What changed in this filing

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Item 1. Financial Statements

2025-08-11 compared with 2025-05-01 · 210 added, 116 removed, 824 unchanged (28% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Assets (in thousands, except share and per share data)

22 unchanged sentences

Debt, long-term 317,277 138,891

Deferred tax liabilities 5,140 —

Other long-term liabilities 22,471 20,743

4 unchanged sentences

Preferred stock, $ .001 par value, 5,000,000 shares authorized, no shares issued

Common stock, $ .004 par value, 200,000,000 shares authorized, 81,348,131 and 81,436,594 issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Common stock, $ .004 par value, 200,000,000 shares authorized, 81,509,387 and 81,436,594 issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 48,607 68,946

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(in thousands, except share and per share data)

21 unchanged sentences

Consolidated Statements of Stockholders' Equity

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Common Stock Paid-in Retained

4 unchanged sentences

Net income — — — 44,779 44,779

Stock options exercised and restricted 365 1 4,355 — 4,356

stock awards granted

Stock options exercised and restricted stock awards granted 535 2 10,023 — 10,025

Share-based compensation — — 8,795 — 8,795

1 unchanged sentence

Dividends — — — ( 16,276 ) ( 16,276 )

Balances at March 31, 2025 81,348 $ 325 $ 39,020 $ 776,507 $ 815,852

Three Months Ended March 31, 2024

Balances at June 30, 2025 81,509 $ 326 $ 48,607 $ 783,813 $ 832,746

Six Months Ended June 30, 2024

Common Stock Paid-in Retained

3 unchanged sentences

Net income — — — 91,244 91,244

Stock options exercised and restricted 403 2 9,842 — 9,844

stock awards granted

Stock options exercised and restricted stock awards granted 595 3 15,818 — 15,821

Contingent shares issued (Note 17)

3 unchanged sentences

Dividends — — — ( 13,079 ) ( 13,079 )

Balances at June 30, 2024 80,951 $ 324 $ 49,174 $ 691,000 $ 740,498

Three Months Ended June 30, 2025

Common Stock Paid-in Retained

Shares Amount Capital Earnings Total

(in thousands)

Balances at March 31, 2025 81,348 $ 325 $ 39,020 $ 776,507 $ 815,852

Net income — — — 15,487 15,487

Stock options exercised and restricted stock awards granted 170 1 5,668 — 5,669

Share-based compensation — — 4,774 — 4,774

Stock repurchased and retired ( 9 ) — ( 855 ) — ( 855 )

Dividends — — — ( 8,181 ) ( 8,181 )

Balances at June 30, 2025 81,509 $ 326 $ 48,607 $ 783,813 $ 832,746

Three Months Ended June 30, 2024

Common Stock Paid-in Retained

Shares Amount Capital Earnings Total

(in thousands)

Balances at March 31, 2024 82,118 $ 329 $ 139,184 $ 645,295 $ 784,808

Net income — — — 52,228 52,228

Stock options exercised and restricted stock awards granted 192 1 5,976 — 5,977

Share-based compensation — — 4,494 — 4,494

Stock repurchased and retired ( 1,359 ) ( 6 ) ( 100,480 ) — ( 100,486 )

Dividends — — — ( 6,523 ) ( 6,523 )

Balances at June 30, 2024 80,951 $ 324 $ 49,174 $ 691,000 $ 740,498

The accompanying notes are an integral part of these consolidated financial statements.

1 unchanged sentence

Consolidated Statements of Cash Flows

Three Months Ended

Six Months Ended

Operating Activities (in thousands)

6 unchanged sentences

Provision for excess and obsolete inventories, net of write-offs

Provision for credit losses on contract assets, net of adjustments

Share-based compensation 8,795 8,451

26 unchanged sentences

Stock options exercised 10,025 15,821

Repurchase of stock ( 31,536 ) —

Employee taxes paid by withholding shares ( 6,768 ) ( 3,041 )

Repurchases of stock - open market ( 29,992 ) ( 100,034 )

Repurchases of stock - LTIP plans (Note 17 )

( 9,167 ) ( 3,493 )

Cash dividends paid to stockholders ( 16,276 ) ( 13,079 )

40 unchanged sentences

and could impact the availability of supply from our vendors.

