PPHC

Ladies and gentlemen, thank you for standing by. Welcome to PPHC's second quarter 2026 earnings conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Matthew Mazzanti, Chief Administrative Officer. Please go ahead.

Thank you, operator, and good afternoon. With me today are Stewart Hall, our Chief Executive Officer, Roel Smits, our Chief Financial Officer, and Thomas Gensemer, our Chief Strategy Officer. Before we begin, please note that the following remarks and presentation include forward-looking statements and non-GAAP financial data. Forward-looking statements about the company, including those related to earnings guidance, are subject to uncertainties and risks, factors addressed in the company's SEC filings. For further details of the non-GAAP financial figures discussed in this presentation, including reconciliations to the nearest GAAP figures, please refer to the financial appendix in the investor presentation available on our website, investors.pphcompany.com. With that, I'll now turn the call over to Stewart.

Thanks, Matthew, and thanks to everyone who's joining us this afternoon. The first half of the year developed broadly as we expected, and we're pleased with both the performance of the business and the progress we've made against our overall strategy. At the highest level, revenue in the first half increased 16.3% year-over-year to $102.3 million. That was organic growth included in that of 4.4%. Adjusted EBITDA increased to $23.4 million, up 9.3%, representing a margin toward the top end of the range that we previously had communicated. Just as importantly, the business strengthened as the half progressed as it usually does. In the second quarter, we delivered revenue of $52.1 million, continued organic growth and an adjusted EBITDA margin of 23.5%, an improvement from the first quarter and consistent with the seasonally adjusted numbers that we discussed on our last call.

Following this performance and our recent acquisitions, we're raising our full-year revenue and adjusted EBITDA guidance. Roel will take you through that more thoroughly in our quarterly results and revised outlook and the underlying drivers in greater detail shortly. Halfway through the year, we're delivering how we said we would. The outlook for the business has strengthened, and we retain the balance sheet capacity to continue executing our strategy. Additionally, on results, we reported a GAAP loss of $3.7 million in the quarter, a nearly 35% improvement year-over-year. I want to take a moment and really discuss that number because the direction of travel is significant here, and especially as we enter the second half of 2026 and the beginning of 2027. The story behind it hasn't changed, but it's worth repeating plainly.

The largest difference between our GAAP and our management P&L is the approximately $30 million a year non-cash share-based comp charge that resulted from our 2021 London listing, subjecting shares issued at that time to employee owners to a five-year vesting schedule. This charge will fully amortize at the end of this year, and we are looking forward to it dropping off and the positive effect we believe it will have on our GAAP financials. Roel, again, will jump into this in a bit more detail. On M&A, we continue to execute a disciplined strategy. We closed on three deals this year, including our long-desired presence in Florida with the addition of The Advocacy Partners on August 1st. All three transactions follow the same principles we stick to in M&A. We added a differentiated capability with each acquisition. They were margin accretive.

They extended our reach where clients need us, and they link future purchase consideration to future performance. Thomas will go into these in more detail as well toward the end of the call. Before we go into the financials, a word on AI. It is a question that we hear from investors often, and it deserves a very direct answer from us. We believe PPHC is very well positioned for the continued adoption of AI across industries for three main reasons. One is our business structure. Two is the demand that AI clients and AI issues are generating for our services. And three, the operating leverage that AI itself provides for our senior-heavy workforce. First, let us talk about structure. We do not do hourly billing, but in a very, very small % of our engagements.

By default, firms that bill by the hour are built on a pyramid of junior staff that sell output that any capable model can reproduce now in seconds. And they are in an existential period, and they need reinvention. That is not our model. Roughly 90% of our revenue is retainer-based, and our annual client retention of that revenue is 80%-85%.

That remaining revenue that we do take in on top of that is project-based, but what that just means is that it is a short-term engagement by design tied to deliverables, but it is not billed against hours. Our clients buy senior counsel that drives outcomes and on issues that are vital to their businesses, not billable time, not consumer-oriented campaigns, and not markup on entry-level hours. There is no pyramid at PPHC for AI to compress. Unlike sectors where the fear is shrinking the fee pool, our core market is expanding.

Federal lobbying spending set a record last year, roughly $5 billion, and grew at its fastest pace since 2008. Second, demand. When we look at AI, we do not see a threat to defend against. We actually see a tailwind driving our growth. AI is now one of the most active policy issues in the country at every level of government. At state level, we have tracked over 1,800 AI-related bills in 47 states, and that is a twelvefold increase over three years. Since 2025, our firms have been engaged by roughly 60 new clients whose core business itself is AI. That is everyone from model developers and AI native companies to the chip designers, hyperscalers, and data center builders behind them. Companies that need some subset of our services, often very early in their journey.

And also it's important to note, clients across energy technology, healthcare, and financial services are retaining us to work on the same issues, because AI now touches their regulatory agenda, whether they build the technology or simply deploy it. Third is operating leverage. We're deploying AI workflows inside our own business. So our senior advisors spend less time assembling research and more time on judgment, strategy, and the advocacy services clients hire us for. Virtually none of our revenue depends on reselling the hours that AI eliminates for other firms. Commodity work gets automated. The work we do, senior led, built on client trust, is worth more as AI proliferates, and that's where PPHC sits. In conclusion, we think the environment remains favorable for our business. Federal lobbying continues at record levels. State-level activity remains intense.

The 2026 midterm cycle is adding to client demand for intelligence, advocacy, and strategic communication support following this election cycle. This is exactly the operating backdrop the company was constructed for, and we continue to execute against quarter after quarter. With that, I'll hand it over to Roel for a closer look at the numbers. Roel?

Thank you, Stewart. I'm going to focus on four areas. On overall growth and profitability, on our results by segments, on our cash generation. Today I'm going to start with our guidance. We are very pleased to update our financial guidance for the full year 2026, following the several M&A transactions that we've announced. I'm really referring to WPI on April 1st, Tancredi on July 1st, and as of last week, the acquisition of The Advocacy Partners in Florida as of August 1st. Based on our ongoing expectation that we will deliver approximately 5% organic growth in combination with the aforementioned acquisitions, we're now anticipating reported revenue to come out in the range of $213 million-$216 million, and adjusted EBITDA in the range of $48.5 million-$50.5 million at a margin between 22.5% and 23.5%.

Compared to our previous guidance, this represents approximately an additional $8 million in revenue, $2.5 million in adjusted EBITDA, and a margin range that is 50 basis points higher than our previous guidance. What has not changed is that we continue to expect strong free cash flow conversion in the balance of the year, consistent with our normal second half weighting. First, to set things up, a quick overview emphasizing that we're really pleased with how the year has been progressing so far. We've grown revenues by 16.3%, including a healthy dose of organic growth. Alongside, our profit has gone up and we've controlled our margin in a way that we're able to reiterate and strengthen the guidance that I just gave you. So let's look at the financial highlights. Here's a chart that captures our primary KPIs, both for the three months and the six months.

Revenue in the second quarter was $52 million, up 7% year-over-year, of which 3.9% was organic and the balance came from acquisitions, primarily WPI Strategy in London that was acquired in Q2. We were pleased with the organic growth of 3.9%, especially because this was up against a very strong comparable of 10% organic growth in last year's Q2. For the first half, revenue was $102 million, up 16% with organic growth of 4.4%, consistent with the approximately 5% average organic growth that underpins our outlook. When we go to adjusted EBITDA, after six months, it was at $23.4 million at a 22.9% margin, which is indeed at the top end of the range of 22%-23% that we previously communicated for the full year.

When comparing ourselves to last year for the six months, we were up 9%, and for the three months, we were down 4.4%. I want to be very explicit about the three factors that drive the relatively modest level of Q2 year-on-year adjusted EBITDA growth, or decline rather. First, there is this already aforementioned relatively strong comparable from Q2 2025, when we delivered a 10% organic growth at a 26% margin. That's what we were battling against this quarter. Second, we saw the predicted increase of our corporate costs come through as a direct result of U.S. public company costs we are incurring due to our Nasdaq listing, and also the continued build out of our central platform and all the associated advisory costs. Finally, as a third factor, there's also the relative change in business mix between our three segments.

Although, I would say that the impact thereof is relatively light this year. You will see in a later chart that I'll bring up that the underlying operating business actually remained very resilient with the blended margin of the three operating segments broadly stable. That means that the reduction in our adjusted EBITDA margin really reflected the higher holding company costs rather than changes in our operating companies, and such was also anticipated in our March guidance. Now let's move to adjusted net income. For the first six months, adjusted net income was $17.9 million, up 15%. That was a good result. It was positively impacted by a reduction in our interest charges because our cash and debt positions have both improved due to debt repayments and, of course, having the IPO money on our balance sheet.

This was partially outweighed, not visible here, by one-off M&A expenses being heavier this year to the tune of $800,000 year-on-year increase. The final explaining factor for adjusted net income is the tax rate. But for the six months, the effective tax rate was approximately even to last year. However, on a quarter-by-quarter basis, there was a significant swing. As I explained last quarter, the phasing of a tax provision across the quarters is heavily impacted by our GAAP results and the forecasts thereof. Therefore, the quarterly rates are typically not really indicative of where we will land for the full year. Now, let's go to EPS. Our GAAP loss per share for the six months improved from a year ago to a -$0.68 per share.

Adjusted fully diluted EPS, which is the measure most of us will look at, was $0.34 per share for the quarter and $0.59 per share for the first half, which is down $0.015 versus the prior year. That is a modest result on EPS, but it really is actually a very good result if one realizes that the good result in the numerator, i.e., the movement in adjusted net income, was getting offset by an increase in the denominator, i.e., in the share count. A reminder, our weighted average share count increased by 70% year-over-year, principally as a result of the Nasdaq IPO in January. That dilution provided us the capital that reduced our net debt almost to a net cash position, and it is also funding the acquisition agenda that Thomas will describe. There are dividends.

As a reminder, in Q2, we paid our customary final dividend of $0.24 per share this year, which equaled to approximately $7 million cash outflow. Adjusted free cash flow for the first half was $4.1 million, compared to $11.7 million in the first half of last year. This is a step down that clearly not aligns with the growth we are posting elsewhere in our P&L. Let me be very precise about what is driving it and why we are not so concerned about the trajectory as a company with a historically very high adjusted free cash flow conversion. The two factors. The first was the lower cash flow in H1, which is an expected outcome of the fact that our free cash flow generation is structurally weighted towards the second half, given that in the first half, we paid annual bonuses to our staff.

Secondly, we had in this first half a relatively high investment in working capital in 2026, primarily in accounts receivable. We already mentioned this factor in Q1, and I will admit it has taken us longer to regain ground on it. But right now, we see the impact of various actions that we put on the way, and we expect that working capital investment will lessen as the year progresses further. Taken altogether, we are confident that adjusted free cash flow will accelerate in the second half and will convert in line with our normal pattern. That brings me to the balance sheet. We ended the quarter with $36.9 million of cash against a total debt of $42 million, which results in a net debt position of $5.2 million, which you can compare against the $42.2 million at this point last year.

This is after the $7 million dividend payment in May and after the cash consideration for the acquisition of WPI. Obviously, it does not yet reflect the closing payments we made early Q3 for the acquisitions of Tancredi and The Advocacy Partners, which total $28 million. Overall, we remain in a position of real balance sheet strength with ample flexibility for continued earnings accretive M&A. Now let us look at the segments. Starting with organic growth, organic revenue growth. In this chart at the top, you see the organic growth for the past four years, and at the bottom, you see a quarterly breakout for the past two years. Going from left to right, one can see that Government Relations, here depicted in dark blue and always remaining our anchor activity, 58% of our total business, it accelerated its growth.

6% organic growth for the half year, with 5% organic growth in the first quarter being followed by 7.4% in the second quarter. Corporate Communications & Public Affairs has shown a relatively muted growth this first half year at -1%, with the quarter so far being +3% in Q1 and -3% in Q2. However, it's important to also look back and see the strong comparable of last year, especially in this last segment, i.e., in Corporate Communications & Public Affairs. You can see here that last year we recorded 22% organic growth in Q2 due to an exceptional flow of post-election project work. That puts this year's muted growth in a different spotlight. Finally, Compliance & Insight Services, which represents 7% of our business, keeps growing at double digits, this year in the low to mid-teens.

Now we go to margin performance, and we are introducing this new chart as it does a very clear job of showing the reason of our year-on-year margin decline, in this case, depicted for Q2. One can see that the segments keep scoring margins at approximately the same levels as last year, leading to a blended segment margin before bonus of 39.5%, only half a point down from last year. But below that blended segment margin, one can see the impact the holdco costs have on the margin. The holdco costs went from 6% of revenue last year to 8.2% of revenue this year. As previously mentioned, that was primarily as a result of the IPO cost and the associated investments we had to make in staff, tech stack, and advisors. Finally, the bonus pool remained actually steady at 7.8%.

