AAON Inc (NASDAQ: AAON) reported record second-quarter FY26 net sales of $627 million, surging 101% year over year. The HVAC manufacturer’s adjusted EBITDA more than doubled to $94.2 million as accelerated production throughput and robust demand across its BASX and AAON brands drove significant top-line expansion.

Financial Performance

The company achieved its fourth consecutive quarterly revenue record, with sales rising 26% sequentially. Gross profit increased 84.3% to $152.5 million from $82.7 million in the prior-year period. However, gross margin contracted to 24.3% from 26.6% a year ago, reflecting the impact of ramping recently added manufacturing capacity, including the Memphis facility, alongside increased outsourcing and inflationary cost pressures.

SG&A expenses demonstrated operating leverage, declining 570 basis points to 13.3% of sales despite a dollar increase of $24.5 million to $83.6 million due to intentional growth investments. Adjusted diluted earnings per share grew 213.6% to 69 cents.

Segment Highlights

BASX segment sales grew 221% to $218 million, driven by sustained data center cooling demand and higher utilization at the Memphis facility. BASX gross margin expanded to 30.0% from 27.9%, with gross profit jumping 244.2% to $65.3 million.

AAON Oklahoma net sales increased 42% to $262.3 million. Gross profit rose 18.9% to $63.6 million, though gross margin fell 460 basis points to 24.3% from 28.9%. This decline was primarily due to $18.1 million in overhead expenses associated with the Memphis facility, compared to just $3 million in the prior-year period. Excluding these costs, Oklahoma margins expanded approximately 60 basis points.

AAON Coil Products (ACP) sales surged 151% to $146.7 million, supported by $126.6 million in BASX-branded liquid cooling product sales. ACP gross margin contracted to 16.0% from 17.5% due to temporary inflationary pressures on raw materials and freight.

What the Numbers Show

The divergence between top-line acceleration and margin compression highlights the transitional nature of AAON’s current growth phase. While revenue doubled, gross margin contracted by 230 basis points because the mix shifted toward lower-margin, ramping operations in Memphis and higher-cost outsourcing. However, SG&A leverage of 570 bps indicates that fixed administrative costs are being effectively absorbed by the volume surge, suggesting operational efficiency is improving even as variable production costs remain elevated during capacity expansion.

Balance Sheet and Outlook

Cash and cash equivalents totaled $12.7 million as of June 30, 2026, against debt of $435 million. The leverage ratio improved to 1.48 from 1.71 at the end of Q1FY26. Operating cash flow for the first half of FY26 was a positive $55 million, a significant improvement from a $31 million use of cash in the prior-year period.

Management updated full-year FY26 guidance, expecting sales growth of 55% to 60% and gross margins of 25% to 26%. CEO Matt Tabolski noted that while consolidated margins face near-term pressure from ramp-up activity, the backlog carries a more favorable margin profile than the first half, setting the stage for improvement in the latter half of the year.

AAON Inc. (NASDAQ: AAON) has introduced The Aaon Group as its new enterprise identity, marking a structural shift to reflect its evolution into a multi-brand organization. The Tulsa-based HVAC and thermal management solutions provider stated that the rebranding creates a clear distinction between the parent enterprise and its two operating brands, AAON and BASX.

The move aims to provide a durable framework for governance, capital allocation, shared capabilities, and future portfolio growth. According to the company, the new identity brings greater clarity to its status as an enterprise built around two strong and highly differentiated operating brands.

Strategic Rationale

Matt Tobolski, President and CEO, noted that the company has evolved significantly over the last several years, necessitating an update to the enterprise identity. He stated that The Aaon Group provides a clear enterprise identity above AAON and BASX while preserving the distinct brands, cultures, and customer relationships that have made each successful.

Tobolski added that the change reflects how the company operates today and provides a framework to support the next phase of growth.

Operational Continuity

The introduction of The Aaon Group does not alter the company’s operating segments, leadership team, financial reporting, or NASDAQ ticker symbol. AAON and BASX products, services, customer relationships, and customer-facing teams remain unchanged.

The Aaon Group continues to provide high-performance HVAC and thermal management solutions for commercial, industrial, and data center environments. Through its two brands, the company designs and manufactures highly configurable and custom-engineered equipment focused on efficiency, performance, reliability, and long-term customer value.