AAON : 2025 Earnings Call Presentation Q1Q1
AAON
Published on 04/30/2025 at 17:33
( D U Q L Q J V & R Q I H U H Q F H & D O O
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Q1 2025 overview
Sales
Gross Profit Margin
Adj. EBITDA
Adj. Diluted EPS
Backlog
+22.9% Y/Y
-840 bps Y/Y
+75 bps Q/Q
-6.3% Y/Y
17.6% margin
-20.0% Y/Y
+83.9% Y/Y
+18.4% Q/Q
Q1 sales and earnings improved from Q4 results
Strong backlog will result in a steep recovery in 2H 2025
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Q1 Highlights
The year-over-year increase was driven by a 374.8% increase in sales of BASX-branded equipment, largely spurred by data center equipment demand.
This was partially offset by a 19.1% decline in sales of AAON-branded equipment
$400
$300
$266.0
$284.0
$312.2 $306.6
$262.1
$313.6 $327.3
$297.7
$322.1
(in millions)
$200
$100
$-
Q1 2023 Q2 2023 Q3 2023 Q4 2024 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025
37.2%
36.4%
33.1%
35.2%
36.1%
34.9%
29.0%
26.1%
26.8%
40%
30%
20%
10%
0%
Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025
Q1 Highlights
Year-over-year contraction largely reflects lower volumes and the related reduced absorption of fixed costs at the AAON Oklahoma segment
Right sizing capacity to meet growing demand at AAON Coil Products and BASX segments resulted in substantial margin expansion at these two segments
$60 18%
$50
(in millions)
$40
$30
16%
$32.9
$39.3
$45.9
$45.3
$48.2
$48.6
$47.9
$51.3
$51.5
14%
$20
$10
12%
$0
Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025
10%
As a percent of sales, SG&A decreased to 15.9%
Included in SG&A was a $2.7 million fee related to tax incentives for the new Memphis facility
$0.55
$0.58
$0.62
$0.63
$0.56
$0.44
$0.46
$0.35
$0.30
$0.70
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$-
Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025
The y/y decline is largely associated with the lower gross margin, partially offset by an excess tax benefit related to stock compensation
Included in EPS was a $2.7 million fee related to tax incentives for the new Memphis facility. Excluding the net impact, adjusted EPS was $0.37.
Balance sheet remains strong
Leverage ratio at the
end of the first quarter was 0.95
Working Capital
$500
$267.1
$365.1
Annual Capex
$300
$200
$109.5
$213.2
Expect capex of approximately
$220.0 million in 2025, related to preparing the Memphis facility for production later this year
$250
$0
Q1 2024 Q1 2025
$100
$0
$76.0
2022 2023 2024
Repurchased $30.0 million of shares outstanding
* All metrics are in millions
Restricted Cash, Cash & Cash Equivalents
$40
$20
$0
$8.4
$20.0
$1.0
$1.4
Q1 2024 Q1 2025
Cash and cash equivalents Restricted cash
Debt
$400
$252.4
$200
$0
$-
Q1 2024
Q1 2025
Sales
(All percentages on this slide represent year-over-year changes)
AAON Oklahoma
AAON brand BASX brand
Sales
$161.8M
Down 23.0%
$189.5M
Down 19.1%
$132.6M
Gross Profits
Up 374.8%
$38.0M
Down 51.6%
Production was slower than anticipated due to temporary supply chain issues
Strong demand of data center equipment at the Oregon and Texas facilities
Entering Q2, backlog is strong and supply chain issues are abating, allowing for production to improve substantially
AAON Coil Products
BASX
$94.0M
Up 287.8%
$66.2M
Up 138.9%
$32.5M
Up 299.1%
$15.9M
Up 179.5%
Strength driven by the new BASX-branded data center liquid cooling product
Anticipate improvement in productivity throughout 2025
(All percentages on this slide represent year-over-year changes)
Backlog
AAON brand
BASX brand
$403.9M
Up 44.9%
$623.0M
Up 122.7%
Backlog is the highest level since the first quarter of 2023
With supply chain issues abating, expect production to increase
Demand of air-side and liquid cooling solutions for data centers is robust
Strong visibility into 2026 will result in robust growth for the foreseeable future
TOTAL BACKLOG $1,026.9M
Up 83.9%
Strong backlog allows us to plan production more efficiently
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Anticipate improvement in production volume and efficiency throughout 2025
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R X W O R R N
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Non-GAAP Adjusted Net Income Non-GAAP EBITDA and Adjusted EBITDA
Three Months Ended March 31,
2025 2024
(in thousands)
Net income, a GAAP measure $ 29,292 $ 39,016
Memphis incentive fee12,700 -
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.
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.
Disclaimer
AAON Inc. published this content on April 30, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 30, 2025 at 21:31 UTC.