Ericsson (ERIC) Q2 2026 earnings summary

Executive summary

• Net sales were SEK 52.7 billion, down 6% year-on-year; organic sales declined 1%, or grew 1% excluding the prior-year IPR settlement.

• Adjusted gross margin rose to 48.4% from 48.0%, while adjusted EBITA was SEK 6.9 billion at a 13.1% margin.

• SEK 8.2 billion was returned to shareholders, including SEK 3.2 billion in share repurchases.

• Per Narvinger was appointed CEO successor to Börje Ekholm, who will retire September 30, 2026.

• AI-enabled drone sensing and tracking was demonstrated at a major sporting event.

Financial highlights

• Net income was SEK 4.1 billion, down from SEK 4.6 billion year-on-year; diluted EPS was SEK 1.22.

• Adjusted gross income was SEK 25.5 billion, down 5%; reported gross income was SEK 24.1 billion.

• Reported EBITA was SEK 6.3 billion at an 11.9% margin; adjusted EBITA was down 7% year-on-year.

• Free cash flow before M&A was SEK 0.4 billion, versus SEK 2.6 billion a year earlier, reflecting lower results and higher inventories.

• Net cash was SEK 59.8 billion at quarter-end, down SEK 8.3 billion sequentially following dividends and share repurchases.

Outlook and guidance

• Networks Q3 2026 sales growth expected above three-year average seasonality; adjusted gross margin forecast at 48%-50%.

• Cloud Software and Services Q3 sales growth expected to be broadly in line with historical seasonality.

• IPR licensing revenues expected to benefit from new agreements, with annualized recurring revenues at SEK 13.5 billion.

• Restructuring charges expected to remain elevated in 2026, with a large portion incurred in H1.

• Macroeconomic and geopolitical uncertainty remains elevated; input cost impacts are expected to build in coming quarters.