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 Ago1
Quarterly Adjusted EBITDA (non-GAAP) Increased 114% from Prior Year2
Record Total Backlog and Awarded Contracts of $5.67 Billion, a 105% Increase from a Year Ago
Establish Third Quarter 2026 Guidance for Revenue of $1.225 Billion - $1.275 Billion and Non-GAAP Adjusted EBITDA of $150 Million - $160 Million
Raise Full Year 2026 Guidance for Revenue to $4.7 Billion - $4.8 Billion and Non-GAAP Adjusted EBITDA of $565 Million - $585 Million
SAN JOSE, Calif., Aug. 13, 2026 (GLOBE NEWSWIRE) -- Legence Corp. (Nasdaq: LGN) (“Legence” or the “Company”) today reported financial results for the second quarter ended June 30, 2026.
“Strong customer demand led to another record quarter for Legence, with new highs in revenue, Adjusted EBITDA and backlog and awarded contracts,” said Jeff Sprau, Chief Executive Officer of Legence. “Total revenue more than doubled year over year, with revenue growth, excluding the impact of The Bowers Group ("Bowers") acquisition, of approximately 60%. 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. Our dedicated craftspeople, technicians, and engineering professionals are executing at the highest standards, and we are leveraging the scalability of our growth platform to drive sequential Adjusted EBITDA Margin expansion. 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.”
Second Quarter 2026 Consolidated Results:
Revenues for the second quarter 2026 totaled $1.26 billion, an increase of 110.7% from $598.9 million for the second quarter 2025. Excluding the impact of the Bowers acquisition, non-GAAP revenue growth was 60.0%. Gross profit for the second quarter 2026 was $220.2 million with gross margin of 17.4%, compared to gross profit of $128.7 million and gross margin of 21.5% for the second quarter 2025. Excluding the impact of compensation related to legacy Series A Interests and Restricted Series C Interests paid for by entities outside of Legence, we generated non-GAAP Adjusted Gross Profit of $234.0 million and non-GAAP Adjusted Gross Margin of 18.5% for the second quarter 2026, compared to non-GAAP Adjusted Gross Profit of $130.3 million and non-GAAP Adjusted Gross Margin of 21.8% for the second quarter 2025. The decrease in non-GAAP Adjusted Gross Profit and non-GAAP Adjusted Gross Margin was primarily due to a revenue mix shift towards Installation & Maintenance and a slight decline in Engineering & Consulting Adjusted Gross Margin. Net loss attributable to Legence for the second quarter 2026 was $27.8 million, or $(0.37) per diluted share, compared to a net loss attributable to Legence of $5.3 million for the second quarter 2025. Net loss for the second quarter 2026 was $34.6 million, compared to a net loss of $3.9 million for the second quarter 2025. Non-GAAP Adjusted EBITDA for the second quarter 2026 was $154.6 million, an increase of 114.1% from $72.2 million for the second quarter 2025. Refer to “Non-GAAP Financial Measures” for definitions of revenue growth (excluding Bowers), Adjusted Gross Profit, Adjusted Gross Margin, Adjusted EBITDA and Adjusted EBITDA Margin and a reconciliation of each to the most directly comparable GAAP measure.
Legence Corp. Consolidated Results($ in thousands) Three Months Ended June 30, 2026 2025 Year over Year Change $
% $
% $ %Revenues: Engineering & Consulting $206,893 16.4% $196,094 32.7% $10,799 5.5%Installation & Maintenance 1,055,234 83.6% 402,796 67.3% 652,438 162.0%Consolidated Revenues $1,262,127 100.0% $598,890 100.0% $663,237 110.7% Three Months Ended June 30, 2026 2025 Year over Year Change $
% Margin $
% Margin $ %Gross Profit: Engineering & Consulting $56,148 27.1% $64,111 32.7% $(7,963) (12.4)%Installation & Maintenance 164,083 15.5% 64,563 16.0% 99,520 154.1%Consolidated Gross Profit $220,231 17.4% $128,674 21.5% $91,557 71.2%Non-GAAP Adjusted Gross Profit $233,960 18.5% $130,330 21.8% $103,630 79.5% Non-GAAP Adjusted EBITDA $154,569 12.2% $72,204 12.1% $82,365 114.1%
Engineering & Consulting Segment Results:
Engineering & Consulting segment revenue for the second quarter 2026 totaled $206.9 million, an increase of 5.5% from $196.1 million for the second quarter 2025, driven by higher 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.
