Aaon, Inc. · NASDAQ:AAON
Aaon — Investor Presentation (September 2025)
39 slides from Aaon's investor presentation, Sep 18, 2025
Slide 1: Investor Presentation September 18, 2025
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 The AAON investment thesis 2027 Targets Sustainable competitive advantage High barriers to entry protect our market position Strategic growth opportunity Capitalizing on the expansion in the data center market, positioned for outsized returns Financial outperformance With a proven trac
Slide 4: Our strategic pillars
Our strategic pillars Winning with superior engineering, innovation, customization and automation Optimizing the organization to drive results and empower leaders to drive value Capitalize on the value proposition of our mission critical solutions in a dynamically growing data center market Capitali
Slide 5: AAON: an overview
AAON: an overview 1 Adjusted for replacement purchase orders received in July related to administrative processing. Note: All data is based on trailing twelve months as of June 30, 2025. See Non-GAAP Financial Measures in Appendix. 5 �1.1B Order backlog1 28.7% Gross margin 18.1% EBITDA margin 22.5%
Slide 6: Future structure: Leveraging two strong brands
Future structure: Leveraging two strong brands 6 Non-res HVAC equipment Packaged rooftop units and split Semi-custom Innovation Premium quality and customer support 30% of Sales 70% of Sales Note: Data is based on trailing twelve months as of June 30, 2025. Data centers, clean rooms, commercial/indu
Slide 7: What makes BASX special?
What makes BASX special? 7 Provides solutions not just products Full customization High quality manufacturing Premier customer care Superior customer support BASX is the only player in the industry that specializes in providing solutions, as opposed to standard products BASX offers a fully customize
Slide 8: Data centers are a huge and growing market
Data centers are a huge and growing market ¹ The total cost of constructing data centers in 2024 ² Source: U.S. Census Bureau ³ Source: Company estimates. Our 2024 estimated TAM is related to the products BASX provides to data centers. TAM ~�35B² TAM �5-�7B³ TAM �2.5-�3.0B³ ~40% ~7% Total North Amer
Slide 9: Data center TAM is shifting to liquid cooling
40% 60% Data center TAM is shifting to liquid cooling BASX-specific thermal management equipment 85% 15% Thermal management equipment By 2028 To date, a vast majority of TAM is cloud compute data centers cooled by air-side equipment By 2028 we anticipate the split to be 60% liquid and 40% air-cooled
Slide 10: Data center pipeline underpins growth
Data center pipeline underpins growth 2 4 100-150 2023 2024 Industry pipeline in construction Installed capacity (GW) In 2023, compute power of data centers put-in-place in the industry was ~2GW In 2024, it was ~4GW and currently, there is a pipeline of projects in development totaling 100-150 GWs A
Slide 11: BASX product offerings provide end-to-end solution for data centers
BASX product offerings provide end-to-end solution for data centers opportunity is ~�1.0B - �1.5B per GW1 Computer Room Air Handler Air Handling Units Free Cooling Heat Rejection Chiller Coolant Distribution Unit Overhead Fan Coil Fan Coil Wall 1 Note: Opportunity is based on full utilization of man
Slide 12: Air-side data center cooling
Air-side data center cooling Highly engineered, custom designed capabilities a proven success factor Leading in innovation with both air-side cooling… Cloud compute market growth plus BASX share gains drives robust growth Nearly all of BASX-branded sales growth (3-year trailing sales CAGR of 40%, in
Slide 13: And liquid cooling data center solutions
…And liquid cooling data center solutions Liquid cooling is incremental growth to air-side cooling, as it is utilized in AI data centers Since last October, BASX has secured a substantial dollar value of orders for liquid cooling solutions The technology in AI data centers is changing so rapidly, pr
Slide 14: Building capacity for efficient growth
Building capacity for efficient growth AAON Three largest peers combined Added capacity: 2022-2024 ~1M sq ft total incremental manufacturing space • Designing our first ideally arranged manufacturing facility in Memphis with 787,000 sq ft • Opened 240,000 sq ft in Longview in January 2025 Prioritizi
Slide 15: Memphis doubles BASX's production capacity
Memphis doubles BASX’s production capacity Production to start in Q4 2025, ramp up in 2026 Facility with 787,000 sq ft, of which 490,000 sq ft is dedicated to BASX DC equipment 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?
