Public Policy Holding Company, Inc. (PPHC)

ITEM 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollars in tables in millions, except per share amounts.)

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “target,” “estimate,” “intend,” “continue” or “believe” or the negatives of, or other variations of, these terms or comparable terminology. These forward-looking statements include, but are not limited to, statements regarding: our core strategy; our ability to improve our content offerings and service; our future financial performance, including expectations regarding revenues, deferred revenue, operating income and margin, net income, expenses, and profitability; liquidity, including the sufficiency of our capital resources, cash requirements; net cash provided by (used in) operating activities, access to financing sources, and free cash flows; capital allocation strategies, including any stock repurchases or repurchase programs; stock price volatility; impact of foreign exchange rate fluctuations; impact of interest rate fluctuations; adequacy of existing facilities; future regulatory changes and their impact on our business; intellectual property; cybersecurity; price changes and testing; artificial intelligence (“AI”); acquisitions; actions by competitors; dividends; future contractual obligations, including unknown content obligations and timing of payments; our global content and marketing investments; tax expense; unrecognized tax benefits; deferred tax assets; tax deposits; resolutions of disputes and other proceedings; our ability to effectively manage change and growth; our company culture; and our ability to attract and retain qualified employees and key personnel. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included throughout this filing and particularly in Part II, Item 1A: “Risk Factors” section set forth in this Quarterly Report on Form 10-Q. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to revise or publicly release any revision to any such forward-looking statement, except as may otherwise be required by law.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the significant factors affecting the operating results, financial condition and liquidity, and cash flows of the Company as of and for the three and six months ended June 30, 2026, and 2025.

The unaudited consolidated financial statements and related notes to the unaudited consolidated financial statements, including our critical accounting estimates, and the related Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report, should be read in conjunction with our 2025 Form 10-K.

Executive Highlights

The table below presents the revenue, its growth, and other financial performance measures over the period 2018- June 30, 2026. Results for the period 2018-2025 provide supplemental financial information prior to our initial registration with the SEC:

(1)We have presented Adjusted EBITDA from 2022 onwards only as, prior to 2022, we were formed as a partnership with profits being distributed to the partners.

The table below sets out the non-GAAP financial measures used by our management together, in each case, with the nearest comparable measure under GAAP.

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Reconciliation of net loss and net loss margin to Adjusted EBITDA and Adjusted EBITDA margin

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Financial Results

Second Quarter Financial Results

•In the three months ended June 30, 2026, revenue increased by 7.3% to $52.1 million, with organic growth contributing 3.9%, and the balance primarily driven by two acquisitions, Westminster Policy Partners Limited (“WPI”) (completed April 1, 2026) and Pine Cove Strategies, LLC (“Pine Cove”) (completed July 11, 2025).

•GAAP net losses decreased from $5.7 million in the three months ended June 30, 2025, to $3.7 million in the three months ended June 30, 2026. The loss is primarily attributable to the $7.4 million in share-based accounting charge stemming from the 2021 UK IPO and the treatment of acquisitions in our accounts, related to the change in fair value of contingent consideration and post combination compensation charges.

•The reduction in net loss of $2.0 million during the three months ended June 30, 2026 is attributable to a decrease of $1.1 million in Post-combination compensation charge, $0.8 million bargain purchase gain resulting from the acquisitions in 2026, and a favorable decrease in the change in fair value of contingent consideration of $0.8 million. These favorable reductions in expense were partially offset by an increase in mergers and acquisitions expenses of $0.7 million, reflecting heightened acquisition activity during the quarter relative to the comparable prior-year period.

•In the three months ended June 30, 2026, Adjusted EBITDA was $12.3 million, down 4.4% or $0.6 million, as compared to the three months ended June 30, 2025, realized at a 23.5% margin. This decrease in Adjusted EBITDA was primarily attributable to the growth in non-allocated corporate costs, which increased $1.4 million, from $2.9 million to $4.3 million, as a result of building out a robust central platform for supporting our clients, the incremental U.S. public company costs stemming from the 2026 U.S. IPO, and the growing of our group of member companies. In addition, non-allocated bonu

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ITEM 7.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”), summarizes the significant factors affecting the operating results, financial condition and liquidity, and cash flows of the Company as of and for the years ended December 31, 2025, and 2024 . This MD&A should be read in conjunction with our consolidated financial statements, the accompanying notes to the consolidated financial statements and the other financial information included in this Annual Report on Form 10-K. Except for historical information, the matters discussed in this MD&A contain various forward-looking statements that involve risks and uncertainties and are based upon judgments concerning various factors beyond our control. Our actual results could differ materially from those anticipated in these forward-looking statements. All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by applicable law. Certain monetary amounts, percentages and other figures included in this MD&A have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

Overview

Public Policy Holding Company, Inc. ("we," "us," "our," "PPHC," or the "Company") through our wholly-owned subsidiaries, operates a portfolio of firms that offer global strategic communications services, including government relations, corporate communications and public affairs. Engaged by over 1,400 clients, including companies, trade

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associations and non-governmental organizations, we are active in all major sectors of the economy, including healthcare and pharmaceuticals, financial services, energy, technology, telecoms and transportation. Our services help clients to enhance and defend their reputations, advance policy goals, manage regulatory risk and engage with federal and state-level policy makers, stakeholders, media and the public in multiple jurisdictions and with diverse and complementary capabilities.

Since our inception in 2014, we have acquired and integrated numerous businesses specializing in key facets of strategic communications, including government relations, public affairs, research, crisis management, investor relations and creative communications delivery. Under the PPHC holding company, we now operate as 12 member companies in the United States (“US” or "U.S.") and the United Kingdom (“UK”), with expanding reach into Europe and parts of Asia and the Middle East. These 12 member companies include Crossroads, Forbes Tate, Seven Letter, O’Neill, Alpine, KP, MultiState, Concordant, Lucas, Pagefield, TrailRunner, and Pine Cove.

