ABB Exits Robotics To Focus On Industrial Automation Growth
Strong Q3’25 Performance Signals New Direction
ABB (OTCPK: ABBNY) delivered a strong Q3’25 with 11% revenue growth. EBITDA margin expanded 4%, reflecting solid execution across electrification and automation. The company gained momentum from rising demand in data centers, utilities, and industrial manufacturing.
ABB’s management now targets a multi-year upcycle as electrification and automation markets expand globally. With its robotics exit, ABB aims to sharpen focus on high-return segments. I rate ABBNY as a Buy, with a $68 target price based on 13.95x FY27 EV/EBITDA.
Robust Orders Driven by U.S. Demand
ABB’s Q3’25 orders grew 9% year over year, reaching $9.1 billion. Data centers and utilities led growth with double-digit gains. The U.S. market surged 27%, while Germany dipped 4% due to weaker machine builder demand.
The company closed the quarter with a 1.01x book-to-bill ratio and a $25.1 billion backlog, showing strong future revenue visibility.
Electrification Fuels ABB’s Growth
Electrification orders increased 10% to $4.5 billion in Q3’25. Data center expansion and grid modernization fueled strong momentum in the U.S. and Europe.
Management sees electrification as a major growth engine post-robotics sale. ABB plans targeted acquisitions to expand in electrification, motion, and automation.
U.S. utilities expect to invest $1.1 trillion by 2030 for power grid upgrades. ABB aims to capture this opportunity through advanced power orchestration and control solutions.
800VDC: The Next Data Center Revolution
ABB is working with NVIDIA to develop 800VDC chips and high-power racks for next-gen AI data centers. These racks will consume up to 1 megawatt each, far more than current systems.
This shift could redefine data center design by 2027. ABB’s involvement places it at the center of this electrification-meets-automation revolution.
Motion and Process Automation Strengthen Momentum
ABB’s Motion segment saw orders climb 17% to $2.2 billion, driven by rail, HVAC, oil and gas, and water industries.
Process automation rose 4% to $1.9 billion, supported by offshore oil production and water infrastructure projects. U.S. reindustrialization and clean water demand should sustain future growth.
Strategic Sale of Robotics Segment
In Q3’25, ABB announced the sale of its Robotics division to SoftBank for $5.4 billion (18.31x EV/EBITDA). The transaction is expected to close by mid-2026.
After divestment, ABB will merge Discrete Automation into the Process Automation segment, further simplifying its structure. This move strengthens ABB’s focus on scalable, high-margin markets.
Financial Strength Supports Expansion
ABB reported 11% revenue growth in Q3’25, with electrification leading at +15%. The company’s EBITDA margin expanded 4%, reflecting strong pricing and mix.
ABB ended the quarter with $5.8 billion in cash and $2.7 billion in debt, achieving a 0.38x net leverage ratio. The upcoming robotics sale proceeds will further enhance M&A capacity and organic investments.
Bull and Bear Scenarios
Bull Case: ABB benefits from rising investments in utilities, automation, and electrification, driving margin-accretive growth.
Bear Case: Supply chain tightness and macro uncertainty may delay customer projects, impacting short-term execution.
Attractive Valuation Creates Opportunity
ABBNY trades at 15.12x EV/EBITDA, slightly below its 16x historical average. The discount creates a compelling entry point.
Based on growth forecasts and sector trends, I maintain a Buy rating with a $68 price target. ABB’s strong balance sheet, focus, and exposure to major megatrends make it a long-term winner.