Engineering & Consulting segment gross profit for the second quarter 2026 totaled $56.1 million, a decrease of 12.4% from $64.1 million for the second quarter 2025. Excluding the impact of compensation related to legacy Series A Interests and Restricted Series C Interests paid for by entities outside of Legence, we generated non-GAAP Adjusted Gross Profit of $64.3 million and non-GAAP Adjusted Gross Margin of 31.1% for the second quarter 2026, compared to non-GAAP Adjusted Gross Profit of $65.1 million and non-GAAP Adjusted Gross Margin of 33.2% for the second quarter 2025. Refer to “Non-GAAP Financial Measures” for definitions of Adjusted Gross Profit and Adjusted Gross Margin and a reconciliation of each to the most directly comparable GAAP measure. The decrease in non-GAAP Adjusted Gross Profit was primarily driven by lower non-GAAP Adjusted Gross Margin, partially offset by higher revenue. The decrease in non-GAAP Adjusted Gross Margin was primarily driven by a revenue mix shift towards the Program & Project Management service line and rising indirect customer fulfillment costs.
Engineering & Consulting Segment Results($ in thousands) Three Months Ended June 30, 2026 2025 Year over Year Change $
% $
% $ %Segment Revenues: Engineering & Design $102,348 49.5% $106,685 54.4% $(4,337) (4.1)%Program & Project Management 104,545 50.5% 89,409 45.6% 15,136 16.9%Engineering & Consulting Revenues $206,893 100.0% $196,094 100.0% $10,799 5.5% Three Months Ended June 30, 2026 2025 Year over Year Change $
% Margin $
% Margin $ %Engineering & Consulting Gross Profit $56,148 27.1% $64,111 32.7% $(7,963) (12.4)%Engineering & Consulting Non-GAAP Adjusted Gross Profit $64,334 31.1% $65,088 33.2% $(754) (1.2)%
Installation & Maintenance Segment Results:
Installation & Maintenance segment revenue for the second quarter 2026 totaled $1.06 billion, an increase of 162.0% from $402.8 million for the second quarter 2025. Excluding the impact of the Bowers acquisition, non-GAAP Installation & Maintenance segment revenues grew by 86.6% over the comparable periods.3 The increase was driven by strong demand for our Installation & Fabrication services, primarily from data centers & technology clients. The increase in Maintenance & Service revenue was primarily from data centers & technology, education, state & local government and life sciences & healthcare clients. See the section titled “Non-GAAP Financial Measures” for more information about non-GAAP revenue growth (excluding Bowers).
Installation & Maintenance segment gross profit for the second quarter 2026 totaled $164.1 million, an increase of 154.1% from $64.6 million for the second quarter 2025. Excluding the impact of compensation related to legacy Series A Interests and Restricted Series C Interests paid for by entities outside of Legence, we generated non-GAAP Adjusted Gross Profit of $169.6 million and non-GAAP Adjusted Gross Margin of 16.1% for the second quarter 2026, compared to non-GAAP Adjusted Gross Profit of $65.2 million and non-GAAP Adjusted Gross Margin of 16.2% for the second quarter 2025. Refer to “Non-GAAP Financial Measures” for definitions of Adjusted Gross Profit and Adjusted Gross Margin and a reconciliation of each to the most directly comparable GAAP measure. The increase in non-GAAP Adjusted Gross Profit was primarily driven by revenue growth, partially offset by a slight decline in non-GAAP Adjusted Gross Margin. The slight decline in non-GAAP Adjusted Gross Margin was primarily due to an increase in Installation & Fabrication revenue mix, and lower service line margins, largely offset by greater economies of scale in customer fulfillment support costs.
