Ericsson reported 7% organic sales growth for the third quarter, driven by increased demand for mobile network equipment. However, the Swedish manufacturer’s adjusted operating profit fell sharply compared with the same period last year. This is primarily due to one-time revenue in 2025.
Revenue rose to about 5.5 billion euros last quarter, up from 5.2 billion euros a year ago. Adjusted EBITA fell from approximately 1.46 billion euros to 930 million euros. The margin declined from 28.1 to 17 percent. However, a one-time book gain of approximately 700 million euros in the third quarter of 2025 skews the picture. Without that gain, adjusted operating profit would actually have risen this year. Net income fell from approximately 1.04 billion euros to 535 million euros. Ericsson generated approximately 450 million euros in free cash flow, excluding mergers and acquisitions.
Ericsson made it clear that its sales success is partly due to customers investing in modernizing their networks and mission-critical infrastructure.
According to Per Narvinger, Ericsson’s CEO, telecom operators are increasingly seeking intelligent, autonomous networks that deliver better performance at lower operating costs. Ericsson is already providing AI-based features in its customers’ networks. The company says these lead to efficiency improvements for customers.
Corporate restructuring
During its quarterly results presentation, Ericsson also announced plans to simplify the organization’s structure. The changes are intended to lead to faster decision-making and lower operating costs.
Despite strong sales results, the manufacturer remains cautious about market conditions. Ericsson expects the radio access network (RAN) market to remain flat. Higher component costs could put pressure on gross margins in 2027. Nevertheless, the supplier expects its portfolio strength and planned efficiency measures to enable profitable growth in the long term.
Despite strong sales results, the manufacturer remains cautious about market conditions. Ericsson expects the radio access network (RAN) market to remain flat. Higher component costs could put pressure on gross margins in 2027. Nevertheless, the supplier expects its portfolio strength and planned efficiency measures to enable profitable growth in the long term.