管理層發言
Thank you for standing by. At this time, I would like to welcome everyone to the AAON Inc. Second Quarter 2026 Earnings Release Conference Call. I would now like to turn the conference over to Joe Mondillo, Director of Investor Relations. The floor is yours.
Thank you, operator, and good afternoon, everyone. The press release announcing our second quarter 2026 financial results was issued earlier this afternoon and can be found on our corporate website, aaon.com. The call today is accompanied by a presentation that you can also find on our website as well as on our listen-only webcast. We begin with our customary forward-looking statement policy. During the call, any statement presented dealing with information that is not historical is considered forward-looking and made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, the Securities Act of 1933 and the Securities Exchange Act of 1934, each as amended. As such, it is subject to the occurrence of many events outside of AAON's control that could cause AAON's results to differ materially from those anticipated. You are all aware of the inherent difficulties, risks and uncertainties in making predictive statements. Our press release and Form 10-Q that we filed this afternoon detail some of the important risk factors that may cause our actual results to differ from those in our predictions. Please note that we do not have a duty to update our forward-looking statements. Our press release and portions of today's call use non-GAAP financial measures as defined in Regulation G. You can find the related reconciliations to GAAP measures in our press release and presentation. Joining me on today's call is Matt Tobolski, President and CEO; and Andy Cheung, our CFO. Matt will start off with some opening remarks, Andy will follow with a walk-through of the quarterly results, and Matt will finish up with our updated outlook for 2026. With that, I will turn the call over to Matt.
Thanks, Joe, and good afternoon. Q2 was another strong quarter, building on the momentum established in Q1 and reflecting continued execution across the business. Higher throughput across all four of our major facilities resulted in substantial volume growth, demonstrating the value of recent investments we have made across the organization, including supply chain management, lean manufacturing, operational excellence initiatives, expanded capacity and leadership development. These efforts translated into our fourth consecutive quarterly revenue record with sales increasing 101% year-over-year and 26% sequentially. EBITDA more than doubled from the prior year period, and we generated substantial earnings growth while converting backlog at a much faster pace across the enterprise. These results are tangible evidence that the investments we have made are translating into measurable operating progress. For an industrial manufacturing company, this level of organic growth and operational scaling is exceptional, and it reflects the strength of our markets, our strategy and our people. Despite the substantial increase in production rates during the first half of the year, backlog remains nearly double prior year levels. Sequentially, backlog declined because production and shipments increased significantly across the enterprise, resulting in accelerated backlog conversion. That is exactly the outcome we have been working to achieve. Customer engagement remains strong. Our pipeline of opportunities remains healthy, and backlog continues to provide meaningful visibility into future growth. Let me begin our brand discussion with BASX. The long-term market opportunity remains compelling, supported by continued investment in data center infrastructure and the differentiated solutions we provide to the market. BASX branded sales were a record, increasing 216% year-over-year in the quarter and 501% on a two-year stack. For the first half of the year, sales were up 137% year-over-year and 570% on a two-year stack. Achieving and sustaining this level of growth requires coordination across engineering, operations, supply chain, manufacturing and our field teams. Production increased across our facilities, and I hope all of our stakeholders appreciate the significance of what our teams have accomplished. As we have scaled at an unprecedented pace, maintaining high standards across quality, delivery and customer support has remained a major focus. We continue to see meaningful improvement as the systems, processes and teams we have been building become more mature and effective. The progress is translating into better outcomes for our customers and stronger execution across the enterprise. BASX branded bookings were below the unusually elevated levels experienced in recent quarters. However, we do not view that as a change in the long-term opportunity. These projects are large in scale and can generate quarter-to-quarter variability in booking activity and award timing. Customer engagement remains strong. Our opportunity pipeline remains healthy and backlog continues to provide substantial visibility into future growth opportunities. More importantly, our ability to support customers continues to improve