Cuộc họp công bố kết quả kinh doanh Q2 2026 của Legence (LGN): Giá trị đơn hàng tồn đọng kỷ lục và nâng dự phóng kinh doanh

Cuộc họp công bố kết quả kinh doanh quý 2 năm 2026 của Legence đã làm nổi bật mức tăng trưởng hữu cơ nhanh chóng, giá trị đơn hàng tồn đọng (backlog) và hợp đồng trúng thầu đạt mức kỷ lục, cùng việc nâng dự báo cho cả năm. Trung tâm dữ liệu và công nghệ tiếp tục là động lực tăng trưởng chính, trong khi ban lãnh đạo cũng báo cáo hoạt động sôi động hơn trong các mảng bán dẫn, sản xuất, y tế, giáo dục và các dự án chính phủ.

Điểm tin chính

• Doanh thu quý 2 năm 2026 tăng 111% so với cùng kỳ năm ngoái lên 1,262 tỷ USD. Thương vụ thâu tóm Bowers Group đóng góp khoảng 300 triệu USD, trong khi doanh thu không bao gồm Bowers tăng gần 60%.
• EBITDA điều chỉnh tăng 114% lên 155 triệu USD. Biên EBITDA điều chỉnh đạt 12,2%, tăng gần 20 điểm cơ bản so với cùng kỳ năm ngoái và tăng gần 90 điểm cơ bản so với quý trước.
• Giá trị đơn hàng tồn đọng và hợp đồng trúng thầu đạt mức kỷ lục 5,7 tỷ USD, tăng 105% so với cùng kỳ năm ngoái và tăng 5% so với quý trước. Tỷ lệ book-to-bill theo quý đạt 1,2 lần, trong khi tỷ lệ trong 12 tháng gần nhất đạt 1,4 lần.
• Legence đã nâng dự báo doanh thu năm 2026 lên 4,7 tỷ - 4,8 tỷ USD và dự báo EBITDA điều chỉnh lên 565 triệu - 585 triệu USD.
• Trung tâm dữ liệu và công nghệ dẫn đầu đà tăng trưởng. Ban lãnh đạo cho biết các cuộc thảo luận với khách hàng cho thấy nhu cầu sẽ tiếp tục duy trì trong vài năm tới, với một số tiến độ dự án đang được đẩy nhanh.
• Tỷ lệ đòn bẩy ròng pro forma giảm xuống 1,5 lần từ mức 3,0 lần sau đợt IPO vào tháng 9, mặc dù công ty đã hoàn tất thương vụ thâu tóm Bowers.

Dữ liệu tài chính cốt lõi

Kết quả hoạt động và kinh doanh

Lắp đặt & Bảo trì

Doanh thu mảng Lắp đặt & Bảo trì tăng 162% lên 1,055 tỷ USD. Hơn một nửa đà tăng trưởng của mảng này đến từ tăng trưởng hữu cơ, phần còn lại phần lớn nhờ thương vụ thâu tóm Bowers.

Doanh thu mảng Lắp đặt & Chế tạo tăng 189%, nhờ sự mở rộng hữu cơ và thương vụ thâu tóm. Doanh thu mảng Bảo trì & Dịch vụ tăng 58%; nếu không tính Bowers, tăng trưởng hữu cơ đạt gần 20%.

Biên lợi nhuận gộp điều chỉnh của mảng đạt 16,1%, về cơ bản không đổi so với mức 16,2% của cùng kỳ năm ngoái. Tỷ trọng công việc lắp đặt có biên lợi nhuận thấp hơn tăng lên đã bù trừ cho sự gia tăng của hoạt động chỉ chế tạo - mảng mang lại biên lợi nhuận cao hơn.

Kỹ thuật & Tư vấn

Doanh thu mảng Kỹ thuật & Tư vấn tăng 6% lên 207 triệu USD, phần lớn là tăng trưởng hữu cơ. Doanh thu mảng Quản lý Chương trình & Dự án tăng 17%, nhờ sự hỗ trợ từ các dự án của chính quyền bang và địa phương tại Washington, D.C., South Carolina, Colorado và Minnesota, cũng như nhu cầu về trung tâm dữ liệu.

Doanh thu mảng Kỹ thuật & Thiết kế giảm 4% chủ yếu do nhu cầu tư vấn phát triển bền vững từ các khách hàng bất động sản thương mại phức hợp suy yếu. Biên lợi nhuận gộp điều chỉnh của mảng giảm xuống 31,1% từ 33,2%, chủ yếu do Quản lý Chương trình & Dự án chiếm 51% doanh thu mảng so với mức 46% của cùng kỳ năm trước.

Năng lực sản xuất và Nguồn nhân lực

Legence có gần 11.000 nhân viên vào cuối tháng 7, bao gồm khoảng 8.000 kỹ thuật viên và thợ lành nghề. Ban lãnh đạo cho biết công ty không gặp phải tình trạng thiếu hụt lao động đến mức làm hoãn tiến độ dự án, mặc dù nguồn cung lao động vẫn còn căng thẳng trên toàn quốc.

Công suất chế tạo đã tăng thêm khoảng 200.000 foot vuông trong quý 2 lên 1,5 triệu foot vuông. Công ty dự kiến sẽ bổ sung thêm 100.000 foot vuông nữa trong những tuần tới. Ban lãnh đạo cho biết việc tăng ca, tự động hóa, công cụ làm việc và tối ưu hóa không gian làm việc có thể mở rộng sản lượng trong phạm vi mặt bằng hiện tại.

Nhu cầu chế tạo cho bên thứ ba vẫn tập trung vào các trung tâm dữ liệu và ở mức độ thấp hơn là các khách hàng ngành dược phẩm. Legence cũng đang chứng kiến nhu cầu gia tăng từ các khách hàng trong lĩnh vực bán dẫn và chip nhớ.

Dự báo của Ban lãnh đạo

Mức trung vị của khoảng dự báo doanh thu cả năm mới cao hơn 13% so với triển vọng 4,1 tỷ - 4,3 tỷ USD trước đó. Khoảng dự báo EBITDA điều chỉnh được nâng khoảng 20% từ mức 470 triệu - 490 triệu USD.

