LGN 10-K & 10-Q changes, risk factors and insider trading
Legence Corp. · Nasdaq · Construction - Special Trade Contractors · CIK 2052568 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Comparison not available: Not available: fewer than two 10-K filings on EDGAR to compare (only one so far)..
What changed in the latest 10-Q
Risk Factors
Our business faces many risks. In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under “Item 1A. Risk Factors” in our 2025 Annual Report, and the risk factors and other cautionary statements contained in our subsequent SEC filings. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in the 2025 Annual Report.
Full comparison: every changed paragraph (1)
Our business faces many risks. In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under “Item 1A. Risk Factors” in our 2025 Annual Report, and the risk factors and other cautionary statements contained in our subsequent SEC filings. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results. There have been no material changes in our risk factors from those described in the 2025 Annual Report.
Management's Discussion & Analysis (MD&A)
New heading “Goodwill Impairment”
New heading “Long-Lived Asset Impairment”
New heading “Interest Expense”
New heading “Income Tax Expense”
New heading “Results of Operations”
New heading “For the Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025”
New heading “Selling, General & Administrative”
New heading “Depreciation and Amortization”
New heading “Goodwill Impairment”
New heading “Long-Lived Asset Impairment”
Removed heading “Engineering & Consulting”
Removed heading “Installation & Maintenance”
Largest changes
“Goodwill represents the excess of the purchase price over the fair value of identifiable assets and liabilities of the acquired business. Goodwill is not subject to amortization but is tested for impairment at the reporting unit level, which represents the operating segment level or one level below the operating segment level for which discrete information is available. …”see in full comparison
“During the three months ended June 30, 2026, it was determined the carrying amount of goodwill for one reporting unit in the Engineering & Consulting segment exceeded fair value, resulting in a goodwill impairment of $21.6 million. The impairment was primarily driven by a decline in new contracts during the three months ended June 30, 2026, due to lower customer demand for sustainability services, which resulted in declining revenue, margins and cash flow projections.”see in full comparison
Full comparison: every changed paragraph (87)
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the related notes thereto that appear elsewhere in this Quarterly Report on Form 10-Q and our audited Consolidated Financial Statements and the related notes thereto contained in our 2025 Annual Report. In addition to historical consolidated financial information, the following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. The forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described or referenced under “Cautionary Statement Regarding Forward-Looking Statements” and “Part II. Other Information, Item 1A. Risk Factors” in this Quarterly Report and under“Cautionary Statement Regarding Forward-Looking Statements” and “Part I, Item 1A. Risk Factors” in our 2025 Annual Report. Our actual results may differ materially from those contained in or implied by any forward-looking statements. We do not undertake any obligation to publicly update any forward-looking statements except as otherwise required by applicable law.Thelaw. The following management’s discussion and analysis reflects the historical results of operations and financial position of Legence Holdings LLC prior to our initial public offering (the “IPO”) and the series of organizational transactions completed in connection therewith (the “Corporate Reorganization”) and that of Legence Corp. and its consolidated subsidiaries, including Legence Holdings LLC, following the completion of the Corporate Reorganization and the IPO.
On November 13, 2025, the Company entered into an equity purchase agreement to acquire all of the outstanding equity of The Bowers Group, Inc (“Bowers”). The acquisition was completed on January 2, 2026. In connection with the consummation of the Bowers acquisition, Legence Holdings obtained a $200.0 million incremental term loan, and used the proceeds to fund acquisition-related payments. The incremental term loan increased the quarterly principal payments to $2.5 million.
On February 25, 2026, the Board adopted the 2026 Employee Stock Purchase Plan (“2026 ESPP”), including the reservation of 1,580,053 shares of Class A Common Stock for issuance under the 2026 ESPP. The 2026 ESPP is subject to the approval of our stockholders.
On March 1, 2026, the Company acquired Metrix Engineers, LLC.
In March 2026, we entered into interest rate swap agreements.
These items are further described under “Note 4—Acquisitions,” “Note 7—Debt,” “Note 10—Stockholders’ Equity” and “Note 9—Derivatives,” respectively, in Notes to Condensed Consolidated Financial Statements included in Item 1. Financial Statements”.
