Ericsson reported solid fourth-quarter and full-year 2025 results, underpinned by strong operational execution, improved margins, and continued commercial momentum across key segments, despite currency headwinds and a largely flat global RAN market.
In the fourth quarter, Ericsson recorded 6% organic year-on-year sales growth, with all three business segments contributing. Cloud software and services led performance, delivering 12% organic growth, while networks and enterprise also posted gains. Sales growth was driven primarily by Europe, the Middle East and Africa, as well as South East Asia, Oceania and India, while the Americas remained broadly stable and North East Asia declined.
2025 Q4 Financial Overview
Reported Q4 sales stood at SEK 69.3 billion, compared to SEK 72.9 billion a year earlier. Adjusted gross margin improved to 48.0%, up from 46.3%, reflecting strong operational execution and margin improvements in cloud software and services. Adjusted EBITA rose to SEK 12.7 billion, with a margin of 18.3%, marking the ninth consecutive quarter of year-on-year adjusted EBITA margin expansion. Net income more than doubled to SEK 8.6 billion, while diluted earnings per share increased to SEK 2.57. Free cash flow before M&A amounted to SEK 14.9 billion.
2025 Full-Year Financial Overview
For the full year (2025), Ericsson achieved 2% organic sales growth, driven by networks and cloud software and services. Reported sales totaled SEK 236.7 billion. Adjusted gross margin strengthened to 48.1%, up from 44.9%, despite a SEK 7.2 billion currency headwind. Adjusted EBITA reached SEK 42.9 billion, corresponding to an 18.1% margin, supported by improved mobile networks performance and the gain from the divestment of iconectiv.
Full-year net income surged to SEK 28.7 billion, compared to SEK 0.4 billion in 2024, while diluted EPS rose to SEK 8.51. Free cash flow before M&A was SEK 26.8 billion, delivering a cash flow to net sales of 11.3%. Net cash at year-end increased to SEK 61.2 billion, and return on capital employed reached 24.1%, benefiting from the iconectiv divestment.
As a result of its strong financial position, Ericsson’s Board of Directors will propose a dividend of SEK 3.00 per share for 2025, up from SEK 2.85, along with a SEK 15.0 billion share buyback program, subject to shareholder approval at the Annual General Meeting.
2026 Trajectory
Commenting on the results, Börje Ekholm, President and CEO of Ericsson, said:
“Our Q4 results demonstrate solid execution of our strategy priorities. It is encouraging that we delivered organic growth in a flattish RAN market environment through our efforts in mission-critical networks, 5G core, and enterprise. The operational actions we have taken in recent years have resulted in improved margins and cash flow, with a ninth consecutive quarter of year-over-year adjusted EBITA margin expansion.”
Looking ahead, Ericsson expects the RAN market to remain flat in 2026, while mission-critical and enterprise markets are forecast to grow. The company plans to increase investments in defense during the year, while continuing to focus on margin protection and cash flow generation.
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