Ban lãnh đạo giải thích việc nâng dự báo là nhờ kết quả kinh doanh quý 2, đơn hàng tồn đọng tăng lên, tiến độ dự án và năng lực thực thi liên tục. Một số công việc chế tạo đang được hoàn thành nhanh hơn dự kiến ban đầu, nhưng công ty không định lượng mức tăng dự báo phản ánh bao nhiêu phần doanh thu đẩy nhanh tiến độ so với công việc phát sinh thêm.

Rủi ro và Các mảng cần theo dõi

• Biên lợi nhuận gộp điều chỉnh giảm xuống 18,5% từ 21,8%, chủ yếu do đóng góp doanh thu lớn hơn từ mảng Lắp đặt & Bảo trì có biên lợi nhuận thấp hơn và biên lợi nhuận mảng Kỹ thuật & Tư vấn suy yếu.
• Mảng tư vấn phát triển bền vững tiếp tục đối mặt với nhu cầu suy yếu từ bất động sản thương mại. Đơn hàng tồn đọng sụt giảm trong mảng kinh doanh này đã dẫn đến khoản trích lập dự phòng giảm giá trị lợi thế thương mại và các tài sản vô hình khác trong quý 2.
• Các hợp đồng trúng thầu lớn hơn có thể tạo ra sự biến động theo quý trong giá trị đơn hàng đăng ký ròng và tỷ lệ book-to-bill. Ban lãnh đạo lưu ý rằng các đơn hàng đăng ký lớn hiện nay đôi khi vượt quá 100 triệu USD và có thể nhanh chóng chuyển hóa thành doanh thu.
• Vốn lưu động làm tiêu tốn một khoản tiền mặt nhỏ trong quý 2. Ban lãnh đạo dự kiến đà tăng trưởng nói chung sẽ yêu cầu thêm vốn lưu động, mặc dù các khoản trả trước của khách hàng cho các mô-đun chế tạo theo yêu cầu có thể giúp bù đắp phần nào.
• Kết quả thuế báo cáo chịu ảnh hưởng bởi chi phí lãi lợi nhuận lịch sử không được trừ khi tính thuế. Ban lãnh đạo dự kiến tình trạng này sẽ tiếp tục kéo dài trong suốt năm 2026 và ở một mức độ nào đó sang năm 2027.

Tóm tắt phần Hỏi & Đáp với Chuyên viên phân tích

• Các hợp đồng trung tâm dữ liệu lớn: Ban lãnh đạo đã viện dẫn các dự án hoàn thiện nội thất cho bên thuê trung tâm dữ liệu gần đây có quy mô từ khoảng 175 triệu đến 200 triệu USD. Công ty mô tả danh mục cơ hội tiềm năng là rất mạnh nhưng không đưa ra dự báo chính thức về đơn hàng đăng ký.
• Năm 2027 và xa hơn: Khách hàng đang tiếp cận sớm hơn để đảm bảo năng lực kỹ thuật, nhân công và chế tạo. Ban lãnh đạo cho biết đơn hàng tồn đọng đang kéo dài hơn sang các kỳ tương lai và các cuộc thảo luận ngày càng đề cập nhiều hơn đến năm 2027 và xa hơn nữa.
• Mức độ hiện diện trung tâm dữ liệu theo khu vực: Các thị trường lắp đặt chính bao gồm California, Phoenix và khu vực Washington, D.C., Maryland, Virginia. Legence cũng đã mở rộng sang Texas, trong khi các sản phẩm chế tạo được vận chuyển đến các thị trường bao gồm Iowa, North Carolina, Ohio và Georgia.
• Khả năng sinh lời của đơn hàng tồn đọng: Ban lãnh đạo cho biết biên lợi nhuận gộp tích hợp trong đơn hàng tồn đọng về cơ bản nhất quán với biên lợi nhuận thực hiện gần đây, tùy thuộc vào sự thay đổi trong cơ cấu dịch vụ.
• Cơ cấu chế tạo: Công việc chỉ chế tạo chiếm tỷ trọng ở vùng thấp của khoảng 20% doanh thu mảng Lắp đặt & Bảo trì trong ba quý qua. Mảng này mang lại biên lợi nhuận cao hơn so với công việc lắp đặt toàn bộ, mặc dù các dự án lắp đặt mang lại cơ hội doanh thu lớn hơn đáng kể.
• Bán dẫn và xu hướng đưa sản xuất về nước (reshoring): Doanh thu mảng bán dẫn đã tăng hơn 50% trong quý, mặc dù ban lãnh đạo cho biết cơ hội này vẫn nhỏ hơn so với trung tâm dữ liệu. Mảng sản xuất chiếm chưa đến 3% tổng doanh thu, nhưng công ty kỳ vọng xu hướng reshoring sẽ hỗ trợ nhu cầu trong tương lai.
• Bảng cân đối kế toán và M&A: Ban lãnh đạo mô tả danh mục thâu tóm tiềm năng là sôi động nhất từ trước đến nay. Với tỷ lệ đòn bẩy ròng pro forma ở mức 1,5 lần, Legence cho biết họ có vị thế thuận lợi để thực hiện các thương vụ thâu tóm đáp ứng các tiêu chí chiến lược và tài chính của mình.

Toàn văn Biên bản cuộc họp công bố kết quả kinh doanh

Toàn văn cuộc gọi công bố kết quả kinh doanh

Phần trình bày của ban lãnh đạo

Operator

Good day, and thank you for standing by. Welcome to the Q2 2026 Legence Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Son Vann, Vice President of Investor Relations. Please go ahead.

Son Vann

Thanks, Daniel. And good morning, everyone. Welcome to Legence's Second Quarter 2026 Earnings Call. With me today are Jeff Sprau, Chief Executive Officer; Stephen Butz, Chief Financial Officer; and Steve Hansen, Chief Operating Officer.

This morning, we issued a press release that covers our second quarter 2026 financial results and posted a presentation that accompanies the earnings release. All materials can be found on the Investor Relations section of the company's website, www.wearelegence.com.