Together, these factors lead us to the adjusted EBITDA margin we're presenting today. We believe this picture shows very clearly that the margin erosion that we currently experience is not so much a function of our business results, but merely of our holdco investments. As I did last quarter, I'm going to skip the charts covering the full management P&L, cash flow, and net debt position, but they're in this deck and the appendix for your later reference. After having reviewed these financials, I would like to make one more observation that reinforces the point that Stewart made earlier on the GAAP results. In this chart, one sees our GAAP results for a number of periods. At the bottom, we also show what the GAAP results would have looked like had it not been for the share-based accounting charge.

As we have explained in each of our filings since 2021, this share-based accounting charge is a remnant of our 2021 London listing and has no cash impact or share dilutive impact. As Stewart noted, this amortization charge will fully roll off at the end of this fiscal year. As of 2027, that single expiring item will greatly affect our GAAP profitability, and in many periods, we're going to likely present positive GAAP profits. As of that time, the primary remaining non-cash item sitting in between our management results and the GAAP results are going to be our non-cash M&A related charges, which all relate to the specific fact that in our M&A model, the way we structure our deals, we make significant portions of the purchase price subject to vesting and continued employment.

That in itself results in P&L charges, and they are here to stay, and they will continue to suppress the GAAP results. However, with the disappearance of the share-based accounting charge, we believe the GAAP results will look a whole lot better. With that, I am going to hand it over to Thomas. Thomas?

Thanks, Roel. I would like to focus my remarks on a few threads Stewart opened because the quarter gave us important examples of each. Starting with talent, because our growth strategy remains fundamentally talent-focused, recruiting and retaining the best people for our markets. First is talent via M&A, and I want to give you the strategist version of the three deals Stewart covered earlier, because both are precise examples of our stated criteria. We invest against capability and geography, in that order. WPI brings economics grounded capability and bolstered our scale in London. A win-win. On this, the early cross-sell is telling. Here is a timely example. WPI, now part of our Pagefield Group, just sold an important piece of work to one of California's based clients via KP Public Affairs. Their economics expertise is globally applicable.

In fact, their Chief Economist, Martin Beck, has started getting media attention in the U.S. for his work, including recently in Dow Jones and in Reuters, as he broadens his visibility via PPHC. Similarly, Tancredi, which closed in July, is a powerhouse addition by way of its advisory capabilities. They add geographic depth to TrailRunner and deepen our collective strength in the highest value area of communications work, crisis, litigation, and financial special situations. Another win-win. Most recently, just in fact last week, The Advocacy Partners gave us a strong entry into the state of Florida. We have said that we need to be in Florida for years now, given its significance, politically and economically, and we finally found the right team to bring into the group. Keep in mind, Florida's economy would rank 14th in the world. Like California, a very critical market for us.

In addition to being an excellent team, they have all the features of a standout Government Relations firm, superb margins, and highly recurring retained revenue from a blue-chip client base. You heard me say last quarter, as we expand our base in key U.S. states, in Europe and beyond, we are definitely not putting dots on the map for the purposes of coverage. Indeed, we are seeking and convincing world-class entrepreneurs and market leading practitioners who seek to join a different kind of global platform. Our unique multi-branded operating model also appeals to leading individual talents. Outside of an M&A situation too, our operating brands represent distinct political relevance in their jurisdictions. They have unique firm cultures and diverse leadership, which is attractive to professionals looking for entrepreneurial issue-rich career opportunities. Our public company status and incentive stock programs makes PPHC a unique career opportunity in the sector.

Finally, portfolio integration and client diversification, because the model keeps proving itself in the numbers. Our top 10 clients now represent 7.5% of revenue, down from 9.4% a year ago. That is with integration and collaboration increasingly meaningful. Extrapolating further, my favorite stat to boast, no single client is more than 2% of the business. We ended the half with approximately 1,500 clients, including roughly half of the Fortune 100, and the revenue mix continues to diversify as well. There remains no meaningful client concentration risk in our business. A quick update on our post-M&A integrations. TrailRunner International is now past its first year and performing above expectations. Pine Cove Strategies continues to deliver on the Texas state-based theory, and WPI Strategy's first quarter with Pagefield is tracking to plan. Finally, the M&A pipeline, it remains very active.

Dozens of firms at various stages with the same mix of capability in North America, U.K., mainland Europe, Middle East, and Asia. Our sweet spot is unchanged. Businesses in the $10 million-$30 million revenue range, which can contribute to our premium margin profile and with a clear cross-selling capability into the existing portfolio. Competition for these assets remain dominated by private equity platforms and our differentiation is the same as it has always been. The market-leading scale of our Government Relations business, the policy expertise across the platform, and our public company status. With that, I will hand it back to Stewart.

Thanks so much, Thomas. Let me pull it together with the same framing we used last quarter, because a quarter on, it still holds up. First, stability. The retainer base, the client retention, and the lack of meaningful revenue concentration, all as Thomas spoke of just now. Second, profitability. First half adjusted EBITDA up year-over-year with margins holding steady and well inside of our full year guidance range. The GAAP picture is improving on schedule as we noted twice with the approximately 30 million share base comp charge from the London listing fully amortizing at the end of this year and putting us on a path to have GAAP results more closely reflect our management P&L. Third, growth.

Our base delivered 4.4% organic growth in the first half against a very tough comparable, and our disciplined M&A continues with three deals closed year to date and a robust pipeline that remains under active consideration. Four, the most important, and I always mention this, is our people. The reason any of this works. 200+ of our 476 employees have some form of equity instrument, including more than 150 with outright stock ownership. This model is built around keeping our best talent as employee owners, bringing the next generation into ownership, and aligning the interest of our employees with the overall success of the business.

The first half played out the way we told you it would and the way we expected it to, with steady organic growth, disciplined M&A, margins at the high end of our previous guidance, and a balance sheet that gives us room to keep executing on our strategy. As always, I appreciate your time and your continued interest in PPHC, and we'll turn it over to the operator for questions.

Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question is going to come from Jason Tilchen with Canaccord Genuity. Your line is open.

Good afternoon, everyone, and thanks for taking my questions. To start, with the three deals you've completed so far this year, can you now give us a refreshed look at your top priorities in terms of an M&A checklist and how the most active part of your current pipeline aligns with that checklist?

Jason, I'll let Thomas add any flavor he wants, but this is Stewart. I'll take that first. Thank you for being here with us today. In short, it remains as we've repeatedly laid it out, which is, as Thomas said again, geography capability along with the people and the margin profile that make it fit the overall mix of the company properly. Is it complementary in one way or another or not? I think, obviously, we still maintain a very healthy pipeline. We continue to evaluate opportunities regularly. I think that, again, we will continue to look at geographic expansion, as well as, again, capability adds. I would probably say in terms of our actual business mix, we like where we sit now. I think adding our first lobbying property in quite a while in The Advocacy Partners last week was significant.

I think, again, it shows and I hope it demonstrates to people that we're committed to our base of Government Relations as our highest margin business. We're going to continue to pursue those along with other selected communications assets, which either enhance the Corporate Communications & Public Affairs side of the equation or again, are additive to our PA comms. Thomas, you got anything you want to add to that?

Yeah. I'd only add that to emphasize Stewart's point, that we really like the lobbying anchor, because of just the nature of the client relationship. The fact that's where we started from, where the differentiation versus our sort of peer set is. Without giving too much away, there are some key geographies that we still see both immediate client need and positive growth. We've managed so far to do the international thing without margin accretion. All the margin accretion we've seen has just been at the whole company level based on the listings. London into Europe, into other places where we can still maintain this premium and unlock new client wallets is really important.

They also are small sized enough that they could be acqui hires, they could be outright hires or, in the case of like The Advocacy Partners or Tancredi, they were sort of sweet spot sized partnerships of a relatively small set of people. So we'll continue to deploy the firepower and the hiring around key talent when it comes available.

Okay. That was very helpful. I guess the follow-up there, understanding that because of sort of business secrets and whatnot, you may not be able to share full details, but in terms of geography, when we spoke sort of six months ago, the U.K. and Florida were both on that priority list. With those being checked off, is it fair to say that maybe New York, the Middle East, Southeast Asia, have shifted up that list? Similarly, on the tech side, is there anything with the evolving AI landscape? Is there anything from a capability standpoint that you're certainly looking at adding via M&A rather than doing organically?

On the second question, you're sharp on the list. That's right, the reshuffling only broader points of Europe, I continue to emphasize the need of Brussels as to our operating companies and clients. On the AI side, there's so much innovation happening there. We'll get something or more every day about platforms that are targeting our space or adjacencies. We feel comfortable having been really promoting the usage of a mix of tools across the different operating companies and holding our powder a little bit because there's still a lot to be sorted in how this will be. We've invested in some tools for our group, for users, and promoted some use cases, and are watching how clients are demanding and restricting usage. It's super interesting. Nothing to invest in yet, but for that.

Okay, great. Very helpful. Then one last quick one for Roel. I know there was a lockup that was set to unlock, I should say, around six months after the U.S. listing. Can you just provide some additional detail on the exact timing of when that happened, or when that is going to happen in the near future here, and the magnitude of that as well?

Yes. Yeah, that half year lock-up actually started on at the time for IPO end of January. So that's now over because it expired at the end of July. We have, of course, since been still in a blackout period. So our employees have not been able to trade. We'll need to see to what extent people are looking to sell right now. Our expectation as management is that we're not going to see a whole lot of selling. But okay, we will need to see how that develops now in these days after the announcement of the results when we're out of our blackout.

Great. Thank you very much.

Thank you. Our next question will come from Scott Schneeberger with Oppenheimer. Your line's open.

It's Scott. Thanks very much. Hey, Stewart. Good afternoon, all. Stewart, great overview on AI. I found that was very well laid out. I think I'll start. This sounds like a question for Roel, but Stewart, I'd like to hear your thoughts, too. With the new guidance and obviously unannounced acquisitions aside, what are some drivers that would put you feeling good at the high end? What are some things out there that make you nervous maybe toward the low end? Thanks.

Shall I take this?

Yeah, go ahead, Roel, then I'll provide just a tad of color after you're done.

Yes, absolutely. Scott, I think the variability of our guidance is really driven by the unknown about our project work. Our project work can go up, can go down. We've had many years where certain big projects suddenly come up, and it's very hard to predict for those. So I would say that is first and foremost the biggest driver of change. All the other bits we actually have a very good visibility on.

The only thing I'd like to add to that too is that the one thing that is extremely encouraging is to have had lobbying grow at 6%. It wasn't all federal. Our assets did pretty well across the globe that we defined as Government Relations. That converts, again, at a much higher profit rate than comms does.

As a result, we get more uplift on average from lobbying growth, and it really is demonstrating the first half of this year was really positive. I think that, as much as anything, provides me some level of comfort within the range as Roel's provided. I think more to the point is that we've seen this pattern before with PA comms in even numbered years, getting a little bit flatish in the first and second quarters of an even numbered year. We saw a pretty big pickup toward the very end of 2024. You never want to, as Roel says, or intimated, you never want to count your chickens before you hatch. We've seen these patterns before, but the lobbying uplift really to me is what's driving my positive feelings about the year.

Great, thanks. That segues nicely to my next question, which was just that. Looking at second quarter last year, Roel, I'm on slide 23 for reference, but it was a really strong second quarter last year, and you grew nicely on top of that. The question is, what is driving the strength in lobbying, maybe beyond seasonality or odd and even number years? Clearly, there's some tailwind. What are you seeing maybe across some of those end market trends?

I think, Scott, there's a macro trend against it where we just continue to see government be more active at every level. I think one thing we're seeing too is some uplift too from the fact that our state government operations continue to get more robust as well. A lot of states are going through constitutional office elections. Obviously, legislative seats are up too this year, just like the federal level. We've really, I think, seen the macro trend that really is kind of the basis of all of PPHC, or at least its original founding, which was the growth of the size of government and the activity that any social or economic changing factor, whether it be technology, be practices, et cetera, that are new, will drive political interest and lead people to obviously have to look after their interests.

I think, again, you go back to the AI example. That's not all of that growth, but it's significant that there's an issue that wasn't as heavily in the ecosystem last year, but this year has really come to the fore at every level of our practices, state, federal, and local. I think there's a macro trend there. I think the micro trend is probably that, again, frankly, in the federal sector, the president does drive a certain level of activity across a number of issue areas. That continues apace as well in Washington. Again, we're kind of seeing this across the board.

Great, thanks. Just last one from me. It is referencing slide 32, just client base, nearly half the Fortune 100 is quite impressive. Can you speak to mix of lobbying versus strategic communication and maybe hit on cross-sell since you have this great base and how that is working within the organization? Thanks.