Installation & Maintenance Segment Results($ in thousands) Three Months Ended June 30, 2026 2025 Year over Year Change $
% $
% $
%Segment Revenues: Installation & Fabrication $924,884 87.6% $320,025 79.5% $604,859 189.0%Maintenance & Service 130,350 12.4% 82,771 20.5% 47,579 57.5%Installation & Maintenance Revenues $1,055,234 100.0% $402,796 100.0% $652,438 162.0% Three Months Ended June 30, 2026 2025 Year over Year Change $
% Margin $
% Margin $
%Installation & Maintenance Gross Profit $164,083 15.5% $64,563 16.0% $99,520 154.1%Installation & Maintenance Non-GAAP Adjusted Gross Profit $169,626 16.1% $65,242 16.2% $104,384 160.0%
Backlog and Awarded Contracts and Book-to-Bill Ratio
Backlog and awarded contracts totaled $5.67 billion at June 30, 2026, an increase of 104.6% from $2.77 billion at June 30, 2025. The consolidated book-to-bill ratio for the three-month period ended June 30, 2026 was 1.2x. Engineering & Consulting segment backlog and awarded contracts increased by 26.6% year over year, primarily from growth in the state & local government, education, and life sciences & healthcare end markets. Installation & Maintenance segment backlog and awarded contracts increased by 141.2% year over year, primarily from the acquisition of Bowers and strong growth in the data centers & technology and education end markets.
Backlog and Awarded Contracts ($ in thousands) As of June 30,Year over Year Change 2026 2025 $
%Engineering & Consulting $1,122,226 $886,217 $236,009 26.6%Installation & Maintenance 4,549,573 1,886,457 2,663,116 141.2%Total Backlog and Awarded Contracts $5,671,799 $2,772,674 $2,899,125 104.6% Book-to-bill ratio for the three months ended June 30 1.2x 1.3x Book-to-bill ratio for the six months ended June 30 1.2x 1.3x
Balance Sheet
At June 30, 2026, the Company had cash and equivalents of approximately $292.0 million and total debt4 of approximately $1.03 billion. As a result, net leverage was 1.6 times, based on non-GAAP Adjusted EBITDA of the Company for the last 12 months ended June 30, 2026 (“Legence LTM adjusted EBITDA”). When including non-GAAP EBITDA of Bowers for the six months ended December 31, 2025 together with Legence LTM adjusted EBITDA, adjusted net leverage was 1.5 times. Refer to “Non-GAAP Financial Measures” for definitions of net leverage and adjusted net leverage and related reconciliations.
Guidance
Legence announces the following guidance for the third quarter of 2026:
- Total revenues of $1.225 billion to $1.275 billion; and
- Non-GAAP Adjusted EBITDA of $150 million to $160 million.
Legence revises guidance for full year 2026 as follows:
- Total revenues of $4.7 billion to $4.8 billion, up from $4.1 billion to $4.3 billion; and
- Non-GAAP Adjusted EBITDA of $565 million to $585 million, up from $470 million to $490 million.
Conference Call
Legence will host a webcast and conference call to discuss its financial results on August 13, 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 September 13, 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 60% of the Nasdaq-100 Index among its clients.
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 including, without limitation, those relating to 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,” “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 beliefs, 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 a number of assumptions, 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, 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 Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2026 (the “Annual Report”), and in other documents subsequently filed by the Company 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 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: [email protected]
Investor Relations: [email protected]
Condensed Consolidated Statements of Operations
(In thousands, except per share data) (Unaudited)
Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue $1,262,127 $598,890 $2,300,020 $1,104,843 Cost of revenue 1,041,896 470,216 1,893,635 864,465 Gross profit 220,231 128,674 406,385 240,378 Selling, general and administrative 147,591 72,468 263,686 141,927 Depreciation and amortization 37,972 25,344 74,800 51,436 Acquisition-related costs 415 19 11,847 176 Gain on sale of property and equipment (118) (122) (182) (220)Goodwill impairment 21,586 — 21,586 — Long-lived asset impairment 19,491 — 19,491 — Equity in earnings of joint venture (88) (364) (592) (824)(Loss) income from operations (6,618) 31,329 15,749 47,883 Other expense (income): Interest expense (including $1,567 and $4,169 for the three months in 2026 and 2025, respectively, and $3,247 and $8,465 for the six months in 2026 and 2025, respectively, from related parties) 16,911 30,404 33,911 60,045 Interest income (1,914) (764) (3,234) (1,519)Credit agreement amendment fees 2,014 49 5,257 2,926 Loss on debt extinguishment 13 — 13 — Other income, net (169) (37) (738) (145)Total other expense, net 16,855 29,652 35,209 61,307 (Loss) income before income tax (23,473) 1,677 (19,460) (13,424) Income tax expense (benefit) 11,091 5,546 (2,290) 9,584 Net loss (34,564) (3,869) (17,170) (23,008)Net (loss) income attributable to noncontrolling interests (6,723) 1,401 (5,423) 3,475 Net loss attributable to Legence $(27,841) $(5,270) $(11,747) $(26,483) Loss per share: Basic $(0.37) $(0.16) Diluted $(0.37) $(0.23) Weighted-average Class A Common Stock outstanding: Basic 76,032 71,616 Diluted 76,032 107,976