Before we begin, I want to remind you that comments made during this call contain certain forward-looking statements and are subject to risks and uncertainties, including those identified in our risk factors contained in our SEC filings. Our actual results could differ materially, and we undertake no obligation to update any such forward-looking statements.

During this call, we will refer to certain non-GAAP financial measures, which should not be considered in isolation from or as a substitute for measures prepared in accordance with generally accepted accounting principles. Please refer to our quarterly earnings presentation for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures. With that, let me turn the call over to Jeff.

Jeffrey Sprau

Thank you, Son, and thanks, everyone, for joining today to discuss our second quarter performance and current outlook for Legence.

As we have talked about on our past earnings calls, the demand environment for mission-critical building systems continues to be robust. This strength is evident in the exceptional growth in both our record revenue and backlog.

Excluding the impact of acquisitions, Organic revenue growth was nearly 60%, while backlog and awards grew organically by over 35% year-over-year. And when we include acquisitions, revenue more than doubled with similar growth in total backlog. As you would expect, the data center and technology end market led this growth.

Recent discussions with our data center clients suggest continued risk 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.

Within the data centers and technology end market, it's worth noting this sector also includes semiconductors, an area where we're also experiencing solid revenue growth.

Our growth extends to other core markets as well, including life science and health care, education and state and local government. All of which are experiencing solid high single to double-digit organic revenue growth year-to-date.

Also worth noting is our activity level in manufacturing, which is embedded in our other end market category. While this end market represents less than 3% of our overall revenue base, it is experiencing very strong revenue growth and is now about equal to the size of our mixed-use market. We expect reshoring to favorably impact our manufacturing end market in the coming years.

As I mentioned before, I really like our exposure to diverse end markets. understanding that growth rates between markets can ebb and flow. By intentionally focusing on attractive higher-growth target-rich sectors that align well with our mission-critical services, this diversity can offset to a degree, some of the volatility of each market. We, of course, value every client relationship and strive to deliver exceptional outcomes on every project. This customer-first philosophy has served us well for decades and in some cases, over a century and is the foundation of the reputation, trust and long-standing partnerships that we built across our broad client base.

On our quarterly results, Stephen will go into greater detail. But at a high level, total revenue of $1.3 billion increased by 111% year-over-year and over half of this growth was organic. In a similar fashion, adjusted EBITDA grew by 114% year-over-year. Adjusted EBITDA margins expanded by almost 90 basis points sequentially.

Total backlog and awards ended the quarter at a record $5.7 billion, up 105% year-over-year and 5% sequentially. We saw strong growth in backlog in both segments. Notably, our Engineering segment backlog grew by 27% year-over-year and 11% sequentially, mostly on an organic basis.

Our consolidated book-to-bill ratio for the 3 months ended June 2026 was 1.2x. Book-to-bill over the last 12 months was 1.4x. As our markets evolve, particularly the data centers and technology market, the award sizes have grown quite significantly. In fact, it's not uncommon these days for some of the larger bookings to exceed $100 million. These bookings can come in waves with some of the large projects burning pretty quickly. All of these factors can create some volatility in our quarterly net bookings and book-to-bill ratio which is why we like to also look at the book-to-bill ratio over a 12-month period.

Overall, we feel confident in our ability to continue to grow total backlog as the year progresses, based on what we see in our opportunity pipeline. Our confidence in the future is also reflected in our revised guidance for full year 2026, which Stephen will walk you through shortly.

To support the execution of our growing backlog, we continue to grow and invest in our workforce. Total employee head count is now close to 11,000 at the end of July, including approximately 8,000 skilled technicians and crafts people. As demand for our services continues to grow, we expect to further expand our labor force. Combined with our continuous efforts to drive operational efficiencies, optimize workforce scheduling and stay selective on our project pursuit, these efforts position us to better serve our customers going forward.

Our fabrication footprint is a big part of our efficiency efforts. During the second quarter, we grew our fabrication capacity by about 200,000 square feet, putting our current capacity at 1.5 million square feet, and we expect to add another 100,000 within the next couple of weeks and are looking at opportunities to expand even further.

There are a lot of efficiencies that we can implement in our square footage through the use of advanced tooling, automation, optimization of floor spacing and flexibility with labor shifts, among other levers.

I should also note that the capacity expansion is based on existing demand that we see in our backlog. When adding this incremental capacity with the organic expansion that we have completed over the past year, and the capacity that came with [ Bowers ], we will have grown our fabrication capacity by over 1 million square feet across our key geographies.

Our third-party fabrication demand continues to be concentrated on data center and to a lesser extent, pharmaceutical clients. More recently, we've seen increased demand from semiconductors and memory chip clients.

Before handing the call to Stephen, I want to point out the continued improvement to our net leverage. During our IPO process, we heard from the investment community about the importance of having a strong balance sheet. And as a result, prioritize the entire IPO proceeds towards debt reduction. This allowed us to exit the IPO at 3x net leverage last September.

In just 3 quarters, we've essentially cut our financial leverage in half with pro forma net leverage now standing at 1.5x. This reduction was achieved during a period when Legence completed our largest acquisition in company history, namely [ Bowers ] in the [ DMV ]. And at 1.5x net leverage, we're in a great financial position to pursue other attractive impactful acquisition opportunities that meet our strategic and financial objectives. 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. With that, let me turn the call over to Stephen.

Stephen Butz

Thank you, Jeff, and good morning, everyone. I'll begin with a review of second quarter 2026 results in comparison to second quarter of 2025. Following my review of our historical results, I'll provide a brief update on our current guidance and discuss our balance sheet and liquidity position before turning the call back to Jeff.

Starting with the second quarter of 2026, we generated revenue of $1.262 billion, an increase of $663 million or 111% from the year ago quarter. The [ Bowers ] Group acquisition contributed approximately $300 million of revenue. Excluding [ Bowers ], our revenues grew by nearly 60% year-over-year.

