Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 16, 2026 · N/A
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ABB's record Electrification orders, driven by triple-digit data center growth, underscore the accelerating AI infrastructure buildout. The company's capacity expansions and raised guidance signal sustained demand for electrical equipment critical to AI data centers. The Rotork acquisition could further strengthen ABB's automation offering for energy and process industries, potentially benefiting from AI-driven efficiency investments.
ABB delivered record orders and revenues in Q2, with group orders up 28% comparable to $12.0B and revenues up 12% to $9.5B. Electrification led with 58% order growth, driven by triple-digit data center demand, while Motion grew 20% and Automation declined 14% due to a tough comparable. Operational EBITA rose 20% to $1.9B with margin up 90 bps to 20.2%, despite gross margin pressure from unrealized derivatives and price-cost gap. Free cash flow improved slightly to $881M. Management announced three acquisitions, including the $5.5B offer for Rotork, and raised full-year revenue guidance.
Management raised full-year comparable revenue growth guidance to low double-digit to low teens, citing strong markets, rising backlog, and supportive short-cycle demand. They expect Q3 comparable revenue growth of low- to mid-teens with Operational EBITA margin sequentially improving from Q2, driven by strong revenue growth and continued price-cost recovery. The Rotork acquisition, expected to close in H1 2027, would add ~3% to revenues and ~20 bps to Operational EBITA margin based on 2025 figures, with EPS accretion in year two. Electrification Q3 revenue growth expected at least similar to Q2 with margin improving from 24.9%; Motion Q3 revenue growth mid-to-high single digits with margin similar to Q2; Automation Q3 revenue growth mid-single digits with margin improving YoY. Management reiterated full-year margin improvement excluding the Q1 real estate gain and expects free cash flow to improve from last year's $4.6B.
“We delivered new record levels for both orders and revenues. In the order chart, you see that this is the first time we generated about $12 billion in one quarter.”
on Record orders and revenues
“We see the strong growth here in all sectors. The lead times are the same or similar to what they have been before. We don't see any pre-buys.”
on Demand sustainability
“We have zero order in the backlog for 800 volt DC data centers. Nobody has, because there is waiting for the availability of components from NVIDIA and the like.”
on 800 VDC data centers
On Electrification orders, is the strength lead-time related or true underlying strength?
Morten Wierod said lead times are similar, no pre-buys, and the growth is driven by more capacity coming online, allowing ABB to take more orders.
How quickly can Electrification revenues convert from the high order backlog, and can revenues reach $25-26B next year?
Morten Wierod declined to guide for 2027, but noted capacity expansions in the U.S., China, India, and Europe, and that they only take orders they can commit to deliver on time. He confirmed some backlog extends into 2028.
What drove the decision to acquire Rotork now, and how will you synergize given Rotork's oil & gas exposure?
Morten Wierod cited ABB's strong performance and established ABB Way governance as enabling the deal. He noted Rotork's oil & gas exposure adds only 0.5% to ABB's overall, and the combination strengthens the Sense, Control, Act loop with revenue and cost synergies.