On May 27, 2026, Legence Holdings amended its credit agreement to refinance and replace the previously existing $995.3 million term loan facility with a $995.3 million term loan facility that (i) reduces its applicable interest rate on SOFR rate term loans by 0.25% to the SOFR plus 2.00% and (ii) reduces its applicable interest rate on base rate term loans by 0.25% to the base rate (the “Base Rate”), which is the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate and (c) the SOFR rate for one month plus 1.00%, plus 1.00%. The amendment provided for an additional 0.25% reduction of the interest rate applicable to the term loan if the Company maintains certain credit ratings. On June 5, 2026, S&P Global Ratings upgraded the Company’s issuer credit rating. On June 24, 2026, Moody’s Ratings upgraded the Company’s issuer credit rating. As such, an incremental 0.25% interest rate reduction will have full effect upon the delivery of the Company’s second quarter lender compliance certificate related to the filing of this Quarterly Report.
On June 11, 2026, the Company’s stockholders approved the Legence Corp. 2026 Employee Stock Purchase Plan, which had been previously approved by the Board, subject to stockholder approval. The 2026 ESPP is designed to allow eligible employees of the Company and certain designated subsidiaries of the Company to purchase shares of Class A Common Stock, at a discount to the market price, subject to the terms of the 2026 ESPP. Up to 1,580,053 shares of Class A Common Stock are authorized for issuance pursuant to the 2026 ESPP, which number is subject to adjustment for certain corporate and recapitalization events as described in the 2026 ESPP.
These items are further described under “Note 7—Debt” and “Note 10—Stockholders’ Equity” in Notes to Condensed Consolidated Financial Statements included in “Item 1. Financial Statements”.
(7)Includes a variety of other industries such as manufacturing, aerospace & defense, energy, agriculture, multi-family, and hospitality & entertainment, among others, as well as the federal government.
Engineering & Consulting
Installation & Maintenance
We derive a significant portion of our revenues from technology companies, and demand for our services depends, in part, on technology companies making continued investments in their facilities. Investment in technology is subject to a number of factors, including the frequency and nature of innovations, whether or not developing or implementing those innovations requires new physical infrastructureinfrastructure, the impact on demand caused by evolving state or local government policies, permitting requirements or land use regulations, and the availability of capital to fund investments in thatsuch infrastructure.
For the Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025
A summary of our consolidated results of operations, selected data as a percentage of revenues for the periods indicated,operations as well as the dollar and percentage change from the prior year period is presented as follows (dollars in thousands):
Consolidated revenue increased $531.9$663.2 million, or 105.1%,110.7%, during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase is attributable to the results of our operating segments, which are discussed below.
Engineering & Consulting: Engineering & Consulting segment revenue increased $20.4$10.8 million, or 14.0%,5.5%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025.
The Engineering & Design service line revenue decreased $(9.0)$4.3 million, or (8.4)%,4.1%, during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The decrease is attributable to lower demand, primarily from education and mixed-use clients.
The Program & Project Management service line revenue increased $29.3$15.1 million, or 75.4%,16.9%, during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase is attributable to higher demand, primarily from education clients, hospitalitystate & entertainmentlocal clients within Other,government and data centers & technology clients.
Installation & Maintenance: Installation & Maintenance segment revenue increased $511.6$652.4 million, or 141.9%,162.0%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. Organic revenue growth drove over half of the overall segment revenue growth. Substantially all of the remaining increase in the Installation & Maintenance segment revenue resulted from the acquisition of Bowers on January 2, 2026.
The Installation & Fabrication service line accounted for $468.9$604.9 million, or 91.7%,92.7%, of the increase in Installation & Maintenance segment revenue. Organic revenue growth, driven mainly by data centers & technology clients, accounted for slightly over half of the increase in Installation & Fabrication service line revenue. The majority of the remaining increase in the Installation & Fabrication service line revenue resultedgrowth fromoriginated in the acquisitiondata ofcenters Bowers.& technology end market.
The Maintenance & Service service line accounted for $42.7$47.6 million, or 8.3%7.3%, of the increase in the Installation & Maintenance segment revenue. Approximately two-thirds60% of the increase in Maintenance & Service service line revenue resulted from the acquisition of Bowers. Organic revenue growth accounted for the majority of the remaining increase in Maintenance & Service service line revenue, primarily from data centers & technology, education, state & local government and life sciences & healthcare andend state & local governmentmarket clients.
Consolidated gross profit increased $74.5$91.6 million, or 66.6%,71.2%, during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase is attributable to the results of our Installation & Maintenance segment, as discussed below.
Engineering & Consulting: The $(9.2)$8.0 million, or (15.5)%,12.4%, decrease in gross profit for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 was driven by a lower project% marginmargin, andpartially offset by higher revenue. The lower gross profit reflects the combined effect of higher customer fulfillment support costs, including the impact of higher compensation expense related to legacy Series A Interests paid for by entities outside of Legence, partially offset by higher revenue. The lower project margin primarily reflects a higher percentage of subcontractor expenses,and a revenue mix shift toward our lower % margin Program & Project Management service line and lower project margins in our Engineering & Design service line.
