EX-99.1 2 liveaaonpressreleaseexs.htm EX-99.1 Document
Exhibit 99.1

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AAON Reports First Quarter 2026 Results with Record Sales and Backlog, Robust Earnings Growth, and Raises Full-Year Guidance

First Quarter 2026 Results
(All comparisons are year-over-year, unless otherwise noted)

•Delivered record sales and accelerated earnings growth on strong demand and expanding production throughput
◦Net sales grew 54.3% to a record $496.9 million
◦Operating margins reflected early benefits from improving utilization, with margin improvement expected to build as capacity absorption improves
◦GAAP diluted EPS increased 37.1% to $0.48 reflecting strong earnings growth on higher volume

•Total backlog increased 107.4% to a record $2.1 billion, driven by continued strength from the data center market
Raises 2026 Outlook

•2026 outlook now reflects revenue growth of 40%-45% and gross margins of approximately 27-28%, supported by record backlog, expanded capacity, and improving operational execution


TULSA, Okla., May 7, 2026 - AAON, INC. (NASDAQ-AAON), a leader in high-performing, energy-efficient HVAC solutions that bring long-term value to customers and owners, today announced its results for the first quarter of 2026.

First Quarter 2026 Results

Net sales for the first quarter of 2026 increased 54.3% to $496.9 million, from $322.1 million in the first quarter of 2025. This growth was driven by strong demand across both the AAON and BASX brands, and accelerating production throughput made possible by investments made in capacity and operational execution. BASX-branded sales increased 72.4% to $228.6 million, reflecting continued strength in data center cooling demand, higher production volumes, and increased utilization of recently commissioned capacity. AAON-branded sales increased 41.6% to $268.4 million, supported by a strong backlog and accelerating production rates. Booking activity remained solid across both brands, supporting continued share gains and elevated backlog levels. BASX-branded products ended the quarter with backlog up 160.0%, while AAON‑branded bookings demonstrated continued resilience in a softer market environment.

Gross profit margin in the quarter was 25.1%, compared to 26.8% in the prior-year period. The year‑over‑year decline reflected unabsorbed fixed costs associated with recent capacity investments, temporary outsourcing used to support accelerated growth, and transitory price and cost timing dynamics. These effects are intentional and temporary, and are expected to unwind as internal capacity scales and utilization improves.

Selling, general and administrative expenses as a percent of sales declined 220 basis points to 13.7%, demonstrating strong operating leverage and disciplined cost management.

Earnings per diluted share were $0.48, an increase of 37.1% from $0.35 in the first quarter of 2025.

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“First‑quarter results demonstrate strong earnings growth driven by higher volume, improved execution, and continued share gains,” said President and CEO Matt Tobolski. “We delivered record sales, improved cash flow, and higher production throughput across our manufacturing network. Importantly, the additional volume we are taking on is carrying attractive incremental contribution, allowing earnings to grow while we intentionally sequence margin improvement during this phase of capacity ramp.

"Our backlog provides exceptional visibility, particularly across the BASX-brand, and positions us to drive continued growth as we move through the year. At the same time, increasing utilization across existing capacity is expected to support margin improvement over time as fixed costs are absorbed, equipment comes fully online, and productivity continues to improve.

"As we progress through 2026, our priorities are clear and unchanged. Drive throughput, convert backlog, and deliver disciplined margin progression over time. We have built the foundation, and we are now focused on converting that foundation into durable earnings power and long-term returns."

Backlog
March 31, 2026December 31, 2025March 31, 2025
(in thousands)
AAON-branded products$509,806 $526,350 $403,863 
BASX-branded products1,619,649 1,302,145 623,006 
$2,129,455 $1,828,495 $1,026,869 

Total backlog increased 107.4% year-over-year to $2.13 billion, and increased 16.5% sequentially. The sequential growth was driven entirely by the BASX brand, with backlog increasing 24.4% from the prior quarter. Sustained data center demand and BASX's custom-engineered solutions continue to support share gains. As planned, AAON-branded products backlog declined sequentially 3.1%, reflecting a deliberate increase in production to address extended lead times, with manufacturing output exceeding order intake during the quarter. Order activity of AAON equipment remained solid, supporting continued share gains despite softer end-market conditions.

