Aaon, Inc. · NASDAQ:AAON
Aaon — DA Davidson September 2025
39 slides from Aaon's conference presentation, Sep 18, 2025
Slide 1: Investor Presentation
Investor Presentation September 18, 2025
Slide 2: Forward-looking statements and other references
Forward-looking statements and other references Certain statements and information set forth in this presentation contains “forward-looking statements” and “forward-looking information” within the meaning of the Private Securities Litigation Reform Act of 1995. Except for statements of historical fa
Slide 3: Driving value: The AAON investment thesis
Driving value 2027 Targets The AAON 12.5%+ 3-year organic sales CAGR investment thesis 32%-35% gross margin Premium offering Market leadership & differentiation & innovation Our rooftop business delivers Industry leader providing premium quality and a cutting-edge, customized compelling value propos
Slide 4: Our strategic pillars
Our strategic pillars 01 02 03 04 05 Winning with Optimizing the Capitalize on the Capitalize on Be a best in superior organization to value proposition industry leading class operator and engineering, drive results and of our mission innovation and make strategic innovation, empower critical soluti
Slide 5: AAON: an overview
AAON: an overview AAON Coil International Products AAON Sales by Sales by Sales by branded segment region BASX products BASX AAON U.S. Oklahoma $1.1B 28.7% 18.1% 22.5% $1.47 11.9% Order backlog1 Gross margin EBITDA margin CapEx and R&D as EPS ROIC a percent of sales 1 Adjusted for replacement purcha
Slide 6: Future structure: Leveraging two strong brands
Future structure: Leveraging two strong brands Non-res HVAC Data centers, clean rooms, equipment commercial/industrial Innovation Air handling, liquid Packaged rooftop Premium cooling, cleanroom units and split quality and environments 70% customer 30% of Sales of Sales support Semi-custom Fully cus
Slide 7: What makes BASX special?
What makes BASX special? Provides solutions Full High quality Premier Superior not just products customization manufacturing customer care customer support BASX is the only player BASX offers a fully The manufacturing is of A foundational principle BASX focuses greatly on in the industry that custom
Slide 8: Data centers are a huge and growing market
Data centers are a huge and growing market Total North America data Total cooling equipment & BASX-specific thermal center construction infrastructure management equipment put in place in 2024¹ TAM TAM ~20% ~40% TAM ~7% ~$35B² $5-$7B³ $2.5-$3.0B³ ¹ The total cost of constructing data centers in 2024
Slide 9: Data center TAM is shifting to liquid cooling
Data center TAM is shifting to liquid cooling BASX-specific thermal Liquid cooling Air-cooled management equipment 40% Thermal TAM 85% management 15% By 2028 ~7% equipment 60% $2.5-$3.0B¹ To date, a vast majority of TAM By 2028 we anticipate the is cloud compute data centers cooled split to be 60% l
Slide 10: Data center pipeline underpins growth
Data center pipeline underpins growth In 2023, compute power of In 2024, it was ~4GW and currently, data centers put-in-place in there is a pipeline of projects in the industry was ~2GW development totaling 100-150 GWs Data center pipeline from a macro Installed capacity (GW) perspective is 100-150
Slide 11: BASX product offerings provide end-to-end solution for data centers
BASX product offerings provide end-to-end solution for data centers Computer Room Coolant Air Handler Distribution Unit Overhead Air Handling Fan Coil Units opportunity is ~$1.0B - $1.5B per GW1 Free Cooling Heat Rejection Chiller Fan Coil Wall 1 Note: Opportunity is based on full utilization of man
Slide 12: Leading in innovation with both air-side cooling
Air-side data center cooling Highly engineered, custom designed capabilities a proven success factor Nearly all of BASX-branded sales growth (3-year trailing sales CAGR of 40%, including 35% in 2024) has been driven by providing custom air-side cooling solutions for cloud compute DCs Leading in inno
Slide 13: …And liquid cooling data center solutions
Liquid data center cooling Being on the cutting edge of liquid cooling is extremely advantageous in a rapidly evolving market BASX is a leading provider as shown by recent order wins …And liquid Liquid cooling is incremental growth to air-side cooling, as it is utilized in AI data centers cooling da
Slide 14: Building capacity for efficient growth
Building capacity for efficient growth In our view, the data center HVAC supply Added capacity: chain will remain tight for years 2022-2024 Prioritizing aggressive growth Three largest in an efficient way peers combined ~1M sq ft total incremental manufacturing space • Designing our first ideally ar
Slide 15: Memphis doubles BASX's production capacity
Memphis doubles BASX’s production capacity Facility with 787,000 sq ft, of which 490,000 sq ft is dedicated to BASX DC equipment Production to start in Q4 2025, ramp up in 2026 Flexibility with 297,000 sq ft of undedicated space: More data center equipment New solutions/products 15
Slide 16: What makes the AAON brand special?
