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AAON, Inc.

Q2 FY26Building Products

AAON, Inc. Q2 FY26 Results — Earnings Call Analysis

Q2 FY26 earnings call: what management said on revenue, margins and capex.

Price₹142

Market cap₹11.7K Cr

P/E98.7

Updated30 May 2026

Read4 min read

What the Q2 FY26 call signalled

4 of 4 strong

RevenueStrong growth

MarginMargins slightly up

CapexCapex planned

Order bookOrder book rising

The short version

- Strong growth anticipated throughout 2026, driven by ramped production and capacity investments, especially in Memphis. - AAON anticipates strong earnings growth in 2026, with diluted EPS for Q1 up 37% year-over-year to $0.48.

From AAON, Inc.'s Q2 FY26 earnings-call transcript · updated 30 May 2026.

Revenue & Sales Performance

Strong growth

Strong growth anticipated throughout 2026, driven by ramped production and capacity investments, especially in Memphis.
Basic branded sales expected to reach roughly $1 billion in 2026, reflecting 40%-45% growth.
Continued sequential growth in Memphis revenue as the facility matures.
AAON branded sales projected to remain stable with slight upside.
Scaling internal manufacturing capacity (Memphis, Longview, Tulsa, Redmond, Kansas City) to support growth without requiring massive additional CapEx.
Growth in data center cooling solutions is broad-based across product portfolio, including airside, liquid cooling, and AI-centric chillers.
Market share gains expected in both transactional and national account segments.

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Profitability & Margins

AAON anticipates strong earnings growth in 2026, with diluted EPS for Q1 up 37% year-over-year to $0.48.
Full-year sales growth expected at 40% to 45%, with gross margin guidance of 27% to 28%.
SG&A as a percent of sales forecasted between 14% and 15%, with depreciation and amortization expenses around $95 million to $100 million.
Earnings growth is expected despite near-term margin pressure from outsourcing and tariff-related costs, which are considered temporary.
Margins expected to improve over the year as internal capacity matures, outsourcing costs decline, and pricing actions take effect.
Operating cash flow improved, with $34 million positive cash flow in Q1 driven by higher earnings and working capital efficiency.

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Capital Expenditure Plans

Capex planned

Full-year capital expenditures (CapEx) planned at $190 million, with $119 million expected for the current year.
Major focus on investments in Memphis facility: building out equipment, maturing operations, and expanding back-of-house to support growth.
Prior investments made over the last few years across multiple sites including Longview, Tulsa, Redmond, and Kansas City to support forward-looking growth potential.
Current Memphis investment provides substantial revenue potential without requiring massive additional follow-up CapEx to sustain growth.
Additional capital deployed to expand coil production capacity to reduce short-term outsourcing, enhancing internal manufacturing.

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Fundraising & Capital Structure

As of March 31, 2026, AAON had $1.1 million in cash and $425.2 million in debt, with a leverage ratio improved to 1.71x from 1.77x at year-end.
The company highlighted positive cash flow from operations ($34 million in Q1 2026), the highest since Q3 2024, driven by higher earnings and improved working capital.
Capital expenditures in Q1 were $52.9 million for capacity investments.

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Order Book & Pipeline

Order book rising

Basics segment posted a book-to-bill ratio over 2, indicating strong demand and order intake.
Basics branded orders backlog is at a record high, up 160% year-over-year and 24% sequentially.
Bookings of AAON branded equipment increased approximately 9% year-over-year and about 15% on a trailing 12-month basis.
AAON branded backlog declined 3% sequentially but remained up 26% from a year ago.
Strong focus on ramping production to work down AAON branded backlog and normalize lead times.

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Frequently Asked Questions

What were AAON, Inc. Q2 FY26 results?

- Strong growth anticipated throughout 2026, driven by ramped production and capacity investments, especially in Memphis. - AAON anticipates strong earnings growth in 2026, with diluted EPS for Q1 up 37% year-over-year to $0.48.

What is AAON, Inc. share price analysis?

AAON, Inc. currently shows a strong growth signal based on ranking data. The stock trades at a P/E of 98.7 with a market cap of $11,653. Investors should review the full earnings analysis for detailed insights.

Is AAON, Inc. planning capital expenditure?

- Full-year capital expenditures (CapEx) planned at $190 million, with $119 million expected for the current year.

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This analysis is AI-generated based on publicly available earnings data and the company's earnings call transcript. This is not investment advice. Please consult a SEBI-registered advisor before making investment decisions.