AAON, INC. 10-Q

Item 1. Financial Statements. AAON, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) March 31, 2026 December 31, 2025 Assets (in thousands, except share and per share data) Current assets: Cash and cash equivalents $ 13 $ 13 Restricted cash 1,087 1,226 Accounts receivable, net 290,161 314,387 Income tax receivable 19,691 27,445 Inventories, net 313,203 261,151 Contract assets, net 298,368 247,037 Prepaid expenses and other 21,177 17,921 Total current assets 943,700 869,180 Property, plant and equipment, net 654,857 631,262 Intangible assets, net and goodwill 171,913 165,799 Right of use assets 17,335 17,988 Other long-term assets 1,907 2,281 Total assets $ 1,789,712 $ 1,686,510 Liabilities and Stockholders' Equity Current liabilities: Short-term obligations of NMTC 1 7,535 7,535 Accounts payable 160,139 110,437 Accrued liabilities 136,731 132,213 Contract liabilities 55,229 80,670 Total current liabilities 359,634 330,855 Debt, long-term 425,154 398,320 Deferred tax liabilities 34,899 30,313 Other long-term liabilities 27,038 23,299 New markets tax credit obligations 1 8,778 8,738 Commitments and contingencies (Note 19) Stockholders' equity: Preferred stock, $ .001 par value, 5,000,000 shares authorized, no shares issued — — Common stock, $ .004 par value, 200,000,000 shares authorized, 81,851,483 and 81,691,075 issued and outstanding at March 31, 2026 and December 31, 2025, respectively 327 327 Additional paid-in capital 71,913 64,358 Retained earnings 861,969 830,300 Total stockholders' equity 934,209 894,985 Total liabilities and stockholders' equity $ 1,789,712 $ 1,686,510 1 Held by variable interest entities (Note 18) The accompanying notes are an integral part of these consolidated financial statements. 1 AAON, Inc. and Subsidiaries Consolidated Statements of Income (Unaudited) Three Months Ended March 31, 2026 2025 (in thousands, except per share data) Net sales $ 496,936 $ 322,054 Cost of sales 371,971 235,690 Gross profit 124,965 86,364 Selling, general and administrative expenses 67,906 51,293 Gain on disposal of assets — ( 40 ) Income from operations 57,059 35,111 Interest expense ( 5,055 ) ( 2,802 ) Other income, net 77 174 Income before taxes $ 52,081 $ 32,483 Income tax provision 12,266 3,191 Net income $ 39,815 $ 29,292 Earnings per share: Basic EPS $ 0.49 $ 0.36 Diluted EPS $ 0.48 $ 0.35 Cash dividends declared per common share: $ 0.10 $ 0.10 Weighted average shares outstanding: Basic 81,756,604 81,472,351 Diluted 83,179,954 83,351,536 The accompanying notes are an integral part of these consolidated financial statements. 2 AAON, Inc. and Subsidiaries Consolidated Statements of Stockholders Equity (Unaudited) Three Months Ended March 31, 2026 Common Stock Shares Amount Paid-in Capital Retained Earnings Total (in thousands) Balances at December 31, 2025 81,691 $ 327 $ 64,358 $ 830,300 $ 894,985 Net income — — — 39,815 39,815 Stock options exercised and restricted stock awards granted 195 1 3,061 — 3,062 Share-based compensation — — 7,696 — 7,696 Stock repurchased and retired ( 35 ) ( 1 ) ( 3,202 ) — ( 3,203 ) Dividends — — — ( 8,146 ) ( 8,146 ) Balances at March 31, 2026 81,851 $ 327 $ 71,913 $ 861,969 $ 934,209 Three Months Ended March 31, 2025 Common Stock Shares Amount Paid-in Capital Retained Earnings Total (in thousands) Balances at December 31, 2024 81,437 $ 326 $ 68,946 $ 755,310 $ 824,582 Net income — — — 29,292 29,292 Stock options exercised and restricted stock awards granted 365 1 4,355 — 4,356 Share-based compensation — — 4,021 — 4,021 Stock repurchased and retired ( 454 ) ( 2 ) ( 38,302 ) — ( 38,304 ) Dividends — — — ( 8,095 ) ( 8,095 ) Balances at March 31, 2025 81,348 $ 325 $ 39,020 $ 776,507 $ 815,852 3 AAON, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 2026 2025 Operating Activities (in thousands) Net income $ 39,815 $ 29,292 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization 20,903 18,943 Amortization of debt issuance costs 40 52 Amortization of right of use assets 40 25 (Recoveries of) Provision for losses on accounts receivable, net of adjustments ( 120 ) 88 Provision for excess and obsolete inventories, net of write-offs 701 57 Share-based compensation 7,696 4,021 Other — ( 45 ) Deferred income taxes 4,586 5,976 Changes in assets and liabilities: Accounts receivable 24,346 ( 17,631 ) Income tax receivable 7,754 ( 3,323 ) Inventories ( 52,753 ) ( 11,489 ) Contract assets ( 51,331 ) ( 53,235 ) Prepaid expenses and other long-term assets ( 1,487 ) ( 2,703 ) Accounts payable 50,375 21,625 Contract liabilities ( 25,441 ) 1,508 Extended warranties 4,387 37 Accrued liabilities and other long-term liabilities 4,483 ( 2,412 ) Net cash provided by (used in) operating activities 33,994 ( 9,214 ) Investing Activities Capital expenditures ( 45,127 ) ( 46,723 ) Grant proceeds received 1,650 — Proceeds from sale of property, plant and equipment — 40 Acquisition of intangible assets ( 7,808 ) ( 3,717 ) Principal payments from note receivable — 12 Net cash used in investing activities ( 51,285 ) ( 50,388 ) Financing Activities Borrowings of debt 252,867 235,925 Payments of debt ( 226,033 ) ( 138,411 ) Payment related to financing costs ( 1,395 ) — Stock options exercised 3,062 4,356 Repurchase of stock - open market — ( 31,536 ) Repurchases of stock - LTIP plans (Note 17) ( 3,203 ) ( 6,768 ) Cash dividends paid to stockholders ( 8,146 ) ( 8,095 ) Net cash provided by financing activities 17,152 55,471 Net decrease in cash, cash equivalents, and restricted cash ( 139 ) ( 4,131 ) Cash, cash equivalents, and restricted cash, beginning of period 1,239 6,514 Cash, cash equivalents, and restricted cash, end of period $ 1,100 $ 2,383 The accompanying notes are an integral part of these consolidated financial statements. 4 AAON, Inc. and Subsidiaries Notes to Consolidated Financial Statements March 31, 2026 (Unaudited) 1. General Basis of Presentation AAON, Inc. is a Nevada corporation which was incorporated on August 18, 1987. Our operating subsidiaries include AAON, Inc. (“AAON Oklahoma”), an Oklahoma corporation, AAON Coil Products, Inc. (“AAON Coil Products”), a Texas corporation, and BASX, Inc. (“BASX”) an Oregon corporation (collectively, the “Company”). The accompanying unaudited consolidated financial statements of AAON, Inc. and our operating subsidiaries, all of which are wholly-owned, have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the rules and regulations of the Securities and Exchange Commission (“SEC”). Our financial statements consolidate all of our affiliated entities in which we have a controlling financial interest. Because we hold certain rights that give us the power to direct the activities of eight variable interest entities (“VIEs”) (Note 18) that most significantly impact the VIEs economic performance, combined with a variable interest that gives us the right to receive potentially significant benefits or the obligation to absorb potentially significant losses, we have a controlling financial interest in those VIEs. These financial statements have not been audited by the Company's independent registered public accounting firm, except that the consolidated balance sheet at December 31, 2025, is derived from audited consolidated financial statements. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. The financial statements reflect all adjustments (all of which are of a normal recurring nature) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for a full year. Certain disclosures have been condensed in or omitted from these consolidated financial statements. The accompanying unaudited financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. All intercompany balances and transactions have been eliminated in consolidation. We are engaged in the engineering, manufacturing, marketing, and sale of premium air conditioning and heating equipment consisting of standard, semi-custom, and custom rooftop units, data centers cooling solutions, cleanroom systems, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal/water-source heat pumps, coils, and controls. 