We source raw materials domestically, but historically have seen those suppliers increase prices when tariffs are increased.

Additionally, while we source most components domestically, our vendors may be impacted by tariffs if they use foreign parts and materials and often pass any additional costs as a result of tariffs through to us.

We expect to continue to pass along some of these costs to our customers, but the increased price of our products could adversely affect the demand, which could have an adverse effect on our business and our earnings.

Due to our favorable liquidity position, we are well positioned to make strategic purchases of materials when we see opportunities or potential disruptions in our supply chain.

While we source a significant amount of our inventory and supplies from domestic vendors, certain vendors may source components internationally.

We have experienced supply chain challenges

related to specific manufacturing parts, which could be exacerbated by the trade conflict.

We have experienced supply chain challenges related to specific manufacturing parts, which could be exacerbated by the trade conflict.

We manage our supply chain challenges through strong vendor relationships as well as expanding our list of available vendors.

25 unchanged sentences

These capitalized costs are reflected in intangible assets, net and goodwill on the consolidated balance sheets and are amortized over the estimated useful life of the software.

The useful life of our internal-use software development costs is generally one to six years .

The useful life of our internal-use software development costs is generally one to ten years .

Definite-Lived Intangible Assets

8 unchanged sentences

Goodwill represents the excess of the consideration paid for the acquired businesses over the fair value of the individual assets acquired, net of liabilities assumed.

Goodwill at March 31, 2025, is expected to be tax deductible in future periods.

Goodwill at June 30, 2025, is expected to be tax deductible in future periods.

Indefinite-lived intangible assets consist of trademarks and trade names.

12 unchanged sentences

BASX BASX Data center cooling solutions, cleanroom products, and air handling products

Three months ended March 31, 2025

Three Months Ended June 30, 2025

AAON Oklahoma AAON Coil Products BASX Total

2 unchanged sentences

BASX Products — 41,060 67,982 109,042

$ 161,838 $ 94,023 $ 66,193 $ 322,054

Three months ended March 31, 2024

Total 185,120 58,465 67,982 $ 311,567

Three Months Ended June 30, 2024

AAON Oklahoma AAON Coil Products BASX Total

2 unchanged sentences

BASX Products — 926 56,466 57,392

$ 210,140 $ 24,247 $ 27,712 $ 262,099

Aftermarket part sales were $ 15.2 million and $ 15.6 million for the three months ended March 31, 2025 and 2024, respectively.

Total $ 225,727 $ 31,373 $ 56,466 $ 313,566

Six Months Ended June 30, 2025

AAON Oklahoma AAON Coil Products BASX Total

(in thousands)

AAON Products $ 346,958 $ 45,060 $ — $ 392,018

BASX Products — 107,428 134,175 241,603

Total $ 346,958 $ 152,488 $ 134,175 $ 633,621

Six Months Ended June 30, 2024

AAON Oklahoma AAON Coil Products BASX Total

(in thousands)

AAON Products $ 435,867 $ 54,488 $ — $ 490,355

BASX Products — 1,132 84,178 85,310

Total $ 435,867 $ 55,620 $ 84,178 $ 575,665

Aftermarket part sales (included in the AAON Product sales above) were $ 20.7 million and $ 18.9 million for the three months ended June 30, 2025 and 2024, respectively, and $ 35.9 million and $ 34.5 million for the six months ended June 30, 2025 and 2024, respectively.

The Company recognizes revenue, presented net of sales tax, when it satisfies the performance obligation in its contracts.

32 unchanged sentences

The Representatives’ fee and Third Party Products amounts (“Due to Representatives”) are paid only after all amounts associated with the order are collected from the customer.