Installation & Maintenance: The $83.7$99.5 million, or 160.8%,154.1%, increase in gross profit for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025 was primarily due to organic revenue and margin growth, partially offset by a slightly lower % margin. The decrease in the Installation & Maintenance % margin was primarily due to lower project % margins in both our Installation & Fabrication and Maintenance & Service service lines, a revenue mix shift toward our lower % margin Installation & Fabrication service line and the impact of higher compensation expense related to legacy Series A Interests paid for by entities outside of Legence.Legence, largely offset by greater economies of scale in customer fulfillment support costs. Approximately one-third of the increase in gross profit resulted from the acquisition of Bowers. The increase in margin was primarily due to strong project execution and greater economies of scale in customer fulfillment support costs.
Selling, general and administrative expenses increased $46.6$75.1 million during the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, primarily drivendue byto $40.6$64.4 million inhigher compensation expense largelyreflecting duethe tocombined effect of higher compensation expense related to legacy Series A Interests paid for by entities outside of Legence as well asand higher headcount. LeaseProfessional services and lease & related expenses increased $2.9$2.8 million.million and $2.7 million, respectively. Selling, general and administrative expenses as a percentage of revenue declined from 13.7%,12.1%, during the three months ended MarchJune 31,30, 2025, to 11.2%11.7% during the three months ended MarchJune 31,30, 2026.
The increase in depreciation and amortization is primarily attributable to an increase in the amortization of intangible assets associated with acquisitions completed in late 2025 and during the three months ended March 31,early 2026.
Goodwill Impairment
During the three months ended June 30, 2026, it was determined the carrying amount of goodwill for one reporting unit in the Engineering & Consulting segment exceeded fair value, resulting in goodwill impairment of $21.6 million. The impairment was primarily driven by a decline in projected cash flows due to lower customer demand for sustainability services.
Long-Lived Asset Impairment
Long-lived asset impairment of $19.5 million for the three months ended June 30, 2026 was primarily driven by a decline in revenue, margins and cash flow projections due to lower customer demand for sustainability services.
Interest Expense
The decrease in interest expense is primarily attributable to lower average borrowings as well as lower average interest rates during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025.
Income Tax Expense
Income tax expense was $11.1 million for the three months ended June 30, 2026, and resulted in an effective tax rate of negative 47.3%, as compared to income tax expense of $5.5 million for the three months ended June 30, 2025 and an effective tax rate of 330.7%. For the three months ended June 30, 2026, the effective tax rate was lower than the U.S. federal statutory rate of 21%, primarily due to non-deductible compensation expense related to Series A Interests. For the three months ended June 30, 2025, the effective tax rate was higher than the U.S. federal statutory rate of 21% primarily due to the loss before income tax from pass-through entities that are not subject to income taxes at the Company level.
Results of Operations
For the Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
A summary of our consolidated results of operations as well as the dollar and percentage change from the prior year period is presented as follows (dollars in thousands):
*Not meaningful.
Revenue
Consolidated revenue increased $1.2 billion, or 108.2%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase is attributable to the results of our operating segments, which are discussed below.
The following table presents our revenue by reportable segment, as well as our primary service lines (dollars in thousands):
Engineering & Consulting: Engineering & Consulting segment revenue increased $31.2 million, or 9.1%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
The Engineering & Design service line revenue decreased $13.3 million, or 6.2%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease is attributable to lower demand, primarily from mixed-use and data centers & technology clients.
The Program & Project Management service line revenue increased $44.5 million, or 34.7%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase is attributable to higher demand, primarily from data centers & technology, education, and state and local government clients.
Installation & Maintenance: Installation & Maintenance segment revenue increased $1.2 billion, or 152.5%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
The Installation & Fabrication service line accounted for $1.1 billion, or 92.2%, of the increase in Installation & Maintenance segment revenue. Organic revenue growth, driven mainly by data centers & technology clients, accounted for slightly over half of the increase in Installation & Fabrication service line revenue. The majority of the remaining increase in the Installation & Fabrication service line revenue resulted from the acquisition of Bowers on January 2, 2026.
The Maintenance & Service service line accounted for $90.3 million, or 7.8% of the increase in the Installation & Maintenance segment revenue. Approximately two-thirds of the increase in Maintenance & Service service line revenue resulted from the acquisition of Bowers. Organic revenue growth accounted for the majority of the remaining increase in Maintenance & Service service line revenue, primarily from data centers & technology, education, life sciences & healthcare and state & local government clients.
