Legence’s Record-Setting Quarter: Revenues Top $1 Billion as Backlog Surges Over 100%
Legence Corp. (NASDAQ: LGN) is kicking off 2026 on solid footing, reporting its highest-ever quarterly revenues and doubling its project backlog compared to a year earlier. Strong organic performance in core business lines, combined with the acquisition of The Bowers Group, has transformed the company's growth profile and driven an upward revision to full-year guidance.
Revenues and Orders: Growth Driven by Acquisitions and Core Demand
The company reported first quarter consolidated revenues of $1.04 billion, rising 105% from the same period last year. Excluding the Bowers acquisition, revenue still increased by 57.1%—a significant mark of organic demand. The consolidated backlog and awarded contracts now stand at $5.38 billion, up 104% year-over-year, with a healthy book-to-bill ratio of 1.2x, indicating more projects are coming in than being completed.
| Key Metrics | Q1 2026 | Q1 2025 | YoY Change |
|---|---|---|---|
| Revenues | $1,037.89M | $505.95M | +105.1% |
| Adjusted EBITDA | $118.10M | $50.82M | +132.4% |
| Gross Profit | $186.15M | $111.70M | +66.6% |
| Net Income | $16.09M | ($21.21M) | Turnaround |
| Backlog & Awarded Contracts | $5,382.85M | $2,639.88M | +103.9% |
Segment Performance: Installation & Maintenance Powers Earnings, Consulting Stable
Installation & Maintenance: Revenues surged to $872.09 million (+141.9% YoY), with non-GAAP organic growth of 74.4%. Adjusted gross profit hit $138.82 million and gross margin improved by 1.6 percentage points to 15.9%, reflecting efficiency gains and increased scale, particularly in data centers and technology projects.
Engineering & Consulting: Revenues grew modestly to $165.80 million (+14% YoY). However, margins tightened (non-GAAP adjusted gross margin slipped to 33.2% from 40.7%), primarily due to a revenue mix shift and higher subcontractor expenses, despite stable demand from education, hospitality, and technology sectors.
| Segment | Q1 Revenue (M) | YoY Change | Adj Gross Margin |
|---|---|---|---|
| Installation & Maintenance | $872.09 | +141.9% | 15.9% (up from 14.3%) |
| Engineering & Consulting | $165.80 | +14.0% | 33.2% (down from 40.7%) |
Profitability and Balance Sheet: EBITDA Soars, Leverage Remains Conservative
Non-GAAP adjusted EBITDA jumped 132% to $118.1 million, and net income swung to $16.09 million from a $21.21 million loss last year. The company’s strong cash flow ($120.1 million from operations in Q1) positions it well, even after acquisition spend, with cash and equivalents at $244.6 million and total debt at $1.02 billion. Net leverage stands at 2.1x (or an improved 1.8x after including Bowers’ EBITDA), keeping financial flexibility intact.
Guidance Raised: Management Expects Continued Strength in 2026
Given the robust start, Legence has raised its full-year 2026 guidance to $4.1–$4.3 billion in revenue (up from $3.7–$3.9 billion) and adjusted EBITDA of $470–$490 million (previously $400–$430 million). For Q2, the revenue projection is $1.05–$1.1 billion with EBITDA between $115–$125 million.
| Guidance | Prior (FY26) | Updated (FY26) |
|---|---|---|
| Revenue | $3.7–$3.9B | $4.1–$4.3B |
| Adjusted EBITDA | $400–$430M | $470–$490M |
Key Takeaways: Backlog Acceleration and Margin Trends Shape the Investment Debate
Legence’s Q1 report highlights several themes: accelerating sales, record backlog, and strong execution in core markets. Although margin compression in Engineering & Consulting warrants monitoring, management’s willingness to raise guidance underscores their visibility and confidence. If current demand trends persist, LGN could be positioned to capitalize on both organic and acquisition-driven growth through 2026.
With the company set to discuss results further on its May 14th webcast, investors may want to watch for more details on backlog conversion and margin management over the coming quarters.
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