Company: LGN
Filing Date: 2025-02-14
Form Type: DRS
Source: 0000950123-25-002471
Chunk: 112

Company: Legence Corp.
Filing Date: 2025-02-14
Form: DRS
Chunk 112
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 acquisition strategy and our ability to effectively integrate acquired companies or assets into our business.

Effects of Seasonality

Our
revenues are subject to seasonal fluctuations, particularly in regions with colder winter climates and areas prone to extreme weather events, such as wildfires, storms, flooding, and hurricanes. We generally see greater levels of activity in the
spring and summer months than we do in the winter months due to reduced construction activity during inclement weather and less use of air conditioning during colder months. Activity in our business also fluctuates with the academic calendar, as
most schools and colleges prefer to have work performed on their facilities when classes are not in session, which drives increased revenue from education clients during the second and third quarters of the year. Additionally, activity levels in our
business can be affected by government spending cycles and fiscal calendars, which can be impacted by a wide variety of factors. Consequently, we may occasionally experience consecutive quarterly declines in revenues or earnings that are not
indicative of the future performance of our business.

Components of Results of Operations

Revenue

Revenue is derived from
customer contracts, pursuant to which we provide engineering, consulting, installation and maintenance services for industrial and commercial buildings. Customer contracts typically have terms that span from one day to several years, though the vast
majority of contracts are completed in less than 12 months. The majority of our contracts are fixed-price.

Cost of Revenue

Cost of revenue primarily consists of direct costs including labor, material and equipment, as well as overhead costs including project
management, facilities, IT, vehicles and various third-party expenses, such as insurance, rentals and subcontractor costs.

Selling, General and Administrative

Selling, general and administrative expenses primarily consist of personnel costs, including wages, payroll tax,
benefits and incentive compensation, as well as the costs of our real estate and IT services, integration costs for acquisitions after the acquisition date and various third-party professional fees.

Acquisition-Related Costs

Acquisition-related costs are costs we incur to effect a business combination, such as legal and professional fees.

Changes in the Fair Value of Contingent Consideration

Contingent consideration liabilities are related to business acquisitions as further described in Note 4 of the Notes to Consolidated Financial
Statements. Changes in the fair value of contingent consideration are recorded to Changes in the fair value of contingent consideration on the Company’s Consolidated Statements of Operations. As of December 31, 2024, there were no
outstanding contingent consideration liabilities, though future business acquisitions may result in future