Aaon — Income Statement, Cash Flows & Balance Sheet
Is AAON profitable?
Revenue grew strongly, but margins compressed significantly as costs rose faster than sales.
| Metric | 2024 | 2025 | Change |
|---|---|---|---|
| Net sales ($000s) | $1,200,635 | $1,442,076 | +20.1% |
| Gross profit ($000s) | $397,109 | $385,724 | -2.9% |
| Gross margin | 33.1% | 26.7% | -6.4 pp |
| SG&A ($000s) | $188,014 | $239,480 | +27.4% |
| Net income ($000s) | $168,559 | $107,593 | -36.1% |
| Diluted EPS | $2.02 | $1.29 | -36.1% |
AAON grew the top line by over a fifth, but profitability fell sharply. Gross margins dropped meaningfully as cost of sales grew faster than revenue, and SG&A jumped — partly reflecting the company's heavy investment in R&D (up to $58.2M from $47.3M) and higher interest costs from increased borrowing. The bottom line was also squeezed by a sharp rise in interest expense, reflecting new debt taken on to fund growth.
Where does AAON's revenue come from?
BASX, AAON's data center cooling unit, is the standout growth engine — nearly doubling in a year.
| Segment | 2024 Sales ($000s) | 2025 Sales ($000s) | Change |
|---|---|---|---|
| AAON Oklahoma | $858,711 | $801,209 | -6.7% |
| AAON Coil Products | $143,871 | $325,353 | +126.1% |
| BASX | $198,053 | $315,514 | +59.3% |
| BASX-branded (total) | $224,993 | $547,794 | +143.5% |
The traditional AAON Oklahoma business — rooftop HVAC units for commercial buildings — actually shrank. The growth story is entirely in data center cooling: BASX-branded products across all three segments more than doubled. Customers include major hyperscalers like Microsoft, Amazon Web Services, and Google Cloud, giving AAON exposure to the AI infrastructure buildout.
Does AAON generate cash?
Operating cash flow nearly evaporated in 2025 as working capital consumed most of the company's earnings.
| Item | 2024 ($000s) | 2025 ($000s) | Change |
|---|---|---|---|
| Net cash from operations | $192,532 | $534 | -99.7% |
| Capital expenditures | $(195,660) | $(190,563) | -2.6% |
| Free cash flow (ops minus capex) | $(3,128) | $(190,029) | n/m |
| Net debt borrowed (net) | $116,806 | $243,187 | +107.8% |
Despite reporting over $100M in net income, AAON generated almost no cash from operations. The gap is explained by a massive surge in receivables and contract assets — money tied up in work-in-progress for BASX's fast-growing order book. The company funded ongoing capital investment and working capital needs almost entirely through new borrowings.
How strong is AAON's balance sheet?
Debt jumped substantially to fund growth, but AAON remains within its covenant limits and has significant credit availability.
| Item | 2024 ($000s) | 2025 ($000s) | Change |
|---|---|---|---|
| Total debt (long + short term) | $154,891 | $398,320 | +157.2% |
| Stockholders' equity | $824,582 | $894,985 | +8.5% |
| Revolver capacity | $200,000 | $600,000 | +200% |
| Available borrowing headroom | $123,233 | $201,026 | +63.1% |
AAON significantly expanded its revolving credit facility and drew it down heavily to finance the business. The leverage ratio (debt relative to earnings) stood at 1.77x against a covenant ceiling of 3.0x, leaving a reasonable buffer. The balance sheet is being stretched to support growth, but is not yet at a worrying level — and the company still has over $200M of undrawn credit available.