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AAON Reports Sales & Earnings for the First Quarter of 2025

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AAON reported strong Q1 2025 performance with total net sales increasing 22.9% to $322.1 million. The company's BASX-branded products showed remarkable growth, with sales up 374.8% year-over-year, while AAON-branded equipment sales declined 23% due to supply chain issues with R454B refrigerant components.

The company achieved a gross profit margin of 26.8%, down from 35.2% in Q1 2024. Earnings per diluted share were $0.35, decreasing 23.9% compared to the previous year. Notable highlights include a record total backlog of $1.0 billion, up 83.9% year-over-year.

Looking ahead, AAON plans to invest $220 million in 2025 for its new Memphis plant, improvements in Longview, and technology automation. The company increased its quarterly dividend by 25% to $0.10 per share and completed a share repurchase of 371,139 shares for $30 million at an average price of $80.81.

AAON ha riportato una solida performance nel primo trimestre 2025 con vendite nette totali in aumento del 22,9%, raggiungendo 322,1 milioni di dollari. I prodotti con marchio BASX hanno registrato una crescita straordinaria, con vendite in aumento del 374,8% su base annua, mentre le vendite di apparecchiature a marchio AAON sono diminuite del 23% a causa di problemi nella catena di approvvigionamento dei componenti refrigeranti R454B.

L'azienda ha raggiunto un margine lordo del 26,8%, in calo rispetto al 35,2% del primo trimestre 2024. L'utile per azione diluita è stato di 0,35 dollari, con una diminuzione del 23,9% rispetto all'anno precedente. Tra i punti salienti si segnala un backlog totale record di 1,0 miliardo di dollari, in aumento dell'83,9% su base annua.

Guardando al futuro, AAON prevede di investire 220 milioni di dollari nel 2025 per il nuovo stabilimento di Memphis, miglioramenti a Longview e automazione tecnologica. La società ha aumentato il dividendo trimestrale del 25%, portandolo a 0,10 dollari per azione, e ha completato un riacquisto di 371.139 azioni per 30 milioni di dollari a un prezzo medio di 80,81 dollari.

AAON reportó un sólido desempeño en el primer trimestre de 2025 con ventas netas totales que aumentaron un 22,9%, alcanzando los 322,1 millones de dólares. Los productos con la marca BASX mostraron un crecimiento notable, con ventas que aumentaron un 374,8% interanual, mientras que las ventas de equipos con la marca AAON disminuyeron un 23% debido a problemas en la cadena de suministro de componentes refrigerantes R454B.

La compañía logró un margen bruto del 26,8%, por debajo del 35,2% del primer trimestre de 2024. Las ganancias por acción diluida fueron de 0,35 dólares, disminuyendo un 23,9% respecto al año anterior. Entre los aspectos destacados se encuentra un récord de cartera de pedidos total de 1.000 millones de dólares, un aumento del 83,9% interanual.

De cara al futuro, AAON planea invertir 220 millones de dólares en 2025 para su nueva planta en Memphis, mejoras en Longview y automatización tecnológica. La empresa incrementó su dividendo trimestral en un 25%, hasta 0,10 dólares por acción, y completó una recompra de 371.139 acciones por 30 millones de dólares a un precio promedio de 80,81 dólares.

AAON은 2025� 1분기� � 순매출이 22.9% 증가� 3� 2,210� 달러� 기록하며 강력� 실적� 보고했습니다. BASX 브랜� 제품은 전년 대� 374.8% 매출 성장� 보였으나, AAON 브랜� 장비 매출은 R454B 냉매 부� 공급� 문제� 인해 23% 감소했습니다.

회사� 2025� 1분기 매출총이익률 26.8%� 달성했으�, 이는 2024� 1분기� 35.2%에서 하락� 수치입니�. 희석 주당순이익은 0.35달러� 전년 대� 23.9% 감소했습니다. 주목� 만한 점으로는 � 수주잔고가 10� 달러� 전년 대� 83.9% 증가� 기록적인 수치� 달성했습니다.

