AAON - AAON, Inc.

AAON, Inc. manufactures HVAC equipment — specifically rooftop units, chillers, air-handling units, and data center cooling systems — sold primarily to commercial and industrial building owners and contractors through a direct-sales model. The company targets mid-to-large commercial construction projects, including office buildings, retail spaces, and data centers, selling through its own sales force rather than distributors. AAON generates approximately $900M in annual revenue, with operations concentrated in the United States and a smaller presence in Canada.

Past Year Trends

• AAON's full-year 2024 net revenues grew approximately 16% year-over-year to roughly $1.04 billion (up from $897 million in FY2023), driven primarily by accelerating commercial HVAC orders and data center cooling demand through its BasX segment. (Bullish)
• Gross margins compressed approximately 200–300 basis points in FY2024 versus FY2023 as AAON absorbed startup and ramp-up costs from its new Longview, Texas manufacturing facility, which entered production during 2024. (Bearish)
• AAON's BasX subsidiary (acquired January 2022 for $190 million) reported materially higher revenues in 2024 as hyperscaler customers accelerated AI data center builds, making data center precision cooling a meaningfully larger share of consolidated revenue than in prior years. (Bullish)

Next Year Trends

• The Longview, Texas facility is expected to achieve full production capacity in 2025–2026, adding significant rooftop unit output and allowing startup cost drag to roll off, which should drive operating leverage and partial gross margin recovery toward historical norms. (Bullish)
• AAON's BasX unit carries an elevated backlog of liquid-cooling and precision-cooling orders tied to ongoing AI infrastructure expansion by hyperscalers such as Amazon and Microsoft; if hyperscaler capex sustains at current elevated levels, BasX revenue could grow another 20–30% in the next 12 months. (Bullish)
• Non-data-center commercial HVAC demand faces a potential unit volume headwind as the post-pandemic equipment replacement cycle matures and tighter commercial construction lending constrains new-build rooftop unit orders, specifically the light commercial segment that represents AAON's legacy revenue base. (Bearish)

Red Flags

No severe red flags identified as of August 2025.