Johannesburg: AfricUpdate – News Desk
Ericsson has reported a solid performance for the third quarter of 2025, marked by stronger profitability, improved operational efficiency, and greater financial flexibility. The company highlighted significant progress in strengthening its commercial momentum with key customer agreements secured across major markets, including India, Japan, and the United Kingdom. These wins, combined with ongoing efficiency measures and strategic cost optimizations, contributed to sustained margin improvements and operational resilience.
During the quarter, Ericsson’s 5G leadership was once again recognized by leading industry analysts Gartner and Omdia, both of which reaffirmed the company’s position at the forefront of technology innovation. The company’s Open RAN-ready 5G portfolio, featuring an AI-based and hardware-agnostic software architecture, continues to set a benchmark in flexibility and performance. The portfolio allows integration with third-party radio systems and supports both Ericsson’s proprietary silicon and external CPU and GPU technologies, offering customers a future-proof, interoperable network foundation.
Financially, Ericsson reported net sales of SEK 56.2 billion for the third quarter, compared with SEK 61.8 billion in the same period last year. The year-on-year decline of 9% was mainly due to a negative currency impact of SEK 4.2 billion, though organic sales fell by only 2%, with growth achieved in three of the company’s four market areas. The adjusted gross margin improved to 48.1% from 46.3%, reflecting stronger profitability within the Networks and Cloud Software and Services divisions. Reported gross margin stood at 47.6%, up from 45.6% a year earlier.
Adjusted EBITA more than doubled to SEK 15.8 billion from SEK 7.8 billion in the third quarter of 2024, corresponding to a margin of 28.1% compared to 12.6% a year earlier. The figure included a SEK 7.6 billion gain from the sale of iconectiv, which supported the company’s improved earnings performance. Reported EBITA reached SEK 15.5 billion, translating to a 27.6% margin. Net income rose sharply to SEK 11.3 billion, compared with SEK 3.9 billion a year earlier, while earnings per share after dilution increased to SEK 3.33 from SEK 1.14.
Free cash flow before mergers and acquisitions totaled SEK 6.6 billion, while Ericsson’s net cash position strengthened significantly to SEK 51.9 billion, more than double the SEK 25.5 billion recorded in the same quarter last year. This solid cash position gives the company increased financial flexibility and the capacity to return value to shareholders. Operationally, the company continues to deliver on its strategic priorities. Sales within Cloud Software and Services grew by 9%, driven by strong demand in core networks.
The company also continued to enhance efficiency across its operations, resulting in sustainable margin improvements and a stable foundation for future growth. Looking ahead, Ericsson expects sales within its Enterprise segment to stabilize in the fourth quarter, while the global RAN market is forecast to remain broadly steady. The company’s strong cash generation, along with proceeds from the divestment of iconectiv, has reinforced its balance sheet.
The Board of Directors will provide recommendations on the scale and form of shareholder returns in the fourth-quarter report, to be presented at the Annual General Meeting. Overall, the third quarter of 2025 marked a period of financial and operational strength for Ericsson. The company’s focused execution on strategy, continued investment in next-generation technology, and disciplined cost management have lifted margins to a new, sustainable level. With a solid financial position and a clear pathway for growth, Ericsson enters the next phase of its transformation with renewed confidence and resilience.