Condensed Consolidated Balance Sheets
(In thousands, except par value and share amounts) (Unaudited)
June 30, 2026 December 31, 2025Assets Current assets: Cash and cash equivalents $291,980 $230,166 Accounts receivable, net 918,930 584,060 Contract assets, net 382,167 259,941 Prepaid expenses and other current assets 55,099 36,179 Total current assets 1,648,176 1,110,346 Property and equipment, net of accumulated depreciation of $115,490 and $98,650 as of June 30, 2026 and December 31, 2025, respectively 130,412 92,333 Operating lease right-of-use assets (including $18,598 and $20,025 as of June 30, 2026 and December 31, 2025, respectively, from related parties) 153,536 117,139 Goodwill 822,521 764,336 Intangible assets, net 792,175 551,420 Other assets 192,869 43,822 Total assets $3,739,689 $2,679,396 Liabilities and Equity Current liabilities: Accounts payable $428,988 $246,161 Accrued compensation and benefits 139,133 68,064 Accrued and other current liabilities 81,405 16,475 Contract liabilities 517,932 339,462 Current portion of operating lease liabilities (including $3,889 and $3,920 as of June 30, 2026 and December 31, 2025, respectively, from related parties) 31,008 21,300 Current portion of long-term debt 26,201 16,694 Total current liabilities 1,224,667 708,156 Long-term debt, net of current portion (including $97,162 and $84,735 as of June 30, 2026 and December 31, 2025, respectively, from related parties) 1,008,336 812,398 Operating lease liabilities, net of current portion (including $15,759 and $17,282 as of June 30, 2026 and December 31, 2025, respectively, from related parties) 130,023 103,762 Tax receivable agreement liability - related party 342,729 207,448 Deferred tax liabilities, net 43,397 46,714 Other long-term liabilities 12,997 12,123 Total liabilities 2,762,149 1,890,601 Commitments and contingencies Stockholders' equity Preferred stock, $0.01 par value, 50,000,000 shares authorized, no shares issued or outstanding as of June 30, 2026 and December 31, 2025 — — Class A common stock, $0.01 par value, 1,000,000,000 shares authorized, 76,881,291 and 63,856,975 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 768 638 Class B common stock, $0.01 par value, 200,000,000 shares authorized, 31,171,134 and 41,479,954 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 312 415 Additional paid-in capital 917,012 701,791 Accumulated deficit (321,696) (309,949)Accumulated other comprehensive income (loss) 4,067 (698)Total Legence stockholders' equity 600,463 392,197 Noncontrolling interests 377,077 396,598 Total stockholders' equity 977,540 788,795 Total liabilities and stockholders' equity $3,739,689 $2,679,396
Condensed Consolidated Statements of Cash Flows
(In thousands) (Unaudited)
Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net loss $(17,170) $(23,008)Adjustments to reconcile net loss to cash provided by operating activities: Amortization of intangible assets 65,954 42,237 Depreciation of property and equipment 20,512 15,884 Goodwill impairment 21,586 — Long-lived asset impairment 19,491 — Amortization of debt issuance costs and discounts 859 2,065 Stock-based compensation 96,478 3,241 Compensation expense - Performance Interests 15,554 — Deferred taxes (26,647) (3,929)Equity in earnings of joint venture (592) (824)Operating lease right-of-use asset lease expense 14,413 8,301 Other 755 430 Changes in operating assets and liabilities: Accounts receivable, net (151,052) (41,071)Contract assets (53,696) (24,516)Prepaid expenses and other current assets (2,934) 3,887 Accounts payable 105,297 46,514 Accrued compensation and benefits 42,716 21,771 Accrued and other current liabilities 1,908 (2,410)Contract liabilities 51,421 20,039 Operating lease liabilities, current and long-term (12,051) (6,652)Other long-term assets and liabilities 1,692 583 Cash provided by operating activities 194,494 62,542 Cash flows from investing activities: Purchases of property and equipment (41,867) (14,164)Consideration paid for acquisitions, net of cash acquired (281,293) (453)Proceeds from sale of property and equipment 220 166 Cash used in investing activities (322,940) (14,451) Cash flows from financing activities: Term loan borrowings (including $15,000 and $2,495 in 2026 and 2025, respectively, from related parties) 200,000 2,495 Term loan payments (4,983) (10,714)Revolver borrowings 25,000 — Revolver payments (25,000) — Notes payable payments (3,273) (4,354)Finance lease payments (2,855) (1,813)Payments for deferred offering costs (60) (16,973)Other 1,431 — Cash provided by (used in) financing activities 190,260 (31,359)Increase in cash and cash equivalents 61,814 16,732 Cash and cash equivalents, beginning of period 230,166 81,167 Cash and cash equivalents, end of period $291,980 $97,899
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), this press 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 as 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 reconciliations of the forward-looking non-GAAP financial measures are included.
