Public Policy Holding Company, Inc. 10-Q

Item 1. Financial Statements CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share data) March 31, 2026 December 31, 2025 (Unaudited) ASSETS: Current assets: Cash and cash equivalents $ 42,852 $ 20,436 Contract receivables, net 34,238 21,851 Notes receivable - related parties, current portion 750 750 Income taxes receivable — 2,068 Prepaid post-combination compensation, current portion 2,862 3,585 Prepaid expenses and other current assets 7,696 9,598 Amounts due from related parties 142 266 Total current assets 88,540 58,554 Property and equipment at cost, less accumulated depreciation 1,077 598 Notes receivable - related parties, long term 900 900 Operating lease right of use asset 26,346 18,829 Goodwill 56,776 56,990 Other intangible assets, net of accumulated amortization 35,502 37,113 Deferred income tax asset 28,787 24,600 Prepaid post-combination compensation, long term 4,326 4,692 Other long-term assets 266 276 TOTAL ASSETS $ 242,520 $ 202,552 LIABILITIES AND EQUITY: Current liabilities: Accounts payable and accrued expenses 17,751 30,819 Income taxes payable 4,861 — Deferred revenue 6,075 3,310 Operating lease liability, current portion 4,839 5,070 Contingent consideration, current portion 4,385 3,134 Other liability, current portion 3,513 1,441 Notes payable, current portion, net 10,508 9,082 Total current liabilities 51,932 52,856 Notes payable, long term, net 34,114 37,906 Contingent consideration, long term 14,899 9,864 Other liability, long term 9,046 10,553 Operating lease liability, long term 23,642 16,469 Total liabilities $ 133,633 $ 127,648 Shareholders' equity: Common stock, $ 0.001 par value, 1,000,000,000 shares authorized, 28,928,777 and 25,174,492 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively 28 24 Additional paid-in capital 282,874 237,075 Accumulated deficit ( 174,878 ) ( 163,381 ) Accumulated other comprehensive income (loss) 863 1,186 Total shareholders’ equity 108,887 74,904 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 242,520 $ 202,552 The accompanying notes to the consolidated financial statements are an integral part of these statements 2 PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (Amounts in thousands, except share and per share data) Three months ended March 31, 2026 2025 Revenue $ 50,123 $ 39,311 Operating expenses: Salaries and other personnel costs 39,203 33,881 Office and other direct costs 1,759 1,473 Cost of services 40,962 35,354 Salaries, general and administrative 9,286 7,488 Mergers and acquisitions expense 252 195 Depreciation and amortization expense 1,505 1,191 Change in fair value of contingent consideration 6,303 983 Total operating expenses 58,308 45,211 Loss from operations ( 8,185 ) ( 5,900 ) Gain on bargain purchase 52 — Interest income 11 33 Interest expense ( 801 ) ( 635 ) Other income, net 166 — Net loss before income taxes ( 8,757 ) ( 6,502 ) Income tax expense ( 2,740 ) ( 4,112 ) Net loss $ ( 11,497 ) $ ( 10,614 ) Net loss per share attributable to common shareholders, basic and diluted $ ( 0.49 ) $ ( 0.63 ) Weighted average basic and diluted shares outstanding 23,301,135 16,903,655 Net loss $ ( 11,497 ) $ ( 10,614 ) Foreign currency translation gain (loss) ( 323 ) 721 Total comprehensive loss $ ( 11,820 ) $ ( 9,893 ) The accompanying notes to the consolidated financial statements are an integral part of these statements 3 PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Amounts in thousands, except share and per share data) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Shareholders' Equity Shares Amount Balance as of December 31, 2025 25,174,492 $ 24 $ 237,075 $ ( 163,381 ) $ 1,186 $ 74,904 Long term incentive program charges — — 1,530 — — 1,530 Issuance of unvested legally outstanding shares 16,579 — — — — — 2026 U.S. IPO Issuance, net of underwriting discounts and offering expenses 3,742,500 4 35,945 — — 35,949 Post-combination compensation charge-shares — — 1,042 — — 1,042 Forfeiture, Retained Pre-UK IPO shares ( 4,794 ) — — — — — Share-Based Accounting Charge — — 7,282 — — 7,282 Foreign currency translation gain (loss) — — — — ( 323 ) ( 323 ) Net loss — — — ( 11,497 ) — ( 11,497 ) Balance as of March 31, 2026 28,928,777 $ 28 $ 282,874 $ ( 174,878 ) $ 863 $ 108,887 The accompanying notes to the consolidated financial statements are an integral part of these statements 4 PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited) (Amounts in thousands, except share and per share data) Common Stock Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Shareholders' Equity Shares Amount Balance as of December 31, 2024 24,017,599 $ 23 $ 197,489 $ ( 115,721 ) $ ( 536 ) $ 81,255 Long term incentive program charges — — 1,179 — — 1,179 Vesting of stock issued from acquisitions — — 1 ( 1 ) — — Repayment of note receivable by related party ( 63,356 ) — ( 532 ) — — ( 532 ) Post-combination compensation charge-shares — — 605 — — 605 Share-Based Accounting Charge — — 7,444 — — 7,444 Foreign currency translation gain (loss) — — — — 721 721 Net loss — — — ( 10,614 ) — ( 10,614 ) Balance as of March 31, 2025 23,954,243 $ 23 $ 206,186 $ ( 126,336 ) $ 185 $ 80,058 The accompanying notes to the consolidated financial statements are an integral part of these statements 5 PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in thousands) Three months ended March 31, 2026 2025 Cash Flows from Operating Activities: Net loss $ ( 11,497 ) $ ( 10,614 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 42 40 Amortization expense - intangibles 1,603 1,292 Amortization of right of use assets 1,196 