Ericsson (ERIC) Q2 2026 earnings summary

Executive summary

• Adjusted gross margin rose to 48.4%, reflecting strong operational execution and improved margins in Mobile Networks and Cloud Software and Services.

• Net sales were SEK 52.7 billion, down 6% year-over-year, with organic sales declining 1% due to lower IPR licensing revenues.

• SEK 8.2 billion was returned to shareholders in Q2, including SEK 3.2 billion in share repurchases.

• CEO Börje Ekholm to retire September 30, 2026; Per Narvinger appointed as successor, ensuring a smooth leadership transition.

• Demonstrated AI-enabled drone sensing and tracking at a major sporting event, highlighting technology leadership.

Financial highlights

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

• Adjusted EBITA was SEK 6.9 billion (13.1% margin), down 7% year-over-year; reported EBITA was SEK 6.3 billion (11.9% margin).

• Net income was SEK 4.1 billion, down 12% year-over-year; diluted EPS was SEK 1.22.

• Free cash flow before M&A was SEK 0.4 billion, reflecting lower results and higher inventories ahead of planned Q3 deliveries.

• Net cash at period end was SEK 59.8 billion.

Outlook and guidance

• Networks sales growth in Q3 2026 expected to exceed 3-year average seasonality; adjusted gross margin forecasted at 48–50%.

• Cloud Software and Services sales growth in Q3 2026 expected to align with historical seasonality.

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

• Elevated restructuring charges anticipated for 2026, with a large portion already incurred in H1.

• Macroeconomic and geopolitical uncertainty remains high.