Legence Corp.

For the three months ended March 31, 2026, Revenue of $243.3 million and Net loss attributable to Legence of $9.2 million are included in the Condensed Consolidated Statements of Operations for the Bowers acquisition. Results of operations for the Metrix acquisition are not disclosed as they are not material to the Company’s Condensed Consolidated Financial Statements.

Note 5 -Goodwill and Intangible Assets

The following is a summary of changes in the carrying value of Goodwill by segment (in thousands):

The Company’s identifiable intangible assets consist of the following (in thousands, except weighted-average remaining lives):

The value of acquired identifiable intangibles at the applicable acquisition dates in 2026 is $324.4 million. Refer to “Note 4—Acquisitions” for further information.

Future amortization of intangible assets as of March 31, 2026 was as follows (in thousands):

Note 6 -Variable Interest Entities and Equity Method Investments

The Company holds interests in a number of joint ventures and other entities, some of which are VIEs. The Company consolidates a VIE when it is the primary beneficiary. For unconsolidated joint ventures, the Company accounts for its investment using the equity method.

Consolidated Variable Interest Entities

In connection with the Corporate Reorganization, Legence Corp. became the sole managing member of Legence Holdings, in which Legence Corp. operates and controls all of the business and affairs of Legence Holdings, and has the obligation to absorb losses and receive benefits from Legence Holdings. Accordingly, Legence Holdings is evaluated under the guidance for limited partnerships and similar entities in ASC 810, Consolidation, and is considered a variable interest entity. Legence Corp. has both (i) the power to direct the activities that most significantly impact Legence Holdings’ economic performance and (ii) the right to receive benefits or the obligation to absorb losses that could be significant to Legence Holdings. Accordingly, Legence Corp. is the primary beneficiary and consolidates Legence Holdings in its consolidated financial statements. The assets of Legence Holdings can only be used to settle its own obligations. Refer to “Note 12—Nonc ontrolling Interests”.

The Company has various contractual relationships withtwo professional corporations (“PCs”) that provide engineering and design services in New York and California. The Company does not own any equity interest in the PCs but provides most of the administrative functions, personnel and other resources required for the PCs to fulfill contracts with their customers. The Company receives fees from the PCs for these services. The Company is the primary beneficiary of the PCs. As such, the Company consolidates the PCs within the Condensed Consolidated Financial Statements.

The table below shows the carrying amounts and classification of the PCs’ assets and liabilities included on the Company’s Condensed Consolidated Balance Sheets, excluding intercompany balances (in thousands):

The assets of the PCs can only be used to settle their own obligations. The Company and the PCs have a promissory note agreement that allows each PC to borrow up to $1.0 million from the Company; however, no amounts have been borrowed. The Company’s Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows, net of intercompany eliminations, are impacted by the performance of the PCs. The Company's Condensed Consolidated Financial Statements show noncontrolling interests, which represent the equity owned by the PCs’ owner.

Equity Method Investments

The Company has investments in, and transactions with, a number of unconsolidated joint ventures. The investments and earnings are immaterial. In addition, the Company recognized immaterial related-party revenue from subcontracts with these joint ventures during the three months ended March 31, 2026 and 2025, respectively. These amounts are included in Revenue on the Condensed Consolidated Statements of Operations.

Note 7 -Debt

Debt obligations consist of the following (in thousands):

Term loan

Legence Holdings has entered into a credit agreement (as amended from time to time) with Jefferies Finance LLC as the administrative agent for a group of lenders, which provides for a term loan credit facility and a revolving credit facility. The term loan matures on December 2031, and is secured by a lien on substantially all assets of Legence Holdings and its wholly-owned subsidiaries, subject to customary exclusions. A portion of the term loan is held by entities associated with the Company and BX Aggregators. They are subject to the same terms described below, including interest payments, principal payments and maturity. The credit agreement has been amended from time to time, including as described below:

•On January 2, 2026, Legence Holdings obtained a $200.0 million incremental term loan, and used the proceeds to fund acquisition-related payments. In connection with the amendment, Legence Holdings incurred $4.1 million of fees, of which $3.2 million relate to third parties and are recognized in Credit agreement amendment fees on the Condensed Consolidated Statements of Operations.

•On January 15, 2026, Legence Holdings amended its credit agreement to modify and clarify the terms governing letters of credit, while confirming that all existing letters of credit remain in effect and all other provisions of the agreement remain unchanged.