2026 Outlook

Dr. Tobolski concluded, “We are encouraged by the start of the year and the momentum we are seeing across the business. Backlog and demand remain exceptionally strong, providing the visibility and stability needed to maintain a sharp focus on execution, production ramp‑up, and customer fulfillment. We are pleased with the benefits we are starting to see from operational investments, and we have meaningful opportunity ahead to further increase production volumes and enhance productivity, which support improved results over time.

"We now expect 2026 sales to grow 40%-45%, with gross margin of 27%-28%, reflecting intentional ramp decisions early in the year and improving margin as utilization and productivity increases through the year. We anticipate SG&A expenses as a percentage of sales will be 14%-15% and expect depreciation and amortization expenses of $95-$100 million.”

CurrentPrior
MetricFY26FY26
YoY Sales Growth40%-45%18%-20%
Gross Profit Margin27%-28%29%-31%
SG&A as a % of sales14%-15%~16%
Depreciation & Amortization$95M-$100M$95M-$100M



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Segment Results


AAON Oklahoma

Three Months Ended 
(in thousands)March 31, 2026December 31, 2025March 31, 2025
Net sales$243,967 $215,503 $161,838 
Gross profit$64,272 $59,168 $40,600 
Gross profit margin26.3 %27.5 %25.1 %

Net sales for the AAON Oklahoma segment totaled $244.0 million, an increase of 50.7% year-over-year, driven by a strong starting backlog and ongoing production enhancements that improved backlog conversion despite a challenging industry environment. First‑quarter 2026 results also benefited from an easier year‑over‑year comparison, as the prior‑year period was disrupted by the industry’s refrigerant transition, contributing to regained market share.

Gross margin for the segment was 26.3%, compared to 25.1% in the first quarter of 2025. Overhead expenses associated with the new Memphis facility impacted segment margin by $9.8 million. Excluding these costs, segment margins were 29.6%. During the quarter, the segment was impacted by elevated outsourcing levels, price‑cost timing dynamics, and tariff‑related costs, all of which are temporary and do not change the long-term earnings power of the segment.

AAON Coil Products

Three Months Ended 
(in thousands)March 31, 2026December 31, 2025March 31, 2025
Net sales$117,611 $102,619 $94,023 
Gross profit$28,302 $21,827 $29,858 
Gross profit margin24.1 %21.3 %31.8 %

Net sales for the AAON Coil Products segment totaled $117.6 million, up 25.1% compared to the same period last year. Growth was driven primarily by BASX-branded liquid cooling sales of $93.2 million, up 40.5% during the period, while AAON‑branded sales declined 11.8% year-over-year.

AAON Coil Products gross margin was 24.1%, declining year-over-year from 31.8%, but increasing sequentially from 21.3%. The sequential margin expansion reflected improved operating leverage on higher throughput at the Longview facility, including a favorable mix of higher-margin BASX sales.









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BASX
Three Months Ended
(in thousands)March 31, 2026December 31, 2025March 31, 2025
Net sales$135,358 $106,095 $66,193 
Gross profit$32,391 $28,775 $15,906 
Gross profit margin23.9 %27.1 %24.0 %

Net sales for the BASX segment increased 104.5% to $135.4 million from $66.2 million in the prior-year period. The year-over-year growth reflected strong demand for data center equipment, supported by robust order intake and elevated backlog levels. Increased production from the Company's new Memphis facility played a key role by expanding capacity and driving higher sales volumes.

BASX segment gross margin was 23.9%, unchanged from the prior-year period. Margin stability reflected strong volume growth, offset by incremental resources and investments to support future growth and share gains. These incremental costs also contributed to the sequential margin contraction.

Balance Sheet & Cash Flow

As of March 31, 2026, the company had cash, cash equivalents and restricted cash of $1.1 million and a balance on its revolving credit facility of $425.2 million. Andy Cheung, CFO and Treasurer, commented, “During the first quarter, operating cash flow totaled $34.0 million, representing the highest level since the third quarter of 2024. This improvement reflected higher earnings and enhanced working capital efficiency. Capital expenditures totaled $52.9 million, primarily reflecting continued investments in incremental capacity to support future growth. As improvements in profitability and productivity continue, we expect these trends to support stronger cash flow and a healthier balance sheet over time.”