as throughput increases, lead times come down and additional capacity comes online. The underlying market opportunity remains very favorable, and we continue to see substantial long-term opportunities for growth. Turning to the AAON brand. The AAON brand continued to perform exceptionally well, gaining market share despite a relatively soft commercial HVAC market. AAON branded sales increased 40% year-over-year and 5% sequentially, reflecting improved production throughput, strong demand and continued execution improvement across the business. These results point to meaningful market share gains and reinforce the strength of our product offering, sales channel and customer relationships. Increased production volumes also drove further lead time improvement during the quarter, although additional improvement remains a priority as we continue increasing throughput. Bookings of AAON branded equipment increased approximately 16% year-over-year during the quarter and were up approximately 45% on a two-year stack. Year-to-date, bookings increased 12% year-over-year and 25% on a two-year stack. Growth was primarily driven by continued strength in our traditional transactional business, which is particularly encouraging given the softness we experienced throughout much of last year. National account activity remained healthy and generally consistent with prior year levels. We also continue to see strong momentum with Alpha Class, our fully electric heat pump platform. Alpha Class orders increased 50% during the quarter and 54% year-to-date, and customer adoption continues to build. This platform is an important long-term growth opportunity as customers increasingly focus on electrification, sustainability and energy efficiency. Strong AAON branded bookings resulted in a 6% sequential increase in AAON branded backlog despite significantly higher production rates. As a result, we remain focused on continuing to drive throughput, work down backlog, shorten lead times and deliver for our customers. Turning now to margins. As we have discussed for several quarters, the level of demand we are experiencing has required us to scale the business rapidly. We have expanded our manufacturing footprint, brought new capacity online, invested in equipment and infrastructure, strengthened our supply chain capabilities and significantly increased talent across operations, engineering, manufacturing and support functions. These actions have been deliberate. They allow us to better serve customers, convert backlog faster, capture market share opportunities and build the operating platform required for the company AAON is becoming. Importantly, the underlying economics of the business continue to improve. Oklahoma's core operations are performing well. Memphis continues to perform meaningfully ahead of our expectations and production throughput across the enterprise continues to increase. Consolidated margins remain pressured by the mix impact of exceptionally strong growth, ramp-up activity associated with new capacity and price/cost timing dynamics. We continue to expect margin improvement through higher facility utilization, productivity gains, sourcing initiatives, improved price/cost realization and a continued maturation of recently added capacity. The key point here is that we are not simply growing revenue. We are building a stronger operating company with scale, infrastructure, systems and discipline to support higher revenue, stronger execution, improved margins, greater cash generation and durable earnings growth over time. We are confident in our ability to continue demonstrating the earnings power of this business as we move through the balance of 2026 and into 2027. And with that, I will now turn the call over to Andy.
Thank you, Matt, and good afternoon, everyone. Second quarter net sales were a record $627 million, an increase of 101% year-over-year. Growth reflected robust BASX and AAON brand performance as well as enhanced manufacturing throughput enabled by strategic capacity investments and ongoing productivity initiatives. BASX branded sales increased 216.2% year-over-year, reflecting the combination of sustained momentum in data center cooling demand, higher production output and greater utilization of recently added manufacturing capacity. AAON branded sales grew 39.3% in the second quarter, driven by a healthy backlog and improved production throughput as we work to reduce lead times at both our Tulsa and Longview facilities. Gross profit in the second quarter increased 84.3% to $152.5 million compared with $82.7 million in the prior year period, reflecting the company's strong revenue growth. Gross margin was 24.3%, down from 26.6% in the second quarter of 2025. Results reflected the impact of ramping recently added manufacturing capacity, including the Memphis facility, along with the increased use of outsourcing to support accelerated growth and ongoing inflationary cost pressures. Importantly, these factors are temporary and largely reflect deliberate investments to support long-term growth. As throughput and utilization continue to increase, productivity improves and better-priced backlog is converted, there