Legence Corp.

Rapidly growing MEP/building-systems provider with strong cash generation and data-center tailwinds, offset by leverage-driven net losses.

Strengths

• FCF $219M (80th pct), FCF margin 8.6% and OCF margin 10% (71st pct) with $3.7B backlog up 49%
• High-growth end markets (data centers, life sciences, healthcare) and integrated MEP model driving recurring revenue

Risks

• GAAP net loss (margin -2.3%, ROE -15%) from heavy debt and amortization; material weakness in internal controls
• Fixed-price contract/cost-overrun risk, sponsor control and TRA obligations

Notable findings

• Exec changeRecent 8-K item 5.02 8-K ↗
• Net lossNet loss (net margin -2.3%)
• Material weakness• We have identified material weaknesses in our internal control over financial reporting which could, if not timely remediated, adversely affect our ability to accurately and timely report our financ
• Strong balance sheetStrong balance sheet — $230M cash & investments