AAON, Inc.

Good day, everyone, and thank you all for joining this Aon, Inc. Q4 2025 earnings release conference call. As a reminder, all phone lines are in a listen-only mode to prevent background noise, but later you will have the opportunity to ask questions during the question and answer session provided after our prepared remarks. To signal for a question, simply press star and 1 on your telephone keypad, and your line will be placed into a queue for the Q&A session. Once again, that is star and one, ladies and gentlemen. Also, a reminder, today's session is being recorded. It is now my pleasure for opening remarks and introductions to turn the floor to Director of Investor Relations, Mr. Joseph Mondillo. Welcome, sir.

Thank you, Operator, and good morning, everyone. The press release announcing our fourth quarter and full year 2025 financial results was issued earlier this morning 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 the 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 and Exchange Act of 1934, each as amended. As such, it is subject to the occurrence of many events outside of AON's control that could cause AON'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 in Form 10-K that we filed this morning details 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 calls 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 Tobolsky, President and CEO, and Rebecca Thompson, CFO and Treasurer. Matt will start off with some opening remarks. Rebecca will follow with a walkthrough of the quarterly results. And Matt will then finish up with our outlook for 2026 and some closing remarks. With that, I will turn the call over to Matt.

Thanks, Joe, and good morning. 2025 was a year marked by several notable achievements delivered alongside transformational investments that are building a more resilient and scalable business. Importantly, we've made these investments with clear priorities and disciplined execution, strengthening our foundation and sustaining strong commercial momentum. Robust bookings and revenue momentum underscore demand for our products and custom solutions as customers seek greater operational efficiency, supporting continued market share gains. As we enter 2026, we have clear visibility into growth drivers and a well-defined plan that positions us for improved operating performance and margin expansion as temporary headwinds fade. The data center market continues to represent our most robust and dynamic growth opportunity. In 2025, Basics branded sales increased 143% to $548 million, while backlog grew 141% to $1.3 billion. Strong demand resulted in a book-to-bill of 2.4 for the Basics brand on the year. Our differentiated custom airside and liquid cooling solutions continue to gain momentum as customers increasingly require highly engineered systems tailored to their specific performance and scalability needs. This dynamic aligns directly with basics core strengths, custom engineering, thermal management innovation, and speed. And it positions us well to grow with this increasingly demanding AI data center market. Our focus is now squarely on converting this demand into sustained profitable growth through disciplined program execution and capacity readiness. Aon branded sales and bookings remained resilient in 2025, particularly in light of a 16% decline in overall industry volumes. Despite the refrigerant transition and the ERP rollout at our Longview facility, Aon-branded sales declined just 8%, significantly outperforming the broader industry. Bookings saw even stronger performance, growing approximately 12%, driven primarily by national accounts, which increased 86%. This sales growth represents deliberate market share gains as customers increasingly recognize the total cost of ownership advantages our products deliver across their building portfolios. In other words, while we worked through near-term friction, we continued to take share in the places that matter most and where our differentiation is strongest. Building on the operational foundation established in prior years, we advanced several initiatives designed to drive margins to optimal levels and support durable long-term growth. These included strategic investments in people and leadership, in manufacturing capacity, supply chain management, product development, and IT systems and infrastructure. Over the past 18 months, we have expanded our manufacturing footprint by more than 25% and meaningfully strengthened our leadership depth. Our investments in supply chain management will improve supply reliability, help reduce material costs, and improve working capital discipline going forward. These actions are practical, execution-focused, and designed to improve throughput, reduce variability, and enhance margin performance over time. Our focus on innovation drove meaningful advances in product development, most notably in support of AI data centers, where we introduced unique concepts designed to enhance scale, operating efficiency, and strategic flexibility. In 2025, we also became the first manufacturer in the commercial HVAC industry to commercialize rooftop units up to 40 tons with cold climate heat pumps that are capable of delivering reliable heating performance at ambient temperatures down to negative 20 degrees Fahrenheit. We also made significant progress in upgrading our legacy ERP system, which is critical to supporting long-term scalability. As expected in a transformation of this scale, when issues were encountered, we addressed them directly and implemented a revised rollout approach that prioritizes stability, customer deliveries, and execution certainty. We are sequencing remaining ERP implementations under a disciplined governance framework with regiments scheduled for the back half of 2026 in Tulsa expected in 2027. This approach reflects control and intentionality, allowing us to protect service levels while preserving the long-term benefits of the system. Alongside these accomplishments, 2025 included several temporary challenges, most notably the industry's refrigerant transition early in the year, and incremental complexity from our ERP upgrade. While these factors pressured margins in the near term, they are well understood, largely contained, and do not change our confidence in meaningful margin improvement as execution continues to strengthen. Before turning it over to Rebecca, I want to share my perspective on how we ended the year. Bookings and backlog remained strong in the fourth quarter. Basics branded bookings again reached record levels. driving backlog to $1.3 billion, up 45% sequentially and 141% year-over-year. Aon branded bookings were also strong and increased 20% year-over-year, with backlog up 24% sequentially and 61% from the prior year period. That demand strength, paired with actions to improve execution, set the stage for a strong 2026. Operationally, Production drove record sales. Basics branded sales more than doubled year over year, supported by the continued rampant Memphis and strong throughput of liquid cooling solutions in Longview. Aeon branded sales increased 9.5%, supported by a 42% increase in alpha class heat pump sales, and represents the strongest quarterly growth since the second quarter of 2024. Fourth quarter margins reflected differing operational dynamics across our facilities. Margin momentum in Tulsa moderated sequentially due to normal seasonality and temporary supply chain constraints that reduced production volumes. Redmond delivered stable margins, balancing productivity gains with targeted investments to support strong basis growth in Longview and Memphis. Memphis, though still a near-term margin headwind, remained on plan and achieved profitability for the first time in a quarter. Together, Tulsa Revenue Memphis comprised the Aon Oklahoma in basic segments with Memphis results reflected in both. On a combined basis, fourth quarter sales grew 31% and incremental margins were a solid 25%. While incremental margins remain below our long-term target, they are improving and they reflect temporary pressures expected with ramping a new facility. With production volumes in Tulsa increasing materially in January and February, in Memphis continuing to ramp, we expect strong growth and accelerated incremental margins going forward. At Longview, which represents the coil product segment, basics production and profitability remained exceptionally strong, while Aon branded throughput and productivity improved sequentially. Margins reflected this progress. partially offset by the impacts of a five-day closure to support a wall-to-wall inventory at year-end. In summary, the softer-than-expected fourth quarter margin was primarily driven by lower production at Tulsa. With a strong backlog in production already approaching record levels, Tulsa is positioned to become a meaningful tailwind in 2026. Supported by robust basics backlog and accelerating momentum in Longview and Memphis, We are positioned for 2026 to be a strong year for growth and margin expansion. We have a clear view of the drivers. Our teams are executing, and we are confident in that trajectory. I will now turn the call over to Rebecca, who will walk through the quarterly financials in more detail.