Roel, you want to comment on that?

Yes. The relative size, is that your first question about the relative size between strategic communication and lobbying?

Yeah, mix, essentially, Roel.

Yes, exactly. No, listen, we expect actually now for the remainder of this year, of course, the mix to remain roughly the same given that we bought a little bit of strategic comms and a bit of lobbying. Margin-wise, I also suspect that this year is going to be fairly, I would say, level compared to prior year. We provided that one extra chart now where you can really see that actually overall, the business has delivered very, very resilient margins overall, and that it was indeed more the corporate overhead that has gone up a little bit, driving overall margin down. I would say for our overall business picture in the three segments, I don't anticipate too much change in relative weight and more in margins of each of these segments.

I guess, Scott, the other piece of your question was really alluding to cross-sell and intercompany business development. Again, I think that momentum continues to pick up. I'm not going to quote any exact internal metrics for you, but the fact is, there's more and more work that is going out now that is involving more than one company under a unified contract vehicle, meaning that they are pulling on the best of the best from each of the disciplines, whether that be a researcher/data scientist combined with a comms group, combined with a lobbying effort at whatever level it's needed at.

Seeing a lot more of that moving across the transom, a lot more activity driven by our chief client officer's efforts for a full year now that are really starting to pay fruit to really pull people together and practice horizontals across the globe, in which people are really more directly now in touch with their colleagues and working regularly every week, every month together on these larger cross-company mandates. We really feel like it's all coming together. I think one year in, little plus with TrailRunner International our firm belief that their skill sets were absolutely needed and integral to the Government Relations and public affairs side has proven absolutely correct. They've gotten a good bit of inbound from their sister companies and vice versa. We're certainly seeing that sometimes their skill sets might lend themselves a little more toward their skill sets rather than PA comms.

Our lobbyists and others, government affairs practitioners, are recognizing that. Again, I think the interplay between those two sides has been firmly validated a year in.

Great. Thank you all.

Thank you. Our next question comes from Sam Dindol with Stifel. Your line's open.

Hi, guys. Hope you're well.

Hey, Sam.

Good results. Hi, sure. Two questions for me, please. Firstly, on senior talent hires, obviously good progress there. Are more people picking up the phone to you now given you're U.S. listed and the good progress you're making?

I think there's no doubt about it. I think we've seen both more inbound from the sell side for firms from bankers, again, because of raised awareness, our activity in the M&A market, which obviously doesn't hurt to think that someone might be a good fit with us and to refer us for a look at things. On the talent intake side, I don't think there's any doubt about that as well. Made some key adds. TrailRunner International added Alden Mitchell, who's the former Interim Athletic Director at Stanford, to be the head of the sports division there. We've had some other selected ones. But again, really quality adds. They're setting us up well for the future.

But again, I think people are interested in being part of this platform at a time where many people, especially in the comms industry or with platforms that may be in some level of distress, whether that's because of AI or just refocusing their efforts in other areas.

Yeah. Just lastly from me, I think you previously said on M&A, three to four deals a year may be the right level. I think you've done three this year already-

Yeah.

Which is very good. Do you still think that is the right level, or do you think you go a bit quicker than that, or is there an integration element that you want to go?

Sam, there is an integration element for sure. Then all of them, I think it is always dangerous to call yourself a well-oiled machine because things change. But the integration efforts sort of start from day one and the rationalization of everything. Three to four still feels like the pace that we will operate at. And that is not saying there will be one more. It is just how we have been at this for 10 years and how we see the organization evolving each day. Yeah, I think we are opportunistic at a faster pace. I indicated in my remarks how that sort of sweet spot is $10 million-$30 million in revenue. There are still things out there that we would always bucket as sort of transformational that are bigger, but we stay sort of focused in our lanes and our regions. And the pipeline remains strong.

We are pleased with both the pace of how they are coming online and then obviously the integration success thereafter.

The only quick thing I would add to what Thomas said is that we have a really low leverage ratio. We are not finance. We have been paying for our acquisitions for this year from IPO and balance sheet cash. Frankly, as Sam, if the right thing, as Thomas alluded to, comes along or things, we are not going to hesitate as long as we maintain a prudent leverage ratio and a low leverage ratio, which we have always liked. We are not going to shy away from trying to see those things work and certainly to give them every shot if they meet our metrics.

Brilliant. Thank you.

Thank you. I am showing no further questions in the queue at this time.

Well, thanks, everybody, for joining us today. Obviously, to our investor relations people, primarily Matthew Mazzanti here at the company, who is our Chief Administrative Officer. We are always happy to schedule follow-up and talk further. We appreciate your time, your attention, and your interest in PPHC today.

This concludes today's conference call. Thank you for participating, and you may now disconnect.

Good day. Thank you for standing by. Welcome to the PPHC First Quarter 2026 Earnings Conference Call. Please be advised that today's call is being recorded. I would like to hand it over to our first speaker, Matthew Mazzanti, Chief Administrative Officer. Please go ahead.

Thank you, operator, and good afternoon, everyone. I'm here today with Stewart Hall, CEO of PPHC, Roel Smits, our CFO, and Thomas Gensemer, our Chief Strategy Officer. A press release detailing our first quarter 2026 results was issued a short while ago and is available on the investor relations section of our website. Before we begin, I'd like to remind you that during this call, management will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in the company's filings with the Securities and Exchange Commission. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

In addition, during this call, we may refer to certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings press release, which can be found on the investor section of our website. I'll now turn the call over to our CEO, Stewart Hall.

Thanks, Matthew. Good afternoon, everyone who's joining us today. I'll keep this setup brief. We covered a great deal of background on the company and its marketplace on the last call. For anyone looking for a deeper dive on PPHC, I'd encourage you to go ahead and listen back to that call or feel free to reach out to our investor relations team. They're always available for you. Turning quickly to the first quarter, we had a strong start to 2026. Revenue grew 27.5% to $50.1 million, with organic growth of 5.1%. That was a step up from the 4.7% we saw in the first quarter of last year.

Our Adjusted EBITDA was a record first quarter result at $11.2 million, up nearly 29.7% with a margin of 22.3% while we reported a GAAP loss of $11.5 million. With the IPO proceeds on the balance sheet, we ended the quarter with net debt of just $1.8 million, down from $44.6 million a year ago. That's a very different balance sheet picture than where we were. A few other notes from the quarter that I'd like to call out quickly. On M&A, we continue to execute in the same fashion we always have, using the same discipline playbook that you've heard about before. On April 1, we closed the acquisition of WPI Strategy.

WPI is a U.K.-based public affairs and economics consultancy that deepens our London presence through Pagefield Communications, but also has applications and cross-sell potential with a number of our companies across the worldwide platform. Alongside platform-level acquisitions that we are consistently evaluating and progressing to at various stages, we also pursue what I like to call common sense talent additions, or sometimes called acqui-hires. Smaller deals that bring experienced professionals with established client relationships into existing firms. They aren't transformative in size by themselves, but they're immediately accretive, and they compound over time. Last week's addition of Lee Cowen and Nicholas Evans to MultiState Associates is a good example of this. We expanded the firm's stakeholder engagement practice across federal, state, and local government relations.

Lastly, in March, we were added to the Russell 2000 and 3000 indices, a welcome milestone just a couple of months after the Nasdaq listing and one that will expand our shareholder base. On the operating environment, it remains favorable for our business. Federal lobbying spending continues at record level. State-level activity is intense. Legislatures have filed over 100,000 bills in the last year on issues that our clients care about most, things like data centers, AI, healthcare, energy, financial services. The policy agenda remains active at every level, and our clients are turning to PPHC companies to help them navigate it. That's exactly the operating backdrop that we constructed the company for and we continue to take advantage of. I'm going to have Thomas at the end of the call cover some of the relevant ways we're capitalizing on these tailwinds.

With that, I will hand it over to Roel for a closer look at the numbers. Roel?

Yes. Thank you, Stewart. I'll take you through the key financial highlights for the quarter. Before I do so, I would like to point out that the comparables for Q1 of 2025, we had never released those before due to the semi-annual reporting schedule that we used to work under when we were only at the London AIM listing. Needless to say that these Q1 numbers for 2025 were produced in a way that is consistent with all our subsequent quarters and undergoing the same level of rigor and review by our auditors. Let's do first a quick helicopter picture of what we believe was a really nicely strong quarter. Our revenue continued to trend upward year after year, every year with positive organic growth. As Stewart already alluded to, we reached revenue of $60 million in Q1, which represented year-over-year growth of 28%.

In this chart, the light blue part in the revenue bars represents M&A growth. In Q1, this M&A-driven growth stemmed primarily from TrailRunner, which we completed in Q2 of last year and which has now been for a full year within our portfolio.

As well as by Pine Cove Strategies, which joined us in Q3 of last year. The red segment in each bar represents organic growth. In 2026 Q1, this organic growth was equal to $2 million of 5%, which is really actually in line with the organic growth that we ended Q4 last year with. In terms of profit at the bottom, we realized Adjusted EBITDA of $11 million, which is a record for Q1 by itself, and it's up $2 million versus prior year. In margin terms, it was approximately level with last year's margin. I would like to point out that margins in Q1 typically tend to be slightly lower than the margins for the full year because of the slight seasonality in our top line that favors Q2 and Q3.

Overall, it's worth re-emphasizing that in 2026, we anticipate a margin of somewhat below our 25% target. On the one hand, due to the ongoing shift in business mix, but primarily because of the increase in our public company costs we're experiencing as a consequence of our new Nasdaq listing. We already anticipated those increased costs and then are now seeing them come through. Let's look at the financial highlights on a consolidated basis. Thereafter, I'll zoom in by segment. The first two boxes, revenue and Adjusted EBITDA, I already talked about. Let's go to the third box, the adjusted net income. This measure nearly doubled from $3.7 million to $7.4 million.

That was of course, partly driven by the underlying increase in Adjusted EBITDA, but a meaningful part of the step-up also stemmed from a change in effective tax rate from 53% last year in Q1 to 27% this year. In either year, this effective tax rate is much higher than where our full year tax rate eventually ends up, which is typically in the 15%-16% range. However, the phasing of our tax provision across the quarters is heavily impacted by the actual GAAP results, which, as you know, in our case, are getting impacted by various non-cash items in our P&L. The most notable non-cash charge in our P&L is the share-based accounting charge, which relates to our 2021 London IPO, which by the way, will roll off at the end of 2026.

Also the M&A related payments that we extend through our P&L because of the continued employment conditions that we attach to our new terms. Now let's move on to cash flow. Our free cash flow for the quarter was negative $10.3 million, compared to a positive $3.2 million in Q1 last year. That negative cash flow in Q1 is not atypical, as the company always pays its bonuses during the first quarter, resulting in a reduction of our pre-expense balances. This year, our cash flow generation was further suppressed by a $13 million increase in accounts receivable, resulting from the inclusion of the 2025 acquisitions, but also from slower collections. Now, a significant part of these accounts receivable investments is temporary, and we anticipate that this will get unwound in the upcoming quarters to a very large extent. Moving to our EPS results.

Our GAAP EPS is still negative due to the aforementioned non-cash GAAP charges that we take through our P&L. However, the adjusted fully diluted EPS was positive at $0.25 per share, which is up 75% from the prior year. In turn, that result is an outcome of having a very strong improvement in the adjusted net income that we just saw, offset by the dilutive impact of the 15% increase in the number of shares, which was impacted by our Nasdaq IPO. On the balance sheet, we are now at the right bottom of this chart. We ended the quarter with $43 million in cash and total debt of $45 million, and therefore a net debt position of just about $2 million.

That was a major improvement from the $27 million net debt that we had at year-end, and even more so from the $45 million net debt that we had at the same point last year. This improvement was driven by the IPO proceeds coming onto the balance sheet in January, in tandem with the customary debt repayments that we make throughout the year. Where does that leave us from a balance sheet perspective? Knowing that we've engaged in significant M&A activity over the past five years, and that even after those five years, we find ourselves in a situation with such a strong balance sheet with hardly any net debt, I cannot conclude otherwise than that we're very ready for the next phase of growth with ample balance sheet flexibility for continued strategic M&A.

One final point on this chart, I would like to mention that our cash position in Q2 will be impacted by our customary final dividend over the prior book year, which in this case was $0.24 per share. That amounts to approximately $7 million in dividend payments upcoming in May. As promised, let's look at the operating performance of each of our segments. First, here you'll find a quick visual view of the organic growth by segment, which I really would like to describe as very robust. At the top of the page is your consolidated 5% organic growth. You'd also see that this was better than 2023, better than 2024, and slightly below 2025. In the bottom half by segment, we see that in the government relations segment, we saw stability and healthy growth at 5%.

