AAON lifted its full-year outlook after reporting record quarterly sales and a backlog surge tied to continued demand for data center cooling equipment.
Key Investor Takeaways
- AAON (NASDAQ:AAON) reported record first-quarter sales of $496.9 million, up 54.3% year-over-year.
- Total backlog more than doubled to a record $2.13 billion, driven largely by BASX-branded data center cooling demand.
- The company raised its 2026 revenue growth outlook to 40%-45%, up sharply from prior guidance of 18%-20%.
- BASX sales and backlog growth continue to position AAON as a beneficiary of expanding data center infrastructure spending.
- Gross margin pressure from capacity expansion and temporary outsourcing remains a near-term factor investors may monitor.
Why AAON Stock Is in Focus
AAON (NASDAQ:AAON) posted record first-quarter revenue and raised its full-year guidance as demand tied to data center cooling systems continued to accelerate.
Net sales climbed 54.3% year-over-year to $496.9 million. BASX-branded sales surged 72.4% to $228.6 million, while AAON-branded sales increased 41.6% to $268.4 million.
The company’s total backlog reached a record $2.13 billion, up 107.4% from a year earlier. BASX backlog alone rose 160.0% year-over-year, reflecting continued strength in the data center market.
GAAP diluted EPS increased 37.1% to $0.48.
AAON also raised its 2026 guidance. The company now expects revenue growth of 40%-45%, compared with prior guidance of 18%-20%. Gross margin guidance was revised to 27%-28%, while SG&A expense guidance improved to 14%-15% of sales.
“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.”
Why This Matters for Investors
The updated outlook may reinforce investor expectations that AAON is becoming increasingly tied to long-term data center infrastructure spending trends.
The BASX business remains central to that narrative. Strong backlog growth suggests demand for cooling systems tied to AI and high-performance computing infrastructure continues to expand, potentially giving AAON stronger revenue visibility than many industrial peers.
At the same time, the company is still moving through a large operational scaling phase. Gross margins declined year-over-year as AAON absorbed costs tied to new facilities, temporary outsourcing, and capacity investments.
Management framed those pressures as temporary, arguing that utilization improvements and productivity gains could support margin expansion over time. Investors may focus on whether production ramp execution translates into sustained profitability improvements over the next several quarters.
The sharp increase in guidance also raises expectations. Future results may be judged against the company’s ability to continue converting its elevated backlog into revenue while maintaining operational discipline.
What to Watch Next
Investors will likely monitor backlog conversion rates, particularly within the BASX segment, as well as progress ramping production at the Memphis facility.
Additional focus may center on gross margin recovery, data center order momentum, cash flow generation, and whether utilization improvements continue to offset the costs associated with expansion efforts.