Company: LGN
Filing Date: 2025-09-02
Form Type: S-1/A
Source: 0001193125-25-193346
Chunk: 292

Company: Legence Corp.
Filing Date: 2025-09-02
Form: S-1/A
Chunk 292
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 presented.

The Company invoices its customers in accordance with contractual payment terms. It is common for construction contracts to specify
that an architect or a general contractor is not required to make payments to a subcontractor until it has received those funds from the owner or funding source. In most instances, the Company receives payment of its invoices between 30 to 90 days
of the invoice issuance.

Changes in Estimates

For contracts where the Company applies the Cost-to-Cost Input Method, the
accuracy of the Company’s revenue and profit recognition in each year depends on the accuracy of management’s estimates of the cost to complete each project. Contract costs include labor, material, subcontractors and various overhead
costs such as maintenance, depreciation, consumables, or equipment rentals, which are either directly related to the fulfillment of specific contract performance obligations or indirectly contribute to the overall customer service delivery
fulfillment of multiple contracts and obligations. Costs associated with change orders, unresolved contract modifications, claims to or from owners and back-charge recoveries are recorded as incurred. Revisions to estimated total costs are reflected
in the Company’s measure of progress.

F-27

Legence Holdings LLC and Subsidiaries Notes to Consolidated Financial Statements There are several factors that can contribute to changes in estimates of contract cost and profitability. Potential factors include:

| • |     | The completeness and accuracy of the original bid; |

| • |     | Costs associated with scope and schedule changes as well as changes from the original design; |

| • |     | Changes in costs of labor and/or materials, owner changes, weather, site conditions and other delays; |

| • |     | Subcontractor performance; |

| • |     | Changes in productivity expectations; |

| • |     | The Company’s ability to fully and promptly recover on contract scope changes; and |

| • |     | The customer’s ability to properly administer the contract. |

The foregoing factors, as well as the stage of completion of contracts in process and the mix of contracts at different margins, may cause fluctuations in gross profit from period to period, which may have a significant impact on the Consolidated Financial Statements. At the time a loss on a contract becomes probable, the entire amount of the estimated loss is accrued. Management monitors for circumstances that may affect the accuracy of its estimates. Disaggregation of Revenue The Company’s revenue was derived from contracts to provide goods or services in the Engineering & Consulting and Installation & Maintenance segments. Refer to “ Note 16—Segment Information” for