Legence Reports Fourth Quarter and Year End 2025 Financial Results
Rhea-AI Summary
Legence (Nasdaq: LGN) reported record Q4 2025 revenue of $737.6 million (+34.6% YoY) and full-year 2025 revenue of $2.55 billion (+21.5%).
Non-GAAP adjusted EBITDA was $86.98 million in Q4 (+53%) and $298.8 million for FY2025 (+30%). Backlog and awards reached $3.7 billion (+49%). The company provided Q1 2026 and raised FY2026 revenue and adjusted EBITDA guidance.
Positive
- Record Q4 revenue of $737.6 million (+34.6% YoY)
- Backlog & awards reached $3.7 billion (+49% YoY)
- Q4 non-GAAP Adjusted EBITDA of $86.98 million (+53% YoY)
- FY2025 non-GAAP Adjusted EBITDA of $298.8 million (+30.1% YoY)
- Raised FY2026 guidance to $3.7B–$3.9B revenue and $400M–$430M adjusted EBITDA
- Tuck-in acquisition of Seattle-area engineering firm Bowers added strategic scale
Negative
- GAAP net loss of $32.7 million in Q4 2025 and $59.8 million for FY2025
- Q4 consolidated gross margin declined to 20.0% from 20.6% a year ago
- Engineering & consulting gross profit down 7.3% in Q4 2025 versus Q4 2024
- Stock-based compensation adjustments materially affect GAAP vs non-GAAP comparability
Key Figures
Market Reality Check
Peers on Argus
LGN was down 5.07% with elevated volume while scanned peers were mixed: FGL up 1.49%, SLND down 31.68%. This points to a stock-specific move rather than a broad Engineering & Construction shift.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 14 | Q3 2025 earnings | Positive | +20.9% | Record Q3 revenue, EBITDA growth, higher backlog, 2026 guidance introduced. |
The only tagged earnings event in the past six months saw a strong positive price reaction to record results and raised guidance.
Over the past several months, Legence has used strong operating performance and capital actions to reshape its profile. In Q3 2025 it reported record revenue of $708.0M and Adjusted EBITDA of $88.8M, with backlog at $3.07B and book-to-bill of 1.5x. IPO proceeds of $780.2M were used to cut net debt to about $650M. The company also advanced its M&A strategy, signing the $475M Bowers deal and providing 2026 guidance, which this new release updates and expands.
Historical Comparison
Prior Legence earnings news produced an average move of +20.86%. This full-year 2025 report similarly emphasizes record revenue, EBITDA growth, backlog expansion and updated 2026 guidance.
Earnings updates progressed from Q3 2025 results and initial 2026 guidance to a full-year 2025 report with raised 2026 revenue and EBITDA outlook.
Market Pulse Summary
This announcement delivers record quarterly and full-year 2025 revenue, solid Adjusted EBITDA growth, and a record $3.7B backlog, supported by a Q4 book-to-bill of 1.9x. Segment data highlight strong Installation & Maintenance performance and modest margin pressure in Engineering & Consulting. Compared with the Q3 2025 update, Legence is extending its growth trend while raising 2026 revenue and EBITDA guidance. Investors may watch backlog conversion, margin mix, and integration of recent acquisitions.
Key Terms
adjusted ebitda financial
non-gaap financial
backlog technical
book-to-bill technical
AI-generated analysis. Not financial advice.
Record Quarterly Revenues of
Quarterly Adjusted EBITDA (non-GAAP) Increased
Record Total Backlog and Awards of
Tuck-In Acquisition of Seattle Area-Based Engineering Firm
Establish First Quarter 2026 Guidance for Revenue of
Raise Full Year 2026 Guidance for Revenue to
SAN JOSE, Calif., March 27, 2026 (GLOBE NEWSWIRE) -- Legence Corp. (Nasdaq: LGN) (“Legence” or the “Company”) today reported financial results for the fourth quarter and year ended December 31, 2025.
“Our fourth quarter 2025 performance punctuates a milestone year for Legence,” said Jeff Sprau, Chief Executive Officer of Legence. “We achieved record quarterly revenues which increased by
Our latest results speak to the demand momentum for mission-critical building systems, which we anticipate will continue throughout 2026 and beyond. The combination of robust industry tailwinds, our record backlog, and the strategic addition of The Bowers Group, Inc. (“Bowers”), along with several recent tuck-in acquisitions over the past year, positions Legence for an exciting new phase of growth.”