is clear sight into gross margin improvement in the coming quarters. SG&A expenses as a percent of sales declined 570 basis points to 13.3%, demonstrating strong operating leverage as revenue growth outpaced our continued investments in the organization. On a dollar basis, SG&A increased $24.5 million to $83.6 million as the company continues to make intentional investments to drive long-term growth. Non-GAAP adjusted EBITDA increased 102.3% from the prior year period to $94.2 million. Adjusted EBITDA margin was 15.0% compared to 14.9% a year ago. Adjusted diluted earnings per share grew 213.6% to $0.69. Turning now to the segment's financials, beginning with AAON Oklahoma. Second quarter net sales increased 42% to $262.3 million, driven by strong execution against a robust beginning backlog and accelerated conversion enabled by production improvements. Results also benefited from favorable price realization and a beneficial comparison to the prior year period, which was impacted by the industry refrigerant transition and other operational challenges. AAON Oklahoma gross profit increased 18.9% to $63.6 million. Gross margin was 24.3%, a decline of 460 basis points from 28.9% in the second quarter of 2025. Overhead expenses associated with the Memphis facility impacted segment margin by $18.1 million compared with just $3 million in the prior year period. Excluding these costs, Oklahoma margins expanded approximately 60 basis points to 31.2% compared to 30.5% last year. Adjusted for Memphis overhead expenses, the increase in AAON Oklahoma gross margins was largely due to increased production rates. These gains were partially offset by elevated outsourcing levels and inflationary pressures, both of which are temporary and do not change the long-term margin profile of the segment. These factors have been addressed in recent quarters with actions embedded in backlog and new pricing actions. We expect these temporary headwinds to moderate as the year progresses. AAON Coil Products sales were $146.7 million in the second quarter, an increase of $88.2 million or 151% compared to the prior year period. Growth was driven by $126.6 million in BASX branded liquid cooling product sales, which increased 208% during the quarter. This strength was also supported by a 15.1% increase in AAON branded output within the segment. AAON Coil Products gross profit increased 130% to $23.5 million. Gross margin was 16.0% in the second quarter compared to 17.5% in the prior year period. The margin contraction reflected temporary inflationary pressures that we expect will moderate in Q3 and Q4. The segment continues to deliver strong profit growth supported by higher sales volumes that are expected to continue throughout 2026. Along with the expected margin improvement, we expect profit growth will accelerate in the second half of the year. BASX segment sales grew 221% in the second quarter to $218 million. The outsized growth was driven by sustained demand for data center solutions and a robust backlog. Increased utilization at the Memphis facility contributed meaningfully to quarterly results by expanding production capacity, accelerating backlog conversion and driving higher sales volume. BASX segment gross profit increased 244.2% to $65.3 million compared with $19 million in the prior year period. Gross margin was 30.0%, up from 27.9% in the prior year period. The improvement in margin reflected strong volume growth, partially offset by incremental resources and investments to support future growth and share gains. Lastly, a quick update on the Memphis facility. We understand the accounting treatment can make performance difficult to evaluate, and we intend to provide greater clarity going forward. When considering the facility's revenue generation to date and fully burdening results with all associated expenses, including overhead currently allocated to the Oklahoma segment, Memphis is performing exceptionally well and ahead of plan. Production and revenue have significantly outpaced expectations and margins have expanded for two straight quarters, reaching levels well ahead of where we expected them to be at this point in the facility's development. Now turning to the balance sheet. Cash, cash equivalents and restricted cash balances totaled $12.7 million on June 30, 2026, and debt at the end of the quarter was $435 million. Our leverage ratio improved to 1.48, down from 1.71 on March 31 and 1.77 on December 31. In the first half of 2026, cash flow from operations was a positive $55 million, a significant improvement compared to a $31 million use of cash in the prior year period. This was driven by higher earnings and improved working capital efficiency. Capital expenditures totaled $102.6 million year-to-date, reflecting continued investment in incremental capacity to support future growth. Looking ahead, we continue to see significant opportunities to improve productivity, profitability and working capital efficiency. We expect these initiatives to support stronger cash flow generation and continued balance sheet improvement, providing a solid foundation for sustained long-term growth. I will now hand the call back to Matt.
