Financial Analysis

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 short-term and long-term, cancellable and occasionally non-cancellable, contracts with major suppliers for the purchase of raw material and component parts. We expect to receive delivery of raw material and component parts 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 September 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 $1.6 million and $3.8 million the three a …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

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 at or 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 nine months ended September 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 Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 (in thousands) Contributions, net of forfeitures, made to the defined contribution plan $ 5,975 $ 4,570 $ 17,974 $ 14,646 Profit Sharing Bonus Plans We maintain a discretionary profit sharing bonus plan under which approximately 8.5% of pre-tax profi …

CompensationAndEmployeeBenefitPlansTextBlock · excerpt; the full note is in the filing

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 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. The Revolver expires on May 27, 2030. Revolver September 30, 2025 December 31, 2024 (in thousands) Total Revolver commitment $ 500,000 $ 200,000 Less: Revolver borrowings outstanding 360,142 76,467 Less: Standby letter of credit 654 300 Borrowings available under the Revolver $ 139,204 $ 123,233 Term Loan September 30, 2025 December 31, 2024 (in thousands) Term loan, short-term $ $ 16,000 Term loan, long-term 62,424 Total Term Loan $ $ 78,424 Interest Rates Any outstanding loans under the Amended Revolver bear interest …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables show disaggregated net sales by reportable segment (Note 21) by major source, 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 Three Months Ended September 30, 2025 AAON Oklahoma AAON Coil Products BASX Total (in thousands) AAON Products $ 235,750 $ 23,700 $ $ 259,450 BASX Products 2,998 46,546 75,244 124,788 Total $ 238,748 $ 70,246 $ 75,244 $ 384,238 Three Months Ended September 30, 2024 AAON Oklahoma AAON Coil Products BASX Total (in thousands) AAON Products $ 228,887 $ 34,633 $ $ 263,520 BASX Products 599 63,133 63,732 Total $ 228,887 $ 35,232 $ 63,133 $ 327,252 Nine Months Ended September 30, 2025 AAON Oklahoma AAON Coil Products BASX Total (in thousands) AAON Products $ 582,708 $ 68,760 $ $ 651,468 BASX Products 2,998 153,974 209,419 366,391 Total $ 585,706 $ 222,734 $ 209,419 $ 1,017,859 Nine Months Ended September 30, 2024 AAON Oklahoma AAON Coil Products BASX Total (in thousands) AAON Products $ 664,754 $ 89,121 $ $ 753,875 BASX Products 1,731 147,311 149,042 Total $ 664,754 $ 90,852 $ 147,311 $ 902,917 …

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Share-Based Compensation On May 22, 2007, our stockholders adopted a Long-Term Incentive Plan (LTIP) which provided 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 LTIP, the exercise price of shares granted could 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 LTIP that were then 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 (collectivel …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Income Taxes The provision for income taxes consists of the following: Three Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 (in thousands) Current $ (17,798) $ 16,038 $ (8,166) $ 38,568 Deferred 25,458 (4,153) 23,035 (4,112) Income tax provision $ 7,660 $ 11,885 $ 14,869 $ 34,456 The provision for income taxes differs from the amount computed by applying the Federal statutory income tax rate before the provision for income taxes. The reconciliation of the Federal statutory income tax rate to the effective income tax rate is as follows: Three Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Federal statutory rate 21.0 % 21.0 % 21.0 % 21.0 % State income taxes, net of Federal benefit 3.1 4.9 4.2 5.0 Excess tax benefits related to share-based compensation (Note 14) (2.2) (7.9) (10.9) (6.6) Return to provision (0.5) (0.3) 0.3 (0.2) Non-deductible executive compensation (0.1) 1.9 3.4 1.5 Research and development credits (0.9) (1.1) (2.1) (1.2) Other (0.5) (0.1) 0.5 (0.2) Effective tax rate 19.9 % 18.4 % 16.4 % 19.3 % The Company recorded an excess tax benefit of $0.9 million and $5.1 million for the three months ended September 30, 2025 and 2024, respectively, and $9.9 million and $11.7 million for the nine months ended September 30, 2025 and 2024, respectively. The excess tax benefit is related to the timing of stock option exercises and the vesting of restricted …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Leases The Company has lease arrangements for certain administrative, manufacturing and warehousing facilities and equipment. Lease expiration dates, including expected renewal options, range from October 2025 to November 2033, with the weighted average remaining term being 6.3 years. The discount rates used to calculate the present value of lease payment range from 1.3% to 5.9% as of September 30, 2025. All leases are classified as operating leases. Balance Sheet Classification September 30, 2025 December 31, 2024 (in thousands) Right of use assets Right of use assets $ 17,050 $ 15,436 Current lease liability Accrued liabilities 2,903 2,481 Noncurrent lease liability Other long-term liabilities 14,902 13,592 Since 2018, the Company has leased the manufacturing, engineering and office space used by our operations in Parkville, Missouri. 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 square feet with a lease term through April 2030. The Companys 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 …