앞으� AAON은 2025년에 멤피� 신공�, 롱뷰 개선 � 기술 자동화를 위해 2� 2천만 달러� 투자� 계획입니�. 회사� 분기 배당금을 25% 인상하여 주당 0.10달러� 올렸으며, 평균 가� 80.81달러� 371,139주를 3천만 달러� 자사� 매입� 완료했습니다.

AAON a annoncé une solide performance au premier trimestre 2025 avec une augmentation des ventes nettes totales de 22,9 % à 322,1 millions de dollars. Les produits de la marque BASX ont connu une croissance remarquable, avec des ventes en hausse de 374,8 % en glissement annuel, tandis que les ventes d'équipements sous la marque AAON ont diminué de 23 % en raison de problèmes d'approvisionnement en composants de réfrigérant R454B.

L'entreprise a réalisé une marge brute de 26,8 %, en baisse par rapport à 35,2 % au premier trimestre 2024. Le bénéfice par action diluée s'est élevé à 0,35 $, soit une baisse de 23,9 % par rapport à l'année précédente. Parmi les points forts, on note un carnet de commandes total record de 1,0 milliard de dollars, en hausse de 83,9 % en glissement annuel.

Pour l'avenir, AAON prévoit d'investir 220 millions de dollars en 2025 pour sa nouvelle usine de Memphis, des améliorations à Longview et l'automatisation technologique. L'entreprise a augmenté son dividende trimestriel de 25 % à 0,10 $ par action et a finalisé un rachat d'actions de 371 139 actions pour 30 millions de dollars à un prix moyen de 80,81 $.

AAON meldete eine starke Leistung im ersten Quartal 2025 mit einem Anstieg des Nettoumsatzes um 22,9 % auf 322,1 Millionen US-Dollar. Die BASX-Markenprodukte verzeichneten ein bemerkenswertes Wachstum mit einem Umsatzanstieg von 374,8 % im Jahresvergleich, während die Verkäufe von AAON-Markenanlagen aufgrund von Lieferkettenproblemen bei R454B-Kältemittelkomponenten um 23 % zurückgingen.

Das Unternehmen erzielte eine Bruttogewinnmarge von 26,8 %, gegenüber 35,2 % im ersten Quartal 2024. Der Gewinn je verwässerter Aktie lag bei 0,35 US-Dollar, was einem Rückgang von 23,9 % gegenüber dem Vorjahr entspricht. Hervorzuheben ist ein Rekordauftragsbestand von 1,0 Milliarde US-Dollar, ein Anstieg von 83,9 % im Jahresvergleich.

Für die Zukunft plant AAON Investitionen in Höhe von 220 Millionen US-Dollar im Jahr 2025 für das neue Werk in Memphis, Verbesserungen in Longview und technologische Automatisierung. Das Unternehmen erhöhte die vierteljährliche Dividende um 25 % auf 0,10 US-Dollar pro Aktie und schloss einen Aktienrückkauf von 371.139 Aktien im Wert von 30 Millionen US-Dollar zu einem Durchschnittspreis von 80,81 US-Dollar ab.

Positive
  • Record total backlog of $1.0 billion, up 83.9% year-over-year
  • BASX-branded products net sales surged 374.8% year-over-year
  • Strong Q1 bookings rebound for AAON-branded equipment
  • AAON Coil Products segment grew 287.8% year-over-year
  • Dividend increased by 25% to $0.10 per quarter
  • Supply chain issues for R454B refrigerant components beginning to resolve
Negative
  • Net income declined 24.9% to $29.3 million
  • Earnings per diluted share decreased 23.9% to $0.35
  • Gross profit margin contracted to 26.8% from 35.2% year-over-year
  • AAON Oklahoma segment sales declined 23.0%
  • Operating margin decreased to 10.9% from 17.9%
  • Revolving credit facility balance of $178.0 million with only $2.4M cash on hand

Insights

AAON shows mixed Q1 results with 22.9% revenue growth but declining margins and EPS, driven by surging data center demand amid supply challenges.