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 A proprietary, hard-to-replicate process that seamlessly integrates deep customization w
Slide 17: Our competitive advantage: The unique integrated process
Our competitive advantage: The unique integrated process Sophisticated engineering department for design Efficient manufacturing through automation and soft tooling 21 3 4 High barriers to entry with a model that is difficult to copy and perfect Most capable R&D lab in the industry Electronically ac
Slide 18: AAON equipment versus the alternative
Feature AAON’s custom productsLow-quality products AAON equipment versus the alternative Production Soft-tooled, highly automated processes Price Premium, reflects higher quality Durability Durable and long-lasting, with a lifespan up to 2x the competition Customization Highly customizable, tailored
Slide 19: Products to meet a range of customer needs
Packaged Rooftop Unit 16-30 tons Outdoor Rooftop Air Handling Unit 800-2400 cfm Evaporative Condenser Unit 51-261 tons Condensing Units 2-60 tons Vertical Indoor Air Handling Unit 450-10,000 cfm Products to meet a range of customer needs Packaged Rooftop Unit 2-6 tons Horizontal Indoor Air Handling
Slide 20: Offering a solutions-based sales channel model
Offering a solutions- based sales channel model Building owners prefer this approach more than contracting with multiple sub-contractors Sales reps use AAON equipment to customize the ideal solution This solutions-based sales channel is superior to most factory products-based sales channels that we
Slide 21: Building strength in our go-to-market strategy
Building strength in our go-to-market strategy Focus on parts and service AAON selling parts and supporting our sales channel in building a world class services operation is key to our solutions-based offering Leveraging the marketing function set up in 2022 Marketing budget up 10x since creation, s
Slide 22: Total addressable market and share gain opportunity
Total addressable market and share gain opportunity¹ Nonresidential HVAC market 6% market share and growing �875M⁴ �14.5B² The addressable market of AAON’s commercial HVAC products, including rooftop units, air handlers and condensing units, is ~16x the size of our rooftop sales Positioned to take s
Slide 23: Favorable secular trends
Favorable secular trends Decarbonization Energy efficiency Government regulations Total cost of ownership focus Our customized, highly automated platform allows us to adapt to these secular trends much more efficiently These secular trends are driving up the cost of manufacturing across the industry
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, AAON’s average price premium relative to the alternative market solution was 15%-20% In the last few years, the company was able to bring that premium down to ~10% In 2
Slide 25: Operationally, we've never been stronger
Operationally, we’ve never been stronger Productivity gains and scaling the operations efficiently 30.5% 2020 35.2% 2024 Continuously finding ways to increase productivity and throughput AAON Oklahoma gross margin transformed At the Tulsa facility, we could increase production volumes by ~40% with m
Slide 26: Continuing to innovate with Alpha Class and heat pumps
2023 AAON’s Alpha Class were the only heat pumps operable below 30OF, and were operable all the way down to 0OF 2025 Introducing Alpha Class with operability down to -20OF, meeting the Department of Energy’s challenge two years ahead of requirement 2024 AAON's total rooftop sales were down 5% The Al
Slide 27: National account opportunity
National account opportunity Landing just one or two national accounts per year could be meaningful and incremental to traditional growth Many are interested in electrifying their HVAC systems, with Alpha Class giving us an advantage A substantial percentage of this pipeline is focused on multi-year
Slide 28: Q2 2025 recap
| 28 -0.6% Y/Y -950 bps Y/Y -20 bps Q/Q -43.1% Y/Y -64.5% Y/Y +71.9% Y/Y +8.8% Q/Q Sales �311.6M 26.6% �46.6M �0.22 �1.1B Gross Profit Margin Non-GAAP Adj. EBITDA* Non-GAAP Adj. Diluted EPS* Adjusted Backlog** Q2 2025 recap Q2 sales and earnings impacted by ERP implementation Strong backlog will res
Slide 29: New ERP implementation impacted recent results
| 29 New ERP implementation impacted recent results To support future growth, identified need to evolve business systems Longview goes live with new SAP system Production rates slowed Coil production at Longview limits Tulsa production ramp AAON updates investors with preliminary details at IR day T
Slide 30: Update on ERP roll-out
| 30 Update on ERP roll-out Key takeaways Intentionally began roll-out in Longview given the site’s scale and production of AAON and BASX-branded products, including coils Implementation resulted in slower production Global functions overseeing implementation will apply lessons learned to future sit
Slide 31: Production of AAON-branded equipment continued to improve through August
| 31 Production of AAON-branded equipment continued to improve through August
Slide 32: Both brands contributing to our strong backlog
1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 1Q25 2Q26 AAON BASX Both brands contributing to our strong backlog Backlog remains strong despite changes in the cycle Ended 2Q25 at record �1,117.6M* 461.4 464.0 514.7 548.0 599.9 526.2 490.6 510.0 558.4 650.0 647.7 867.1 Backlog (�M) 1,02
Slide 33: Reaffirming 2025 outlook
Reaffirming 2025 outlook Sales Sales growth in the low-teens Expenses Gross margin of 28%-29% 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
Gross margin 32%-35% SG&A as a percent of sales 13%-14% Reaffirming our 3-year targets Organic sales CAGR 12.5%-plus mid-single digits ~40% Note: The three-year organic sales CAGR is assuming a base year of 2024. 34
Slide 35: Appendix
35 Appendix
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures 36 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 GA
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$ 297,718
Slide 38: Non-GAAP Financial Measures
Non-GAAP Financial Measures 38 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-G
Slide 39: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended June 30, 2025 2024 (in thousands) Net income, a GAAP measure $ 15,487 $ 52,228 Depreciation and amortization 19,936 14,486 Interest expense, net 4,009 367 Income tax expense 4,018 14,779 EBITDA, a non-GAAP measure $ 43,450 $ 81,860 Memphis incentive fee