5 Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because these estimates and assumptions require significant judgment, actual results could differ from those estimates and could have a significant impact on our results of operations, financial position, and cash flows. We reevaluate our estimates and assumptions as needed, but at a minimum on a quarterly basis. The most significant estimates include, but are not limited to, inventory valuation, inventory reserves, warranty accrual, income taxes, useful lives of property, plant, and equipment, estimated future use of leased property, share-based compensation, revenue percentage of completion and estimated costs to complete. Actual results could differ materially from those estimates. Accounting Policies A comprehensive discussion of our critical accounting policies and management estimates is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025. Fair Value Measurements The carrying amounts of cash and cash equivalents, receivables, accounts payable, and accrued liabilities approximate fair value because of the short-term maturity of the items. The carrying amount of the Company’s debt, and other payables, approximates their fair values either due to their short-term nature, the variable rates associated with the debt or based on current rates offered to the Company for debt with similar characteristics. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. Fair value is based upon assumptions that market participants would use when pricing an asset or liability. We use the following fair value hierarchy, which prioritizes valuation technique inputs used to measure fair value into three broad levels: • Level 1: Quoted prices in active markets for identical assets and liabilities that we have the ability to access at the measurement date. • Level 2: Inputs (other than quoted prices included within Level 1) that are either directly or indirectly observable for the asset or liability, including (i) quoted prices for similar assets or liabilities in active markets, (ii) quoted prices for identical or similar assets or liabilities in inactive markets, (iii) inputs other than quoted prices that are observable for the asset or liability, and (iv) inputs that are derived from observable market data by correlation or other means. • Level 3: Unobservable inputs for the asset or liability including situations where there is little, if any, market activity for the asset or liability. Items categorized in Level 3 include the estimated fair values of intangible assets, contingent consideration, and goodwill acquired in a business combination. The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). In some cases, the inputs used to measure fair value might fall into different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to a fair value measurement requires judgment, considering factors specific to the asset or liability. Software Development Costs We capitalize costs incurred to purchase or develop software for internal use. Internal-use software development costs are capitalized during the application development stage. 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 ten years . Definite-Lived Intangible Assets Our definite-lived intangible assets include customer relationships, internal-use software and other intellectual property acquired in business combinations or asset acquisition. We amortize our definite-lived intangible assets on 6 a straight-line basis over the estimated useful lives of the assets. We evaluate the carrying value of our amortizable intangible assets for potential impairment when events and circumstances warrant such a review. Amortization is computed using the straight-line method over the following estimated useful lives: Intellectual property 6 - 30 years Customer relationships 14 years Goodwill and Indefinite-Lived Intangible Assets 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, 2026, is expected to be tax deductible in future periods. Indefinite-lived intangible assets consist of trademarks and trade names. Goodwill and indefinite-lived intangible assets are not amortized but instead are evaluated for impairment at least annually. We perform our annual assessment of impairment during the fourth quarter of our fiscal year, and more frequently if circumstances warrant. Recent Accounting Pronouncements Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). We consider the applicability and impact of all ASUs. ASUs not listed or included within the Company's Annual Report on Form 10-K for the year ended December 31, 2025, were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements and notes thereto. 2. Revenue Recognition The following tables show disaggregated net sales by reportable segment (Note 21) by major product brand, net of intercompany sales eliminations. Segment Brands Produced Brand Products AAON Oklahoma AAON Rooftop units and aftermarket parts AAON Coil Products AAON / BASX Condensing units, air handling products, data center cooling solutions, and geothermal/water-source heat pumps BASX BASX Data center cooling solutions, cleanroom products, and air handling products 7 Three Months Ended March 31, 2026 AAON Oklahoma AAON Coil Products BASX Total (in thousands) AAON-branded Products $ 243,967 $ 24,384 $ — $ 268,351 BASX-branded Products — 93,227 135,358 228,585 Total $ 243,967 $ 117,611 $ 135,358 $ 496,936 Three Months Ended March 31, 2025 AAON Oklahoma AAON Coil Products BASX Total (in thousands) AAON-branded Products $ 161,838 $ 27,655 $ — $ 189,493 BASX-branded Products — 66,368 66,193 132,561 Total $ 161,838 $ 94,023 $ 66,193 $ 322,054 Aftermarket part sales (included in the AAON Product sales above) were $ 17.0 million and $ 15.2 million for the three months ended March 31, 2026 and 2025, respectively. The Company recognizes revenue, presented net of sales tax, when it satisfies the performance obligation in its contracts. For certain manufactured equipment contracts and parts sales, the primary performance obligation in such a contract is delivery of the requested manufactured equipment. We satisfy the performance obligation when the control is passed to the customer, generally at time of shipment. Final sales prices are fixed based on purchase orders. Sales allowances and customer incentives are treated as reductions to sales and are provided for based on historical experiences and current estimates. Due to the highly customized nature of many of the Company’s products and each product not having an alternative use to the Company without significant costs to the Company, the Company recognizes revenue over time as progress is made toward satisfying the performance obligations of each contract. The Company has formal cancellation policies and generally does not accept returns on these units. As a result, many of the Company’s products do not have an alternative use and have an enforceable right to payment, including a reasonable profit margin, and therefore, for these products, we recognize revenue over the time it takes to produce the unit. Contract costs include direct materials, direct labor, installation, freight and delivery, commissions and royalties. Other costs not related to contract performance, such as indirect labor and materials, small tools and supplies, operating expenses, field rework and back charges are charged to expense as incurred. Provisions for estimated losses on contracts in progress are made in the period in which such losses are determined. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions and final contract settlements, may result in revisions to costs and income and are estimated and recognized by the Company throughout the life of the contract. The aggregate of costs incurred, and income recognized on uncompleted contracts in excess of billings is shown as a contract asset within our consolidated balance sheets, and the aggregate of billings on uncompleted contracts in excess of related costs incurred and income recognized is shown as a contract liability within our consolidated balance sheets. Historically, sales of our AAON products are moderately seasonal with the peak period being May-October of each year due to timing of construction projects being directly related to warmer weather. 