1,060 Amortization of prepaid post-combination compensation 1,239 1,641 Accretion of other liability 565 1,194 Amortization of debt discount 51 51 Provision for deferred income taxes ( 4,172 ) ( 1,420 ) Share-based accounting charge 7,282 7,444 Stock-based compensation 962 1,123 Post-combination compensation charge-shares 1,042 605 Change in fair value of contingent consideration 6,303 983 Gain on bargain purchase ( 52 ) — Credit losses on accounts receivable 683 279 (Increase) decrease in: Accounts receivable ( 13,112 ) ( 5,936 ) Prepaid post-combination expense ( 1,910 ) ( 10,090 ) Prepaid expenses and other assets ( 484 ) ( 1,088 ) Increase (decrease) in: Accounts payable and accrued expenses ( 9,982 ) ( 4,577 ) Income taxes payable and receivable 6,915 5,529 Deferred revenue 2,770 4,208 Operating lease liability ( 1,227 ) ( 1,188 ) Other liabilities — ( 1,720 ) Transactions with members and related parties 123 2,560 Net Cash Used in Operating Activities ( 11,660 ) ( 8,624 ) Cash Flows from Investing Activities: Purchases of property and equipment ( 521 ) — Prepayment on business acquisition ( 1,910 ) ( 18,522 ) Net Cash Used in Investing Activities ( 2,431 ) ( 18,522 ) Cash Flows from Financing Activities: Proceeds from initial public offering, net of underwriting fees of $ 3.0 million 42,866 — Proceeds from notes payable — 24,000 Payment of debt issuance costs — ( 96 ) Payment of deferred equity offering costs ( 3,876 ) — Principal payment of note payable ( 2,418 ) ( 1,820 ) Net Cash Provided by Financing Activities 36,572 22,084 Effect of foreign exchange rate changes on cash and cash equivalents ( 65 ) 65 Net Change in Cash and Cash Equivalents 22,416 ( 4,997 ) Cash and Cash Equivalents as of Beginning of Period 20,436 14,536 Cash and Cash Equivalents at the End of Period $ 42,852 $ 9,539 The accompanying notes to the consolidated financial statements are an integral part of these statements CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in thousands) Three months ended March 31, 2026 2025 Supplemental disclosure of cash flow information: Cash paid for interest $ 750 $ 584 Cash paid for income taxes 2 — Common stock received for repayment of note receivable with Alpine Group — 532 Right of use assets obtained with lease liabilities 8,714 — Accrued deferred equity offering costs ( 2,479 ) — The accompanying notes to the consolidated financial statements are an integral part of these statements 6 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared by Public Policy Holding Company, Inc. ("PPHC-Inc.", "the Company", "we", "us", and "our") in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and footnote disclosures have been condensed or omitted. All intercompany balances and transactions have been eliminated. In our opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation, in all material respects, of the information contained herein. These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Form 10-K"). Results for the interim periods are not necessarily indicative of results that may be expected for the year. 2026 U.S. Initial Public Offering On January 26, 2026, we completed our U.S. initial public offering (“2026 U.S. IPO”) of 4,150,000 shares of common stock. The offering comprised 3,400,000 newly issued shares of common stock sold by the Company and 750,000 shares of existing common stock sold by certain shareholders, at a price of $ 12.25 per share. On March 2, 2026, the Company announced the issuance of 342,500 additional shares of common stock, pursuant to the partial exercise of the over-allotment option granted to the underwriters in connection with the Company's 2026 U.S. IPO and admission to the Nasdaq Global Market. We received net proceeds from the 2026 U.S. IPO of $ 36.0 million after deducting underwriting discounts and offering fees. Omnibus Incentive Plan On September 29, 2025, our board of directors approved an amendment (the "2025 Amendment") to the Public Policy Holding Company, Inc. 2021 Omnibus Incentive Plan (the "Omnibus Incentive Plan"), which became effective on January 26, 2026. The 2025 Amendment provides that no more than 2,600,000 shares of common stock may be available from the effective date of the amendment, for the grant of awards under the Omnibus Incentive Plan, subject to adjustment in accordance with the plan's provisions. The maximum aggregate number of shares of common stock that may be issued in the form of incentive stock options shall not exceed 2,164,801 . Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires the Company’s management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but not limited to, the allowance for credit losses, useful lives of intangible assets, recoverability of the carrying amounts of intangible assets, shared-based compensation, business acquisitions, valuation of contingent considerations, post-combination liabilities and income tax provisions. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates. Unless otherwise noted, dollars in tables are in thousands, except per share amounts. Certain monetary amounts, percentages, and other figures included elsewhere in this Form 10-Q 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. 