AAON, Inc. reported significant financial results for the third quarter and the first nine months of 2025, with net sales reaching $384.2 million for the quarter, a 17.4% increase from $327.3 million in the same period last year. For the nine months ended September 30, 2025, net sales totaled $1.018 billion, up 12.7% from $902.9 million in 2024. However, the company experienced a decline in profitability, with net income for the third quarter falling to $30.8 million, down from $52.6 million in the prior year, and a nine-month net income of $75.6 million compared to $143.9 million in 2024.
The decrease in profitability was attributed to several factors, including increased costs associated with tariffs and supply chain disruptions related to the transition to new refrigerants. Selling, general, and administrative expenses rose significantly to $63.2 million for the third quarter, compared to $48.6 million in the previous year, driven by higher warranty claims and increased salaries and benefits as the company expanded its workforce. The gross profit margin also declined, from 34.9% to 27.8% for the quarter, reflecting the impact of these cost pressures.
Operationally, AAON saw a notable increase in demand for its BASX brand products, particularly in the data center cooling solutions segment, which contributed to a 99.4% increase in sales for the AAON Coil Products segment. In contrast, sales for the AAON brand were negatively impacted by a softer rooftop market and challenges stemming from the implementation of a new Enterprise Resource Planning (ERP) system. The company reported a consolidated backlog of $1.32 billion as of September 30, 2025, a 103.8% increase from the previous year, indicating strong future demand.
In terms of strategic developments, AAON has continued to invest in its growth, with capital expenditures totaling $138.9 million in 2025, a 22.1% increase from the previous year. The company has also been active in share repurchases, having bought back approximately $30 million worth of shares in the first nine months of 2025. Looking ahead, AAON anticipates that the implementation of its new ERP system will stabilize and improve operational efficiency, while it continues to navigate the challenges posed by macroeconomic conditions and supply chain issues. The company remains focused on leveraging its strong liquidity position to capitalize on growth opportunities in the HVAC market.
About AAON, INC.
AAON, Inc. is a leading provider of HVAC solutions, specializing in semi-custom and custom heating, ventilation, and air conditioning systems for commercial and industrial markets. With a focus on energy efficiency and sustainability, AAON's innovative products, including rooftop units and advanced controls, cater to diverse applications, including data centers and cleanrooms. The company is well-positioned to capitalize on growing demand for high-performance HVAC systems, supported by robust R&D initiatives.
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