AAON Raises 2026 Sales Growth Outlook to 72%-75% After BASX Sales Jump 218.3%

Key Facts

On November 9, AAON raised its 2026 sales growth outlook to 72%-75%, from a previous range of 55%-60%, after strong demand and production growth in the third quarter. The company said in a statement accompanying its filing with the U.S. Securities and Exchange Commission that sales benefited from strong demand for the AAON and BASX brands, increased manufacturing output and greater utilization of recently expanded capacity. The results show a clear divergence between the brands, with much faster growth at BASX, which is tied to data-center demand. For the year, the company expects a gross margin of about 26% and selling, general and administrative expenses of about 13% of sales. The outlook increase comes as the company continues to deliver orders, with demand expected to remain strong in the fourth quarter and into 2027.

AAON product sales reached a record $310.2 million, up 19.6% year over year in the third quarter. BASX sales rose 218.3% to a record $397.2 million. The company attributed BASX growth to strong momentum in data-center demand, alongside increased production and utilization of added capacity. It also said BASX product backlog increased 51.1% year over year, reflecting continued customer investment in data-center infrastructure. AAON product backlog rose 18.0% year over year, supported by order activity despite weakness in some end markets.

Gross profit rose 76.4% to $188.5 million, but gross margin was 26.7%, compared with 27.8% in the same period a year earlier. The margin improved 60 basis points from the previous quarter, marking a second consecutive quarterly improvement, according to the company. AAON attributed the year-over-year pressure mainly to BASX's larger share of revenue, as the brand's products come from less mature and less utilized facilities. Operating income, meanwhile, rose 129.3% to $100.0 million, compared with $43.6 million a year earlier. Diluted earnings per share were $0.83, versus $0.37 in the third quarter of 2025.

Selling, general and administrative expenses declined 400 basis points as a share of sales to 12.5%. The company said this reflected improved operating leverage and cost control as revenue grew faster than overhead expenses. AAON expects these expenses to be about 13% of sales in 2026, compared with its previous outlook of 13%-14%. It also expects a gross margin of about 26% for the year, following a previous range of 25%-26%. On liquidity, operating cash flow since the start of 2026 through September 30 improved to $146.9 million. The company had reported operating cash use of $18.8 million in the same period a year earlier.

The company said total backlog declined from its level in the second quarter, although it remained higher year over year, while continued order fulfillment drove sales to record levels. AAON said it expects demand in the data-center market to remain strong in the fourth quarter and into 2027, and anticipates further gross-margin progress in the fourth quarter. Investing.com cited William Blair analysts as saying BASX orders accelerated and fourth-quarter orders are on track to match or exceed the $586 million recorded in the fourth quarter of 2025. The analysts attributed this to recurring large orders from hyperscale computing customers and the addition of new customers. Those estimates remain attributed to the analysts, while the company said order strength is expected to continue over the coming period.

On governance, AAON said in its November 9 filing that it had re-presented unaudited financial statements for the quarters ended March 31 and June 30, 2026, and that the previous statements for those quarters should not be relied upon. The company linked the errors to revenue recognition under the percentage-of-completion method and accounting for software subscriptions. It also disclosed a material weakness in internal control over financial reporting. The company said it found no evidence of fraud or misconduct. After the results and outlook increase were announced, the company's shares rose about 22% in premarket trading on Tuesday, November 10, according to Investing.com.