Thank you, Andy. We entered the second half of the year with strong momentum across the business. Production throughput has increased significantly. Backlog remains at elevated levels despite record revenue conversion and demand across both brands continues to be healthy. Importantly, the backlog we are converting today carries a more favorable margin profile than the backlog during the first half of the year. Combined with higher production volumes, improving facility utilization, pricing actions, sourcing initiatives and continued operational improvements, we believe the building blocks for margin improvement are firmly in place. Turning to our outlook for 2026. We now expect sales growth of 55% to 60%, gross margin of 25% to 26%, SG&A expense of 13% to 14% of sales, and depreciation and amortization expense of $95 million to $100 million. Our updated outlook reflects stronger-than-expected production, backlog conversion and execution across the enterprise. While we continue to see operational improvement across the business, our consolidated margin outlook reflects the mix impact of exceptionally strong growth from recently added capacity, continued ramp-up activity and price/cost timing. As we sit here more than halfway through the year, I want to provide a few thoughts on how we're thinking about the business beyond 2026. First, we continue to feel extremely positive about the long-term outlook for both the AAON and BASX brands. Both businesses continue to gain market share, supported by differentiated products, strong customer relationships, our industry best sales channel and highly engineered solutions that are difficult to replicate. Second, we continue to see substantial opportunity to improve margins over time. The drivers are straightforward and well understood: higher utilization of recently added capacity, improved fixed cost absorption, increased productivity, continued sourcing improvements and pricing actions already embedded within our backlog. We expect to see progress through the balance of the year and a more meaningful benefit as we move into 2027. Third, we see a significant opportunity to improve cash generation. We have already started to see encouraging progress with operating cash flow improving meaningfully during the first half of the year. As margins improve, growth investments begin to normalize and working capital efficiency continues to improve, we expect cash generation to become a more visible component of the AAON story. The business has undergone significant transformation over the past several years. We have expanded capacity, strengthened leadership, invested in supply chain and manufacturing capabilities, broadened our product portfolio and built the operational infrastructure necessary to support a much larger company. Those investments are increasingly showing up in the results. Today, we are seeing stronger throughput, faster backlog conversion, improved sales growth, expanding operating leverage and improving cash flow. These are the outcomes we expected to see as the investments we have made across the business matured. The key point is that we are not simply growing revenue. We are building a stronger operating company with the scale, infrastructure, systems and discipline to support higher revenues, stronger execution, improved margins, greater cash generation and durable earnings growth over time. We still have work ahead, particularly around margin improvement, but the direction is clear. The long-term opportunity remains strong and the actions required to improve margins and cash generation are underway. We are proud of what the team has accomplished, confident in the opportunity ahead and focused on demonstrating the earnings power of this business as we move through the balance of 2026 and into 2027. In closing, I want to thank our employees, customers, sales channel partners and shareholders for their continued support. Our employees have accomplished an extraordinary amount. The growth we are delivering today is a direct result of their efforts, discipline and commitment to serving customers while building a stronger company. We remain focused on execution, disciplined in our approach and excited about the opportunities ahead. And with that, I will open the call up for questions.
分析師問答
Your first question comes from Ryan Merkel with William Blair.
I want to start with the data center orders in the quarter. They're a little bit weaker than I think some of us were expecting. So Matt, just put a finer point on that, if you would. I know you mentioned the pipeline is healthy. And then could you provide any color on if you think orders will improve in the third quarter?
Certainly, great question, one we anticipated was going to come out today. So I want to start by stepping back for one second and looking at the trajectory that we've had in our data center bookings over the last four quarters. At a high level, when we look at the momentum that we have going into this quarter, the prior four quarters had a book-to-bill approaching three over that time period. So we've had exceptionally strong bookings as we've been ramping up capacity. And we think about it from the standpoint of that trajectory that we see really highlights that differentiated offering that we have in the data center space, which has certainly been resonating within the marketplace. There's been a lot of great momentum, a lot of great trajectory and a tremendous amount of pipeline opportunity. Now when we look at the size and the scale of the orders, it's important to recognize that these tend to be large orders. And so there is potential, as we talked about in prior quarters, and we really highlighted that there's potential for there to be a little bit of lumpiness around how that flows through to actual backlog and bookings. But really, at a high level, the amount of activity that we have in the data center space and the amount of volume we're putting through shows a tremendous amount of momentum around our products and our orders. Really, it's a timing conversation around how that pipeline opportunity is converting to overall bookings. The pipeline itself is the strongest that it's ever been. It's not just strength with existing customers; there's great strength with our existing customer base, but our pipeline continues to expand in terms of diversification of our overall customer base. So from an outlook perspective, we're incredibly excited about the opportunity. We've seen acceleration in conversations and activity with our sales channel and engagement in the overall market. So while this quarter certainly had a little bit lighter bookings, we don't see that as indicative of anything in the overall market opportunity for our product.