7 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Significant Accounting Policies There have been no material changes to the significant accounting policies discussed in Note 1 - Organization And Significant Accounting Policies included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025. New Accounting Pronouncements Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands annual disclosures in an entity’s income tax rate reconciliation table and requires annual disclosures regarding cash taxes paid both in the United States (federal, state and local) and foreign jurisdictions. The amendments in this ASU are effective for annual periods beginning after December 15, 2024, although early adoption is permitted. The Company has adopted ASU 2023-09 for the year ended December 31, 2025, and has applied the new disclosure requirements prospectively to the current annual period. Prior period disclosures have not been adjusted to reflect the new disclosure requirements. See Note 8. Income Taxes, in the accompanying notes to the consolidated financial statements for further details. In June 2024, the FASB issued ASU 2024-01, Compensation - Stock Compensation (Topic 718), which provides guidance on the scope application of profits interest and similar awards. This guidance is effective for public business entities for annual reporting periods beginning after December 15, 2024, and interim reporting periods beginning after December 15, 2025. The Company has determined that there is no impact of this guidance on its consolidated financial statement disclosures, as the Company's stock compensation does not allow for profits interest and similar awards. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This guidance requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at each interim and annual reporting period. This guidance is effective for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company expects to adopt this guidance in its fiscal year beginning January 1, 2027, and is evaluating the potential impact of this guidance on its consolidated financial statement disclosures. NOTE 2. REVENUE Revenue recognition: The Company generates the majority of its revenue by providing consulting services through fixed-fee arrangements related to Government Relations Consulting, Corporate Communications & Public Affairs Consulting and Compliance and Insights Services. Types of Contract Arrangements: Most of the consulting service contracts are based on one of the following types of contract arrangements: 1) Fixed-fee arrangements (“Retainer Revenue” and “Subscription Services Revenue”): these require the client to pay a fixed fee in exchange for a predetermined set of professional services. Retainer contracts generally comprise of a single stand-ready performance obligation for consulting services. The Company recognizes retainer revenue over time by measuring the progress toward complete satisfaction of the performance obligation. Subscription services generally comprise of a single performance obligation recognized over time with a straight-line pattern. The Company’s standard practice for retainer revenue is to enter into agreements with clients that stipulate a fixed monthly fee, payable at the beginning of each month, for the services to be rendered. These agreements may also include provisions for the reimbursement of pre-approved, reasonable expenses incurred in fulfilling the performance obligations. Member companies typically invoice clients in advance, and the amounts billed are initially recorded as deferred revenue. Revenue is then recognized from deferred revenue as performance obligations are achieved. A significant portion of the Company’s contracts with customers have termination clauses that give the customer the right to terminate the contract without cause with one month's notice without any substantial penalty. As such, the 8 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Company believes such contracts should be treated as a month-to-month contract as this reflects the non-cancelable period of performance. The parties do not have enforceable rights and obligations beyond the month (or months) of services already performed. The Company's contracts generally do not contain a material right. 2) Project Revenue includes additional services such as 1) advertisement placement and management, 2) video production, 3) website development and 4) research services, in which third-party companies may be engaged to achieve specific business objectives. These services are either in a separate contract or within the fixed-fee consulting contract, in which the Company usually receives a markup on the cost incurred. Generally, these contracts are less than 12 months in length. The Company recognizes revenue earned to date in an amount that is probable and not likely to reverse. The Company utilizes an output method to measure progress toward complete satisfaction of the performance obligation, recognizing revenue based on the services delivered to the customer to date as a proportion of the total services promised in the contract. This approach reflects the transfer of control to the customer, as the customer receives and consumes the benefits of each service as it is performed. Any out-of-pocket administrative expenses incurred are billed at cost. Revenue is recognized when control of services provided is transferred to customers and in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services, using the following steps: 1) identify the contract, 2) identify the performance obligations, 3) determine the transaction price, 4) allocate the transaction price to the performance obligations in the contract, and 5) recognize revenue as or when the Company satisfies the performance obligations. In determining the method and amount of revenue to recognize, the Company must make judgments and estimates. Specifically, complex arrangements with nonstandard terms and conditions may require management's judgment in