Highlights

  • Second quarter 2026 net sales rose 101% to $627 million, led by BASX data center cooling products.
  • Diluted earnings per share reached $0.68 against $0.19 a year earlier, while gross margin narrowed to 24.3% from 26.6%.
  • Backlog stood at $1.97 billion on June 30, 2026, up 98% from a year earlier, mostly BASX orders.
  • Revolver borrowings rose to $435.0 million, while six-month operating cash flow was $55.0 million after a use of cash.

AAON (NASDAQ:AAON) shares were trading near their 52-week low at USD 75.28 on October 21, 2026, up 1.84%. The Tulsa-based HVAC manufacturer reported second quarter 2026 results in a Form 10-Q filed on August 10, 2026, showing net sales that more than doubled and a lower gross margin.

AAON is a Nevada corporation, incorporated on August 18, 1987, and is headquartered in Tulsa, Oklahoma. It engineers, manufactures and sells premium heating, ventilation and air conditioning equipment, including rooftop units, data center cooling solutions, cleanroom systems, air handling units, condensing units and geothermal heat pumps. The company reports three segments: AAON Oklahoma, which makes AAON-branded rooftop units and parts; AAON Coil Products, which makes condensing units, air handling products and cooling solutions; and BASX, which focuses on data center cooling and cleanroom products. Its fiscal year ends December 31.

Net Sales Double, Gross Margin Narrows

Net sales for the three months ended June 30, 2026 were $627.0 million, compared with $311.6 million a year earlier. BASX-branded products grew 216% to account for most of the gain, and AAON-branded sales rose 39% to $79.7 million. By segment, BASX sales climbed 221% to $218.0 million, AAON Coil Products rose 151% to $146.7 million, and AAON Oklahoma increased 42% to $262.3 million.

Net income was $56.7 million, up from $15.5 million, and diluted EPS was $0.68 versus $0.19. Selling, general and administrative expense fell to 13.3% of sales from 19.0%, although the dollar amount increased $24.5 million, including a $7.4 million rise in warranty expense linked to higher historical claims.

Gross profit grew 84% to $152.5 million, but gross margin narrowed to 24.3% from 26.6%. The company attributed the AAON Oklahoma decline to added overhead at its Memphis plant, which contributed $18.1 million of cost of sales to that segment, and the Coil Products decline to higher material costs. BASX gross margin improved to 30.0% from 27.9%.

Backlog, Borrowings and Capital Spending

Backlog totaled $1.97 billion at June 30, 2026, up from $995.3 million a year earlier and $1.83 billion at December 31, 2025. BASX-branded backlog reached $1.43 billion, while AAON-branded backlog was $540.5 million.

Growth has required funding. Operating cash flow for the six months was $55.0 million, compared with a use of $31.0 million a year earlier, even as inventories rose $71.4 million and contract liabilities, which include customer down payments, fell from $80.7 million to $12.8 million. Capital expenditures were $97.3 million, mainly for the Memphis, Tennessee build-out. Debt under the revolving credit facility rose to $435.0 million from $398.3 million at year-end, leaving $163.7 million available on a $600.0 million facility that expires May 27, 2030. The leverage ratio was 1.46 to 1.0, within the covenant limit of 3 to 1.

Unrestricted cash was $13 thousand, and the company funds working needs through operations and the revolver. The quarterly dividend remained $0.10 per share, and no open market repurchases were made in the six months.

The company described mixed demand. It said its core nonresidential new construction markets began contracting in late 2024 and softened through 2025, with no clear sign of a significant reacceleration, while data center construction spending expanded roughly 240% between 2022 and 2025.

Outlook and Planned Investment

The filing does not include revenue or earnings guidance. It says management estimates 2026 capital expenditures at about $190.0 million, although many projects can be reviewed or cancelled at the discretion of the CEO and board without substantial charges. The company expects an annual 2026 effective tax rate of about 25.0%, excluding discrete items.

Management said it believes cash, operating cash flow, the revolver and access to capital markets will cover working capital, capital spending and other liquidity needs through 2027 and the foreseeable future. It plans targeted price increases to address input costs and tariffs, subject to market demand.