Interest on Secured Overnight Financing Rate (“SOFR”) rate term loans is payable based on the selected interest period if less than three months or quarterly if the selected interest period is three months or longer. Interest on base rate loans is payable quarterly.

As of March 31, 2026, principal payments on the term loans of $2.5 million are payable quarterly, with any remaining principal balance due on December 16, 2031. Subject to the requirements of the agreement, Legence Holdings may also be required, as applicable, to make additional principal payments based on its excess cash flow, as defined in the credit agreement. The credit agreement contains customary representations and warranties and customary events of default, as well as certain affirmative and negative covenants. Legence Holdings is in compliance with the financial covenants as of March 31, 2026.

Revolving Credit Facility

The credit agreement provides Legence Holdings with a revolving credit facility in an aggregate principal amount of $200.0 million. Borrowings under the revolving credit facility are secured by a lien on substantially all the assets of Legence Holdings and its wholly-owned subsidiaries on a pari passu basis with the term loan facility.

Advances, including standby letters of credit, under the revolving credit facility may be elected to be treated as either SOFR rate loans or base rate loans.

SOFR rate revolving loans bear interest at SOFR plus 2.25% and base rate revolving loans bear interest at 1.25% plus the base rate which is the highest of (a) the federal funds rate plus 0.50%, (b) the prime rate and (c) the SOFR rate for one month plus 1.00%. Interest on SOFR rate revolving loans is payable based on the selected interest period if less than three months or quarterly if the selected interest period is three months or longer. Interest on base rate revolving loans is payable quarterly.

In January 2026, Legence Holdings borrowed and repaid $25.0 million under the revolving credit facility. The weighted-average interest rate was 5.95%.

In addition, a revolver commitment fee is payable quarterly for the unused portion of the revolving credit facility at a rate of 0.38% to 0.50% based on Legence Holdings’s Net Leverage Ratio. As of March 31, 2026, the rate for the unused portion of the revolving credit facility is 0.38%. The revolving credit facility may be used to issue standby letters of credit, which reduce the available borrowings. As of March 31, 2026, there are $30.7 million letters of credit outstanding under the revolving credit facility, with an interest rate of 2.38%.

As of March 31, 2026, $169.3 million was available to be borrowed under the revolving credit facility. There were no outstanding borrowings under the revolving credit facility as of March 31, 2026 and December 31, 2025.

The credit agreement, in addition to customary affirmative covenants, contains a springing financial maintenance covenant that requires the Consolidated First Lien Net Leverage Ratio to be less than 8.50 to 1.00 if certain testing conditions are satisfied. The springing financial maintenance covenant is only tested if as of the last day of a Test Period (generally quarterly) the amount of loans and/or letters of credit outstanding under the revolving credit facility is greater than 35% of the facility size. The springing financial maintenance covenant was not required to be tested during the periods presented in the Condensed Consolidated Financial Statements, and the Company is in compliance with the financial covenant as of March 31, 2026.

Notes payable

As part of the consideration transferred to acquire certain companies in prior years, the Company issued notes payable to former owners of acquired companies. The former owners are considered related parties when they are employees or Parent interests holders. The Company can prepay these notes without penalty.

The Company issued a promissory note payable in connection with a 2022 acquisition. As of March 31, 2026 and December 31, 2025, the outstanding balance is $10.8 million and $10.6 million, respectively, and the carrying value is $10.3 million and $10.1 million, respectively, recorded in Long-term debt, net of current portion on the Condensed Consolidated Balance Sheets. The stated interest rate is 5.5%. All principal and interest are due at the earlier of the end of the 5-year term in 2027 or upon a sale event as defined in the note agreement.

The Company issued promissory notes payable in connection with a 2023 acquisition and a 2022 acquisition, and the holders of the promissory notes were related parties as of March 31, 2026 and December 31, 2025. As of both March 31, 2026 and December 31, 2025, the outstanding balance is $13.7 million and the carrying value is $12.9 million and $12.8 million, respectively. As of March 31, 2026 and December 31, 2025, $10.9 million and $10.8 million, respectively, are recorded in Long-term debt, net of current portion on the Condensed Consolidated Balance Sheets. As of both March 31, 2026 and December 31, 2025, $2.0 million is recorded in Current portion of long-term debt on the Condensed Consolidated Balance Sheets. The promissory notes have a range of stated interest rates from 5.5% to 6.0% and maturities ranging from 2026 to 2028, at which time all principal and interest are due. The promissory note related to the 2022 acquisition requires the Company to repay all principal and interest earlier if the Company undergoes a change of control as defined in the note agreement.