interpreting the contract to determine the appropriate accounting, including whether the promised services specified in an arrangement are distinct performance obligations and should be accounted for separately, and how to allocate the transaction price, including any variable consideration, to the separate performance obligations. When a contract contains multiple performance obligations, the Company allocates the transaction price to each performance obligation based on its estimate of the stand-alone selling price. Other judgments include determining whether performance obligations are satisfied over time or at a point in time, and the selection of the method to measure progress towards completion. The Company has considered the guidance of combining contracts in accordance with ASC 606-10-25-9, Combining Contracts. The Company has noted that its customers occasionally execute multiple orders for services, add-ons and professional services within a short period of time. The Company evaluates multiple orders to determine if the services across multiple orders relate directly to the same retainer service or project and will combine contracts if deemed to be related, as they are packaged within a single commercial objective. For any contracts that meet one or more of the requirements of ASC 606-10-25-9, the Company will account for the contracts as a single contract. The majority of contracts entered into with customers are entered into with multiple commercial objectives, and the consideration of one contract is determined independently from the price or performance of other contracts. Certain services provided by the Company include the utilization of a third party in the delivery of those services. These services are primarily related to the production of an advertising campaign or media buying services. The Company has determined that it acts as an agent and is solely arranging for the third parties to provide services to the customer. Specifically, the Company does not control the specified services before transferring those services to the customer, is not primarily responsible for the performance of the third-party services, nor can the Company redirect those services to fulfill any other contracts. The Company does not have discretion in establishing the third-party pricing in its contracts with customers. For these performance obligations for which the Company acts as an agent, the Company records revenue as the net amount of the gross billings less amounts remitted to the third party. The following table provides disaggregated revenue by revenue type: Three months ended March 31, 2026 2025 Government Relations Consulting revenue $ 28,358 $ 26,164 Corporate Communications & Public Affairs Consulting revenue 18,293 10,013 Compliance and Insights Services revenue 3,472 3,134 Total revenue $ 50,123 $ 39,311 9 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Revenue by geographic region: Three months ended March 31, 2026 2025 United States $ 47,352 $ 37,704 International 2,771 1,607 Revenue by geographic market $ 50,123 $ 39,311 NOTE 3. BASIC AND DILUTED EARNINGS (LOSS) PER SHARE The Company presents both basic and diluted earnings per share on the face of the consolidated statements of operations and other comprehensive loss. Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Due to their anti-dilutive effect, the calculation of diluted net loss per share for the three months ended March 31, 2026 and the year ended December 31, 2025, does not include the common stock equivalent shares and nonvested shares. The Company’s weighted average shares utilized for its calculation of earnings (loss) per share include only the common shares outstanding. The following table includes the number of shares outstanding and potentially dilutive stock options and Restricted Stock Units ("RSU's") as of March 31, 2026, and December 31, 2025, respectively: March 31, 2026 December 31, 2025 Common shares outstanding 24,706,309 20,821,959 Nonvested shares outstanding 4,222,468 4,352,533 Legally outstanding shares 28,928,777 25,174,492 Stock options and RSUs outstanding (1) 1,675,716 1,693,734 Total fully diluted shares 30,604,493 26,868,226 (1) The holders of Restricted Stock Units and Stock Options are not entitled to dividends or to vote The following tables includes the weighted average shares outstanding and potentially dilutive stock options and RSUs for three months ended March 31, 2026 and 2025, respectively: March 31, 2026 March 31, 2025 Common shares, weighted average 23,301,135 16,903,655 Nonvested shares, weighted average 4,309,055 7,074,521 Legally outstanding shares, weighted average 27,610,190 23,978,176 Stock options and RSUs outstanding, weighted average 1,684,464 1,522,847 Total securities on a fully diluted basis, weighted average 29,294,654 25,501,023 The following table shows the computation of basic and diluted loss per share for the three months ended March 31, 2026 and 2025, respectively: March 31, 2026 March 31, 2025 Numerator Net loss $ ( 11,497 ) $ ( 10,614 ) Less unvested common stock dividends under the two - class method — — Net loss attributable to common shareholders ( 11,497 ) ( 10,614 ) Denominator Weighted average basic and diluted shares outstanding 23,301,135 16,903,655 Basic and diluted loss per share $ ( 0.49 ) $ ( 0.63 ) 10 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) NOTE 4. GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill is an indefinite lived asset with balances as follows: As of December 31, 2024 $ 64,308 Impairment ( 6,219 ) Other adjustment ( 2,527 ) Foreign currency translation 