Looking at our latest quarterly revenue growth at the segment level, starting with Engineering & Consulting. Segment revenue increased by 6% to $207 million, which was mostly organic. Program & Project Management service revenues grew by 17% and with particularly strong growth in state and local government as we're working on several large projects in Washington, D.C., South Carolina, Colorado and Minnesota. We also saw strength in data centers and technology. Engineering & Design revenues declined by 4%, with the decrease mainly attributable to soft demand from our sustainability consulting services for mixed-use clients. Primarily large owners of commercial real estate.

Our sustainability consulting business has experienced softer market conditions over the past several quarters, reflecting both broader challenges across the commercial real estate sector and evolving client demand for these services. Because impairment testing reflects our longer-term forecast, but the near term is often underpinned by customer contracts, the downward trend we've seen in backlog for those services was a key consideration and led to our decision to impair goodwill and other intangibles for this business during the second quarter. We still have conviction in the long-term value that our sustainability consulting services can deliver to clients, particularly in an environment with rising energy costs.

Turning now to our larger Installation & Maintenance segment. Segment revenue of $1.055 billion increased by 162% versus the year ago quarter. Over half of the segment's revenue growth was organic, while the remainder was largely attributable to the addition of [ Bowers ]. Installation & Fabrication services drove the majority of the segment growth increasing by 189% year-over-year due to both strong organic growth and again, a meaningful contribution from [ Bowers ].

With respect to the organic growth, data center and technology was a key driver, but our other core markets such as life science and health care and education also saw solid organic growth in the low to mid-teens. And state and local government growth was also very strong, though from a lower base.

Maintenance & service revenue increased by 58% year-over-year. Excluding the impact of [ Bowers ], this service line delivered organic growth of nearly 20%. The high growth rate was spread across essentially all of our end markets with the exception of mixed use.

Turning to reported gross profit. Consolidated gross profit for the second quarter 2026 increased by 71% to approximately $220 million. Similar to our prior quarterly results, Reported gross profit includes stock-based and other compensation expense related to legacy profit interest units were the payment of which is entirely borne by entities outside of Legence Corp. Essentially, the legacy pre-IPO shareholders.

As a reminder, the settlement of legacy profit interest expense does not impact Legence Corp. either in the form of cash outlay or the issuance of additional common shares. Because these profit interest units are marked to market, any significant change to our share price will have a material impact on this expense as it did in the second quarter.

Excluding the impact of profit interest and related expense, adjusted gross profit on a consolidated basis totaled approximately $234 million, an adjusted gross margin was 18.5% for the second quarter 2026 compared to approximately $130 million and 21.8% in the second quarter 2025.

The decrease in adjusted gross margin was primarily driven by the combined impact of a shift in revenue mix to our Installation & Maintenance segment, reflecting the addition of [ Bowers ] and the segment's higher growth rate. as well as somewhat lower adjusted gross margin within the Engineering and Consulting segment.

Looking into margins at the segment level. Second quarter 2026 Engineering & Consulting adjusted gross margin was 31.1%, down from 33.2% in the second quarter 2025. The adjusted gross margin decline largely reflects a revenue mix shift towards the program and project management service line, which accounted for 51% of segment revenue compared to 46% in the year ago quarter.

The Installation & Maintenance segment generated an adjusted gross profit margin of 16.1%, essentially in line with 16.2% reported in the year ago quarter. As you would expect, there are a lot of moving parts that take us to that flat level year-over-year in the I&M segment. But to name a few, we saw a mix shift toward the installation and fabrication service line at the expense of the higher margin maintenance and service line, but our overall mix of fabrication only work within the installation and fabrication service line increased year-over-year.

Turning to SG&A. This expense includes approximately $59 million of stock-based and noncash compensation expense, the vast majority of which, almost $54 million was related to the legacy profit interest that is paid for by entities outside of Legence Corp. Excluding the impact of stock-based compensation expense, as well as approximately $2 million of acquisition and strategic initiative expenses, our adjusted SG&A expense was $87 million, up from $62 million in the year ago quarter. This increase was primarily driven by the addition of [ Bowers ] and higher general head count to support our strong growth.

More importantly, though, adjusted SG&A as a percentage of revenue improved significantly to 6.9%, down from 10.3% in the year ago quarter as we benefit from greater economies of scale.

All in all, we generated adjusted EBITDA of $155 million in the second quarter of 2026, an increase of 114% from second quarter 2025 levels. Adjusted EBITDA margin for the second quarter of 2026 improved by almost 20 basis points to 12.2% when compared to the year ago quarter.

However, given the sequential comparison to first quarter 2026, adjusted EBITDA margins includes [ Bowers ], we believe this is probably a more relevant comparison and yields an almost 90 basis point improvement.

Depreciation and amortization totaled $44 million in the second quarter of 2026, up from $29 million in the year ago quarter, with the increase largely due to the incremental depreciation and amortization, this stemmed from the [ Bowers ] acquisition. Interest expense net of income was $15 million for the second quarter of 2026 and declined by almost $15 million from a year ago, primarily due to lower average debt balance and average interest rates during the year ago -- than the year ago period.

Turning to income tax. Though we reported a pretax loss for the second quarter of 2026, we recorded income tax expense of $11 million due to the nondeductible nature of various items, primarily the legacy profit interest expense. As a result, on a reported basis, the effective tax rate for the quarter isn't all that meaningful. This dynamic is expected to continue through 2026 and into 2027 to some degree.

Excluding the impact of these material nonrecurring and noncash items, the normalized effective tax rate would be closer to the high 20% to low 30% range, which we would expect to gravitate towards over time.

Regarding cash taxes, our current estimate for 2026 is in the mid-$50 million range. This increase -- this is an increase from our prior estimate based on our revised profit outlook in states where our revised profit outlook originates from. Aside from our cash tax payments, we continue to expect to make a [ TRA ] payment of around $8 million to $9 million related to our 2025 operating activity, likely in early 2027. Our [ TRA ] payment related to estimated 2026 activity is expected to total between $25 million and the low $30 million range, and this payment is likely to occur in early 2028.

To the extent we have additional share exchanges, this could slightly reduce our cash tax payments, while increasing our [ TRA ] payments by 85% of the reduction in cash tax. So the net difference for Legence is a 15% reduction in cash outflow.