Conference Call

The company will host a conference call and webcast this morning at 9:00 a.m. EST to discuss the first quarter of 2026 results and outlook. The conference call will be accessible via dial-in for those who wish to participate in Q&A as well as a listen-only webcast. The dial-in is accessible at 1-888-880-3330. To access the listen-only webcast, please register at https://app.webinar.net/x89XOEkP41z. On the next business day following the call, a replay of the call will be available on the company’s website at https://aaon.com/investors.

About AAON

Founded in 1988, AAON is a global leader in HVAC solutions for commercial, industrial and data center indoor environments. The company's industry-leading approach to designing and manufacturing highly configurable and custom-made equipment to meet exact needs creates a premier ownership experience with greater efficiency, performance and long-term value. Its highly engineered equipment is sold under the AAON and BASX brands. AAON is headquartered in Tulsa, Oklahoma, where its world-class innovation center and testing lab allows AAON engineers to continuously push boundaries and advance the industry. For more information, please visit www.aaon.com.


Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “should”, “will”, and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligations to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Important factors that could cause results to differ materially from those in the forward-looking statements include (1) the timing and extent of changes in raw material and component prices, (2) the effects of fluctuations in the commercial/industrial new construction market, (3) the timing and extent of changes in interest rates, as well as other competitive factors during the year, and (4) general economic, market or business conditions. For a
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discussion of such risks and uncertainties, which could cause actual results to differ from those contained in any forward-looking statements, see “Risk Factors” and “Forward Looking Statements” in AAON’s Annual Report on Form 10-K for the most recent fiscal year, as may be revised and updated by AAON’s Quarterly Reports on Form 10-Q, and AAON’s Current Reports on Form 8-K.


Contact Information

Joseph Mondillo
Director of Investor Relations & Corporate Strategy
Phone: (617) 877-6346
Email: joseph.mondillo@aaon.com
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AAON, Inc. and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended March 31,
 20262025
(in thousands, except per share data)
Net sales$496,936 $322,054 
Cost of sales371,971 235,690 
Gross profit124,965 86,364 
Selling, general and administrative expenses67,906 51,293 
Gain on disposal of assets— (40)
Income from operations57,059 35,111 
Interest expense(5,055)(2,802)
Other income, net77 174 
Income before taxes52,081 32,483 
Income tax provision12,266 3,191 
Net income$39,815 $29,292 
Earnings per share:
Basic EPS$0.49 $0.36 
Diluted EPS$0.48 $0.35 
Cash dividends declared per common share:$0.10 $0.10 
Weighted average shares outstanding:
Basic81,756,604 81,472,351 
Diluted83,179,954 83,351,536 



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AAON, Inc. and Subsidiaries
Segment Net Sales and Profit
(Unaudited)


Three Months Ended March 31,
20262025
(in thousands)
AAON Oklahoma
External sales$243,967 $161,838 
Inter-segment sales44,509 3,839 
Eliminations(44,509)(3,839)
     Net sales243,967 161,838 
     Cost of sales1
179,695 121,238 
     Gross profit64,272 40,600 
AAON Coil Products
External sales$117,611 $94,023 
Inter-segment sales6,818 3,579 
Eliminations(6,818)(3,579)
     Net sales117,611 94,023 
     Cost of sales1
89,309 64,165 
     Gross profit28,302 29,858 
BASX
External sales$135,358 $66,193 
Inter-segment sales(2)43 
Eliminations2 (43)
     Net sales135,358 66,193 
     Cost of sales1
102,967 50,287 
     Gross profit32,391 15,906 
Consolidated gross profit$124,965 $86,364 
1 Presented after intercompany eliminations.