1,428 As of December 31, 2025 $ 56,990 Foreign currency translation ( 214 ) As of March 31, 2026 $ 56,776 We monitor our reporting units for indicators of impairment throughout the year to determine if a change in facts or circumstances warrants a re-evaluation of our goodwill. No goodwill impairment charges were recognized for the three months ended March 31, 2026. We incurred a non-cash impairment charge of $ 6.2 million in 2025 related to our Pagefield Communications Limited (“Pagefield”) Government Relations Consulting reporting unit and Pagefield Corporate Communications & Public Affairs reporting unit. There was no goodwill impairment for the three months ended March 31, 2025. Intangible assets We did not recognize any impairment charges on indefinite-lived intangible assets during the three months ended March 31, 2026. We incurred non-cash impairment charges of $ 0.3 million and $ 2.6 million respectively, within our Pagefield Government Relations Consulting and Pagefield Corporate Communications & Public Affairs Consulting reporting units in 2025. The Company has not recorded any impairment charges related to long-lived assets for the three months ended March 31, 2025. The following presents the Company’s gross and net amounts of intangible assets, other than goodwill, as reported on the Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025: March 31, 2026 Weighted Average Useful Life (in Years) Gross Book Value Accumulated Amortization Net Book Value Customer relationships 7.1 $ 40,741 $ ( 21,553 ) $ 19,188 Developed technology 7.0 3,938 ( 1,735 ) 2,203 Noncompete agreements 4.7 3,114 ( 1,469 ) 1,645 Total definite lived assets 47,793 ( 24,757 ) 23,036 Trade names 12,466 12,466 Total intangible assets $ 60,259 $ ( 24,757 ) $ 35,502 December 31, 2025 Weighted Average Useful Life (in Years) Gross Book Value Accumulated Amortization Net Book Value Customer relationships 7.1 $ 40,760 $ ( 20,283 ) $ 20,477 Developed technology 7.0 3,938 ( 1,594 ) 2,344 Noncompete agreements 4.7 3,111 ( 1,309 ) 1,802 Total definite lived assets 47,809 ( 23,186 ) 24,623 Trade names 12,490 — 12,490 Total intangible assets 60,299 $ ( 23,186 ) $ 37,113 Amortization expense for customer relationships, noncompete agreement and developed technology assets approximated $ 1.6 million and $ 1.3 million for the three months ended March 31, 2026 and 2025, respectively. 11 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) NOTE 5. LEASES The Company leases office space and equipment under non-cancelable operating leases, which may include renewal or termination options that are reasonably certain of exercise. Most leases include one or more options to renew, and the exercise of lease renewal options is at the Company’s sole discretion. Certain of the Company’s lease agreements include rental payments that are adjusted periodically for inflation. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company also subleases office space to third parties under separate sublease agreements, which are generally month-to-month leases. ASC 842 - Leases , requires use of the interest rate that a lessee would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. When the Company cannot readily determine the discount rate implicit in the lease agreement, the Company will utilize the incremental borrowing rate. The Company uses its incremental borrowing rate on the commencement date to determine the present value of its lease payments. The discount rate used to measure the lease asset, and the liability is determined at the beginning of the lease term, using the rate implicit in the lease if readily determinable, or otherwise using the Company's collateralized credit-adjusted borrowing rate. The following table presents lease costs and other quantitative information: Three months ended March 31, 2026 2025 Operating lease cost (cost resulting from lease payments) $ 1,519 $ 1,333 Variable lease cost (cost excluded from lease payments) 98 82 Sublease income ( 103 ) ( 78 ) Net lease cost $ 1,513 $ 1,337 Cash paid for amounts included in the measurement of lease liabilities $ 1,550 $ 1,462 Weighted average lease term - operating leases 6.0 years 4.3 years Weighted average discount rate - operating leases 6.0 % 5.3 % As of March 31, 2026, the current and long term operating lease liabilities are $ 4.8 million and $ 23.6 million, respectively. Future payments of operating leases as of March 31, 2026 are listed in the table below: Year Amount 2026 (Excluding the Three months ended March 31, 2026) $ 4,330 2027 5,960 2028 6,610 2029 5,199 2030 3,655 Thereafter 9,145 Total future minimum lease payments 34,899 Amount representing interest ( 6,418 ) Present value of net future minimum lease payments $ 28,481 NOTE 6. NOTES PAYABLE On February 28, 2023, PPHC entered into a $ 17.0 million credit agreement with Bank of America (as amended, the “Credit Agreement”), providing for a senior secured line of credit of up to $ 3.0 million (the “2023 Facility 1”) and a senior secured term loan of $ 14.0 million (the “2023 Facility 2,” and, together with the 2023 Facility 1, the “2023 Facilities”). In April 2024 and June 2024, we executed two separate amendments to our Credit Agreement. These amendments provided for two additional term loans: a $ 6.0 million facility (“2024 Term Loan A”) and a $ 19.0 million facility (“2024 Term Loan B”). Collectively, these loans, together with the 2024 Term Loan A, are referred to as the “2024 Term Loans.” 