AAON's Q1 2025 presents a study in contrasts with total revenue growing 22.9% to $322.1 million, while earnings per share fell 23.9% to $0.35. The performance divergence by segment tells the real story - BASX-branded products revenue surged 374.8% year-over-year, fueled by robust data center demand, while traditional AAON-branded product sales declined 19.1%.

This sharp shift in product mix, combined with temporary supply chain constraints for R454B refrigerant components, compressed gross margins to 26.8% from 35.2% in Q1 2024. The backlog picture provides a forward-looking bright spot, reaching a record $1.0 billion - up 83.9% year-over-year, with both segments showing significant increases.

Management's confidence is evidenced by their 25% dividend increase and $30 million share repurchase program. However, the balance sheet shows limited cash ($2.4 million) with $178 million drawn on their revolving credit facility, which bears watching given planned 2025 capital expenditures of $220 million. The sequential gross margin improvement from Q4 indicates early signs of operational stabilization as production volumes increase.

AAON's operational pivot: surging BASX data center equipment production offset by AAON-branded product supply chain constraints affecting profitability.

AAON's manufacturing operations faced significant dichotomy in Q1 2025. The company successfully accelerated production of BASX-branded equipment across four major facilities including the new Memphis location, evidenced by the 374.8% year-over-year sales growth. This demonstrates impressive operational flexibility and capacity expansion, particularly for data center cooling solutions.

Conversely, core AAON-branded product manufacturing struggled with supply chain constraints for R454B refrigerant components, hampering production rates and contributing to the 19.1% sales decline. Management indicates these constraints are gradually abating, with vendor production beginning to catch up with demand.

The operational transformation is reflected in segment performance, with improved productivity at Longview, Texas and Redmond, Oregon facilities, while Tulsa operations experienced temporary inefficiencies. The planned $220 million investment for 2025 targets capacity expansion in Memphis, improvements in Longview, and back-office automation - signaling management's confidence in continued data center demand.

With record backlog of $1.0 billion, the operational challenge becomes efficiently converting this demand into revenue while rebuilding margins. Management expects "considerable" increase in Tulsa production volumes as supply issues resolve, suggesting near-term operational improvements.

TULSA, Okla., April 30, 2025 /PRNewswire/ -- 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 2025.

Gary Fields, CEO, stated, "We had a strong first quarter. Net sales, gross margin and earnings all experienced quarter-over-quarter improvement. Production of BASX-branded equipment made solid progress as we accelerated backlog conversion, utilizing all four of our major locations, including our new facility in Memphis. The resulting net sales of BASX-branded products for the quarter were up year-over-year 374.8%. Bookings for BASX-branded equipment were also strong, driven by demand for both our air-side and liquid cooling data center equipment, with total backlog at the end of the quarter up 83.9% from a year ago and up 18.4% from the end of last year."

Fields continued, "Turning to AAON-branded equipment sales, we expected the weak book of orders throughout most of the fourth quarter last year was going to result in a soft first quarter. However, supply chain issues related to the new R454B refrigerant components exacerbated this dynamic, resulting in slower than anticipated production rates. On a positive note, we are beginning to see these supply chain issues abate as production at our vendors is beginning to catch up with our demand. Also, bookings of AAON-branded equipment in the first quarter experienced a strong rebound, reinforcing our belief that our competitive position on this side of the business is strengthening. The strong book of orders led to the backlog of AAON-branded equipment increasing to the highest level since the first quarter of 2023, up 44.9% year-over-year. This, along with the strength of BASX-branded bookings, led to a record total backlog of $1.0 billion, up year-over-year 83.9%."

Fields concluded, "Gross margins were in line with our expectations, showing slight improvement from the fourth quarter. The sequential increase is due to both growth in BASX-branded sales and improved productivity at our Longview, Texas and Redmond, Oregon facilities, which is reflected in the margins at the AAON Coil Products and BASX segments, respectively. This was partially offset by weaker than expected margins at the AAON Oklahoma segment, which was impacted by the temporary supply chain issues associated with R454B refrigerant components."