Okay. That's helpful. And just a quick follow-up there just because it's an important topic. Was there a large order that slipped because of a timing issue? Or is it just the lumpiness that you talked about and the pipeline is still healthy?
Yes, it's just lumpiness. There's no specific order pushout or movement. Again, it's really lining up the overall bookings in a given quarter.
All right. And then moving to gross margin. You cut the gross margin for the year 200 basis points. My question is, I'm curious what changed versus when we spoke to you in May. It almost seems like you accelerated throughput and you were willing to eat the higher cost, but just tell us what happened.
Let's unpack this a bit. When we look at margin as a whole and comparing Q1 to Q2, operationally, the margin in the Oklahoma segment is improving and the BASX and Memphis segments are improving. There's a bit of pressure from a price-cost perspective in the ACP segment. The progression we see operationally is improvement in the overall margin profile. The main driver of the conversation is the accelerated backlog conversion within our Memphis site. From a mix perspective, the increasing revenue volume through Memphis while ramping that facility is at a lower margin point than the Oklahoma segment. So as we're driving more volume through Memphis, on a consolidated basis, it's pulling the margin down, but providing a net positive impact to the business. More importantly, it's helping us build a stronger foundation to continue serving data center customers. Pushing harder in Memphis and really ramping this facility gives us a foundation to drive more business, turn on more production lines and continue growing overall volume. That mix conversation is one of the biggest drivers of the consolidated margin coming down in the quarter.
Your next question comes from David Tarantino with KeyBanc Capital Markets.
Could you give us some color on what the sales outlook now embeds between AAON and BASX branded product sales? And maybe some thoughts on what's informing the confidence on your ability to deliver that growth relative to the capacity ramp that's ongoing?
Great question. From a branded perspective, the 2026 guide assumes approximately 20% growth year-over-year in the AAON brand. Backing that in implies that BASX will more than double in the year. For perspective, the overall data center market last year and this year is growing around 30%, so more than doubling BASX, after having 140% growth the prior year, represents outperformance and market share capture. Confidence in supporting and executing that growth comes from the visibility we now have from run time in the Memphis site. As we get more run time, we gain confidence in the ramp rate. That visibility informs our approach to backlog conversion and our guidance. Add to that the investments we've made in our operational model — manufacturing, lean processes, continuous improvement, supply chain discipline — and we're seeing meaningful results in execution. We have to be cautious: growing at this rate brings pressures, whether supply chain or operational. That conservatism is embedded in our outlook and guidance. We're intentional and clear-eyed about the realities of growing this fast.
And then just to follow up on that last comment. Is that supply chain pressures and/or other pressures that you're seeing today? Or is that just conservatism?
There are always challenges that pop up. Q1 and Q2 had a variety of issues we've tackled and continue to tackle. There's nothing new or meaningful beyond that, but we do not want to dismiss the reality of some supply chain sensitivities and operational issues in this environment.
Okay. Great. And then maybe back on gross margins. Could you just give us the key buckets driving the second half improvement versus the first half, particularly between the better absorption and improving price-cost? And then maybe kind of give us some color on how these should progress between both Q3 and Q4?
At a high level, the biggest driver of margin improvement in the back half is price-cost. We noticed price-cost challenges at the end of last year and took pricing actions. The backlog we have today is at a substantially different price point than the backlog executed in Q1 and Q2, and that is the biggest driver of margin improvement in the back half. Beyond that, productivity gains will continue to help. For example, more run time in Memphis will yield productivity gains and improved margins. The progression from Q2 is improving in Q3, but Q4 will carry the bulk of the margin improvement.
Your next question comes from Noah Kaye with Oppenheimer.
Maybe just double-clicking on margins. Can you help us understand the margin trends in ACP where we saw sequentially lower margins and liquid cooling was, I think, over 85% of the segment. How should that segment, particularly the liquid cooling side of it, profile from a margin perspective? What happened in the quarter? And what is sort of embedded for improvement from here?
