AAON delivers high-efficiency HVAC comfort products to commercial and industrial sectors, leveraging proprietary heat exchanger technology to drive growing demand in data centers and healthcare.
AAON benefits from secular growth trends in data center construction and hospital expansions requiring specialized cooling solutions. The company's proprietary technology creates a high barrier to entry, allowing for premium pricing and stable margins. Strong operating cash flow provides flexibility for dividends and share repurchases while funding organic growth initiatives.
Recent revenue growth is moderating with net income dropping significantly from 2023 highs, raising concerns about margin compression or demand saturation. High inventory levels of $261.2M coupled with accounts receivable of $314.4M suggest potential working capital strain if sales slow. Significant cash outflows for investing activities and large revolver activity indicate potential balance sheet stress or aggressive M&A strategy.
AAON, Inc. designs, manufactures, and markets indoor and outdoor comfort products primarily for commercial, industrial, and institutional buildings. The company serves global markets including data centers, healthcare facilities, education institutions, and hospitality sectors with its proprietary heat exchanger technology. Key product lines include packaged terminal air conditioners, rooftop units, and specialized cooling solutions for high-density server environments.
Revenue grew to $1.44B in 2025 from $888.8M in 2022, driven by strong demand in data center and healthcare sectors. Net income declined to $107.6M from a peak of $177.6M in 2023, likely reflecting higher operating expenses and inventory buildup of $73.9M. Cash flow from operations remains robust at $534M while significant investing outflows of $192.4M suggest aggressive capacity expansion or strategic acquisitions.
The commercial HVAC market is experiencing structural growth driven by data center expansion, aging infrastructure replacement cycles, and energy efficiency regulations. Competition remains intense from global players like Trane and Carrier, but niche specialization in high-efficiency heat exchange technology offers differentiation. Market consolidation continues as smaller players struggle with margin pressures and supply chain volatility.
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $888.8M | $1.17B | $1.20B | $1.44B |
| Cost of Revenue | $651.2M | $769.5M | $803.5M | $1.06B |
| Gross Profit | $237.6M | $399.0M | $397.1M | $385.7M |
| Operating Expenses | $110.8M | $171.5M | $188.0M | $239.5M |
| Operating Income | $126.8M | $227.5M | $209.1M | $146.2M |
| R&D | $46.8M | $43.7M | $47.3M | $58.2M |
| G&A | $110.8M | $171.5M | $188.0M | $239.5M |
| Stock-Based Comp | $13.7M | $16.4M | $16.7M | $18.0M |
| D&A | $35.1M | $46.5M | $62.7M | $79.2M |
| Depreciation | — | — | $54.0M | $72.3M |
| Amortization | $3.6M | $5.3M | $8.7M | $6.9M |
| Other OpEx | $-46.8M | $-43.7M | $-47.3M | $-58.2M |
| Non-Operating Income | $-2.2M | $-4.3M | $-2.5M | $-17.5M |
| Pre-Tax Income | $124.5M | $223.2M | $206.6M | $128.8M |
| Income Tax | $24.2M | $45.5M | $38.0M | $21.2M |
| Continuing Ops | $100.4M | $177.6M | $168.6M | $107.6M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $100.4M | $177.6M | $168.6M | $107.6M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $100.4M | $177.6M | $168.6M | $107.6M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $349.1M | $409.0M | $488.2M | $869.2M |
| Cash & Equivalents | $5.5M | $287.0K | $14.0K | $13.0K |
| Accounts Receivable | $127.2M | $138.1M | $147.4M | $314.4M |
| Inventory | $198.9M | $213.5M | $187.4M | $261.2M |
| Prepaid Expenses | $1.9M | $3.1M | $7.3M | $17.9M |
| Other Current Assets | $15.6M | $53.9M | $146.0M | $275.7M |
| Long-Term Assets | $464.8M | $532.5M | $687.0M | $817.3M |
| PP&E (Net) | $304.7M | $369.9M | $510.4M | $631.3M |
| Intangibles | $64.6M | $68.1M | $78.3M | $83.9M |
| Goodwill | $81.9M | $81.9M | — | — |
| Operating Leases | $7.1M | $11.8M | $15.4M | $18.0M |
| Other LT Assets | $6.4M | $816.0K | $83.0M | $84.2M |
| Total Assets | $813.9M | $941.4M | $1.18B | $1.69B |
| Current Liabilities | $145.6M | $126.7M | $174.9M | $330.9M |
| Accounts Payable | $45.5M | $27.5M | $44.6M | $110.4M |
| Current Leases | $1.3M | $2.0M | $2.5M | $3.3M |
| Deferred Revenue | $21.4M | $13.8M | $14.9M | $80.7M |
| Taxes Payable | $12.5M | $1.2M | $0 | — |
| Other Current Liab | $-13.7M | $-3.2M | $13.5M | $4.3M |
| Long-Term Liabilities | $107.6M | $79.5M | $175.7M | $460.7M |
| LT Operating Leases | $6.0M | $10.2M | $13.6M | $15.5M |
| Other LT Liab | $101.6M | $69.3M | $162.2M | $445.1M |
| Total Liabilities | $253.2M | $206.2M | $350.7M | $791.5M |
| Shareholders' Equity | $560.7M | $735.2M | $824.6M | $895.0M |
| Paid-In Capital | $98.7M | $122.1M | $68.9M | $64.4M |
| Retained Earnings | $461.8M | $612.8M | $755.3M | $830.3M |
| Total L&E | $813.9M | $941.4M | $1.18B | $1.69B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $100.4M | $177.6M | $168.6M | $107.6M |
| Non-Cash Adjustments | $-204.1M | $-79.0M | $-91.8M | $-646.1M |
| Working Capital Changes | $165.0M | $60.3M | $115.8M | $539.1M |
| Cash from Operations | $61.3M | $158.9M | $192.5M | $534.0K |
| Cash from Investing | $-76.2M | $-109.3M | $-213.1M | $-192.4M |
| Dividends Paid | $22.9M | $26.4M | $26.1M | $32.6M |
| Cash from Financing | $17.4M | $-46.5M | $18.0M | $186.6M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $2.5M | $3.1M | $-2.5M | $-5.3M |
| Beginning Cash | $3.5M | $5.9M | $9.0M | $6.5M |
| Ending Cash | $5.9M | $9.0M | $6.5M | $1.2M |
Commercial HVAC Systems (Packaged Terminal Air Conditioners, Rooftop Units), Industrial Comfort Solutions (Data Center cooling, Healthcare systems), and Building Envelope Products (Windows, Doors, Skylights). Revenue streams are further diversified by end-market segments including Education, Healthcare, Hospitality, and Commercial Office.
Cyclical nature of commercial construction and capital spending downturns affecting demand for new units. Rising raw material and energy costs impacting gross margins despite pass-through mechanisms. Supply chain disruptions affecting component availability and production schedules. Regulatory changes regarding refrigerant phase-outs requiring costly equipment redesigns.
Proprietary heat exchanger technology that enhances energy efficiency and extends equipment lifespan. Strong global distribution network with localized manufacturing capabilities reducing logistics costs. Dominant market share in specialized verticals like data centers and healthcare where reliability is critical.
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