Fourth Quarter and Full Year 2025 Consolidated Results:
Revenues for the fourth quarter 2025 totaled
| Legence Corp. Consolidated Results | |||||||||||||||||||
| ($ in thousands) | Three Months Ended December 31, | ||||||||||||||||||
| 2025 | 2024 | Year over Year Change | |||||||||||||||||
| $ | % | $ | % | $ | % | ||||||||||||||
| Revenues: | |||||||||||||||||||
| Engineering & Consulting | $ | 172,580 | 23.4 | % | $ | 156,872 | 28.6 | % | $ | 15,708 | 10.0 | % | |||||||
| Installation & Maintenance | 565,062 | 76.6 | % | 391,343 | 71.4 | % | 173,719 | 44.4 | % | ||||||||||
| Consolidated Revenues | $ | 737,642 | 100.0 | % | $ | 548,215 | 100.0 | % | $ | 189,427 | 34.6 | % | |||||||
| Three Months Ended December 31, | |||||||||||||||||||
| 2025 | 2024 | Year over Year Change | |||||||||||||||||
| $ | % Margin | $ | % Margin | $ | % | ||||||||||||||
| Gross Profit: | |||||||||||||||||||
| Engineering & Consulting | $ | 47,779 | 27.7 | % | $ | 51,518 | 32.8 | % | $ | (3,739 | ) | (7.3)% | |||||||
| Installation & Maintenance | 99,709 | 17.6 | % | 61,423 | 15.7 | % | 38,286 | 62.3 | % | ||||||||||
| Consolidated Gross Profit | $ | 147,488 | 20.0 | % | $ | 112,941 | 20.6 | % | $ | 34,547 | 30.6 | % | |||||||
| Non-GAAP Adjusted Gross Profit | $ | 156,560 | 21.2 | % | $ | 112,315 | 20.5 | % | $ | 44,245 | 39.4 | % | |||||||
| Non-GAAP Adjusted EBITDA | $ | 86,981 | 11.8 | % | $ | 56,788 | 10.4 | % | $ | 30,193 | 53.2 | % | |||||||
Revenues for the full year 2025 totaled
| Legence Corp. Consolidated Results | ||||||||||||||||||
| ($ in thousands) | Twelve Months Ended December 31, | |||||||||||||||||
| 2025 | 2024 | Year over Year Change | ||||||||||||||||
| $ | % | $ | % | $ | % | |||||||||||||
| Revenues: | ||||||||||||||||||
| Engineering & Consulting | $ | 726,293 | 28.5 | % | $ | 601,602 | 28.7 | % | $ | 124,691 | 20.7 | % | ||||||
| Installation & Maintenance | 1,824,198 | 71.5 | % | 1,497,000 | 71.3 | % | 327,198 | 21.9 | % | |||||||||
| Consolidated Revenues | $ | 2,550,491 | 100.0 | % | $ | 2,098,602 | 100.0 | % | $ | 451,889 | 21.5 | % | ||||||
| Twelve Months Ended December 31, | ||||||||||||||||||
| 2025 | 2024 | Year over Year Change | ||||||||||||||||
| $ | % Margin | $ | % Margin | $ | % | |||||||||||||
| Gross Profit: | ||||||||||||||||||
| Engineering & Consulting | $ | 238,869 | 32.9 | % | $ | 205,085 | 34.1 | % | $ | 33,784 | 16.5 | % | ||||||
| Installation & Maintenance | 297,056 | 16.3 | % | 225,682 | 15.1 | % | 71,374 | 31.6 | % | |||||||||
| Consolidated Gross Profit | $ | 535,925 | 21.0 | % | $ | 430,767 | 20.5 | % | $ | 105,158 | 24.4 | % | ||||||
| Non-GAAP Adjusted Gross Profit | $ | 549,665 | 21.6 | % | $ | 432,083 | 20.6 | % | $ | 117,582 | 27.2 | % | ||||||
| Non-GAAP Adjusted EBITDA | $ | 298,825 | 11.7 | % | $ | 229,625 | 10.9 | % | $ | 69,200 | 30.1 | % | ||||||
Engineering & Consulting Segment Results:
Engineering & Consulting segment revenue for the fourth quarter 2025 totaled
Engineering & Consulting segment gross profit for the fourth quarter 2025 totaled
| Engineering & Consulting Segment Results | |||||||||||||||||||
| ($ in thousands) | Three Months Ended December 31, | ||||||||||||||||||
| 2025 | 2024 | Year over Year Change | |||||||||||||||||
| $ | % | $ | % | $ | % | ||||||||||||||
| Segment Revenues: | |||||||||||||||||||
| Engineering & Design | $ | 100,848 | 58.4 | % | $ | 101,583 | 64.8 | % | $ | (735 | ) | (0.7)% | |||||||
| Program & Project Management | 71,732 | 41.6 | % | 55,289 | 35.2 | % | 16,443 | 29.7 | % | ||||||||||
| Engineering & Consulting Revenues | $ | 172,580 | 100.0 | % | $ | 156,872 | 100.0 | % | $ | 15,708 | 10.0 | % | |||||||
| Three Months Ended December 31, | |||||||||||||||||||
| 2025 | 2024 | Year over Year Change | |||||||||||||||||
| $ | % Margin | $ | % Margin | $ | % | ||||||||||||||
| Engineering & Consulting Gross Profit | $ | 47,779 | 27.7 | % | $ | 51,518 | 32.8 | % | $ | (3,739 | ) | (7.3)% | |||||||
| Engineering & Consulting Non-GAAP Adjusted Gross Profit | 53,405 | 30.9 | % | 51,185 | 32.6 | % | 2,220 | 4.3 | % | ||||||||||
Engineering & Consulting segment revenue for the full year 2025 totaled
Engineering & Consulting segment gross profit for the full year 2025 totaled
| Engineering & Consulting Segment Results | ||||||||||||||||||
| ($ in thousands) | Twelve Months Ended December 31, | |||||||||||||||||
| 2025 | 2024 | Year over Year Change | ||||||||||||||||
| $ | % | $ | % | $ | % | |||||||||||||
| Segment Revenues: | ||||||||||||||||||
| Engineering & Design | $ | 425,014 | 58.5 | % | $ | 345,977 | 57.5 | % | $ | 79,037 | 22.8 | % | ||||||
| Program & Project Management | 301,279 | 41.5 | % | 255,625 | 42.5 | % | 45,654 | 17.9 | % | |||||||||
