AAON, Inc. (NASDAQ:AAON) reported fourth-quarter results on Monday that topped revenue expectations but fell short on earnings, as the HVAC equipment manufacturer faced higher costs linked to capacity expansion and ongoing production ramp-ups.
The company’s shares declined 2.17% in pre-market trading following the announcement, with investors focusing on weaker-than-expected profitability despite robust top-line growth.
Adjusted earnings per share came in at $0.39 for the quarter, below analyst forecasts of $0.45.
Revenue jumped 42.5% year over year to $424.2 million, surpassing consensus estimates of $378.08 million. Growth was largely fueled by surging demand for BASX-branded data center cooling equipment, where sales climbed 138.8% to $181.4 million. Sales under the AAON brand also increased, rising 9.5% to $242.8 million.
Gross margin narrowed slightly to 25.9%, compared with 26.1% a year earlier, mainly due to unabsorbed fixed costs tied to the startup phase of the company’s new Memphis manufacturing facility. These pressures offset gains from higher shipment volumes.
“We made meaningful progress expanding production capacity and further advanced our operational readiness for sustained long-term growth,” said CEO Matt Tobolski. “Production at our new Memphis facility is ramping rapidly, while our Longview, Texas facility continues to scale, increasing our ability to support accelerating demand for our data center equipment.”
AAON finished the quarter with a record backlog of $1.83 billion, up 110.9% from the prior year, strengthening revenue visibility heading into 2026. BASX backlog rose 141.3% year over year, while AAON-branded backlog increased 60.8%.
Looking ahead to fiscal 2026, the company expects revenue to grow between 18% and 20%, with gross margins projected in a 29%–31% range. The midpoint of 30% implies a notable improvement from the 26.7% margin recorded in fiscal 2025, supported by higher utilization rates and improved absorption of fixed manufacturing costs.