AAON, Inc. Reports 22.9% Revenue Growth to $322.1 Million in Q1 2025

AAON, Inc. reported a significant increase in its financial performance for the first quarter of 2025, with net sales reaching $322.1 million, a 22.9% increase from $262.1 million in the same period last year. The growth was primarily driven by a substantial rise in sales of BASX branded products, which surged by 374.8% to $132.6 million, while sales from AAON branded products decreased by 19.1% to $189.5 million. The company's gross profit for the quarter was $86.4 million, down from $92.2 million in the prior year, reflecting a gross margin of 26.8%, compared to 35.2% in 2024.

The filing highlighted several operational changes, including a notable increase in the company's backlog, which reached a record $1.03 billion, up 83.9% year-over-year. This increase was attributed to heightened demand for BASX products, particularly in the data center cooling solutions market. The company also reported a rise in capital expenditures, totaling $50.4 million, marking a 30.2% increase compared to the previous year, as it continues to invest in expanding its manufacturing capabilities.

AAON's workforce has also seen changes, with the company implementing wage increases to attract and retain employees amid a tight labor market. In March 2025, the company awarded a 4.0% merit raise, following a 3.3% increase in March 2024. The total employee headcount remains a critical focus as the company navigates supply chain challenges and labor shortages, which have impacted production capacity.

The company’s financial outlook remains cautious due to ongoing macroeconomic conditions, including the impact of tariffs and inflation on material costs. AAON has indicated that it will continue to pass some of these costs onto customers, although this could affect demand. The company is also focused on maintaining its liquidity position, with a revolving credit facility of $200 million and a term loan of $80 million, which provides flexibility for future investments and operational needs.

In summary, AAON, Inc. has demonstrated strong revenue growth driven by its BASX product line, while facing challenges in its AAON branded sales. The company is actively investing in its future growth and managing operational challenges, with a keen eye on market conditions and labor dynamics as it moves forward.