| Engineering & Consulting Revenues | $ | 726,293 | 100.0 | % | $ | 601,602 | 100.0 | % | $ | 124,691 | 20.7 | % | ||||||
| Twelve Months Ended December 31, | ||||||||||||||||||
| 2025 | 2024 | Year over Year Change | ||||||||||||||||
| $ | % Margin | $ | % Margin | $ | % | |||||||||||||
| Engineering & Consulting Gross Profit | $ | 238,869 | 32.9 | % | $ | 205,085 | 34.1 | % | $ | 33,784 | 16.5 | % | ||||||
| Engineering & Consulting Non-GAAP Adjusted Gross Profit | 247,282 | 34.0 | % | 205,922 | 34.2 | % | 41,360 | 20.1 | % | |||||||||
Installation & Maintenance Segment Results:
Installation & Maintenance segment revenue for the fourth quarter 2025 totaled
Installation & Maintenance segment gross profit for the fourth quarter 2025 totaled
| Installation & Maintenance Segment Results | ||||||||||||||||||
| ($ in thousands) | Three Months Ended December 31, | |||||||||||||||||
| 2025 | 2024 | Year over Year Change | ||||||||||||||||
| $ | % | $ | % | $ | % | |||||||||||||
| Segment Revenues: | ||||||||||||||||||
| Installation & Fabrication | $ | 475,406 | 84.1 | % | $ | 310,269 | 79.3 | % | $ | 165,137 | 53.2 | % | ||||||
| Maintenance & Service | 89,656 | 15.9 | % | 81,074 | 20.7 | % | 8,582 | 10.6 | % | |||||||||
| Installation & Maintenance Revenues | $ | 565,062 | 100.0 | % | $ | 391,343 | 100.0 | % | $ | 173,719 | 44.4 | % | ||||||
| Three Months Ended December 31, | ||||||||||||||||||
| 2025 | 2024 | Year over Year Change | ||||||||||||||||
| $ | % Margin | $ | % Margin | $ | % | |||||||||||||
| Installation & Maintenance Gross Profit | $ | 99,709 | 17.6 | % | $ | 61,423 | 15.7 | % | $ | 38,286 | 62.3 | % | ||||||
| Installation & Maintenance Non-GAAP Adjusted Gross Profit | 103,155 | 18.3 | % | 61,130 | 15.6 | % | 42,025 | 68.7 | % | |||||||||
Installation & Maintenance segment revenue for the full year 2025 totaled
Installation & Maintenance segment gross profit for the full year 2025 totaled
| Installation & Maintenance Segment Results | ||||||||||||||||||
| ($ in thousands) | Twelve Months Ended December 31, | |||||||||||||||||
| 2025 | 2024 | Year over Year Change | ||||||||||||||||
| $ | % | $ | % | $ | % | |||||||||||||
| Segment Revenues: | ||||||||||||||||||
| Installation & Fabrication | $ | 1,493,830 | 81.9 | % | $ | 1,183,750 | 79.1 | % | $ | 310,080 | 26.2 | % | ||||||
| Maintenance & Service | 330,368 | 18.1 | % | 313,250 | 20.9 | % | 17,118 | 5.5 | % | |||||||||
| Installation & Maintenance Revenues | $ | 1,824,198 | 100.0 | % | $ | 1,497,000 | 100.0 | % | $ | 327,198 | 21.9 | % | ||||||
| Twelve Months Ended December 31, | ||||||||||||||||||
| 2025 | 2024 | Year over Year Change | ||||||||||||||||
| $ | % Margin | $ | % Margin | $ | % | |||||||||||||
| Installation & Maintenance Gross Profit | $ | 297,056 | 16.3 | % | $ | 225,682 | 15.1 | % | $ | 71,374 | 31.6 | % | ||||||
| Installation & Maintenance Non-GAAP Adjusted Gross Profit | 302,383 | 16.6 | % | 226,161 | 15.1 | % | 76,222 | 33.7 | % | |||||||||
Backlog and Awarded Contracts
Backlog and awarded contracts totaled
| Backlog and Awarded Contracts | ||||||||||||
| ($ in thousands) | ||||||||||||
| As of December 31, | Year over Year Change | |||||||||||
| 2025 | 2024 | $ | % | |||||||||
| Engineering & Consulting | $ | 994,073 | $ | 855,784 | $ | 138,289 | 16.2 | % | ||||
| Installation & Maintenance | 2,680,276 | 1,616,310 | 1,063,966 | 65.8 | % | |||||||
| Total Backlog and Awarded Contracts | $ | 3,674,349 | $ | 2,472,094 | $ | 1,202,255 | 48.6 | % | ||||
| Book-to-bill ratio for the three months ended | ||||||||||||
| December 31 | 1.9x | 1.2x | ||||||||||
| Book-to-bill ratio for the twelve months ended | ||||||||||||
| December 31 | 1.6x | 1.3x | ||||||||||
Acquisitions
On March 1, 2026, the Company completed the acquisition of Metrix Engineers LLC (“Metrix”). Founded in 2011, Metrix is a Renton, WA-based MEP engineering firm with a strong presence in the education end market in the Pacific Northwest. Total consideration for Metrix was approximately
“The Metrix team is a great addition to our organization, within the Engineering & Consulting segment, and aligns well with our collaborative culture,” said Jeff Sprau, Chief Executive Officer of Legence. “This acquisition adds scale to our engineering and consulting capabilities in the Pacific Northwest, a region known for innovation, diversifies our customer base and offers compelling cross selling opportunities. Metrix reflects our disciplined M&A approach which targets strategic opportunities that are expected to drive growth and enhance margins.”
Balance Sheet
At December 31, 2025, the Company had cash and equivalents of approximately
Guidance
Legence announces the following guidance for the first quarter of 2026:
- Total revenues of
$925 million to$950 million ; and - Non-GAAP adjusted EBITDA of
