Key Highlights

● Second-quarter net sales were US$627.0 million, up 101.2% year over year.

● Gross margin slipped to 24.3% from 26.6% a year earlier.

● Backlog was US$1.97 billion, up 98.0% year over year.

● 2026 sales growth guidance rose to 55% to 60% from 40% to 45%.

AAON, Inc. (NASDAQ:AAON), the Tulsa, Oklahoma-based maker of heating, ventilation and air-conditioning equipment, published second-quarter 2026 results on 10 August 2026. Net sales for the quarter ended 30 June 2026 were US$627.0 million, up 101.2% from US$311.6 million in the same quarter of 2025 and the fourth consecutive quarterly record, according to the company.

The expansion was led by BASX-branded products, which supply liquid-cooling and related equipment. BASX-branded sales rose 216.2% to US$345.0 million, while AAON-branded sales grew 39.3% to a brand record of US$282.2 million. Within the Coil Products segment, BASX-branded liquid-cooling sales reached US$126.6 million, up 208.4%.

Earnings Up, Margin Down

Gross profit increased 84.3% to US$152.5 million, but the gross margin slipped to 24.3% from 26.6% a year earlier. Selling, general and administrative costs fell to 13.3% of sales, a drop of 570 basis points, which helped operating income climb 192.1% to US$68.9 million. GAAP net income was US$56.7 million, or US$0.68 per diluted share, versus US$15.5 million, or US$0.19. Adjusted earnings per share, which excludes a Memphis incentive fee, were US$0.69.

The Oklahoma segment shows the margin pressure most clearly. Its gross margin was 24.3% against 28.9% a year earlier, with Memphis facility overhead of US$18.1 million compared with US$3.0 million. Excluding that overhead, the company calculates a segment margin of 31.2%. That adjusted figure is management's presentation, not a reported GAAP measure.

Backlog and Cash Flow

Year to date, net sales for the six months were US$1,123.9 million, against US$633.6 million in the first half of 2025, and GAAP diluted earnings per share were US$1.15 compared with US$0.54. Adjusted EBITDA for the half-year was US$172.2 million, with a margin of 15.3% versus 16.3%, so profit grew more slowly than sales on that measure. The headline doubling in revenue therefore sits alongside a narrower margin trend.

Backlog at 30 June 2026 totalled US$1.97 billion, up 98.0% from US$995.3 million a year earlier but 7.4% below the US$2.13 billion recorded at 31 March 2026. Management attributed the sequential dip in BASX backlog, to US$1.43 billion, to faster conversion of orders into sales and the timing of large project awards. AAON-branded backlog rose 6.0% sequentially to US$540.5 million.

For the six months to 30 June 2026, operating cash flow was US$55.0 million, a swing from a US$31.0 million outflow a year before, while capital expenditure was US$97.3 million. Long-term debt under the revolving credit facility rose to US$435.0 million from US$398.3 million at the end of 2025, and cash including restricted cash was US$12.7 million.

Raised Guidance, Lower Margin Outlook

Management lifted its 2026 sales growth forecast to 55% to 60% from 40% to 45%, and narrowed selling and administrative costs to 13% to 14% of sales. It cut the expected gross margin to 25% to 26% from 27% to 28%. Chief executive Matt Tobolski said the company expects sequential margin improvement in the second half. A quarterly dividend of US$0.10 per share was declared.

The lower margin range signals that rapid growth is carrying costs.

Data-Centre Demand Is Reshaping AAON, but Memphis and Borrowing Carry the Risk

The results illustrate how demand for data-centre infrastructure is reshaping a business once associated mainly with rooftop commercial air-conditioning. Execution risks now centre on the Memphis ramp, working capital and borrowing, since cash is thin relative to debt, and on whether project-based BASX orders keep replenishing the backlog.