We operate in large growing markets that we believe provide us significant opportunity for continued growth. We estimate our total addressable market (“TAM”) in 2024 was in excess of $20.0 billion, comprising $4.4 billion of disclosed federal lobbying expenditure, an estimated $2.2 billion of partially disclosed total US state-based lobbying expenditure, an estimated $5.6 billion global public affairs spend, and an estimated $8.4 billion global corporate communications spend. The latter, which covers corporate, crisis, and financial communications, became part of our offering with the 2025 acquisition of TrailRunner. We believe this segment may be larger than $8.4 billion, though it is difficult to quantify given that industry metrics often combine it with broader public relations categories—such as marketing communications—that PPHC does not provide.

We have built a scalable platform which also creates cross-selling and referral opportunities. We provide our companies with a scalable platform for growth, providing uniform and efficient financial infrastructure, legal services, human resources, compliance and administration at the parent company level. We also incentivize cross-company selling, talent referrals and effective conflict management remedies across our client portfolio.

We have grown our geographical reach and practice capabilities to provide clients a full range of services through multiple member companies. Our evolution to date is the result of a careful and methodical strategy to build a unique service platform to simplify and more effectively address global client challenges and opportunities in an increasingly fragmented and accelerated policy and communications landscape. This growth strategy is predicated on adding both geographic reach for clients and a complete set of asset capabilities to bring the client the ability to synthesize and simplify the best in class practices to address policy and reputational issues. Leveraging deep policy and issue expertise derived from our original core government relations member companies, first established in 2014, we now work with clients to provide the full-spectrum of strategic communications, including government affairs, public affairs, issues and crisis communications, financial communications and corporate and institutional reputation management needs.

Building on the globalization of public policy and reputation challenges, our founders and many of our senior managers operate in Washington, DC, and have past careers and/or close professional ties to the US executive branch, Congress and regulatory authorities over a period of more than 30 years. Other leaders operate principally at the state or regional level, drawing on decades of experience, deep community ties and relationships with key stakeholders in key markets, including California, Texas and New York. With the acquisition of Pagefield in June 2024 and TrailRunner in April 2025, we have expanded our operations to London, Shanghai, Abu Dhabi and Dubai, giving us truly global reach. We continue to look for opportunities to broaden the geographic scope of our services both domestically and abroad.

Adding complementary practice capabilities to augment geographic coverage, our business comprises three reporting segments—Government Relations Consulting, Corporate Communications & Public Affairs Consulting and Compliance and Insights Services—corresponding to the different types of strategic communications services our member companies provide to our clients:

•Government Relations Consulting services include advocacy, strategic guidance, political intelligence and issue monitoring at the United States federal and state levels and internationally through our offices in London;

•Corporate Communications & Public Affairs Consulting services include crisis communications, community relations, social and digital media, public opinion research, branding and messaging, relationship marketing and litigation support; and

•Compliance and Insights Services include lobbying compliance services and legislative tracking.

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As of December 31, 2025, we had approximately 1,400 active client relationships, which were highly diversified with the top 10 PPHC clients representing 9.2% of revenue in 2025 versus 8.7% at the end of the year ended December 31, 2024. We have no single client representing more than 2.1% of overall revenues for the year ended December 31, 2025. Our client base includes corporate, trade association and non-profit client organizations across a range of industries. Our client portfolio includes clients in the healthcare and pharmaceuticals, defense and aerospace, agriculture, financial services, energy, technology, telecom and transportation sectors. We also have a track record of high client retention, with an average annual renewal rate of approximately 77.4% and an average revenue retention rate of 85.5% between 2020 to 2025.

From January 1, 2018 to December 31, 2025, we achieved revenue growth of 27.6% CAGR, with organic revenue growth of 15.0% CAGR over the same period.

Financial Results

•In the year ended December 31, 2025, Revenue increased by 24.7% to $186.5 million, with organic growth contributing 6.2% and the balance driven by four acquisitions made in 2024 and 2025.

•GAAP Net losses increased from $(24.0) million in 2024 to $(39.0) million in 2025, the losses primarily being the result of a $29.6 million share based accounting charge stemming from the UK IPO and the treatment of acquisitions in our accounts. The increase in loss in 2025 was driven by a $9.7 million increase in post-combination compensation charges primarily stemming from the Lucas, Pagefield, TrailRunner and Pine Cove acquisitions, a $9.1 million impairment charge related to Pagefield's intangibles and goodwill, and an increase of $3.2 million in the change in fair value of contingent consideration.

•Adjusted EBITDA was at record level of $45.4 million, up 17.7% as compared to prior year, achieved at a 24.3% margin.

•Adjusted Net Income of $36.6 million was up 32.1% as compared to prior year that includes an increase in finance costs offset by a more favorable effective tax rate.

•Adjusted EPS fully diluted of $1.39 was up $0.27 or 24.7%, with fully diluted share count increasing by 5.9%.

•PPHC's cash generation remains robust with net cash flows provided by operating activities increasing by $8.4 million to $24.8 million while Adjusted Free Cash Flow increased to $36.9 million as compared to $22.2 million in 2024, reflecting strong cash conversion helped by diligent working capital management.

(1) Refer to the Non-GAAP Financial Measures section below for our definition of the non-GAAP measures.

Recent Developments

Refer to Item 8. Financial Statements and Supplementary Data, Note 19 - Subsequent Events of this Form 10K.

Comparison of the years ended December 31, 2025 and December 31, 2024

Results of Operations

Amounts presented in the tables below are in millions, except percentages, share and per share data and unless otherwise noted.

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The table below presents the detailed components of our income statement:

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