In the Corporate Communications & Public Affairs segment, we saw a moderate growth of 3%, I should say that this was against a very strong 2025 post-election comparable. Finally, in compliance and insights on the right, we saw organic growth at 11%, excellent result, driven especially compliance continues to drive really good growth. Let's double-click on these segments and look at their profitability. In the following slide, which is very informative, but at the same time, admittedly, also somewhat dense. The government relations segment, which remains our anchor at 57% of our total revenue, increased 8%, with margins moving up to 45% from 44%. Corporate Communications & Public Affairs was up 83% on a reported basis. That reflects the full benefits of the incorporation of Seven Letter.

The segment margin in CC&PA moved up nicely from 22%-26% as we see the operating leverage that we had expected from the acquisitions we made in this area. Finally, Compliance and Insight Services had another strong quarter. We already saw that with 11% growth of reported and organic. The margin remains around 50%. At the subtotal, you can see the total for these three segments, which has a blended margin that remained very stable around 39%. What follows after that 39% are two final items bridging us to the published Adjusted EBITDA. Those two bridging items are, on one hand, the bonus pool, which was up 24% versus prior year, in line with profit growth. Secondly, the corporate costs or the holding costs, which are up 19%. As mentioned before, that's a consequence of our incremental public company cost and investments.

I'm going to skip the next three charts that portray the management P&L, the management cash flow statements, and the net debt position, because we already covered most of the key points in the highlights I just reviewed. I really want everybody to know that our deck contains these charts as well as a set of other charts and tables in the financial appendix. This gets me to the guidance statement. Since this practice at the end of deck, we've made our guidance slightly more specific than what we were used to doing. What's not changed is that in general, PPHC expects to continue growing its revenues at an average organic rate of approximately 5%, and this will be supplemented by acquisitions. If there's no further acquisitions for 2026, we would anticipate reported revenue to come in the range between $205 million-$209 million.

Going to profit. In general, we continue to aim for an Adjusted EBITDA margin around 25%. However, as communicated before and taking into account the dynamics of our changing business mix, in 2026 we will come out below that target number, also as we experience the impact from assuming U.S. public company costs and certain technology investments. Therefore, we anticipate our Adjusted EBITDA to come in at a range between $46 million and $48 million, reflecting an adjusted margin between 22% and 23%. More written here, but I would like to end by saying that we also expect strong free cash flow conversion in the balance of the year, which is typically weighted towards the second half of the year. With that, I'll hand it over to Thomas.

Thanks, Roel. I'll keep my comments focused on a handful of things that are significantly new or notable this quarter, rather than retrace the platform story we covered in great detail last time. As we've said before with this same slide setup, our growth strategy is fundamentally talent-focused, recruiting and retaining top-level talent. We got a strong start to the year by all measures. Just a quick recap of some of the news from the reporting quarter. Seven Letter, our leading public affairs brand, expanded in Los Angeles, bringing in a specialty media practice. We're also expanding this fast-growing space and defense practice with some high-impact talent there too. Also out west in Sacramento, our firms KP and LP have just celebrated their 30th and 20th anniversaries respectively, as standout leaders in that and the larger state market.

Both have built strength and long-term succession plans into their leadership teams since joining us. TrailRunner Sports recently named Alden Mitchell, previously Stanford and Uber, as its new president. That practice continues to thrive amid rapid change across college, professional, and international sports. We also just announced new leadership at Forbes Tate Partners, one of our founding firms, now officially FTP, with fresh leadership across both the lobbying and public affairs practices there. This is a planned generational succession at one of Washington's largest lobbying firms, and it's exactly the kind of institutional continuity our model is designed to produce. Our growth strategy involves three more drivers: expanding service lines, capturing additional client wallet, and executing on a creative M&A agenda.

A great example of collaboration from the quarter, the launch of investor services offerings from Concordant Advisory, which brings together PPHC's full depth of experience to deal teams, private equity, family offices, and corporates facing growing policy and regulatory risk to their investments. It's a focused, repeatable product that aims to capture a different budget and is backed by the unique collection of expertise across our platform. You can learn more about it at the Concordant Advisory website. The growth of our issue-based practice groups and the simple but effective client referral incentives we offer are all tools to drive this collaboration. Still, we benefit from the multi-brand strategy that we've had from the start. As an aside, uniquely, and even with the measurably increasing growth via the collaboration, our key client concentration measures drifted further down.

Our top 10 clients are now just 8% of total revenue versus 9% a year ago, and no single client is more than 2% of the overall business. There is no significant client concentration risk in the business at all. A further update on our post M&A integrations. TrailRunner International is now full year in, and you're seeing its big contribution in the communication segment, that 82.7% reported growth, and most importantly, the nearly four-point margin expansion as operating leverage shows up as a result in that segment. On the same front, Pine Cove Strategies is delivering similarly on the Texas-based growth thesis we laid out when we announced it last fall with George P. Bush. Lastly, on our future M&A pipeline, it's still very active.

Dozens of firms at various stages with the same mix, selective U.S. specializations, key states, and international opportunities in Europe, the Middle East, and Asia, guided where our clients tell us they need us most. Our sweet spot remains businesses in the $10 million-$30 million revenue range, profitably contributing to our premium margin profile and with a clear cross-sell into the existing portfolio based on geography and capability. As in our most recently announced deals, we work closely with our existing firms to identify opportunities to acquire specialization and scale into the portfolio. Both deals, while small in scale, will have outsized impacts on the firms they are being brought into, Pagefield and MultiState respectively, by way of the specialization and reputation. Big wins for both.

We continue to see a good level of deal flow, with private equity platforms still dominating the competitive set along with a few traditional players. Our uniqueness remains based on the market-leading scale of our government relations segment, state and federal, that policy expertise, and the public market status and how it shapes our M&A formula. With that, I'll hand it back to Stewart.

Thanks, Thomas. Let me pull it together for you in the same framing that we used last quarter, because one quarter later, it holds up very well. First, stability. About 92.8% of our revenue is still retainer-based. Client retention remains in the mid-80s across the entire network, and no single client, as Thomas noted, is more than 2% of our books. That delivered our steady 5.1% organic growth against a busy macro backdrop. Secondly, profitability. It was a record first quarter on our Adjusted EBITDA of $11.2 million, with margins moving in the right direction in both CC&PA and government relations. As Roel noted, the largest non-cash charge on our P&L, the approximately $30 million a year in share-based comp charge from our London listing, fully amortizes after this fiscal year, putting us on a clear path to PAT profitability in 2027. Third, on growth.

Disciplined M&A continues. One acquisition closed in the quarter, another just recently, and a robust pipeline that remains under active consideration and process. Thomas walked you through the talent acquisitions and new practices across the portfolio, and each is an example of what we mean by compounding growth by investing in the people and capabilities we already have, not simply buying revenue. Fourth, our people, and most importantly, our people. The reason why any of this works at PPHC. Approximately 200 of our 450 employees have some form of equity instrument, and that includes more than 140 with outright stock ownership. The model is built around keeping our best talent and bringing in the next generation into ownership. As Thomas mentioned, two of our firms celebrate milestone anniversaries in this quarter, with new leadership teams in place or on the rise.

That's what long-term retention and succession planning looks like in practice, and it's what we work the hardest at every day. The short version, the quarter played out the way we told you we thought it would, with steady organic, disciplined M&A, meaningful margin progress in the segments where we've been investing, and a balance sheet that gives us room to keep executing on the agenda that Thomas laid out for you. We appreciate your time today, your continued interest in PPHC. Operator, I will hand it over, and we will open the floor for questions. Thanks.

Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by. We're compiling the Q&A roster. One moment for our first question. Our first question comes from the line of Rajiv Sharma from Texas Capital. Your line is open.

Thank you. Congratulations on the stellar results. Thank you for taking my questions. I wanted to just ask about your organic growth this quarter, especially in the CC&PA segment, there is 3% growth relative to much greater growth last year. I am wondering if you have any color on that, what contributed to the CC&PA growth last year that one shouldn't expect to continue going forward? I have a follow-on question.

Thanks, Rajiv. Good to hear from you today. Appreciate the question. I think as we noted that frankly, we had a really strong first half of the year in CC&PA last year, and as a result, you just have a tougher print that you're working against. We came out of election season last year like we traditionally did, with a whole new agenda based on those results, and there was momentum that carried into the first half, especially in project execution against those agenda items, coupled with lobbying, but especially in the comms segment where the project work naturally picks up. Really, I think, the carryover into this year has been from quarter to quarter, really positive in my opinion, and I've been really pleased with it. Roel, you got anything you'd like to add? Roel says I covered it. Thanks. Go ahead, Rajiv, what's your other question?

The other question is any sort of commentary, any sort of color on contribution from acquisition that you just did, any contribution to the revenues this year? Also, can you comment on the size of the acquisition that you likely plan to do or intend to do every year? I know it's tough to call. I know your pipeline is pretty robust. Any sort of sense on what do you plan to do this year?

Yeah. Well, you will have noted, Raj, this is Roel, that indeed the acquisitions that we've done so far this year are on the smaller side. The largest of them was WPI, and that was closed by April 1, so that's not reflected in any of these numbers yet. Then we also announced Cowen as a small acquisition for May 1, but that was really more a hire of two people who have a bringing a book of business. I would say our acquisition volume up till now has been relatively small. We've been on records in the past that we expect to acquire, on average, somewhere between $30 million and $40 million of revenues each year.

Obviously, that always depends on the availability of the right targets and then the exact timing of those transactions, let alone, of course, then the profit contribution that they have and the price that we pay for it. These are all variables that are different for each acquisition, therefore makes it somewhat hard to predict.

Got it. Thank you for taking my questions. I'll take it offline again. Thank you. Great quarter.

Thank you. Thanks, Raj.

Thank you. Our next question will come from the line of Jason Tilton from Canaccord Genuity. Your line is open.

Good afternoon, everyone. Thanks for taking my question. Wanted to start, last month you announced a new practice Concordant that really seems to leverage your complete portfolio of assets. I believe Thomas mentioned this trademarks. This should go after a different part of client budgets. Maybe can you talk a little bit about how meaningful the opportunity is, what sort of investment you may have to make to get this sort of launched and rolled out, and then sort of more broadly, how many other similar opportunities do you see in the pipeline to organically sort of expand the new services and areas?

Sure. I mean, this is one we've eyed for some time is so adjacent depending on where your clients are and who clients are calling. We do work in the financial services sector, obviously, and directly with private equity funds. There's a category of 2 or 3 leading providers of this regulatory multi-issue diligence, we've eyed it for some time, made some inquiries from an inquisitive standpoint, realized we were just losing too much. It's a light investment from headquarters, really, into the Concordant framework that was already set up a couple of years ago to really facilitate a one or best of practice. Some select hiring from the right people, we can talk about the people there. We're being quite entrepreneurial about it, still flexing our scale, showing up in a competitive space.

Not only is it new client budget, in many cases, it's just new clients. It's getting into a different part of either a private equity fund from a deal-by-deal basis or a whole new type of buyer across the world. It's an interesting frugal thing. Look, we look for opportunities, including WPI, to bolster that service. Some of the economic consultancy they do is again under adjacency, call it a product or a sort of service-enhanced product. It is a different kind of a thing for the arsenal.

Great. That's very helpful. Just curious maybe if you could talk to the conflict in the Middle East, either positively impacted in terms of benefiting defense practice or maybe negative in creating some sort of distraction in Washington. Just curious how that's sort of netting out so far and any observations you've had?

Well, I think, Jason, this is Stewart. I think, we viewed the area and the region for quite a while as a really potential, a good place for us, especially in terms, again, of our Corporate Comms practices. There's a lot of investment money that's in the region in general that's looking for connectivity in the U.S., for direct investment here, which is kind of the U.S. onshoring move, that we think is going to pay a lot of dividends for us in the future. Certainly, we're leveraging heavily off of a really, really good practice that an office that TrailRunner International has in the U.A.E. We think as this sorts out, frankly, if anything, the acceleration of alignment to interest over there to U.S. markets is going to only accelerate.

Obviously, things are going to have to continue to sort themselves out and will at some point, I think, in the coming months. When that happens we really, really feel like we've got some great opportunities there, and we've really positioned our assets here in the U.S., and frankly, in London to really leverage off of those opportunities, and we're going to actively work that axis.

Great. That's really helpful. If I could just toss in one quick one for Roel. EBITDA margin's up 40 basis points year-over-year, despite the increased public company cost and tech investments. Just if you could talk to some of the sources of efficiency you're seeing beyond just operating leverage at the portfolio companies.

