LGN

Legence is riding a powerful demand tailwind. FY2025 revenue grew to $2.55B (+21.5% YoY), the third straight year of strong growth from $1.62B in FY2023 and $2.10B in FY2024. Growth is concentrated in attractive end markets: data centers & technology revenue rose to $1,087,800 thousand (42.7% of revenue) and the company reported $3.7 billion of backlog and awarded contracts, up 49% year over year. Operating cash flow surged to $257M (+777.7%), and cash & equivalents nearly tripled to $230M (+183.6%), demonstrating that the model can self-fund working capital as activity scales.

The quality of earnings, however, is weak. Despite top-line momentum, the company posted a net loss of -$59.8M (worse than the -$28.6M loss in FY2024), operating margin is just 2.4%, and net margin is -2.3%. ROE is -15.2% and retained earnings stand at -$310M, reflecting an accumulated deficit. Leverage is elevated: liabilities/equity is 4.82x on only $392M of stockholders' equity against $1.89B of total liabilities. The company continues to add debt for M&A, taking a $200.0 million incremental term loan to fund the Bowers acquisition that closed January 2, 2026, raising quarterly principal payments to $2.5 million.