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Variable Interest Entities and Equity Method Investments
 12 Months Ended
Dec. 31, 2025
Equity Method Investments and Joint Ventures [Abstract]  
Variable Interest Entities and Equity Method Investments Variable Interest Entities and Equity Method Investments
The Company holds interests in a number of joint ventures and other entities, some of which are VIEs. The Company consolidates a VIE when it is the primary beneficiary. For unconsolidated joint ventures, the Company accounts for its investment using the equity method.
Consolidated Variable Interest Entities
In connection with the Corporate Reorganization, Legence Corp. became the sole managing member of Legence Holdings, in which Legence Corp. operates and controls all of the business and affairs of Legence Holdings, and has the obligation to
absorb losses and receive benefits from Legence Holdings. Accordingly, Legence Holdings is evaluated under the guidance for limited partnerships and similar entities in ASC 810, Consolidation, and is considered a variable interest entity. Legence Corp. has both (i) the power to direct the activities that most significantly impact Legence Holdings’ economic performance and (ii) the right to receive benefits or the obligation to absorb losses that could be significant to Legence Holdings. Accordingly, Legence Corp. is the primary beneficiary and consolidates Legence Holdings in its consolidated financial statements. The assets of Legence Holdings can only be used to settle its own obligations. Refer to “Note 14—Noncontrolling Interests.”
The Company has various contractual relationships with two professional corporations ("PCs") that provide engineering and design services in New York and California. The Company does not own any equity interest in the PCs but provides most of the administrative functions, personnel and other resources required for the PCs to fulfill contracts with their customers. The Company receives fees from the PCs for these services. The Company is the primary beneficiary of the PCs. As such, the Company consolidates the PCs within the Consolidated Financial Statements.
The table below shows the carrying amounts and classification of the PCs' assets and liabilities included on the Company's Consolidated Balance Sheets, excluding intercompany balances (in thousands):
December 31,
20252024
Cash$5,019 $11,391 
Accounts receivable, net12,868 25,744 
Contract assets, net3,699 2,475 
Total current assets21,586 39,610 
Other assets224 467 
Total assets$21,810 $40,077 
Accrued and other current liabilities$2,359 $1,448 
Contract liabilities7,012 4,471 
Total liabilities$9,371 $5,919 
The assets of the PCs can only be used to settle their own obligations. The Company and the PCs have a promissory note agreement that allows each PC to borrow up to $1.0 million from the Company; however, no amounts have been borrowed. The Company's Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements of Cash Flows, net of intercompany eliminations, are impacted by the performance of the PCs. The Company's Consolidated Financial Statements show noncontrolling interests, which represent the equity owned by the PCs' owner.
Equity Method Investments
The Company has investments in, and transactions with, a number of unconsolidated joint ventures. The investments and earnings are immaterial. In addition, the Company recognized related party revenue from subcontracts with these joint ventures of $2.6 million and $5.7 million for the years ended December 31, 2025 and 2024, respectively. These amounts are included in Revenue on the Consolidated Statements of Operations.