Company: LGN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0002052568-25-000018
Chunk: 57

Company: Legence Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 57
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 ended September 30, 2024.Contract Assets and LiabilitiesDue to the nature of the Company’s performance obligations and the timing of contractual payment terms, the Company has material contract asset and liability balances. 

19

Legence Corp.Notes to Condensed Consolidated Financial Statements - (Continued)(Unaudited)

Contract assets and contract liabilities on the Condensed Consolidated Balance Sheets consist of the following amounts (in thousands):September 30, 2025December 31, 2024Contract assets:Contract assets, net$234,302 $188,132 Other assets$2,379 $2,040 Contract liabilities$285,894 $164,130 Contract assets include $84.9 million and $78.3 million of contract retentions as of September 30, 2025 and December 31, 2024, 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 increase in contract assets from December 31, 2024 to September 30, 2025 was primarily due to the increase in the Company’s volume of project activity and revenue from both Installation & Maintenance and Engineering & Consulting segments. The change in contract liabilities from December 31, 2024 to September 30, 2025 was primarily due to the timing and amount of revenue recognized.During the three and nine months ended September 30, 2025, the Company recognized revenue of $27.2 million and $124.5 million, respectively, related to contract liabilities outstanding as of December 31, 2024. During the three and nine months ended September 30, 2024, the Company recognized revenue of $24.7 million and $142.0 million, respectively, related to contract liabilities outstanding as of December 31, 2023.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 September 30, 2025 and December 31, 2024 were $9.5 million and $9.8 million, respectively.Remaining Performance ObligationsThe Company had approximately $2,317.8