AAON's Q4 2024 Earnings Call: Leadership Changes, Capacity Concerns, and Refrigerant Conversion Inconsistencies

These are the key contradictions discussed in AAON's latest 2024 Q4 earnings call, specifically including: CEO Succession, Data Center Capacity Expansion, Production Issues and Capacity Utilization, and Refrigerant Conversion Impact:



Strong Performance of BASX Brand:
- BASX brand reported net sales growth of 35.1% for the year, with data center equipment sales up approximately 85%.
- The growth was primarily due to robust demand from the data center market and strong execution by the engineering and sales teams.

AAON Brand Challenges:
- Despite headwinds, sales of AAON branded equipment were down only in the low single digits, with bookings up in the mid-teens and backlog up approximately 20%.
- The challenges were attributed to disruptions caused by the refrigerant transition and weaker nonresidential construction activity.

Strong Q4 Bookings and Backlog:
- The company reported bookings up approximately 62% in Q4, and Europe's AAON backlog finished up 70% to $867.1 million.
- This was driven by bookings of data center equipment and the large $200 million plus liquid cooling equipment order booked late last year.

Temporary Softness in AAON Oklahoma Segment:
- The segment experienced a temporary sales and earnings slowdown in Q4, with bookings of rooftop units soft in October and November.
- This was primarily due to the first quarter of accepting orders for equipment configured with the new refrigerant, which led to production throttling.