Aaon Inc (NASDAQ:AAON), a leader in high-performance and energy-efficient HVAC solutions, stock fell 10.24% (As on March 3, 11:31:32 AM UTC-4, Source: Google Finance) after the company announced its Alpha Class EXTREME SERIES packaged rooftop unit has successfully completed the laboratory evaluation phase of the U.S. Department of Energy’s Commercial Building HVAC Technology Challenge — and did so with true simultaneous dual fuel capability. Meanwhile, the company has reported mixed result for the fourth quarter of FY25. The company delivered strong sales growth in 2025, while margins and earnings reflected strategic investments in production expansion and ERP implementation to support future growth. Robust bookings trends of both AAON- and BASX-branded equipment support continued market share gains. Record year-end backlog of $1.83 billion, up 110.9% year-over-year, providing strong visibility entering 2026. As of December 31, 2025, the company had cash, cash equivalents and restricted cash of $1.2 million and a balance on its revolving credit facility of $398.3 million.

Moreover, AAON-branded sales increased 9.5% to $242.8 million, supported by a strong backlog and favorable comparison to the prior-year period, which was adversely impacted by the industry’s refrigerant transition. Booking activity remained solid across both brands, led by the BASX brand, which ended the quarter with backlog up 141.3%, while AAON-branded bookings increased approximately 20% compared to the prior-year period. Gross profit margin in the quarter was 25.9%, compared to 26.1% in the prior-year period. The modest year‑over‑year decline primarily reflected unabsorbed fixed‑cost investments at the Company’s new Memphis facility as production capacity was brought online to support a significant ramp of BASX‑branded data center equipment, positioning the business for improved operating leverage as volume scales. Net sales for the AAON Oklahoma segment totaled $215.5 million, an increase of 11.1% year-over-year, driven by a strong starting backlog and ongoing production enhancements that improved backlog conversion despite a challenging industry environment. Net sales for the AAON Coil Products segment totaled $102.6 million, up 93.6% compared to the same period last year.

AAON in the fourth quarter of FY25 has reported the adjusted earnings per share of 39 cents, missing the analysts’ estimates for the adjusted earnings per share of 45 cents. The company had reported the adjusted revenue growth of 42.5 percent to $424.2 million in the fourth quarter of FY25, beating the analysts’ estimates for revenue of $372.4 million.

The company expects 2026 sales to grow 18%-20%, with gross margin of 29%-31%. The company also anticipate SG&A expenses as a percentage of sales will be approximately 16% and expect depreciation and amortization expenses of $95-$100 million.