Regardless of a 9% income drop, Ericsson’s revenue and margins surged
In sum – what to know:
Profitability surged regardless of income decline – Internet gross sales fell 9% to ~$5.12 billion, however adjusted EBITA doubled to ~$1.44 billion, boosted by price efficiencies and a ~$693 million acquire from the iconectiv sale.
Stronger margins and stability sheet – Gross margin climbed to 47.6%, web revenue almost tripled to ~$1.03 billion, and web money greater than doubled yr over yr to ~$4.72 billion.
Strategic positioning for 5G/6G period – Ericsson highlighted new offers in Japan and emphasised programmable networks as important for operators transitioning to 5G standalone and future 6G deployments.
Ericsson on Tuesday reported strong third-quarter and year-to-date outcomes, pushed by improved margins and a considerable capital acquire, at the same time as gross sales had been weighed down by forex headwinds and tender demand in sure geographies.
In Q3 2025, the Swedish telecom tools big recorded web gross sales of roughly $5.12 billion, down 9% from about $5.62 billion in the identical quarter a yr earlier. Natural gross sales — adjusted for forex results and acquisitions/divestments — fell 2%.
Adjusted EBITA rose to about $1.44 billion, with a margin of 28.1%, together with a 7.6 billion Swedish kronor ($799.5 million) capital acquire profit from the divestment of iconectiv. Reported EBITA was about $1.41 billion, with a 27.6% margin. Internet revenue for the quarter got here in at roughly $1.03 billion, roughly tripling the $355 million posted within the prior yr interval, whereas diluted earnings per share had been $0.30 (versus $0.10).
Ericsson’s gross margin additionally improved meaningfully — reported gross margin climbed to 47.6%, from 45.6% a yr in the past. Adjusted gross margin stood at 48.1%. The margin beneficial properties had been pushed by price reductions, operational effectivity measures, and efficiency enhancements in its Networks and Cloud Software program & Providers segments. In the meantime, analysis & improvement and SG&A prices had been trimmed, partly offset by continued investments in tech management.
On the stability sheet and money circulation entrance, Ericsson ended the quarter with web money of about $4.72 billion, up from $2.32 billion a yr earlier. Free money circulation earlier than M&A got here in at $600 million, down from $1.17 billion a yr earlier, because of working capital timing and diminished working money circulation. Gross money rose sequentially to about $8.04 billion, supported by proceeds from the iconectiv transaction.
Section-wise, Ericsson noticed divergent tendencies:
- Networks gross sales dipped (–11% reported) however margins improved, aided by prior price actions.
- Cloud Software program & Providers delivered more healthy progress — gross sales up ~3% (9% natural) — with margin growth.
- Enterprise remained below stress: gross sales fell ~20%, reflecting the divestment of iconectiv and continued buyer warning.
Geographically, Europe, the Center East, and Africa grew modestly; North East Asia noticed robust demand (particularly in Japan); the Americas and India confronted softness.
CEO Börje Ekholm described the quarter as a “milestone” in establishing a brand new margin baseline:
“In Q3, we established margins at a brand new long-term stage following robust operational execution over the previous few years … Our stable progress on expertise initiatives continues. Gartner and Omdia reconfirmed our 5G options are industry-leading … Strong recurring money circulation and the iconectiv sale contributed to a robust Q3 money place.”
He added that looking forward to This fall, the corporate expects enterprise natural gross sales to stabilize and for the RAN market to stay steady.
On the investor name, Ekholm famous that the corporate has been “laser centered [ed]” on strategic and operational priorities. “Our robust outcomes are a mirrored image of the actions we’ve taken to structurally enhance our enterprise previously few years … embrace[ing] each the work we’ve achieved to enhance our price base and the way in which we run the enterprise with higher operational effectivity and business self-discipline. The outcomes of those efforts are actually clearly seen,” he stated.
Ekholm additionally emphasised the significance of high-performing programmable networks as operators transition to standalone 5G and, finally, 6G. He highlighted new agreements in Japan — together with an expanded function in SoftBank’s 5G standalone community — as proof of Ericsson’s rising market share and strategic positioning for future progress. “Total … we proceed to have good discussions with all our clients in Japan,” he added.
In sum, Ericsson’s third quarter underscores the agency’s potential to drive margin growth and money energy — even amid tender demand and forex pressures — by combining portfolio optimization, disciplined price administration, and selective divestitures.