$90 million to$100 million .
Legence revises guidance for full year 2026 as follows (which in both cases, reflects the expected results following the acquisition of Metrix and incorporates the previously-disclosed separate guidance for Bowers for full year 2026):
- Total revenues of
$3.7 billion to$3.9 billion , up from$3.5 billion to$3.7 billion ; and - Non-GAAP Adjusted EBITDA of
$400 million to$430 million , up from$370 million to$400 million .
Conference Call
Legence will host a webcast and conference call to discuss its financial results on March 27, 2026 at 10:00 a.m. (Eastern Time). The webcast link to the call and the slide presentation to accompany the call remarks can be accessed on the Company’s website at https://investors.wearelegence.com/. A replay of the webcast can be accessed through the same webcast link on the Company’s website shortly after the call and will be available through April 27, 2026.
About Legence
Legence is a leading provider of engineering, consulting, installation, and maintenance services for mission-critical systems in buildings. The Company specializes in designing, fabricating, and installing complex HVAC, process piping, and other mechanical, electrical and plumbing (MEP) systems—enhancing energy efficiency, reliability, and sustainability in new and existing facilities. Legence also delivers long-term performance through strategic upgrades and holistic solutions. Serving some of the world’s most technically demanding sectors, Legence counts over
Forward-Looking Statements
Some of the information in this press release may contain “forward-looking statements.” All statements, other than statements of historical fact included in this press release regarding our strategy, future operations, financial position and guidance, estimated revenues and losses, projected costs, prospects, plans and objectives of management, are forward-looking statements. When used in this press release, words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “plan,” “potential,” “predict,” “forecast,” “budget,” “project,” “future,” “will,” “seek,” “foreseeable,” the negative versions of these words and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are not historical facts but rather are based on management’s current belief, based on currently available information, as to the outcome and timing of future events, and it is possible that the results described in this press release will not be achieved. Such statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, changes to economic and regulatory conditions and other trends in the markets in which we operate; our ability to compete effectively in our target markets; the business plans or financial condition of our customers; the impact of acquired companies, including Bowers and Metrix, on our organization and the ability to recognize the anticipated benefits of such acquisitions; the regulations related to environmental, health and safety matters; the ability to receive necessary government permits and approvals; the future availability and price of materials and equipment necessary for the performance of our business; the risks associated with inflation, interest rates, recessionary economic conditions and commodity prices; the fact that we outsource various elements of the services we sell and use materials and equipment produced by third parties; our clients’ reliance on third party financing; the recognition of all revenues from our backlog and awarded contracts; our receipt of all payments anticipated under awarded projects and customer contracts; the maintenance of safe work sites and equipment; restrictions imposed by our existing and any future indebtedness; our exposure to costs and liabilities under environmental, health and safety laws; misconduct and errors by employees, subcontractors, partners or third party service providers; and the other risks described under the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s final prospectus, dated December 11, 2025, filed with the Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended, on December 15, 2025 (the “Prospectus”), and our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”) to be filed with the SEC, and in other documents the Company subsequently files from time to time with the SEC. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified in their entirety by the statements in this section, to reflect events or circumstances after the date of this press release. New factors emerge from time to time, and it is not possible for the Company to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in the Prospectus and the Annual Report and in the Company’s subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements.
