Q1 2026 Legence Corp Earnings Call Transcript
Key Points
- Legence Corp (LGN) reported a significant revenue increase of 105% year over year, reaching over $1 billion in the first quarter of 2026.
- The acquisition of Bowers contributed significantly to revenue growth, accounting for over $240 million, and has been successfully integrated.
- Adjusted EBITDA grew by 132% year over year, with margins expanding by over 130 basis points due to strong project execution.
- The company's backlog and awards reached a record $5.4 billion, up 104% year over year, providing strong visibility into future revenue.
- Legence Corp (LGN) raised its full-year 2026 revenue guidance to $4.1 billion to $4.3 billion, reflecting confidence in continued growth and execution.
- The Engineering & Consulting segment experienced a decline in gross margins, dropping from 40.7% to 33.2% year over year.
- There was a notable revenue mix shift towards lower-margin Program & Project Management services within the Engineering & Consulting segment.
- Despite strong revenue growth, the company faces challenges in maintaining high gross margins due to the mix shift and increased subcontractor costs.
- Interest expense, although reduced, remains a significant cost at $16 million for the first quarter of 2026.
- The company anticipates potential variability in its effective tax rate due to non-deductible expenses and the mark-to-market nature of profit interest expenses.
Good day, and thank you for standing by. Welcome to the first-quarter 2026 Legence earnings conference call. (Operator Instructions) I would now like to hand the conference over to your speaker today, Son Vann, Vice President, Investor Relations. Please go ahead.
Thank you, Daniel, and good morning, everyone. Welcome to Legence first-quarter 2026 earnings call. With me today are Jeff Sprau, our Chief Executive Officer; Stephen Butz, Chief Financial Officer; and Steve Hansen, Chief Operating Officer. This morning, we issued a press release that covers our first-quarter 2026 financial results and posted a slide presentation that accompanies the earnings release. All materials can be found on the investor relations section of the company's website, wearelegence.com.
Before we begin, I want to remind you that comments made during this call contain certain forward-looking statements and are subject to risks and uncertainties, including those identified in our risk factors contained in our SEC
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