Company: LGN
Filing Date: 2025-08-15
Form Type: S-1
Source: 0001193125-25-181698
Chunk: 131

Company: Legence Corp.
Filing Date: 2025-08-15
Form: S-1
Chunk 131
---
     |          | 19.5% |     | $ | 430,767 |     |          | 20.5% |     | $              | 115,621 |     |   | 36.7% |     |          | 1.0%   |

Engineering & Consulting: The increase in gross profit was attributable to higher revenue partially offset by modestly lower gross margin resulting from lower sustainability consulting revenue, which typically generates higher margins. Additionally, 2023 gross profit benefited from $7.4 million in revenue related to one-timeamendments to several contracts with a developer in exchange for discounted fees. Installation & Maintenance: The increase in gross profit was primarily attributable to higher revenue. The increase in gross profit margin was driven by several larger projects with higher margins. Selling, General & Administrative The increase in selling, general and administrative expenses is primarily attributable to a $29.7 million increase in compensation costs during the period resulting from more headcount. Additionally, there was an increase in professional fees of $7.4 million as compared to the prior year related primarily to IT costs, acquisition-related costs and other costs related to our strategic initiatives. 93

Depreciation and Amortization

The increase in depreciation and amortization is attributable to a $10.9 million increase in the amortization of intangible assets and a
$7.1 million increase in the depreciation of property and equipment, primarily from the full year impact of acquisitions completed in 2023 and the contribution from companies acquired in 2024.

Changes in the Fair Value of Contingent Consideration Liabilities

The decrease in changes in the fair value of contingent consideration liabilities is primarily attributable to the contingent earnout
obligation associated with the Black Bear acquisition, which we completed in 2022. During the year ended December 31, 2023, the fair value of the contingent earnout obligation increased $27.0 million as the maximum earnout was achieved. We
paid the earnout amount in 2024 and have no further obligations to Black Bear shareholders under the earnout agreement and as such did not recognize any changes in the fair value of the contingent earnout obligation during the year ended
December 31, 2024.

Goodwill Impairment

During the year ended December 31, 2024, it was determined the carrying amount of goodwill for one reporting unit in the
Engineering & Consulting segment exceeded its fair value, resulting in goodwill impairment charges of $17.8 million