The amount of payments to our Representatives were $ 12.7 million and $ 10.8 million for the three months ended March 31, 2025 and 2024, respectively.

The amount of payments to our Representatives were $ 12.0 million and $ 10.2 million for the three months ended June 30, 2025 and 2024, respectively, and $ 24.7 million and $ 21.0 million for the six months ended June 30, 2025 and 2024, respectively.

Contract Assets and Liabilities

1 unchanged sentence

2025 December 31,

2024 March 31,

2024 June 30,

2024 December 31,

6 unchanged sentences

Costs and estimated earnings on uncompleted contracts and related billings are as follows:

2025 March 31,

2025 June 30,

(in thousands)

1 unchanged sentence

Estimated earnings 136,447 90,774

276,749 186,036

Total 298,674 209,465

Contract billings to date 106,838 168,920

2 unchanged sentences

Total, net $ 199,432 $ 41,309

Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period for the three months ended March 31, 2025 and 2024 was $ 1.6 million and $ 5.2 million, respectively.

Typically, we expect to satisfy performance obligations relating to uncompleted in-process contracts within one year or less, however, timing of performance obligations can vary from timing of payment, production scheduling and timing of customer installation requirements.

Revenue recognized in the reporting period that was included in the contract liability balance at the beginning of the period for the six months ended June 30, 2025 and 2024 was $ 5.9 million and $ 11.5 million, respectively.

Typically, we expect to satisfy performance obligations relating to uncompleted in-process contracts within one year or less, however, timing of performance obligations can vary due to timing of payment, production scheduling and timing of customer installation requirements.

Increases in contract assets are mainly due to the increased production and increased demand of our BASX branded products.

The Company has lease arrangements for certain administrative, manufacturing and warehousing facilities and equipment.

Lease expiration dates, including expected renewal options, range from April 2025 to November 2033, with the weighted average remaining term being 6.4 years.

The discount rates used to calculate the present value of lease payment range from 1.3 % to 6.6 % as of March 31, 2025.

Lease expiration dates, including expected renewal options, range from October 2025 to November 2033, with the weighted average remaining term being 6.5 years.

The discount rates used to calculate the present value of lease payment range from 1.3 % to 5.9 % as of June 30, 2025.

All leases are classified as operating leases.

Balance Sheet Classification March 31, 2025 December 31, 2024

Balance Sheet Classification June 30, 2025 December 31, 2024

(in thousands)

3 unchanged sentences

Since 2018, the Company has leased the manufacturing, engineering and office space used by our operations in Parkville, Missouri.

The lease term is through December 2032.

The leases original term was through December 2032.

In May 2025, the Company added approximately 17,000 additional square feet and extended the lease term through April 2033.

Additionally, in May 2025, the Company added

approximately 22,300 sq feet with a lease term through April 2030.

The Company’s total leased space in Parkville, Missouri is approximately 125,300 sq feet.

In November 2022, the Company entered into a lease arrangement for additional storage facilities in Tulsa, Oklahoma to support our operations.

5 unchanged sentences

In April 2025, we amended the lease for an additional 28,000 square feet.

We also lease six properties near our Redmond location.

We also lease four properties near our Redmond location.

In the aggregate, these leases contain approximately 46,000 square feet of additional warehouse space, office space, as well as outside storage.

These leases have expiring terms from April 2025 to May 2028.

Total future lease payments as of March 31, 2025, are as follows:

These leases have expiring terms from October 2025 to May 2028.