Note 8 -Fair Value Measurements

The Company recognizes certain financial assets and liabilities at fair value on a recurring basis following the fair value hierarchy detailed in ASC Topic 820, Fair Value Measurement:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2: Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3: Inputs are unobservable inputs that reflect the reporting entity’s own assumptions on which assumptions the market participants would use in pricing the asset or liability based on the best available information.

The following table presents the input level used to determine the fair value of the financial instruments measured at fair value on a recurring basis (in thousands):

The carrying value of Cash approximates fair value due to its short-term nature.

Interest Rate Swap Instruments: Additional derivative instrument disclosures for the Company’s interest rate swaps can be found in “Note 9—Derivatives.”

For determining the fair value of the interest rate swap contracts, the Company uses significant observable market data or assumptions (Level 2 inputs) that market participants use in pricing similar assets or liabilities, including assumptions about counterparty risk. The fair value estimates reflect an income approach based on the terms of the interest rate swap contracts and inputs corroborated by observable market data, including interest rate curves.

Financial Instruments Not Carried at Fair Value: The table below shows the fair value and carrying value of the term loan and promissory notes (a component of notes payable) included in Total debt as shown in “Note 7—Debt” (in thousands):

The fair value of the term loan as of March 31, 2026 and December 31, 2025 was derived by taking the mid-point of the trading prices from observable market inputs in the secondary bond market for the term loan (Level 2 measurement) and multiplying it by the outstanding face value of the term loan.

The fair value of the promissory notes as of March 31, 2026 and December 31, 2025 was calculated using a discounted cash flow methodology under the income approach, using interest rate indices, risk premiums, and adjustments for the size and subordination of the instrument (Level 3 measurement).

The carrying value of the remaining notes payable and finance lease liabilities approximates fair value as of March 31, 2026 and December 31, 2025.

Note 9 -Derivatives

Interest Rate Swaps: The Company has multiple interest rate swap agreements designated as cash flow hedges. The Company utilizes these interest rate swap agreements to reduce exposure to fluctuations in variable interest rates for future interest payments on its term loan. The total notional amount is $785.0 million as of March 31, 2026 and December 31, 2025. Failure of the interest rate swap counterparties to make payments may result in the loss of any potential benefit to the Company under the interest rate swap agreements. The Company mitigates risk of non-performance by counterparties by dealing with highly rated counterparties. The Company does not use financial instruments for trading or speculative purposes. Additional information regarding the fair value of the Company’s interest rate swaps can be found in “Note 8—Fair Value Measurements”.

The fair value of derivative instruments is presented on the Condensed Consolidated Balance Sheets, as follows (in thousands):

The following table presents the gross changes in Accumulated Other Comprehensive Income (“AOCI”) from the Company’s cash flow hedges (in thousands):

For the three months ended March 31, 2026 and 2025, there was no ineffectiveness recognized in earnings.

The following table provides additional details related to the interest rate swap agreements, as amended, that were in effect as of March 31, 2026 (notional in thousands):

(1)The interest rate swaps with effective dates of December 31, 2026 were added in July 2025 and March 2026 are not included in the notional amount as of March 31, 2026.

(2)For the interest rate swap with a notional amount of $110,000, the notional amount was $140,000 from January 31, 2024 to September 14, 2025, and was reduced to $110,000 on September 15, 2025 in connection with a debt prepayment on that date.

(3)Payments will be made to the Company if the one-month SOFR exceeds the fixed interest rates for the respective interest rate swaps.

The following table provides additional details related to the interest rate swap agreements, as amended, that were in effect as of December 31, 2025 (notional in thousands):

(1)The interest rate swaps with effective dates of December 31, 2026 were added during July 2025 and are not included in the notional amount as of December 31, 2025.

(2)For interest rate swaps with ranges, the notional amount is $140,000 from January 31, 2024 to September 14, 2025 and $110,000 from September 15, 2025 to December 31, 2026, due to a $30,000 reduction in notional amount in connection with a debt prepayment on September 15, 2025.

(3)Payments will be made to the Company if the one-month SOFR exceeds the fixed interest rates for the respective interest rate swaps.

