Legence Corp. (LGN): Results of Operations and Financial Condition
Legence Corp. (LGN) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Legence Reports Second Quarter 2026 Financial Results Record Quarterly Revenues of $1.26 Billion, a 111% Increase from a Year Ago Excluding Bowers Acquisition, Revenues (non-GAAP) Grew by 60% from a Year Ago 1 Quarterly Adjusted EBITDA (non-GAAP) Increased 114% from
How this was made
The 30-second read
Why it matters
Traders can reprice LGN based on the raised full-year revenue and non-GAAP adjusted EBITDA ranges, and on the disclosed backlog and awarded contracts level that underpins visibility.
Market read
Record backlog and a guidance raise are the core catalysts, while margin/mix dynamics introduce a key risk to the magnitude of earnings upside.
What to watch
The filing attributes margin changes to revenue mix toward Installation and Maintenance and rising indirect customer fulfillment costs, which could cap upside if costs persist.
Record Quarterly Revenues of $1.26 Billion, a 111% Increase from a Year Ago Excluding Bowers Acquisition, Revenues (non-GAAP) Grew by 60% from a Year Ago; Quarterly Adjusted EBITDA (non-GAAP) Increased 114% from Prior Year; Record Total Backlog and Awarded Contracts of $5.67 Billion
Revenue more than doubled, Adjusted EBITDA increased 114.1%, backlog and awarded contracts increased 104.6%, and management raised full-year revenue and Adjusted EBITDA guidance. The result included gross-margin pressure, impairment charges, and a net loss attributable to Legence.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Consolidated revenuesGAAP | $1.26 billion | – | 110.7% |
| Revenue growth excluding Bowersnon-GAAP | 60.0% | – | – |
| Gross profitGAAP | $220.2 million | – | 71.2% |
| Gross marginGAAP | 17.4% | – | – |
| Adjusted gross profitnon-GAAP | $234.0 million | – | 79.5% |
| Adjusted gross marginnon-GAAP | 18.5% | – | – |
| Loss from operationsGAAP | $(6.6) million | – | – |
| Net lossGAAP | $34.6 million | – | – |
| Net loss attributable to LegenceGAAP | $27.8 million | – | – |
| Diluted loss per shareGAAP | $(0.37) per diluted share | – | – |
| Basic loss per shareGAAP | $(0.37) | – | – |
| Adjusted EBITDAnon-GAAP | $154.6 million | – | 114.1% |
| Adjusted EBITDA marginnon-GAAP | 12.2% | – | – |
| Backlog and awarded contractsother | $5.67 billion | – | 104.6% |
| Consolidated book-to-bill ratio for the three months ended June 30other | 1.2x | – | – |
| Cash provided by operating activities for the six months ended June 30GAAP | $194,494 | – | – |
| Purchases of property and equipment for the six months ended June 30GAAP | $(41,867) | – | – |
| Goodwill impairmentGAAP | $21,586 | – | – |
| Long-lived asset impairmentGAAP | $19,491 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Engineering & ConsultingHigher demand for Program & Project Management services primarily from state & local government and data centers & technology clients, partially offset by lower revenue from Engineering & Design services primarily from mixed-use clients. | $206.9 million | – | 5.5% |
| Installation & MaintenanceStrong demand for Installation & Fabrication services, primarily from data centers & technology clients. Maintenance & Service revenue increased primarily from data centers & technology, education, state & local government and life sciences & healthcare clients. | $1.06 billion | – | 162.0% |
| Engineering & Design service lineLower revenue primarily from mixed-use clients. | $102.3 million | – | (4.1)% |
| Program & Project Management service lineHigher demand primarily from state & local government and data centers & technology clients. | $104.5 million | – | 16.9% |
| Installation & Fabrication service lineStrong demand primarily from data centers & technology clients. | $924.9 million | – | 189.0% |
| Maintenance & Service service lineGrowth primarily from data centers & technology, education, state & local government and life sciences & healthcare clients. | $130.4 million | – | 57.5% |
Third Quarter 2026 and Full Year 2026 outlook
- RevenueThird Quarter 2026: $1.225 billion to $1.275 billion; Full Year 2026: $4.7 billion to $4.8 billion
- NoteThird Quarter 2026 Non-GAAP Adjusted EBITDA: $150 million to $160 million
- NoteFull Year 2026 Non-GAAP Adjusted EBITDA: $565 million to $585 million
- NoteFull Year 2026 revenue guidance was raised from $4.1 billion to $4.3 billion
- NoteFull Year 2026 Non-GAAP Adjusted EBITDA guidance was raised from $470 million to $490 million
What drove it
- Consolidated revenue growth excluding approximately $303.8 million of second quarter 2026 revenues from Bowers was 60.0%.
