AAON earnings call summary

Prepared Highlights

• Q4 2025 net sales increased 42.5% year-over-year to $424.2M, driven by 138.8% Basics branded sales growth and 9.5% AAON branded sales growth (CFO).
• Basics branded sales in 2025 grew 143% to $548M; Basics backlog grew 141% to $1.3B (CEO).
• AAON branded sales in 2025 declined 8% vs. a 16% industry volume decline; AAON branded bookings grew ~12% (CEO).
• Q4 gross margin was 25.9% (down from 26.1% a year ago) due to unabsorbed fixed costs at the new Memphis facility (CFO).
• Q4 non-GAAP adjusted EBITDA margin was 15.2% (down from 15.8% a year ago); diluted EPS was $0.39 (up 30% YoY) (CFO).
• Basics segment Q4 sales grew 109.1% YoY to $106.1M; segment gross margin improved to 27.1% from 18.8% (CFO).
• AAON Oklahoma segment Q4 sales +11.1% YoY to $215.5M; gross margin 27.5% (down from 30.7%) due to $6.4M overhead from Memphis (CFO).
• AAON Coil Products segment Q4 sales +93.6% YoY to $49.6M; gross margin 21.3% (up from 16.1% YoY) (CFO).
• 2025 CapEx decreased 3.9% to $204.9M; operating cash flow was $0.5M vs. $192.5M in 2024 (CFO).
• Basics book-to-bill for 2025 was 2.4; Basics backlog at Q4 end was $1.3B (up 45% sequentially, 141% YoY) (CEO).
• AAON branded backlog at Q4 end up 61% YoY and 24% sequentially (CEO).
• Memphis facility achieved profitability for the first time in Q4 2025 (CEO).

Official Guidance

• FY 2026 sales growth: 18%–20% (CEO).
• FY 2026 gross margin: 29%–31% (CEO).
• FY 2026 SG&A as % of sales: ~16% (CEO).
• FY 2026 depreciation & amortization: $95M–$100M (CEO).
• FY 2026 planned CapEx: $190M (CFO).
• No quarterly guidance provided.

Mgmt Quotes

1. “The data center market continues to represent our most robust and dynamic growth opportunity.” (CEO)
2. “While incremental margins remain below our long-term target, they are improving and reflect temporary pressures expected with ramping a new facility.” (CEO)
3. “Basics remains the company’s key growth driver, fueled by exceptional demand from the data center market and our differentiated custom design solutions.” (CEO)
4. “2025 was a year of meaningful structural change and strategic investment… As we move into 2026, our focus shifts squarely to execution.” (CEO)
5. “We do expect cash flows to improve through increased earnings, supply chain improvements, and increased billings and conversion of contract assets.” (CFO)

Prepared Metrics