AAON (AAON) investor relations material

Executive summary

• Net sales for Q3 2025 rose 17.4% year-over-year to $384.2 million, led by BASX-branded growth and robust data center demand, while AAON Coil Products nearly doubled sales and AAON Oklahoma saw modest gains.

• Gross margin improved 120 bps sequentially to 27.8%, though down from 34.9% a year ago due to ERP inefficiencies, tariffs, and Memphis cost underabsorption.

• Backlog reached a record $1.32 billion, up 103.8% year-over-year and 18.1% sequentially, with BASX-branded backlog up 119.5% year-over-year, driven by data center liquid cooling solutions.

• Diluted EPS was $0.37, down from $0.63 a year ago but up 94.7% sequentially; net income for Q3 2025 was $30.8 million.

• Bookings for national accounts surged 96% in Q3 and 92% year-to-date, now 35% of total bookings.

Financial highlights

• Q3 2025 net sales: $384.2 million (+17.4% YoY); gross profit: $106.9 million (27.8% margin); net income: $30.8 million; diluted EPS: $0.37.

• BASX-branded sales grew 95.8% year-over-year, offsetting a 1.5% decline in AAON-branded sales.

• Adjusted EBITDA margin was 16.5% in Q3 2025, down from 25.3% a year ago but up sequentially.

• Leverage ratio at quarter-end was 1.73; debt increased to $360.1 million to support working capital and capex.

• Cash, cash equivalents, and restricted cash totaled $2.3 million as of September 30, 2025.

Outlook and guidance

• FY25 sales growth guidance raised to mid-teens percentage, with gross margin expected between 28.0% and 28.5%.

• Non-GAAP adjusted SG&A as a percent of sales projected at 16.5%–17.0%.

• BASX brand expected to deliver meaningful growth in 2026 as Memphis facility ramps up.

• 2025 capital expenditures expected at $180 million, with most deferred to 2026.

• Estimated annual 2025 effective tax rate (excluding discrete items) is 24.1%.