Public Policy Holding Company, Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 14, 2026
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Consolidated Results of Operations
The table below presents the detailed components of our consolidated income statement:
| Income Statements | Three months ended March 31, | |||
|---|---|---|---|---|
| 2026 | 2025 | % Variance | $ Variance | |
| Revenue | $50.1 | $39.3 | 27.5% | $10.8 |
| Operating expenses: | ||||
| Staff cost - direct | 25.4 | 20.1 | 26.4% | 5.3 |
| Share-based accounting charge - direct | 6.6 | 6.7 | (2.3)% | (0.2) |
| Long term incentive program charges - direct | 0.7 | 0.8 | (15.0)% | (0.1) |
| Post-combination compensation - direct | 2.8 | 3.4 | (17.3)% | (0.6) |
| Bonus - direct | 3.7 | 2.8 | 32.1% | 0.9 |
| Salaries and other personnel costs | 39.2 | 33.9 | 15.7% | 5.3 |
| Amortization expense – technology | 0.1 | 0.1 | — | (0.0) |
| Office costs | 1.6 | 1.3 | 21.4% | 0.3 |
| Office and other direct costs | 1.8 | 1.5 | 19.4% | 0.3 |
| Cost of services | 41.0 | 35.4 | 15.9% | 5.6 |
| Staff cost - indirect | 1.9 | 2.0 | (7.4)% | (0.2) |
| Share-based accounting charge - indirect | 0.7 | 0.7 | (1.4)% | (0.0) |
| Long term incentive program charges - indirect | 0.2 | 0.3 | (12.2)% | (0.0) |
| Non-staff costs | 6.2 | 4.1 | 52.4% | 2.1 |
| Bonus - indirect | 0.2 | 0.4 | (37.9)% | (0.1) |
| Salaries, general and administrative | 9.3 | 7.5 | 24.0% | 1.8 |
| Mergers and acquisitions expense | 0.3 | 0.2 | 29.3% | 0.1 |
| Amortization | 1.5 | 1.2 | 30.7% | 0.4 |
| Depreciation | 0.0 | 0.0 | 5.2% | 0.0 |
| Depreciation and amortization expense | 1.5 | 1.2 | 29.9% | 0.4 |
| Change in fair value of contingent consideration | 6.3 | 1.0 | 541.0% | 5.3 |
| Total operating expenses | 58.3 | 45.2 | 29.1% | 13.1 |
| Loss from operations | (8.2) | (5.9) | (39.4)% | (2.3) |
| Gain on bargain purchase | 0.1 | — | — | 0.1 |
| Other income, net | 0.2 | — | — | 0.2 |
| Interest income | 0.0 | 0.0 | (64.9)% | (0.0) |
| Interest expense | (0.8) | (0.6) | (26.2)% | (0.2) |
| Net loss before income taxes | (8.8) | (6.5) | (35.3)% | (2.3) |
| Income tax expense | 2.7 | 4.1 | (33.4)% | (1.4) |
| Net Loss | $(11.5) | $(10.6) | (8.3)% | $(0.9) |
Revenue
Refer to Note 2 - Revenue in this Form 10-Q for our revenue recognition policy.
The components of fluctuations in revenue by reportable segment for the three months ended March 31, 2026 and 2025 were as follows:
| Three months ended March 31, | ||||||
|---|---|---|---|---|---|---|
| 2026 · 2025 | ||||||
| Revenue from acquisitions | Organic revenue | Total revenue | Total revenue | Organic Revenue Growth(1) | Total Growth | |
| Government Relations Consulting | $0.8 | $27.5 | $28.4 | $26.2 | 5.2% | 8.4% |
| Corporate Communications & Public Affairs Consulting | 8.0 | 10.3 | 18.3 | 10.0 | 3.3% | 82.7% |
| Compliance and Insights Services | — | 3.5 | 3.5 | 3.1 | 10.8% | 10.8% |
| Total | $8.8 | $41.3 | $50.1 | $39.3 | 5.1% | 27.5% |
(1) Refer to the Non-GAAP Financial Measures section below for the Company’s definition of Organic Revenue Growth.
Our total revenue increased 27.5%, to $50.1 million for the three months ended March 31, 2026 compared to $39.3 million for the three months ended March 31, 2025, with Organic Revenue Growth contributing 5.1% of growth.
This performance was supported by increased client demand, particularly within our Compliance and Insights Services segment as well as sustained demand for Government Relations Consulting and Corporate Communications & Public Affairs Consulting. These increases demonstrate the stability of the Company’s core business operations, the dedication of our management teams across our member companies, and the critical importance of our work to our clients, with the balance of growth driven by the successful integrations of our 2025 Q2 acquisition of TrailRunner and the 2025 Q3 acquisition of Pine Cove.
