- Strong commercial momentum with significant customer agreements including in India, Japan and the UK.
- Operational excellence and cost efficiency actions driving gross margins to strong sustainable levels.
- 5G Open RAN-ready portfolio breadth and technology leadership position reaffirmed by Gartner and Omdia.
Financial highlights – further profitability growth
- Organic sales declined by -2%, with growth in three out of four market areas. Reported sales were SEK 56.2 (61.8) b., with an FX impact of SEK -4.2 b.
- Adjusted[1] gross income decreased to SEK 27.0 (28.6) b. as currency headwinds offset strong operational execution. Reported gross income was SEK 26.8 (28.2) b.
- Adjusted[1] gross margin was 48.1% (46.3%) driven by improvements in Networks and Cloud Software and Services. Reported gross margin was 47.6% (45.6%).
- Adjusted[1] EBITA was SEK 15.8 (7.8) b. with a 28.1% (12.6%) margin, including a SEK 7.6 b. capital gain benefit from the divestment of iconectiv. Reported EBITA was SEK 15.5 (6.2) b. with a 27.6% (10.0%) margin.
- Net income was SEK 11.3 (3.9) b. including a benefit from the capital gain. EPS diluted was SEK 3.33 (1.14).
- Free cash flow before M&A was SEK 6.6 (12.9) b. Net cash increased to SEK 51.9 b.
Ericsson has reported solid third-quarter results marked by operational efficiency gains, improved gross margins, and strengthened financial flexibility, even as foreign exchange challenges weighed on its overall sales.
The Swedish telecoms giant highlighted its sustained commercial momentum, citing major customer agreements across India, Japan, and the United Kingdom. The company said its focus on operational excellence and cost efficiency has helped it achieve a “new long-term level” of profitability, underpinned by a strong and sustainable margin performance.
Ericsson reaffirmed its technology leadership in 5G, with research firms Gartner and Omdia once again recognizing its Open RAN-ready portfolio for its innovation breadth and integration capabilities. The firm noted that its AI-native software architecture, designed to be hardware agnostic, supports both Ericsson and third-party silicon technologies while integrating seamlessly with partner radio systems.
Financial Performance
Despite an organic sales decline of 2%, Ericsson recorded growth in three of its four market areas. Reported sales stood at SEK 56.2 billion, compared to SEK 61.8 billion in the same period last year, reflecting a foreign exchange impact of SEK -4.2 billion.
Adjusted gross income came in at SEK 27 billion, down slightly from SEK 28.6 billion, as currency effects offset the gains from strong operational execution. Adjusted gross margin improved to 48.1% from 46.3%, driven mainly by the Networks and Cloud Software and Services divisions.
Earnings before interest, taxes, and amortization (EBITA) rose sharply to SEK 15.8 billion, with a 28.1% margin, boosted by a SEK 7.6 billion capital gain from the divestment of iconectiv. Net income also climbed to SEK 11.3 billion, compared to SEK 3.9 billion in the previous year, with diluted earnings per share increasing to SEK 3.33 from SEK 1.14.
Free cash flow before mergers and acquisitions was SEK 6.6 billion, while net cash improved to SEK 51.9 billion, reflecting the company’s stronger balance sheet and enhanced financial flexibility.
| SEK b. | Q3 2025 | Q3 2024 | YoY change | Q2 2025 | QoQ change | Jan-Sep 2025 | Jan-Sep 2024 | YoY change |
| Net sales | 56.239 | 61.794 | -9% | 56.132 | 0% | 167.396 | 174.967 | -4% |
| Organic sales growth * [2] | - | - | -2% | - | - | - | - | 0% |
| Gross income | 26.777 | 28.185 | -5% | 26.649 | 0% | 79.963 | 76.658 | 4% |
| Gross margin [2] | 47.6% | 45.6% | - | 47.5% | - | 47.8% | 43.8% | - |
| EBIT (loss) | 15.151 | 5.774 | 162% | 6.391 | 137% | 27.473 | -3.6 | - |
| EBIT margin [2] | 26.9% | 9.3% | - | 11.4% | - | 16.4% | -2.1% | - |
| EBITA [2] | 15.516 | 6.203 | 150% | 6.763 | 129% | 28.931 | 13.522 | 114% |
| EBITA margin [2] | 27.6% | 10.0% | - | 12.0% | - | 17.3% | 7.7% | - |
| Net income (loss) | 11.300 | 3.881 | 191% | 4.626 | 144% | 20.143 | -4.505 | - |
| EPS diluted, SEK | 3.33 | 1.14 | 192% | 1.37 | 143% | 5.94 | -1.43 | - |
| Free cash flow before M&A [2] | 6.631 | 12.944 | -49% | 2.581 | 157% | 11.916 | 24.210 | -51% |
| Net cash, end of period [2] | 51.858 | 25.534 | 103% | 36.040 | 44% | 51.858 | 25.534 | 103% |
| Adjusted financial measures [1][2] | ||||||||
| Adjusted gross income | 27.048 | 28.609 | -5% | 26.959 | 0% | 80.702 | 77.670 | 4% |
| Adjusted gross margin | 48.1% | 46.3% | - | 48.0% | - | 48.2% | 44.4% | - |
| Adjusted EBIT (loss) | 15.454 | 7.327 | 111% | 7.047 | 119% | 28.713 | -0.259 | - |
| Adjusted EBIT margin | 27.5% | 11.9% | - | 12.6% | - | 17.2% | -0.1% | - |
| Adjusted EBITA | 15.819 | 7.756 | 104% | 7.419 | 113% | 30.171 | 16.908 | 78% |
| Adjusted EBITA margin | 28.1% | 12.6% | - | 13.2% | - | 18.0% | 9.7% | - |
* Sales adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations.
CEO Outlook
President and CEO Börje Ekholm said Ericsson’s margins have now reached a sustainable level thanks to “strong operational execution over the past few years.” He noted that Cloud Software and Services sales grew by 9%, driven by solid demand in core networks.
Ekholm added that the company expects enterprise sales to stabilize in the fourth quarter and the overall Radio Access Network (RAN) market to remain broadly steady. “Our strong cash position, bolstered by recurring cash flow and the iconectiv sale, provides scope for increased shareholder distributions,” he said, adding that details of the proposed payout would be outlined in the fourth-quarter report for approval at the next annual general meeting.
Overall, Ericsson’s third-quarter performance underscores its progress in efficiency, technology leadership, and strategic positioning within the global 5G ecosystem.