12 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) In January 2025, we entered into a third amendment to our Credit Agreement, which established an additional term loan facility of up to $ 24.0 million (the “2025 Term Loan C”). The 2025 Term Loan C, together with the 2023 Facilities and the 2024 Term Loans, are collectively referred to as the “Bank Credit Facilities.” The interest rate applicable to the 2023 Facilities is the Secured Overnight Financing Rate (“SOFR”), as administered by the Federal Reserve Bank of New York, plus 2.25 % per annum. The 2024 Term Loans and the 2025 Term Loan C each bear interest at SOFR plus 2.60 % per annum. Interest on all Bank Credit Facilities is payable monthly. The Bank Credit Facilities are collateralized by substantially all of our assets. The Company has several term loans outstanding with a financial institution (the "Term Loans"). The 2023 Facility 2 loan matures on March 31, 2029, with monthly principal payments of $ 0.2 million plus interest. The 2024 Term Loans require monthly principal payments of $ 0.3 million plus interest until their maturity date of April 30, 2028. The 2025 Term Loan C requires monthly principal payments of $ 0.2 million per month plus interest through March 1, 2026, increasing to $ 0.3 million per month plus interest through the maturity date of March 31, 2029. The Company's total debt consists of the following as of: Original Loan Amount March 31, 2026 December 31, 2025 2023 Facility 2 $ 14,000 $ 3,208 $ 4,083 2024 Term Loan A 6,000 4,725 4,950 2024 Term Loan B 19,000 14,963 15,675 2025 Term Loan C 24,000 21,809 22,407 Total Term Loans 63,000 44,705 47,115 Other debt — 117 124 Less: unamortized debt issuance costs 748 200 251 Total debt, net of unamortized issuance costs $ 62,252 44,622 46,988 Less: current portion ( 10,508 ) ( 9,082 ) Total debt, long-term $ 34,114 $ 37,906 As of March 31, 2026, the future principal maturities of the Term Loans are as follows: 2023 Facility 2 2024 Term Loan A 2024 Term Loan B 2025 Term Loan C Total 2026 (excluding the three months ended March 31, 2026) $ 1,575 $ 675 $ 2,138 $ 2,700 $ 7,088 2027 1,633 900 2,850 3,600 8,983 2028 — 3,150 9,975 3,600 16,725 2029 — — — 11,909 11,909 Total $ 3,208 $ 4,725 $ 14,963 $ 21,809 $ 44,705 Total approximate interest expense incurred was as follows: Three months ended March 31, 2026 2025 Cash interest on term loans $ 748 $ 577 Cash interest on other debt 2 7 Debt discount amortization 51 51 Total interest expense $ 801 $ 635 The Credit Agreement and Amended Credit Agreements for the Term Loans contain certain non-financial and financial covenants with which the Company is required to comply. The Company must submit a compliance certificate to 13 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) the bank on a quarterly basis. The financial covenants include a total leverage ratio and fixed coverage ratio. The Company was in compliance with all covenants as of March 31, 2026 and December 31, 2025. NOTE 7. SEGMENT REPORTING The Company has determined that its business is conducted across three reportable segments as of March 31, 2026, as follows: Government Relations Consulting, Corporate Communications & Public Affairs Consulting and Compliance and Insights Services. • Government Relations Consulting services (also commonly referred to as “lobbying”) include advocacy, strategic guidance, political intelligence and issue monitoring at the U.S. federal and state levels, and in the United Kingdom through our offices in London; • Corporate Communications & Public Affairs Consulting services include policy communications, crisis communications, financial communications and investor relations, litigation support, community relations, social and digital media, public opinion research, branding and messaging, and relationship marketing, across the United States and internationally through our offices in London, Shanghai, Abu Dhabi, and Dubai; and • Compliance and Insights Services include lobbying compliance services and legislative tracking. The Chief Operating Decision Maker ("CODM"), who is the Company's Chief Executive Officer, is not regularly provided asset information on a segment basis, as it is not used to allocate resources or assess performance for each segment. Therefore, total segment assets have not been disclosed. In addition, for the three months ended March 31, 2026 and 2025, revenues in each of the three segments were primarily attributable the United States operations, as there were no other countries from which the Company derived segment revenues that exceeded 10% of that segment's total. The CODM utilizes segment revenues, significant expenses consisting of staff costs and non-staff costs by segment and Adjusted Pre-Bonus EBITDA by segment (as described in the MD&A) to evaluate the Company’s financial performance, allocate resources, and make key operating decisions. The following tables present key segment information and a reconciliation to the consolidated net loss after income taxes for each of the three months ended March 31, 2026, and 2025. 