Organic growth of 5.1% for the three months ended March 31, 2026 was primarily attributable to the strong organic growth in Compliance and Insights Services at 10.8%, as a result of high renewal rates, price increases, and new clients wins, all together reflective of a unique and high value-added offering together with strong organic growth in both our Corporate Communications & Public Affairs segment at 3.3% and Government Relations segment at 5.2%.
During the three months ended March 31, 2026, 56.6% of the Company’s revenues were attributable to our Government Relations segment as compared to 66.6% during the three months ended March 31, 2025. That decrease was a result of the TrailRunner acquisition in Q2 2025 which also led to an increase in our Corporate Communications & Public Affairs segment, which increased to 36.5% during the three months ended March 31, 2026 compared to 25.5% in the prior year; 6.9% of our total revenues were from our Compliance and Insights Services segment, a decrease as compared to the previous year's 8.0%.
Our Government Relations Consulting segment’s revenue increased by 8.4%, to $28.4 million for the three months ended March 31, 2026, compared to $26.2 million as reported for the three months ended March 31, 2025. This increase reflects Organic Revenue Growth of 5.2% in tandem with the acquisition of Pine Cove (completed in 2025 Q3).
Our Corporate Communications & Public Affairs Consulting segment’s revenue increased by 82.7% to $18.3 million for the three months ended March 31, 2026, compared to $10.0 million for the three months ended March 31, 2025. This increase reflects Organic Revenue Growth of 3.3% stemming from increased client demand for our Corporate Communications & Public Affairs Consulting services, as well as the acquisition of TrailRunner (completed in 2025 Q2).
Our Compliance and Insight Services segment’s revenue grew by 10.8% to $3.5 million for the three months ended March 31, 2026, compared to $3.1 million for the three months ended March 31, 2025. 100% of this growth was organic, driven by increasing demand for specialized services, including compliance, grant writing, and research-driven policy insights, and characterized by high renewal rates, favorable pricing and new clients wins, all together reflective of a unique and high value-added offering.
For the three months ended March 31, 2026, we generated $2.8 million, or 5.5% of our total revenue, outside of the US, as compared to $1.6 million, or 4.1% for the three months ended March 31, 2025, being a result of our growing international presence resulting from our Pagefield and TrailRunner acquisitions.
Cost of Services
The table below presents the components of cost of services:
| Three months ended March 31, | ||||
|---|---|---|---|---|
| 2026 | 2025 | $ Change | % Change | |
| Salaries and other personnel costs | ||||
| Staff cost - direct | $25.4 | $20.1 | $5.3 | 26.4% |
| Share-based accounting charge - direct | 6.6 | 6.7 | (0.2) | (2.3)% |
| Long term incentive program charges - direct | 0.7 | 0.8 | (0.1) | (15.0)% |
| Post-combination compensation - direct | 2.8 | 3.4 | (0.6) | (17.3)% |
| Bonus - direct | 3.7 | 2.8 | 0.9 | 32.1% |
| Total salaries and other personnel costs | 39.2 | 33.9 | 5.3 | 15.7% |
| Office and other direct costs | ||||
| Amortization developed software | 0.1 | 0.1 | (0.0) | — |
| Office costs | 1.6 | 1.3 | 0.3 | 21.4% |
| Total office and other direct costs | 1.8 | 1.5 | 0.3 | 19.4% |
| Cost of services | $41.0 | $35.4 | $5.6 | 15.9% |
Salaries and other personnel costs represent our largest component of cost of services. Its principal components include employee salaries and benefits, share-based accounting charges, long term incentive program charges, post-combination compensation expense, and employee bonuses from operations that deliver services to our clients. For the three months ended March 31, 2026, salaries and other personnel costs increased by 15.7% to $39.2 million compared to $33.9 million for the three months ended March 31, 2025. The $5.3 million increase, $6.8 million was driven by the acquisitions of TrailRunner and Pine Cove in 2025. Annual bonus amounts increased by $0.9 million to $3.7 million for the three months ended March 31, 2026 compared to $2.8 million for the three months ended March 31, 2025. Bonus amounts represent annual payments paid to senior executives and employees which are awarded based on the Company’s performance, the relative performance of their respective member company and for the individual meeting specific performance goals companywide. The increase is primarily attributable to the acquisitions completed in 2025 and the Company performance improving as compared to the previous year. These increases were partially offset by our non-cash post-combination compensation expense which decreased by $0.6 million or $2.8 million when excluding the impact of TrailRunner and Pine Cove compared to Q1 2025.