Well, yes. There is some operating leverage that in years of good revenue growth, there's always, well, we share margins expand. I'd say that helped us actually almost offset the higher holding costs that we've experienced in Q1 to a good extent. We hope to continue this.

Thank you very much.

Thank you. Our next question will come from the line of Scott Schneeberger from Oppenheimer. Your line is open.

Thanks very much. Good afternoon, and congratulations. I'd like to start off, Stewart, you highlighted at the beginning, certainly we've seen an acceleration in the organic growth versus the past two years and the past few quarters here in the first quarter in the organic growth of Government Relations. Can you just speak to what that is? Is it just a very dynamic environment right now where there's a lot of activity, or are you winning a few big contracts that are lifting that versus previous competitions?

Well, it's a combination of factors, Scott. I think number one is that we put a lot of effort in really over the past 18 months to try to build even greater intercompany synergies between our complementary brands. I think it's really starting to bubble up to the surface in the macro numbers that you're starting to see. I think the interplay with CorpComms and investor and crisis with TrailRunner International, along with our traditionally more public affairs-oriented assets has been really, really strong. I think what you're really seeing is a lot of production off of that. Obviously, macro environments, especially given our moat, remains, again, in kind of lobbying and public affairs. Certainly, macro dynamics of change, of evil, all those things lead our clients to have to obviously address, again, that interface with government on an ongoing basis.

There is a strong macro backdrop, and it's not simply in D.C., it's worldwide. I think that helps as well, and I think all of these factors are coming to confluence that again is uplifting and helping us with organic growth and so forth.

Great. Thanks. Two more. One is just it's kind of a two-parter. What is it that you're looking for? What is topping your priority list in your M&A pipeline? Is it state government relations? Is it moving internationally? Just kind of curious. The part B of this question is there really nice margin profiles in your pipeline? I know that with this guidance of 25% in a normalized year with the public company costs, is there a lot in the pipeline that has very robust margins, or is that something where it's really you have to pick and choose of what the profiles are in the pipeline? Thanks.

We tooled up in the comms, Corporate Comms via M&A over the past 18 months, TrailRunner, Pagefield, and we continue to say that we invest against capabilities and geography. I can say within the dozens of things that we've discussed in the pipeline, there are some really prime margin geographies that we want to still play in for that prime margin. The reason that they're the core to business activities and some quite specialized things that may be smaller in scale but chunkier in margin. At the same time, when we look at the geographic play, we know that as we expand the base in Europe, it's not going to be the most prime margin for us across the wallet. It's still where our clients need us and where sort of expertise is needed in global policy considerations.

We do have to play in both as we do have a premium margin, and that's sort of balanced by the lobbying practices in D.C., and then we have Strasbourg, London, and then we have Austin and sort of the things have slight different profiles but towards the premium across.

Just let me add, Scott, that we mentioned before that we look at several gating factors on M&A. One is what Thomas just said. Does it add geography? Does it add capability? Is it complementary to the rest of the portfolio? We obviously look at the people profile. All those terms, which is maybe as critical as any issue, but margin is right there as well. I've said before, and I think I'll repeat it again, while we have desires to build our network out further, again, based on those three prime issues, we're not interested in putting dots on the map to simply say we have an office somewhere. If the margin profile is not right or the people aren't right, we're not going to do it.

I think that's what everyone should always be assured of, that we're not looking to just have loss leaders or really things that fall well below our margin profile just for the sake of being somewhere.

Great. Thanks, Thomas. That's good color and insight. Last question, probably it's going to get Roel involved as well, is with establishing annual guidance here, specifically to revenue, but also EBITDA, what are some of the things we should keep in mind that could put you to the top or above the high end of the range, or things that you might be concerned that could put you more down toward the lower end of the range? Thanks.

Yes. Well, Scott, two things that pop in my head primarily. First is our volume of project work. That is always somewhat unpredictable, and of course, we've got lots of statistics to go off from prior years. At the end of the day, it also depends on certain issues bubbling up. Last year's, for instance, the whole issue around the expiration of the Obamacare subsidies in the healthcare, that created a huge, nice flow of projects that you never know to what extent such a flow will reoccur this year. That is factor number one. The other factor is very simply acquisitions. Any new acquisition will put us outside that range that I've mentioned for the call.

Excellent. Thanks. Appreciate it. I'll call you guys.

Sure.

Thank you. The next question comes the line of Sam Dindol from Stifel. Your line is open.

Hi, guys. How are you? Welcome. Congratulations on the results. Just one question from me, please. Just on the acquire front, appreciate the hiring of Lee Cowen and Nicholas Evans some few weeks ago. Has that accelerated post-U.S. listing? Are you finding more people you sort of had conversations with after years are now more willing to join? Any insight on that would be great. Thanks.

What I would say to that, Sam, and thanks for the comment there. I really appreciate it. I think what I would say is it's really been interesting, just like our pipeline, it feels more robust now post-U.S. listing than it's been at any prior time. I think the other thing is we're seeing more inbound talent coming to us, some that are much more willing to listen to us now, et cetera, post-U.S. listing. I would continue to anticipate that we'll continue to make some really good talent acquisitions in the foreseeable future, because again, I think we're really frankly getting noticed out there. I think we're a differentiated platform because we're public, and this is a space that has typically been dominated by private investment and private companies.

I think there are people that are starting to look at our public company status, our levels of employee ownership, et cetera, and it's really, I think, in their prime years of their career, seeming like an attractive possible option for them if they fit with us. We're really excited about that. It's been one of the downstream benefits of being able to evaluate a lot of individual or small collectives of talent as opposed to simply looking at platform acquisitions.

Brilliant. Thanks for coming.

Thank you. I'm not showing any further questions in the queue at this time.

Great. Well, thank you a lot, operator. Thanks for all of you for participating today. Again, as always, as I noted in my closing, investor relations is always open here. We are always happy to interface, take your questions. Please reach out after this call. If you'd like to follow up on anything, either related financially or strategically, and we'll be glad to work with you and get you the answers that we can. Thanks.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.

Good day, and thank you for standing by. Welcome to the PPHC Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Matthew Mazzanti. Please go ahead.

Thank you, operator. I'm here today with Stewart Hall, CEO of PPHC; Roel Smits, CFO; and Thomas Gensemer, Chief Strategy Officer. A press release detailing our full year 2025 results was released recently and is available on the Investor Relations section of our website. Before we begin, I'd like to remind you that during this call, management will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are detailed in the company's filings with the Securities and Exchange Commission. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, during this call, we may refer to certain non-GAAP financial measures. A reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings press release, which can be found on the Investors section of our website. I will now turn the call over to our CEO, Stewart Hall.

Thank you, Matthew. Good afternoon to everyone who's joined us. My name is Stewart Hall. I'm one of the Co-Founders and current CEO of PPHC, Public Policy Holding Company. I'm joined here today, as Matthew noted, by Roel Smits, our CFO; and Thomas Gensemer, our Chief Strategy Officer. I'd like to start off by saying this is an important milestone for PPHC. This is our first earnings call as a Nasdaq-listed company and I want to welcome all of our audience who's joining us and many of you who are joining us for the first time. We are pleased with the response from the U.S. investment community. Being public on Nasdaq gives us access to the capital markets that match our scale and our growth ambitions, particularly on the M&A side, which Thomas and Roel will cover shortly. But it's also worth stepping back to explain why we built the company in the first place because the context is important for investors hearing from us for the first time. So why did we build PPHC? Well, from day 1, our mission has been largely unchanged. That was to be the preeminent global strategic communications provider, uniting a diverse group of specialists around the world for the collective success of our clients, employees and shareholders. We started with a foundation in government relations and public affairs. That was our common experience amongst the founders. But we recognized early on that the marketplace was changing in ways that demanded a different kind of platform. A few dynamics in particular stood out, but I will run through 3 that we found and still find are the most significant factors that affect the marketplace that we're addressing. First, policy complexity and its impact on business has been intensifying for a number of years. For over 40 years, government has come into every aspect of the economy. When public companies identify key risk factors today, regulatory and legislative risk is consistently among the top concerns of public and private companies. And that complexity is no longer just federal. In the state level, and the international level, it's a multi-jurisdictional challenge. Our clients are often dealing with the same issues in Washington, Sacramento, Brussels and London simultaneously. Second, reputation and policy have been converging. And a digital world, driven by social media, political problems become instant reputational problems and reputation problems become instant political problems. Companies can no longer separate government relations from corporate communications. They need both, and they have to work together in tandem. Third, clients need integrated specialist advice, not generalists, but the deep specialists who can work across jurisdictions and discipline as one team. The large marketing holding companies tried to build this but their attempts are often faltered, whether for wrong cultural fit, fragmented acquisitions or lack of real integration. That opened the door to a different kind of model, the PPHC model, and that's what we've built and continue to build. These dynamics are exactly why we have constructed PPHC the way we have, and they continue to drive our growth and our differentiation in the market today. So where do we stand today? We operate a complementary portfolio of strategic communications advisory firms across government relations, corporate communications and public affairs, compliance and insights. Our firms operate in the high-end, high-margin segment of the market. These aren't commoditized consumer-oriented marketing services. They're trusted advisory relationships driven by C-suite adjacent budgets, existential corporate budget, so to speak, just like legal, accountancy, et cetera, professional services that companies have to have in their budgets year in and year out. As such, we service over 1,400 clients, including nearly half the Fortune 100. Approximately 90% of our revenues come from retainers or subscriptions. Client revenue retention runs around 80% to 85% on a dollar basis, and we're not politically cyclically dependent. We don't do campaigns and elections work. We relish policy opportunity, regardless of which side of the spectrum it comes from because that's what drives our clients' needs and drives our profitability. The opportunity for scale is enormous in our market. Policy and strategic communications industry is highly fragmented with a total addressable market of approximately $20 billion. Our recent expansion in the corporate communications has significantly broadened that TAM, and so we're just getting started. Just a few highlights in 2025. 2025 was a strong year for PPHC. Revenue grew 25% to $186.5 million. Organic growth was 6%. And just a side note that not a single year in PPHC's history have we ever not had positive organic growth. Our adjusted EBITDA margins came in around 25%. On the M&A side, we completed 2 acquisitions during the year. TrailRunner International joined in the second quarter. This brought 80 professionals across 8 offices globally and marked a massive leap forward into the complementary corporate communications space, as I mentioned earlier. They are a perfect example of the convergence of some of the trends we've talked about. They serve major corporations at their most critical moments and at a premium price point. In August, we added Pine Cove Strategies in Austin, led by former Texas Land Commissioner George P. Bush, giving us a third state level government relations operation alongside California and Massachusetts, in addition to our 50-state coverage we already provided through MultiState. On the people side, we brought in John Green as the Chief Client Officer, and he's already driving more referrals between our firms and a sharper focus on joint pitches for broader mandates. We strengthened our Board announcing 2 new independent directors, Kathleen Casey and Charles Brown, and we're very proud to have them with us. And our head count has now crossed 450 employees through 2025. Our firms continue to be recognized. Seven Letter, a public affairs firm based in Washington, D.C., was named one of PRWeek's Best Places to Work for the third consecutive year. Forbes Tate and Seven Letter were both named PRNEWS' Agency Elite Top 120, also for the third straight year. And many of our people have been recognized for various impressive industry awards. And on a consolidated basis, our 3 government relations brands remain in the top 25 federal lobbying properties in the United States by disclosed revenue. Finally, of course, we completed the Nasdaq listing raising approximately $46 million in gross proceeds. Looking at the year ahead, I think the operating environment for our business is extremely favorable. Starting with the macro picture, federal lobbying spending hit a record $5 billion in 2025. The number of organizations engaged in lobbying itself rose by 12%. That's the core market that we started in and we continue to serve and it continues to grow. Congress has a full plate with their major debates and pending policy developments in energy, transportation, health care and of course, artificial intelligence. From the executive branch, companies are navigating an extraordinary pace of change. Since January of last year, there have been more than 240 executive orders issued touching everything from trade to housing to cybersecurity. And at the state level, the complexity is only compounding further. State legislatures introduced more than 135,000 bills last year. In just the first 6 weeks of 2026, over 300 data center bills were filed across 30 states. More than 250 AI-related bills are in play in the states, health care, energy, financial services. States are filling the gap where federal policy remains uncertain or undefined, and our clients have to be engaged at both levels simultaneously. In November, 36 governors races are up. Every one of those debates becomes amplified as a result. All in all, in our core business, we see a really positive environment for the coming year. And all of that will, in one way or another filter into our corporate strategic communications practice through the natural interconnect activity with our policy practices. We've been clear from the outset that we intend to deploy the capital we raised at IPO in a disciplined and accretive way. We take a long view of these transactions. Roel will walk you through the actual structure of our general deals but the key point is that we're not looking for quick flips. We're building a platform for the long term, and our acquisition approach reflects that. Today, we announced the acquisition of WPI Strategy, adding to our London subsidiary, Pagefield. WPI is a U.K.-based public affairs and economics consultancy, research-driven advocacy and economic modeling being their core. It deepens our presence in London and combined with our Pagefield platform, it now has over 60 client-facing professionals and the transaction is immediately earnings accretive. It's exactly the kind of complementary deal that builds on our set of tools that we deploy for our clients. More broadly, our M&A pipeline remains very active, more than 50 firms under consideration by us at any given stage. It's a really interesting time in the market. We're looking at a mix of deepening specific states and specialty offerings here in the U.S. and broadening set of European, Middle Eastern and Asian targets, driven by where our clients are and where they need to be. Think data centers, AI and financial services as downstream of these potential acquisitions that we're looking at. A few words on AI. Our business is fundamentally about relationships, both in client service execution and business development, deep relationships, experience and expertise. That's not something that technology is going to replace. That said, we also are investing meaningfully in AI across the platform to make our people more effective. We've begun deploying tools that automate legislative and regulatory monitoring across all 50 states, the federal government and over 100 international jurisdictions, surfacing changes in real time, better tools for our practitioners, not to replace the advisory relationships at the heart of what we do, but again, enabling our practitioners to be more efficient and serve clients better. Goal is straightforward, free our people from the mechanical parts of the work so they can spend more time on strategic counsel and relationships that our clients value and pay us for. We're not using AI to replace advisory. We don't think that's possible. We're using it to, again, make our advisers sharper and faster and better for our clients. As far as people, I think it's very important to note that employee ownership is a cornerstone of how we constructed PPHC from its inception 11 years ago. And this is something I and all of our people feel extremely strongly about. Our people are 100% the key to our success. They are our #1 asset. We have to keep those people and attract new talent, and we have to approach that a bit differently than some of our peers. So we believe deeply in the equity story as a retention recruitment and M&A tool. We have more than 135 employee shareholders out of our employee base of 450 people. Beyond that, there are an additional 200 people across the group that have some form of equity instruments. Employee ownership has led to the retention of culture, creation of tangible ownership and a stable means to the transition of leadership in these businesses over time, which is so extremely critical. We use equity provision across our portfolio of brands to deepen both employee loyalty and, therefore, client loyalty. And we're continuing to broaden that base as we anticipate head count growth via acquisitions, and we're committed to getting more equity in more employees' hands over that time. With that, I want to hand it over to Roel Smits, again, our CFO, who can dive deeper into the financial details for '25. Roel?