Total future lease payments as of June 30, 2025, are as follows:

(in thousands)

7 unchanged sentences

2025 December 31,

2024 March 31,

2024 June 30,

2024 December 31,

3 unchanged sentences

$ 170,573 $ 147,434 $ 149,149 $ 138,108

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

Allowance for credit losses:

4 unchanged sentences

Accounts receivable written off, net of recoveries

( 97 ) ( 5 ) ( 107 ) ( 5 )

Balance, end of period $ 1,308 $ 1,492 $ 1,308 $ 1,492

11 unchanged sentences

$ 234,980 $ 187,420

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

Allowance for excess and obsolete inventories:

17 unchanged sentences

Depreciation expense is as follows:

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

(in thousands)

9 unchanged sentences

Accumulated amortization 22,317 18,573

Total, net 64,150 63,689

Definite-lived intangible assets, net 65,844 63,689

Indefinite-lived intangible assets

2 unchanged sentences

Amortization expense is as follows:

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

(in thousands)

Amortization expense $ 1,669 $ 1,749 $ 3,744 $ 3,455

The weighted-average amortization period for definite-lived intangible assets are as follows as of March 31, 2025:

The weighted-average amortization period for definite-lived intangible assets are as follows as of June 30, 2025:

Intellectual property 17.3

9 unchanged sentences

The changes in the carrying amount of goodwill were as follows:

Three Months Ended

2025 March 31,

Six Months Ended

2025 June 30,

(in thousands)

4 unchanged sentences

Supplemental Cash Flow Information

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

Supplemental disclosures:

7 unchanged sentences

Foreign currency transaction (gain) loss

( 22 ) 4 ( 23 ) 15

Interest income on note receivable

( 4 ) ( 4 ) ( 8 ) ( 9 )

Total, other $ ( 26 ) $ — $ ( 71 ) $ ( 10 )

2 unchanged sentences

Contingent shares issued (Note 17)

$ — $ — $ — $ 6,364

The Company has product warranties with various terms from one year from the date of first use or 18 months for parts, data center cooling solutions, and cleanroom systems to 25 years for certain heat exchangers.

2 unchanged sentences

Changes in the warranty accrual are as follows:

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

Warranty accrual:

4 unchanged sentences

Balance, end of period $ 23,762 $ 21,632 $ 23,762 $ 21,632

Warranty expense by reportable segment (Note 21) is as follows:

Three Months Ended

2025 March 31,

Warranty expense (benefit) by reportable segment (Note 21) is as follows:

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

(in thousands)

1 unchanged sentence

AAON Coil Products 461 340 860 520

BASX 428 ( 59 ) 1,073 201

Total $ 3,599 $ 3,320 $ 6,810 $ 6,718

23 unchanged sentences

$ 22,471 $ 20,743

On December 16, 2024, we amended our Amended and Restated Loan Agreement dated November 24, 2021 (as amended, “Amended Loan Agreement”), to include an $ 80.0 million term loan (“Term Loan”).

The Amended Loan Agreement provides for a $ 200.0 million revolving credit facility (the “Revolver”) and an option to increase the maximum borrowings to $ 300.0 million.

On December 16, 2024, we entered into the Third Amendment to the Amended and Restated Loan Agreement dated November 24, 2021, to include an $ 80.0 million term loan payable in equal monthly installments, plus interest, over 60 months, expiring December 16, 2029.

The agreement provided for a $ 200.0 million revolving credit facility and an option to increase the maximum borrowings to $ 300.0 million.

In April 2025, we increased our available Revolver to $ 230.0 million, an increase of $ 30.0 million, to fund our additional working capital needs.

On May 29, 2025, we entered into the Fifth Amendment to the Amended and Restated Loan Agreement dated November 24, 2021 (as amended, “Amended Loan Agreement”) whereby the remaining balance of the term loan, approximately $ 72.0 million, was rolled into the amended Revolving Loan (“Amended Revolver”), the capacity of which was increased from $ 230.0 million to $ 500.0 million.

The Amended Revolver is prepayable without penalty.

2025 December 31,

10 unchanged sentences

Total Term Loan $ — $ 78,424

The Term Loan is payable in equal monthly installments, plus interest, over 60 months, expiring December 16, 2029.

Interest Rates

Any outstanding loans under the Revolver bear interest at the daily compounded secured overnight financing rate (“SOFR”) plus the applicable margin.

