Fourth-quarter performance: broad-based growth and margin expansion
During the fourth quarter, Ericsson achieved organic sales growth in all segments, with Cloud Software and Services standing out with 12%* growth. Overall sales rose by 6%* year-on-year. Regionally, Europe, the Middle East and Africa, as well as South East Asia, Oceania and India, delivered growth. The Americas market remained broadly stable, while North East Asia experienced a decline. Reported sales for the quarter amounted to SEK 69.3 billion, compared with SEK 72.9 billion a year earlier.
Adjusted gross income reached SEK 33.2 billion, slightly down from SEK 33.7 billion, as currency headwinds offset strong operational execution. On a reported basis, gross income was unchanged at SEK 32.7 billion. Adjusted gross margin improved to 48.0% from 46.3%, driven mainly by margin improvements in Cloud Software and Services. Reported gross margin also strengthened, rising to 47.2% from 44.9%.
Profitability advanced further at the operating level. Adjusted EBITA increased to SEK 12.7 billion from SEK 10.2 billion, corresponding to an adjusted margin of 18.3%, up from 14.1%. This improvement reflected better segment margins, particularly in Mobile Networks. Reported EBITA amounted to SEK 11.6 billion, with a margin of 16.7%, compared with SEK 8.6 billion and 11.8% a year earlier.
Net income for the quarter rose to SEK 8.6 billion from SEK 4.9 billion, while diluted earnings per share increased to SEK 2.57 from SEK 1.44. Free cash flow before M&A totaled SEK 14.9 billion, compared with SEK 15.8 billion in the prior-year period.
Full-year 2025: stabilized margins and strong cash position
For the full year, Ericsson delivered organic sales growth of 2%*, supported by growth in Networks and Cloud Software and Services. Reported full-year sales were SEK 236.7 billion, down from SEK 247.9 billion in 2024.
Adjusted gross income increased to SEK 113.9 billion from SEK 111.4 billion, despite a currency headwind of SEK –7.2 billion. Improvements in Mobile Networks were a key contributor. Adjusted gross margin rose to 48.1%, up from 44.9% the previous year.
Adjusted EBITA climbed significantly to SEK 42.9 billion from SEK 27.2 billion, resulting in an adjusted EBITA margin of 18.1%, compared with 11.0% in 2024. This figure includes the gain from the divestment of iconectiv. Net income for the year reached SEK 28.7 billion, a marked improvement from SEK 0.4 billion a year earlier, while diluted earnings per share increased to SEK 8.51 from SEK 0.01.
Free cash flow before M&A amounted to SEK 26.8 billion, compared with SEK 40.0 billion in the prior year, corresponding to a cash flow to net sales ratio of 11.3%. Ericsson ended the year with a strong net cash position of SEK 61.2 billion, up from SEK 37.8 billion. Return on capital employed improved sharply to 24.1%, compared with 2.6% in 2024, reflecting in part the impact of the iconectiv divestment.
Shareholder returns and outlook
Reflecting the company’s improved financial position, the Board of Directors will propose a dividend of SEK 3.00 per share for 2025, up from SEK 2.85, alongside a share buyback program of SEK 15.0 billion, subject to approval at the Annual General Meeting.
Commenting on the results, President and CEO Börje Ekholm highlighted the company’s strategic progress, noting that fourth-quarter performance demonstrated solid execution of Ericsson’s priorities. He emphasized that organic growth was achieved despite a flat RAN market, driven by advances in mission-critical networks, 5G core, and enterprise solutions. Ekholm also pointed to the ninth consecutive quarter of year-over-year adjusted EBITA margin expansion, underscoring the impact of operational actions taken in recent years.
Ericsson continued to invest heavily in research and development to strengthen its technology leadership, with a focus on AI-native, secure, and autonomous mobile networks. Strong free cash flow generation and a robust balance sheet further support these investments.
Looking ahead to 2026, Ericsson expects the RAN market to remain flat. However, mission-critical and enterprise markets are forecast to grow, areas where the company believes it is well positioned. In this context, Ericsson plans to increase investments in defense during 2026 while continuing to optimize its cost base to support margins and sustained cash flow generation.
* Organic growth adjusted for currency effects.
* Sales adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations.
[1] Adjusted metrics exclude restructuring charges.
| SEK b. | Q4 2025 | Q4 2024 | YoY change | Q3 2025 | QoQ change | Jan-Dec 2025 | Jan-Dec 2024 | YoY change |
| Net sales | 69.285 | 72.913 | -5% | 56.239 | 23% | 236.681 | 247.880 | -5% |
| Organic sales growth [1][2] | - | - | 6% | - | - | - | - | 2% |
| Gross income | 32.705 | 32.707 | 0% | 26.777 | 22% | 112.668 | 109.365 | 3% |
| Gross margin [2] | 47.2% | 44.9% | - | 47.6% | - | 47.6% | 44.1% | - |
| EBIT | 11.161 | 7.958 | 40% | 15.151 | -26% | 38.634 | 4.3 | - |
| EBIT margin [2] | 16.1% | 10.9% | - | 26.9% | - | 16.3% | 1.7% | - |
| EBITA [2] | 11.601 | 8.623 | 35% | 15.516 | -25% | 40.532 | 22.145 | 83% |
| EBITA margin [2] | 16.7% | 11.8% | - | 27.6% | - | 17.1% | 8.9% | - |
| Net income | 8.571 | 4.879 | 76% | 11.300 | -24% | 28.714 | 0.374 | - |
| EPS diluted, SEK | 2.57 | 1.44 | 78% | 3.33 | -23% | 8.51 | 0.01 | - |
| Free cash flow before M&A [2] | 14.853 | 15.824 | -6% | 6.631 | 124% | 26.769 | 40.034 | -33% |
| Net cash, end of period [2] | 61.236 | 37.830 | 62% | 51.858 | 18% | 61.236 | 37.830 | 62% |
| Adjusted financial measures [2][3] | ||||||||
| Adjusted gross income | 33.243 | 33.741 | -1% | 27.048 | 23% | 113.945 | 111.411 | 2% |
| Adjusted gross margin | 48.0% | 46.3% | - | 48.1% | - | 48.1% | 44.9% | - |
| Adjusted EBIT | 12.258 | 9.584 | 28% | 15.454 | -21% | 40.971 | 9.325 | - |
| Adjusted EBIT margin | 17.7% | 13.1% | - | 27.5% | - | 17.3% | 3.8% | - |
| Adjusted EBITA | 12.698 | 10.249 | 24% | 15.819 | -20% | 42.869 | 27.157 | 58% |
| Adjusted EBITA margin | 18.3% | 14.1% | - | 28.1% | - | 18.1% | 11.0% | - |
[1] Sales adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations.
[2] Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statement.
[3] Adjusted metrics exclude restructuring charges