Earnings Recap — Q3 FY2026
CY Q3 2026 · Reported August 13, 2026 · Beat 2 of last 3 quarters
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Legence's record backlog and raised guidance underscore sustained demand for mission-critical infrastructure, particularly data centers and semiconductors. The company's expansion of fabrication capacity and focus on modular solutions position it to capture a larger share of the AI infrastructure buildout. Its strong balance sheet and active M&A pipeline could accelerate its role in this buildout.
Legence delivered record revenue of $1.262B, up 111% YoY, with organic growth of nearly 60% excluding Bowers. Adjusted EBITDA grew 114% to $155M, with margins expanding ~90 bps sequentially. Backlog and awards reached a record $5.7B, up 105% YoY, driven by data center and technology demand. The company also grew fabrication capacity to 1.5M sq ft and reduced net leverage to 1.5x. They recorded a goodwill impairment in the sustainability consulting business due to softer demand.
Management raised full-year 2026 revenue guidance to $4.7B–$4.8B (from $4.1B–$4.3B) and adjusted EBITDA to $565M–$585M (from $470M–$490M), citing strong backlog coverage and continued execution. They noted that data center demand remains robust with no change in pace and some acceleration in speed-to-market. They expect to continue expanding fabrication capacity, adding ~100k sq ft in the coming weeks, and see growing demand from semiconductor and memory chip clients. They also highlighted an active M&A pipeline and a strong balance sheet (1.5x net leverage) to pursue acquisitions. Margin trajectory is expected to benefit from scale and mix shift toward higher-margin fab-only work.
“Recent discussions with our data center clients suggest continued brisk demand over the next several years. These discussions suggest no change in the pace of activity from what was discussed at the beginning of the year and in some cases, speed to market has actually accelerated.”
on Data center demand
“Our M&A pipeline has never been as active as it is today. And of course, we'll be disciplined with our evaluation of these opportunities.”
on M&A pipeline
“We've had some really strong bookings in the data centers, specifically in some TFO projects, which follow after base builds. They're ranging anywhere from the $175 million range to between $200 million range there as well as in our off-site manufacturing, third-party manufacturing, we've had some solid bookings there as well. And the trend, our pipeline that we don't report on is strong now, and we feel like that trend will continue to be positive going forward.”
on Project acceleration
Can you give us a sense of the size of the largest projects you're putting in backlog this quarter and makeup of data center customers?
Steve Hansen noted strong bookings in data centers, including TFO projects ranging from $175M to $200M, and solid bookings in third-party manufacturing. He said the pipeline is strong and the trend should continue.
What are your gross margins in backlog today and how do they compare to current P&L?
Stephen Butz said gross margins in backlog are generally similar to current realizations, with no dramatic change in pricing. He noted mix shifts but consistent underlying service margins.
How do you think about bookings trend into 2027 and the duration of the growth?
Jeffrey Sprau said momentum continues to increase, driven by larger projects and the company's positioning. Steve Hansen added that diversity in end markets and reshoring support a positive outlook.