Revenue Growth (excluding Bowers)
This press release discloses consolidated revenue growth of Legence of 60.0%, and revenue growth of Legence’s Installation & Maintenance segment of 86.6%, for the quarter ended June 30, 2026, compared to the quarter ended June 30, 2025, the calculation of which, in each case, excludes the impact of approximately $303.8 million of second quarter 2026 revenues from Bowers. Such metrics are not calculated in accordance with GAAP. Management believes such metrics provide investors with useful supplemental information regarding the Company’s organic revenue performance by presenting revenue growth without giving effect to the impact of the Bowers acquisition. As calculated in accordance with GAAP, revenue growth of Legence was 110.7% (based on second quarter 2026 and 2025 consolidated revenues of $1.26 billion and $598.9 million, respectively), and revenue growth of Legence’s Installation & Maintenance segment was 162.0% (based on second quarter 2026 and 2025 I&M segment revenues of $1.06 billion and $402.8 million, respectively), for the quarter ended June 30, 2026 compared to the quarter ended June 30, 2025.
Adjusted EBITDA and Adjusted EBITDA Margin; Net Leverage and Adjusted Net Leverage
Adjusted EBITDA and Adjusted EBITDA Margin are financial measures not presented in accordance with GAAP but are intended to provide useful and supplemental information to investors and analysts as they evaluate our performance. Adjusted EBITDA is defined as net loss adjusted to exclude, or otherwise reflect, interest expense, interest income, income tax expense (benefit), depreciation and amortization, credit agreement amendment fees, goodwill impairment, long-lived asset impairment, net gain 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 and other non-cash compensation expense (benefit). Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue. Adjusted EBITDA and Adjusted EBITDA Margin should not be considered alternatives to net loss or net loss margin, respectively, as determined in accordance with GAAP. Management believes that the exclusion of the above-described items from net loss in the presentation of the non-GAAP measures 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 these measures may be useful for investors in comparing our operating results with those of other companies.
Net leverage is defined as net debt of Legence divided by Adjusted EBITDA of Legence, and adjusted net leverage is defined as net debt of Legence divided by LTM combined adjusted EBITDA. Net debt includes total balance sheet debt, excluding finance lease liabilities, less cash and cash equivalents. LTM combined adjusted EBITDA is the sum of (1) adjusted EBITDA of Legence for the 12-month period ended June 30, 2026 (or “Legence LTM adjusted EBITDA”) and (2) EBITDA of Bowers for the six month period ended December 31, 2025 (“Bowers EBITDA”), which is based, in part, on certain unaudited financial information of Bowers for the three months ended December 31, 2025 and audited financial information of Bowers for the year ended September 30, 2025. Bowers EBITDA is defined as net income, plus depreciation and amortization, interest income and income tax expense. The Company believes these non-GAAP measures are useful to investors as they provide alternative information that management believes to be useful in assessing (including, in the case of adjusted net leverage, on a combined basis giving effect to the Bowers acquisition) our ability to meet our payment obligations in addition to considering the absolute amount of our debt.
