AAON Q3 2026: Data Center Boom Drives 84% Revenue Surge and Guidance Hike

AAON reported third-quarter revenue of $707.43 million, an 84.1% jump from the same period a year earlier, exceeding expectations. Adjusted diluted earnings per share came in at $0.83, also exceeding expectations. Both figures represent the company's strongest quarterly results on record.

BASX, AAON's data center cooling brand, drove the quarter, with sales up 218.3% to $397.20 million as demand from data center customers combined with higher production output and newly added capacity. BASX liquid cooling sales alone rose 255.6% to $165.5 million. AAON-branded commercial HVAC sales also grew 19.6% to $310.2 million, with CEO Matt Tobolski noting the company continues to gain market share despite softer conditions in the broader commercial HVAC market.

Profitability improved on multiple fronts. Consolidated gross margin of 26.7% improved 60 basis points sequentially for the second straight quarter, driven by pricing actions, sourcing initiatives and better overhead absorption, though it dipped from 27.8% a year earlier as revenue from less-mature BASX facilities carried a heavier weight in the mix. Operating income grew 129.3% year over year to $100.0 million, and net income rose 124% to $69.0 million.

Management raised its full-year 2026 sales growth outlook to a range of 72% to 75% from a prior range of 55% to 60%, while holding gross margin guidance at approximately 26%. Tobolski said management expects continued gross margin progress in the fourth quarter and that data center order strength is expected to carry into the fourth quarter and 2027.

AAON restated its first- and second-quarter 2026 financial statements after identifying revenue recognition errors, and disclosed a material weakness in internal controls over financial reporting. No fraud was found. Tobolski stated the company takes the weakness seriously and listed remediation of internal controls and strengthening of the finance organization as active priorities.

One additional risk flag for investors: AAON ended the quarter with just $13,000 in cash and equivalents and $386.7 million drawn on its revolving credit facility, a reflection of the capital demands of its rapid manufacturing expansion, including the ramp of its Memphis facility. Sequential backlog declined 5.9%, and management acknowledged that the timing of large BASX awards can introduce variability into the revenue outlook.