ABB’s Strong Q3 2025 Performance Drives Growth Momentum
ABB (ABBNY) reported robust Q3 2025 results with 11% revenue growth and a 4% EBITDA margin expansion. Growth was primarily fueled by rising demand in electrification, data centers, and industrial automation markets, positioning ABB well for a multi-year upcycle, especially in the US.
Geographic and Market Segment Highlights
Orders rose 9% to $9.1 billion, led by double-digit growth in data centers and utilities. The US was a standout with a 27% order increase, while Germany faced a slight 4% decline due to softness in machine builder demand. ABB ended the quarter with a strong book-to-bill ratio of 1.01 and $25.1 billion backlog.
Electrification: A Key Growth Driver
Electrification stands out as a major growth area post-robotics sale. US utilities’ planned $1.1 trillion investment by 2030 in grid modernization presents vast opportunities. ABB’s solutions for power orchestration and process controls uniquely position it to capture this expanding market.
Innovation in Data Centers and 800VDC Technology
ABB is advancing the transition to 800-volt DC ecosystems for AI data centers, enabling power racks to scale from 10-100kW to 1MW per rack. Collaboration with Nvidia on next-gen 800V DC chips targets market entry around 2027, supporting efficient high-power data center infrastructure.
Motion and Process Automation Segment Growth
The motion segment grew 17%, driven by rail, HVAC, oil & gas, and water sectors. Process automation orders increased 4%, supported by offshore oil production and expanding water/wastewater needs. US reindustrialization trends also bolster demand for automation technologies.
Robotics Divestiture Sharpens Strategic Focus
ABB agreed to sell its Robotics segment to SoftBank for $5.4 billion, with the transaction expected by mid-to-late 2026. This divestiture streamlines ABB’s focus on electrification and automation, merging discrete automation into process automation.
Financial Health and Outlook
With $5.8 billion cash and low leverage (0.38x net debt/EBITDA), ABB is financially strong to pursue M&A and organic growth. Q4 2025 projections estimate $9 billion revenue and $0.63 diluted EPS, continuing the company’s solid momentum.
Risks and Market Considerations
Potential challenges include macroeconomic headwinds delaying projects and supply chain constraints affecting electrification efforts. Despite these, ABB’s strong positioning in megatrends offers resilience.
Valuation and Buy Recommendation
Currently trading at 15.12x EV/EBITDA—slightly below historical averages—ABB offers an attractive buy opportunity. The $68/share price target reflects a 13.95x EV/EBITDA multiple for FY27, driven by strong growth potential.