8 Product Warranties A provision is made for the estimated cost of maintaining product warranties to customers at the time the product is sold based upon historical claims experience by product line. The Company records a liability and an expense for estimated future warranty claims based upon historical experience and management’s estimate of the level of future claims. Changes in the estimated amounts recognized in prior years are recorded as an adjustment to the liability and expense in the current year. The Company also sells extended warranties on parts for various lengths of time ranging from six months to 10 years. Revenue for these separately priced warranties is deferred and recognized on a straight-line basis over the separately priced warranty period. Representatives and Third-Party Products We are responsible for billings and collections resulting from all sales transactions, including those initiated by our independent manufacturer representatives (“Representatives”). Representatives are national companies that are in the business of providing heating, ventilation, and air conditioning (“HVAC”) units and other related products and services to customers. The end user customer orders a bundled group of products and services from the Representative and expects the Representative to fulfill the order. These other related products and services may include controls purchased from another manufacturer to operate the unit, start-up services, and curbs for supporting the unit (“Third Party Products”). All are associated with the purchase of an HVAC unit but may be provided by the Representative or another third party. Only after the specifications are agreed to by the Representative and the customer, and the decision is made to use an AAON HVAC unit, will we receive notice of the order. We establish the amount we must receive for our HVAC unit (“minimum sales price”), but do not control the total order price that is negotiated by the Representative with the end user customer. The Representatives submit the total order price to us for invoicing and collection. The total order price includes our minimum sales price and an additional amount which may include both the Representatives’ fee and amounts due for additional products and services required by the customer. The Company is considered the principal for the equipment we design and manufacture and records that revenue gross. The Company has no control over the Third Party Products to the end customer and the Company is under no obligation related to the Third-Party Products. Amounts related to Third-Party Products are not recognized as revenue but are recorded as a liability and are included in accrued liabilities on the consolidated balance sheets. 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 $ 17.2 million and $ 12.7 million for the three months ended March 31, 2026 and 2025, respectively. 3. Contract Assets and Liabilities Opening and closing balances of contract assets and contract liabilities are as follows: March 31, 2026 December 31, 2025 (in thousands) Contract assets $ 298,967 $ 247,635 Less: Allowance for credit losses 599 598 Contract assets, net 298,368 247,037 Contract liabilities ( 55,229 ) ( 80,670 ) Total, net $ 243,139 $ 166,367 9 Costs and estimated earnings on uncompleted contracts and related billings are as follows: March 31, 2026 March 31, 2025 (in thousands) Costs incurred on uncompleted contracts $ 377,167 $ 157,050 Estimated earnings 315,685 119,699 Total 692,852 276,749 Less: Contract billings to date 464,125 111,891 Less: Allowance for credit losses 599 399 Plus: Completed contracts, unbilled 15,011 7,776 Total, net $ 243,139 $ 172,235 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, 2026 and 2025 was $ 36.2 million and $ 1.6 million. Typically, we expect to satisfy performance obligations relating to 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. Increases in contract assets are mainly due to the increased production and increased demand for our BASX-branded products. 4. Leases The Company has lease arrangements for certain administrative, manufacturing and warehousing facilities and equipment. Lease expiration dates, including expected renewal options, range from January 2029 to April 2033, with the weighted average remaining term being 6.0 years. The discount rates used to calculate the present value of lease payments range from 1.3 % to 6.6 % as of March 31, 2026. All leases are classified as operating leases. March 31, 2026 December 31, 2025 (in thousands) Right-of-use assets Right of use assets $ 17,335 $ 17,988 Current lease liability Accrued liabilities 3,353 3,262 Noncurrent lease liability Other long-term liabilities 14,825 15,529 Since 2018, the Company has leased the manufacturing, engineering and office space used by our operations in Parkville, Missouri. The lease term is through January 2029. 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 square feet with a lease term through April 2030. The Company’s total leased space in Parkville, Missouri is approximately 125,300 square feet. In November 2022, the Company entered into a lease arrangement for additional storage facilities in Tulsa, Oklahoma to support our operations. The lease added an additional 198,000 square feet to our operations. In January 2024, we amended the lease for an additional 157,550 square feet for operations and parts distribution. The amended lease term will expire April 2033. In July 2023, the Company entered into a lease agreement with a start date of September 2023 for land and approximately 72,000 square feet of facilities in Redmond, Oregon to support our manufacturing operations. The lease term will expire November 2033 with additional renewal options. We also lease six properties near our Redmond location. In the aggregate, these leases contain approximately 83,000 square feet of additional warehouse space, office space, as well as outside storage. These leases have expiring terms from May 2027 to October 2030. In October 2025, the Company entered into a lease agreement in Bend, OR with a start date of November 2025, for approximately 34,000 square feet of additional warehouse and office space. The lease term will expire October 2030. 10 Total future lease payments as of March 31, 2026, are as follows: (in thousands) 2026 $ 3,210 2027 4,248 2028 4,103 2029 2,477 2030 2,225 Thereafter 5,013 Total minimum lease obligations $ 21,276 Less: present value of minimum lease payments 3,098 Less: current portion 3,353 Lease obligations, long-term $ 14,825 5. Accounts Receivable Accounts receivable and the related allowance for credit losses are as follows: March 31, 2026 December 31, 2025 (in thousands) Accounts receivable $ 291,349 $ 315,695 Less: Allowance for credit losses 1,188 1,308 Total, net $ 290,161 $ 314,387 Three Months Ended March 31, 2026 2025 Allowance for credit losses: (in thousands) Balance, beginning of period $ 1,308 $ 1,038 Provisions for expected credit losses, net of adjustments ( 48 ) 98 Accounts receivable recoveries (write offs) ( 72 ) ( 10 ) Balance, end of period $ 1,188 $ 1,126 6. Inventories Inventories are valued at the lower of cost or net realizable value. Cost is determined by the first-in, first-out (“FIFO”) method. We establish an allowance for excess and obsolete inventories based on product line changes, the feasibility of substituting parts and the need for supply and replacement parts. 11 The components of inventories and the related changes in the allowance for excess and obsolete inventories are as follows: March 31, 2026 December 31, 2025 (in thousands) Raw materials $ 317,255 $ 265,427 Work in process 1,482 475 Finished goods 511 593 Total, gross 319,248 266,495 Less: Allowance for excess and obsolete inventories 6,045 5,344 Total, net $ 313,203 $ 261,151 Three Months Ended March 31, 2026 2025 Allowance for excess and obsolete inventories: (in thousands) Balance, beginning of period $ 5,344 $ 5,192 Provision for excess and obsolete inventories 753 398 Inventories written off ( 52 ) ( 341 ) Balance, end of period $ 6,045 $ 5,249 7. Property, Plant and Equipment Our property, plant and equipment consist of the following: March 31, 2026 December 31, 2025 Property, plant and equipment: (in thousands) Land $ 17,148 $ 17,148 Buildings 369,366 366,919 Machinery & equipment 581,794 555,801 Furniture and fixtures 67,041 63,909 Total property, plant and equipment 1,035,349 1,003,777 Less: Accumulated depreciation 380,492 372,515 Property, plant and equipment, net $ 654,857 $ 631,262 Depreciation expense is as follows: Three Months Ended March 31, 2026 2025 (in thousands) Depreciation expense $ 19,361 $ 16,868 12 8. Intangible Assets and Goodwill Intangible Assets Our intangible