AAON (NASDAQ:AAON) Posts Record Q2 Revenue of $627M, Raises Full-Year Sales Growth Outlook to 55%-60%

AAON, Inc. (NASDAQ: AAON) posted record second-quarter net sales of $627.0 million, up 101.2% year over year, as accelerating production throughput across its facilities drove backlog conversion at an unprecedented pace. Adjusted EPS of $0.69 beat the $0.52 analyst consensus by 33.2%, while GAAP diluted EPS of $0.68 rose 257.9% from $0.19 in the prior-year period. The company simultaneously raised its full-year 2026 revenue growth outlook to 55%-60% from a prior range of 40%-45%.

Q2 2026 Results

• Net sales: $627.0 million, up 101.2% from $311.6 million in Q2 2025, marking a fourth consecutive quarterly record.
• BASX-branded sales: $345.0 million, up 216.2% year over year, reflecting data center demand and higher production output from recently added manufacturing capacity.
• AAON-branded sales: $282.2 million, up 39.3% year over year, supported by healthy backlog and continued production throughput improvements.
• Operating income: $68.9 million, up 192.1% from $23.6 million in Q2 2025, with operating margin expanding to 11.0% from 7.6% in the prior-year period.
• Total backlog: $2.0 billion as of June 30, 2026, up 98.0% year over year, with BASX-branded backlog up 185.4% and AAON-branded backlog up 9.4%.
• Year-to-date operating cash flow: $55.0 million, compared with negative $31.0 million in the year-ago period.

What Drove the Results

Adjusted EPS of $0.69 exceeded the $0.52 consensus by 33.2%, driven primarily by operating leverage rather than margin expansion at the gross profit line. Gross profit increased 84.3% to $152.5 million, but gross margin contracted to 24.3% from 26.6% in Q2 2025, reflecting ramp costs at the Memphis facility and the use of outsourced components to support accelerated production. SG&A as a percentage of sales declined 570 basis points to 13.3%, as revenue growth outpaced overhead investment and more than offset the gross margin compression, producing operating income growth of 192.1% against revenue growth of 101.2%.

Total backlog of $2.0 billion remained nearly double the prior-year level even as the company converted a record volume of backlog into revenue during the quarter. BASX-branded backlog declined 7.4% sequentially from $1.62 billion at March 31, 2026, to $1.43 billion at June 30, 2026, primarily reflecting accelerated conversion and the timing variability of large project awards. AAON-branded backlog rose 6.0% sequentially to $540.5 million.

Raised Guidance

Management updated its full-year 2026 outlook, raising the net sales growth target to 55%-60% from the prior 40%-45% range. The revised gross profit margin guidance of approximately 25%-26% is below the prior 27%-28% range, reflecting near-term costs associated with scaling new capacity. SG&A as a percent of sales is now guided at 13%-14%, improved from the prior 14%-15% range. Depreciation and amortization guidance is unchanged at $95 million to $100 million. Management indicated it expects sequential margin improvement in the second half of 2026 as utilization increases, pricing actions take effect, and backlog with improved pricing converts to revenue.

Wall Street View

Analyst reaction was mixed following the print. Robert W. Baird lowered its price target on AAON, and other firms adjusted forecasts, according to market reports, citing the revised gross margin outlook as the primary concern. Specific revised price targets and rating changes were not fully detailed in available sourcing at the time of publication.

Investor Takeaway

The Q2 report confirms that AAON's capacity investments are translating into real revenue scale, with the $2.0 billion backlog providing significant forward revenue visibility even after a record conversion quarter. The key unresolved question for investors is whether gross margins can recover to the 25%-26% full-year guidance range in the second half, given that Memphis facility utilization and price-cost timing remain works in progress. Shares traded at $86.69 on Tuesday, August 11, 2026, down -2.86%, while the S&P 500 gained 0.09%.