Any outstanding loans under the Amended Revolver bear interest at the daily compounded secured overnight financing rate (“SOFR”) plus the applicable margin.

The outstanding amount under the Term Loan bears interest at the SOFR plus a credit spread adjustment of 0.10 % per annum plus the Applicable Margin.

2 unchanged sentences

The applicable fee percentage is determined quarterly based on the Company’s leverage ratio.

Fees associated with the unused portion of the committed amount are included in interest expense on our consolidated statements of income and were not material for the three months ended March 31, 2025 and 2024, respectively.

Fees associated with the unused portion of the committed amount are included in interest expense on our consolidated statements of income and were not material for the three and six months ended June 30, 2025 and 2024, respectively.

Weighted average interest rate of our borrowings outstanding are as follows:

2025 March 31,

Three months ended Six months ended

2025 June 30,

2024 June 30,

2025 June 30,

Revolver 5.6 % 6.6 % 5.6 % 6.6 %

1 unchanged sentence

1 Funds were borrowed on December 16, 2024.

No borrowings outstanding during the three months ended March 31, 2024

No borrowings outstanding during the six months ended June 30, 2024.

If SOFR cannot be determined pursuant to the definition, as defined by the Amended Loan Agreement, any outstanding effected loans will be deemed to have been converted into alternative base rate (“ABR”) loans.

1 unchanged sentence

As of December 16, 2024, as defined by the Amended Loan Agreement, if the SOFR cannot be determined any outstanding balance will bear interest at the Prime Rate in effect on such day.

At March 31, 2025, we were in compliance with our covenants, as defined by the Amended Loan Agreement.

At June 30, 2025, we were in compliance with our covenants, as defined by the Amended Loan Agreement.

Our financial covenants require that we meet certain parameters related to our leverage ratio.

At March 31, 2025, our leverage ratio was 0.95 to 1.0, which meets the requirement of not being above 3 to 1.

At June 30, 2025, our leverage ratio was 1.4 to 1.0, which meets the requirement of not being above 3 to 1.

The provision for income taxes consists of the following:

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

(in thousands)

4 unchanged sentences

The reconciliation of the Federal statutory income tax rate to the effective income tax rate is as follows:

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

Federal statutory rate 21.0 % 21.0 % 21.0 % 21.0 %

7 unchanged sentences

Effective tax rate 20.6 % 22.1 % 13.9 % 19.8 %

The Company recorded an excess tax benefit of $ 7.2 million for the three months ended March 31, 2025, as compared to $ 4.4 million during the same period in 2024, respectively.

The excess tax benefit is related to the timing of stock option exercises as a result of our high stock price during the three months ended March 31, 2025 and 2024.

The Company recorded an excess tax benefit of $ 1.9 million and $ 2.2 million for the three months ended June 30, 2025 and 2024, respectively, and $ 9.0 million and $ 6.7 million for the six months ended June 30, 2025 and 2024, respectively.

The excess tax benefit is related to the timing of stock option exercises as a result of our high stock price during the six months ended June 30, 2025 and 2024.

In accordance with the 2017 Tax Cuts & Jobs Act, under Internal Revenue Code Section 162(m), the tax deduction for covered executives of public companies is limited to $1.0 million per individual.

Because of the increase in our stock price and timing of executive stock option exercises this resulted in an increase to the income tax provision of $ 2.3 million and $ 0.5 million for the three months ended March 31, 2025 and 2024, respectively.

Because of the increase in our stock price and timing of executive stock option exercises this resulted in an increase to the income tax provision of $0.8 million and $1.0 million for the three months ended June 30, 2025 and 2024, respectively, and $ 3.1 million and $ 1.5 million for the six months ended June 30, 2025 and 2024, respectively.

We also earn research and development tax credits as defined under Section 41 of the Internal Revenue Code.

1 unchanged sentence

Eligible expenses include but are not limited to supplies, materials, contractor expenses and internal employee wages.

