Key Highlights

  • AAON reported record second-quarter 2026 net sales of $627.0 million, up 101.2%, with diluted EPS of $0.68, up 258%, and a Backlog of $2.0 billion.
  • Its BASX-branded data-center Business drove the surge, with sales up 216% to around $345 million, meaning data centers now account for more than half of company revenue.
  • Gross Margin slipped to 24.3% as the company scaled rapidly, and it raised full-year sales-growth guidance to 55% to 60%.
  • Total backlog reached $2.0 billion, up 98% year on year, giving visibility into future quarters.

AAON (NASDAQ:AAON) links investors to one of the least visible but fastest-growing needs of the artificial-intelligence era: keeping data centers cool. The servers that train and run AI models generate enormous heat, and removing that heat efficiently is now a central engineering challenge. AAON, long known for high-quality commercial heating, ventilation, and air-conditioning equipment, has leaned into that Demand through its BASX brand, which supplies custom cooling and air-handling systems for data centers.

AAON trades in the Nasdaq Composite, which includes essentially all common Equity listed on the exchange; membership follows from the listing rather than from selection into a size-screened index.

Sales Doubled

For the second quarter of 2026, AAON reported record net sales of $627.0 million, up 101.2% from a year earlier. Diluted Earnings per Share rose 257.9% to $0.68. The standout was the data-center business: BASX-branded sales climbed 216.2% to roughly $345 million, meaning data centers now account for more than half of the company's revenue. Total backlog reached $2.0 billion, up 98% year on year.

That growth, however, came with a cost to margins. Gross margin fell to 24.3% from 26.6% a year earlier, as the company absorbed the expense of scaling capacity and ramping new production quickly.

Raised Guidance

Management raised its full-year 2026 outlook, guiding to net-sales growth of 55% to 60%, gross margins of roughly 25% to 26%, and selling, general and administrative costs of 13% to 14% of sales. A raised outlook alongside a near-doubling of the backlog is a confident signal.

The Opportunity

As long as operators keep constructing facilities for AI and cloud computing, demand for specialized cooling should remain strong, and AAON's $2.0 billion backlog suggests that demand is booked well into the future. The company also retains its traditional commercial HVAC business, which serves a broad base of buildings and provides a foundation beyond data centers.

From Rooftops to Hyperscale

For decades the company built a reputation on premium, semi-custom rooftop HVAC units for commercial buildings, differentiated by quality and configurability rather than lowest price. Data-center cooling is a natural extension of that engineering culture, but it operates at a different scale and tempo: orders are larger, customers are more concentrated, and the pace of construction is dictated by a handful of hyperscale operators racing to add capacity.

The strategic prize is that data centers give AAON a far larger addressable market than its traditional business ever offered. The strategic risk is that the company becomes more cyclical and more concentrated than it used to be.

Risks

With data centers now more than half of revenue, AAON is increasingly tied to the capital-spending plans of a relatively small number of large operators; a slowdown in data-center construction, or a pause in AI investment, would hit the fastest-growing part of the business hardest. The margin compression seen in the second quarter shows the strain of scaling, and there is execution risk in adding capacity fast enough without sacrificing quality.

Scaling Growth Into Durable Earnings

The key signals in coming quarters are the direction of gross margin as new capacity matures, the size and composition of the backlog, the pace of data-center versus traditional HVAC sales, and whether the company meets its raised 55% to 60% growth guidance. AAON has executed a striking pivot into a booming market; the question now is whether it can scale profitably and turn extraordinary top-line growth into durable earnings.