assets consist of the following: March 31, 2026 December 31, 2025 Definite-lived intangible assets (in thousands) Intellectual property $ 11,750 $ 12,450 Customer relationships 47,547 47,547 Capitalized internal-use software 43,158 34,802 Less: Accumulated amortization 27,005 25,463 Definite-lived intangible assets, net 75,450 69,336 Indefinite-lived intangible assets Trademarks 14,571 14,571 Total intangible assets, net $ 90,021 $ 83,907 Amortization expense is as follows: Three Months Ended March 31, 2026 2025 (in thousands) Amortization expense $ 1,542 $ 2,075 The weighted-average amortization period for definite-lived intangible assets are as follows as of March 31, 2026: (in years) Intellectual property 17.5 Customer relationships 9.7 Capitalized internal-use software 9.7 Definite-lived intangible assets 10.7 Total future amortization expense for finite-lived intangible assets was estimated as follows: (in thousands) 2026 $ 4,615 2027 6,096 2028 5,531 2029 5,149 2030 4,221 Thereafter 25,331 Total future amortization expense 50,943 Internal-use software projects in process 24,507 Total $ 75,450 13 Goodwill The changes in the carrying amount of goodwill were as follows: March 31, 2026 December 31, 2025 (in thousands) Balance, beginning of period $ 81,892 $ 81,892 Decreases due to acquisition adjustments — — Balance, end of period $ 81,892 $ 81,892 9. Supplemental Cash Flow Information Three Months Ended March 31, 2026 2025 Supplemental disclosures: (in thousands) Interest paid $ 4,929 $ 2,513 Operating activities - other: Gain on disposal of assets $ — $ ( 40 ) Foreign currency transaction gain — ( 1 ) Interest loss on note receivable — ( 4 ) Total, other $ — $ ( 45 ) Non-cash investing and financing activities: Non-cash capital expenditures $ ( 673 ) $ 10,885 Income taxes paid (net of refund) during the three months ended March 31, 2026 and 2025, disaggregated by jurisdiction: Three Months Ended March 31, 2026 2025 (in thousands) U.S. Federal $ ( 104 ) $ — Minnesota 50 — New York — 270 Pennsylvania 82 91 Virginia — 22 Other States — 155 Total $ 28 $ 538 Jurisdictions where income taxes paid were equal to or exceeded 5% of total income taxes paid are disclosed individually. 10. Warranties 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. The Company has an obligation to replace parts if conditions under the warranty are met. A provision is made for estimated warranty costs at the time the related products are sold based upon the warranty period, historical trends, new products, and any known identifiable warranty issues. 14 Changes in the warranty accrual are as follows: Three Months Ended March 31, 2026 2025 Warranty accrual: (in thousands) Balance, beginning of period $ 29,965 $ 24,341 Payments made ( 4,431 ) ( 3,942 ) Warranty expense 5,913 3,211 Balance, end of period $ 31,447 $ 23,610 Warranty expense by reportable segment (Note 21) is as follows: Three Months Ended March 31, 2026 2025 (in thousands) AAON Oklahoma $ 4,472 $ 2,167 AAON Coil Products 1,214 399 BASX 227 645 Total $ 5,913 $ 3,211 11. Accrued Liabilities and Other Long-Term Liabilities Accrued liabilities were comprised of the following: March 31, 2026 December 31, 2025 (in thousands) Warranty $ 31,447 $ 29,965 Due to representatives 35,299 30,453 Payroll 26,826 22,238 Profit sharing 5,671 3,581 Workers' compensation 296 279 Medical self-insurance 3,420 4,844 Customer prepayments 2,106 6,856 Donations — 57 Employee vacation time 16,586 15,408 Extended warranties, ST 3,309 3,365 Operating lease liability ST 3,353 3,262 Property tax 1,885 143 Other 6,533 11,762 Total $ 136,731 $ 132,213 Other long-term liabilities were comprised of the following: March 31, 2026 December 31, 2025 (in thousands) Lease liability $ 14,825 $ 15,529 Extended warranties 12,213 7,770 Total $ 27,038 $ 23,299 15 12. Debt 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 entered into the Fourth Amendment to the Amended and Restated Loan Agreement dated November 24, 2021, to increase 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, 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 to $ 500.0 million from $ 230.0 million. On December 29, 2025, we entered into the Sixth Amendment to the Amended and Restated Loan Agreement (as amended, “Amended Loan Agreement”). The terms of the Amendment increased the amount of the borrowing capacity on the Amended Revolver to $ 600.0 million from $ 500.0 million by exercising the $ 100.0 million accordion feature. The Amended Revolver is prepayable without penalty and expires on May 27, 2030. Revolver March 31, 2026 December 31, 2025 (in thousands) Total Revolver Commitment $ 600,000 $ 600,000 Less: Revolver borrowings outstanding 425,154 398,320 Less: Standby letters of credit 1,308 654 Borrowings available under the Revolver $ 173,538 $ 201,026 Interest Rates Any outstanding loans under the Revolver bear interest at the daily compounded secured overnight financing rate (“SOFR”) plus the applicable margin, with a 10-basis point credit spread adjustment. Applicable margin, ranging from 1.25 % - 1.75 %, is determined quarterly based on the Company’s leverage ratio. The Company is also subject to letter of credit fees, ranging from 1.25 % - 1.75 %, and a commitment fee, ranging from 0.10 % - 0.20 %. 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, 2026 and 2025, respectively. Weighted average interest rate of our borrowings outstanding is as follows: Three Months Ended March 31, 2026 2025 Revolver 5.3 % 5.6 % 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. ABR loans would bear interest at a rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Rate in effect on such day plus 0.50 %, or (c) daily simple SOFR for a one-month tenor in effect on such day plus 1.00 %. 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. Debt Covenants At March 31, 2026, we were in compliance with our financial covenants as defined by the Amended Loan Agreement. These covenants included a financial covenant that we meet certain parameters related to our leverage ratio. At March 31, 2026, our leverage ratio was 1.71 to 1.0, which meets the requirement of not being above 3 to 1. 16 13. Income Taxes Income Tax Provision (Benefit) The provision for income taxes consists of the following: Three Months Ended March 31, 2026 2025 (in thousands) Current Federal $ 5,234 $ ( 2,032 ) Current State 2,446 ( 753 ) Deferred Federal 5,983 4,610 Deferred State ( 1,397 ) $ 1,366 Income tax provision $ 12,266 $ 3,191 The provision for income taxes differs from the amount computed by applying the statutory Federal income tax rate before the provision for income taxes. Rate Reconciliation The following table reconciles the U.S federal statutory income tax rate to the Company’s effective income tax rate for the three months ended March 31, 2026 and 2025: Three Months Ended March 31, 2026 2025 Amount % Amount % (in thousands) (in thousands) Federal statutory rate $ 10,962 21.0 % $ 6,821 21.0 % State income taxes, net of Federal benefit 2,461 4.7 % 1,759 5.4 % State tax credits ( 499 ) ( 1.0 ) % ( 236 ) ( 0.7 ) % Changes in tax laws in current period 88 0.2 % — — % Excess tax benefits related to share-based compensation (Note 15) ( 803 ) ( 1.5 ) % ( 7,164 ) ( 22.1 ) % Work opportunity tax credit — — ( 53 ) ( 0.2 ) % Non-deductible executive compensation 791 1.5 % 2,313 7.1 % Research and development tax credits ( 525 ) ( 1.0 ) % ( 775 ) ( 2.4 ) % Other ( 209 ) ( 0.3 ) % 526 1.7 % Effective tax rate 12,266 23.6 % 3,191 9.8 % The Company’s effective tax rate differs from the statutory rate primarily due to the excess tax benefits of stock transactions and state taxes. Pretax income is all domestic and there are no foreign income effects. No state jurisdictions individually meet the 5% disaggregation threshold. State taxes in Oregon, Oklahoma, Virginia, and Pennsylvania for the three months ended March 31, 2026, and state taxes in Oregon, Indiana, and Pennsylvania for the three months ended March 31, 2025, contributed to the majority (greater than 50%) of the tax effect in the state and local income tax category. The Company’s estimated annual 2026 effective tax rate, excluding discrete events, is approximately 25.0 %. We file income tax returns in the U.S., state and foreign income tax jurisdictions. We are subject to U.S. income tax examinations for the tax years 2023 to present, and to non-U.S. income tax examinations for the tax years 2022 to present. In addition, we are subject to state and local income tax examinations for tax years 2022 to present. The Company continues to evaluate its need to file returns in various state jurisdictions. Any interest or penalties would be recognized as a component of income tax expense. 17 Tax Law Changes On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing significant amendments to the Internal Revenue Code. In accordance with ASC 740, Income Taxes, the Company recognized the tax effects of the enacted legislation in the period that includes the enactment date. Impact of Tax Law Changes The Company measured the effects of the tax law change using the enactment date approach, with a measurement date of June 30, 2025, from the Q2 2025 tax provision calculation as the closest date of measurement for deferred and current values. The measurement resulted in an increase in DTLs of $ 35.4 million, a decrease in current income tax payable of $ 36.2 million, and an increase in provision expense of $ 0.8 million due to the bonus depreciation change effect on Texas Franchise tax and the reduced R&D Tax Credit allowed with the §174A change. Significant provisions of OBBBA affecting the Company include: • 100% Bonus Depreciation: Effective for qualified property acquired after January 19, 2025, including manufacturing equipment, which reverses the previously scheduled phase-down of the bonus depreciation deduction to 40% for 2025 under prior law. This provision increased DTLs by $ 7.0 million, decreased current payable by $ 7.0 million, and increased provision expense due to the accelerated tax deductions for capital expenditures made in 2025 and the small provision effect from the change in Texas Franchise Tax and state bonus depreciation. This adjustment also decreased the DTL for the UNICAP inventory calculation by $ 0.6 million, offset against current income tax payable. • Permanent Expensing of Domestic R&E Costs (Section 174A): Retroactive to January 1, 2025, resulting in decreased DTAs due to immediate tax deductibility of qualified domestic R&E costs as incurred. This provision decreased DTAs by $ 3.4 million, decreased current payables by $ 4.2 million, and increased provision expense by $ 0.8 million due to the reduction in the R&D tax credit (the Company will revert to the reduced credit method for calculation of the tax credit under the new law). • Accelerated Deduction of Unamortized Domestic R&E Cost Originally Capitalized in Tax Years 2022, 2023, and 2024 (Section 174A): The Company has elected to deduct the unamortized amounts of Section 174 Costs as of December 31, 2024, fully in tax year 2025, which decreased DTAs and current payables by $ 25.5 million. The impact of OBBBA enactment increased the Company’s effective tax rate by 0.7% for the year ended December 31, 2025. Effective January 1, 2026, the OBBBA enacted a 1% charitable contribution floor. The Company has included this permanent difference in the Q1 tax provision calculation, and the change increased the Company’s effective tax rate by 0.1% for the three months ended March 31, 2026. Net Operating Loss Due to the favorable changes in tax law related to the OBBBA, as of December 31, 2025, the Company generated Federal and State net operating loss (“NOL”) carryforwards of approximately $ 57.0 million and $ 22.5 million, respectively. The Federal NOLs have an indefinite carryforward period but are limited to offsetting 80% of taxable income in any given year under current tax law. The State NOLs have varying expiration dates. The Company recorded deferred tax assets of $ 12.0 million (Federal) and $ 1.1 million (State) related to these NOL carryforwards as of December 31, 2025. As of March 31, 2026, the deferred tax asset balances are $ 3.6 million (Federal) and $ 0.5 million (State), considering usage of the NOL’s in the first quarter of 2026. Management has evaluated the positive and negative evidence in assessing the need for a valuation allowance (historical operating results, cumulative losses in recent years, and projected future taxable income) and we believe it is more likely than not that we will recognize the deferred tax assets in tax year 2026. 18 14. Share-Based Compensation On May 22, 2007, our stockholders adopted a Long-Term Incentive Plan (as amended, “2007 Plan”) which provided an additional 5.0 million shares that could be granted in the form of stock options, stock appreciation rights, restricted stock awards, performance units, and performance awards. Under the 2007 Plan, the exercise price of shares granted may not be less than 100 % of the fair market value at the date of the grant. On May 24, 2016, our stockholders adopted the 2016 Long-Term Incentive Plan (“2016 Plan”) which provides for approximately 13.4 million shares, comprised of 5.1 million new shares provided for under the 2016 Plan, approximately 0.6 million shares that were available for issuance under the previous 2007 Plan that are now authorized for issuance under the 2016 Plan, approximately 3.9 million shares that were approved by the stockholders on May 15, 2018, and an additional 3.8 million shares that were approved by the stockholders on May 12, 2020. On May 21, 2024, our stockholders adopted the 2024 Long-Term Incentive Plan (“2024 Plan”) which provides for approximately 2.7 million new shares and approximately 3.7 million shares that were issued and outstanding under the 2016 Plan (as of May 21, 2024) that are now authorized for issuance under the 2024 Plan. The 3.7 million shares issued and outstanding under the 2016 Plan are only eligible for issuance under the 2024 Plan upon forfeiture, expiration, or cancellation. Under the 2024 Plan and previously under the 2016 Plan (collectively, the “LTIP Plans”), shares can be granted in the form of stock options, stock appreciation rights, restricted stock awards, performance awards, dividend equivalent rights, and other awards. Under the LTIP Plans, the exercise price of shares granted may not be less than 100% of the fair market value at the date of the grant. The LTIP Plans are administered by the Compensation Committee of the Board of Directors or such other committee of the Board of Directors as is designated by the Board of Directors (the “Committee”). Membership on the Committee is limited to independent directors. The Committee may delegate certain duties to one or more officers of the Company as provided in the LTIP Plans. 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 is necessary for the administration of the LTIP Plans. Options 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, 2026 and 2025 using a Black Scholes-Merton Model: Three Months Ended March 31, 2026 2025 Senior Leadership 1 : Expected (annual) dividend rate $ 0.40 $ 0.40 Expected volatility 45.53 % 38.81 % Risk-free interest rate 3.72 % 3.98 % Expected life (in years) 4.0 4.0 Employees: Expected (annual) dividend rate $ 0.40 $ 0.40 Expected volatility 47.23 % 42.39 % Risk-free interest rate 3.64 % 3.92 % Expected life (in years) 3.0 3.0 1 Senior Leadership Team (“SLT”) consists of officers and key members of management. The expected term of the options is based on evaluations of historical and expected future employee exercise behavior. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on historical volatility of our stock over time periods equal to the expected life at grant date. 19 The following is a summary of stock options vested and exercisable as of March 31, 2026: Range of Exercise Prices Number of Shares Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Intrinsic Value ( in thousands ) 17.65 - 27.58 963,308 2.45 $ 26.17 $ 54,508 29.29 - 37.07 594,424 4.55 31.58 30,418 37.09 - 140.75 750,507 6.94 65.12 13,303 Total 2,308,239 4.45 $ 40.22 $ 98,229 A summary of option activity under the plans is as follows: Stock Options Shares Weighted Average Exercise Price Outstanding at December 31, 2025 2,837,113 $ 47.21 Granted 741,558 91.33 Exercised ( 68,551 ) 44.67 Forfeited or Expired ( 20,417 ) 82.27 Outstanding at March 31, 2026 3,489,703 $ 56.43 Exercisable at March 31, 2026 2,308,239 $ 40.22 The total pre-tax compensation cost related to unvested stock options not yet recognized as of March 31, 2026, is $ 31.3 million and is expected to be recognized over a weighted average period of 2.6 years. The total intrinsic value of options exercised during the three months ended March 31, 2026 and 2025, was $ 3.5 million and $ 13.1 million, respectively. The cash received from options exercised during the three months ended March 31, 2026 and 2025, was $ 3.1 million and $ 4.4 million, respectively. The impact of these cash receipts is included in financing activities in the accompanying consolidated statements of cash flows. Restricted Stock The fair value of restricted stock awards is based on the fair market value of AAON common stock on the respective grant dates, reduced for the present value of dividends. At March 31, 2026, unrecognized compensation cost related to unvested restricted stock awards was approximately $ 11.6 million which is expected to be recognized over a weighted average period of 2.5 years. A summary of the unvested restricted stock awards is as follows: Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2025 139,708 $ 80.36 Granted 84,039 90.21 Vested ( 48,368 ) 73.83 Forfeited ( 2,224 ) 81.29 Unvested at March 31, 2026 173,155 $ 86.94 20 PSUs We have awarded PSUs to certain officers and employees under our LTIP Plans. Unlike our restricted stock awards, these PSUs are not considered legally outstanding and do not accrue dividends during the vesting period. These PSUs vest based on the level of achievement with respect to the Company's total shareholder return (“TSR”) benchmarked against similar companies included in the capital goods sector of the S&P 400 and S&P 600 building products industry. The TSR measurement period is three years . At the end of the measurement period, each award will be converted into AAON common stock at 0 % to 200 % of the PSUs held, depending on overall TSR as compared to the S&P 400 and S&P 600 building products industry. The total pre-tax compensation cost related to unvested PSUs not yet recognized as of March 31, 2026, is $ 8.7 million and is expected to be recognized over a weighted average period of approximately 2.3 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, 2026 and 2025, using a Monte Carlo Model: Three Months Ended March 31, 2026 2025 Expected (annual) dividend rate $ 0.40 $ 0.40 Expected volatility 48.04 % 41.91 % Risk-free interest rate 3.64 % 3.92 % Expected life (in years) 2.8 2.8 The expected term of the PSUs is based on their remaining performance period. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date. Volatility is based on historical volatility of our stock over time periods equal to the expected life at grant date. 21 A summary of the unvested PSUs is as follows: Shares Weighted Average Grant Date Fair Value Unvested at December 31, 2025 144,760 $ 88.31 Granted 51,457 132.00 Payout adjustment 1 ( 8,998 ) 84.42 Vested ( 44,471 ) 84.42 Forfeited ( 2,034 ) 92.17 Unvested at March 31, 2026 2 140,714 $ 105.71 1 PSU payout adjustment based on a 83.2 % achievement at December 31, 2025 for awards vesting in 2026. 2 Consists of 43,732 PSUs cliff vesting in 2027, 45,846 PSUs cliff vesting in 2028, and 51,136 PSUs cliff vesting in 2029. Summary of Share-based Compensation A summary of share-based compensation is as follows: Three Months Ended March 31, 2026 2025 Grant date fair value of awards during the period: (in thousands) Options $ 24,469 $ 10,473 PSUs 6,857 2,703 Restricted stock 7,581 5,206 Total $ 38,907 $ 18,382 Three Months Ended March 31, 2026 2025 Stock-based compensation expense: (in thousands) Options $ 4,250 $ 1,879 PSUs 1,438 1,017 Restricted stock 2,008 1,125 Total $ 7,696 $ 4,021 Three Months Ended March 31, 2026 2025 Income tax benefit related to share-based compensation (in thousands) Options $ 674 $ 3,157 PSUs ( 66 ) 3,472 Restricted stock 195 535 Total $ 803 $ 7,164 22 15. Employee Benefits Defined Contribution Plan - 401(k ) We sponsor a defined contribution plan (the “Plan”). Eligible employees may make contributions in accordance with the Plan and IRS guidelines. In addition to the traditional 401(k), eligible employees are given the option of making an after-tax contribution to a Roth 401(k) or a combination of both. The Plan provides for automatic enrollment and for an automatic increase to the deferral percentage at January 1st of each year and each year thereafter. Eligible employees are automatically enrolled in the Plan at a 6.0 % deferral rate and currently contributing employees’ deferral rates will be increased to 6.0 % unless their current rate is above 6.0 % or the employee elects to decline the automatic enrollment or increase. Administrative expenses are paid for by Plan participants. The Company paid no administrative expenses during the three months ended March 31, 2026 and 2025. 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 March 31, 2026 2025 (in thousands) Contributions, net of forfeitures, made to the defined contribution plan $ 7,461 $ 6,022 Profit Sharing Bonus Plans We maintain a discretionary profit sharing bonus plan under which approximately 8.5 % of pre-tax profit from the Company is paid to eligible employees on a quarterly basis in order to reward employee productivity. 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 March 31, 2026 2025 (in thousands) Profit sharing bonus plan $ 5,680 $ 3,297 Employee Medical Plan We self-insure for our employees’ health insurance, and make medical claim payments up to certain stop-loss amounts. We estimate our self-insurance liabilities using an analysis provided by our claims administrator and our historical claims experience. Eligible employees are regular full-time employees who are actively employed and working. Participants are expected to pay a portion of the premium costs for coverage of the benefits provided under the Plans. 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 March 31, 2026 2025 (in thousands) Medical premium payments $ 5,607 $ 5,835 Health saving account contributions 4,471 3,010 16. Earnings Per Share Basic net income per share is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted net income per share assumes the conversion of all potentially dilutive securities and is calculated by dividing net income by the sum of the weighted average number of shares of common stock outstanding plus all potentially dilutive securities. Dilutive common shares consist primarily of stock options and restricted stock awards. 23 The following table sets forth the computation of basic and diluted earnings per share: Three Months Ended March 31, 2026 2025 Numerator: (in thousands, except share and per share data) Net income $ 39,815 $ 29,292 Denominator: Basic weighted average shares 81,756,604 81,472,351 Effect of dilutive shares related to stock based compensation 1 1,423,350 1,879,185 Diluted weighted average shares 83,179,954 83,351,536 Earnings per share: Basic $ 0.49 $ 0.36 Diluted $ 0.48 $ 0.35 Anti-dilutive shares: Shares 648,657 108,254 1 Dilutive shares related to stock options, restricted stock, and PSUs (Note 14) 17. Stockholders' Equity Stock Repurchases The Board has authorized one active stock repurchase program for the Company. The Company may purchase shares on the open market from time to time. The Board must authorize the timing and amount of these purchases and all repurchases are in accordance with the rules and regulations of the SEC allowing the Company to repurchase shares from the open market. Our authorized open market repurchase programs during the periods are as follows: Agreement Execution Date Authorized Repurchase $ Expiration Date February 25, 2025 $ 100 million ** 1 1 Expiration Date is at Board's discretion. 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, 2026, approximately $ 30 million of shares have been repurchased, and approximately $70.0 million remains under the current board authorization. The Company repurchases shares of AAON, Inc. stock related to the LTIP Plans (Note 14) at current market prices. Our repurchase activity is as follows: Three Months Ended March 31, 2026 2025 (in thousands, except share and per share data) Program Shares Total $ $ per share Shares Total $ $ per share Open market — $ — $ — 371,139 $ 29,992 $ 80.81 LTIP Shares 34,568 3,203 92.66 82,664 8,312 100.55 Total 34,568 $ 3,203 $ 92.66 453,803 $ 38,304 $ 84.41 1 Includes stock repurchased for payment of statutory tax withholding and/or stock repurchased to cover the strike price of stock options. Cash Dividends At the discretion of the Board, we pay cash dividends. Board approval is required to determine the date of declaration and amount for each cash dividend payment. 