14 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Three months ended March 31, 2026 Government Relations Consulting Corporate Communications & Public Affairs Consulting Compliance and Insights Services Total Revenue $ 28,358 $ 18,293 $ 3,472 $ 50,123 Costs and expenses: Staff costs by segment 12,903 10,979 1,474 25,356 Non-staff costs by segment 2,560 2,521 254 5,335 Segment Adjusted Pre-Bonus EBITDA $ 12,895 $ 4,793 $ 1,744 19,432 Reconciliation to net loss before income taxes: Unallocated bonuses ( 3,889 ) Unallocated corporate level expenses ( 4,690 ) Depreciation ( 42 ) Share-based accounting charge ( 7,282 ) Post-combination compensation charges ( 2,846 ) Long term incentive program charges ( 962 ) Change in contingent consideration ( 6,303 ) Amortization of intangibles ( 1,603 ) Loss from operations ( 8,185 ) Gain on bargain purchase 52 Interest, net ( 790 ) Other income, net 166 Net loss before income taxes ( 8,757 ) Income tax expense 2,740 Net loss after income taxes $ ( 11,497 ) 15 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) Three months ended March 31, 2025 Government Relations Consulting Corporate Communications & Public Affairs Consulting Compliance and Insights Services Total Revenue $ 26,164 $ 10,013 $ 3,134 $ 39,311 Costs and expenses: Staff costs by segment 12,601 6,320 1,322 20,243 Non-staff costs by segment 2,066 1,455 140 3,661 Segment Adjusted Pre-Bonus EBITDA $ 11,497 $ 2,238 $ 1,672 15,407 Reconciliation to net loss before income taxes: Unallocated bonuses ( 3,138 ) Unallocated corporate level expenses ( 3,846 ) Depreciation ( 40 ) Share-based accounting charge ( 7,444 ) Post-combination compensation charges ( 3,441 ) Long term incentive program charges ( 1,123 ) Change in contingent consideration ( 983 ) Amortization of intangibles ( 1,292 ) Loss from operations ( 5,900 ) Gain on bargain purchase — Interest, net ( 602 ) Net loss before income taxes ( 6,502 ) Income tax expense 4,112 Net loss after income taxes $ ( 10,614 ) NOTE 8. INCOME TAXES The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. As of March 31, 2026, and March 31, 2025, no material valuation allowance has been recorded against the Company’s deferred tax assets. The Company applies a recognition threshold and measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For a tax benefit to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company has not identified any uncertain income tax positions that could have a material impact on the condensed consolidated financial statements. The Company recognizes interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense; the Company did not have any such amounts accrued as of March 31, 2026, and December 31, 2025. Tax years from 2022 to 2024 remain subject to examination; 2025 has not yet been filed. For interim periods, the Company recognizes an income tax expense or benefit based on an estimated annual effective tax rate ("EAETR"), calculated on a worldwide consolidated basis and expected for the full fiscal year. The EAETR is based on the statutory tax rates then in effect and adjusted for estimated permanent differences. Discrete items, when material, are excluded from the EAETR and are recognized in the interim period in which they occur. For the three months ended March 31, 2026, the Company recognized an income tax expense of approximately $ 2.7 million on a net loss before income taxes of $ 8.8 million. Income tax expense for the period included a discrete tax benefit of approximately $ 1.7 million related to a one‑time transaction that resulted in the recognition of a deferred tax asset. This discrete benefit was recognized in the period incurred and was excluded from the Company’s estimated annual effective 16 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) tax rate. The Company’s effective tax rate for the three months ended March 31, 2026, was ( 31.3 )%, which was significantly impacted by the discrete item described above. For the three months ended March 31, 2025, the Company recognized an income tax expense of approximately $ 4.1 million on a net loss before income taxes of $ 6.5 million. The effective tax rate for the period was ( 63.2 )%. The effective tax rates for the periods differed from the federal statutory rate of 21% primarily due to state taxes, GAAP compensation incurred that is not deductible for tax purposes, as well as other items related to prior periods’ business combinations that generate permanent book/tax differences. The Company does not expect that any law changes enacted during the period will have a material impact on the provision for income taxes. NOTE 9. FAIR VALUE MEASUREMENT The following table presents a summary of the Company’s liabilities that are measured at fair value on a recurring basis by their respective fair value hierarchy level as of March 31, 2026: Level 1 Level 2 Level 3 Other liabilities $ — $ — $ 12,595 Contingent consideration — — 19,284 Total liabilities $ — $ — $ 31,879 The following table presents a summary of the Company’s liabilities that are measured at fair value on a recurring basis by their respective fair value hierarchy level as of December 31, 2025: Level 1 Level 2 Level 3 Other liabilities $ — $ — $ 12,030 Contingent consideration — — 12,998 Total liabilities $ — $ — $ 25,028 The carrying values of cash, contract receivables, and accounts payable and accrued expenses on March 31, 2026 and December 31, 2025 approximated their fair value due to the short maturity of these instruments. Financial Instruments that are Measured at Fair Value on a Recurring Basis Contingent Consideration The fair value of contingent consideration from the Company's acquisitions were measured using Level 3 inputs. The following table summarizes the change in fair value, as determined by Level 3 inputs, for the contingent consideration using the unobservable Level 3 inputs for the three months ended March 31, 2026 as follows: Balance as of December 31, 2025 $ 12,998 Change in fair value 6,303 Effect of currency translation adjustment ( 17 ) Balance as of March 31, 2026 $ 19,284 17 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The following table summarizes the change in fair value, as determined by Level 3 inputs, for the contingent consideration using the