Aaon Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Julio Romero - Sidoti - Analyst : Great. Good morning, Gary, Rebecca, Matt and Joe. I want to start off, congratulations again, Gary, for all your work over the years.

Question: Julio Romero - Sidoti - Analyst : Maybe to start on what you're seeing on K-12 public bid data, what does that data tell you in terms of where the industry is in terms of pricing of equipment and where AAON's pricing delta currently stands relative to the competition?

Question: Julio Romero - Sidoti - Analyst : Got it. That's very helpful. And then, can you give us a sense of where your market share stands today with regards to national accounts, and where you think you can take that over time by leveraging your heat pump technology?

Question: Julio Romero - Sidoti - Analyst : Very helpful. thanks, again. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 1:00PM, AAON.OQ - Q1 2025 Aaon Inc Earnings Call

Question: Ryan Merkel - William Blair - Analyst : Hey, everyone, good morning. Nice quarter. And let me also say congrats, Gary. It's been great working with you. Wish you best of luck.

Question: Ryan Merkel - William Blair - Analyst : So, my first question is just on the core rooftop business. You guys talked about strengthening orders through the quarter. Can you just talk about a couple of things? The pushouts that you saw last quarter, did those come back as you expected? Do you think you're taking market share just given where you're priced? And then, I'm a little curious if you saw kind of a pop in March ahead of that surcharge that you put it in April.

Question: Ryan Merkel - William Blair - Analyst : Got it. Okay. That's encouraging, and that was the answer I was looking for actually. Thanks for that. And then I'd like to put a finer point on the 2Q guide. The Street is about $0.60. You just did adjusted $0.37 and you're talking about up modestly. Can you just help us with that? And help us think through sales and margins. I'm just wondering if there's a potentially bigger margin impact in 2Q because of the Memphis facility that maybe we don't appreciate, but just any help there would be great.

Question: Ryan Merkel - William Blair - Analyst : Okay. That's really helpful. I'll pass it on. Thanks so much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 1:00PM, AAON.OQ - Q1 2025 Aaon Inc Earnings Call

Question: Chris Moore - CJS Securities - Analyst : Hey. Good morning, guys. Thanks for taking a couple, and also congrats, Gary. Thanks for everything.

Question: Chris Moore - CJS Securities - Analyst : Sure. In terms of you still hear some big players canceling or downsizing data center construction. Just wanted to kind of go a little deeper in terms of what you're hearing from your customers. How much visibility do they give you in terms of their plans over the next three to five years?

Question: Chris Moore - CJS Securities - Analyst : Perfect. The $200 million-plus liquid cooling order, was I know it had gotten pushed a little bit. Was any of that or much of that in Q1?

Question: Chris Moore - CJS Securities - Analyst : Got it. I appreciate that. I'll jump back in line. Thanks, Matt.

Question: Brent Thielman - D.A. Davidson - Analyst : Hey, great. Thanks. Gary, I relay all the same. It's been a pleasure. I guess first question, just on the rooftop business, some of the supply chain issues you've felt here in the quarter, and it sounds like you continue to feel to some degree. Are you at the point where there's some confidence these issues are going to be behind you as you go into the second half of the year? And I guess just with that, I was curious, it didn't really seem like that impacted the BASX-branded product. I'm just wondering if that could still come or do you see it as a nonissue there.

Question: Brent Thielman - D.A. Davidson - Analyst : Really helpful, Matt. And then maybe as a follow-on, sort of beyond the issues associated with the refrigerant change and those associated components, can you talk about maybe broader exposure just now with the implementation of tariffs and what that might do to the kind of broader supply chain? How you think AAON is positioned around that, where you feel like you're well positioned or not, just for the things that we can't potentially see coming in terms of broader impacts to the supply chain?

Question: Brent Thielman - D.A. Davidson - Analyst : Okay. Just last one, just on the basics branded products. Maybe more of a clarification, Matt, I think I heard you say, a lot of growth certainly aligned with one of the customers out there. Could you just talk about diversification of customers within that product line? Do you expect more diversity in the coming year, especially as you're bringing on new capacity? Just trying to get a sense around how much is aligned with a single customer versus a lot of different customers that are out there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 1:00PM, AAON.OQ - Q1 2025 Aaon Inc Earnings Call

Question: Brent Thielman - D.A. Davidson - Analyst : Very good thank you.

Question: Timothy Wojs - Baird - Analyst : Hey, everybody. Good morning. Just wanted to echo the same sentiments to Gary. It's been great working with you.

Question: Timothy Wojs - Baird - Analyst : Maybe just I just have a couple of follow-ups. So, I guess, on the Oklahoma business, has there been any change to how you're thinking about the full year revenue guidance? I think previously, you had kind of said maybe the full year would be flat to down a little bit. Has that changed at all? Is it just kind of more back half weighted? And then, how do you think about kind of layering that surcharge part into that?

Question: Timothy Wojs - Baird - Analyst : Okay. That's helpful. Thanks. And then just on the data kind of the BASX backlog, I mean, the $80 million to $85 million sequential increase, I guess, any color on kind of the mix of liquid cooling and airside cooling within that? And then I guess just in the total backlog, kind of the same question, kind of the mix of liquid versus air?

Question: Timothy Wojs - Baird - Analyst : Okay. Thanks for the color. Good luck on the rest of the year.