ABB: Record orders and record cash flow. ABB is running at full speed.

Orders reached $11.3 billion in the quarter, setting a new record and marking a 32% increase from a year ago, or 24% on a comparable basis. This comparable basis strips out currency movements and acquisitions to show the underlying business performance. This figure is significant because today’s orders will become future revenues and profits. The total backlog, or the stock of booked but undelivered orders, now stands at a record $27.5 billion, up 27% year over year. ABB’s revenue visibility for the rest of 2026 is as strong as it has ever been. The company is not just moving quickly. It is pulling further ahead.

Revenue came in at $8.7 billion, up 18% year on year, or 11% on a comparable basis. Operational EBITA, ABB’s preferred measure of underlying profitability, which excludes interest, taxes and acquisition-related write-downs, increased by 37% to $2.05 billion, pushing the margin to 23.5%, up 3.2 percentage points from a year ago. Earnings per share increased 21% to $0.73. Free cash flow, the actual cash the business generated after investments, reached $1.25 billion, the strongest first quarter in ABB’s history.

By region, the Americas drove exceptional momentum, with the United States alone posting a 67% increase in comparable orders. Electrification, ABB’s largest division, recorded a striking 44% comparable increase in orders, with data centers delivering triple-digit order growth. This is not a rounding error.

At first glance, the fall in the gross margin, revenue minus the direct cost of making products, by nearly 3 percentage points to 39.4% looks concerning. However, a closer look shows that this was almost entirely a timing effect related to how ABB accounts for currency and commodity hedging contracts, and that ABB is not being squeezed on pricing or hit by commodity costs. These are unrealized paper losses that should reverse when the underlying trades are settled. The underlying business has not deteriorated.

That said, the 320-basis-point improvement in the Operational EBITA margin also warrants closer inspection. Of that increase, 250 basis points came from a one-off gain on the sale of real estate, not from operational improvement. The genuine improvement in the business was a respectable, but more modest, 70 basis points. Both of these factors need to be considered at the same time.

The structural backdrop for ABB could hardly be more supportive. Utilities are investing heavily in grid reliability. Data center operators are racing to increase power capacity for AI infrastructure. Spending tied to the energy transition, including solar, heat pumps and electric vehicle charging, is feeding directly into ABB’s product lines. The company has also introduced an upgraded distributed control system platform that uses AI analytics. In March, ABB shareholders approved a dividend of CHF 0.94 per share, and a new $2 billion share buyback programme has already begun. ABB is growing while also returning capital, a combination that rarely goes unnoticed.

The upgrade to ABB’s guidance is significant. The company now expects comparable revenue growth of between 10% and 20% for the full year, along with margin improvement even after stripping out the real estate gain. This is a confident signal from management.

There are two factors that could move the stock sharply from here. First, tariff escalation. ABB has acknowledged early signs of disruption in the Middle East and some sensitivity in process industries. A further deterioration in the global trade environment could result in a faster decline in order intake than the backlog can offset. Second, the pending $5.2 billion divestment of the Robotics division to SoftBank, expected to close in the second half of 2026, will release significant capital that ABB will need to deploy intelligently. How management handles that cash will reveal a great deal about the next chapter of this story.

Source: ABB's report for the first quarter of 2026, published on April 22, 2026