Ericsson’s second-quarter results reflect solid operational discipline and targeted strategic execution, even as overall sales faced regional headwinds and currency pressures. The company delivered its highest adjusted EBITA margin in three years, underscoring the impact of ongoing efficiency initiatives and a streamlined cost base.
Total reported sales reached SEK 56.1 billion, down from SEK 59.8 billion in the prior-year quarter, with a significant foreign exchange impact of SEK -4.7 billion. On an organic basis, however, sales grew by 2%, driven primarily by strength in the Americas market and improved income from intellectual property rights (IPR) licensing. This growth was partly offset by weaker performance in other regions, while investments in India remain on hold.
Gross income also improved, supported by operational excellence and a favorable IPR licensing settlement. Adjusted gross income rose to SEK 27.0 billion from SEK 26.3 billion, while reported gross income was SEK 26.6 billion, up from SEK 25.8 billion. This translated into an adjusted gross margin of 48.0%, up from 43.9% a year earlier, marking a significant margin improvement across all business segments despite currency headwinds.
One of the key highlights was the sharp increase in profitability. Adjusted EBITA nearly doubled to SEK 7.4 billion (from SEK 4.1 billion), yielding a margin of 13.2%, compared to 6.8% in the previous year. Reported EBITA also grew strongly, reaching SEK 6.8 billion versus SEK 2.4 billion, with margins improving to 12.0% from 4.1%.
Net income rebounded to SEK 4.6 billion from a loss of SEK -11.0 billion last year, reflecting the absence of the previous year’s SEK -11.4 billion impairment charge. Diluted earnings per share similarly improved to SEK 1.37 from a negative SEK -3.34. Free cash flow before mergers and acquisitions was SEK 2.6 billion, lower than last year’s SEK 7.6 billion, though Q2 2024 still benefited from strong working capital release.
Segment performance was especially encouraging in Cloud Software and Services, where strategic initiatives continued to drive robust adjusted EBITA. IPR licensing also made strong progress, and Ericsson believes there is further opportunity to grow revenues in this area through additional licensing deals and settlements.
President and CEO Börje Ekholm commented on the results, highlighting the company’s focus on efficiency and long-term strategic goals. He pointed to the success in structurally lowering Ericsson’s cost base, supporting the strong margin expansion.
Ekholm also noted encouraging regional trends. Growth in the Americas continued, while the European market showed signs of stabilization. Meanwhile, global adoption of fixed wireless access (FWA) surpassed 160 million users, driving significant increases in network traffic.
However, he acknowledged that deployment of 5G standalone (SA) networks remains limited. He stressed that broader adoption of 5G SA is essential to fully enable AI use cases at the edge, which require ultra-low latency and improved uplink capabilities.
Looking forward, Ericsson is intensifying its investments in AI, including participation in the Sweden AI Factory Consortium. According to Ekholm, AI will be critical not only for accelerating innovation in Ericsson’s product portfolio but also for driving further operational efficiencies internally.
The company is also seeing growth in the ecosystem for network APIs, which enable developers to access network capabilities for new services. Ericsson’s Aduna platform, for instance, has now expanded its network API coverage to all three major service providers in Japan, underscoring its progress in building out this strategic growth area.
Overall, while Ericsson continues to face regional and currency challenges, the latest results highlight a company focused on disciplined execution, margin improvement, and targeted investments to support long-term growth.
| SEK b. | Q2 2025 | Q2 2024 | YoY change | Q1 2025 | QoQ change | Jan-Jun 2025 | Jan-Jun 2024 | YoY change |
| Net sales | 56.132 | 59.848 | -6% | 55.025 | 2% | 111.157 | 113.173 | -2% |
| Organic sales growth *[2] | - | - | 2% | - | - | - | - | 1% |
| Gross income | 26.649 | 25.815 | 3% | 26.537 | 0% | 53.186 | 48.473 | 10% |
| Gross margin[2] | 47.5% | 43.1% | - | 48.2% | - | 47.8% | 42.8% | - |
| EBIT (loss) | 6.391 | -13.519 | - | 5.931 | 8% | 12.322 | -9.419 | - |
| EBIT margin[2] | 11.4% | -22.6% | - | 10.8% | - | 11.1% | -8.3% | - |
| EBITA[2] | 6.763 | 2.426 | 179% | 6.652 | 2% | 13.415 | 7.319 | 83% |
| EBITA margin[2] | 12.0% | 4.1% | - | 12.1% | - | 12.1% | 6.5% | - |
| Net income (loss) | 4.626 | -10.999 | - | 4.217 | 10% | 8.843 | -8.386 | - |
| EPS diluted, SEK | 1.37 | -3.34 | - | 1.24 | 10% | 2.61 | -2.57 | - |
| Free cash flow before M&A[2] | 2.581 | 7.595 | -66% | 2.704 | -5% | 5.285 | 11.266 | -53% |
| Net cash, end of period[2] | 36.040 | 13.133 | 174% | 38.647 | -7% | 36.040 | 13.133 | 174% |
Adjusted financial measures[1][2] | ||||||||
| Adjusted gross income | 26.959 | 26.281 | 3% | 26.695 | 1% | 53.654 | 49.061 | 9% |
| Adjusted gross margin | 48.0% | 43.9% | - | 48.5% | - | 48.3% | 43.4% | - |
| Adjusted EBIT (loss) | 7.047 | -11.891 | - | 6.212 | 13% | 13.259 | -7.586 | - |
| Adjusted EBIT margin | 12.6% | -19.9% | - | 11.3% | - | 11.9% | -6.7% | - |
| Adjusted EBITA | 7.419 | 4.054 | 83% | 6.933 | 7% | 14.352 | 9.152 | 57% |
| Adjusted EBITA margin | 13.2% | 6.8% | - | 12.6% | - | 12.9% | 8.1% | - |
*Sales adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations.
[1] Adjusted metrics are adjusted to exclude restructuring charges.
[2] Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statement.