Revenue came in at roughly SEK 53–54 billion, flat to slightly down year over year (-1% to -2%), and slightly missed consensus estimates, reflecting continued weakness in North America despite steadier trends in other regions. Adjusted operating profit was around SEK 4.5–5.0 billion, down mid-single digits y-o-y, with EPS also coming in below expectations due to margin pressure. Gross margin declined to the low-40% range, compared with the mid-40s a year earlier, driven by higher component costs and an unfavorable regional mix.
Operationally, the Networks segment remained the primary driver but slowed, while other segments offered limited offset. Cost controls and efficiency measures provided some support, though not enough to fully counter softer demand.
For FY 2026, the company expects the global radio access network (RAN) market to remain roughly flat in 2026, reflecting a pause in telecom operator spending following the initial 5G rollout cycle. Growth is expected to come from enterprise connectivity, mission-critical networks, and 5G core solutions, areas where Ericsson believes it has stronger positioning and higher software content. Management also indicated it will increase investment in defense-related communications and continue R&D in AI-driven and autonomous networks, while maintaining a focus on cost optimization to support margins and cash flow. In parallel, Ericsson plans to continue workforce reductions and operational efficiency initiatives to protect profitability in a slow infrastructure spending environment.
Below are key drivers of Ericsson's value that present opportunities for upside or downside to the current Trefis price estimate:
For additional details, select a driver above or select a division from the interactive Trefis split for Ericsson at the top of the page.
Sweden-based Ericsson provides communication infrastructure, services, and software solutions to the telecom and other sectors. It operates through four segments: Networks, Cloud Software and Services, Enterprise, and Other.
Ericsson's value is primarily driven by its global leadership in mobile network infrastructure and its long-standing relationships with telecom operators.
Ericsson is one of the largest suppliers of mobile network equipment globally, competing primarily with Nokia and Huawei. The company has a large installed base of telecom operators across North America, Europe, and Asia, giving it recurring upgrade opportunities as operators transition from 4G to 5G and eventually to 5G Advanced networks.
In addition to hardware equipment, Ericsson generates revenue from software platforms, network management solutions, and cloud-native telecom services. These offerings typically carry higher margins and provide recurring revenue streams, improving overall profitability and resilience across telecom investment cycles.
Ericsson owns a substantial portfolio of wireless patents related to cellular technologies such as 4G and 5G. Licensing revenue from these patents provides high-margin income and benefits from the global expansion of connected devices and mobile networks.
The telecommunications industry continues to invest in 5G infrastructure, although spending growth has moderated following the initial rollout phase. Ericsson expects further network upgrades, including 5G standalone deployments and 5G Advanced capabilities, to drive long-term demand for its network equipment and software solutions.
Ericsson has undertaken significant restructuring initiatives to reduce its cost base and improve profitability. These actions include workforce reductions, operational consolidation, and improved supply chain efficiency. The company has already achieved notable margin improvements as a result of these measures.
Ericsson is expanding beyond telecom operators into enterprise networking markets through private 5G networks, programmable network APIs, and industrial connectivity solutions. These initiatives aim to diversify revenue streams and capture opportunities from enterprise digital transformation and the growing adoption of connected devices.
