Legence (LGN) Q3 2025 Financial Results Summary

2025-11-14 · Stocks · QuoteReporter

Legence Corp. (LGN) Q3 2025 Financial Results Summary

Release Date: November 14, 2025

Legence Corp. reported its financial results for the third quarter ending September 30, 2025, showcasing impressive growth across various metrics compared to the same quarter in the previous year.

Key Financial Highlights:

Revenues:
Total revenues of $708.0 million, representing a 26.2% increase from $560.8 million in Q3 2024.
Breakdown:
- Engineering & Consulting: $212.2 million (up 9.5% from $193.8 million)
- Installation & Maintenance: $495.8 million (up 35.1% from $367.0 million)
Gross Profit:
Gross profit of $148.1 million, a 24.9% increase from $118.5 million.
Gross margin slightly decreased to 20.9% from 21.1% a year ago.
Net Loss:
Net loss attributable to Legence was $(0.6) million, or $(0.02) per diluted share, compared to a net loss of $(1.1) million in Q3 2024.
Adjusted EBITDA:
Non-GAAP Adjusted EBITDA of $88.8 million, up 38.9% from $64.0 million year over year.

Segment Performance:

Engineering & Consulting:
Revenues of $212.2 million, up 9.5%.
Gross profit of $67.3 million, a 5.3% increase.
Margins slightly declined to 31.7% from 33.0%.
Installation & Maintenance:
Revenues surged to $495.8 million, marking a 35.1% growth.
Gross profit increased to $80.7 million, a 47.9% increase.
Margins improved to 16.3% from 14.9%.

Backlog and Awards:

Total Backlog and Awards:
Reached $3.1 billion, representing a 29.4% increase from $2.4 billion year-over-year.
Book-to-bill ratio stood at 1.5x, up from 1.3x.
Segment-specific backlog:
Engineering & Consulting: $894.7 million (up 1.5% from $881.5 million).
Installation & Maintenance: $2.2 billion (up 45.9% from $1.5 billion).

Debt and Liquidity:

Total Debt: Decreased to $836 million.
Net Debt: Reduced to $650 million following strong cash generation and IPO proceeds.
Net leverage stood at 2.4 times based on Adjusted EBITDA for the last 12 months.

Guidance:

For Q4 2025:
Revenue Guidance: $600 million to $630 million.
Adjusted EBITDA Guidance: $60 million to $65 million.
For Full Year 2026:
Revenue Guidance: $2.65 billion to $2.85 billion.
Adjusted EBITDA Guidance: $295 million to $315 million.

Acquisitions:

Legence signed a definitive agreement to acquire Bowers Group, a mechanical contractor based in the Northern Virginia/DC Metro area, for $475 million.
Completed tuck-in acquisitions of Arizona Pinnacle Engineering and Innovative Mechanical & Design.

Dividends and Share Repurchase:

No dividend was declared for the quarter.
No share repurchase activity was mentioned in the report.

Summary:

Legence Corp. demonstrated robust growth in Q3 2025, with significant increases in revenue, Adjusted EBITDA, and backlog compared to the prior year. The company also highlighted a strategic acquisition process and significantly reduced its debt, positioning itself well for future growth.

Condensed Consolidated Statements of Operations

(In thousands, except per share data) (Unaudited)

	2025	2024	2025	2024
Revenue	708,006	560,804	1,812,849	1,550,387
Cost of revenue	559,947	442,258	1,424,412	1,232,561
Gross profit	148,059	118,546	388,437	317,826
Selling, general and administrative	85,887	67,199	227,814	179,848
Depreciation and amortization	24,183	25,475	75,619	70,738
Acquisition-related costs	795	154	971	5,593
Loss (gain) on sale of property and equipment	21	—	-199	—
Equity in earnings of joint venture	-24	-1,233	-848	-3,131
Income from operations	37,197	26,951	85,080	64,778
Interest expense	28,183	23,707	88,228	65,392
Interest income	-1,069	-523	-2,588	-4,356
Loss on debt extinguishment	5,685	—	5,685	—
Credit agreement amendment fees	64	—	2,990	4,119
Other income, net	-123	-121	-268	-434
Total other expense, net	32,740	23,063	94,047	64,721
Income (loss) before income tax	4,457	3,888	-8,967	57
Income tax expense	4,078	4,564	13,662	9,500
Net income (loss)	379	-676	-22,629	-9,443
Net income attributable to	955	407	4,430	407
Net loss attributable to Legence	-576	-1,083	-27,059	-9,850
Net loss per Class A Common Stock—basic and diluted	-0.02	-0.02
Weighted-average Class A Common Stock outstanding—basic and diluted	58,511

Condensed Consolidated Balance Sheets

(In thousands) (Unaudited)

	September 30, 2025	December 31, 2024
Assets
Current assets:
Cash and cash equivalents	176,034	81,167
Accounts receivable, net	588,433	448,610
Contract assets, net	234,302	188,132
Prepaid expenses and other current assets	39,038	38,506
Total current assets	1,037,807	756,415
Property and equipment, net	81,094	73,381
Operating lease right-of-use assets, (including amounts from related parties)	106,469	90,922
Goodwill	782,931	781,194
Intangible assets, net	562,361	624,250
Other assets	29,607	26,338
Total assets	2,600,269	2,352,500
Liabilities and Equity
Current liabilities:
Accounts payable	224,256	126,502
Accrued compensation and benefits	89,832	54,601
Accrued and other current liabilities	25,659	28,490
Contract liabilities	285,894	164,130
Current portion of operating lease liabilities, (including amounts from related parties)	18,051	14,402
Current portion of long-term debt	16,301	22,984
Total current liabilities	659,993	411,109
Long-term debt, net of current portion, (including amounts from related parties)	812,628	1,585,846
Operating lease liabilities, net of current portion, (including amounts from related parties)	94,568	80,669
Tax receivable agreement liability – related party	146,474	—
Deferred tax liabilities, net	41,543	35,428
Other long-term liabilities	17,590	35,856
Total liabilities	1,772,796	2,148,908
Stockholders’ equity / Member’s equity
Member’s equity	—	443,738
Preferred stock	—	—
Class A common stock	585	—
Class B common stock	467	—
Additional paid-in capital	664,299	—
Accumulated deficit	-277,228	-250,169
Accumulated other comprehensive (loss) income	-248	9,111
Total Legence stockholders’ equity / Member’s equity	387,875	202,680
Noncontrolling interests	439,598	912
Total stockholders’ equity / Member’s equity	827,473	203,592
Total liabilities and stockholders’ equity / Member’s equity	2,600,269	2,352,500