And switching gears to backlog. We ended June with consolidated backlog and awards of $5.7 billion, up 105% from year ago levels. Compared to the first quarter of 2026, backlog and awards grew by approximately $289 million translating to a book-to-bill for the second quarter of 1.2x. Considering that our bookings tend to fluctuate due to the growing size of our project awards, viewing book-to-bill over a longer time horizon is also important. To that end, our last 12-month book-to-bill ratio was 1.4x.

In either case, these are fairly solid ratios, especially when taking into account our particularly strong quarterly revenue realization.

In terms of our organic growth in backlog and awards, the data center and technology end market remains the primary driver. However, we are seeing healthy growth in state and local government, education and manufacturing clients.

Now turning to our guidance. We are establishing third quarter 2026 guidance for consolidated revenue of between $1.225 billion and $1.275 billion and adjusted EBITDA of between $150 million and $160 million. For full year 2026, we're increasing our revenue guidance to a range of $4.7 billion to $4.8 billion. At the midpoint, this has increased by 13% from our previous guidance range of $4.1 billion to $4.3 billion that we presented during our first quarter report in mid-May.

We're also raising our full year 2026 EBITDA guidance range by about 20% from prior guidance to $565 million to $585 million, up from $470 million to $490 million, again just three months ago.

While part of our full year guidance increases to account for our second quarter outperformance relative to guidance, so it's more of a reflection on our growing backlog, current expectations on project timing and a continuation of the strong execution that we've experienced in recent quarters.

Now just a few additional housekeeping items to support your modeling efforts. Interest expense net of interest income for the second half of the year is expected to average approximately $15 million per quarter. Depreciation and amortization for the third quarter is expected to be similar to second quarter levels of $44 million.

In terms of capital spending for the second half of 2026, we currently expect to spend between $40 million and $45 million. This represents an increase to our prior full year guidance by $15 million to $20 million, largely reflecting additional spending related to incremental fabrication capacity expansion that Jeff discussed earlier, to outfit the new space, including cranes and advanced tooling as well as additional spend on existing facilities.

Our current capital spending forecast remains within 2% of expected revenue for the year, consistent with our historical spending levels for growth and maintenance CapEx.

Now turning to our balance sheet, liquidity and leverage. We ended the second quarter with $292 million of cash, up from $245 million at the end of the first quarter. Total liquidity at was $461 million at quarter end compared to $414 million at the end of the first quarter. Total debt at the end of June was slightly over $1 billion, approximately flat from the end of the first quarter.

Based on pro forma last 12-month EBITDA, which would include pro forma EBITDA from [ Bower ] during the second half of 2025. Our pro forma net leverage ratio is now 1.5x, which is about half the level that we were after our IPO last September.

During the quarter, we further lowered our debt costs with the repricing of our term loan. That repricing lowered our interest cost by 25 basis points at the outset. In early June, we received a credit rating upgrade from Standard & Poor's from B+ to BB- as well as from Moody's from B1 to Ba3. With our credit rating upgrade, the loan pricing will step down by an additional 25 basis points to SOFR plus 175. That concludes my remarks. And now I'll turn the call back to Jeff.

Jeffrey Sprau

Thanks, Stephen. In closing, and before we get to the Q&A, I want to thank our entire team at Legence. Your commitment to safely serving our customers every single day, makes it possible to deliver the incredible results that we are reporting today. Operationally, we continue to experience very robust organic growth across our diverse end markets and service lines. Backlog continues to grow to record levels, and we are leveraging our growing scale and national footprint to deliver higher EBITDA margins. We expect these trends to continue, and I'm really excited for what's next. With that, we'll now open the call up to your questions. Operator?

Operator

[Operator Instructions] our first question comes from Adam Bubes with Goldman Sachs.

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Adam Bubes

I'd like to Nice to see the sequential bookings acceleration in the quarter, I think, to about $1.5 billion of bookings. Can you just give us a sense of the size of the largest projects you're putting in backlog this quarter and make up of data center customers, whether hyperscalers or co-locators and how are you thinking about the bookings trajectory in the balance of the year?

Jeffrey Sprau

Yes. We've had some really strong bookings in the data centers, specifically in some [ TFO ] projects, which follow after base builds. They're ranging in 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.

Adam Bubes

And then can you just update us on a high-level breakdown on your key data center regions today? And to what extent are your crews traveling? And do you expect travel to increase as data center development shift towards more rural markets?

Stephen Butz

Yes. Today, boots on the ground, California, Phoenix, and the DMV are three major locations that we are performing installation work. Our fabrication is shipping all around the country from Salt Lake City to Georgia to Charlotte, North Carolina. So we are covering a large part of the country where we aren't located and have resources to do installation.

Jeffrey Sprau

Yes. And Adam, this is Jeff. We've also, over the last several quarters, began to travel into Texas via our adjacent business in New Mexico and are serving a handful of customers in that region as well.

Operator

Our next question comes from Julien Dumoulin-Smith with Jefferies.

Julien Dumoulin-Smith

Jeff and team, look, if I can ask just to lead off of this, bookings trend, how do you think about '27? You've obviously started -- continued this year fabulously, put up even better results. It looks like the order book is accelerating here quarter-over-quarter. I just want to get a little bit of your commentary. You said it even at the end in your concluding comments that you're seeing an acceleration here. How does this portend into the next year? I just want to make sure I'm hearing you very clearly because obviously, the near-term results are translating very squarely. Just want to hear how it extends here and sort of the duration if maybe if I were to like 0 in 1 aspect of this. Can you pound off these elevated levels, the same confidence?

Jeffrey Sprau

Yes. It's really -- I used the word momentum. The momentum continues to increase, Julien, and it's remarkable. And I think it's a function of course, amazing demand drivers. It's also a function of the fact that these projects are getting bigger. And as you are well aware, only certain companies are positioned to accommodate those larger projects. You need to have lots of employees. You need to have lots of square footage. And most importantly, you have to have the technical expertise and the relationships to be able to capitalize, and so we're just seeing it continuing to go up and to the right.

