Company: LGN
Filing Date: 2025-09-02
Form Type: S-1/A
Source: 0001193125-25-193346
Chunk: 293

Company: Legence Corp.
Filing Date: 2025-09-02
Form: S-1/A
Chunk 293
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 terms, the Company has material contract asset and liability balances. Contract assets represent revenue recognized in excess of amounts paid or payable to the Company on uncompleted contracts for which the right to bill is conditional on something other than the passage of time (e.g., the Company’s future performance on uncompleted contracts or performance obligations). Contract liabilities represent the Company’s obligation to perform on uncompleted contracts for which the Company has invoiced the customer or received payment. Contract assets and contract liabilities in the Consolidated Balance Sheets consist of the following amounts (in thousands):

| Contract assets:     |     | December 31, 
 2024         |         |     | 2023 |         |     | 2022 |        |
|:---------------------|:----|:-------------|--------:|:----|:-----|--------:|:----|:-----|-------:|
| Contract assets, net |     | $            | 188,132 |     | $    | 125,373 |     | $    | 91,481 |
| Other assets         |     | $            |   2,040 |     | $    |   1,772 |     | $    |  1,007 |
| Contract liabilities |     | $            | 164,130 |     | $    | 164,598 |     | $    | 94,711 |

Contract assets include $78.3 million, $83.1 million and $49.4 million of contract retentions as of December 31, 2024, 2023 and 2022, respectively. Contract retentions included in contract assets are generally subject to substantial project completion and acceptance by the customer. Contract assets and liabilities fluctuate based on factors that occur in the normal course of business, including the volume of projects in progress at period end, the timing of negotiated payment terms, billing frequency and other differences in payment terms relative to revenue recognition. The Company recognized $11.8 million of contract assets and $14.0 million of contract liabilities related to acquisitions completed during the year ended December 31, 2024. The remaining increase in contract assets from December 31, 2023 to December 31, 2024 is primarily due to the increase in the Company’s volume of project activity from both Installation & Maintenance and Engineering & Consulting segments, as reflected in increased revenue for the year ended December 31, 2024. The remaining change in contract liabilities from December 31, 202