Well, thank you, Stewart. My name is Roel Smits, and let me start with the key highlights for the year, and then I'll also take you through the numbers in a bit more detail. As Stewart already indicated, we're really pleased with the way that 2025 turned out financially. For the full year '25, revenue increased 25% to $187 million. And of that 25%, organic growth contributed 6%, which was a really strong result. Adjusted EBITDA was a record $45 million, up 18% year-over-year at a margin of 24.3%. Then adjusted net income increased 32% to $37 million. And this adjusted net income number provides the foundation for our adjusted EPS calculation and our dividend decisions. So then to the left bottom corner of the chart, we had a very strong free cash flow year, delivered $37 million of free cash flow. And then moving to the EPS results, while our GAAP EPS was still negative, and I'll talk about that on the next chart, our adjusted fully diluted EPS was $1.39, up 25% versus the prior year. And finally, we proposed a final dividend of $0.24 per share, which brings the total dividend for the book year 2025 to $0.355 per share, and that reflects a payout ratio of approximately 30%. Then on the balance sheet, we are going to close off this chart, we ended the year with a net debt of $27 million. And as we noted in the earnings release, following the completion of our U.S. IPO and Nasdaq dual-listing in January '26, debt has by now reverted into a net cash position. Okay. Now let's take a step back. What I think this new chart shows is clearly that we continue to combine strong top line growth with a consistently good level of profitability. As we already mentioned, the revenue in 2025 was up 25%, of which 6% was organic and that extended really a 12-year long record of always reporting positive organic growth and then especially in the recent years, supplemented by contributions from M&A. Below, you see the profit trend. And in that trend, you see that the adjusted EBITDA increased to $45 million, up from the $39 million last year. Margin coming in at 24%. This margin is slightly below the 26% that we reported in '24, but still very close to the level of 25% that we've historically targeted. Primary items explaining the difference between the adjusted EBITDA and the adjusted free cash flow are 3 things. It's interest, it's taxes and a little bit of working capital investments. CapEx, on the other hand, is effectively 0 in our business. So therefore, the conversion from EBITDA to free cash flow has traditionally been really strong, and we've seen, on average, a level of 63% in the prior years. But in 2025, it was as high as 82%. That strong result was really driven by very attentive working capital management, lower tax payments and the timing of our accretive acquisitions. Now let's look at the organic growth by segment because I think organic growth is one of the encouraging parts of our 2025 story and, of course, a key way how we add value. Now on the left, first in red, and you find our overall organic growth picture. And then to the right, you can see how this is broken down into 3 segments that we're active in. First, in Government Relations, which by the way, is our largest segment, representing 58% of our business. Organic growth in 2025 was 4% for the year. And that is a very steady performance in this anchor segment and really in line with prior years, as you can see there. Then in Corporate Communications & Public Affairs, that segment has been growing to 35% while organic growth was 9%, really good outcome. And it also reflected a significant rebound and a much stronger performance after a somewhat softer 2024, which was directly tied to the typical cycle that we see around the U.S. Presidential election. And then finally, in Compliance and Insights Services, net organic growth was 22%, truly spectacular performance again. And that segment represents 7% of our portfolio. It continues really its multiyear double-digit growth streak and this business has really attractive recurring characteristics, continuing to exceed our expectations. So when we put that all together, what you see is that all 3 segments delivered organic growth in 2025, and that's what underpins the group's overall organic growth rate of 6% per year. Now let me go on this side to segment's profitability in a bit more detail. So we already looked at Government Relations and that it generated $108 million of revenue in 2025, up 6% from the '24 results. The segment profit levels depicted in this table are at a level that is pre-bonus and pre-corporate overhead. So when talking about Government Relations, you see that the margin remained very stable at approximately 45%. That's a very strong and stable segment for us, high margins, high client retention. Then in Corporate Communications & Public Affairs, revenues increased to $65 million, which really represents a very strong growth of 79%. Now obviously, a large part of that is M&A and most prominently the addition of TrailRunner. The margin of this segment increased significantly in 2025, going from 21% to 29% and that was really helped by a recovery in the volume that we saw already in the organic growth measure. And then Compliance and Insight Services, truly spectacular performance again. Not only did it grow its top line by 22%, but it also increased its margin from 48% to 55%, helped by this technology that's supporting this line of business. So tying this segment performance now to the adjusted EBITDA that we looked at before. Well, at the bottom of the table, we report 2 remaining expense items. Both these cost items increased in size in '25. First, we restored our bonus pool to regular levels as a percentage of profit after we had a similar bonus pool in 2024. And then secondly, we increased our corporate cost by 13%, which really reflects the investments we've made in our platform and also wanted to be ready to be a U.S. Pubco in 2026. So at the group level, when you take the segment profit and deduct the bonus and corporate costs, we arrived at $45.4 million of adjusted EBITDA that I mentioned earlier. So now let's turn to cash flow because how does all this EBITDA convert to cash? Well, that's an area where we are particularly pleased with outcome. Adjusted free cash flow increased to $37 million in 2025, up from $22 million in 2024. Primary items explaining the difference between the adjusted EBITDA and the adjusted free cash flow are 3 things. It's interest, it's taxes and a little bit of working capital investments. CapEx, on the other hand, is effectively 0 in our business. So therefore, the conversion from EBITDA to free cash flow has traditionally been really strong, and we've seen, on average, a level of 63% in the prior years. But in 2025, it was as high as 82%. That strong result was really driven by very attentive working capital management, lower tax payments and the timing of our accretive acquisitions. So as we also noted in the release, the cash generation by PPHC is typically weighted towards the second half of the year. because annual bonuses are paid in the first half. Now the 2025 cash flow result is strong and also consistent with the profile that we've seen in prior years. Now with all this cash generated, now let's look at the impact on our balance sheet. On December 31, 2025, our total debt was $47 million, whilst at the same time, cash and cash equivalents were $20 million. So that resulted in a net debt position of $27 million. If you compare that against our EBITDA, well, that's just a bit more than 0.5 turns EBITDA. So we're not really any leverage by any standards. Not reflected here because not part of our 2025 results, but also still good to point out is that we raised approximately $46 million in gross proceeds during our IPO early in '26. And therefore, this net debt position that I just talked about, has now turned into a net cash position. Then on dividends, as I mentioned earlier, we proposed a final dividend of $0.24 per share, together with the interim dividend that we already paid in the fall of 2025 of $0.115. That brings the total dividend for 2025 to $0.355 per share. So in dollar terms, absolute terms, the dividends paid in 2025 will be $9.7 million, down from the $11.4 million that we paid in 2024, and that really reflects the dividend policy change that we announced early in 2025. So I think a combination of good cash flow generation, moderate leverage and the capital raise completed in January gives us a very solid financial base to support our next phase of growth. Now I want to go into a little bit more detail going to this P&L. This chart that you see now depicts our more granular view on our P&L. The top side of the table reflects many numbers that I've already quoted, and that's how we, as management, look at our business, which, as you have seen, it's a very profitable business and allowing us to build a track record of dividend payments. But then I do want to also take a moment to reflect on our GAAP results, particularly for investors reviewing PPHC for the first time. At the very bottom of this chart, you'll find a bridge connecting our management P&L to the GAAP reported loss. So yes, on a GAAP basis, we do report a net loss and that's entirely driven by noncash charges. The most important and chief amongst them all is this share-based compensation charge of approximately $30 million. That stems from equity awards at the time of our 2021 London IPO. And this will continue to be part of our P&L until 2026. After 2026, this will have fully amortized and will no longer be part of P&L. The second most important item in these noncash charges are post-combination compensation charges, which are a real direct result from how we structure our M&A deals because we made significant proportion of the purchase price payments subject to continued employment of the recipients, we had to take those purchase price payments through the P&L. Hence, we don't account for them in our balance sheet, but we take them through our P&L in this post-combination compensation line. Now besides those 2 large components, we also account for the changes in fair value of contingent consideration. There's long-term incentive plan charges, amortization of acquired intangibles. And in 2025, we took an impairment charge on one of our prior acquisitions. So that led to a GAAP loss. Now the most important thing I can tell you about this charge is the following. The $30 million of the annual share-based compensation from our AIM listing that will have fully invested by the end of fiscal year 2026. And when that rolls off, it removes $30 million of expense out of our P&L. We, therefore, expect to start reporting GAAP profits beginning as of the fiscal year 2027. Now let me finish the financial review with the overall cash flow picture. So adjusted free cash flow, as I mentioned, was $37 million. Against that, we deployed $30 million -- $34 million on cash payments for acquisitions during the year, which was up from last year. That includes both upfront payments as well as earn-out payments. Then on the financing side, we drew additional debt early on in 2025 to support our acquisitions. And then on the equity side, you'll see we paid dividends during the year, albeit at a structurally lower level than what we used to do at 2024. So altogether, our net cash position for the year increased by $ 5 million. So overall, the business continues to generate strong cash flow, whilst we are funding dividends, doing acquisitions and servicing our debt. Okay. Now before I move to the outlook, let me spend a couple of minutes on our historical M&A because I think that remains a very important differentiator in how we've built PPHC. And then Thomas will talk more about future M&A. So let's look at this chart that depicts our track record since the London IPO in 2021. This slide shows 6 major acquisitions that we've done in the period '22 through '25. I would say we have been disciplined, adding approximately 1 to 2 companies each year, very much in line with our growth strategy of geographic and functional strengthening that Thomas will talk about further. Overall, we typically see that companies that join us enjoy an increase in the revenue growth in year 1 and 2, really benefiting from the network effect being part of PPHC. And also, we do see an improvement in their margins stemming from 3 sources already from the earlier mentioned benefit to the top line from your network effect; second, from stronger financial planning capability; and third, from some savings in the back office costs because we will, as a holding company, take over some of the back opportunities. Now let me take a moment to explain how we structure our acquisitions because we're doing this in a very intentional way, having learned from what is really decades of experience between the 3 of us. There are similarities to how the large holding companies have traditionally structured their transactions, but also some really clear differences. Typically, as is typical for professional services, we do use an earn-out structure, an upfront payment today in combination with 1 or 2 earn-out payments stable after a period of time. And in our structures, that's typically a 5-year earn-out deal. Now the way we structure our earn-outs is that earn-out payments will only materialize if the company grows its profit after the point of acquisition. Therefore, if the company were to remain flat after acquisition, well, then no earn-out payment will be due. Now -- but here's where we're really different. First, we do not only pay in cash, but we pay in a mix of cash and shares, all as a mix. Second, we do want the sellers on the cap table to share some of those earn-out payments with next-generation management. And that's a very important element to us because at the time those payments are being made, then that next-generation management will also become a significant shareholder in PPHC. As a third difference, we make each payment that's made as part of the earn-out conditional upon continued employment. Now yes, that creates significant accounting complexity but we're really happy to take that because we believe it's really the right thing to do from a commercial point of view. So when you add it all up, a typical transaction has a length of 7 to 9 years, which is really a 5-year earn-out structure plus on top of that, a 4-year vesting tail on the final payment. Now that long deal duration is not for everybody. And some sellers may opt to go for a quick buck, for example, by accepting PE offer. But there are certain entrepreneurs for whom this type of deal structure works really well because they're able to crystallize value from the company whilst continuing to grow it as part of a bigger platform. And across our acquired businesses, typically, we've seen, on average, a 30% uptick in our EBITDA post-acquisition as a result. Now one question we often get is, well, with all these acquisitions and earn-outs, what's your total expected earn-out obligation. Well, that's a good question. Obviously, it's reflected in our balance sheet but we also always present the table that you see here at the right bottom. At year-end, based on latest forecasts of the companies under earn-out. We anticipate making approximately $78 million in future earn-out payments. And of that $45 million is in cash and the remainder in stock. Now please also note that the stock portion will be priced at the share price at the time of payment. Now this table, we report every quarter as part of the earnings release. Good. Looking ahead, the way we think about our business remains consistent with what we have reported in our life as a public company in London since 2021. So in general, we expect to continue growing revenue at an average organic rate of approximately 5%. And then that growth number will be supplemented by acquisitions. On the profit side, we generally anticipate our adjusted EBITDA margin to come in around 25%. Although in 2026, we do -- we will experience the impact of U.S. public company costs and certain technology investments we've made. So our focus remains on client retention, new business generation, continued cross-selling across the group's member companies. And with the recent capital raise on Nasdaq uplisting now completed, we believe that we enter this next phase of growth from a position of strength with the balance sheet flexibility for earnings accretive acquisitions and strong cash flow to continue investing in the business. So now that you've seen the financial profile, I'd like to hand it over to Thomas Gensemer, our Chief Strategy Officer, to walk you through how this platform generates its results and where we see growth from here. Thomas?

