Ericsson (ERIC) Q1 2026 earnings summary

Executive summary

• Q1 2026 delivered 6% organic sales growth across all segments, with stable margins, despite a 10% decline in reported sales due to significant currency headwinds and divestments.

• Strategic focus on reducing geographic dependency, strengthening technology leadership, and improving supply chain resilience supported diversified growth and stable operations amid macro and geopolitical uncertainty.

• Net income fell to SEK 0.9 billion from SEK 4.2 billion YoY, mainly due to SEK 3.8 billion in restructuring charges and adverse currency effects.

• Cash flow remained strong, with free cash flow before M&A at SEK 5.9 billion and net cash position increasing to SEK 68.1 billion.

• The board approved an increased dividend and a SEK 15 billion share buyback program, commencing April 23, 2026.

Financial highlights

• Net sales for Q1 were SEK 49.3 billion, down 10% YoY due to SEK 7.8 billion negative currency impact, but organic sales grew 6% YoY.

• Adjusted gross margin was 48.1%, with adjusted EBITDA/EBITA margin at 11.3%, both impacted by currency and divestments.

• Net income was SEK 0.9 billion, down from SEK 4.2 billion YoY, with diluted EPS at SEK 0.27.

• Free cash flow before M&A was SEK 5.9 billion, up from SEK 2.7 billion YoY.

• Gross cash: SEK 99.5 billion; net cash: SEK 68.1 billion at period end.

Outlook and guidance

• Q2 outlook assumes no tariff changes and stable exchange rates; Networks sales growth expected to follow three-year average seasonality, while Cloud Software and Services should exceed it.

• Networks adjusted gross margin guided at 49%-51% for Q2.

• Elevated restructuring charges for 2026 anticipated, with a significant portion already incurred in Q1.

• RAN market expected to remain flat; company aims to outpace mobile networks market growth.