AAON, Inc. (AAON) Q1 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

Was 25.1% in the first quarter, down 170 basis points from 26.8% in the prior year period. Gross margin was impacted by an increased amount of outsourced components to drive growth and share gains, and the absorbed fixed costs at the new Memphis facility, as well as tariff related and general inflation pressures, all of which are temporary. Despite these near term margin impacts, earnings growth remains strong, reflecting our exceptional growth trajectory. As internal capacity scales, utilization and productivity increase, reducing reliance on outsourced components and resulting in better fixed cost absorption. Additionally, we have taken margin actions through pricing and mix, and those actions are embedded in the backlog. SG and A expenses as a percentage of sales declined two twenty basis points to 13.7%, up 32% to 67,900,000 This reflects strong operating leverage and disciplined cost management and demonstrates how our organizational investments are scaling as revenue grows. Driven by the strong top line performance, non GAAP adjusted EBITDA increased 44% from the prior year period to $78,000,000 Non GAAP adjusted EBITDA margin was 15.7% compared to 17.6% a year ago. Diluted earnings per share in the first quarter of twenty twenty six were $0.48 representing an increase of 37% from the first quarter of twenty twenty five. Turning now to the segment financials, beginning with AAON, Oklahoma. For the first quarter, net sales increased 51% year over year to $244,000,000 This outsized growth was driven by a strong beginning backlog and improved production throughput, which supported by higher backlog conversion despite a challenging industry backdrop. Results also benefited from a favorable comparison to the prior year period, which had been disrupted by the industr...