What Legence Corp. told the SEC could break it.

A meaningful share of Legence's energy-efficiency and decarbonization services demand is driven by government incentives: its clients benefit from federal legislation — the Inflation Reduction Act of 2022, the Infrastructure Investment and Jobs Act, and the CHIPS Act of 2022 — plus state/local tax credits, grants, subsidies and rebates for new facilities and building energy-efficiency upgrades. Curtailment or repeal of these incentives (e.g., the OBBBA's rollback of IRA clean-energy credits) would reduce client investment in the energy-efficiency and electrification projects Legence performs. A specific demand-side policy exposure tied to clean-energy/infrastructure incentives.

“they may benefit from federal legislation, including the Inflation Reduction Act of 2022, the Infrastructure Investment and Jobs Act, the CHIPS Act of 2022 and state and local legislation provided for tax credits, grants, subsidies and rebates to businesses”

Legence frequently purchases equipment (HVAC, mechanical, electrical) that it installs in clients' buildings, often under fixed-price contracts, and passes through or absorbs the cost. It flags that changes in U.S. trade policy — including significant 2025 tariff actions — may have a material adverse impact, and that inflation/trade wars can raise the cost of labor and other inputs. Because many contracts are fixed-price, tariff-driven equipment-cost increases that cannot be passed through compress project margins. A specific tariff/trade-policy cost exposure on a fixed-price building-systems contractor.

“Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business, financial condition and results of operations.”

Although no single customer is more than 10% of revenue, Legence's growth is heavily concentrated in the data-center & technology end market: higher demand from data-center/technology clients drove roughly 40% of the increase in its Installation & Fabrication service-line revenue and was the primary growth driver across its segments (alongside life sciences/healthcare). This ties a large share of its growth to the AI/hyperscaler data-center construction cycle. A slowdown or pause in data-center capex (overbuild, power constraints, financing/rate shifts) would disproportionately reduce Legence's backlog and revenue growth. A real end-market (data-center capex) concentration.

“Higher demand from data centers & technology clients accounted for approximately 40% of the increase in Installation & Fabrication service line revenue.”