Thanks, Roel. So you've seen the numbers. Now let me briefly take you inside on how we produce them. As you see, we operate a complementary portfolio of advisory firms, and we've focused our M&A agenda from the start on deepening specialization and broadening our geographic reach. Here on the next slide, we explain in simple terms how these specializations work together to address our clients' most urgent and complicated issues. As mentioned earlier in Stewart's comments, the successful deployment of the lobbying more and more requires the careful coordination of communications and stakeholder engagement sort of across the spectrum, across geographies, jurisdictions versus our competitors, which include names you may be more familiar with like FGS, FTI, Teneo, Brunswick, some others, we've been very deliberate in our multi-branded strategy. There are several reasons for this, and it ties back to our shared experiences, particularly that Stewart and I both sold businesses into big holding companies in previous chapters of our respective careers. The first reason here is about client conflict. Uniquely in the government relations and lobbying segment, every quarter, we file activity reports on behalf of our clients, every person making contact with government authorities and agencies on behalf of that clinic's behalf and every dollar charged. Maintaining separate brands with appropriate divisions allows us to manage different sides of issues, handle competitive brands and ultimately allows us to serve the broader set of clients than a single entity really could. Second, and this is the capstone -- this is the keystone of our sort of founding thesis now over a decade ago. We retain our key leaders and employees. That sounds like obvious, but here you see a picture of about 100 of them and client retention goes hand-in-hand with account retention. If we don't retain our teams, that 85% annual retention of clients just wouldn't be possible. On this chart, you see many of the key leaders. These are some of the best client advisers and issue experts in the world. So as Stewart reported earlier, ownership runs deep and broad with nearly 1/3 of our employees being active shareholders and more than another 1/3 having been introduced to the equity instrument through LTIP and options grants and other things over the years that we've been public in London. To our knowledge, we're unique in the sector for having this depth of employee ownership, so core to the model. Essentially, our model offers the best of both worlds, global scale and sophistication with the workplace culture and client connectivity of a more boutique advisory. As we broke out in the financials minutes ago, we report 3 clear segments and you can see them here. Government Relations is our anchor. We like to call it our moat. This is federal lobbying, state lobbying with issue advocacy across jurisdictions. If you were speaking to us at the time of our London IPO late '21, this was nearly 75% of the business. This is our bread and butter. This is our core where many of our founders began. It's now 58% of the business, that's not because it shrank, it grows healthy year-on-year, but we've built the capabilities around it, both to make the lobbying more successful as we described earlier, and just broaden the wallet opportunity for the client. Government Relations remains our most profitable division and enjoys the highest degree of client longevity and corporate connectivity. None of our other competitors, as I mentioned before, are nearly as deep in this sector in either the BRAC the bipartisan, issue depth, et cetera, et cetera. They are trying to catch up. Next, just in Corporate Communications & Public Affairs. This includes everything from earned media, digital, social campaigning, crisis, financial communications, internal comms, all the things that are sort of non-marketing communications. We're not advertisers. Integration of these specializations are absolutely critical to the success of the policy work that was our foundation. Last, we have the Compliance and Insight Services. It's our third segment. It includes regulatory tracking, lobbying compliance services at the state and federal levels. These are largely subscription-based contracts. They're highly technology supported independent products. It's our highest growth segment, and it's the place where AI is showing an immediate positive impact. There's other aspects that we're getting to as Stewart mentioned, with AI, but this is one that is very close and immediate just given the nature of the business. Next slide, you'll see the client roster speaks for itself. So you here see some of the biggest brands in the world, there are more than 1,400 clients across the portfolio. Also noted along the right column is the breadth of the issue expertise sectors we play in. Obviously, the top 5 or 6 are dominant, but this represents the U.S. and even global economy. This is an incredibly stable portfolio. Speaking to stability, we carefully track spending by clients and are always working to add new services and new geographies to the scope whenever possible. Here you can see the strong upward trajectory of our clients spending more than $100,000 and now more than $250,000 a year, a very healthy gains. That's been a concerted effort as the -- as both the geography and capabilities grow. Importantly, and this is very enviable from our competitors, no single client in the portfolio represents more than 2% of the business. This lack of industry and client concentration is truly unique to what we're building at PPHC. Lastly and perhaps most enviably to our competitors, 90% of our work is retainer based. You see here, our clients renew at nearly 85%. That's why we start January 1, knowing where that much of the business is coming from. It's a huge advantage towards other parts of our competitive sector, again, that deals more with procurement, marketing time budgets, project-based work and far lower renewal rates. Stewart mentioned our large total addressable market in his opening remarks. We've seen estimates far higher up to 5x as high I've recently seen. We'd like to stay conservative on this front. Moving from left to right on the estimates, U.S. federal and state lobbying are reported figures due to the disclosure laws I've described. So that $6.5 billion to $7 billion is quite exact but it's highly fragmented. Thousands of individual firms register and disclose their clients. Last year, 2,400 firms filed each quarter in the federal space. Moving then left to right, again, trade estimates for global corporate communications. That's a non-marketing spend that I mentioned. Then global public affairs is basically the equivalent to what our lobbyists in Washington do, but they don't use the vernacular. And in many capitals, it's not nearly as transparent or disclosed and defined as it is in the federal space that was our start. In other words, there's a lot of room here for PPHC to grow. And grow we have. Here, you've seen the revenue history with organic and acquired. We are proud that we've always driven organic growth even in periods where the market has not been up or our competitors have not been as fortunate. You see at the bottom, how we've added capabilities and geographies via M&A and at a pretty deliberate pace, always focusing on the integration, both on client side and talent side and picking the geographies that our clients need us most. California, for example, was the first thing outside of Washington, D.C. years ago. And finally, just a few comments on our 2026 growth strategy. As we've described here today, it's all a bit of a virtuous circle. By careful design, our growth strategy is premised on the commitment to our people, investing in the platform, working with our entrepreneurs and founders on succession planning, refreshing and building their organizations for the longer term. From the very start of PPHC, back when the first 2 lobbying firms merged, we've maintained a referral bonus of 10% for the life of the contract on all internal referrals. You'd be surprised at how unique and powerful this simple program is. More recently, we've created the role of Chief Client Officer early last year to better coordinate referrals or see joint pitches as an integrated group and to deepen the industry expertise globally. In Q3 last year, for example, we launched cross company practice groups to pursue group-wide business in energy, AI, health care, media, transportation. You'll be seeing more about that in our communications in the months to come. And finally, there's M&A. Simply put, we've never bought revenue for revenue sake. We buy for a strategic fit, quality of leadership and to enhance the geographic reach of our offer. As Stewart and Roel both discussed, we enjoy a very active pipeline of M&A prospects from around the world, while our recent Nasdaq listing has helped raise the profile and creates more inbound. We've long found the best place to find new targets to our clients through our people. It's a small world in the work that we do. Beyond platform level acquisitions, we also make investments into our existing firms, adding capabilities, deepening specializations and expand in adjacent markets. What we're doing in London now with the addition of WPI Strategy is very much to deepen the team there and to also add a new specialization to the group. And as Roel pointed out, we've seen significant average uplift in EBITDA across our acquired businesses over the years. That's just table stakes though. More importantly, we've successfully brought newly acquired teams into an expanding set of international markets into the PPHC growth story for the years to come. And with that, I'll hand it back to Stewart to close. Thank you.

Thanks, Thomas. Let me bring it together with what we really think makes PPHC such a compelling story. First is stability. We operate a growing market, a steady growing market and low political dependency, low client concentration, high retention and approximately 90% of our revenue remains retainer-based. We're advisers. As such, our clients pay us largely on retainer and as such, they stay. That makes for a highly predictable, highly recurring business with great visibility into future performance. Second, profitability. We operate on the high margin end of the world that we live in. We've consistently delivered around 25% adjusted EBITDA. We're a capital-light organization. We have very little in CapEx. It's really our people that we invest in and that results in strong free cash flow conversion. And our largest single noncash charge rolls off at the end of this year, putting us on a clear path to GAAP profitability in '27. Third, growth. We have a proven disciplined M&A engine. More than 50 firms are in our pipeline. Our balance sheet has a significant capacity and on top of that, consistent and mid-single-digit organic growth in a market where our clients are facing more complexity, not less. Our clients are asking for breadth and simplicity, one platform to rely on, and we're building that platform. Fourth, our people. More than 135 employee shareholders, as we noted earlier, more than 200 with equity instruments on top of that and a growing team that's committed to the long-term success of the company. Being a public company allows us to bring people into the equity story in a way that will keep them here and keeping our people is how we keep our clients. So we're excited about where PPHC is headed. We built something differentiated and again, a fragmented market and addressable market. We have a scale platform with the stability of a recurring advisory business and a growth dynamic of a great M&A engine. We appreciate your time today and your interest in our company, and we'll take your questions. Thank you.

[Operator Instructions] And our first question today will be coming from the line of Jason Tilchen of Canaccord.

I really appreciate all the helpful color in the prepared remarks. One thing I want to talk about was the commentary around growth expectations. And I believe you said you expect mid-single-digit organic growth over the next few years. Wondering how we should be thinking about some of the various building blocks to achieving this in terms of new client growth, more spend at existing clients, increases in retainer values and some of the other factors? And then specifically, as it relates to 2026, can you talk about some of the key puts and takes that may drive upside or downside relative to those targets?

Thanks, Jason. Appreciate you joining us today. I think you started out with a point on organic growth and expectations going forward, too, on pricing. So I'm going to hand that to Roel and let him start off.

Yes. So thanks, Jason. Good question. Listen, from a growth expectation perspective, first of all, we have a bottom, let's say, of what we call market growth, and that really provides a nice bottom in overall growth. Then on top of that, we like to grow like a tad faster than the market just because we believe that our efforts on creating cross collaboration between our companies allows us to grow like 1, perhaps 2 points faster than the market. Now when you look at it from a client perspective, I think, Jason, we've always worked on a mix of upselling and adding clients. And there will be no change on that going forward. The actual mix between increase in revenue per client and new clients varies a bit. But roughly, as you could generally say it's 50-50. Now all of that always changes once we add a new acquisition because a new acquisition will add a new profile and sometimes, they work with smaller clients, larger clients, more client concentration, less client concentration. So therefore, we typically stopped disclosing those numbers, because it's very hard to extrapolate them with all this M&A going on. I hope that gives you some color on how we continue to target 5% organic growth in the midterm.

