AAON, Inc. has reported its second-quarter 2025 results, revealing a mix of performance across its segments. Net sales for the period decreased by 0.6% year-over-year to $311.6 million. The company's GAAP diluted EPS stood at $0.19, reflecting a decline of 69.4% compared to the same period last year. Meanwhile, non-GAAP adjusted diluted EPS was $0.22, marking a decrease of 64.5%.
The company's adjusted backlog increased significantly year-over-year, up 71.9% to $1.12 billion. However, the gross profit margin for the quarter contracted to 26.6%, down from 36.1% in the comparable quarter in 2024, primarily due to lower production volumes at the AAON Oklahoma segment and operational inefficiencies caused by ERP implementation.
In terms of segment performance, AAON Oklahoma saw net sales decrease by 18.0% to $185.1 million, with the gross profit margin contracting to 27.5% from 37.2% in the second quarter of 2024. AAON Coil Products experienced a challenging quarter, with sales growing by 86.4%, but with a gross margin contraction of 1,990 basis points year-over-year to 22.0%. Basx, however, saw a 20.4% increase in net sales to $68.0 million, while the gross profit margin slightly decreased to 27.9%.
Looking ahead, the company has revised its full-year 2025 outlook, reducing expectations for sales growth and gross profit margin. The new outlook projects low single-digit sales growth in Q3, high twenties growth in Q4, and low teens growth for the full year. The gross profit margin is expected to be in the range of 28.5%-29.5% for Q3 and 30.0%-31.0% for Q4.
The company's total backlog increased year-over-year by 71.9% to $1.12 billion, indicating sustained growth in order activity. The adjusted AAON-branded equipment backlog rose by 93.4% compared to the same quarter last year, while the adjusted Basx-branded backlog grew by 58.0% from three years ago.
Despite the challenges faced in the second quarter, the company remains confident in its long-term growth prospects, citing sustained demand for its differentiated solutions and strong fundamentals. CEO Matt Tobolski emphasized the company's commitment to transparency and providing clear, timely updates as they address operational challenges and work towards delivering consistent results in the future.
The company's conference call and webcast, held to discuss the second-quarter results and outlook, provided an opportunity for stakeholders to gain further insights into the company's performance and future strategies.
Following these announcements, the company's shares moved -2.67%, and are now trading at a price of $80.52. For the full picture, make sure to review AAON, INC.'s 8-K report.