Office and other direct costs also represent a component of cost of services. Its principal component includes operating lease expenses for office space leased by the Company’s members and holding companies. Office and other direct costs increased by 19.4% in the three months ended March 31, 2026 to $1.8 million, compared to $1.5 million for the three months ended March 31, 2025. This increase was primarily a result of additional office spaces associated with the acquisitions of Pine Cove and TrailRunner.
Salaries, general and administrative expenses
The table below presents the components of general and administrative expenses:
| Three months ended March 31, | ||||
|---|---|---|---|---|
| 2026 | 2025 | $ Change | % Change | |
| Non-staff costs | $6.2 | $4.1 | $2.1 | 52.4% |
| Staff cost - indirect | 1.9 | 2.0 | (0.2) | (7.4)% |
| Share-based accounting charge - indirect | 0.7 | 0.7 | (0.0) | (1.4)% |
| Bonus - indirect | 0.2 | 0.4 | (0.1) | (37.9)% |
| Long term incentive program charges - indirect | 0.2 | 0.3 | (0.0) | (12.2)% |
| Salaries, general and administrative | $9.3 | $7.5 | $1.8 | 24.0% |
Salaries, general and administrative expenses comprise of general and administrative expenses, employee salaries, share-based accounting charges, long term incentive program charges, post-combination compensation expense, U.S. and UK public company and related costs, advisory costs, benefits and bonuses of employees employed in our corporate function. Salaries, general and administrative expenses increased 24.0% in the three months ended March 31, 2026, to $9.3 million, compared to $7.5 million for the three months ended March 31, 2025. Of the $1.8 million increase, $0.8 million was driven by the acquisitions of TrailRunner and Pine Cove in 2025. The remaining $1.0 million is primarily made up of $0.4 million in incremental audit fees, along with a $0.3 million increase in bad debt expense and $0.2 million in higher IT consulting, software, and license costs to support our new reporting requirements.
Mergers and acquisitions expense
The principal components of mergers and acquisitions expense include legal, audit and other advisory expenses, transaction taxes, and debt origination costs. Mergers and acquisitions expense increased by 29.3% in the three months ended March 31, 2026, to $0.3 million, compared to $0.2 million in the three months ended March 31, 2025.
Depreciation and amortization expense
The table below presents the components of depreciation and amortization expense:
| Three months ended March 31, | ||
|---|---|---|
| 2026 | 2025 | |
| Cost of services | ||
| Amortization – technology | $0.1 | $0.1 |
| Charged to cost of services | 0.1 | 0.1 |
| Depreciation and amortization expense | ||
| Amortization – customer relations companies acquired | 1.3 | 1.0 |
| Amortization – non-compete companies acquired | 0.2 | 0.1 |
| Depreciation | 0.0 | 0.0 |
| Charged to depreciation and amortization expense | 1.5 | 1.2 |
| Total depreciation and amortization expense | $1.6 | $1.3 |
The principal components of depreciation and amortization expense include the amortization of intangible assets related to customer relationships, developed technology, and non-compete contracts.
Depreciation and amortization expense increased by 23.6% in the three months ended March 31, 2026, to $1.6 million, compared to $1.3 million in the three months ended March 31, 2025 reflecting additional costs associated with the acquisitions of TrailRunner and Pine Cove in 2025.
Change in fair value of contingent consideration
Contingent consideration represents a liability that is settled through a combination of cash and shares of our common stock based on the respective purchase agreement. The amount ultimately paid is dependent on the achievement of certain operating results.
Change in fair value of contingent consideration represents changes in obligations relating to historical acquisitions, to the extent those obligations are not subject to vesting or claw-back provisions.
Change in fair value of contingent consideration increased by 541.0% in the three months ended March 31, 2026, to $6.3 million, compared to $1.0 million in the three months ended March 31, 2025. This increase is primarily the result of a non-cash remeasurement of the acquisition-related earn-out liabilities that were revised based on updated performance forecasts and valuation assumptions that occurred in 2025 Q4.
Gain on bargain purchase
Gain on bargain purchase comprises of the difference between the fair value of the net identifiable assets acquired and the purchase price paid, where the purchase price is lower than the fair value of the acquired assets.
There was a $0.1 million gain on bargain purchase for the three months ended March 31, 2026 resulting from an immaterial acquisition in 2026 compared to none in the three months ended March 31, 2025.
Interest income
Interest income represents the interest income accrued on interest bearing accounts and financial instruments.
Interest income remained relatively flat in the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.
Interest expense
Interest expense represents the interest expense incurred under our Term Loans as defined in Note 6. Notes Payable. Interest expense includes cash interest and debt discount amortization amounts.
Interest expense increased by 26.2% in the three months ended March 31, 2026, to $0.8 million, compared to $0.6 million in the three months ended March 31, 2025, reflecting interest on increased principal amounts that are associated with new Term Loans with financial institutions that were obtained in 2025.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.