Contact
Media: media@wearelegence.com
Investor Relations: ir@wearelegence.com
| Legence Corp. Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Revenue | $ | 737,642 | $ | 548,215 | $ | 2,550,491 | $ | 2,098,602 | |||||||
| Cost of revenue | 590,154 | 435,274 | 2,014,566 | 1,667,835 | |||||||||||
| Gross profit | 147,488 | 112,941 | 535,925 | 430,767 | |||||||||||
| Selling, general and administrative | 114,813 | 63,040 | 342,627 | 242,888 | |||||||||||
| Depreciation and amortization | 24,746 | 26,415 | 100,365 | 97,153 | |||||||||||
| Acquisition-related costs | 4,768 | 41 | 5,739 | 5,634 | |||||||||||
| Gain on sale of property and equipment | (127 | ) | — | (326 | ) | — | |||||||||
| Goodwill impairment | 24,966 | 17,804 | 24,966 | 17,804 | |||||||||||
| Long-lived asset impairment | 2,415 | — | 2,415 | — | |||||||||||
| Equity in earnings of joint venture | (595 | ) | 68 | (1,443 | ) | (3,063 | ) | ||||||||
| (Loss) income from operations | (23,498 | ) | 5,573 | 61,582 | 70,351 | ||||||||||
| Other expense (income): | |||||||||||||||
| Interest expense (including | 13,550 | 26,217 | 101,778 | 91,609 | |||||||||||
| Interest income | (1,900 | ) | (1,108 | ) | (4,488 | ) | (5,464 | ) | |||||||
| Loss on debt extinguishment | 966 | — | 6,651 | — | |||||||||||
| Credit agreement amendment fees | 3,312 | 3,682 | 6,302 | 7,801 | |||||||||||
| Other expense (income) , net | 6,749 | (39 | ) | 6,481 | (473 | ) | |||||||||
| Total other expense, net | 22,677 | 28,752 | 116,724 | 93,473 | |||||||||||
| Loss before income tax | (46,175 | ) | (23,179 | ) | (55,142 | ) | (23,122 | ) | |||||||
| Income tax expense (benefit) | 8,499 | (4,979 | ) | 22,161 | 4,521 | ||||||||||
| Net loss | (54,674 | ) | (18,200 | ) | (77,303 | ) | (27,643 | ) | |||||||
| Net (loss) income attributable to noncontrolling interests | (21,953 | ) | 505 | (17,523 | ) | 912 | |||||||||
| Net loss attributable to Legence | $ | (32,721 | ) | $ | (18,705 | ) | $ | (59,780 | ) | $ | (28,555 | ) | |||
| Period from September 12, 2025 to December 31, 2025 | |||||||||||||||
| Net loss per Class A Common Stock—basic and diluted | $ | (0.55 | ) | $ | (0.57 | ) | |||||||||
| Weighted-average Class A Common Stock outstanding—basic and diluted | 59,561 | 59,381 | |||||||||||||
| Legence Corp. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) | |||||||
| December 31, 2025 | December 31, 2024 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | 230,166 | 81,167 | |||||
| Accounts receivable, net | 584,060 | 448,610 | |||||
| Contract assets, net | 259,941 | 188,132 | |||||
| Prepaid expenses and other current assets | 36,179 | 38,506 | |||||
| Total current assets | 1,110,346 | 756,415 | |||||
| Property and equipment, net | 92,333 | 73,381 | |||||
| Operating lease right-of-use assets (including | 117,139 | 90,922 | |||||
| Goodwill | 764,336 | 781,194 | |||||
| Intangible assets, net | 551,420 | 624,250 | |||||
| Other assets | 43,822 | 26,338 | |||||
| Total assets | $ | 2,679,396 | $ | 2,352,500 | |||
| Liabilities and Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | 246,161 | 126,502 | |||||
| Accrued compensation and benefits | 68,064 | 54,601 | |||||
| Accrued and other current liabilities | 16,475 | 28,490 | |||||
| Contract liabilities | 339,462 | 164,130 | |||||
| Current portion of operating lease liabilities (including | 21,300 | 14,402 | |||||
| Current portion of long-term debt | 16,694 | 22,984 | |||||
| Total current liabilities | 708,156 | 411,109 | |||||
| Long-term debt, net of current portion (including | 812,398 | 1,585,846 | |||||
| Operating lease liabilities, net of current portion (including | 103,762 | 80,669 | |||||
| Tax receivable agreement liability - related party | 207,448 | — | |||||
| Deferred tax liabilities, net | 46,714 | 35,428 | |||||
| Other long-term liabilities | 12,123 | 35,856 | |||||
| Total liabilities | 1,890,601 | 2,148,908 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity / Member’s equity | |||||||
| Member’s equity | — | 443,738 | |||||
| Preferred stock, | — | — | |||||
| Class A common stock, | 638 | — | |||||
| Class B common stock, | 415 | — | |||||
| Additional paid-in capital | 701,791 | — | |||||
| Accumulated deficit | (309,949 | ) | (250,169 | ) | |||