And I think the fact that we're not a one-trick pony in terms of just doing one service line. We do all service lines, and we do it for many, many customers. And so when you have that sort of, I guess, diversity of capability and diversity of customer and you have an amazing market backdrop that turns into momentum, and that's what we're seeing. I don't know, Steve, if you have anything to add to that?

Stephen Butz

Well said, I think the diversity in our end markets helps to continue that growth as well. And we're seeing -- we're just starting to see Jeff mentioned it, the manufacturing end market and the reshoring that's happening gives us nothing positive outlook.

Julien Dumoulin-Smith

Excellent. If I can zero in a little bit more on this. I mean if you can speak a little bit more specifically the working capital needs as you think about like that, is there maybe an offset here just as the business accelerates. And then related modular capacity expansion, how large does your gas need to be to adequately serve, right? Just if you can kind of speak into like how you accommodate this accelerating outlook as well in terms of the different pieces of this.

Jeffrey Sprau

Yes, Julien, good question. On working capital, as you'll probably recall, at the time we went public, we said that we could drive some improvements in working capital management. And I think you saw that in the first few quarters out of the box where we even generated cash from working capital despite really strong revenue growth. We're probably now much closer to what I'd call normalized levels. This quarter, it was a modest use of cash. And I expect with revenue growth that to continue to be the case generally. It's always hard to call quarter-to-quarter because of the lumpiness of a balance sheet type metric like that. But I think that most of the improvements have already been driven through.

That said, where we're working on customized fabrication modules, we tend to generate higher levels of prepayment than we do for our other services. So to the extent that continues to increase in our mix, that could be a positive.

Stephen Butz

And then from a fabrication square footage, Julien, we're sitting at 1.5 million square feet today. We have capacity for growth with that number now. And we can pull several levers within that footprint, right? We can add multiple shifts, more days on manpower load.

But we will continue to grow. We look to add about another 100,000 square feet here in the coming weeks to that number. And we'll monitor our incoming requests and backlog and size appropriately for work to come.

Operator

Our next question comes from Chad Dillard with Bernstein.

Charles Albert Dillard

I was hoping you could talk about your gross margins in backlog. What are they today? And can you bridge it to the gross margins that you have in your current P&L?

Stephen Butz

Yes. Our gross margins and backlog are generally similar to what our current recent realizations are. We haven't seen a dramatic change in pricing across the service lines versus, say, what we would have reported this quarter or even last if that answers your question.

Of course, there's always changes in mix, like what's in the backlog but for the underlying services and service lines, similar levels of margin.

Charles Albert Dillard

Okay. Yes. That's helpful. And so as you look forward over the next couple of years, what share of your revenues do you think will be on like the modular and prefab side? And how do you put that in the context of your margin potential for just the broader business?

Stephen Butz

Yes. Great question. We did see, as you recall, really a ramp in our mix of [ FAM ] only to work, particularly in the second and third, fourth quarter of 2025. It's been at a relatively similar percentage the last 3 quarters. When we think about our overall I&M revenue, it's been in the low 20% range. the last 3 quarters now. And while we're experiencing really nice growth in that fab only work, we're also winning large installation jobs. So both have been growing at a pretty similar rate. I'll hand it to Jeff or Steve, in terms of the outlook for both of those, but...

Jeffrey Sprau

Yes, from a manufacturing -- third-party manufacturing, solid outlook, lots of inbound stuff. And as we continue to see large projects built in more rural areas where there's just not a lot of resources there, can we expect to see that continue.

And to Steven's point, the large installation projects that are inbound and continuing to get booked and run into our pipeline. We just see a solid outlook there.

Operator

Our next question comes from Brian Brophy with Stifel.

Brian Brophy

Just continuing the conversation on some of the regional areas where you have data center exposure, are you experiencing any notable difference in demand trends by region and particularly curious on [ DMV ] relative to other areas?

Jeffrey Sprau

Yes, I'll start, Brian, and I'll hand it over to Steve. I think any changes that we've seen it probably happened a couple of quarters ago when we started to see data centers get placed in more rural parts of the country, call it, middle America, which really changed the ship-to address on our fabrication work. And so now we are shipping to the Iowa of the world in the North Carolina of the world and the Ohios of the world.

That we obviously didn't see a couple of years ago. And so I think that's a notable difference. Now within sort of the sort of primary markets, they are still the primary markets. The [ DMV ] is still data center ally. Arizona and, I would say, the broader Southwest is still humungous. And obviously, over the last probably 12-plus months, Texas is sort of broken into the top 3.

Stephen Butz

Yes. Well said. And I think to Jeff's point, [ DMV ] continues to be strong in the Phoenix market and that Texas market that we have moved into and are shipping our manufactured product into Texas been a strong growth pattern for us.

Brian Brophy

Appreciate it. That's very helpful. And then just maybe touching on the demand environment you're seeing on the semi fab side. Did you book anything notable in the quarter? And just general thoughts on the outlook there.

Stephen Butz

Yes. Semiconductor is ramping and getting stronger. We're seeing some incoming demand for [ OSM ] manufactured product for our semiconductor clients. We did grow our revenue in that end market as well in the quarter, and we are booking projects to continue that growth.

Operator

Our next question comes from Joseph Osha with Guggenheim Partners.

Joseph Osha

I was going to ask about semiconductors as well. I want to drill down on that a bit. If you look at Intel and TSMC down in Arizona, Micron up in New York I mean the numbers are pretty substantial with perhaps the floor space is not quite the same. So I guess I'm curious, looking a few years out, can we imagine this segment maybe becoming as large view as data centers? Or am I being overly optimistic there? And then I have a follow-up.

Jeffrey Sprau

Yes. And Steve alluded to the fact that we did have nice revenue growth in semiconductors, the contribution this quarter, I mean it was stellar, over 50% growth. That said, that, of course, even pales to what we're seeing in the data center space.

Over time, though, I mean, the outlook is certainly good for semiconductors, but tough though.

