Ericsson delivered a robust fourth quarter, with net sales of SEK 69.3 billion, a 5% year-on-year decline driven by currency headwinds, but revenue beat consensus expectations. Diluted earnings per share rose to SEK 2.57 from SEK 1.44 a year earlier, a 78% increase, while net income climbed to SEK 8.6 billion from SEK 4.9 billion. Adjusted EBITA reached SEK 12.7 billion, representing an 18.3% margin versus 14.1% in Q4 2024, fueled by operational efficiencies across Mobile Networks and Cloud Software & Services.

Operational improvements lifted adjusted gross margin to 48.0% from 46.3%, with reported gross margin at 47.2% versus 44.9% a year ago. The company generated free cash flow before M&A of SEK 14.9 billion, only marginally below the SEK 15.8 billion of Q4 2024, underscoring disciplined working-capital management and cost controls. This marks the ninth consecutive quarter of year-on-year adjusted EBITA margin expansion, reflecting successful execution of restructuring and productivity programs.

Ericsson closed the quarter with net cash of SEK 61.2 billion, up 62% year-on-year, underscoring a rock-solid balance sheet. In January the board proposed a dividend of SEK 3.00 per share for 2025 and a SEK 15 billion share buyback program, funded in part by the recent sale of the U.S.-based Iconectiv business. These actions reflect management’s commitment to returning excess capital to shareholders while preserving financial flexibility.

Looking ahead to 2026, Ericsson expects the RAN market to remain flat, with growth in mission-critical and enterprise segments. The company plans to increase R&D investment in AI-native, secure and autonomous mobile networks, as well as defense networks, while continuing to optimize its cost base. Management reiterated guidance that operational execution and targeted investments will support margin expansion and sustained free cash flow generation throughout the year.