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Jun 30, 2025
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.
Revenue by Segment
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.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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