Stephen Butz

Yes. I would say, and you hit on some of the key players that are growing and building out right now, and we will target them as Intel's one of our main clients in the Bay Area. In other places, the TSMC Phoenix market is super competitive in that region right there for the semiconductor stuff, but we are seeing inbounds from all others that are in memory and chip production.

Jeffrey Sprau

Yes. And just to pile on here, characteristics required for success in the semiconductor and the memory space. are the same characteristics you need for success in data centers. They're complex systems. They're really, really big. They're custom, but they're high volume, and you have to be in that space. And we grew up in the semiconductor space. We grew up in the biotech space and we grow up in the data center space. So we love to see those announcements because it's going to fit right into our wheelhouse.

Joseph Osha

Excellent. And then just as a follow-up, we're starting to see some conversations following the [ 232 ] ruling on larger scale investments in -- still wafer and ingot capacity onshore in the U.S. I mean, notably that Tesla announcement the other day. I'm curious, is that a market that is of interest to you all?

Stephen Butz

I'd say, Joe, that's certainly, we're interested in our large clients and what drives their demand. But I would say there's an outsized reliance upon our attractiveness to that sort of, I guess, evolution or volatility for lack of a better term.

Operator

Our next question comes from Sabahat Khan with RBC Capital Markets.

Sabahat Khan

I just wanted to talk a little bit about the sort of the sort of non-semis, nondata center and manufacturing side that you called out more on the industrial side. Can you maybe just talk about some of the silos where you are seeing some of that reshoring activity. There are some folks out there saying they're not really seeing it in their business lines. Maybe if you can talk about which end markets you're seeing that in kind of the opportunity set are you doing some of the same type of work you're providing some of the technology customers? Just a little bit more color on that opportunity.

Stephen Butz

Yes. So I mean we're reshoring, I think, is still kind of in early stages, and we expect to see that grow over coming years. Currently, places like Tesla, SpaceX for us are great clients, and we're seeing growth with them. They're going to continue to build and inbound. We've got a great engineering relationship with them as well as installation. So from both sides of our business, we'll benefit from that.

Jeffrey Sprau

Yes. And it's interesting from a terminology perspective, obviously, GLP-1 drugs on the pharma side are huge. Where we have some great clients that we're helping them out in that regard. Now is that reshoring or onshoring or just starting from scratch, I'm not sure. But again, those same characteristics, highly complex. You need engineering chops to be able to pull it off. You need the relationships. You need to have a resume, you got to prove that you can do it, and so we, as Steve mentioned, baseball season, it feels early innings on the resharing perspective from our view.

Sabahat Khan

Great. And then just in terms of my follow-up, it looks like sort of the $5.6 billion, $7 billion number here is about 60% in the data center and technology space. round number is almost double the mix of last year. Do you have sort of a threshold in mind for the right mix of this business or a lot of opportunities there you'll capitalize on it and go from there? Just trying to think about how you think about your go-to-market strategy. Are you still active with pursuing these customers as the mix gets larger, that's fine. Just how do you think about the mix of end markets across your business?

Jeffrey Sprau

Yes, I'll start, and then I'll hand it over to Stephen. We've always wanted this growth to be an and versus an or. And I mean by that, we want to be able to satisfy demand from our customers, but not at the exclusion of our amazing customers in these other markets. And so we want it to be additive.

Now in a perfect world, I think it'd be nice and balanced. But so long as we are keeping our customers happy and we're not missing out or turning down opportunities in other markets that maybe are just sort of clicking along in high single digits. We really want it to be both. And if to me, if data centers are 60% or 65% or 55 or 70 doesn't matter to lines that we feel good about handling all of the opportunities.

Now if we have to start making decisions then that's a different story. But I hope we never get to that position. I don't know, Steve, if you.

Stephen Butz

Yes. Great point, Jeff. It's -- we don't want to turn away business from many of our good clients no matter the end market. And so that's going to change our mix over time. The other area where we can change our mix over time is through M&A.

Now as you know, we're focused on high-end contractors and of course, on the engineering side as well. but those that focus on mission-critical facilities. So many of those are also going to have some data center exposure. But there certainly may be opportunities to add to our mix with other high-quality businesses that maybe are a little bit more skewed towards some of our other mission-critical end markets. So that's something that we'll continue to evaluate over time.

Operator

Our next question comes from Michael Dudas with Vertical Research Partners.

Michael Dudas

Jeff, I get you a sense of your customer -- obviously, your customers across the board seem to be quite active. How are you looking at allocating capacity time, your current labor force? How does that look relative to what you have to execute out of your backlog next 3 to 5 quarters. And are your clients looking to secure your services a much greater time into the future, trying to secure opportunities where maybe even a couple of years away for -- they're going to need what you guys do.

Jeffrey Sprau

Yes. Great question, Michael, and I'll start and then I'll hand it over to Steve. And you called it. The two levers that we look at after we get inbound demand, which thankfully has continued to be up and to the right is do we have the labor to accommodate it both on the engineering side and the implementation of the boots on the round side? And number two, do we have the right square footage on the fab side. And those obviously work together. The more that we can do in the factory, all things being equal, you can do factor work with fewer people. And so it reduces the, I guess, pressure from a labor perspective.

That said, and Steve correct me if I'm wrong, we are not seeing labor constraints to the extent that we would have to either push out a project or anything like that. And the fabrication square footage is an interesting capacity challenge, and I'll hand it to Steve to walk through how we think through that.

Stephen Butz

Yes, you're right, Jeff. Though there is tight labor around the country. We've been very successful at recruiting and bringing in people as we build out that capacity and improve our fabrication footprint, we're doing to the latest in technologies and automation and skilled labor wants to come work on that stuff, right? So we've been able to track the labor we need. We haven't run into labor shortages. We're always mindful of it and looking and planning ahead.

And then from a capacity standpoint on our manufacturing. And when we talk a lot about our OSM third-party manufacturing even our installation and everything, we have a high priority on prefabrication, right? Take as much as we can out of the field, put it into our shops, where we're much more efficient. You need less headcount, it's safer. There's a ton of positives to it. And we can adjust by running multiple shifts.