Note 10 -Stockholders’ Equity

Secondary offering transactions

On January 8, 2026, the underwriters fully exercised their 30-day overallotment option related to the secondary offering completed on December 16, 2025, to purchase from the ML Entities up to 1,260,326 shares of Class A Common Stock,780,121 of which were issued in exchange for LGN B Units, together with an equal number of corresponding shares of Class B Common Stock, held by Legence Parent ML. As a result of the exchanges, the LGN B Units that were previously classified as noncontrolling interests were converted into LGN A Units held by Legence Corp. and its subsidiaries, thereby increasing the Company’s ownership interest in Legence Holdings. The Company did not issue or sell any shares of Class A Common Stock and did not receive any proceeds from the sale of shares by the ML Entities in connection with the foregoing transactions.

On April 9, 2026, the Company completed a secondary offering of 15,394,112 shares of Class A Common Stock on behalf of the ML Entities at a public offering price of $54.00 per share, including the full exercise by the underwriters of their overallotment option to purchase up to an additional 2,007,927 shares (the “Subsequent Secondary Offering”). In connection with the Subsequent Secondary Offering, Legence Parent ML exchanged 9,528,699 issued and outstanding LGN B Units, together with an equal number of corresponding shares of Class B Common Stock, for an equal number of shares of Class A Common Stock. As a result of the exchange, the LGN B Units that were previously classified as noncontrolling interests were converted into LGN A Units held by Legence Corp. and its subsidiaries, thereby increasing the Company’s ownership interest in Legence Holdings. The Company did not issue or sell any shares of Class A Common Stock and did not receive any proceeds from the sale of shares by the ML Entities in the Subsequent Secondary Offering.

Acquisition issuances

In connection with the 2026 acquisitions described in "Note 4—Acquisitions", the Company issued 2,701,003 shares of Class A Common Stock as noncash consideration.

ESPP Plan

On February 25, 2026, the Board adopted the 2026 Employee Stock Purchase Plan (“2026 ESPP”), including the reservation of 1,580,053 shares of Class A Common Stock for issuance under the 2026 ESPP. The 2026 ESPP is subject to the approval of our stockholders. Pursuant to the 2026 ESPP, eligible employees may contribute up to 15% of their eligible cash compensation during quarterly offering periods for the purchase of Class A Common Stock up to an annual maximum of $25,000 per employee. The maximum number of shares that may be purchased by an eligible employee during an offering period is 1,000 shares. On each purchase date, participants are entitled to acquire shares of Class A Common Stock at 90% of the Company's closing price on such date.

Note 11 -Stock-Based Compensation and Long-term Incentive Awards

Management Aggregator I and Management Aggregator II issue Series A Interests and Restricted Series C Interests to the Company’s employees. Series A Interests awards are comprised of time vesting interests (60%) (“Time Interests”), performance vesting interests (20%) (“Performance Interests”), and exit vesting interests (20%) (“Exit Interests”). The Management Aggregators are solely responsible for settling these awards and cannot direct Legence Holdings to settle or declare distributions for such purpose. The Time Interests and Restricted Series C Interests are remeasured at fair value each period, with changes recognized as capital contributions from the Management Aggregators through Legence Parent and Legence Parent II.

Series A Interests

The compensation expense (benefit) for Time Interests was as follows (in thousands):

For the three months ended March 31, 2026, the Parent Entities distributed $11.1 million to holders of Time Interests, which the Company recorded as compensation expense. There wereno distributions for Time Interests for the three months ended March 31, 2025. As of March 31, 2026, the unrecognized compensation expense related to Time Interests is approximately $23.7 million to be recognized over a remaining weighted-average term of 1.2 years.

The compensation expense for Performance Interests was as follows (in thousands):

Payments related to the Performance Interests and Exit Interests are contingent upon the achievement of specified market thresholds and require the recipient’s continued employment through distribution dates. Once the applicable thresholds are achieved, holders are entitled to receive payments upon each qualifying distribution from the Parent Entities. For the three months ended March 31, 2026, the Parent Entities distributed $3.8 million to holders of Performance Interests, which the Company recorded as compensation expense. There wereno distributions for Performance Interests for the three months ended March 31, 2025. There wereno distributions for Exit Interests andno compensation expense recorded for Exit Interests for the three months ended March 31, 2026 or 2025. Because additional distributions are dependent on future liquidity events that are not considered probable as of the financial statement dates, no compensation was accrued for these awards as of March 31, 2026 or December 31, 2025.

