Company: LGN
Filing Date: 2025-12-09
Form Type: S-1
Source: 0001193125-25-312729
Chunk: 131

Company: Legence Corp.
Filing Date: 2025-12-09
Form: S-1
Chunk 131
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 level of revenue we generate and the gross profit we earn on that revenue. It is also influenced by the timing of working capital investment associated with the services that we provide. Our
working capital needs may increase when we commence large volumes of work under circumstances where project costs are required to be paid before the associated receivables are billed and collected. Our management strives to negotiate payment terms
that minimize the working capital investment that we are required to make in connection with large projects. Additionally, changes in project timing due to delays or accelerations and other economic, regulatory, market and political factors may
affect customer spending and, thus, impact cash flows from operating activities. We typically require the most working capital during the second half of the year as activity levels increase in the spring and summer months and less working capital in
the first half of the year as activity levels decrease and we receive final payments on completed jobs.

Cash flows provided by operating
activities increased by $138.9 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase mainly reflects fluctuations in the primary components of working capital, as
detailed in the Condensed Consolidated Statements of Cash Flows. Operating cash flows from contract liabilities increased by $140.9 million during the nine months ended September 30, 2025 compared to the nine months ended
September 30, 2024, primarily due to increased billings net of recognized revenue. Operating cash flows from accounts payable increased by $84.6 million during the nine months ended September 30, 2025 compared to the nine months ended
September 30, 2024, primarily due to increased business activity and timing of payments. Additionally, operating cash flows from accrued and other current liabilities increased by $31.7 million, primarily because there were no payments of
contingent consideration during the nine months ended September 30, 2025 compared to $32.6 million during the nine months ended September 30, 2024. These increases are partially offset by a $152.0 million net decrease in
operating cash flows from accounts receivable and contract assets during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The change in accounts receivable and contract assets is primarily
driven by higher revenue and the timing of billing and collection. The impact of adjustments for non-cash items was mostly offsetting in nature and is