The following is a summary of the AAON, Inc. (AAON) Q3 2024 Earnings Call Transcript:

Financial Performance:

• AAON reported a 4.9% increase in total revenue reaching $327.3 million in Q3.

• Gross margin decreased to 34.9%, attributed to the lower volumes at the AAON Oklahoma segment and temporary inefficiencies at BASX, but was offset by strong performance in the AAON Coil Products segment.

• Diluted earnings per share increased by 8.6%.

Business Progress:

• AAON is witnessing strong demand in the data center equipment market, with notable backlog records in Coil Products and BASX segments.

• The company is expanding its production capacity to meet the surging demand, with significant projects in Redmond, Oregon, and Longview, Texas, and a new facility planned in Memphis, Tennessee.

Opportunities:

• Strong year-over-year bookings growth, particularly driven by the data center equipment market.

• Large-scale orders like the $174.5 million for a liquid cooling solution indicate ongoing robust demand in this sector.

• Expansion in production capabilities and acquisition of a new facility in Memphis are expected to support further growth.

Risks:

• The traditional commercial HVAC business (Oklahoma segment) faced slowdowns influenced by the refrigerant transition and soft macro environment, with expectations of further softening in Q4 and Q1 of the following year.

More details: AAON Inc IR

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