24 Our recent cash dividends are as follows: Dividend Annualized Dividend Declaration Date Record Date Payment Date per Share per Share 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 August 14, 2025 September 5, 2025 September 26, 2025 $ 0.10 $ 0.40 November 10, 2025 November 26, 2025 December 18, 2025 $ 0.10 $ 0.40 March 5, 2026 March 18, 2026 March 30, 2026 $ 0.10 $ 0.40 18. New Markets Tax Credit 2019 New Markets Tax Credit On October 24, 2019, the Company entered into a transaction with a subsidiary of an unrelated third-party financial institution (the “2019 Investor”) and a certified Community Development Entity under a qualified New Markets Tax Credit (“2019 NMTC”) program pursuant to Section 45D of the Internal Revenue Code of 1986, as amended, related to an investment in plant and equipment to facilitate the expansion of our Longview, Texas manufacturing operations (the “2019 Project”). In connection with the 2019 NMTC transaction, the Company received a $ 23.0 million NMTC allocation for the Project and secured low-interest financing and the potential for future debt forgiveness related to the 2019 Project. Upon closing of the 2019 NMTC transaction, the Company provided an aggregate of approximately $ 15.9 million to the 2019 Investor, in the form of a loan receivable, with a term of 25 years, bearing an interest rate of 1.0 %. This $ 15.9 million in proceeds plus capital contributed from the 2019 Investor was used to make an aggregate $ 22.5 million loan to a subsidiary of the Company. This financing arrangement is secured by equipment at the Company’s Longview, Texas facilities and a guarantee from the Company, including an unconditional guarantee of the NMTCs. The Company’s seven-year compliance period ends in 2026, at which time the Company expects the put/call feature of the transaction to be exercised, forgiving a portion of the debt. This transaction also includes a put/call feature either of which can be exercised at the end of the seven-year compliance period. The 2019 Investor may exercise its put option or the Company can exercise the call, both of which could serve to trigger forgiveness of a portion of the debt. The 2019 Investor’s interest of $ 7.5 million is recorded as short-term debt on the consolidated balance sheets. The Company incurred approximately $ 0.3 million of debt issuance costs related to the above transactions, which are being amortized over the life of the transaction. 2023 New Markets Tax Credit On April 25, 2023, the Company entered into a transaction with a subsidiary of an unrelated third-party financial institution (the “2023 Investor”) and a certified Community Development Entity under a qualified New Markets Tax Credit (“2023 NMTC”) program pursuant to Section 45D of the Internal Revenue Code of 1986, as amended, related to an investment in plant and equipment to facilitate the expansion of our Longview, Texas manufacturing operations (the “2023 Project”). In connection with the 2023 NMTC transaction, the Company received a $ 23.0 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 2023 NMTC transaction, the Company provided an aggregate of approximately $ 16.7 million to the 2023 Investor, in the form of a loan receivable, with a term of 25 years, bearing an interest rate of 1.0 %. This $ 16.7 million in proceeds plus capital contributed from the 2023 Investor was used to make an aggregate $ 23.8 million loan to a subsidiary of the Company. This financing arrangement is secured by a guarantee from the Company, including an unconditional guarantee of the NMTCs. The net proceeds from the closing of the 2023 NMTC are included in restricted cash on our consolidated balance sheets required to be used for the 2023 Project. This transaction also includes a put/call feature either of which can be exercised at the end of the seven-year compliance period. The 2023 Investor may exercise its put option or the Company can exercise the call, both of which could serve to trigger forgiveness of a portion of the debt. The 2023 Investor's interest of $ 5.8 million is recorded in new markets tax credit obligations on the consolidated balance sheets. The Company incurred 25 approximately $ 0.4 million of debt issuance costs related to the above transactions, which are being amortized over the life of the transaction. 2024 New Markets Tax Credit 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 2023 Project. In connection with the 2024 NMTC transaction, the Company received a $ 15.5 million NMTC allocation for the 2024 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 %. This $ 11.0 million in proceeds plus capital contributed from the 2024 Investor was used to make an aggregate $ 16.0 million loan to a subsidiary of the Company. This financing arrangement is secured by a guarantee from the Company, including an unconditional guarantee of the NMTCs. The net proceeds from the closing of the 2024 NMTC are included in restricted cash on our consolidated balance sheets required to be used for the 2024 Project. This transaction also includes a put/call feature that either of which can be exercised at the end of the seven-year compliance period. The Investor may exercise its put option or the Company can exercise the call, both of which could serve to trigger forgiveness of a portion of the debt. The 2024 Investor's interest of $ 3.9 million is recorded in new markets tax credit obligations on the consolidated balance sheets. The Company incurred approximately $ 0.4 million of debt issuance costs related to the above transactions, which are being amortized over the life of the transaction. 2026 New Markets Tax Credit On April 16, 2026 the Company entered into a transaction with a subsidiary of an unrelated third-party financial institution (the “2026 Investor”) and a certified Community Development Entity under a qualified New Markets Tax Credit (“2026 NMTC”) program pursuant to Section 45D of the Internal Revenue Code of 1986, as amended, related to an investment in our Memphis, TN facility. In connection with the 2026 NMTC transaction, the Company received a $ 50.5 million NMTC allocation for the 2026 Project and secured low interest financing and the potential for future debt forgiveness related to the 2026 Project. Upon closing of the 2026 NMTC transaction, the Company provided an aggregate of approximately $ 35.2 million to the 2026 Investor, in the form of a loan receivable, with a term of 27 years, bearing an interest rate of 1.2 %. This $ 35.2 million in proceeds plus capital contributed from the 2026 Investor was used to make an aggregate $ 48.2 million loan to a subsidiary of the Company. This financing arrangement is secured by a guarantee from the Company, including an unconditional guarantee of the NMTCs. The net proceeds from the closing of the 2026 NMTC were $ 12.9 million. This transaction also includes a put/call feature that either of which can be exercised at the end of the seven-year compliance period. The Investor may exercise its put option or the Company can exercise the call, both of which could serve to trigger forgiveness of a portion of the debt. The 2019 Investor, 2023 Investor, 2024 Investor and 2026 Investor are each subject to 100 percent recapture of the 2019, 2023, 2024 and 2026 NMTC, respectively, it receives for a period of seven years , as provided in the Internal Revenue Code and applicable U.S. Treasury regulations in the event that the financing facility of the Borrower under the transaction (AAON Coil Products for the 2019, 2023 and 2024 transaction and a portion of the business of AAON Oklahoma for the 2026 transaction) becomes ineligible for NMTC treatment per the Internal Revenue Code requirements. The Company is required to be in compliance with various regulations and contractual provisions that apply to the NMTC arrangements. Noncompliance with applicable requirements could result in the Investors' projected tax benefits not being realized and, therefore, require the Company to indemnify the Investor for any loss or recapture of the NMTC related to the financing until such time as the recapture provisions have expired under the applicable statute of limitations. The Company does not anticipate any credit recapture will be required in connection with any of these financing arrangements. The Investors and their majority-owned community development entity are considered VIEs and the Company is the primary beneficiary of the VIEs. Because the Company is the primary beneficiary of the VIEs, they have been included in the consolidated financial statements. There are no other assets, liabilities or transactions in these VIEs 26 outside of the financing transactions executed as part of the 2019 NMTC, 2023 NMTC, 2024 NMTC arrangements or 2026 NMTC arrangements, respectively. 