Ericsson reported Q4 2025 earnings per share of SEK 2.57, up 78% year-over-year, comfortably ahead of consensus estimates and driven by strong cost discipline. Although net sales fell 5% to SEK 69.3 billion, adjusted EBITA rose 24% to SEK 12.7 billion, lifting the adjusted EBITA margin to 18.3% from 14.1% a year earlier. Improved segment margins in Mobile Networks and a 12% surge in Cloud Software & Services underpinned a 48.0% adjusted gross margin, up 170 basis points on better operational execution and efficiency measures implemented during the year.

Net income climbed 76% to SEK 8.6 billion, while free cash flow before M&A reached SEK 14.9 billion, reflecting steady conversion despite a SEK –1.0 billion cash drag from working capital timing. At December 31, Ericsson held SEK 61.2 billion in net cash, up 62% year-over-year, and delivered 11.3% cash flow to net sales for the full year. The company’s debt-to-equity ratio stood at a conservative 0.43, and return on capital employed improved to 24.1%, bolstered by the iconectiv divestment gain.

Building on its solid cash position, Ericsson plans to return SEK 15.0 billion to shareholders through a proposed dividend of SEK 3.00 per share and a SEK 15.0 billion share buyback program. Concurrently, R&D spending remains a priority, with emphasis on AI-native, secure and autonomous mobile networks to sustain technology leadership. For 2026, management anticipates a flat RAN market, expects growth in mission-critical and enterprise segments, and intends to increase defense investments while maintaining tight cost control to support margins and free cash flow generation.