Innovation and engineering Leading in innovation and engineering is at AAON's core, and it enables us to fully support all our customers Semi-custom engineering & manufacturing What makes A proprietary, hard-to-replicate process that seamlessly integrates deep customization within a highly automated
Slide 17: Our competitive advantage: The unique integrated process
Our competitive advantage: The unique integrated process 1 2 3 4 Sophisticated Most capable R&D Electronically Efficient engineering lab in the industry accepting many manufacturing department for configurations through automation design of equipment and soft tooling High barriers to entry with a mo
Slide 18: AAON equipment versus the alternative
AAON equipment versus the alternative Feature Low-quality products AAON’s custom products Mass production, Soft-tooled, highly Production standardized process automated processes Premium, reflects Price Affordable, budget-friendly higher quality Not as durable, shorter Durable and long-lasting, with
Slide 19: Products to meet a range of customer needs
Products to meet a range of customer needs Packaged Outdoor Packaged Rooftop Rooftop Air Rooftop Unit Handling Unit Unit 2-6 tons 800-2400 cfm 9-15 tons Vertical Indoor Packaged Condensing Air Handling Rooftop Units Unit Unit 2-60 tons 450-10,000 16-30 tons cfm Horizontal Evaporative Packaged Indoor
Slide 20: Offering a solutions-based sales channel model
Offering a solutions- Sales reps use AAON equipment based sales channel to customize the ideal solution model AAON sells through an independently owned sales channel, with one representative firm in every region of North America Reps utilize a line card of 20-30 complimentary OEMs that help provide
Slide 21: Building strength in our go-to-market strategy
Building strength in our go-to-market strategy Leveraging the Focus on parts Providing resources Investing marketing function set and service to the sales channel in sales up in 2022 AAON selling parts and Customer Exploration Center Account management Marketing budget up 10x supporting our sales ch
Slide 22: Total addressable market and share gain opportunity
Total addressable market 6% and share gain opportunity¹ market share and growing Nonresidential HVAC market mid-single $14.5B² The addressable market of AAON’s commercial HVAC products, including digits rooftop units, air handlers and 3-year sales target condensing units, is ~16x the size of our roo
Slide 23: Favorable secular trends
Favorable secular trends Total cost of Decarbonization Energy efficiency Government regulations ownership focus Our customized, highly automated platform These secular trends are driving up the cost allows us to adapt to these secular trends of manufacturing across the industry much much more effici
Slide 24: Continuously becoming more competitive
Continuously becoming more competitive As the price premium narrows, we expand margins and increase our market share Prior to 2020, In the last few years, In 2025, AAON’s average price premium we are narrowing the the company was able to bring relative to the alternative price premium further, that
Slide 25: Operationally, we've never been stronger
Operationally, we’ve never been stronger Productivity gains and scaling the operations efficiently AAON Oklahoma gross margin transformed 30.5% 35.2% Continuously finding ways to increase productivity and 2020 throughput 2024 At the Tulsa facility, we could increase production volumes by ~40% with m
Slide 26: Continuing to innovate with Alpha Class and heat pumps
Continuing to innovate with Alpha Class and heat pumps Alpha Class 2023 is a product category of the AAON’s Alpha Class were the only heat pumps operable ~15% AAON brand that includes below 30OF, and were operable all the way down to 0OF of rooftop commercial HVAC sales¹ equipment fueled by a fully