19. Commitments and Contingencies Other Matters The Company is involved from time to time in claims and lawsuits incidental to our business arising from various matters, including alleged violations of contract, product liability, warranty, environmental, regulatory, personal injury, intellectual property, employment, tax and other laws. We closely monitor these claims and legal actions and frequently consult with our legal counsel to determine whether they may, when resolved, have a material adverse effect on our financial position, results of operations or cash flows and we accrue and/or disclose loss contingencies as appropriate. We do not believe these matters will have a material adverse effect on our business, financial position, results of operations or cash flows. We are occasionally party to cancellable and occasionally non-cancellable, fixed-price contracts with major suppliers for the purchase of raw material and component parts. We expect to receive delivery of raw materials for use in our manufacturing operations. 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, 2026, except as noted below. In 2023, the Company executed a five-year purchase commitment for refrigerants. For the three months ended March 31, 2026 and 2025, the Company made payments of $ 3.2 million and $ 0.6 million on this contract, respectively. Estimated minimum future payments are $ 7.3 million, and $ 11.2 million for 2026 and 2027, respectively. In 2025, the Company executed three, one-year purchase commitments for raw materials. Estimated minimum future payments are $ 23.3 million for 2026. We had no other material contractual purchase obligations as of March 31, 2026. 20. Related Parties The following is a summary of transactions and balances with affiliates: Three Months Ended March 31, 2026 2025 (in thousands) Sales to affiliates $ 2,603 $ 1,095 Payments to affiliates 164 509 March 31, 2026 December 31, 2025 (in thousands) Due from affiliates $ 1,273 $ 335 Due to affiliates 2 — 27 The nature of our related party transactions is as follows: • The Company sells units to an entity managed by a board member’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. • The Company purchases some supplies from entities controlled by two of the Company’s board members and a member of the Company's executive management team. • The Company periodically makes part sales to a board member. • The Company periodically rents space partially owned by a board member for various Company meetings. These transactions ceased in the fourth quarter of 2025. • The Company leases flight time of an aircraft partially owned by our President and CEO. 21. Segments The Company has determined that it has three reportable segments for financial reporting purposes. AAON Oklahoma: AAON Oklahoma engineers, manufactures, and sells highly configurable HVAC systems, designs and manufactures controls solutions, and sells aftermarket parts to customers through retail part stores and online. AAON Oklahoma includes operations at the Company’s manufacturing facilities in Tulsa, Oklahoma; Memphis, Tennessee; and Parkville, Missouri, as well as two retail locations, the Norman Asbjornson Innovation Center (“NAIC”), and the Gary D. Fields Customer Exploration Center. The NAIC is a world-class research and development laboratory accredited by the Air Movement and Control Association International, Inc. ("AMCA"), where our products are continuously tested under extreme environmental conditions to ensure optimal performance, efficiency, and value. The Gary D. Fields Customer Exploration Center showcases the engineering, design attributes, and premium build quality of our equipment alongside market alternatives. AAON Coil Products: AAON Coil Products engineers and manufactures and sells semi-custom and custom HVAC systems as well as heating and cooling coils for use in HVAC systems, primarily for AAON Oklahoma, AAON Coil Products, and BASX. AAON Coil Products operates from our Longview, Texas manufacturing facilities, which also produce BASX-branded products. BASX: BASX engineers, manufactures, and sells a wide range of custom, high-performance cooling solutions for the rapidly growing hyperscale data center market; ventilation solutions for cleanroom environments in the biopharmaceutical, semiconductor, medical, and agricultural sectors; and highly customized air handlers and modular solutions for a variety of markets. BASX operates from our manufacturing facilities in Redmond, Oregon, with additional support from facilities in Memphis, Tennessee, and Longview, Texas. The Company’s chief decision maker (“CODM”), our CEO, allocates resources and assesses the performance of each operating segment using information about the operating segment’s net sales, cost of sales, and gross profit directly attributable to our segments. The CODM does not evaluate operating segments using asset or liability information. Due to the integrated nature of our Company as well as the increasing production of both AAON and BASX- branded products across different segments, other costs and expenses, such as selling, general and administrative including corporate expense, are evaluated and resources allocated at a consolidated level. 28 The following table summarizes certain financial data related to our segments and significant segment expenses and other segment items regularly reviewed by our CODM. During the fourth quarter of 2025, the Company modified the reporting of sales of coils from AAON Coil Products to AAON Oklahoma to report at cost to be consistent with our other intercompany sales between segments. The revised methodology is intended to better reflect the manner in which the CODM evaluates segment performance and makes resource allocation decisions. As a result of this change, prior period segment results have been recast to conform to the current period presentation. The change did not affect consolidated net sales, cost of sales or gross profit. The cost of sales and gross profit amounts shown below are presented after elimination entries. Three Months Ended March 31, 2026 2025 (in thousands) AAON Oklahoma External sales $ 243,967 $ 161,838 Inter-segment sales 44,509 3,839 Eliminations ( 44,509 ) ( 3,839 ) Net sales 243,967 161,838 Cost of sales 1 179,695 121,238 Gross profit 64,272 40,600 AAON Coil Products External sales $ 117,611 $ 94,023 Inter-segment sales 6,818 3,579 Eliminations ( 6,818 ) ( 3,579 ) Net sales 117,611 94,023 Cost of sales 1 89,309 64,165 Gross profit 28,302 29,858 BASX External sales $ 135,358 $ 66,193 Inter-segment sales ( 2 ) 43 Eliminations 2 ( 43 ) Net sales 135,358 66,193 Cost of sales 1 102,967 50,287 Gross profit 32,391 15,906 Consolidated gross profit $ 124,965 $ 86,364 1 Presented after intercompany eliminations. The reconciliation between consolidated gross profit to consolidated income from operations is as follows: Consolidated gross profit $ 124,965 $ 86,364 Less: Selling, general and administrative expenses 67,906 51,293 Add: gain on disposal of assets — ( 40 ) Consolidated income from operations $ 57,059 $ 35,111 29 The following table presents long-lived assets by reportable segment, which includes property and equipment, net and operating lease assets: March 31, 2026 December 31, 2025 Long-lived assets (in thousands) AAON Oklahoma $ 422,203 $ 400,316 AAON Coil Products 157,657 157,752 BASX 92,332 91,182 Total long-lived assets $ 672,192 $ 649,250 The following table presents intangible assets and goodwill, net, by reportable segment: March 31, 2026 December 31, 2025 Intangible assets and goodwill (in thousands) AAON Oklahoma $ 32,610 $ 25,600 AAON Coil Products 4,159 4,235 BASX 135,144 135,964 Total intangible assets and goodwill $ 171,913 $ 165,799 30