The reconciliation between consolidated gross profit to consolidated income from operations is as follows:
Consolidated gross profit$124,965 $86,364 
Less: Selling, general and administrative expenses67,906 51,293 
Add: gain on disposal of assets— (40)
Consolidated income from operations$57,059 $35,111 
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AAON, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)

March 31, 2026December 31, 2025
Assets(in thousands, except share and per share data)
Current assets:
Cash and cash equivalents$13 $13 
Restricted cash1,087 1,226 
Accounts receivable, net290,161 314,387 
Income tax receivable19,691 27,445 
Inventories, net313,203 261,151 
Contract assets, net298,368 247,037 
Prepaid expenses and other21,177 17,921 
Total current assets943,700 869,180 
Property, plant and equipment, net654,857 631,262 
Intangible assets, net and goodwill171,913 165,799 
Right of use assets17,335 17,988 
Other long-term assets1,907 2,281 
Total assets$1,789,712 $1,686,510 
Liabilities and Stockholders' Equity
Current liabilities:
Short-term obligations of NMTC1
7,535 7,535 
Accounts payable160,139 110,437 
Accrued liabilities136,731 132,213 
Contract liabilities55,229 80,670 
Total current liabilities359,634 330,855 
Debt, long-term425,154 398,320 
Deferred tax liabilities34,899 30,313 
Other long-term liabilities27,038 23,299 
New markets tax credit obligations1
8,778 8,738 
Commitments and contingencies (Note 19)
Stockholders' equity:
Preferred stock, $.001 par value, 5,000,000 shares authorized, no shares issued
— — 
Common stock, $.004 par value, 200,000,000 shares authorized, 81,851,483 and 81,691,075 issued and outstanding at March 31, 2026 and December 31, 2025, respectively
327 327 
Additional paid-in capital71,913 64,358 
Retained earnings861,969 830,300 
Total stockholders' equity934,209 894,985 
Total liabilities and stockholders' equity$1,789,712 $1,686,510 
1 Held by variable interest entities
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AAON, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31,
20262025
Operating Activities(in thousands)
Net income$39,815 $29,292 
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Depreciation and amortization20,903 18,943 
Amortization of debt issuance costs40 52 
Amortization of right of use assets40 25 
(Recoveries of) Provision for losses on accounts receivable, net of adjustments(120)88 
Provision for excess and obsolete inventories, net of write-offs701 57 
Share-based compensation7,696 4,021 
Other — (45)
Deferred income taxes4,586 5,976 
Changes in assets and liabilities:
Accounts receivable24,346 (17,631)
Income tax receivable7,754 (3,323)
Inventories(52,753)(11,489)
Contract assets(51,331)(53,235)
Prepaid expenses and other long-term assets(1,487)(2,703)
Accounts payable50,375 21,625 
Contract liabilities(25,441)1,508 
Extended warranties4,387 37 
Accrued liabilities and other long-term liabilities4,483 (2,412)
Net cash provided by (used in) operating activities33,994 (9,214)
Investing Activities 
Capital expenditures(45,127)(46,723)
Grant proceeds received1,650 — 
Proceeds from sale of property, plant and equipment— 40 
Acquisition of intangible assets(7,808)(3,717)
Principal payments from note receivable— 12 
Net cash used in investing activities(51,285)(50,388)
Financing Activities 
Borrowings of debt252,867 235,925 
Payments of debt(226,033)(138,411)
Payment related to financing costs(1,395)— 
Stock options exercised3,062 4,356 
Repurchase of stock - open market— (31,536)
Repurchases of stock - LTIP plans (Note 17)(3,203)(6,768)
Cash dividends paid to stockholders(8,146)(8,095)
Net cash provided by financing activities17,152 55,471 
Net decrease in cash, cash equivalents, and restricted cash(139)(4,131)
Cash, cash equivalents, and restricted cash, beginning of period1,239 6,514 
Cash, cash equivalents, and restricted cash, end of period$1,100 $2,383 


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Use of Non-GAAP Financial Measures

To supplement the company’s consolidated financial statements presented in accordance with generally accepted accounting principles (“GAAP”), additional non-GAAP financial measures are provided and reconciled in the following tables. The company believes that these non-GAAP financial measures, when considered together with the GAAP financial measures, provide information that is useful to investors in understanding period-over-period operating results. The company believes that this non-GAAP financial measure enhances the ability of investors to analyze the company’s business trends and operating performance as they are used by management to better understand operating performance. Since adjusted net income, adjusted net income per diluted share, EBITDA, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures and are susceptible to varying calculations, adjusted net income, adjusted net income per diluted share, EBITDA, adjusted EBITDA, and adjusted EBITDA margin, as presented, may not be directly comparable with other similarly titled measures used by other companies.

