Company: LGN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0002052568-25-000018
Chunk: 180

Company: Legence Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 180
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of acquisitions completed in 2024, a revenue mix shift towards the  Engineering & Design service line, and greater efficiency in customer fulfillment support costs. 

Installation & Maintenance: The $33.1 million, or 20.1%, increase in gross profit for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily attributable to higher revenue and margins from our Installation & Fabrication service line, driven by strong project execution, partially offset by higher customer fulfillment support costs and a revenue mix shift towards our lower margin Installation & Fabrication service line.

Selling, General & Administrative 

Selling, general and administrative expenses increased by $48.0 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. Selling, general and administrative expenses for the nine months ended September 30, 2025 includes approximately $12.5 million related to acquisitions completed in 2024. Compensation expense increased $16.5 million compared to the prior period largely due to an increase in fair value of profits interest awards as well as higher headcount. The remaining increase in selling, general and administrative expenses of $19.0 million is primarily attributable to professional fees related to the preparation of our IPO as well as increases in IT software and subscriptions. 

Depreciation and Amortization 

The increase in depreciation and amortization is attributable to a $2.5 million increase in the depreciation of property and equipment and a $2.4 million increase in the amortization of intangible assets, primarily from the impact of acquisitions completed during 2024. 

Interest Expense 

The increase in interest expense is primarily attributable to higher average borrowings during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

Loss on debt extinguishment 

The loss on debt extinguishment is due to accelerated amortization of debt issuance costs related to the early debt payment of $780.3 million during the nine months ended September 30, 2025.

Income Tax Expense

Income tax expense was $13.7 million for the nine months ended September 30, 2025, and resulted in an effective tax rate of negative 152.4%, as compared to an income tax expense of $9.5 million for the nine months ended September 30, 2024 and an effective tax rate of 16,666.7%. For the nine