The biggest driver in the ACP segment margin quarter-over-quarter was price-cost, driven by inflation. Raw material inflation and freight pressure were the main drivers. We were behind on pricing actions to recover those costs. A lot of work has been done around pricing in the ACP segment to capture inflationary pressure. As we invest in organizational sophistication — finance and supply chain — we're getting more visibility to take forward-looking actions to stay ahead of inflationary pressures. We were behind on pricing relative to inflationary costs, those actions have been taken, and we will continue to monitor and take actions going forward to capture this.
Noah, I would also add that given the actions we've taken, we're probably going to be towards the end of the year to see some meaningful rebound there. There's a bit of backlog as well. We knew what it was and we've been taking action. Now that we have a more sophisticated view of our costing and product costs, we will be able to take more timely actions. Many actions are already in place.
Very helpful. And then I guess just to double-click on David's point. I think you talked about Q4 being where some of the margin improvement is weighted towards. So should we not assume fairly ratable sequential margin improvement in Q3 and Q4? Do you think it's more back-end weighted?
You'll see modest improvement in Q3, but Q4 is where the more noticeable improvement will be weighted.
And then just on the orders because to agree with Ryan, that was a big focus today. I just want to see if we can get some clarity here. Were there large orders or meaningful improvement in orders in July and early August versus the second quarter level? Can you share anything on that? You mentioned the pipeline expanding. Can you just talk about trends quarter-to-date to the extent you can share?
Quarter-to-date I don't have the overall bookings specifically in front of me. From a pipeline perspective, with visible and high-confidence conversions, there is a tremendous amount of pipeline with existing customers for 2027 and 2028 orders. A lot of work is going into these existing relationships and they're planning for 2027 and 2028 deliveries that didn't hit the books in Q2. Part of the planning process this time of year is where planning begins to materialize into orders for the next year and beyond. The amount of activity we're involved in with many high-probability closures of existing and new customers is as high as it's ever been.
That would be consistent with how the calendar year works where some of those 2027 and 2028 commitments would start to flow into your orders. Matt, you mentioned diversification progress. What can you share around where you feel you're making real progress on diversification? What are customers looking for? What wins have you had or what feels reasonably high probability?
The diversification progress is relatively broad across our product portfolio, not concentrated in one product. Whether liquid cooling, airside, or chiller products, conversations are happening across the entire portfolio. It's a pretty good weighting across product categories with new customers, showing our portfolio resonates across a broad spectrum of customers.
Your next question comes from Timothy Wojs with Baird.
When you look at the Oklahoma segment and talk about kind of mid- to high-30% gross margins and having visibility to that, we've been discussing that for the last 18 months. We've still been around the 30% to 31% range. Could you put a finer point on when you would expect to get to that mid- to high-30% level? Do you have backlog today clearly at that level? Some color on timing and visibility would be helpful.
On the Oklahoma segment, we saw definite price-cost dislocation at the end of last year and started pricing actions. Those pricing actions took time to hit the production floor. We're starting to see movement; meaningful pricing impact will come in Q4. You'll see a very meaningful price impact hitting Oklahoma margins into 2027. With our overall pricing structure and productivity gains, we expect Q4 and into 2027 to be when we begin to see mid- to high-30s start to flow through.
Can you step back and talk about what you've done over the last six to nine months so that you're not as behind on price-cost as you were here in the last six to nine months?
We've invested and evolved how we run the business: supply chain strategy, finance partnering with the business, and better forward-looking insights. These investments provide better visibility and confidence in execution. Five years ago revenue was around $500 million; now we're more than four times that in this calendar year. That scaling required evolution across the business to provide infrastructure and discipline to run fast and reliably. The investments and operational improvements are designed to provide foresight so we can take action earlier rather than being surprised.
Tim, I'll add that we have a handful of new finance leaders joining us and we reorganized a couple of months ago. Every executive now partners with finance insights, allowing much more analytics to inform action faster. This goes beyond gross margin; we have insight into managing working capital and processes are changing. I'm bullish that we'll quickly see fruits from these investments. We have the next level of insight guiding the business now.
That's helpful. One last question: the BASX backlog — you ran through production more than you thought and had some order lumpiness. Would you expect BASX backlog to be higher at the end of the year than it is today?
