Ericsson (ERIC) Q3 2026 earnings summary

Executive summary

• Q3 net sales were SEK 59.5bn, up 7% organically; adjusted EBITA margin was 17.0%, with growth led by Networks and solid demand in strategic markets.

• Organizational simplification was announced to strengthen customer focus, accountability and efficiency; cost-mitigation actions are underway.

Financial highlights

• Reported sales rose 6% to SEK 59.5bn; organic sales grew 7%. Adjusted gross income was SEK 28.4bn and adjusted gross margin was 47.7% versus 48.1% a year earlier.

• Adjusted EBITA was SEK 10.1bn, with a 17.0% margin versus 28.1%; Q3 2025 included a SEK 7.6bn iconectiv divestment gain.

• Net income was SEK 5.8bn versus SEK 11.3bn; diluted EPS was SEK 1.77 versus SEK 3.33.

• Free cash flow before M&A was SEK 4.9bn versus SEK 6.6bn, with higher inventories reflecting delivery timing and component prices.

• IPR revenue was SEK 3.9bn, partly from retroactive licensing for previously unlicensed periods; annual recurring licensing revenue was ~SEK 13.5bn.

Outlook and guidance

• Q4 Networks and Cloud Software and Services sales growth is expected to broadly follow three-year average seasonality; the outlook assumes USD/SEK 10.0 and EUR/SEK 11.3.

• Q4 Networks adjusted gross margin is expected at 49%–51%; restructuring charges are expected to remain elevated in 2026.

• Component costs are expected to pressure margins in coming quarters; 2027 may be a transition year as tactical measures give way to structural pricing and supply-chain actions.

• Cost pass-through depends on contract renewals; some impact is expected, but its scale and timing remain uncertain.