| Accumulated other comprehensive (loss) income | (698 | ) | 9,111 | ||||
| Total Legence stockholders’ equity / Member’s equity | 392,197 | 202,680 | |||||
| Noncontrolling interests | 396,598 | 912 | |||||
| Total stockholders’ equity / Member’s equity | 788,795 | 203,592 | |||||
| Total liabilities and stockholders’ equity / Member’s equity | $ | 2,679,396 | $ | 2,352,500 | |||
| Legence Corp. Condensed Statements of Cash Flows (In thousands) (Unaudited) | |||||||
| Year Ended December 31, | |||||||
| 2025 | 2024 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (77,303 | ) | $ | (27,643 | ) | |
| Adjustments to reconcile net loss to cash provided by operating activities: | |||||||
| Amortization of intangible assets | 82,342 | 80,967 | |||||
| Depreciation of property and equipment | 31,946 | 29,882 | |||||
| Goodwill impairment | 24,966 | 17,804 | |||||
| Long-lived asset impairment | 2,415 | — | |||||
| Amortization of debt issuance costs and discounts | 3,480 | 5,052 | |||||
| Loss on debt extinguishment | 6,651 | — | |||||
| Stock-based compensation | 67,550 | 5,411 | |||||
| Deferred taxes | 15,287 | (13,704 | ) | ||||
| Tax receivable agreement liability remeasurement | 2,914 | — | |||||
| Equity in earnings of joint venture | (1,443 | ) | (3,063 | ) | |||
| Return on investment in joint venture | 1,700 | 1,000 | |||||
| Operating lease right-of-use asset lease expense | 18,279 | 13,091 | |||||
| Other | 1,158 | 3,749 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable, net | (130,070 | ) | 17,955 | ||||
| Contract assets | (71,185 | ) | (50,995 | ) | |||
| Prepaid expenses and other current assets | 2,929 | 4,498 | |||||
| Accounts payable | 117,910 | 10,699 | |||||
| Accrued compensation and benefits | 12,298 | (2,778 | ) | ||||
| Accrued and other current liabilities | (13,967 | ) | (36,638 | ) | |||
| Contract liabilities | 172,194 | (14,507 | ) | ||||
| Operating lease liabilities, current and long-term | (15,280 | ) | (10,603 | ) | |||
| Other long-term assets and liabilities | 2,102 | (909 | ) | ||||
| Cash provided by operating activities | 256,873 | 29,268 | |||||
| Cash flows from investing activities: | |||||||
| Purchases of property and equipment | (37,940 | ) | (19,008 | ) | |||
| Consideration paid for acquisitions, net of cash acquired | (16,497 | ) | (225,246 | ) | |||
| Proceeds from sale of property and equipment | 390 | 269 | |||||
| Cash used in investing activities | (54,047 | ) | (243,985 | ) | |||
| Cash flows from financing activities: | |||||||
| Term loan borrowings (including | 59,636 | 565,000 | |||||
| Term loan payments (including | (852,214 | ) | (13,682 | ) | |||
| Notes payable payments | (7,878 | ) | (6,485 | ) | |||
| Finance lease payments | (3,843 | ) | (2,460 | ) | |||
| Cash distributions to Legence Parent | — | (301,614 | ) | ||||
| Cash contributions from Legence Parent | — | 400 | |||||
| Proceeds from IPO, net of underwriting discounts and commissions | 780,243 | — | |||||
| Debt issuance costs | (1,626 | ) | (1,495 | ) | |||
| Payments for deferred offering costs | (28,145 | ) | (196 | ) | |||
| Payments of contingent consideration (including ( | — | (32,504 | ) | ||||
| Cash (used in) provided by financing activities | (53,827 | ) | 206,964 | ||||
| Increase (decrease) in cash and cash equivalents | 148,999 | (7,753 | ) | ||||
| Cash and cash equivalents and restricted cash, beginning of period | 81,167 | 88,920 | |||||
| Cash and cash equivalents, end of period | $ | 230,166 | $ | 81,167 | |||
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), our earnings release contains non-GAAP financial measures as described below.
Our non-GAAP financial measures may not be comparable to similarly titled measures used by other companies, have limitations as analytical tools and should not be considered in isolation, or substitutes for analysis of our operating results as reported under GAAP. Additionally, we do not consider our non-GAAP financial measures superior to, or a substitute for, the equivalent measures calculated and presented in accordance with GAAP.
In addition, this press release includes certain projections of the non-GAAP financial measure Adjusted EBITDA. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included.