In accordance with the 2017 Tax Cuts & Jobs Act, under Internal Revenue Code Section 174, research and development expenses incurred after December 31, 2021, are required to be capitalized and amortized over five years.

In accordance with the 2017 Tax Cuts & Jobs Act, under Internal Revenue Code Section 174, research and development expenses (“R&D”) incurred after December 31, 2021, are required to be capitalized and amortized over five years.

The amortization requirements for tax purposes is a mid-year convention, resulting in tax amortization of 10% in the year of acquisition, 20% in the following four years, and 10% in the final year.

9 unchanged sentences

Any interest or penalties would be recognized as a component of income tax expense.

Subsequent effects on our financial statement related to the One Big Beautiful Bill Act effective July 4, 2025

On July 4, 2025, the President signed the One Big Beautiful Bill Act (“OBBBA”), which includes significant changes to corporate tax provisions and deductions.

As the enactment occurred after the June 30, 2025, reporting date, the Company has not adjusted its current or deferred tax balances as of June 30, 2025.

The Company is currently evaluating the impact of the legislation and will reflect any required adjustments in the third quarter ended September 30, 2025.

The OBBBA includes reinstatement of 100% bonus depreciation for qualifying property placed in service after January 19, 2025, which reverses the previously scheduled phase-down of the bonus depreciation deduction to 40% for 2025 under prior law.

The Company expects the reinstatement to accelerate tax deductions for capital expenditures made in the second half of 2025.

This is expected to increase the Company’s June 30, 2025, tax receivable and decrease our deferred tax assets by approximately $4.0 million.

The OBBBA also repealed the mandatory capitalization and amortization of domestic R&D expenses under former IRC Section 174.

As a result, the Company will deduct all 2025 qualifying domestic R&D expenses as incurred.

Additionally, the Company will elect to accelerate the deduction of all remaining unamortized domestic R&D expenses originally capitalized in tax years 2022 through 2024 ratably over two years starting in tax year 2025.

The net deductions benefit is expected to increase the Company’s June 30, 2025, income tax receivable and decrease our deferred tax assets by approximately $ 10.7 million.

Share-Based Compensation

10 unchanged sentences

The Committee determines the persons to whom awards are to be made, determines the type, size and terms of awards, interprets the LTIP Plans, establishes and revises rules and regulations relating to the LTIP Plans and makes any other determinations that it believes necessary for the administration of the LTIP Plans.

The following weighted average assumptions were used to determine the fair value of the stock options granted on the original grant date for expense recognition purposes for options granted during the three months ended March 31, 2025 and 2024, using a Black Scholes-Merton Model:

Three months ended

2025 March 31,

The following weighted average assumptions were used to determine the fair value of the stock options granted on the original grant date for expense recognition purposes for options granted during the six months ended June 30, 2025 and 2024, using a Black Scholes-Merton Model:

Six months ended

2025 June 30,

Senior Leadership 1 :

12 unchanged sentences

Volatility is based on historical volatility of our stock over time periods equal to the expected life at grant date.

The following is a summary of stock options vested and exercisable as of March 31, 2025:

The following is a summary of stock options vested and exercisable as of June 30, 2025:

Prices Number

15 unchanged sentences

( 34,635 ) 71.53

Outstanding at March 31, 2025

Outstanding at June 30, 2025

3,038,832 $ 46.65

Exercisable at March 31, 2025

Exercisable at June 30, 2025

2,230,086 $ 35.16

The total pre-tax compensation cost related to unvested stock options not yet recognized as of March 31, 2025, is $ 17.0 million and is expected to be recognized over a weighted average period of approximately 2.4 years.

The total intrinsic value of options exercised during the three months ended March 31, 2025 and 2024, was $ 13.1 million and $ 14.2 million, respectively.

The cash received from options exercised during the three months ended March 31, 2025 and 2024, was $ 4.4 million and $ 9.8 million, respectively.

