Business
AAON : Financial Document Q2 - (2026 Q2 Earnings Presentation)
AAON : Financial Document Q2 - (2026 Q2 Earnings
About this update from Aaon, Inc.
Q2 2026 Earnings Conference Call August 10, 2026 Q2 2026 Overview $627.0M Sales +101.2% Y/Y +26.2% Q/Q 24.3% Gross Profit Margin -230 bps Y/Y -70 bps Q/Q $94.2M Non-GAAP Adj. EBITDA* +102.3% Y/Y 15.0% margin $0.69 Diluted Non-GAAP EPS* +213.6% Y/Y +43.8% Q/Q $2.0B Backlog +98.0% Y/Y -7.4% Q/Q Q2 2026 sales driven by BASX-branded sales growth, up 216.2% Y/Y Strong backlog of data center orders will result in robust growth going forward *See appendix for additional information regarding Non-GAAP measures. 3 Q2 BASX Brand Highlights Strong BASX-Branded +216.2% +66.3% Sales Momentum Y/Y Q/Q BASX-branded TTM book-to-bill ratio ~2x driven by strong quarterly bookings Robust BASX-Branded Backlog Leveraging Superior Engineering Liquid cooling sales +185.4% Y/Y $331M Liquid cooling sales on a TTM basis -11.7% Q/Q on increased production +190.9% Liquid cooling sales growth on a TTM basis BASX revenue and order growth rates continue to outpace strong data center thermal management market, indicating continued market share gains 4 Q2 AAON Brand Highlights Strong AAON-Branded +39.3% +5.2% Sales in Soft Market Y/Y Q/Q AAON-branded bookings up approximately 16% year-over-year Intentional AAON-Branded Backlog Dynamics Gaining Market Share +9.4% Y/Y +50.0% Alpha Class heat pump bookings Y/Y +6.0% Q/Q on increased production National Accounts strategy driving new growth opportunities Production improvements drive record sales and meaningful share gains as 30%-plus volume growth compared to flattish industry volumes 5 Systems Upgrades IT and digital infrastructure enhancements Modernizing manufacturing management systems Product Innovation Alpha Class Heat Pump Free Cooling Chiller Building a world-class manufacturing organization People & Process Two new independent directors added to Board of Directors New CFO and General Council Strategic finance capabilities Professional supply chain management Global operations and lean manufacturing expertise Physical Infrastructure Added 1+ million sq. ft. of manufacturing capacity since 2024 4x increase in data center capacity 6 Q2 2026 Summary 14.9% $0.22 Q2 2025 $82.7 Q2 2026 Q2 2025 Q2 2026 24.3% $46.6 26.6% Margin Gross Profit $152.5 Q2 2025 Q2 2026 Q2 2025 $311.6 Non-GAAP Adj. EBITDA* 15.0% Q2 2026 Non-GAAP Adj. EPS* $0.69 Net Sales $627.0 Margin $94.2 *See appendix for additional information regarding Non-GAAP measures Q2 2026 Highlights Net sales increase of 101.2% driven by 216.2% growth in BASX-branded sales and a 39.3% increase in AAON-branded sales BASX-branded sales growth was driven by robust demand from the data center market, including $126.6M of liquid cooling equipment Gross profit increased 84.3% Y/Y Y/Y margin contraction reflects intentional growth investments, including Memphis ramp, outsourcing, and temporary cost absorption Significant Y/Y bottom line improvement with Adj. EBITDA increasing 102.1% and Adj. EPS increasing 213.6% in the period 7 AAON Oklahoma Net Sales $262.3 Gross Profit Reported Memphis Impact $185.1 $53.5 Margin 28.9% $3.0 24.3% $63.6 $18.1 Q2 2025 Q2 2026 Q2 2025 Q2 2026 Q2 2026 Highlights Net sales increased 41.7% Y/Y Gross profit increased 18.9% Y/Y despite $18.1 million of unabsorbed costs at Memphis plant in 2Q26 compared to $3.0 million in 2Q25 Unabsorbed Memphis costs resulted in 690 bps of margin pressure in 2Q26 vs. 160 bps of pressure in 2Q25; net of Memphis impact, gross margin expanded approximately 60 bps There is a clear path back to mid-to-high 30s gross margin (ex. Memphis costs) as outsourcing normalizes and price-cost flows through AAON-branded equipment backlog increased sequentially despite strong production throughput, and as such we will continue to ramp production through year-end Orders of AAON equipment remained strong, implying the AAON brand continues to gain market share in a soft market environment 8 AAON Coil Products Net Sales $146.7 Gross Profit $10.2 Margin 17.5% 16.0% $23.5 $58.5 Q2 2025 Q2 2026 Q2 2025 Q2 2026 Q2 2026 Highlights Net sales increased 150.9%, driven by BASX-branded liquid cooling sales, which grew 208.4% to $126.6M AAON-branded sales grew 15.1% to $20.0M Gross profit increased 130.1% Y/Y Gross margin performance