Restricted Series C Interests

The compensation expense for Restricted Series C Interests was as follows (in thousands):

For the three months ended March 31, 2026, the Parent Entities distributed $0.3 million to holders of Restricted Series C Interests, which the Company recorded as compensation expense. There wereno distributions for Restricted Series C Interests for the three months ended March 31, 2025. As of March 31, 2026, the unrecognized compensation expense related to Restricted Series C Interests is approximately $1.8 million to be recognized over a remaining weighted-average term of 2.7 years.

Note 12 -Noncontrolling Interests

Legence Corp. is the sole managing member of Legence Holdings, and the Company consolidates the financial results of Legence Holdings. Therefore, the Company reports a noncontrolling interest on the portion of net assets and income not attributable to Legence.

The following table summarizes the change in ownership of Legence Holdings during the three months ended March 31, 2026. Please refer to “Note 10—Stockholders' Equity” for additional information related to activity during the three months ended March 31, 2026.

Net income (loss) attributable to Legence Holdings is attributed to the Company and the noncontrolling interest based on their relative ownership percentages. Changes in ownership that do not result in a loss of control are accounted for as equity transactions in accordance with ASC Topic 810, Consolidation.

Noncontrolling interests as presented on the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations reflect balances and activity related to the following:

a. Legence Parent ML’s ownership of Legence Holdings.

b. Contributions from Legence Parent for Series A Interests and Restricted Series C Interests based on the percentage that Legence Parent contributes relative to the total contributions of Series A Interests and Restricted Series C Interests from Legence Parent and Legence Parent II. These capital contributions from Legence Parent recorded in noncontrolling interests are reclassified to additional paid-in capital on a proportional basis when a change in ownership occurs related to an exchange of LGN B Units.

c. Noncontrolling interests for the PCs, as discussed in “Note 6—Variable Interest Entities and Equity Method Investments.”

Note 13 -Earnings Per Share

The Company calculates basic and diluted earnings per share (“EPS”) in accordance with ASC Topic 260, Earnings Per Share. Basic EPS is calculated using Net income (loss) attributable to Legence divided by the weighted-average number of shares of Class A Common Stock outstanding during the period. Diluted EPS is calculated using Net income (loss) attributable to Legence divided by the weighted-average number of shares of Class A Common Stock outstanding during the period, adjusted to give effect to potentially dilutive securities. The effect of potentially dilutive securities under the treasury stock method are not included in the computation of diluted EPS for periods in which there is a Net loss attributable to Legence, because to do so would be anti-dilutive. Potentially dilutive securities evaluated under the if-converted method are assessed each reporting period to determine their impact on diluted EPS. Class B Common Stock does not have economic rights in the Company, including no rights to dividends or distributions upon liquidation, and as a result, is not considered a participating security for basic and diluted EPS. As such, basic and diluted EPS of Class B Common Stock has not been presented.

The Company’s potentially dilutive securities consist of (i) unvested restricted stock units (“RSUs”) and unexercised stock options, with the dilutive effect calculated using the treasury stock method, (ii) exchange of LGN B Units to shares of Class A Common Stock, with the dilutive effect calculated using the if-converted method and (iii) settlement of deferred consideration related to the Bowers acquisition with shares of Class A Common Stock using the if-converted method.

The following table sets forth the computation of basic and diluted EPS. Prior to the IPO, Legence Holdings was a single-member limited liability company and did not present earnings per share. Due to the IPO and Corporate Reorganization, the Company’s capital structure before and after the IPO is not comparable and would not be meaningful to the users of these Condensed Consolidated financial statements. As a result, only earnings per share for the three months ended March 31, 2026 are presented.

Anti-dilutive securities that could potentially dilute EPS in the future are set forth below (in thousands):

Note 14 -Tax Receivable Agreement

In connection with the IPO and Corporate Reorganization, the Company entered into the Tax Receivable Agreement (“TRA”) with Legence Parent and Legence Parent II (the “TRA Members”), which are related parties. The TRA generally provides for the payment by the Company to the TRA Members of 85% of the net cash tax savings, if any, in U.S. federal, state and local income tax the Company realizes, or is deemed to realize, as a result of the Company’s (i) allocable share of existing tax basis acquired in connection with the IPO and increases to such allocable share of existing tax basis; (ii) the utilization of certain tax attributes of the blocker entities that became subsidiaries of the Company pursuant to the Corporate Reorganization; (iii) increases in tax basis resulting from future redemptions or exchanges (or deemed exchanges in certain circumstances) of Legence Holdings LGN B Units for Class A Common Stock or cash and certain distributions (or deemed distributions) by Legence Holdings pursuant to the Exchange Agreement; and (iv) certain additional tax benefits arising from payments made under the TRA. The annual tax benefits are computed on a with and without basis by calculating the income taxes due including such tax benefits, and the income taxes due without such benefits. The

Company retains the benefit of the remaining 15% of these cash savings, if any. Payments under the TRA are not conditioned upon any continued ownership interest in Legence Holdings or the Company.

