AAON Data Center Sales Boost Backlog
(NASDAQ:AAON) reported second-quarter 2025 results on Aug. 11, 2025, with net sales down 0.6% year over year to $311.6 million and gross margin contracting 950 basis points to 26.6%. Management lowered full-year 2025 guidance, citing ERP (enterprise resource planning) implementation disruptions, but highlighted strong backlog growth and momentum in the Basics data center segment. The following insights detail the operational challenges, strategic opportunities, and long-term margin outlook discussed on the call.
Production rates for branded equipment at the Longview facility declined 50% in April 2025 compared to the average rate over the first nine months of 2024, and by July, were still 37% below that benchmark. These disruptions also affected the Tulsa facility, which relies on Longview-supplied coils, compounding operational inefficiencies and reducing overall gross margin in the AAON Oklahoma and AAON Coil Products segments.
The ERP rollout is expected to remain a near-term risk, but management anticipates operational normalization and margin recovery in 2026 as further site transitions are completed and lessons from Longview are applied to future implementations.
Source Fool.com
