AAON’s first quarter results prompted a sharply positive market response, as the company’s revenue and adjusted profitability exceeded Wall Street expectations. Management attributed the outperformance to surging demand for BASX-branded data center cooling solutions and operational efficiency gains in its Oregon and Texas facilities. However, AAON-branded rooftop unit production was held back by weak bookings in the prior quarter and ongoing supply chain constraints linked to the industry’s refrigerant transition. CEO Gary Fields highlighted that “sales of BASX-branded equipment were up 374.8%,” while the Oklahoma segment experienced margin compression due to reduced volumes and overhead absorption.
Is now the time to buy AAON? Find out in our full research report (it’s free).
AAON (AAON) Q1 CY2025 Highlights:
- Revenue: $322.1 million vs analyst estimates of $290.4 million (22.9% year-on-year growth, 10.9% beat)
- Adjusted EPS: $0.37 vs analyst estimates of $0.24 (57% beat)
- Adjusted EBITDA: $56.7 million vs analyst estimates of $47.07 million (17.6% margin, 20.4% beat)
- Operating Margin: 10.9%, down from 18% in the same quarter last year
- Backlog: $1.03 billion at quarter end
- Market Capitalization: $5.92 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions AAON’s Q1 Earnings Call
- Julio Romero (Sidoti) asked about AAON’s price premium in public sector bids, and President Matt Tobolski explained the premium has contracted by 1–2%, improving competitiveness and aiding market share gains.
- Ryan Merkel (William Blair) inquired about order trends and the effect of the new tariff surcharge. Tobolski clarified that while orders were pulled forward ahead of the surcharge, the company capped pre-surcharge orders to avoid operational disruption, and traditional order cadence has resumed since.
- Chris Moore (CJS Securities) questioned customer visibility in the data center business, and Tobolski responded that AAON receives regular pipeline updates from major customers, providing strong multi-year outlook despite industry noise.
- Brent Thielman (Davidson) asked about supply chain improvements and tariff exposure. Tobolski stated that supply constraints are abating, and AAON’s heavy U.S. manufacturing footprint reduces tariff risk relative to peers, though some exposure remains.
- Tim Wojs (Baird) sought clarity on Oklahoma segment guidance and the mix of liquid versus airside cooling in backlog. Tobolski confirmed guidance is unchanged, with tariff effects materializing in Q3/Q4, and described backlog as balanced between liquid and airside cooling solutions.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace of AAON-branded rooftop production recovery as supply chain normalization takes hold, (2) progress on national account wins and heat pump adoption, and (3) the sustainability of data center demand and backlog conversion. Any changes in the macroeconomic environment, trade policy, or tariff impacts will also be important to watch for implications on execution and profitability.
AAON currently trades at $72.75, down from $91.14 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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