Adjusted EBITDA
Adjusted EBITDA is a financial measure not presented in accordance with GAAP but is intended to provide useful and supplemental information to investors and analysts as they evaluate our performance. EBITDA is defined as earnings before interest and other financing expenses, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude, or otherwise reflect, interest expense, interest income, income tax expense, depreciation and amortization, credit agreement amendment fees, goodwill impairment, long-lived asset impairment, net (gain) loss on sale and disposition of property and equipment, loss on debt extinguishment, acquisition and integration costs, system deployment costs, strategic initiative costs, indemnification asset adjustments, Tax Receivable Agreement liability remeasurements and stock-based compensation expense. Adjusted EBITDA should not be considered an alternative to net loss that is derived in accordance with GAAP. Management believes that the exclusion of the above-described items from net loss in the presentation of the non-GAAP measure identified above enables us and our investors to more effectively evaluate our operations period over period and to identify operating trends that might not be apparent due to, among other reasons, the variable nature of these items, both in value and frequency, period over period. In addition, management believes this measure may be useful for investors in comparing our operating results with those of other companies.
The following table provides a reconciliation of our net loss, the most directly comparable financial measure presented in accordance with GAAP, to Adjusted EBITDA for the periods presented herein (in thousands):
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Net loss | $ | (54,674 | ) | $ | (18,200 | ) | $ | (77,303 | ) | $ | (27,643 | ) | |||
| Interest expense | 13,550 | 26,217 | 101,778 | 91,609 | |||||||||||
| Interest income | (1,900 | ) | (1,108 | ) | (4,488 | ) | (5,464 | ) | |||||||
| Income tax expense | 8,499 | (4,979 | ) | 22,161 | 4,521 | ||||||||||
| Depreciation and amortization | 28,677 | 29,862 | 114,288 | 110,849 | |||||||||||
| Credit agreement amendment fees(1) | 3,312 | 3,682 | 6,302 | 7,801 | |||||||||||
| Goodwill impairment(2) | 24,966 | 17,804 | 24,966 | 17,804 | |||||||||||
| Long-lived asset impairment(3) | 2,415 | — | 2,415 | — | |||||||||||
| Net (gain) loss on sale and disposition of property and equipment | (127 | ) | 29 | (326 | ) | (270 | ) | ||||||||
| Loss on debt extinguishment | 966 | — | 6,651 | — | |||||||||||
| Acquisition and integration costs(4) | 5,501 | 2,112 | 8,436 | 9,181 | |||||||||||
| System deployment costs(5) | — | 1,139 | 2,140 | 5,048 | |||||||||||
| Strategic initiative costs(6) | 2,964 | 3,545 | 17,092 | 10,778 | |||||||||||
| Indemnification asset adjustments(7) | 3,796 | — | 3,796 | — | |||||||||||
| Tax Receivable Agreement liability remeasurements(8) | 2,914 | — | 2,914 | — | |||||||||||
| Stock-based compensation expense | 46,122 | (3,315 | ) | 68,003 | 5,411 | ||||||||||
| Adjusted EBITDA | $ | 86,981 | $ | 56,788 | $ | 298,825 | $ | 229,625 | |||||||
| Net loss margin | (7.4)% | (3.3)% | (3.0)% | (1.3)% | |||||||||||
| Adjusted EBITDA margin | 11.8 | % | 10.4 | % | 11.7 | % | 10.9 | % | |||||||
(1) Represents costs incurred in connection with our debt refinancings in each of the periods presented.
(2) Refer to “Note 5—Goodwill and Intangible Assets” in the Notes to Consolidated Financial Statements to be included in the Annual Report for details on the nature of the impairment.
(3) Refer to “Note 2—Summary of Significant Accounting Policies, Long-Lived Assets Impairment” in the Notes to Consolidated Financial Statements to be included in the Annual Report for details on the nature of the impairment.
(4) For the years ended December 31, 2025 and 2024, the figures include
(5) Represents consulting and initial upfront costs associated with implementing and optimizing certain enterprise resource planning systems, including IFS, Onestream and Ceridian Dayforce.
(6) Represents (i) consulting costs associated with rebranding efforts in connection with our name change to Legence that we do not expect to recur in the future, (ii) upfront consulting and out-of-pocket costs related to developing and launching the cross-selling framework amongst our brands, many of which were more recently acquired and integrated into the Legence brand, (iii) consulting and legal fees associated with education and marketing efforts for our clients with respect to utilizing certain government incentive programs, (iv) consulting, legal, accounting, and other expenses in connection with non-recurring extraordinary company transactions, including fees related to our IPO that did not meet the requirements to be deferred issuance costs, and (v) consulting, legal, accounting, and other expenses in connection with a secondary offering conducted on behalf of our selling shareholders.
(7) Represents adjustments to an indemnification asset related to unrecognized tax benefits acquired in a prior acquisition recorded in Other expense (income), net on the Consolidated Statements of Operations and is fully offset as an income tax benefit netted in Income tax expense on the Consolidated Statements of Operations.
(8) Tax Receivable Agreement liability remeasurements are recorded in Other expense (income), net on the Consolidated Statements of Operations.