Net sales for the first quarter of 2025 increased 22.9% to $322.1 million, from $262.1 million in the first quarter of 2024. The year-over-year increase was driven by the BASX and AAON Coil Products segments, which realized growth of 138.9% and 287.8%, respectively. The growth was fueled primarily by the demand for BASX-branded air-side and liquid cooling data center equipment. Net sales at the AAON Oklahoma segment declined year-over-year 23.0%. The decline was attributed to a temporary lull in orders in the fourth quarter combined with temporary supply chains issues of R-454B refrigerant components.

Gross profit margin in the quarter was 26.8%, down from 35.2% in the comparable quarter in 2024. The year-over-year contraction in gross margin was a result of lower production volumes at the AAON Oklahoma segment, partially offset by improved operational efficiencies at the AAON Coil Products and BASX segments.

SG&A expenses for the quarter ended March 31, 2025 have increased due to higher depreciation and amortization costs reflective of the investments in growth that have been made, along with increased technology related consulting expenses from the additional investments in technology, offset by a decrease in professional fees. Earnings per diluted share for the three months endedMarch31, 2025, were $0.35, down 23.9% compared to earnings per diluted share in the first quarter of 2024.

Financial Highlights:

Three Months Ended
March 31,


%



2025


2024


Change



(in thousands, except share and per share data)


GAAP Measures







AAON-Branded Products net sales

$ 189,493


$ 234,181


(19.1)%


BASX-Branded Products net sales

$ 132,561


$ 27,918


374.8%


Total net sales

$ 322,054


$ 262,099


22.9%


Gross profit

$ 86,364


$ 92,242


(6.4)%


Gross profit margin

26.8%


35.2%




Operating income

$ 35,111


$ 46,970


(25.2)%


Operating margin

10.9%


17.9%




Net income

$ 29,292


$ 39,016


(24.9)%


Earnings per diluted share

$ 0.35


$ 0.46


(23.9)%


Diluted average shares

83,351,536


84,044,670


(0.8)%




Non-GAAP Measures







Non-GAAP adjusted net income1

$ 31,135


$ 39,016


(20.2)%


Non-GAAP adjusted earnings per diluted share1

$ 0.37


$ 0.46


(19.6)%


Adjusted EBITDA1

$ 56,698


$ 60,484


(6.3)%


Adjusted EBITDA margin1

17.6%


23.1%




1 This is a non-GAAP measure. See "Use of Non-GAAP Financial Measures" below for reconciliation to GAAP measure.

Backlog



March 31, 2025


December 31, 2024


March 31, 2024


(in thousands)

AAON-branded products

$ 403,863


$ 327,343


$ 278,636

BASX-branded products

623,006


539,747


279,807


$ 1,026,869


$ 867,090


$ 558,443

Matt Tobolski, COO and President, stated, "Considering the size of the backlog at the end of the first quarter and the expected conversion rates of that backlog, we are positioned well entering the second quarter. For the AAON Oklahoma segment, bookings trends have been positive year-to-date, backlog is strong, and production rates are increasing. We expect production volumes at our Tulsa, Okla. facility to increase considerably over the next several months given demand and as supply chain constraints abate. This will help drive quarter-over-quarter improvements in AAON Oklahoma sales and margins, partially offset by costs associated with the ramp-up of production at the new Memphis, Tenn. facility. Backlog and bookings of BASX-branded equipment continue to strengthen, driven by the data center market. We continue making progress towards improving operational efficiencies at our Redmond, Oregon and Longview, Texas facilities, and we continue to expect to build on this progress throughout the year. This will drive robust year-over-year growth in the cumulative sales of our BASX and AAON Coil Products segments. In conclusion, while there are increased uncertainties with the second half of the year related to the macroeconomic environment, we are encouraged with the immediate near-term outlook and extremely excited with the long-term fundamentals of the business."

