Company: LGN
Filing Date: 2025-08-15
Form Type: S-1
Source: 0001193125-25-181698
Chunk: 288

Company: Legence Corp.
Filing Date: 2025-08-15
Form: S-1
Chunk 288
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 from December 31, 2022 to December 31, 2023 is due to the increase in the Company’s volume of project activity as well as the timing of scheduled billings exceeding revenue recognition from service delivered to customers. During the years ended December 31, 2024, 2023 and 2022, the Company recognized revenue of $151.3 million, $82.9 million and $34.6 million, respectively, related to contract liabilities outstanding as of the end of the prior year. F-29

Legence Holdings LLC and Subsidiaries

Notes to Consolidated Financial Statements

Contracts Receivable

Included in the contracts receivable balance is retention for which the Company has an unconditional right to payment and is only subject to the passage of
time. Retentions included in Contracts Receivable as of December 31, 2024, 2023 and 2022 are $9.8 million, $13.2 million and $10.1 million, respectively.

Remaining Performance Obligations

The Company had
approximately $1,729.8 million in remaining performance obligations as of December 31, 2024, which represent the expected revenue values under our contracted or otherwise secured fixed-price project commitments. The Company expects to
recognize 75% of the remaining performance obligations within the next twelve months and the remaining 25% thereafter. The majority of the remaining performance obligations after the first 12 months is expected to be recognized by the end of 2026.

Although remaining performance obligations reflect expected revenue values that are considered to be firm, cancellations, scope adjustments or project
deferrals may occur that impact their volume or the expected timing of their recognition.

Note 4—Acquisitions

Acquisitions are recorded under the acquisition method of accounting, and the total consideration transferred is allocated to the acquired net tangible and
identifiable intangible assets based primarily on their fair values as of the acquisition dates. The estimated fair value of identified intangible assets are Level 3 fair value measurements and are determined using discounted cash flow
techniques. Such fair value is estimated using a multi-period excess earnings method for customer relationships and backlog and a relief from royalty method for trade names. The significant assumptions used in estimating fair value of customer
relationships and backlog include i) the estimated life the asset will contribute to cash flows, such as remaining contractual terms, (ii) revenue growth rates and EBITDA margins, (iii) attrition rate of customers, and (iv) the