AAON (AAON) Q4 2025 earnings summary

Executive summary

• Achieved record sales and backlog in 2025, driven by robust demand for data center cooling solutions and market share gains for both AAON- and BASX-branded equipment.

• BASX branded sales surged 143% to $548 million, with backlog up 141% to $1.3 billion and a book-to-bill ratio of 2.4; AAON branded sales declined 8% despite a 16% industry volume drop, indicating market share gains.

• Significant investments in leadership, manufacturing capacity, supply chain, and IT infrastructure, including ERP rollout, to support future growth.

• Expanded manufacturing footprint by over 25% in 18 months, with Memphis facility achieving profitability for the first time in Q4 and doubling BASX data center equipment capacity.

• Introduced industry-first rooftop units with Cold Climate Heat Pumps and advanced ERP upgrades to support scalability.

Financial highlights

• Q4 2025 net sales rose 42.5% year-over-year to $424.2 million, driven by 138.8% BASX sales growth and 9.5% AAON sales growth.

• Full-year net sales were $1.44 billion, up 20.1%; Q4 gross margin was 25.9%, down from 26.1% a year ago, mainly due to unabsorbed fixed costs at Memphis.

• Adjusted EBITDA margin for Q4 was 15.2% (down from 15.8%); diluted EPS was $0.39, up 30% year-over-year; full-year adjusted EBITDA was $231.3 million.

• Cash and equivalents at year-end were $1.2 million; debt at $398.3 million; leverage ratio 1.77.

• 2025 operating cash flow was $0.5 million (vs. $192.5 million in 2024); CapEx down 3.9% to $204.9 million.

Outlook and guidance

• 2026 sales growth expected at 18–20% with gross margin of 29–31%; SG&A to be about 16% of sales; D&A forecasted at $95–$100 million; CapEx planned at $190 million.

• Margin progression to be uneven by quarter as capacity ramps and product mix normalizes.

• BASX revenue growth for 2026 guided at about half of 2025’s rate, with AAON segment expected to drive meaningful growth.

• Commercial HVAC market expected to remain flat in 2026; growth driven by product innovation and national account strategy.