Legence — Third Quarter 2026 Earnings Summary

Financial Performance:

• Consolidated revenues for Q3 2026 totaled $1.31 billion, an 85.1% increase from $708.0 million in Q3 2025.
• Non-GAAP revenue growth excluding the Bowers acquisition impact was 39.5%.
• Consolidated gross profit was $275.5 million with a 21.0% margin, compared to $148.1 million and 20.9% in Q3 2025.
• Non-GAAP Adjusted Gross Profit was $266.6 million with a 20.3% margin, compared to $151.9 million and 21.5% in Q3 2025.
• Net income attributable to Legence was $89.6 million ($1.15 per diluted share), compared to a net loss of $0.6 million ($(0.02) per diluted share) in Q3 2025.
• Total net income was $133.9 million, compared to $0.4 million in Q3 2025.
• Non-GAAP Adjusted EBITDA was $177.0 million, a 99.3% increase from $88.8 million in Q3 2025.
• Net leverage was 1.3 times based on LTM Adjusted EBITDA; adjusted net leverage including Bowers was 1.2 times.
• Cash and cash equivalents were $340.8 million; total debt was approximately $1.02 billion.

Guidance and Future Outlook:

• Raised full-year 2026 revenue guidance to $4.87 billion – $4.91 billion (previously $4.70 billion – $4.80 billion).
• Raised full-year 2026 Non-GAAP Adjusted EBITDA guidance to $610 million – $620 million (previously $565 million – $585 million).
• Established Q4 2026 revenue guidance of $1.26 billion – $1.30 billion.
• Established Q4 2026 Non-GAAP Adjusted EBITDA guidance of $160 million – $170 million.
• Established full-year 2027 revenue guidance of $5.3 billion – $5.6 billion.
• Established full-year 2027 Non-GAAP Adjusted EBITDA guidance of $690 million – $730 million.

Business Segments and Product Lines:

• Engineering & Consulting: Revenue decreased 5.8% to $199.9 million, driven by declines in Program & Project Management and modestly lower Engineering & Design revenue from education clients. Gross profit increased 6.5% to $71.7 million.
• Installation & Maintenance: Revenue increased 124.0% to $1.11 billion, driven by strong demand for Installation & Fabrication services from data centers & technology clients. Non-GAAP revenue growth excluding Bowers was 58.9%.
• Installation & Fabrication: Revenue within this segment was $992.5 million, a 142.8% increase.
• Maintenance & Service: Revenue was $118.2 million, a 35.7% increase.
• Acquisitions: Completed acquisition of The Bowers Group, Inc. in Q3 2026 (contributing ~$322.7 million to Q3 revenue). Completed acquisition of Central Texas Industrial Contractors (CTI) on November 1, 2026, expected to generate ~$40 million in 2026 revenue.

Market and Competitive Landscape:

• Total backlog and awarded contracts reached a record $5.90 billion, a 92.5% increase from $3.07 billion in Q3 2025.
• Consolidated book-to-bill ratio for the three months ended September 30, 2026, was 1.2x.
• Engineering & Consulting backlog increased 32.6%, driven by education and state & local government end markets.
• Installation & Maintenance backlog increased 117.2%, driven by the Bowers acquisition and growth in data centers & technology and education end markets.
• Over 60% of the Nasdaq-100 Index are clients.

Risks and Challenges:

• Forward-looking statements note risks including changes in economic and regulatory conditions, competition, customer financial conditions, and integration of acquired companies.
• Specific risks include environmental, health, and safety regulations, material availability and pricing, inflation, interest rates, and reliance on third-party financing and subcontractors.
• Risks associated with recognizing revenue from backlog and receiving anticipated payments are highlighted.

Management Commentary and Tone:

• CEO Jeff Sprau cited strong customer demand driving record revenue, Adjusted EBITDA, and backlog.
• Management highlighted exceptional project execution and an increasing mix of fabrication work contributing to the highest Adjusted EBITDA margin in company history.
• Confidence in business fundamentals was expressed, reflected in increased guidance and the stock repurchase program.
• The CTI acquisition is described as establishing a reputable platform to expand business in the high-growth central Texas region.

Other Key Points:

• The Board authorized a $150 million stock repurchase program.
• CTI is a mechanical contractor founded in 2010 with a strong presence in the semiconductor end market in central Texas.
• Legence specializes in designing, fabricating, and installing complex HVAC, process piping, and MEP systems.
• The conference call to discuss results was held on November 12, 2026.