10-Q · May 14, 2026
Legence Corp. reported a significant increase in Q1 2026 revenue of $1.037 billion, up 105.1% from $506 million year-over-year, notably boosted by the Installation & Maintenance segment. Although the company reported…
Earnings analysis · 10-Q
LGN earnings analysis
Filed August 13, 2026 · Our reading of the company's report
The latest report
Legence delivered strong top-line momentum with Q2 revenue of $1.262 billion, up from $1.04 billion in Q1 and supported by Installation & Maintenance growth and a $5.67 billion backlog. However, gross margin fell…
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Legence delivered strong top-line momentum with Q2 revenue of $1.262 billion, up from $1.04 billion in Q1 and supported by Installation & Maintenance growth and a $5.67 billion backlog. However, gross margin fell approximately 410 basis points to 13.8%, impairment charges totaled $41.077 million, and diluted EPS of $(0.37) materially missed consensus. The raised FY2026 outlook is positive, but unremediated material weaknesses and increased floating-rate debt of $992.8 million remain significant concerns.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.37
- Gross margin
- 13.8%
- Segment
- Installation & Maintenance: management identified this segment as the primary growth driver, but the extracted filing text does not provide segment revenue amounts.
What stood out
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Revenue materially exceeded consensus
Q2 revenue was $1.262 billion, up from $1.04 billion in Q1 2026 and 17.8% above the $1.071 billion consensus estimate.
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Installation & Maintenance drove growth
The Installation & Maintenance segment was identified as the primary growth contributor; company backlog stood at $5.67 billion, supporting future revenue visibility.
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Full-year revenue outlook raised
Management raised FY2026 revenue guidance to $4.7 billion-$4.8 billion from $4.1 billion-$4.3 billion, an increase of approximately 14%-17%.
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Adjusted EBITDA outlook raised
FY2026 Adjusted EBITDA guidance increased to $565 million-$585 million from $470 million-$490 million, an increase of approximately 16%-24%.
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Margin contraction continued
Q2 gross margin declined to approximately 13.8% from 17.9% in Q1 2026, a sequential contraction of approximately 410 basis points.
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Impairments weighed on earnings
The company reported $41.077 million of impairment charges during the quarter, contributing to diluted EPS of $(0.37).
What to watch
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Large EPS miss and net loss
Diluted EPS of $(0.37) missed the $0.32 consensus estimate by $0.49 per share, while GAAP net loss attributable to Legence was $27.8 million.
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Unremediated internal-control weaknesses
Disclosure controls were not effective as of June 30, 2026, and material weaknesses involving general IT controls, segregation of duties and journal-entry review remained unremediated.
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Higher debt and interest-rate exposure
Floating-rate debt principal increased to $992.8 million from $797.8 million at December 31, 2025; a 1.0% increase in interest rates would raise annual interest expense by approximately $9.9 million.
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Inflation may pressure margins
Inflation and supply-chain pressures may increase labor, transportation, commodity and other input costs; management states it may be unable to offset those costs through pricing.
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Customer concentration in I&M
One customer in the Installation & Maintenance segment accounted for more than 10% of revenue for the three and six months ended June 30, 2026, creating customer-concentration exposure.
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No formal risk-factor changes
The filing states there were no material changes to the risk factors described in the 2025 Annual Report, so no new formal risk-factor additions were identified.
Management's outlook
Management raised FY2026 revenue guidance to $4.7 billion-$4.8 billion from $4.1 billion-$4.3 billion and Adjusted EBITDA guidance to $565 million-$585 million from $470 million-$490 million. Q3 2026 revenue guidance was $1.225 billion-$1.275 billion and Adjusted EBITDA guidance was $150 million-$160 million.
Earlier filings 3
10-K · March 30, 2026
Legence Corp.'s 2025 10-K demonstrates a strong focus on high-growth sectors such as technology and life sciences, with revenue growth of 21.5% year-over-year. Despite significant growth in backlog and acquisition…
10-Q · November 14, 2025
Legence Corp. reported a substantial increase in revenue in Q3 2025, achieving $708 million, a growth of 26.2% year-over-year. Despite this increase, the company posted a net loss of $576,000, resulting in an…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.