Legence’s Record Backlog and Growth in Mission-Critical Services Point to Robust Outlook for 2026

Installation & Maintenance Segment Drives Performance With 44% Quarterly Growth

Legence Corp. (NASDAQ: LGN) closed out 2025 with record quarterly revenues, reporting $737.6 million in the fourth quarter—a 34.6% increase from the prior year. The main engine was the Installation & Maintenance segment, which surged 44.4% year-over-year as demand from data centers, technology clients, and life sciences & healthcare organizations strengthened. Notably, gross profit in this segment climbed 62.3% to $99.7 million for Q4, with non-GAAP adjusted gross margin improving from 15.6% to 18.3%.

Backlog Soars to Historic Highs—48% Year-Over-Year Increase

Legence’s total backlog and awarded contracts reached $3.67 billion at year-end, up 48.6% from the previous year. The Installation & Maintenance segment led the way, with backlog jumping 65.8% to $2.68 billion. The quarterly book-to-bill ratio of 1.9x underscores robust project wins and incoming business, especially in the fast-growing data center sector. With the addition of recent acquisitions, including Bowers and Metrix, the underlying pipeline is even deeper than headline numbers suggest.

Profit Margins Improve Amid Revenue Growth—Adjusted EBITDA Jumps 53% in Q4

The company’s operating leverage was on full display, with non-GAAP adjusted EBITDA up 53.2% to $87.0 million in Q4. Overall gross profit margin for the quarter stood strong at 20%. For the full year, Legence achieved $2.55 billion in revenue (+21.5% year-over-year) and $298.8 million in adjusted EBITDA (+30.1%). Despite higher stock-based compensation and acquisition-related costs, margin expansion in core business lines continues to reflect strong project execution and a higher quality mix.

Outlook: Upgraded Guidance Reflects Strong Demand and Integration of Acquisitions

Legence raised its 2026 full-year guidance, projecting revenue of $3.7–$3.9 billion and non-GAAP adjusted EBITDA of $400–$430 million—up from prior targets. For Q1 2026, the company expects revenue between $925 million and $950 million, with adjusted EBITDA of $90–$100 million. These upgrades incorporate the expected benefits from integrating Bowers and Metrix, as well as sustained end-market demand from data centers and institutional spending in key infrastructure sectors.

Disciplined Expansion and Solid Balance Sheet Support Future Growth

Recent acquisitions are part of Legence’s disciplined M&A strategy. Notably, the addition of Metrix Engineers strengthens Pacific Northwest engineering capabilities, while the transformative Bowers acquisition adds scale and sector diversification. As of year-end, cash and equivalents stood at $230.2 million, with net leverage of 2.0x adjusted EBITDA—a healthy position for ongoing investment and integration efforts.

Key Segment Performance: Installation Outpaces Consulting, Margin Trend Remains Positive

Takeaway: Legence Sets Stage for Accelerated Growth on Expanding Backlog and Industry Tailwinds

Legence’s 2025 results highlight operational momentum and strong underlying demand, particularly for mission-critical building and infrastructure systems. With a record backlog, improving margins, and an established track record of integrating strategic acquisitions, the company appears well-positioned to capitalize on continued sector growth and infrastructure investment trends into 2026. Investors should watch upcoming quarters for updates on the runway for backlog conversion and the continued impact from recent business combinations.

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