Ericsson Delivers Strong Profitability and Margin Growth in Q3 2025
Ericsson has reported a robust performance for the third quarter of 2025, showcasing stronger profitability, improved operational efficiency, and greater financial flexibility. The Swedish telecoms giant secured key customer agreements across major markets. including India, Japan, and the United Kingdom, underscoring its commercial momentum and leadership in next-generation network technologies.
Strong Financial Performance and Margin Expansion
During Q3 2025, Ericsson’s 5G leadership continued to receive global recognition, with Gartner and Omdia reaffirming the company’s position as an industry frontrunner in telecom technology innovation.
Ericsson’s Open RAN-ready 5G portfolio, built on an AI-driven, hardware-agnostic architecture , continues to set the standard for flexibility and performance. The portfolio enables seamless integration with third-party radio systems and supports both Ericsson’s proprietary silicon and external CPU/GPU technologies, providing a future-proof, interoperable network foundation.
Financially, Ericsson reported net sales of SEK 56.2 billion for Q3 2025, compared to SEK 61.8 billion in the same period last year, a 9% year-on-year decline primarily due to a negative currency impact of SEK 4.2 billion. However, organic sales dipped by only 2%, with growth recorded in three out of four of the company’s market areas.
The adjusted gross margin improved to 48.1% from 46.3%, reflecting enhanced profitability within the Networks and Cloud Software and Services divisions. The reported gross margin also rose to 47.6%, compared with 45.6% a year earlier.
EBITA and Net Income Surge
Ericsson achieved a remarkable increase in adjusted EBITA, which more than doubled to SEK 15.8 billion from SEK 7.8 billion in Q3 2024 , representing a 28.1% margin compared with 12.6% the previous year.
This figure included a SEK 7.6 billion gain from the sale of iconectiv, which supported the company’s improved earnings performance. Reported EBITA reached SEK 15.5 billion, translating to a 27.6% margin.
Net income rose sharply to SEK 11.3 billion, compared to SEK 3.9 billion a year earlier, while earnings per share (EPS) after dilution increased to SEK 3.33, up from SEK 1.14.
Ericsson also generated free cash flow before mergers and acquisitions totaling SEK 6.6 billion, with its net cash position strengthening significantly to SEK 51.9 billion, more than double the SEK 25.5 billion recorded in Q3 2024. This improvement provides the company with enhanced financial flexibility and capacity to return value to shareholders.
Operational Efficiency and Strategic Progress
Operationally, Ericsson continues to deliver on its strategic priorities, focusing on sustainable growth and efficiency. The Cloud Software and Services division reported 9% growth, driven by strong demand for core network solutions.
The company’s efficiency programs and strategic cost optimizations have contributed to lasting margin improvements, strengthening Ericsson’s foundation for future profitability and competitiveness.
Outlook: Stability and Shareholder Returns
Looking ahead, Ericsson expects its Enterprise segment to stabilize in Q4 2025, while the global RAN market is forecast to remain broadly steady. The company’s strong cash generation, supported by proceeds from the iconectiv divestment, has reinforced its balance sheet.
The Board of Directors plans to announce recommendations on shareholder returns in the Q4 report, which will be presented at the Annual General Meeting (AGM).
A Confident Path Forward
Overall, the third quarter of 2025 marked a period of financial and operational strength for Ericsson. With disciplined cost management, continued investment in next-generation technologies, and a clear strategic vision, the company has lifted margins to a sustainable new level.
As Ericsson enters the next phase of its transformation, it remains focused on innovation, efficiency, and resilience, ensuring long-term value creation for customers, shareholders, and partners across global markets.