- Installation & Maintenance revenue growth excluding Bowers was 86.6%.
- Data centers & technology was a significant driver of performance.
- Engineering & Consulting backlog and awarded contracts increased by 26.6% year over year, primarily from state & local government, education, and life sciences & healthcare end markets.
- Installation & Maintenance backlog and awarded contracts increased by 141.2% year over year, primarily from the acquisition of Bowers and strong growth in data centers & technology and education end markets.
- Adjusted EBITDA margin was 12.2%, compared to 12.1% for the second quarter 2025.
Concerns
- Consolidated GAAP gross margin was 17.4%, compared to 21.5% for the second quarter 2025.
- Consolidated non-GAAP Adjusted Gross Margin was 18.5%, compared to 21.8% for the second quarter 2025, primarily due to a revenue mix shift toward Installation & Maintenance and a slight decline in Engineering & Consulting Adjusted Gross Margin.
- Engineering & Consulting gross profit decreased 12.4% to $56.1 million and non-GAAP Adjusted Gross Margin declined to 31.1% from 33.2%.
- Engineering & Consulting Adjusted Gross Margin was affected by a revenue mix shift toward Program & Project Management and rising indirect customer fulfillment costs.
- Installation & Maintenance non-GAAP Adjusted Gross Margin declined to 16.1% from 16.2%, due to increased Installation & Fabrication revenue mix and lower service line margins, largely offset by economies of scale in customer fulfillment support costs.
- The Company reported net loss attributable to Legence of $27.8 million, compared to a net loss attributable to Legence of $5.3 million for the second quarter 2025.
- Goodwill impairment was $21,586 and long-lived asset impairment was $19,491.
What to watch
- Execution against third-quarter total revenue guidance of $1.225 billion to $1.275 billion and Non-GAAP Adjusted EBITDA guidance of $150 million to $160 million.
- The mix of Installation & Maintenance revenue and its effect on consolidated gross margin.
- Engineering & Consulting demand in Program & Project Management, state & local government, and data centers & technology, alongside Engineering & Design revenue from mixed-use clients.
- Conversion of $5.67 billion in backlog and awarded contracts into revenue.
- Whether the consolidated book-to-bill ratio, reported at 1.2x for both the three- and six-month periods ended June 30, remains supportive of backlog growth.
- Integration of Bowers and the Company's ability to recognize anticipated acquisition benefits.
Balance sheet and cash flow
- Cash and cash equivalents at June 30, 2026: approximately $292.0 million.
- Total debt at June 30, 2026: approximately $1.03 billion.
- Term Loan balance: $992.8 million.
- Notes Payable balance: $33.6 million.
- Net Debt: $734,399.
- Net Leverage: 1.6.
- Adjusted Net Leverage: 1.5.
- Cash provided by operating activities for the six months ended June 30, 2026: $194,494.
- Cash used in investing activities for the six months ended June 30, 2026: $(322,940).
- Consideration paid for acquisitions, net of cash acquired, for the six months ended June 30, 2026: $(281,293).
- Cash provided by financing activities for the six months ended June 30, 2026: $190,260.
- Increase in cash and cash equivalents for the six months ended June 30, 2026: $61,814.
Analysis
Legence reported record quarterly revenue of $1.26 billion, up 110.7% from $598.9 million in the second quarter 2025. Management said revenue growth excluding approximately $303.8 million of second quarter 2026 revenue from the Bowers acquisition was 60.0%. Adjusted EBITDA increased 114.1% to $154.6 million, while Adjusted EBITDA margin was 12.2%, compared to 12.1% in the prior-year quarter. The result reflects strong demand across data centers & technology and activity in life sciences & healthcare, state & local government, education, and other end markets cited by management.
Installation & Maintenance drove the quarter. Segment revenue was $1.06 billion, up 162.0%, with revenue growth excluding Bowers of 86.6%. Installation & Fabrication revenue increased 189.0% to $924.9 million, while Maintenance & Service revenue increased 57.5% to $130.4 million. Engineering & Consulting revenue was $206.9 million, up 5.5%, as Program & Project Management growth of 16.9% offset a 4.1% decline in Engineering & Design revenue. This leaves the consolidated business more weighted toward Installation & Maintenance, which carried a lower gross margin than Engineering & Consulting.
