilities and geography, with attractive margins and fit with PPHC's existing business mix. The highest priority remains adding to PPHC's core, high-margin government relations/lobbying business, with select complementary communications capability additions. With UK and Florida now secured, priority geographies that have moved up the list include Brussels (Europe), New York, the Middle East, and Southeast Asia. For AI, management is holding its powder, as the space is still rapidly evolving; PPHC has already invested in internal AI tools and is comfortable with its current organic position. (342 words)

Q: What factors could drive full year results to the high end of guidance, and what factors could push results to the low end? / A: The biggest driver of variability around guidance is unpredictable project work, which can fluctuate unexpectedly quarter to quarter. Management is encouraged by the 6% organic growth in the high-margin government relations segment across all geographies in the first half, which provides more upside to results given its higher profit conversion. Historically, corporate communications has tended to be flattish in the first two quarters of even-numbered midterm election years, and an expected pickup in the second half would also support results at the high end of guidance. (179 words)

Q: What is driving the ongoing strength in lobbying growth, and how is cross-selling between lobbying and communications working out? / A: The core macro driver of lobbying growth is expanding government activity at both the federal and state level on every major issue from technology to social policy, with the 2026 midterm election cycle also adding to client demand. Cross-selling momentum continues to accelerate, with more integrated client engagements drawing on capabilities across multiple PPHC brands and disciplines. One year after the acquisition of Trail Runner, its specialized communications capabilities are regularly pulled into government relations client engagements, validating the cross-platform model. (141 words)

Q: PPHC has already completed three deals this year, matching the prior target of 3-4 deals annually. Is this still the right pace, or could PPHC accelerate if attractive opportunities emerge? / A: A 3-4 deal annual pace still feels appropriate given integration requirements, though management is opportunistic. PPHC maintains a very low leverage ratio, has funded 2026 acquisitions from existing IPO and balance sheet cash, and has capacity to pursue additional opportunities if they meet PPHC's criteria, while still maintaining a prudent leverage level. The acquisition sweet spot remains $10-$30 million revenue targets, with the pipeline remaining strong. (133 words)