On January 8, 2026, the underwriters fully exercised their 30-day overallotment option related to the secondary offering completed on December 16, 2025. The exchange resulted in an increase to the TRA liability of $9.8 million. The exercise of the overallotment option and the impact on future TRA payments resulted in an increase to net deferred tax assets of $4.7 million. The net impact is a decrease to Additional paid-in capital of $5.1 million. Refer to “Note 10—Stockholders' Equity” for additional information.

The TRA liability is classified as current or long term based on the expected date of payment. As of March 31, 2026, the current portion of the TRA liability is $8.2 million and is included in Accrued and other current liabilities on the Condensed Consolidated Balance Sheet.

Note 15 -Income Taxes

The income tax (benefit) expense and effective income tax rate were as follows (in thousands):

The Company evaluates its estimated annual effective income tax rate based on current and forecasted business results and enacted tax laws on a quarterly basis and applies this tax rate to ordinary income or loss to calculate the estimated tax liability or benefit, adjusted for discrete events arising in each respective quarter. Due to the nature of the legal structure, the effective tax rate is impacted by changes in the mix of earnings because some of the pass-through earnings are taxed at the Company level or through other corporations.

For the three months ended March 31, 2026, the effective tax rate was lower than the U.S. federal statutory rate of 21%, primarily due to the release of valuation allowance on deferred tax assets related to the future TRA payments. This resulted in a $20.3 million income tax benefit recognized in Income tax (benefit) expense on the Condensed Consolidated Statement of Operations for the three months ended March 31, 2026. For the three months ended March 31, 2025, the effective tax rate was lower than the U.S. federal statutory rate of 21%, primarily due to the loss before income tax from pass-through business not subject to income taxes at the Company level.

A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. In prior periods, a partial valuation allowance was maintained against the deferred tax assets based on management’s assessment of the amount that was more-likely-than not to be realized. Each reporting period, management evaluates the realizability of deferred tax assets by considering all available positive and negative evidence, including forecasted taxable income, character of deductions, reversals of taxable temporary differences, and tax planning strategies. As of March 31, 2026, in part from the impact of the exercise of the underwriters’ overallotment option, management determined that there was sufficient positive evidence to conclude that it is more-likely-than-not that the deferred tax asset of $20.3 million associated with future TRA payments is realizable. The Company maintains a partial valuation allowance associated with the Company’s investment in Legence Holdings that would only be fully realized upon the sale of the Company’s interest in Legence Holdings.

Note 16 -Segment Information

Legence reports its results undertwo reportable segments: (1) Engineering & Consulting, and (2) Installation & Maintenance. Segments are presented according to the nature of the business activities, and reflect the Company’s consideration of financial information provided to the chief executive officer, who is the Chief Operating Decision Maker (“CODM”). The CODM primarily uses gross profit to assess performance and allocate resources, including decisions such as the annual budget review and approval, allocation of resources to hire additional key personnel, entering new markets and development of new technologies, evaluating executive performance, and determining performance-related bonus plans in each segment.

Engineering & Consulting: The Engineering & Consulting segment designs HVAC and other MEP systems for buildings, develops strategies to reduce energy usage and enhance building performance, improve reliability and drive efficiency and provides program and project management services for customers’ installation and retrofit projects. Within this segment, there are two primary service offerings – Engineering & Design and Program & Project Management.

Installation & Maintenance: The Installation & Maintenance segment fabricates and installs HVAC systems, process piping and other MEP systems in new and existing industrial, commercial and institutional buildings and provides ongoing preventive and corrective maintenance services for those systems. Within this segment, there are two primary service offerings – Installation & Fabrication and Maintenance & Service.

All intercompany transactions are eliminated in the Company's Condensed Consolidated Statements of Operations.