The total pre-tax compensation cost related to unvested stock options not yet recognized as of June 30, 2025, is $ 15.8 million and is expected to be recognized over a weighted average period of approximately 2.3 years.

The total intrinsic value of options exercised during the six months ended June 30, 2025 and 2024, was $ 22.3 million and $ 23.8 million, respectively.

The cash received from options exercised during the six months ended June 30, 2025 and 2024, was $ 10.0 million and $ 15.8 million, respectively.

The impact of these cash receipts is included in financing activities in the accompanying consolidated statements of cash flows.

2 unchanged sentences

common stock on the respective grant dates, reduced for the present value of dividends.

At March 31, 2025, unrecognized compensation cost related to unvested restricted stock awards was approximately $ 8.7 million, which is expected to be recognized over a weighted average period of approximately 2.3 years.

At June 30, 2025, unrecognized compensation cost related to unvested restricted stock awards was approximately $ 9.1 million, which is expected to be recognized over a weighted average period of approximately 2.1 years.

A summary of the unvested restricted stock awards is as follows:

4 unchanged sentences

( 3,489 ) 74.43

Unvested at March 31, 2025

Unvested at June 30, 2025

145,945 $ 79.27

4 unchanged sentences

At the end of the measurement period, each award will be converted into common stock at 0 % to 200 % of the PSUs held, depending on overall TSR as compared to the benchmark companies.

The total pre-tax compensation cost related to unvested PSUs not yet recognized as of March 31, 2025, is $ 6.3 million and is expected to be recognized over a weighted average period of approximately 1.7 years.

The following weighted average assumptions were used to determine the fair value of the PSUs granted on the original grant date for expense recognition purposes for PSUs granted during the three months ended March 31, 2025 and 2024, using a Monte Carlo Model:

Three months ended

2025 March 31,

The total pre-tax compensation cost related to unvested PSUs not yet recognized as of June 30, 2025, is $ 5.9 million and is expected to be recognized over a weighted average period of approximately 1.7 years.

The following weighted average assumptions were used to determine the fair value of the PSUs granted on the original grant date for expense recognition purposes for PSUs granted during the six months ended June 30, 2025 and 2024, using a Monte Carlo Model:

Six months ended

2025 June 30,

Expected (annual) dividend rate $ 0.40 $ 0.32

12 unchanged sentences

( 135,209 ) 29.83

Unvested at March 31, 2025 2

( 772 ) 90.28

Unvested at June 30, 2025 2

145,857 $ 88.54

1 The additional number of PSUs earned based on a 196.4% achievement at December 31, 2024 for awards vesting in 2025.

10 unchanged sentences

A summary of share-based compensation is as follows:

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

Grant date fair value of awards during the period:

34 unchanged sentences

Administrative expenses are paid for by Plan participants.

The Company paid no administrative expenses during the three months ended March 31, 2025 and 2024.

The Company paid no administrative expenses during the six months ended June 30, 2025 and 2024.

The Company matches 175.0 % up to 6.0 % of employee contributions of eligible compensation.

Additionally, Plan participant forfeitures are used to reduce the cost of the Company contributions.

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

(in thousands)

3 unchanged sentences

Eligible employees are regular full-time non-exempt employees of the Company who are actively employed and working on the first and last day of the calendar quarter.

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

(in thousands)

6 unchanged sentences

In addition, the Company matches 175.0 % of a participating employee's allowed contributions to a qualified health saving account to assist employees with health insurance plan deductibles.

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

(in thousands)

5 unchanged sentences

Dilutive common shares consist primarily of stock options and restricted stock awards.

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2025 and 2024:

Three Months Ended

2025 March 31,

The following table sets forth the computation of basic and diluted earnings per share for the six months ended June 30, 2025 and 2024:

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

(in thousands, except share and per share data)

31 unchanged sentences

The Company is authorized to effectuate repurchases of the Company’s common stock on terms and conditions approved in advance by the Board.

As of March 31, 2025, approximately $ 70.0 million remains under the current board authorization.