Non-GAAP Adjusted Net Income

The company defines non-GAAP adjusted net income as net income adjusted for any infrequent events, such as litigation settlements, net of profit sharing and tax effect, in the periods presented.

The following table provides a reconciliation of net income (GAAP) to non-GAAP adjusted net income for the periods indicated:

Three Months Ended March 31,
20262025
(in thousands)
Net income, a GAAP measure$39,815 $29,292 
Add: Memphis incentive fee1
— 2,700 
Profit sharing effect2
— (230)
Tax effect— (627)
Non-GAAP adjusted net income$39,815 $31,135 
Non-GAAP adjusted earnings per diluted share$0.48 $0.37 
1The incentive fee relates to fees payable to our real estate broker associated with the acquisition of our Memphis, Tenn. plant for a percentage of the incentives awarded to us by various entities.
2Profit sharing effect of the Memphis incentive fee in the respective period.
EBITDA

EBITDA (as defined below) is presented herein and reconciled from the GAAP measure of net income because of its wide acceptance by the investment community as a financial indicator of a company's ability to internally fund operations. The company defines EBITDA as net income, plus (1) depreciation and amortization, (2) interest expense (income), net and (3) income tax expense. EBITDA is not a measure of net income or cash flows as determined by GAAP. EBITDA margin is defined as EBITDA as a percentage of net sales.

The company’s EBITDA measure provides additional information which may be used to better understand the company’s operations. EBITDA is one of several metrics that the company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of operating performance. Certain items excluded from EBITDA are significant components in understanding and assessing a company's financial performance. EBITDA, as used by the company, may not be comparable to similarly titled measures reported by other companies. The company believes that EBITDA is a widely followed measure of operating performance and is one of many metrics used by the company’s management team and by other users of the company’s consolidated financial statements.

Adjusted EBITDA is calculated as EBITDA adjusted by items in non-GAAP adjusted net income, above, except for taxes, as taxes are already excluded from EBITDA.
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The following table provides a reconciliation of net income (GAAP) to EBITDA (non-GAAP) and Adjusted EBITDA (non-GAAP) for the periods indicated:

Three Months Ended March 31,
20262025
(in thousands)
Net income, a GAAP measure$39,815 $29,292 
Depreciation and amortization20,903 18,943 
Interest expense, net5,055 2,802 
Income tax expense12,266 3,191 
EBITDA, a non-GAAP measure$78,039 $54,228 
Add: Memphis incentive fee1
— 2,700 
Profit sharing effect2
— (230)
Adjusted EBITDA, a non-GAAP measure$78,039 $56,698 
Adjusted EBITDA margin15.7 %17.6 %
1The incentive fee relates to fees payable to our real estate broker associated with the acquisition of our Memphis, Tenn. plant for a percentage of the incentives awarded to us by various entities.
2Profit sharing effect of the Memphis incentive fee in the respective period.

Non-GAAP Adjusted Selling, General and Administrative Expenses

The following table provides a reconciliation of selling, general and administrative expenses (GAAP) to adjusted selling, general and administrative expenses (non-GAAP) for the periods indicated:

Three Months Ended March 31,
20262025
(in thousands)
Non-GAAP Adjusted Selling, General and Administrative Expenses
SG&A, a GAAP measure$67,906 $51,293 
Less: Memphis Incentive Fee1
— 2,700 
Profit Sharing effect2
— (230)
Non-GAAP adjusted SG&A expenses$67,906 $48,823 
As a percent of sales13.7 %15.2 %
1The incentive fee relates to fees payable to our real estate broker associated with the acquisition of our Memphis, Tenn. plant for a percentage of the incentives awarded to us by various entities.
2Profit sharing effect of the Memphis incentive fee in the respective period.




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