Q2 2025 Aaon Inc Earnings Call Transcript
Key Points
- BASX brand demonstrated significant growth, with data center sales up 127% in Q2 and 269% year to date.
- AAON's national account strategy is gaining traction, with orders growing 163% year over year in Q2.
- The AAON branded alpha class heat pump business is experiencing strong market adoption, with sales up 8% and bookings up 61% in Q2.
- AAON's backlog is favorably priced relative to input costs, with recent price increases expected to positively impact sales and margins in the second half of the year.
- The ERP system, once fully implemented, is expected to deliver significant operational and economic benefits across the organization.
- Second quarter results fell short of expectations due to challenges related to the ERP implementation.
- Production at the Longview facility was significantly impacted, leading to a slowdown in AAON branded equipment production.
- The ERP implementation caused coil supply shortages, affecting production at the Tulsa facility.
- Gross margin contracted by 950 basis points due to lower production volumes and increased costs.
- The company revised its full-year 2025 outlook lower, anticipating sales growth in the low teens and a gross margin of 28% to 29%.
Good morning, ladies and gentlemen, and welcome to the AAON Inc. second quarter 2025 earnings release conference call. (Operator Instructions) Also note that the call is being recorded on Monday, August 11, 2025.
And I would like to turn the conference over to Joseph Mandillo, Director of Investor Relations. Please go ahead, sir.
Thank you and good morning, everyone. The press release announcing our second quarter financial results was issued earlier this morning and can be found on our corporate website aaon.com. The call today is accompanied by a presentation that you can also find on our website as well as on the listen only webcast. We begin with a customary forward-looking statement policy. During the call, any statement presented dealing with information that is not historical is considered forward-looking. And made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, the Securities Act of 1933, and the Securities and Exchange Act of 1934, each as amended
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