As of March31, 2025, the Company had cash, cash equivalents and restricted cash of $2.4 million and a balance on its revolving credit facility of $178.0 million. Rebecca Thompson, CFO and Treasurer, commented, "During the quarter, we increased our dividend 25.0% to $0.10 per quarter or $0.40 per annum. We also completed the repurchase of 371,139 shares for $30.0 million at an average price of $80.81 per share during the quarter. We have continued confidence in our ability to grow and plan to invest $220.0 million in 2025 as we stand up our new plant in Memphis, continue improvements in Longview and invest in back office automation and technology."

Conference Call

The Company will host a conference call and webcast tomorrow at 9:00 a.m. EDT to discuss the first quarter of 2025 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 1-800-836-8184. To access the listen-only webcast, please register at. On the next business day following the call, a replay of the call will be available on the Company's website at .

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 .

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 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: [email protected]

AAON, Inc. and Subsidiaries

Consolidated Statements of Income

(Unaudited)






Three Months Ended
March 31,


2025


2024


(in thousands, except share and per share data)

Net sales

$ 322,054


$ 262,099

Cost of sales

235,690


169,857

Gross profit

86,364


92,242

Selling, general and administrative expenses

51,293


45,288

Gain on disposal of assets

(40)


(16)

Income from operations

35,111


46,970

Interest expense, net

(2,802)


(239)

Other income, net

174


77

Income before taxes

32,483


46,808

Income tax provision

3,191


7,792

Net income

$ 29,292


$ 39,016

Earnings per share:




Basic

$ 0.36


$ 0.48

Diluted

$ 0.35


$ 0.46

Cash dividends declared per common share:

$ 0.10


$ 0.08

Weighted average shares outstanding:




Basic

81,472,351


81,661,972

Diluted

83,351,536


84,044,670

AAON, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited)


March 31, 2025


December 31, 2024

Assets

(in thousands, except share and per share
data)

Current assets:




Cash and cash equivalents

$ 994


$ 14

Restricted cash

1,389


6,500

Accounts receivable, net

164,977


147,434

Income tax receivable

7,438


4,115

Inventories, net

198,852


187,420

Contract assets, net

188,656


135,421

Prepaid expenses and other

9,438


7,308

Total current assets

571,744


488,212

Property, plant and equipment, net

552,277


510,356

Intangible assets, net and goodwill

160,613


160,152

Right of use assets

14,751


15,436

Deferred tax assets


836

Other long-term assets

808


242

Total assets

$ 1,300,193


$ 1,175,234





Liabilities and Stockholders' Equity




Current liabilities:




Debt, short-term

$ 16,000


$ 16,000

Accounts payable

77,155


44,645

Accrued liabilities

97,041


99,347

Contract liabilities

16,421


14,913

Total current liabilities

206,617


174,905

Debt, long-term

236,417


138,891

Deferred tax liabilities

5,140


Other long-term liabilities

20,014


20,743

New market tax credit obligation

16,153


16,113

Commitments and contingencies




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, 81,348,131 and
81,436,594 issued and outstanding at March31, 2025 and December 31, 2024,
respectively

325


326

Additional paid-in capital

39,020


68,946

Retained earnings

776,507


755,310

Total stockholders' equity

815,852


824,582

Total liabilities and stockholders' equity

$ 1,300,193


$ 1,175,234

AAON, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)


Three Months Ended
March 31,


2025


2024

Operating Activities

(in thousands)

Net income

$ 29,292


$ 39,016

Adjustments to reconcile net income to net cash (used in) provided by operating
activities:




Depreciation and amortization

18,943


13,437

Amortization of debt issuance costs

52


31

Amortization of right of use assets

25


12

Provision for credit losses on accounts receivable, net of adjustments

88


112

Provision for excess and obsolete inventories, net of write-offs

57


581

Share-based compensation

4,021


3,957

Other

(45)


(10)

Deferred income taxes

5,976


(740)