Gross Profit
Consolidated gross profit increased $166.0 million, or 69.1%, during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase is attributable to the results of our Installation & Maintenance segment, as discussed below.
The following table presents our consolidated gross profit by reportable segment (dollars in thousands):
Engineering & Consulting: The $17.2 million, or 13.9%, decrease in gross profit for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was driven by a lower % margin, partially offset by higher revenue. The lower % margin primarily reflects higher customer fulfillment support costs, including the impact of higher compensation expense related to legacy Series A Interests paid for by entities outside of Legence, a revenue mix shift toward our lower % margin Program & Project Management service line and lower project % margins in our Engineering & Design service line.
Installation & Maintenance: The $183.2 million, or 157.1%, increase in gross profit for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily due to organic revenue growth and a slight increase in % margin. The modest increase in % margin was primarily due to greater economies of scale in customer fulfillment support costs, the effect of which was largely offset by lower % margins in both our Installation & Fabrication and Maintenance & Service service lines, a revenue mix shift toward our lower % margin Installation & Fabrication service line and the impact of higher compensation expense related to legacy Series A Interests paid for by entities outside of Legence. Approximately one-third of the increase in gross profit resulted from the acquisition of Bowers.
Selling, General & Administrative
Selling, general and administrative expenses increased $121.8 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to $105.0 million higher compensation expense reflecting the combined effect of higher expense related to legacy Series A Interests paid for by entities outside of Legence and higher headcount. Lease and related expenses increased $5.6 million. Selling, general and administrative expenses as a percentage of revenue declined from 12.8%, during the six months ended June 30, 2025, to 11.5% during the six months ended June 30, 2026.
Depreciation and Amortization
The increase in depreciation and amortization is primarily attributable to an increase in the amortization of intangible assets associated with acquisitions completed in late 2025 and early 2026.
Goodwill Impairment
During the six months ended June 30, 2026, it was determined the carrying amount of goodwill for one reporting unit in the Engineering & Consulting segment exceeded fair value, resulting in goodwill impairment of $21.6 million. The impairment was primarily driven by a decline in projected cash flows due to lower customer demand for sustainability services.
Long-Lived Asset Impairment
LGN insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 2 filings (1 insider, 2 trade dates, 5,254 shares, about $285.0K; 2 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -5,254 (purchases minus sales); net value about -$285.0K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-18 | Le Bris Philippe |
Open-market sale |
1,058 | $55.01 | $58.2K |
| 2026-09-15 | Butz Stephen M |
Shares withheld for tax | 2,343 | $53.03 | $124.2K |
| 2026-09-15 | Le Bris Philippe |
Option exercise |
4,196 | $28.00 | $117.5K |
| 2026-09-15 | Le Bris Philippe |
Open-market sale |
4,196 | $54.06 | $226.8K |
| 2026-09-15 | Le Bris Philippe |
Shares withheld for tax |
341 | $53.03 | $18.1K |
| 2026-09-15 | Seki Bryce |
Shares withheld for tax | 653 | $53.03 | $34.6K |
| 2026-09-15 | Sprau Jeffrey |
Shares withheld for tax | 9,792 | $53.03 | $519.3K |
| 2026-09-15 | Hansen Stephen Dale |
Shares withheld for tax | 1,671 | $53.03 | $88.6K |
| 2026-09-15 | Barnes Gregory |
Shares withheld for tax | 653 | $53.03 | $34.6K |
| 2026-09-15 | Schwartz Justin |
Shares withheld for tax | 768 | $53.03 | $40.7K |
| 2026-08-18 | Crisci Robert |
Grant/award | 2,257 | — | — |
| 2026-06-11 | Keenen Terrence |
Grant/award | 1,675 | — | — |
| 2026-06-11 | Coghlan David Joseph |
Grant/award | 1,675 | — | — |
| 2026-06-11 | Kelly Christie B. |
Grant/award | 1,675 | — | — |
Well-known investors holding LGN (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 1,478,072 | $126.0M | 0.09% | Added 2074% |
| Renaissance Technologies | 2026-06-30 | 1,180,400 | $100.6M | 0.14% | Added 104% |
| Soros Fund Management | 2026-06-30 | 328,000 | $28.0M | 0.37% | Added 147% |
| Millennium Management (Israel Englander) | 2026-06-30 | 231,670 | $19.7M | 0.01% | Added 762% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 9,798 | $835.1K | 0.0% | Reduced 89% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 6,387 | $544.4K | 0.0% | New position |