AAON Inc. (NASDAQ:AAON) stock surged Tuesday after the HVAC equipment maker beat third-quarter 2026 earnings and revenue estimates and raised its full-year sales forecast above Wall Street expectations.

After the results, Baird analyst Timothy Wojs maintained an Outperform rating but cut his price forecast to $104 from $110.

AAON Earnings Beat Estimates As Margins Improve

AAON reported adjusted earnings of 83 cents per share, beating the 57-cent estimate.

Revenue jumped 84.1% year over year to a record $707.4 million, topping the $599.7 million estimate.

GAAP earnings rose to 83 cents per share from 37 cents a year earlier.

Gross margin narrowed to 26.7% from 27.8% a year earlier but improved 60 basis points from the previous quarter.

Adjusted EBITDA doubled to $127.2 million. Its margin expanded to 18% from 16.5%.

However, AAON restated its first- and second-quarter financial results, raising first-half sales by $10.7 million and earnings per share by 9 cents.

The company also identified a material weakness in its financial reporting controls and continues to address the issue.

AI Cooling Demand Fuels BASX Growth

AAON-branded sales rose 19.6% to $310.2 million, while BASX-branded sales surged 218.3% to $397.2 million.

BASX liquid cooling sales jumped 255.6% to $165.5 million. Sales over the past 12 months reached $450 million, up 188%.

Total backlog climbed 40.5% to $1.85 billion. BASX backlog grew 51.1%, while AAON-branded backlog increased 18%.

However, total backlog fell 5.9% sequentially as the company converted more orders into sales.

Cash Flow Strengthens, Dividend Announced

Operating cash flow for the first nine months improved to $146.9 million from a cash outflow of $18.8 million a year earlier.

AAON held $3.7 million in cash, cash equivalents and restricted cash. It also had $386.7 million outstanding on its revolving credit facility.

The company declared a quarterly dividend of 10 cents per share, payable Dec. 17 to shareholders of record Nov. 25.

AAON Raises 2026 Sales Forecast

AAON raised its full-year sales forecast to $2.48 billion-$2.524 billion from $2.235 billion-$2.307 billion.

The revised outlook exceeds the $2.301 billion Wall Street estimate.

The company also expects a gross margin of about 26%.

AAON Price Action: AAON shares were up 23.60% at $77.70 at the time of publication on Tuesday, according to market data.