Changes in assets and liabilities:




Accounts receivable

(17,631)


28,334

Income taxes

(3,323)


8,221

Inventories

(11,489)


16,699

Contract assets

(53,235)


(5,387)

Prepaid expenses and other long-term assets

(2,703)


(4,349)

Accounts payable

21,625


(9,968)

Contract liabilities

1,508


2,770

Extended warranties

37


698

Accrued liabilities and other long-term liabilities

(2,412)


(1,044)

Net cash (used in) provided by operating activities

(9,214)


92,370

Investing Activities




Capital expenditures

(46,723)


(34,688)

Proceeds from sale of property, plant and equipment

40


16

Acquisition of intangible assets

(3,717)


(4,055)

Principal payments from note receivable

12


13

Net cash used in investing activities

(50,388)


(38,714)

Financing Activities




Borrowings of debt

235,925


115,130

Payments of debt

(138,411)


(153,458)

Proceeds from financing obligation, net of issuance costs


4,186

Payment related to financing costs


(417)

Stock options exercised

4,356


9,844

Repurchase of stock

(31,536)


Employee taxes paid by withholding shares

(6,768)


(3,041)

Cash dividends paid to stockholders

(8,095)


(6,556)

Net cash provided by (used in) financing activities

55,471


(34,312)

Net (decrease) increase in cash, cash equivalents and restricted cash

(4,131)


19,344

Cash, cash equivalents and restricted cash, beginning of period

6,514


9,023

Cash, cash equivalents and restricted cash, end of period

$ 2,383


$ 28,367

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,


2025


2024


(in thousands)

Net income, a GAAP measure

$ 29,292


$ 39,016

Memphis incentive fee1

2,700


Profit sharing effect2

(230)


Tax effect

(627)


Non-GAAP adjusted net income

$ 31,135


$ 39,016

Non-GAAP adjusted earnings per diluted share

$ 0.37


$ 0.46

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.

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,


2025


2024


(in thousands)

Net income, a GAAP measure

$ 29,292


$ 39,016

Depreciation and amortization

18,943


13,437

Interest expense, net

2,802


239

Income tax expense

3,191


7,792

EBITDA, a non-GAAP measure

$ 54,228


$ 60,484

Memphis incentive fee1

2,700


Profit sharing effect2

(230)


Adjusted EBITDA, a non-GAAP measure

$ 56,698


$ 60,484

Adjusted EBITDA margin

17.6%


23.1%

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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SOURCE AAON

FAQ

How much did AAON's BASX-branded product sales grow in Q1 2025?

AAON's BASX-branded product sales grew 374.8% year-over-year in Q1 2025, reaching $132.6 million compared to $27.9 million in Q1 2024, driven by strong demand in data center equipment.

What is AAON's total backlog value as of March 2025?

AAON's total backlog reached a record $1.0 billion as of March 31, 2025, representing an 83.9% increase year-over-year, with BASX-branded products accounting for $623 million and AAON-branded products at $404 million.

How did AAON's earnings per share (EPS) perform in Q1 2025?

AAON's earnings per diluted share decreased 23.9% to $0.35 in Q1 2025, compared to $0.46 in Q1 2024, primarily due to lower production volumes in the AAON Oklahoma segment.

What is AAON's planned capital investment for 2025?

AAON plans to invest $220.0 million in 2025 for their new Memphis plant, improvements in Longview facility, and back office automation and technology upgrades.

How much did AAON increase its dividend in Q1 2025?

AAON increased its quarterly dividend by 25% to $0.10 per share ($0.40 annually) in Q1 2025.

What caused AAON's gross profit margin decline in Q1 2025?

AAON's gross profit margin declined to 26.8% from 35.2% year-over-year due to lower production volumes at AAON Oklahoma segment, partially offset by improved efficiencies at AAON Coil Products and BASX segments.
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Building Products & Equipment
Air-cond & Warm Air Heatg Equip & Comm & Indl Refrig Equip
United States
TULSA