Legence Corp. achieved a 105.1% revenue growth rate in 2026Q1, though gross margins contracted to 14.4% from 22.1% in 2025Q1, suggesting significant pressure on core profitability.
| Sales/Revenue | 3.08B | 2.55B | 2.1B | 1.62B |
| Revenue Growth % | - | 21.53% | 29.94% | - |
| Cost of Goods Sold | 2.51B | 2.01B | 1.67B | 1.3B |
| COGS % of Revenue | - | 78.99% | 79.57% | 80.49% |
| Gross Profit | 573.55M | 535.92M | 428.64M | 315.15M |
| Gross Margin % | 18.61% | 21.01% | 20.43% | 19.51% |
| Gross Profit Growth % | - | 25.03% | 36.01% | - |
| Operating Expenses | 463.54M | 442.99M | 370.2M | 304.89M |
| OpEx % of Revenue | - | 17.37% | 17.64% | 18.88% |
| Selling, General & Admin | 389.26M | 342.63M | 252.67M | 186.06M |
| SG&A % of Revenue | - | 13.43% | 12.04% | 11.52% |
| Research & Development | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - |
| Other Operating Expenses | 3M | 100.36M | 117.53M | 118.83M |
| Operating Income | 110.01M | 92.93M | 58.44M | 10.26M |
| Operating Margin % | 3.57% | 3.64% | 2.78% | 0.64% |
| Operating Income Growth % | - | 59.02% | 469.6% | - |
| EBITDA | 231.78M | 207.22M | 169.29M | 103.06M |
| EBITDA Margin % | 7.52% | 8.12% | 8.07% | 6.38% |
| EBITDA Growth % | - | 22.41% | 64.26% | - |
| D&A (Non-Cash Add-back) | 121.77M | 114.29M | 110.85M | 92.8M |
| EBIT | 53.11M | 46.64M | 45.77M | 14.25M |
| Net Interest Income | -84.08M | -97.29M | -20.07M | -63.95M |
| Interest Income | 5.05M | 4.49M | 5.46M | 4.25M |
| Interest Expense | 89.14M | 101.78M | 25.54M | 68.2M |
| Other Income/Expense | -146.04M | -148.07M | -38.21M | -64.2M |
| Pretax Income | -36.03M | -55.14M | 20.23M | -53.94M |
| Pretax Margin % | -1.17% | -2.16% | 0.96% | -3.34% |
| Income Tax | 4.74M | 22.16M | 2.81M | -7.92M |
| Effective Tax Rate % | -13.16% | -40.19% | 13.89% | 14.68% |
| Net Income | -22.47M | -59.78M | 9.72M | -46.03M |
| Net Margin % | -0.73% | -2.34% | 0.46% | -2.85% |
| Net Income Growth % | - | -715.15% | 121.11% | - |
| Net Income (Continuing) | -40.77M | -77.3M | 17.42M | -46.03M |
| Discontinued Operations | 0 | 0 | 0 | 0 |
| Minority Interest | 445.6M | 396.6M | 912K | 0 |
| EPS (Diluted) | -0.38 | -1.01 | 0.10 | -0.45 |
| EPS Growth % | - | -1157.59% | 121.22% | - |
| EPS (Basic) | - | -1.01 | 0.10 | -0.45 |
| Diluted Shares Outstanding | 59.56M | 59.38M | 58.51M | 58.51M |
| Basic Shares Outstanding | 67.15M | 59.38M | 58.51M | 58.51M |
| Dividend Payout Ratio | - | - | 3103.66% | - |
Unprofitable Scale Expansion
As reported in recent financial filings, Legence Corp. achieved a significant revenue surge to $1.0 billion in 2026Q1, representing a 105.1% growth rate that suggests the company is successfully capturing substantial demand within the mission-critical infrastructure and data center construction sectors during the current fiscal period.
The dramatic acceleration in top-line performance indicates that the company's strategy of targeting high-complexity environments is gaining traction. However, investors should monitor whether this rapid expansion is sustainable or if it reflects a temporary concentration of large-scale project completions that may not repeat in subsequent quarters.
Based on the provided income statement data, Legence Corp. experienced a contraction in gross margins to 14.4% in 2026Q1, down from the 22.1% observed in 2025Q1, which suggests that the company is facing increased cost pressures or competitive pricing dynamics within its installation and maintenance segments.
The erosion of gross margins during a period of rapid revenue growth implies that the company may be sacrificing pricing power to secure market share. This trend warrants further investigation into whether rising labor costs or material inflation are disproportionately impacting the profitability of new project wins.
According to the latest quarterly results, Legence Corp. reported an operating margin of 3.2% in 2026Q1, which indicates that the company has yet to achieve the necessary operating leverage to translate its massive revenue base into meaningful bottom-line profitability despite the significant increase in total volume.
The persistent gap between gross profit and operating income suggests that high SG&A expenses, potentially linked to integration costs or corporate overhead, are offsetting the benefits of scale. It appears that the company's current cost structure is not yet optimized to support its aggressive growth trajectory.
As indicated by the financial statements, Legence Corp. recorded $36.7 million in stock-based compensation during 2026Q1, a figure that significantly impacts the quality of reported net income and suggests that shareholder dilution remains a material consideration for investors evaluating the company's underlying economic performance and earnings power.
The reliance on equity-based incentives during a period of negative or thin net margins may indicate that management is prioritizing talent retention over immediate cash profitability. Analysts should carefully adjust for these non-cash expenses to determine the true operational efficiency of the business model.
Based on the reported figures, the company's transition from a $21.2 million net loss in 2025Q1 to a $16.1 million profit in 2026Q1 appears fragile, as it relies heavily on massive revenue scaling that may mask underlying inefficiencies in the firm's core project execution and cost management.
Short-term profitability improvements may be vulnerable to any slowdown in the semiconductor or data center construction cycles. Investors should remain cautious, as the company's history of net losses suggests that its current business model may be highly sensitive to external macroeconomic shocks and rising interest rates.
Quick answers to the most common questions about buying LGN stock.
For fiscal year 2025, Legence Corp. Class A Common stock (LGN) reported total revenue of $2.55B. This represents a 57.9% increase compared to $1.62B in 2023.
Legence Corp. Class A Common stock (LGN) reported a net loss of $59.8M for the fiscal year ending 2025.
Legence Corp. Class A Common stock (LGN) reported an operating income of $92.9M, resulting in an operating profit margin of 3.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Legence Corp. Class A Common stock (LGN) generated $535.9M in gross profit for the year, representing a gross profit margin of 21.0%. This demonstrates the company's core pricing power and production efficiency.