reflected inflationary cost pressures, outsourcing-related costs, freight pressure, and price-cost timing Margin pressure was partially offset by improved labor efficiency, better overhead absorption, and higher production volume 9 BASX Net Sales $218.0 Gross Profit $19.0 Margin 27.9% 30.0% $65.3 $68.0 Q2 2025 Q2 2026 Q2 2025 Q2 2026 Q2 2026 Highlights Net sales growth of 220.7% driven by strong demand from data center market Continued progress with Memphis plant ramp-up was a meaningful contributor to growth Gross profit increased 244.2% Y/Y Y/Y margin improvement driven by strong volume growth, partially offset by incremental fixed costs and additional resources needed temporarily to support robust growth 10 Q2 2026 Summary: Balance Sheet Q2 2026 $213.2 $(31.0) 1H 2025 $55.0 1H 2026 Debt $435.0 $317.3 Q2 2025 2026E Net Working Capital $664.7 Annual Capex Cash Flow from Operations $443.4 $209.5 $190.0 Q2 2025 Q2 2026 2024 2025 *All metrics are in millions Q2 2025 Highlights Leverage ratio at the end of Q2 was 1.48, down from 1.71 at the end of Q1 Debt increase driven by working capital and capex investments to support strong BASX-branded backlog and future growth YTD operating cash flow totaled $55.0 million, representing an improvement from $(31.0) million in the same period of 2025 Anticipate continued improvement in operating cash flow throughout 2026 driven by earnings growth and improved working capital efficiency Expect capex of approximately $190 million in 2026 11 Backlog by Brands Backlog $1.43B +185.4% Y/Y -11.7% Q/Q Demand for data center air-side and liquid cooling solutions is robust Large scale projects can create quarter-to-quarter bookings variability $0.54B +9.4% Y/Y +6.0% Q/Q Focused on turning over backlog with higher production throughput Strong bookings continued in Q2 Total Backlog $1.97B +98.0% Y/Y -7.4% Q/Q Strong backlog allows us to plan production more efficiently Anticipate continued growth and margin improvement throughout 2026 12 2026 Outlook Current FY26 Outlook Prior FY26 Outlook YoY Sales Growth 55%-60% 40%-45% Gross Margin 25%-26% 27%-28% SG&A % of Sales 13%-14% 14%-15% D&A Expenses $95M-$100M $95M-$100M 13 Appendix Non-GAAP Financial Measures Non-GAAP Adjusted Net Income Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Net income, a GAAP measure $ 56,659 $ 15,487 $ 96,474 $ 44,779 Add: Memphis incentive fee 1 1,448 3,405 1,448 6,105 Profit sharing effect 2 (123) (289) (123) (519) Tax effect (332) (742) (332) (1,369) Non-GAAP adjusted net income $ 57,652 $ 17,861 $ 97,467 $ 48,996 Non-GAAP adjusted earnings per diluted share $ 0.69 $ 0.21 $ 1.16 $ 0.59 1 The incentive fee relates to fees payable to our real estate broker associated with the acquisition of our Memphis, Tenn. plant for a percentage of the incentives awarded to us by various entities. 2 Profit sharing effect of the Memphis incentive fee in the respective period. 15 Non-GAAP Financial Measures Non-GAAP EBITDA and Adjusted EBITDA Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Net income, a GAAP measure $ 56,659 $ 15,487 $ 96,474 $ 44,779 Depreciation and amortization 23,813 19,936 44,716 38,879 Interest expense, net 6,195 4,009 11,250 6,811 Income tax expense 6,188 4,018 18,454 7,209 EBITDA, a non-GAAP measure $ 92,855 $ 43,450 $ 170,894 $ 97,678 Add: Memphis incentive fee 1 1,448 3,405 1,448 6,105 Profit sharing effect 2 (123) (289) (123) (519) Adjusted EBITDA, a non-GAAP measure $ 94,180 $ 46,566 $ 172,219 $ 103,264 Adjusted EBITDA margin 15.0 % 14.9 % 15.3 % 16.3 % 1 The incentive fee relates to fees payable to our real estate broker associated with the acquisition of our Memphis, Tenn. plant for a percentage of the incentives awarded to us by various entities. 2 Profit sharing effect of the Memphis incentive fee in the respective period. 16 Non-GAAP Financial Measures Non-GAAP Adjusted SG&A Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Non-GAAP Adjusted Selling, General and Administrative Expenses SG&A, a GAAP measure $ 83,607 $ 59,147 $ 151,513 $ 110,440 Memphis Incentive Fee (1,448) (3,405) (1,448) (6,105) Profit Sharing effect 123 289 123 519 Non-GAAP adjusted SG&A expenses 82,282 56,031 150,188 104,854 As a percent of sales 13.1 % 18.0 % 13.4 % 16.5 % 17 Attention : This is an excerpt of the original content. 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