Margin performance was the main operating offset to the revenue and Adjusted EBITDA growth. Consolidated GAAP gross margin declined to 17.4% from 21.5%, and non-GAAP Adjusted Gross Margin declined to 18.5% from 21.8%. Engineering & Consulting non-GAAP Adjusted Gross Margin decreased to 31.1% from 33.2%, reflecting a mix shift toward Program & Project Management and rising indirect customer fulfillment costs. Installation & Maintenance non-GAAP Adjusted Gross Margin declined to 16.1% from 16.2% because of Installation & Fabrication mix and lower service line margins, partly offset by greater economies of scale. GAAP results also included $21,586 of goodwill impairment and $19,491 of long-lived asset impairment, contributing to net loss attributable to Legence of $27.8 million.
Demand visibility expanded with total backlog and awarded contracts of $5.67 billion, up 104.6% from $2.77 billion. Engineering & Consulting backlog and awarded contracts increased 26.6%, while Installation & Maintenance increased 141.2%, with the latter driven by Bowers and data centers & technology and education growth. The consolidated book-to-bill ratio was 1.2x for both the three- and six-month periods ended June 30, 2026, compared with 1.3x for the corresponding periods in 2025. Cash and cash equivalents were approximately $292.0 million, total debt was approximately $1.03 billion, and net leverage was 1.6 times.
Management established third-quarter guidance for total revenue of $1.225 billion to $1.275 billion and Non-GAAP Adjusted EBITDA of $150 million to $160 million. It raised full-year revenue guidance to $4.7 billion to $4.8 billion from $4.1 billion to $4.3 billion and raised full-year Non-GAAP Adjusted EBITDA guidance to $565 million to $585 million from $470 million to $490 million. The raised outlook is supported by reported industry conditions and backlog visibility, while gross-margin trends, integration of Bowers, backlog conversion, and the persistence of data-center-related demand remain the central operating items to monitor.
Management, verbatim
Strong customer demand led to another record quarter for Legence, with new highs in revenue, Adjusted EBITDA and backlog and awarded contracts.
Jeff Sprau, Chief Executive Officer of Legence
While the data centers & technology end market continues to be a significant driver of our performance, we are also benefitting from healthy activity across our other diverse end markets, including life sciences & healthcare, state & local government, and education.
Jeff Sprau, Chief Executive Officer of Legence
As we enter the second half of 2026, healthy industry conditions, combined with our backlog-supported visibility, gives us confidence to raise our revenue and profit outlook for the year.
Jeff Sprau, Chief Executive Officer of Legence
Not in the filing
stated, not guessed- Previous quarterly outlook section for comparison with actual second-quarter 2026 results was not provided.
- GAAP operating margin was not reported.
- GAAP net loss margin was not reported for the second quarter 2026 in the consolidated-results discussion.
- Non-GAAP adjusted net income and non-GAAP adjusted EPS were not reported.
- Quarterly operating cash flow was not reported.
- Free cash flow was not reported.
- Capital returns, including share repurchases and dividends, were not reported.
- Third-quarter and full-year guidance for gross margin, operating expenses, and tax rate was not reported.
- Prior-quarter comparisons for reported second-quarter metrics were not reported.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is an SEC Form 8-K (Item 2.02) with Exhibit 99.1 detailing Legence’s Q2 2026 financial results and updated guidance.
Ticker impact
Legence reported Q2 2026 revenues of $1.26B, record backlog/awarded contracts of $5.67B, and raised full-year guidance.
Bias toward upside or reduced downside risk versus prior guidance, with follow-through dependent on margin trajectory.
The filing discloses specific Q2 results and explicit Q3 and full-year revenue and non-GAAP adjusted EBITDA guidance ranges, which are direct inputs to valuation and positioning.
Market effects
Strength in data centers and technology end markets, plus broad end-market demand, may support sentiment for engineering and construction services peers with similar backlog models.
Limited direct regional spillover; company-specific backlog visibility is the main driver.
Primarily US-focused government and education demand; limited global macro linkage.
Counterpoint
Despite revenue growth, gross margin and non-GAAP adjusted gross margin declined versus the prior year, suggesting profitability may be pressured by mix and fulfillment costs.
Key entities
- companyLegence Corp.
Nasdaq-listed contractor reporting Q2 results, record backlog, and raised Q3 and full-year guidance.
- transactionThe Bowers Group (Bowers) acquisition
Acquisition impact is excluded from certain non-GAAP growth and margin comparisons in the filing.