Absolutely. And just one quick follow-up for me. In terms of the acquisition you announced today, it seems like obviously more of a sort of a tuck-in acquisition of specific capabilities. Maybe you could talk us through the balance between a deal like that? And as you're looking at sort of what is closest to execution within the pipeline that you're consistently managing through, how the balance is, between those sort of smaller types of deals where you're adding a specific capability in a certain area versus some -- a larger deal, maybe like a TrailRunner that is more sort of across sectors, across geographies.

Great. It's Thomas here, Jason. Thanks for the question. They are a nice tuck-in from a geographic standpoint, wanting for scale in London. But interestingly, this economic consultancy cuts across the horizontal as well. So we're already seeing sort of appetite for their work for some of the public comparers work we do in California. So was, yes, a specialization, but also a play for better scale there. As we look at the next handful of deals, it will be that careful mix. We have a couple of larger things. Still keep in mind, Pagefield is not that big of a business in the grand scheme. So we have a really healthy range of, call it, that $4 million or $5 million up to $25 million in the portfolio or in the pipeline as we see it now.

[Operator Instructions]And our next question will be coming from the line of Scott Schneeberger of Oppenheimer.

Congrats on your first quarter reporting after becoming publicly listed on the Nasdaq. I guess to start off, I'll follow on Jason's question, specifically on WPI Strategy. Why this one now and you guys did a nice job addressing the pipeline. But curious on -- and Thomas, I think on your comments on horizontal, maybe a little discussion of the cross-sell potential here?

Yes. I mean they have -- specific for what they offer, they can work in any geography, and they have some really high credential economists. So what was a public affairs business in London has sort of grown the specialization. As to why now, it was in conversations over recent months. It wasn't the big deal that could have come out of a Nasdaq listing with, but we're just going along with the game plan. And we'll have more to come on it, big, small and otherwise. I think what's unique about them again is their profitability for a London market sort of is it aligned with Pagefield. They're sort of shared by partisan bench. They came out of sort of similar partisan. It's just a nice tuck-in for Pagefield. But again, we'll have the added value of extending the European presence and cross-selling from California and beyond.

Scott, let me add just quickly. This is Stewart. As we look in why economic research, and it goes back to kind of the principle we talked about with the interplay begin between strategic corporate communications frankly, and public affairs communications and even lobbying. And that is that frequently, more often than not, we're finding that people with economic interest with those are actually companies that are looking to deploy assets, do projects, et cetera, located in certain places, et cetera, feel the need to obviously evaluate the political risk and opportunity and influence political institutions on their economic prospects of investment. So we're finding everything and we've seen this for a while from private funds to public entities to banking institutions, et cetera, along with, again, actual corporates are doing deeper and deeper due diligence on these matters. So again, it all works with the same interplay and the cross-sell, as Thomas noted, but also, again, it just shows again the coming together, frankly, economic interest but again, the need for the management of political risk and opportunity.

Appreciate that both. I think Stewart probably next one for you. It's a 2-parter. It's kind of 2 separate things along the same theme. But I was impressed with -- you mentioned I think 300 data center bills, 250 AI bills and then in November, 36 governor races for grabs. That's just a lot at the state level. If you could just kind of speak to what you all are doing to position around such opportunities and then also just maybe a clarification for all. You highlight you don't work on campaigns elections. So maybe a little bit more elaboration on the work that you do, do with regard to the policy.

Sure. So Scott, in short, we don't do campaign elections work because frankly, there's a number of reasons. It's lumpy financially, but also it tends to breed a certain level, I think, of sometimes animas and things that we don't want to absorb as a company. But more importantly, we pay close attention, obviously, to election cycles, at least again in our core PA and lobbying businesses. And the reason for that is, obviously, our view is that policy and policy production creates obviously opportunity for us and challenges for our clients. So as a result, as we look out on the landscape, what drives things AI just being an example, but it's not just the economic and social disruptions that are resulting from the mass deployment of the technologies exist today, but energy infrastructure, et cetera, the things that are needed to power this transition. So again, we pay close attention. And as was mentioned earlier, what we find is that often issues don't live in the Washington Ecosphere exclusively. And that's why we pay a lot of attention to the states and pay a lot of attention to international, again, enhance our continuing investments in London and other areas of the world. And frankly, we know that no matter what happens in an election depending on where you stand politically, there will be some level of activity, red state, blue state, European Capital, again, international hubs in the Middle East, other places. So again, we stay heavily attuned to that. And the good news is, again, in our actual, what you call, again, lobbying and PA assets they're thoroughly bipartisan. So we really don't worry about the outcome of elections. We worry instead about making sure that, again, we're economically positioned to deal with those issues. We know our clients are already facing it, are going to phase even more intensely in many cases. When you get down in the micro weeds of how we address that, it was mentioned that our CCO efforts, we think are really paying dividends. While our companies always paid attention to these things individually, what we now have established really are issue-based working groups across company lines that collaborate regularly and are now looking at these problems from a global and a local perspective. So we continue to put a lot of effort in being ahead of that curve. And again, it's just in some sense, it's like a lot of our business.

Great answer. Appreciate that. The last question I was alluding to, kind of AI themed I like that you all addressed gear that early on, Stewart, in your remarks, the investors are looking these days is AI a disruptor to a company or is it an enabler? I think clearly, an enabler. In your situation, you did a nice job outlining that and adding that to the slide deck and it segues into you alluded to maybe, Roel, for you, technology investments in 2026 and then, of course, new U.S. public company costs. Can you talk about what the technology investments are and maybe what type of impact we should be considering with regard to OpEx of the public company and the technology investments?

Go ahead, Thomas.

I'll start with on the strategy side. Most of that is just in data sets and things to fuel some of the initial AI efforts that we put from internal development. So we've done a couple of contracts with data providers. We're also deepening our offer in investor services. And this gets a bit to your question about the states and the crowded policy environment in the states. There's a lot of area doing sort of risk scoring for capital investments against public policy. And we have this golden asset in MultiState, which has boots on the ground in every state, and more and more of these disruptions, I mean are coming for tech, health care, energy, AI at the state level. So we really have an unpolished jewel in the work that we can provide for investor services against the state level. So a bit of a combo of your answers. But from the data side of the investment, it's not a major impact at all. We're talking about a couple of hundred thousand dollars.

Great. Understood. Appreciate the very powerful answer. It was very helpful.

[Operator Instructions] And our next question will be coming from the line of Raj Sharma of Texas Capital Bank.

Again, congratulations on your first public call.

Thanks, Raj. Appreciate it.

Yes. I wanted to touch upon the -- you have new money, with the new money, what pace of acquisitions could we expect this year? Just this year and sort of ongoing? I know you've talked a lot about it. Any particular segment or geographic focus? And you're just seeing WPI is small. Will the size of the acquisition be hard to predict you will -- I'm presuming you will acquire what you've come across and what looks good. Can you just kind of talk about the size?

Well, Raj, I think the one thing that we all huddled up shortly after the listing. And I think we agreed that as Roel outlined and Thomas outlined. Our M&A strategy to date has proved very, very sound and building the company, both from a complementary portfolio standpoint, but also the long-term stability of the acquisitions. So I think on pace of deployment, if it fits, we're interested. And we continue to organically dig some of these opportunities up ourselves. Some are brought to us, obviously, from sell-side bankers, et cetera. And so size will also depend on the intake there. If you look at again WPI, incredibly nice small investment, easily affordable that we could do for -- to continue to grow our beachhead in London. But then you look at our TrailRunner from last year, sell-side opportunity that came to us that we thought again was a great fit and certainly more aggressive about trying to see if we could find a way to get them in the family. So I think we don't model in or look at changing our M&A pace per se. The size could definitely vary. But again, I think every time you hear about something we've done going forward, it's always going to fit that overall puzzle. Does it add geography? Does it add opportunity to provide new services to our clients? And is there a distinct cross-sell possibility amongst the family? Roel, you want to add something?

Yes. No indeed. So we'll be in disciplined strategically. But we'll also set to be disciplined financially. I mean you wouldn't expect to hear anything else from me as a CFO. But it is true. We have a model laid out typically components are that make up our acquisition structure. And we'll continue to buy that. That's what they keep or to say also about us huddling soon after the IPO was completed that, hey, yes, we had money on the balance sheet now, but we're not going to change the parameters suddenly of what we're going to pay for companies.

Exactly. I think we've long previewed that we might go -- if you look at the pace over the past 5 years, that we're circa 2 up to 3 to 4 is something that you could plan on, right? We're going to broaden our appetite and geographies, but we're not going crazy. And the sweet spot of things that we're seeing is in that sort of $5 million to $20 million revenue. And what's really important for us, keeping the sort of mid-20s margin profile is it's got to be profitably added to the portfolio and sort of play in a piece of the client wallet that shares the regularity, consistency and sort of deep inventory kind of moat that we enjoy.

I think that was super helpful. And then just wanted to get a sense of, given your acquisition strategy, do you foresee needing extra capital again? Or do you plan on sort of funding those with your yearly high internal cash flow, the pace of acquisitions?

We should be able, to a large extent, to fund it with our internally generated cash plus what we have on the balance sheet. But if, let's say, in the future, we might have a certain cash needs because there was a sequence of acquisitions to be done, then we will probably go back to our debt instruments that we've also been successfully deploying over the past few years, which does tend to be highly flexible because when we acquire some debt, it will help us to get an acquisition done, but we'll immediately start repaying that debt basically the month after we've acquired it.

Got it. Just lastly for me, with the first quarter is almost over. How have your government and public group affairs and corporate sort of business trends? Are they holding up given the recent heightened geopolitical volatility?

Yes. So I think that Q1 has started sort of in line with expectations. And we'll talk more about that in a future release. But right now, I think that's all we can say about it right.

Great. Great. And congratulations again on your fantastic review in the U.S.

And our final question today will be coming from the line of Samuel Dindol of Stifel.

Congratulations on the results. Two questions from me, please. Firstly, on a very good increase in clients -- number of clients spending more than $100,000, $50,000 in the year. Just wondering how crosses going particularly with TrailRunner given you've been out for about a year now and that significantly increased our corporate communications capability? And then secondly, just a more broader question. In terms of your experience and as you expand the number of operating companies? Do you think there is an optimal number of operating companies to have? And do they get too big at some future point? Or how you're going to sort of manage that?

Okay. Let me take number one, Sam. So number of clients indeed spending more than $100,000 or even more than $250,000 has indeed been increasing. I would say, for 2 reasons, TrailRunner has had a good implement on that. First of all, they're an amazing new business machine and have a very new business driving culture that actually you can see is contagious, and John Green has been happily using that to help that cross-calibration that's fostering of more doing together that we've been talking about. And that's sort of shining through in the numbers already. The second component that TrailRunner brings, generally, their clients are pretty big. When they bring in a new client, very often those clients would bring -- while coming in all come in at a monthly rate, for instance, of $50,000 or $75,000 sometimes even $100,000. Those are big numbers. And so that is not a component why our number of clients paying more than $100,000 a year is going up.

On the second question, I'll just -- I mean, even in showing WPI is moving in to bolster scale at Pagefield, we realized there's a limited number. Part of this is going to be done in succession planning of founders that are coming out of the business. We're just not rushing it because of the health of their existing businesses that we're buying. But these working groups across the issue sets. And then as Roel said, the broadening of the capabilities has really brought teams together even while they live within and are retained within the brands. There's a lot happening behind the scenes on the specialty -- development of specializations that doesn't show through on our 12 -- now 12 brands. Is the magic number going to be 20, it really depends. But because succession planning sort of starts from day 1 after the transaction, some of that is in emerging brands, too. So it's a bit wait to be seen. We just know our model since we're working a lot better than others.

Yes. And Sam, I'd add to that -- this is Stewart. I would add to that, too, is just a punctuation our ability to invest further in our existing brands, whether that be key talent intake, especially those that might bring clients or client goodwill with them. Obviously, we like that. And so again, I don't know the right number, as Thomas said, but certainly, you're going to continue to see us make ongoing commitments either to talented teams or again, tuck-in acquisitions into our existing companies, obviously to grow their ability to, again, offer greater services to clients.

Thank you. And I would like to now turn the call back over to Stewart Hall, CEO, for closing remarks. Please go ahead.

Thanks. I think we've covered the war front today. We appreciate all of your time. We know the setup was a little bit long, but probably longer than you'll hear in the future. Obviously, we felt for the first call that was important that we gave some really complete background on the company. So we appreciate everyone's time and attention today, and we look forward to seeing you all regularly as we go forward. Thank you.

Thank you all for attending today's conference. You may now disconnect.