4 As of March 31, 2025, approximately $ 30.0 million of shares have been repurchased in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

As of June 30, 2025, approximately $ 70.0 million remains under the current board authorization.

4 As of June 30, 2025, approximately $ 30.0 million of shares have been repurchased in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

The Company also repurchases shares of AAON, Inc.

1 unchanged sentence

Our repurchase activity is as follows:

Three Months Ended

March 31, 2025 March 31, 2024

Six Months Ended

June 30, 2025 June 30, 2024

(in thousands, except share and per share data)

16 unchanged sentences

March 5, 2025 March 18, 2025 March 28, 2025 $ 0.10 $ 0.40

May 13, 2025 June 6, 2025 June 27, 2025 $ 0.10 $ 0.40

Contingent Shares Issued in BASX Acquisition

31 unchanged sentences

On February 27, 2024, the Company entered into a transaction with a subsidiary of an unrelated third-party financial institution (the “2024 Investor”) and a certified Community Development Entity under a qualified New Markets Tax Credit (“2024 NMTC”) program pursuant to Section 45D of the Internal Revenue Code of 1986, as amended, related to an investment in real estate to facilitate the 2023 Project.

In connection with the 2024 NMTC transaction, the Company received a $ 15.5 million NMTC allocation for the 2023 Project and secured low interest financing and the potential for future debt forgiveness related to the expansion of its Longview, Texas facilities.

In connection with the 2024 NMTC transaction, the Company received a $ 15.5 million

NMTC allocation for the 2023 Project and secured low interest financing and the potential for future debt forgiveness related to the expansion of its Longview, Texas facilities.

Upon closing of the 2024 NMTC transaction, the Company provided an aggregate of approximately $ 11.0 million to the 2024 Investor, in the form of a loan receivable, with a term of 25 years, bearing an interest rate of 1.0 %.

22 unchanged sentences

These contracts are not accounted for as derivative instruments because they meet the normal purchase and normal sales exemption.

We had no material contractual purchase obligations as of March 31, 2025, except as noted below.

We had no material contractual purchase obligations as of June 30, 2025, except as noted below.

In 2023, the Company executed a five-year purchase commitment for refrigerants.

Payments made in satisfaction of the purchase commitment were approximately $ 0.6 million and $ 3.6 million the three months ended March 31, 2025 and 2024, respectively.

Payments made in satisfaction of the purchase commitment were approximately $ 1.5 million and $ 2.1 million the three and six months ended June 30, 2025, respectively, as compared to $ 3.0 million and $ 6.6 million for the three and six months ended June 30, 2024, respectively.

Estimated minimum future payments are $ 7.0 million, $ 10.5 million, and $ 11.2 million for 2025, 2026, and 2027, respectively.

1 unchanged sentence

The following is a summary of transactions and balances with related parties:

Three Months Ended

2025 March 31,

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

(in thousands)

6 unchanged sentences

The nature of our related party transactions is as follows:

• The Company sells units to an entity owned by a member of the CEO’s immediate family.

• The Company sells units to an entity operated by a member of the board’s immediate family.

This entity is also one of the Company’s Representatives and as such, the Company makes payments to the entity for third party products.

2 unchanged sentences

The consulting agreement expired in May 2024.

• The Company periodically rents space partially owned by the CEO for various Company meetings.

• The Company leases flight time of an aircraft partially owned by our President/COO and another member of our senior leadership .

• The Company periodically rents space partially owned a member of the board for various Company meetings.

• The Company leases flight time of an aircraft partially owned by our President and CEO and another member of our senior leadership .

The Company has determined that it has three reportable segments for financial reporting purposes.

16 unchanged sentences

The cost of sales and gross profit amounts shown below are presented after elimination entries.

Three Months Ended

2025 March 31,

(in thousands)

Three Months Ended Six Months Ended

2025 June 30,

2024 June 30,

2025 June 30,

(in thousands) (in thousands)

AAON Oklahoma

42 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements