TULSA, Okla. - AAON, Inc. (NASDAQ: AAON), a provider of high-performance HVAC solutions, has announced securing orders worth approximately $174.5 million from a data center customer. The company will deliver a custom-designed thermal management system to support the customer's liquid cooling technology in their data centers. Production of the equipment, under the BASX brand, is slated to occur predominantly in the first half of 2025 at the company's Longview, Texas facilities, which include a new site expected to be operational by the end of this year.
AAON President and COO Matt Tobolski emphasized the company's engineering and manufacturing prowess, noting that the orders demonstrate AAON's leadership in the data center cooling market. The integration of BASX into AAON since 2021 has bolstered their market position.
CEO Gary Fields expressed excitement over the milestone, asserting that the orders reflect AAON's engineering excellence and commitment to expanding production capacity to meet the demands of the growing data center market. Fields pointed to the Texas facility's existing and future capacity and indicated that these orders represent just a portion of a larger opportunity pipeline in a multi-year growth cycle for the company.
Founded in 1988, AAON is recognized for its configurable HVAC equipment, which offers efficiency, performance, and value. BASX, a subsidiary of AAON, specializes in high-efficiency data center cooling solutions and has been a part of AAON since 2021. The announcement of these orders is based on a press release statement and includes forward-looking statements that involve risks and uncertainties.
The company cautions readers not to place undue reliance on these forward-looking statements, which are subject to changes in raw material prices, fluctuations in the construction market, interest rates, and general economic conditions.
In other recent news, AAON Inc. reported a robust performance in its second quarter, with record-breaking sales, earnings, and backlog. The company's net sales rose by 10.4% year-over-year to $313.6 million, gross profit increased by 20.3% to $113.1 million, and diluted earnings per share grew by 12.7% year-over-year to $0.62. Its backlog reached a record $650 million, marking a 23.5% increase year-over-year. Significant growth was seen in AAON's BasX segment due to the thriving data center market. Baird, an independent global investment advisor, maintained a Neutral rating on AAON but increased the price target to $114 from $105, acknowledging the company's exposure to the data center segment. Despite a slower growth in the Oklahoma market, AAON anticipates growth acceleration in the upcoming year and expects flat to modestly increasing sales growth in the third quarter. The company's capital expenditure guidance remains at $125 million for the year.
InvestingPro Insights
AAON's recent $174.5 million order from a data center customer aligns with the company's strong financial performance and market position. According to InvestingPro data, AAON has demonstrated impressive revenue growth, with a 14.05% increase in the last twelve months as of Q2 2024. This growth trajectory is further supported by the company's robust operating income margin of 21.08% for the same period.
InvestingPro Tips highlight AAON's financial strength, noting that "liquid assets exceed short term obligations" and the company "operates with a moderate level of debt." These factors position AAON well to fulfill large orders and expand its production capacity, as mentioned in the article.
The company's focus on the data center cooling market appears to be paying off, with InvestingPro data showing a remarkable 100.06% price total return over the past year. This performance underscores investor confidence in AAON's strategic direction and growth potential in the data center sector.
It's worth noting that AAON is trading at a high P/E ratio of 46.17, which may reflect market expectations for continued growth. The company's ability to secure large orders like the one mentioned in the article could justify this valuation.
For investors seeking a deeper understanding of AAON's financial health and market position, InvestingPro offers 16 additional tips, providing a comprehensive analysis to inform investment decisions.
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