AAON's Q2 2025 Financial Performance and Future Plans

Author: Owen Jenkins Updated: 08-11-2025 07:13 AM

AAON Reports Strong Performance in Q2 2025

In a recent announcement, AAON, INC. (NASDAQ: AAON) reported its second-quarter results for 2025, showcasing both challenges and areas of growth. The company highlighted a slight decline in net sales, attributed to ongoing supply chain constraints and the roll-out of a new ERP system. Despite these obstacles, the demand for AAON's HVAC solutions remains robust.

Q2 Highlights

During this quarter:

Net sales decreased by 0.6% to $311.6 million from $313.6 million year-over-year.
Gross profit margins dropped to 26.6%, a decrease from 36.1% in the same period last year.
Notably, AAON Coil Products recorded significant sales growth of 86.4%, driven by high demand for BASX-branded equipment.
The company reported strong booking trends for both AAON and BASX products, with the adjusted backlog climbing by 71.9% to $1.12 billion.
AAON has decided to adjust its full-year 2025 outlook in light of these results.

Operational Challenges and Strategic Response

CEO Matt Tobolski expressed concern over the Q2 results, which did not meet the organization's high standards. He emphasized that the disappointing performance stemmed from operational inefficiencies related to the new ERP system, which negatively impacted production levels. However, there has been steady improvement month-over-month since April. July marked the company's strongest production month of the year, with plans to boost production further in the upcoming months.

Addressing Production Inefficiencies

Tobolski reassured stakeholders that the upgrades in the ERP system are crucial for AAON's long-term success. Although the transition posed short-term challenges, he remains optimistic about the benefits it will bring. The management is committed to enhancing operational efficiency across its facilities in Tulsa and Longview.

Financial Overview

For the quarter, AAON's gross profit was significantly impacted by lower production volumes. Adjusted EBITDA margin decreased to 14.9%, down from prior levels. SG&A expenses rose to $59.1 million, representing 19.0% of sales compared to $45.9 million, or 14.6% of sales in Q2 2024. This increase includes investments in infrastructure and one-time expenses related to the Memphis facility.

Future Outlook

Despite the challenges faced in the first half of 2025, AAON's leadership team is committed to improving operational execution and bolstering production capabilities. The company is focused on capitalizing on its strong backlog to ensure a successful second half of the year. Additionally, the organization aims to continue strengthening its market position in the HVAC industry, particularly in the data center sector where demand remains strong.

Frequently Asked Questions

What were the main challenges faced by AAON in Q2 2025?

AAON faced operational inefficiencies related to the new ERP system and supply chain constraints impacting production levels.

How did AAON's net sales change compared to last year?

Net sales decreased by 0.6% year-over-year to $311.6 million.

What growth did the AAON Coil Products segment experience?

The AAON Coil Products segment saw an impressive growth of 86.4% due to heightened demand for BASX-branded products.

What is AAON's current backlog status?

AAON's adjusted backlog increased by 71.9% year-over-year, totaling $1.12 billion.

What is the company's outlook for the remainder of 2025?

While AAON is optimistic about improved production rates, it has revised its expectations downward for the second half of the year due to ongoing inefficiencies.

About The Author

Hi there I'm 38-year-old author and financial consultant Owen Jenkins. Having worked in the financial sector for more than ten years, I am well-versed in the subtleties and complexity that mold our financial environment. Following a degree in finance, I worked in a number of financial institutions honing my abilities in market analysis, financial planning, and investment strategies.

My love is teaching others about investing and personal finance. My goal in writing many books and articles has been to demystify financial ideas and give readers the information they need to make wise financial decisions. I write with a direct, useful style that emphasizes doable suggestions for daily living.

Along with writing, I lead webinars and seminars where I impart knowledge on how to successfully negotiate the financial world. I also write for financial journals and show up as a guest expert on financial news programs a lot. Whether they are new to investing or want to improve their approach, my mission is to enable people to take charge of their financial futures.

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