Public Policy Holding Company, Inc. Common Stock (PPHC) Q2 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to PPHC's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] 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. 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 it has 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, our 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. But 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 5-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'll have on our GAAP financials. Again, we'll 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 1. All three transactions followed 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's 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's talk about structure. We don't do hourly billing, but in a very, very small percentage 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's not our model. Roughly 90% of our revenue is retainer-based, and our annual client retention of that revenue is 80% to 85%. That remaining revenue that we do take in on top of that is project-based. What that just means is that it's a short-term engagement by design tied to deliverables, but it's 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's no pyramid at PPHC for AI to compress. Unlike sectors where the fear is shrinking the fee pool, our core markets are 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 don't 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 the state level, we've tracked over 1,800 AI-related bills in 47 states, and that's a twelvefold increase over 3 years. Since 2025, our firms have been engaged by roughly 60 new clients whose core business itself is AI. That's 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. It's also 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. And 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. And the 2026 midterm cycle is adding the client demand for intelligence, advocacy, and strategic communication support following the 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, and on our cash generation. But 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. And then I'm really referring to WPI on April 1, Tancredi on July 1, and as of last week, the acquisition of The Advocacy Partners in Florida as of August 1. 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 to $216 million and adjusted EBITDA in the range of $48.5 million to $50.5 million, with 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. And 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 3 months and the 6 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 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. So 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. Then, when we go to adjusted EBITDA, after 6 months, it was at $23.4 million at a 22.9% margin, which is, indeed, at the top end of the range of 22% to 23% that we previously communicated for the full year. When comparing ourselves to last year for the 6 months, we were up 9%, and for the 3 months we were down 4.4%. I want to be really 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 that 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. So 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 6 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. Now this was partially outweighed, not visible here, by one-off M&A expenses being heavier this year to the tune of an $800,000 year-on-year increase. The final explaining factor for adjusted net income is the tax rate. For the 6 months, the effective tax rate was approximately even to last year. However, on a quarter-by-quarter basis, there was a significant swing. Now, as I explained last quarter, the phasing of a tax provision across the quarters is heavily impacted by our GAAP results and the forecast thereof. And therefore, the quarterly rates are typically not really indicative of where we will land for the full year. Now let's go to EPS. A GAAP loss per share for the 6 months improved from a year ago to a negative $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's 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. 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. Then there's dividends. As a reminder, in Q2, we paid our customary final dividends of $0.24 per share this year, which equaled to approximately a $7 million cash outflow. Then 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 is not aligned with the growth we're posting elsewhere in our P&L. So let me be very precise about what's driving it and why we're not so concerned about the trajectory as a company with a historically very high adjusted free cash flow conversion. So the two factors. The first, there's 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 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 under way, and we expect that working capital investment will lessen as the year progresses further. Taken all together, we're confident that adjusted free cash flow will accelerate in the second half and will convert in line with our normal pattern. And that brings me to the balance sheet. We ended the quarter with $36.9 million of cash against a total debt of $42 million. This results in a net debt position of $5.2 million, which you can compare against the $42.2 million at this point last year. And this is after the $7 million dividend payment in May and after the cash consideration for the acquisition of WPI. But obviously, it does not yet reflect the closing payments we made early Q3 for the acquisitions of Tancredi and The Advocacy Partners, which totaled $28 million. Overall, we remain in a position of real balance sheet strength with ample flexibility for continued earnings-accretive M&A. Now let's 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 4 years, and at the bottom, you see a quarterly breakout for the past 2 years. So 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. Now, then corporate communication and public affairs have shown relatively muted growth this first half year, minus 1%, with the quarter so far being plus 3% in Q1 and minus 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 and public affairs. As you can see here, 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. And finally, compliance and insights services, which represent 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 that 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 costs and the associated investments we had to make in staff, tech stack, and advisors. And finally, the bonus pool remained actually steady at 7.8%. And 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. So 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. Then 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. 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 our 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 continuing deployment. That in itself results in P&L charges, and they're here to stay, and they'll 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. And with that, I'm going to hand it over to Thomas. Thomas?

Thanks, Roel. I'd 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's a timely example. WPI, now part of our Pagefield group, just sold an important piece of work to one of California-based clients via KP Public Affairs. Their economic 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 make PPHC a unique career opportunity in the sector. And 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's 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 is now past its first year and performing above expectations. Pine Cove continues to deliver on the Texas state-based theory, and WPI'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 to $30 million revenue range, which can contribute to our premium margin profile with a clear cross-sector selling capability into the existing portfolio. Competition for these assets remains dominated by private equity platforms, and our differentiation is the same it's always been: the market-leading scale of our government relations business, the policy expertise across the platform, and our public company status. So with that, I'll 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-based 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. Fourth and most important, and I always mention this, is our people. The reason any of this works. 200-plus 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. So, as always, I appreciate your time and your continued interest in PPHC, and we'll turn it over to the operator for questions.

