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Jun 30
Aaon Q2 2025 Earnings Report
Faced ERP rollout and supply constraints, resulting in a slight sales decline to $311.6M and lower profitability, while backlog surged 71.9% YoY to $1.12B in Q2 2025.
Key Takeaways
AAON reported Q2 2025 net sales of $311.6M, down 0.6% year-over-year, as operational inefficiencies from an ERP rollout and supply constraints weighed on production. Gross margin contracted to 26.6%, and net income dropped to $15.5M. Despite short-term challenges, backlog hit a record $1.12B, up 71.9% YoY, driven by strong demand for AAON- and BASX-branded equipment.
Net sales decreased 0.6% YoY to $311.6M, with declines in AAON Oklahoma offset by growth in BASX and AAON Coil Products.
Gross profit margin fell to 26.6% from 36.1% a year ago due to lower production volumes and ERP-related inefficiencies.
Net income was $15.5M (EPS $0.19), with adjusted EPS of $0.22.
Backlog reached $1.12B, up 71.9% YoY, signaling strong future demand.
Aaon
Aaon
Aaon Revenue by Segment
Revenue by Segment
AAON Oklahoma Revenue
CapyFin.comAAON Coil Products Revenue
CapyFin.comBASX Revenue
CapyFin.com Forward Guidance
AAON expects FY2025 sales growth in the low teens, with gross profit margins between 28%-29% and adjusted SG&A as a percentage of sales between 16.5%-17.0%. Q3 sales are projected to grow low single digits YoY with margins of 28.5%-29.5%, while Q4 sales are expected to grow in the high twenties with margins of 30.0%-31.0%.
Positive Outlook
- Strong backlog supports expectations for improved production in the second half of 2025.
- Q4 margins projected to expand to 30.0%-31.0%.
- BASX segment showing continued demand from data center market.
- AAON-branded backlog up 93.4% YoY, signaling market share gains.
- Targeted operational improvements underway at Tulsa and Longview facilities.
Challenges Ahead
- ERP implementation has caused significant short-term inefficiencies.
- Lower gross margins expected for FY2025 compared to 2024.
- AAON Oklahoma segment saw an 18% YoY decline in sales in Q2.
- Ongoing operational challenges at Longview facility.
- Full-year outlook reduced due to slower-than-expected production ramp.
Revenue & Expenses
Visualization of income flow from segment revenue to net income