The following table presents relevant segment information (in thousands):

The following table presents the reconciliation from Gross profit to Income (loss) before income tax (in thousands):

Separate measures of Legence’s assets, including capital expenditures, are not produced or utilized by management to evaluate segment performance.

Note 17 -Related Party Transactions

The Company’s related party transactions include transactions with certain entities associated with the Company and BX Aggregators.

As discussed in “Note 6—Variable Interest Entities and Equity Method Investments”, the Company had related-party revenue from certain unconsolidated joint ventures.

As discussed in “Note 7—Debt”, a portion of the Company’s term loan is held by entities associated with the Company and BX Aggregators. As discussed in “Note 7—Debt”, the Company issued certain related party promissory notes in connection with certain acquisitions.

As discussed in “Note 14—Tax Receivable Agreement”, the Company entered into the TRA with TRA Members, which are related parties.

The Company has various lease agreements with entities owned by members of its management team and/or owners of the Parent Entities.

Note 18 -Commitments and Contingencies

Legal Proceedings

The Company is involved in various claims and legal proceedings incidental to its normal business activities. When a potential loss from a proceeding or claim is considered probable and the amount can be reasonably estimated or a range of loss can be determined, a loss contingency is recorded. The Company also provides disclosure when it is reasonably possible that a material loss will be incurred. Although the outcome of such claims and proceedings cannot be predicted with certainty, the Company vigorously defends its position in all such matters. The Company is not aware of any known contingencies, claims or lawsuits that will have a material effect on its financial position, results of operations or cash flows other than those described herein.

Insurance

The Company carries various insurance policies to address identified risks of loss including cyber, general liability, worker’s compensation, automobile liability and professional liability risks. As of March 31, 2026 and December 31, 2025, a liability for known and expected but not yet reported claims of $2.9 million and $2.6 million, respectively, was reflected in Accrued and other current liabilities on the Condensed Consolidated Balance Sheets. The determination of such claims and expenses and the appropriateness of the related liability is continually reviewed and updated by management.

The Company is self-insured for its medical coverage. The Company is responsible for the first $0.3 million of claims for each participant enrolled in the medical coverage plan. Any claims exceeding $0.3 million are covered through a stop-loss insurance plan. A liability for expected but not yet reported claims in the amount of $2.8 million and $3.2 million was reflected in Accrued compensation and benefits on the Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025, respectively.

Surety

As a requirement under certain contracts, various Legence subsidiaries procure performance and payment bonds through surety underwriters. As a condition for having surety companies write bonds on Legence subsidiaries’ behalf, Legence enters into indemnification agreements with the surety companies. Total outstanding bonds were approximately $1,562.4 million and $561.5 million as of March 31, 2026, and December 31, 2025, respectively.

Customer Guarantees

As part of its normal course of business, the Company offers guaranteed energy savings to customers under certain contracts. As of March 31, 2026 and December 31, 2025, total guarantees were $299.8 million and $307.4 million, respectively. Historically, the Company has not incurred material losses in connection with these guarantees. Further, management is not aware of any changes in the ability of the Company to meet these guarantees and does not expect to incur significant losses related to these guarantees in the foreseeable future.

Letters of Credit

As discussed in “Note 7—Debt”, the standby letters of credit are secured through the revolving credit facility. As of March 31, 2026 and December 31, 2025, the Company had $30.7 million and $5.7 million, respectively, in standby letters of credit primarily related to surety bonds and the deductibles of insurance policies.

Tax Receivable Agreement

Amounts payable under the TRA are accounted for in accordance with ASC Topic 450, Contingencies. Refer to “Note 14—Tax Receivable Agreement” for additional information.

Note 19 -Other Financial Information

Accounts receivable, net consists of the following (in thousands):

Prepaid expenses and other current assets consists of the following (in thousands):

Accrued and other current liabilities consists of the following (in thousands):

Condensed Consolidated Statements of Cash Flows Information

Additional cash flow information was as follows (in thousands):

(1)The Company classifies the cash flows resulting from its interest rate swaps in Cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows consistent with the interest that is hedged. Refer to “Note 9—Derivatives” for additional information on the Company’s interest rate swaps.

(2)Includes right-of-use assets acquired. Refer to “Note 4—Acquisitions”.

Refer to “Note 4—Acquisitions” for disclosure of non-cash financing of acquisitions through issuance of Class A Common Stock and deferred consideration.

Note 20 -Subsequent Events

Refer to “Note 10—Stockholders' Equity” for a discussion of the Subsequent Secondary Offering.