AAON, Inc. (AAON) Q1 2026 Earnings Call

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WEBVTT NOTE Transcription provided by Deepgram Request Id: 01a0425d-2240-7530-b866-8447709e2d7f Created: 2026-08-27T08:36:37.675Z Duration: 1965.7926 Channels: 1 00:00:00.000 -- 00:00:01.919 Was 25.1% 00:00:01.920 -- 00:00:03.360 in the first quarter, 00:00:03.600 -- 00:00:04.960 down 170 00:00:04.960 -- 00:00:08.160 basis points from 26.8% 00:00:08.160 -- 00:00:09.759 in the prior year period. 00:00:10.240 -- 00:00:12.960 Gross margin was impacted by an increased amount 00:00:12.960 -- 00:00:15.759 of outsourced components to drive growth and share 00:00:15.759 -- 00:00:16.160 gains, 00:00:16.695 -- 00:00:19.015 and the absorbed fixed costs at the new 00:00:19.015 -- 00:00:20.295 Memphis facility, 00:00:20.775 -- 00:00:24.055 as well as tariff related and general inflation 00:00:24.055 -- 00:00:24.855 pressures, 00:00:25.255 -- 00:00:27.015 all of which are temporary. 00:00:27.575 -- 00:00:29.735 Despite these near term margin impacts, 00:00:30.160 -- 00:00:32.240 earnings growth remains strong, 00:00:32.479 -- 00:00:35.440 reflecting our exceptional growth trajectory. 00:00:36.240 -- 00:00:38.320 As internal capacity scales, 00:00:38.560 -- 00:00:39.520 utilization 00:00:39.520 -- 00:00:41.280 and productivity increase, 00:00:41.520 -- 00:00:45.015 reducing reliance on outsourced components and resulting in 00:00:45.015 -- 00:00:46.695 better fixed cost absorption. 00:00:47.335 -- 00:00:48.215 Additionally, 00:00:48.535 -- 00:00:51.415 we have taken margin actions through pricing and 00:00:51.415 -- 00:00:54.135 mix, and those actions are embedded in the 00:00:54.135 -- 00:00:54.934 backlog. 00:00:55.335 -- 00:00:57.655 SG and A expenses as a percentage of 00:00:57.655 -- 00:01:02.660 sales declined two twenty basis points to 13.7%, 00:01:03.300 -- 00:01:07.140 up ...