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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 FASBs 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, 2024, were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial statements and notes thereto. …

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Related Parties The following is a summary of transactions and balances with related parties: Three Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 (in thousands) Sales to affiliates $ 2,556 $ 2,214 $ 5,864 $ 6,035 Payments to affiliates 205 368 1,418 1,488 September 30, 2025 December 31, 2024 (in thousands) Due from affiliates $ 135 $ 1,055 Due to affiliates 369 The nature of our related party transactions is as follows: The Company sells units to an entity operated by a member of the boards immediate family. This entity is also one of the Companys 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 Companys board members and a member of the Company's executive management team. The Company periodically makes part sales and makes payments to a board member related to a consulting agreement. The consulting agreement expired in May 2024. The Company periodically rents space partially owned by 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 …

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Revenue Recognition The following tables show disaggregated net sales by reportable segment (Note 21) by major source, 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 Three Months Ended September 30, 2025 AAON Oklahoma AAON Coil Products BASX Total (in thousands) AAON Products $ 235,750 $ 23,700 $ $ 259,450 BASX Products 2,998 46,546 75,244 124,788 Total $ 238,748 $ 70,246 $ 75,244 $ 384,238 Three Months Ended September 30, 2024 AAON Oklahoma AAON Coil Products BASX Total (in thousands) AAON Products $ 228,887 $ 34,633 $ $ 263,520 BASX Products 599 63,133 63,732 Total $ 228,887 $ 35,232 $ 63,133 $ 327,252 Nine Months Ended September 30, 2025 AAON Oklahoma AAON Coil Products BASX Total (in thousands) AAON Products $ 582,708 $ 68,760 $ $ 651,468 BASX Products 2,998 153,974 209,419 366,391 Total $ 585,706 $ 222,734 $ 209,419 $ 1,017,859 Nine Months Ended September 30, 2024 AAON Oklahoma AAON Coil Products BASX Total (in thousands) AAON Products $ 664,754 $ 89,121 $ $ 753,875 BASX Products 1,731 147,311 149,042 Total $ 664,754 $ 90,852 $ 147,311 $ 902,917 Aftermarket part sales (included in the AAON Product sales above) were $24.9 million and $21.1 million for the three …

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Segments The Company has determined that it has three reportable segments for financial reporting purposes. AAON Oklahoma: AAON Oklahoma engineers, manufactures and sells semi-custom and custom HVAC systems, designs and manufactures controls solutions, and sells aftermarket parts to customers through retail part stores and online. AAON Oklahoma includes the operations of our Tulsa, Oklahoma, Memphis, Tennessee and Parkville, Missouri manufacturing facilities, two retail locations, and the Norman Asbjornson Innovation Center (NAIC) research and development laboratory accredited by the Air Movement and Control Association International, Inc. (AMCA). With the NAIC, a world-class research and development (R&D) laboratory in Tulsa, Oklahoma, our products are continuously tested under a variety of extreme environmental conditions to ensure they deliver the ultimate performance, efficiency, and value. Also located in Tulsa, Oklahoma, our cutting-edge Exploration Center showcases the engineering, design attributes, and premium build quality of our equipment side-by-side the market alternatives. AAON Coil Products: AAON Coil Products engineers and manufactures a selection of our semi-custom, and custom HVAC systems as well as a variety of heating and cooling coils to be used in HVAC systems, mostly for the benefit of AAON Oklahoma, AAON Coil Products, and BASX. AAON Coil Products consists of operations at our Longview, Texas manufacturing facilities. BASX branded products are also …

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Stockholders Equity Stock Repurchases The Board authorizes the stock repurchase programs for the Company. The Company may purchase shares on the open market from time to time at current market prices. 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 presented are as follows: Effective Date Authorized Repurchase $ Expiration Date November 3, 2022 $50 million 1 February 27, 2024 February 27, 2024 $50 million 1 June 4, 2024 June 4, 2024 $50 million 2 June 14, 2024 February 27, 2025 $100 million ** 3 1 Repurchases made in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. 2 Repurchases made in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended. 3 Expiration Date is at Boards discretion. The Company is authorized to effectuate repurchases of the Companys common stock on terms and conditions approved in advance by the Board. As of September 30, 2025, approximately $30.0 million of shares have been repurchased, and approximately $70.0 million remains under the current board authorization. The Company also repurchases shares of AAON, Inc. stock related to our LTIP plans (Note 14) at current market prices. Our repurchase activity is as follows: Nine Months Ended September 30, 2025 September 30, 2024 (in th …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing