AAON reported third‑quarter 2025 revenue of $384.2 million, a 17.4% year‑over‑year increase that exceeded the consensus estimate of $338.05 million by $46.15 million, or 13.7%. Earnings per diluted share came in at $0.37, beating the $0.33 consensus by $0.04, a 12.1% lift that reflects disciplined cost control and a favorable product mix.
The company’s backlog climbed to $1.32 billion, up 103.8% from the same period last year. The surge is driven almost entirely by the BASX brand, whose sales jumped 95.8% YoY to $124.8 million, while AAON‑branded sales dipped 1.5% YoY to $259.5 million but grew 28.1% sequentially. Segment‑level gross margins were 27.0% for BASX and 31.5% for the AAON Oklahoma unit, up from 27.5% in Q2 2025, indicating improved operational efficiency at the Longview, Texas facility and better utilization of the new ERP system.
Gross profit margin for the quarter was 27.8%, down from 34.9% in Q3 2024 but up from 26.6% in Q2 2025. The year‑over‑year compression is largely attributable to the cost of integrating the ERP platform and unabsorbed fixed costs at the new Memphis, Tennessee plant. The sequential improvement reflects higher production volumes and a shift toward higher‑margin BASX contracts, offsetting the temporary investment drag.
AAON reiterated its full‑year 2025 guidance, projecting sales growth in the mid‑to‑high teens and a gross margin of 28‑29%. The guidance upgrade from low‑teens to mid‑teens signals management’s confidence in sustained demand from data‑center customers and the ramp‑up of Memphis capacity. The company also highlighted continued momentum in the data‑center market, noting that backlog conversion is expected to accelerate as production capacity expands.
CEO Matt Tobolski said the quarter “demonstrates the enduring demand for our products and reflects continued share gains, margin improvement and steady progress toward our operational goals.” Analysts noted that the revenue and EPS beats, combined with the record backlog, were the primary drivers of the positive market reaction, while the margin compression and ERP integration costs were viewed as short‑term headwinds that are expected to recede as the new system stabilizes.
The results underscore AAON’s strategic pivot toward high‑efficiency data‑center cooling solutions. The strong BASX performance and backlog growth position the company to capture a larger share of the growing data‑center market, while the company’s investments in manufacturing and ERP integration lay the groundwork for margin recovery and sustained revenue growth in the coming quarters. Headwinds remain in the form of ongoing ERP implementation costs and a softer traditional HVAC market, but the company’s focus on data‑center demand and operational scaling mitigates these risks.
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