We anticipate that. Accelerating backlog conversion builds a stronger foundation. The faster we convert, the better visibility we get to execute at scale, and we can then build more production capacity. That conversion allows our sales team to more aggressively pursue orders. As operations builds that foundation, our sales channel has more ammunition to drive bookings. We expect this to support continued backlog growth heading into 2027.
Your next question comes from Chris Moore with CJS Securities.
Maybe one more on gross margin. Recognizing you're not giving specific guidance on 2027, what would be the puts and takes that would make it possible or make it difficult to improve the 25% to 26% gross margin range in 2026 by, say, 400 basis points in 2027?
When we look at the margin trajectory through 2026, Q4 will be the strongest margin quarter for the organization. That means we're exiting the year at a much higher margin profile than 25% to 26%, which provides a stronger starting point for 2027. The upside to drive margin beyond that comes from higher volumes to absorb fixed costs, continued discipline around price-cost, and improving productivity across the business. These factors allow us to drive margin higher and recover into the 30-plus percent profile on a consolidated basis. Mix is a consideration: BASX continues to improve margin quarter-over-quarter, but as we drive more volume through BASX, mix can be a factor. Still, we expect progress in the BASX margin profile throughout the year.
And as you said, Q4 is going to be the high on the margin side. From a revenue perspective, is Q3 versus Q4 relatively balanced? Or is Q3 meaningfully higher than Q4?
They will be relatively balanced. One point: we have holidays in Q4, which tends to slow production. So a balanced top line revenue Q3 to Q4 implies higher productivity in Q4; sales per day should be up, but overall top line relatively flat quarter-to-quarter.
Maybe one last question. Many data center HVAC players have supply chain issues, such as sourcing fans. You made a decision to vertically integrate further for plenum fans for your HVAC units and external sales. Can you talk about the current impact of that decision and overall supply chain challenges you're seeing?
On the AAON side, we brought manufacturing of fans in-house a couple of years ago. BASX has manufactured its own fans from the start. During recent supply chain challenges, insourcing fans has been a competitive benefit. We still buy fans externally and monitor the marketplace. Fans as a market have capacity constraints, which can create pressure. We continue to look for opportunities to manufacture our own fans or multi-source fans. Our supply chain organization focuses on resiliency and looks at leading indicators to drive multi-sourcing or alternate vendor selection early to mitigate impacts. We've had good success mitigating impacts to volume, but recognize potential for noise in coming quarters. Our focus is on looking ahead for constraints and driving sourcing strategies to mitigate impacts as soon as possible.
Your next question comes from Julio Romero with Sidoti.
Matt, based on the comment earlier in the Q&A that the revised full year sales guide embeds AAON branded sales at 20% growth, I think that implies second half BASX branded product sales of roughly $290 million to $330 million a quarter, and that would be below the $345 million of BASX branded sales you just did in Q2. Is that right, Matt? If so, help us understand why the step down there.
I'd say more flattish on BASX sales quarter-over-quarter in Q2, Q3 and Q4. So relatively flattish, not a big step down. Embedded in the back half is recognition that while we've mitigated supply challenges, there could still be potential issues. Growing a business this fast in a market with constraints is not without challenge. That potential impact to the business is factored into our guidance. Our focus each day is to mitigate those impacts and drive volume through the factory.
Got it. That is helpful. You saw good leverage on SG&A this quarter. Is there room for further leverage as revenue continues to scale, especially as we head into 2027?
We have been making intentional investments to prepare the business for the current scale. We're seeing some leverage show through, which is great. There continue to be investments to make, so I wouldn't expect substantially more leverage in the next quarter or two. As those investments take effect and revenue continues to grow, we would anticipate more leverage, likely in 2027.
That concludes our Q&A session. I will now turn the conference back over to Joe Mondillo for any closing remarks.
Thank you, operator. I'd like to thank everyone for joining today's call. If anyone has any questions over the coming days and weeks, please feel free to reach out to me. Have a great rest of the day, and we look forward to speaking with you in the future.
This concludes today's call. Thank you for attending. You may now disconnect, and have a wonderful rest of your day.