Legence (LGN) Delivers Q3 Revenue Beat Despite EPS Miss

Legence Corp. (Nasdaq: LGN) has released its financial results for the third quarter of 2025, showcasing a remarkable performance that exceeded market expectations. The company’s impressive growth in revenue and strategic acquisitions highlight its strong market position and future potential.

Revenue Beat Driven by Double-Digit Gains Across Core Segments

Legence Corp. has posted a record-breaking third quarter in 2025, with revenues reaching $708.0 million, a significant 26% increase from the same period last year. This figure not only represents a substantial year-over-year growth but also exceeds the market’s expectations of $643.79 million. The company’s performance was driven by robust demand across its key service lines, particularly in installation and maintenance, which saw a 35.1% increase in revenue compared to the previous year. The engineering and consulting segment also contributed to this growth, with a 9.5% increase in revenue.

In terms of profitability, Legence reported a gross profit of $148.1 million for the quarter, up from $118.5 million in the previous year. The gross margin, however, slightly declined from 21.1% to 20.9%, primarily due to a higher percentage of subcontractor expenses and a shift in revenue mix. Despite this, the company’s adjusted EBITDA saw a notable increase of 38.9%, reaching $88.8 million compared to $64.0 million in the same quarter last year.

When comparing the company’s performance against market expectations, Legence’s earnings per share (EPS) was a net loss of -$0.02, which fell short of the expected EPS of $0.03. However, the significant revenue beat helped offset the EPS miss, showcasing the company’s ability to generate strong top-line growth even as it navigates profitability challenges. The increased revenue, coupled with strategic cost management, positions Legence favorably as it continues to expand its market presence.

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Legence Projects Up to $2.85B in 2026 Revenue, Eyes Margin Expansion

Looking ahead, Legence has set optimistic guidance for the fourth quarter of 2025 and the full year 2026. For the upcoming quarter, the company anticipates revenue in the range of $600 million to $630 million, with adjusted EBITDA expected to be between $60 million and $65 million. This guidance reflects the company’s confidence in its ongoing operations and the market demand for its services.

For the full year 2026, Legence projects revenue to be between $2.65 billion and $2.85 billion, with adjusted EBITDA ranging from $295 million to $315 million. This forward-looking guidance does not include the potential impact of the recently announced acquisition of The Bowers Group, Inc., which is expected to close in the first quarter of 2026. The acquisition is anticipated to further strengthen Legence’s position in the Northern Virginia and DC Metro region, providing additional growth opportunities.

Legence’s strategic focus on reducing leverage and enhancing liquidity is evident in its financial maneuvers following the successful IPO. The company has reduced its total and net debt significantly, utilizing IPO proceeds and strong cash generation. With a solid foundation and a clear growth trajectory, Legence is well-positioned to capitalize on market opportunities and deliver value to its stakeholders in the coming quarters.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.