Adjusted Gross Profit and Adjusted Gross Margin
Adjusted Gross Profit is a financial measure not presented in accordance with GAAP but is intended to provide useful and supplemental information to investors and analysts as they evaluate our performance. Gross profit is defined as revenue less cost of revenue services. Adjusted Gross Profit is defined as gross profit adjusted to exclude stock-based compensation expense related to legacy profit interest units, where the payment of this expense is borne by entities outside of Legence Corp. Adjusted Gross Profit should not be considered an alternative to gross profit that is derived in accordance with GAAP. Adjusted Gross Margin is defined as Adjusted Gross Profit divided by revenue. Management believes that the exclusion of the above-described items from gross profit in the presentation of the non-GAAP measure identified above enables us and our investors to supplement the evaluation of our operations period over period and to identify operating trends that might not otherwise be apparent due to, among other reasons, the variable nature of these items, both in value and frequency, period over period. In addition, management believes this measure may be useful for investors in comparing our operating results with those of other companies.
The following table provides a reconciliation of our gross profit, the most directly comparable financial measure presented in accordance with GAAP, to Adjusted Gross Profit for the periods presented herein (in thousands) and our Adjusted Gross Margin for the same periods:
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Gross Profit | |||||||||||||||
| Engineering & Consulting Segment | $ | 47,779 | $ | 51,518 | $ | 238,869 | $ | 205,085 | |||||||
| Installation & Maintenance Segment | 99,709 | 61,423 | 297,056 | 225,682 | |||||||||||
| Consolidated | $ | 147,488 | $ | 112,941 | $ | 535,925 | $ | 430,767 | |||||||
| Non-GAAP Adjustment: | |||||||||||||||
| Stock-based compensation expense (benefit) from legacy profit interest units(1) | |||||||||||||||
| Engineering & Consulting Segment | $ | 5,626 | $ | (333 | ) | $ | 8,413 | $ | 837 | ||||||
| Installation & Maintenance Segment | 3,446 | (293 | ) | 5,327 | 479 | ||||||||||
| Consolidated | $ | 9,072 | $ | (626 | ) | $ | 13,740 | $ | 1,316 | ||||||
| Non-GAAP Adjusted Gross Profit: | |||||||||||||||
| Engineering & Consulting Segment | $ | 53,405 | $ | 51,185 | $ | 247,282 | $ | 205,922 | |||||||
| Installation & Maintenance Segment | 103,155 | 61,130 | 302,383 | 226,161 | |||||||||||
| Consolidated | $ | 156,560 | $ | 112,315 | $ | 549,665 | $ | 432,083 | |||||||
| Non-GAAP Adjusted Gross Margin: | |||||||||||||||
| Engineering & Consulting Segment | 30.9 | % | 32.6 | % | 34.0 | % | 34.2 | % | |||||||
| Installation & Maintenance Segment | 18.3 | % | 15.6 | % | 16.6 | % | 15.1 | % | |||||||
| Consolidated | 21.2 | % | 20.5 | % | 21.6 | % | 20.6 | % | |||||||
(1) Represents the portion of stock-based compensation expense related to legacy profit interest units paid for by entities outside of Legence Corp. and recorded in cost of revenue in the Consolidated Condensed Statement of Operations. Figures exclude the portion of stock-based compensation expense related to restricted stock units and other equity awards issued by Legence Corp.
Net Leverage
Net leverage is defined as net debt divided by Adjusted EBITDA. The Company believes this non-GAAP measure is useful to investors as it provides alternative information that management believes to be useful in assessing our ability to meet our payment obligations in addition to considering the absolute amount of our debt. Net debt is a financial measure not presented in accordance with GAAP but is intended to provide useful and supplemental information to investors and analysts as they evaluate our performance. Net debt includes total balance sheet debt, excluding finance lease liabilities, less cash and cash equivalents.
Backlog and Awarded Contracts and Book-to-Bill Ratio
We believe that backlog and awarded contracts and book-to-bill ratio enable us to more effectively forecast our future results and working capital needs, as well as better identify future operating trends that may not otherwise be apparent. Backlog represents, as of any date of determination, the expected revenue values of the remaining performance obligations under our contracted fixed-price projects. Awarded contracts represents, as of any date of determination, the expected revenue values of projects awarded to us following a request for proposals but for which a formal contract has not yet been signed. We calculate our book-to-bill ratio by taking our additions to backlog and awarded contracts, excluding additions that were attained through acquisition, for the period, and dividing it by revenue from fixed-price contracts for the same period. Given that backlog and awarded contracts and book-to-bill ratio are operational measures and that our methodology for calculating each such measure does not meet the definition of a non-GAAP financial measure, as that term is defined by the SEC, a quantitative reconciliation for each is not required nor provided.
1 Adjusted EBITDA is a non-GAAP financial measure. Definitions of non-GAAP financial measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure are included in the section titled “Non-GAAP Financial Measures.”
2 Total debt defined as Term Loan balance of
FAQ
What were Legence (LGN) Q4 2025 revenues and year-over-year growth?
How much backlog and awards did Legence (LGN) report for year-end 2025?
What is Legence's (LGN) Q1 2026 guidance for revenue and adjusted EBITDA?
How did Legence (LGN) perform on adjusted EBITDA in Q4 and full-year 2025?
Why does Legence (LGN) show a net loss while adjusted EBITDA improved in 2025?