Today, we run two shifts in a lot of our facilities and our second shifts are just light shifts to keep things moving for the next day. We can ramp those up and create capacity within our existing footprint to equal demand.

Jeffrey Sprau

And the thing I probably is underappreciated. We really benefit from being a unionized workforce. It's a national labor force for us that we can pull from and people can travel on a moment's notice and what's beautiful about that, there are several great things about that, one of which is you know exactly you're getting a trained, safe, certified employee and you're pulling from all parts of the country. And so if there's a soft part in one area of the country, we get travelers that come and they go to where the work is. And certainly, one of the ways that you can become a sort of preferred employer is when you have a huge backlog. And when you have amazing customers and you're going to have challenging technologies and cutting-edge technologies and you're safe.

Those are the criteria that folks think about when they decide if they want to go work on a job in, say, Texas or say, Idaho for instance.

Michael Dudas

And just a follow-up. What about on the client side, do they -- are they looking to lock you in longer into the future? Or how are those discussions or how you're allocating those resources to some of your -- you try to keep it balanced, as you mentioned in the response to a prior question of throughout all your customers in the market.

Jeffrey Sprau

It's a great question. And we are having those conversations every day with our clients. And we are seeing our backlog stretch into further out periods than we had historically because they are aware too, right? They need the resources to get their builds completed.

So yes, we are seeing an incoming demand for what does it look like '27 and beyond. And so it continues to be a positive.

Stephen Butz

Yes. And I don't have data to support it. But generally speaking, it's driving ideally earlier decision-making. And we're very -- we're a humble company and we basically tell our clients that we need to know because we need to lock in on whether it's designs or head count or fabrication square footage.

And I think they realize that. And so the earlier that we get engaged and start having those discussions, the better. That's, I think, one of the benefits of the fact that we have engineering as well as installation. It's earlier client involvement and in mostly any industry earlier you're talking to a customer, the better. And the more you understand the customer, you understand the decision-making process, you understand the competition, you understand their pain points, all that stuff earlier than better for us. And I think people are realizing -- and again, I don't know that I have any anything other than anecdotes that since this is such a huge ramp, the earlier we talk, the better.

Operator

Our next question comes from Oliver Davies with Rothschild & Co Redburn.

Oliver Davies

Just two for me. I mean, firstly, could you just provide a bit of color on the margin difference between installation and third-party fabrication sales. And then secondly, I guess, you mentioned larger awards, but speed to market is key. So just any [indiscernible] on the sort of conversion of the backlog, whether that's materially changed over the past 6 months or so?

Jeffrey Sprau

Yes. On the first one, of course, we don't disclose the differences of the sub levels of services versus how we disaggregate revenue. But I think what we get happy to say is that when we're completing a full installation job, those margins, the revenue opportunity is much, much bigger than just the fab only. There's flow-through equipment, sometimes subcontractor costs. And so our margins are lower than when we're essentially manufacture and customized products, we do get a nicely higher margin on those. But -- and so that should be a positive to our margins over time as we continue to do more fab only work -- but then I'll hand it to Steve for the second half of the...

Stephen Butz

Yes. On the acceleration of the schedules and 1 of these projects, we are seeing acceleration on every end market we're in. There is a race to the finish line, especially in the data center world and the semiconductor world that we're in, they want to ramp their projects and get them done right? They're all competing with their peers, just like we are. And so we are seeing those pull in. We're seeing shorter time frames. And again, our ability to leverage the 1.5 million square feet of fabrication capacity allows us to work with our clients and pull those projects in on a timely matter for them.

Operator

Our next question comes from [ Chris Sung ] with Wolf Research. Just 1 question.

Unknown Analyst

Stephen, you mentioned project timing, continued strong execution as drivers of the raise. And I think, Steve, you just talked about the acceleration of projects ramping faster. Can you just separate how much of the increase in guidance this year is like revenue being pulled for versus incremental work that wasn't necessarily contemplated last quarter?

Stephen Butz

Yes. It's hard to provide a split on that. I think it's a combination -- we -- I think the pull forward, we certainly benefited from that in a sense in the second quarter versus our guidance. When I say pull forward, we're just executing on some of -- particularly the fab projects quicker than originally anticipated. So there's some of that in our guidance, but also just -- we've got a strong backlog coverage on our second half results. And so that was part of our overall guidance rates as well.

Operator

And our final question comes from Derek Soderberg with Cantor Fitzgerald.

Derek Soderberg

Yes. Just wanted to dig into the Engineering and Consulting segment. I think gross margins there were down a little bit. I was wondering if that was more labor costs or project mix. And then just as a follow-up on that, I'm curious if the E&C margins are different for work that's sort of attached to larger projects versus smaller projects.

Jeffrey Sprau

Yes, I'll take the first part of that. Our margins, again, the difference in the year-over-year margin was driven by a mix. We had a larger contribution from our program in project management, which includes performance contracting, that are higher-margin engineering and design service line. And that's really what accounted for the difference year-over-year.

And then just more broadly, as I look at the -- think about the margins in that segment, we had 1 quarter that was an outlier quarter where we had really high margins over the past 2 years. But otherwise, over the last 8 quarters, we've generally been in the 31% to 33% range and the difference driven by mix, mix shifts.

The one area, again, that we talked about, sustainability consulting, where we've seen a little bit of degradation as we discussed. That's sort of plus or minus 10% of that overall engineering and design service line. So very small piece. Overall, though, the margins for the underlying services have been consistent essentially within that period other than that, and the changes have been driven by mix shifts.

Stephen Butz

Yes. And I would just piggyback on that. We haven't seen, I don't think, a material difference in engineering fees by vertical market, whether the engineering fee for a data center versus a hospital versus university versus K-12, I think they're similar. I'm sure they're not identical, but nothing that would sort of move the needle from our perspective.

Operator

Thank you. This concludes the question-and-answer session. I would now like to turn it back to Son Vann for closing remarks.

Son Vann

Thank you, Daniel, and thank you, everyone, for attending our second quarter '26 earnings call. A recording of this call will be available on our website in a few hours. And we look forward to updating you again in our next earnings call until then. Have a great week. Talk to you soon.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.