[Operator Instructions] Our first question is going to come from Jason Tilchen with CG.

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 sort of 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. So 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. And 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 and The Advocacy Partners last week was significant, and I think, again, it shows and I hope it demonstrates to people that we're committed to -- our base of government relations is our highest margin business. And we're going to continue to pursue those along with other selected communications assets, which either enhance the corporate comms side of the equation or again are additive to our public affairs comms. Thomas, you got anything you want to add to that?

Yes, I mean, I'd only add that we, to emphasize Stewart's point, that we really like the lobbying anchor because of just the nature of the client relationship and the fact that where we started from, where the differentiation versus our sort of peer set is, without giving too much away, sort of there are some key geographies that we still see both immediate client need and positive growth. And 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. And so 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 the Florida or the Tancredi, they were 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, 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 6 months ago, you know, the U.K. and Florida were both on that sort of priority list. But those being checked off, is it fair to say that maybe New York, the Middle East, Southeast Asia are all sort of have shifted up that list? And similarly, on the tech side, is there anything with the evolving sort of 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 sort of right, and the reshuffling only sort of broader points of Europe, I continue to sort of emphasize the need of Brussels as to our operating companies and clients. On the AI side, there's so much innovation happening there. We're getting something or more every day about platforms that are targeting our space or adjacencies. So 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 work cases and are watching how clients are demanding and restricting usage. So it's super interesting. Nothing to invest in yet but for that.

Okay, great, very helpful. And then one last quick one for Roel. I know there was a lockup that was set to unlock, I should say, around 6 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. That half-year lockup actually started 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 are not being 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 blackouts.

Our next question will come from Scott Schneeberger with Oppenheimer.

And, Stewart, great overview on AI. I thought that, 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's making you -- 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?

Shall I take that question?

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

Yes, absolutely. I mean, Scott, I think the variability of our guidance is really driven by the unknown about project work. 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%. And it wasn't all federal. Our assets did pretty well across the globe that we defined as government relations. And that converts to, again, at a much higher profit rate than comms does. So, 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. So I think that, as much as anything, provides me some level of comfort within the range as Roel's provided. And 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 "flattish" in the first and second quarters of an even-numbered year. We saw a pretty big pickup toward the very end of '24, but you never want to, as Roel said, or intimated, you never want to count your chickens before they hatch. But we've seen these patterns before, but the lobbying uplift really, again, 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. I mean, looking at second quarter last year, I'm on Slide 23 for reference, but it was really strong second quarter last year, and you grew nicely on top of that. What is driving -- the question is what is driving the strength in lobbying maybe beyond seasonality or odd and even number of 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. As a lot of states are going through constitutional office elections, obviously legislative seats are up too this year, just like the federal level. But 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. So 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. So I think there's a macro trend there. I think the micro trend is probably that, again, frankly, in the federal sector, I mean, the President does drive a certain level of activity across a number of issue areas. And that continues apace as well in Washington. But again, we're kind of seeing this across the board.

Great, thanks. And just a last one from me. It's referencing Slide 32, just client base nearly half the Fortune 100, 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's 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?

Yes, mix, essentially, Roel.

Yes, exactly. No, listen, we expect actually now for the remainder of this year for the mix to remain the same given that we bought a little bit of strategic comms and a bit of lobbying. And margin-wise, I also suspect that this year is going to be fairly, I'd say, level compared to prior year. We had been providing 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 our overall margin down. But I would say for our overall business picture, the three segments, I don't anticipate too much change in relative weight nor in margins of each of these segments.

I guess, Scott, the other piece of your question was really alluding to cross-sell and inter-company business development. And again, I think that momentum continues to pick up. We see, I'm not going to quote any exact internal metrics for you, but the fact is that 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 Officers' efforts for a full year now that are really starting to pay through to really pull people together and practice horizontals across the globe in which people are working really more directly now in touch with our colleagues and working regularly every week, every month together on these larger cross-company mandates. So we really feel like it's all coming together. I think 1 year in, a little plus with TrailRunner, 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 PAs -- I mean, toward their skill sets rather than PA comms. And our lobbyists and others, government affairs practitioners, are recognizing that. So, again, I think the interplay between those two sides has been firmly validated year in.

Our next question comes from Samuel Dindol with Stifel.

Two questions from 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 and more inbound from the sales 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. But on the talent intake side, I don't think there's any doubt about that as well. Made some key adds, TrailRunner Sports added Alden Mitchell, 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, 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, are with platforms that may be in some level of distress, whether that's because of AI or just refocusing their efforts in other areas.

And then 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, which is very good. Do you still think that's the right level? Do you think you could go a bit quicker than that? Or is there an integration element that you want to go?

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

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

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

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

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