ABB Ltd

ABB reported record quarterly orders of about $12 billion, up 28% on a comparable basis, and record revenue of $9.5 billion, up 12% comparable. Operational EBITA increased 20% to $1.9 billion, with margin up 90 basis points to 20.2%; gross margin was 40%, down 50 basis points year over year, mainly due to unrealized derivatives on FX and commodities. Book-to-bill was 1.27 and backlog reached a record $30 billion, up 28% comparable. By segment, Electrification revenue was $5.2 billion with 24.9% margin, Motion revenue was $2.2 billion with 18.5% margin, and Automation revenue was $2.2 billion with 15.4% margin. Free cash flow was $881 million, helped by higher operational earnings, partly offset by CapEx and lower discontinued-operations cash flow. For 2025, ABB raised guidance to low double-digit to low-teens comparable revenue growth; it also expects margin to improve from last year. For Q3, ABB guided for low- to mid-teens comparable revenue growth and sequential margin improvement, while Electrification and Motion/Automation divisional commentary pointed to continued growth and mixed profitability.

Morten Wierod framed the quarter as another record performance driven by strong demand, capacity expansion, and execution. He emphasized that ABB does not see pre-buys or a meaningful lead-time change, but rather sustained investment across energy expansion, efficiency, resilience, and data centers. On strategy, he highlighted the announced acquisitions—especially Rotork—as a way to expand ABB’s automation loop from sensing and control into actuation, while also adding service, digital, and installed-base opportunities.

Christian Nilsson focused on the financial quality of the quarter: Electrification delivered record order intake and a 24.9% margin, Motion was pressured by Gamesa Electric losses, and Automation benefited from cost control and a one-time provision release. He noted group free cash flow of $881 million versus a Q1 pattern boosted by a $425 million real-estate sale, and said ABB remains on track to improve full-year free cash flow from $4.6 billion last year. He also said gross margin pressure from price-cost lag is expected to be at least neutral for the full year, and that the Q3 margin should improve sequentially.

Analysts pressed ABB on whether extraordinary Electrification orders reflected pre-buys, longer lead times, or real demand; management said lead times are unchanged and demand is genuine, supported by added capacity and strong customer investment plans. Questions also focused on Rotork’s timing, synergies, and fit; management said ABB’s governance is now strong enough to absorb a larger asset, and that the main synergy pool is revenue and service, with procurement benefits as well. On pricing, management said price rose about 2% overall, with stronger pricing in the Americas and less in China, and on data centers they said there is no 800V DC backlog yet, but ABB is investing ahead of that market in late 2027/2028.