AAON’s first quarter results were marked by significant top-line growth, with revenue and adjusted earnings per share both surpassing Wall Street’s expectations. Management attributed the outperformance to high demand for data center cooling solutions and strong execution in ramping up production across expanded facilities. CEO Matthew Tobolski highlighted that “basics branded sales grew 72% year-over-year,” driven by robust data center market activity and increased share gains. Operational investments in Memphis, Longview, and Redmond enabled higher throughput, supporting both basics and AAON branded products during the quarter.
Is now the time to buy AAON? Find out in our full research report (it’s free for active Edge members).
AAON (AAON) Q1 CY2026 Highlights:
- Revenue: $496.9 million vs analyst estimates of $383.6 million (54.3% year-on-year growth, 29.5% beat)
- Adjusted EPS: $0.48 vs analyst estimates of $0.29 (63.3% beat)
- Adjusted EBITDA: $78.04 million vs analyst estimates of $62 million (15.7% margin, 25.9% beat)
- Operating Margin: 11.6%, in line with the same quarter last year
- Backlog: $2.1 billion at quarter end, up 105% year on year
- Market Capitalization: $11.09 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From AAON’s Q1 Earnings Call
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Ryan Merkel (William Blair) asked about temporary margin pressures in Oklahoma, including the impacts of outsourcing and tariffs. CEO Matthew Tobolski explained that reported margins included Memphis overhead and that temporary outsourcing, price/cost dynamics, and tariffs would ease as pricing actions take effect.
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Christopher Moore (CJS Securities) questioned the sustainability of premium pricing and production ramp in rooftop and basics segments. Tobolski confirmed pricing discipline remains intact and that both national account strength and transactional market recovery are supporting ramped production.
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Noah Kaye (Oppenheimer) inquired about the mix of existing versus new customers in basics orders and the temporary use of outsourcing for coils. Tobolski highlighted that order strength was broad-based and that outsourcing was a short-term measure to accelerate growth while internal capacity ramps.
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Timothy Wojs (Baird) asked about the drivers behind lower margins versus prior guidance, and seasonality in Tulsa. Tobolski cited intentional actions to accelerate volume, increased costs from outsourcing, and internal investments, noting margin improvement is expected as the year progresses.
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Alex Hantman (Sidoti & Company) sought clarity on the Memphis facility’s revenue trajectory and ongoing capital expenditure plans. Tobolski indicated that Memphis remains the primary focus for capacity investment and that the current year’s CapEx plan remains on track, supporting further growth.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace at which internal capacity replaces outsourcing to improve margins, (2) continued strength and diversification in basics segment orders—especially from new customer segments, and (3) execution on operational improvements and backlog conversion across all facilities. Progress in working capital management and sustained pricing discipline will also be key markers of success.
AAON currently trades at $139, up from $98.30 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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