BASX leads sales growth
AAON's third-quarter earnings release reported $707.4 million in net sales, a company record and an 84.1% increase from $384.2 million a year earlier. Operating income reached $100.0 million, up 129.3%, while GAAP diluted earnings per share increased 124.3% to $0.83 from $0.37.
Much of that growth came from BASX, the company's data-center-focused brand. Its sales reached a record $397.2 million, a 218.3% year-over-year increase. Within BASX, liquid cooling sales climbed 255.6% to $165.5 million. AAON-branded commercial HVAC sales totaled $310.2 million, up 19.6%.
The company also lifted its forecast for full-year 2026 net sales growth to 72%-75%, replacing its previous range of 55%-60%. Its outlook calls for a gross margin of approximately 26%, with selling, general and administrative expenses at about 13% of sales.
At September 30, 2026, AAON had a $1.9 billion backlog, 40.5% larger than a year earlier. Backlog growth was 51.1% for BASX-branded products and 18.0% for AAON-branded products. Faster conversion of orders into revenue reduced the total backlog by 5.9% from the second quarter.
The rally against a weaker longer-term record
According to Trefis, the five-session advance increased AAON's market capitalization by about $2.0 billion to roughly $6.5 billion. Even after the rally, its closing price remained 46.7% below the 52-week high of $147.96. It was 44.8% above the 52-week low of $54.42.
The S&P 500 gained 3.3% over those five sessions, substantially less than AAON. Across longer periods ending November 12, however, AAON lagged the index: its year-to-date return was 3.7%, compared with 12.0% for the S&P 500, and its one-year return was negative 23.8%, versus the index's 12.2% gain. These return comparisons include dividends.
AAON was still down 10.1% over three months despite the rally. In the other 58 trading sessions within that period, the stock lost 37.9%.
Growth outpaces peers, but margins trail
Trefis's comparison with S&P 500 Industrials stocks shows AAON growing faster but earning a lower operating margin than the group's median. Revenue increased 72.3% over the trailing 12 months, compared with median growth of 8.5%. AAON's operating margin was 12.3%, below the 17.5% median.
The shares also carried a higher earnings multiple: AAON traded at 31.8 times trailing earnings, versus a median of 25.3 for the comparison group.
Accounting corrections and expansion costs
The quarterly release included corrections to AAON's first- and second-quarter 2026 financial statements. The company identified errors involving revenue recognition and software subscription accounting, along with a material weakness in internal control over financial reporting. The restatements raised first-half net sales by $10.7 million and diluted earnings per share by $0.09. AAON said it found no evidence of fraud or misconduct.
AAON reported $3.7 million in cash, cash equivalents and restricted cash at September 30, alongside $386.7 million borrowed under its revolving credit facility. Those balances reflected the capital demands of its manufacturing expansion, including the ramp-up of the Memphis facility.
Memphis expenses also affected the AAON Oklahoma segment's profitability. Its third-quarter gross margin declined to 25.5% from 33.0% a year earlier, a drop the company attributed largely to facility-related overhead. Those expenses totaled $20.7 million, compared with $4.5 million in the prior-year quarter.
