Legence (LGN) Q3 2026: EPS Nearly Doubles Estimates on Data Center Surge

Legence reported Q3 2026 GAAP diluted earnings of $1.15 per share against a consensus estimate of $0.59, a beat of 96.15%, while revenue of $1.31 billion topped estimates by 3.91% and rose 85.1% year over year. The reported EPS figure includes two notable non-cash items: a $35.32 million stock-based compensation benefit and an $8.87 million favorable cost-of-revenue adjustment tied to legacy Series A and Restricted Series C Interests.

The headline driver was the Installation and Maintenance segment, which grew 124% year over year to $1.11 billion in revenue, with the Installation and Fabrication sub-segment alone up 142.8%. Strong demand from data center and technology clients powered the surge, amplified by a full quarter of contribution from the acquired Bowers Group, which added approximately $322.7 million of Q3 revenue on its own.

That momentum extended to the company's pipeline. Backlog and awarded contracts hit a record $5.90 billion, up 92.5% year over year, with the Installation and Maintenance backlog up 117.2%. Adjusted EBITDA climbed 99.3% to $177.01 million, representing a 13.5% margin, the highest in company history according to management, up from 12.5% a year ago. CEO Jeff Sprau credited exceptional project execution and an increasing mix of fabrication work for the margin expansion.

On the strength of the quarter, management raised full-year 2026 revenue guidance to $4.87 billion to $4.91 billion, up from a prior range of $4.70 billion to $4.80 billion, with Adjusted EBITDA guidance lifted to $610 million to $620 million from $565 million to $585 million. The company also issued initial 2027 guidance calling for revenues of $5.3 billion to $5.6 billion and Adjusted EBITDA of $690 million to $730 million.

Alongside the guidance raise, the board authorized a $150 million share repurchase program, which Sprau said reflects the company's confidence in its fundamentals and broadens its capital allocation options. Legence also completed the acquisition of Central Texas Industrial Contractors on November 1, 2026, establishing a foothold in the central Texas semiconductor market, with CTI expected to contribute $6 to $8 million of revenue in Q4 2026.

Not every segment kept pace. Engineering and Consulting revenue slipped 5.8% year over year to $199.9 million, dragged by a 10.3% decline in Program and Project Management. The book-to-bill ratio also eased to 1.2x from 1.5x a year ago, and total debt stood at approximately $1.02 billion, with a Tax Receivable Agreement liability of $342.7 million on the books.