unobservable Level 3 inputs for the three months ended March 31, 2025 as follows: Balance as of December 31, 2024 $ 10,896 Cash and stock payout of contingent consideration ( 725 ) Change in fair value 983 Effect of currency translation adjustment 46 Balance as of March 31, 2025 $ 11,200 The estimated fair value of contingent consideration is calculated using Monte Carlo simulations with inputs such as expected volatility of future operating results, discount rates applicable to future results, and expected growth rates. Other Liabilities The fair value of other liabilities, comprising of post-combination compensation obligations of the Company, relates to various acquisitions. The estimated fair value of other liabilities is calculated by Monte Carlo simulations utilize estimates including expected volatility of future operating results, discount rates applicable to future results, and expected growth rates. The following table summarizes the change in fair value, as determined by Level 3 inputs, for the other liabilities using the Level 3 inputs for the three months ended March 31, 2026 as follows: Balance as of December 31, 2025 $ 12,030 Accretion of liability 565 Balance as of March 31, 2026 $ 12,595 The following table summarizes the change in fair value, as determined by Level 3 inputs, for the other liabilities using the Level 3 inputs for the three months ended March 31, 2025 as follows: Balance as of December 31, 2024 $ 4,880 Accretion of other liability 1,195 Other liabilities ( 996 ) Effect of currency translation adjustment 3 Balance as of March 31, 2025 $ 5,081 18 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The Monte Carlo assumptions and inputs (which are Level 3 inputs) are as follows for the years ended March 31, 2026 and 2025 are as follows: March 31, 2026 Significant Input Weighted Average Input (1) Input Range Discount rate for credit risk and time value 4.7 % 4.4 % to 4.9 % Discount rate for future profit after tax 15.1 % 9.0 % to 19.5 % Expected volatility of future annual profit after tax 32.1 % 11.0 % to 35.0 % Discount Rate Applicable to Future Annual EBITDA 15.0 % 14.6 % to 15.5 % Expected Volatility of Future Annual EBITDA 31.5 % 31.0 % to 32.0 % Forecasted growth rate 8.4 % 0.8 % to 28.0 % March 31, 2025 Significant Input Weighted Average Input (1) Input Range Discount rate for credit risk and time value 5.1 % 5.0 % to 5.7 % Discount rate for future profit after tax 15.4 % 11.0 % to 20.7 % Expected volatility of future annual profit after tax 30.1 % 30.0 % to 31.0 % Forecasted growth rate 8.1 % 4.9 % to 55.1 % (1) The weighted average is calculated using the estimated fair values Financial Instruments Not Measured at Fair Value on a Recurring Basis The Company's Notes Payable are subject to a variable interest rate. As a result, the carrying amount of these instruments closely approximates their fair value. Non-financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain non-financial assets are measured at fair value on a nonrecurring basis, primarily goodwill and intangible assets, which are classified as Level 3 fair value measurements, and right-of-use lease assets, which are classified as Level 2 fair value measurements. These assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic evaluations for potential impairment. NOTE 10. CONTRACT BALANCES AND ALLOWANCE FOR EXPECTED CREDIT LOSSES The following table provides information about receivables, contract receivables and contract liabilities from contracts with customers as of: March 31, 2026 December 31, 2025 Accounts receivable $ 35,098 $ 23,831 Unbilled receivables 1,526 512 Allowance for expected credit losses ( 2,386 ) ( 2,492 ) Total contract receivables, net 34,238 21,851 Contract Liabilities / (Deferred revenue) $ ( 6,075 ) $ ( 3,310 ) Contract liabilities represent advance consideration received from customers under the terms of the Company's contracts, primarily related to retainer fees and reimbursements of third-party expenses. These amounts are generally recognized as revenue shortly after billing, as the related services are performed or expenses are incurred. Deferred revenue totaled $ 6.1 million as of March 31, 2026, and $ 3.3 million as of December 31, 2025. The Company expects that these amounts will be recognized as revenue within one year of the respective balance sheet dates. 19 Table of Contents PUBLIC POLICY HOLDING COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Amounts in thousands, except share and per share data) The following table summarizes information about the activity in the allowance for expected credit losses as follows: Balance as of December 31, 2024 $ 1,102 Provision for expected credit losses 2,353 (Write-off)/Recoveries ( 963 ) Balance as of December 31, 2025 $ 2,492 Provision for expected credit losses 683 (Write-off)/Recoveries ( 789 ) Balance as of March 31, 2026 $ 2,386 As of March 31, 2026 and December 31, 2025 the balance of the allowance for credit losses approximated $ 2.4 million and $ 2.5 million. respectively . NOTE 11. SUBSEQUENT EVENTS On March 20, 2026, the Company entered into a binding agreement to acquire all of the outstanding shares of Westminster Policy Partners Limited, a leading UK public affairs and economics consultancy. The acquisition was completed on April 1, 2026, for a combination of cash and shares. On May 1, 2026, the Company acquired the assets of the management companies Cowen Consulting, LLC and Putnam Strategies, LLC, specialists in federal, state, and local government relations. The acquisition was completed for a combination of cash and shares. 20