Slide 27: National account opportunity
National accounts In the last were not a big focus 20 years National Began to target account national account opportunities In early In2024 Early opportunity 2024 Built a pipeline of opportunity with annualized sales of several hundred million dollars Last 18 months A substantial percentage of Landi
Slide 28: Q2 2025 recap
Q2 2025 recap $311.6M 26.6% $46.6M $0.22 $1.1B Sales Gross Profit Margin Non-GAAP Adj. Non-GAAP Adj. Adjusted Backlog** EBITDA* Diluted EPS* -0.6% Y/Y -950 bps Y/Y -43.1% Y/Y -64.5% Y/Y +71.9% Y/Y -20 bps Q/Q +8.8% Q/Q Q2 sales and earnings Strong backlog will result in a impacted by ERP strong reco
Slide 29: New ERP implementation impacted recent results
New ERP implementation impacted recent results 2022 – 2024 April 2025 May 2025 June 2025 July 2025 August 2025 AAON updates Longview goes live investors with New guide for 2025 To support future Coil production at with new SAP system Coil production at preliminary details at accounts for Q2 growth,
Slide 30: Update on ERP roll-out
Update on ERP roll-out Key takeaways Intentionally began roll-out in Longview given the site’s scale and production of Background Rationale Principles AAON and BASX-branded products, including coils Legacy ERP system was Improves visibility in Strategically rolling-out in not built for scale. To ope
Slide 31: Production of AAON-branded equipment continued to improve through August
Production of AAON-branded equipment continued to improve through August | 31
Slide 32: Both brands contributing to our strong backlog
Both brands contributing to our strong backlog Backlog remains strong despite changes in the cycle Backlog ($M) 1,026.9 867.1 599.9 650.0 647.7 Ended 2Q25 514.7 548.0 526.2 490.6 510.0 558.4 461.4 464.0 at record $1,117.6M* 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q26 AAON B
Slide 33: Reaffirming 2025 outlook
Reaffirming 2025 outlook Sales Sales growth in the low-teens Gross margin of 28%-29% Expenses Non-GAAP Adj. SG&A as a % of sales of 16.5%-17.0% CapEx Approximately $220.0 million 33
Slide 34: Reaffirming our 3-year targets
Organic sales CAGR Reaffirming 12.5%-plus SG&A as a Gross margin our 3-year 32%-35% percent of sales 13%-14% targets mid-single ~40% digits Note: The three-year organic sales CAGR is assuming a base year of 2024. 34
Slide 35: Appendix
Appendix 35
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures The following table provides a net sales (GAAP), gross profit (GAAP) and gross margin for the periods indicated. The trailing twelve months ("TTM") period presented is a non-GAAP reconcilation period. June 30, 2025 Q2 2025 Q1 2025 Q4 2024 Q3 2024 (TTM) Net income, a GAAP
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures The following table provides a net sales (GAAP), gross profit (GAAP) and gross margin for the periods indicated. The trailing twelve months ("TTM") period presented is a non-GAAP reconcilation period. Q2 2025 Q1 2025 Q4 2024 Q3 2024 TTM Net sales $ 311,567 $ 322,054 $ 297
Slide 38: Non-GAAP Financial Measures
Non-GAAP Financial Measures The following table provides a reconciliation of total assets (GAAP) to invested capital (non-GAAP), averaged invested capital (non-GAAP) and return on invested capital (non-GAAP) for the periods indicated. The trailing twelve months ("TTM") period presented is a non-GAAP
Slide 39: Non-GAAP Financial Measures
Non-GAAP Financial Measures The following table provides a reconciliation of net income (GAAP) to EBITDA (non -GAAP) and Adjusted EBITDA (non-GAAP) for the periods indicated: Three Months Ended June 30, 2025 2024 (in thousands) Net income, a GAAP measure $ 15,487 $ 52,228 Depreciation and amortizati