Ericsson delivered a Q4 2025 earnings beat, reporting adjusted EPS of $0.28 versus consensus of $0.23. Net income more than doubled year over year, rising from $545 million to $958 million, while EBITDA grew to $1.45 billion. Despite a 5% decline in revenues compared with Q4 2024, the company’s disciplined cost management drove earnings well ahead of analyst expectations.

The company closed the quarter with a net cash position of $2.59 billion and a debt-to-equity ratio of 0.43, underscoring a rock-solid balance sheet. Ericsson announced a total return of 15 billion Swedish crowns ($1.7 billion) to shareholders via an increased dividend and a share buyback program, following the divestiture of its U.S.-based iconectiv business.

Q4 marked the ninth consecutive quarter of year-over-year adjusted EBITA margin expansion, driven by streamlined operations and headcount reductions. Cost-cutting initiatives lifted gross margins by 320 basis points, while SG&A expenses fell by 8% year over year. These efficiencies offset regional market softness, particularly in North America, and underpinned robust free cash flow generation.

Ericsson continues to invest heavily in R&D, allocating 17% of revenues to development of AI-native, secure and autonomous 5G networks. The cloud software and services segment saw organic sales growth of 12% in the quarter, reflecting momentum in mission-critical network deployments. Management reiterated its full-year guidance for mid-single-digit organic sales growth and a further expansion of adjusted EBITA margins by 100–150 basis points.