The following table provides a reconciliation (the “Legence adjusted EBITDA Reconciliation”) of our net loss, the most directly comparable financial measure presented in accordance with GAAP, to Adjusted EBITDA, and a calculation of Adjusted EBITDA Margin for the periods indicated (in thousands):
Three Months Ended June 30, Six Months Ended June 30, Year Ended December 31, Twelve Months Ended June 30, 2026 2025 2026 2025 2025 2026 Net loss $(34,564) $(3,869) $(17,170) $(23,008) $(77,303) $(71,465)Interest expense 16,911 30,404 33,911 60,045 101,778 75,644 Interest income (1,914) (764) (3,234) (1,519) (4,488) (6,203)Income tax expense (benefit) 11,091 5,546 (2,290) 9,584 22,161 10,287 Depreciation and amortization 44,190 28,770 86,466 58,121 114,288 142,633 Credit agreement amendment fees(1) 2,014 49 5,257 2,926 6,302 8,633 Goodwill impairment 21,586 — 21,586 — 24,966 46,552 Long-lived asset impairment 19,491 — 19,491 — 2,415 21,906 Net gain on sale and disposition of property and equipment (118) (122) (182) (220) (326) (288)Loss on debt extinguishment 13 — 13 — 6,651 6,664 Acquisition and integration costs(2) 420 298 12,113 1,766 8,436 18,783 System deployment costs(3) — 1,034 — 2,140 2,140 — Strategic initiative costs(4) 1,512 3,159 2,711 9,947 17,092 9,856 Indemnification asset adjustments(5) (93) — (198) — 3,796 3,598 Tax Receivable Agreement liability remeasurements(6) 88 — (161) — 2,914 2,753 Stock-based and other non-cash compensation expense(7) 73,942 7,699 114,357 3,241 68,003 179,119 Adjusted EBITDA $154,569 $72,204 $272,670 $123,023 $298,825 $448,472 Net loss margin (2.7)% (0.6)% (0.7)% (2.1)% (3.0)% (1.9)%Adjusted EBITDA margin 12.2% 12.1% 11.9% 11.1% 11.7% 12.0%
The following table provides a reconciliation (the “Bowers EBITDA Reconciliation”) of net income of Bowers, the most directly comparable financial measure presented in accordance with GAAP, to Bowers EBITDA for the six months ended December 31, 2025:
The following table, taken together with the Legence adjusted EBITDA Reconciliation and the Bowers EBITDA Reconciliation, presents the calculation of LTM combined adjusted EBITDA:
Six Months Ended December 31, 2025
Twelve Months Ended June 30, 2026
Legence Adjusted EBITDA $272,670 $175,802 $448,472 Bowers EBITDA 51,332 51,332 LTM combined adjusted EBITDA $499,804
The following table presents the calculation of net leverage and adjusted net leverage:
Cash and cash equivalents $291,980 Term Loan $992,790 Notes Payable 33,589 Total Debt(1) $1,026,379 Net Debt(1) $734,399 Legence LTM adjusted EBITDA $448,472 Net Leverage 1.6 LTM combined adjusted EBITDA(2) $499,804 Adjusted Net Leverage 1.5
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 compensation related to legacy Series A Interests and Restricted Series C Interests, where the payment of this expense is borne by entities outside of Legence 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 EndedJune 30, 2026 2025 Gross Profit Engineering & Consulting Segment $56,148 $64,111 Installation & Maintenance Segment 164,083 64,563 Consolidated $220,231 $128,674 Non-GAAP Adjustments: Compensation related to legacy Series A Interests and Restricted Series C Interests(1) Engineering & Consulting Segment $8,186 $977 Installation & Maintenance Segment 5,543 679 Consolidated $13,729 $1,656 Non-GAAP Adjusted Gross Profit: Engineering & Consulting Segment $64,334 $65,088 Installation & Maintenance Segment 169,626 65,242 Consolidated $233,960 $130,330 Non-GAAP Adjusted Gross Margin: Engineering & Consulting Segment 31.1% 33.2%Installation & Maintenance Segment 16.1% 16.2%Consolidated 18.5% 21.8%
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 or provided.
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1 Excludes impact of approximately $303.8 million of second quarter 2026 revenues from Bowers. Revenue growth (excluding Bowers) is a non-GAAP financial measure. See the section titled “Non-GAAP Financial Measures” for more information.
2 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.”
3 Excludes impact of approximately $303.8 million of second quarter 2026 revenues from Bowers. Revenue growth (excluding Bowers) is a non-GAAP financial measure. See the section titled “Non-GAAP Financial Measures” for more information.
4 Total debt defined as Term Loan balance of $992.8 million and Notes Payable balance of $33.6 million.