Ericsson Q3 2026 Market Insight Briefing
NextGComm Telecom Market Intelligence · 24 October 2026
1. Executive Summary
- Growth is back on a strong quarter. ReportedNet sales were SEK 59.5b (56.2b), +6% reported and +7% organic. Organic growth came in all three segments and in three of four market areas; only Americas declined (-1%). Management framed it as “executing well in a challenging environment”.
- Underlying profitability improved. ReportedAdjusted gross margin was 47.7% (48.1%), broadly stable. Adjusted EBITA was SEK 10.1b (15.8b), a 17.0% margin (28.1%). The prior-year quarter included a SEK 7.6b iconectiv divestment gain; excluding it, EBITA rose, and opex excluding restructuring fell about SEK 0.7b.
- Networks was the engine. ReportedSales SEK 38.7b (+9%), adjusted gross margin 50.3% (50.1%) and adjusted EBITA margin 23.1% (20.3%). Drivers: share gains in strategic markets such as Japan, some customers pulling spend forward ahead of price increases, well-executed near-term actions, and retroactive IPR revenue.
- Component costs are the 2027 story. Q&AManagement flagged 2027 as a possible transition year. Without mitigation, margin dilution would be significant (no figure given). Tactical actions are working now; structural actions (portfolio, pricing, supply chain, efficiency) phase in as 3–5-year frame agreements renew.
- Cash and returns stay solid. ReportedFree cash flow before M&A was SEK 4.9b (6.6b); rolling four-quarter FCF is 11% of sales, inside the 9–12% target. Net cash rose to SEK 60.7b and gross cash reached SEK 98b, including a EUR 500m bond. Q3 share repurchases were SEK 4.8b (SEK 4.5b cash outflow); about SEK 8b returned via buybacks year to date, plus about SEK 5b in dividends.
- Q4 guidance. GuidanceNetworks and Cloud Software & Services sales broadly in line with 3-year average seasonality (Q3 to Q4: +17% and +29%). Networks adjusted gross margin 49–51%. Restructuring charges for 2026 elevated (SEK 5.3b year to date). Assumes USD:SEK 10.0 and EUR:SEK 11.3.
- Simpler organisation from January. ReportedA new Asia-Pacific market area (North East Asia + South East Asia, Oceania & India); Enterprise Wireless Solutions dissolved as a business area, with neutral host and private 5G (EP5G) moving to Networks; Cradlepoint stays standalone in Enterprise; a leaner Executive Team.
- AI is live in networks today. ReportedAI-native link adaptation gives about 10% spectral efficiency gain and is commercially deployed with 3 operators on more than 60,000 base stations, running on Ericsson’s own silicon. Most of the portfolio is planned to be 6G-upgradable.
- What it means for operators. NextGComm viewExpect vendor price increases to arrive through contract renewals from 2027, and expect AI features to be priced on spectrum value. Use the 2026–27 renewal window to negotiate price-protection and performance-linked terms.
SEK 59.5bNet sales+7% organic · +6% reported
47.7%Adj. gross margin48.1% in Q3 2025
17.0%Adj. EBITA margin28.1% incl. SEK 7.6b gain a year ago
SEK 4.9bFCF before M&ARolling 4Q: 11% of sales
SEK 60.7bNet cashGross cash SEK 98.0b
SEK 1.77Diluted EPSSEK 3.33 incl. SEK 1.72 gain
2. Q3 2026 Performance Snapshot
Higher Networks sales drove a strong quarter, but rising component costs are expected to pressure gross margin in 2027. ‘Adjusted’ metrics exclude restructuring charges; organic growth adjusts for acquisitions, divestments and currency.
+7%Organic sales growthAll three segments grew
SEK 28.4bAdj. gross income27.0b; reported 28.0b (26.8b)
SEK 10.1bAdj. EBITA15.8b; reported 9.2b (15.5b)
SEK 5.8bNet income11.3b; includes restructuring
SEK 0.9bRestructuring charges0.3b a year ago
85,417Employees86,536 at 30 Jun 2026
Group headline results (SEK b.)
Q3 2026 vs Q3 2025 and Q2 2026. Prior-year EBITA and net income include the SEK 7.6b iconectiv gain.
Margins (%)
Adjusted margins exclude restructuring charges
Seven-quarter trend
Group net sales (SEK b.) with adjusted EBITA margin; Q3 2025 margin includes the iconectiv gain
Group headline results
- ReportedNet sales SEK 59.5b against 56.2b: +6% reported, +7% organic, driven by solid demand in strategic markets and effective commercial execution, including near-term actions.
- ReportedAdjusted gross income SEK 28.4b (27.0b), adjusted gross margin 47.7% (48.1%), broadly stable. The increase came from higher Networks (Mobile Networks) sales; component cost increases hit the cost side, mostly in Networks. Networks margin rose with retroactive IPR; Enterprise margin was lower after the iconectiv divestment; Cloud Software & Services margin was stable.
- ReportedReported gross margin 47.1% (47.6%), reflecting higher restructuring charges and the iconectiv divestment; reported gross income SEK 28.0b (26.8b).
- ReportedOpex excluding restructuring fell about SEK 0.7b year on year (SEK 18.7b vs 19.3b). Cost-reduction actions are offsetting wage pressure. R&D expenses were SEK -11.8b (-11.5b) including SEK -0.3b restructuring; SG&A was SEK -7.4b (-7.9b) including SEK -0.3b (-0.1b) restructuring, with the largest reduction in Enterprise.
- ReportedOther operating income and expenses SEK 0.1b (7.7b); the prior year included the SEK 7.6b iconectiv capital gain.
- ReportedAdjusted EBITA SEK 10.1b (15.8b), 17.0% margin (28.1%). Excluding the prior-year gain, EBITA increased; gross income rose SEK 1.2b while opex fell SEK 0.2b (reported basis). Management said the quarter shows the operating leverage of higher sales and cost discipline. Reported EBITA SEK 9.2b (15.5b), 15.5% (27.6%).
- ReportedEBIT SEK 8.9b (15.2b), 14.9% margin; adjusted EBIT SEK 9.8b (15.5b), 16.4%. Amortization stable at SEK -0.4b.
- ReportedRestructuring charges SEK -0.9b (-0.3b): SEK -0.4b in gross income, SEK -0.5b in operating expenses.
- ReportedFinancial net SEK -0.9b (-0.2b), hit by provisions for interest expenses linked to the resolution of tax matters and a SEK -0.2b (-0.1b) currency hedge effect. Taxes SEK -2.2b (-3.6b).
- ReportedNet income SEK 5.8b (11.3b); diluted EPS SEK 1.77 (3.33). Prior-year EPS included a SEK 1.72 per share divestment gain.
- ReportedFree cash flow before M&A SEK 4.9b (6.6b), driven by earnings but reduced by higher inventories.
- ReportedEmployees: 85,417 on 30 September 2026, versus 86,536 on 30 June 2026 and 89,898 a year earlier.
View the full group data table
| SEK b. | Q3 2026 | Q3 2025 | YoY | Q2 2026 | QoQ | Jan-Sep 2026 | Jan-Sep 2025 | YoY |
|---|---|---|---|---|---|---|---|---|
| Net sales | 59.5 | 56.2 | 6% | 52.7 | 13% | 161.5 | 167.4 | -4% |
| Organic sales growth | - | - | 7% | - | - | - | - | 4% |
| Gross income | 28.0 | 26.8 | 5% | 24.1 | 16% | 75.4 | 80.0 | -6% |
| Gross margin | 47.1% | 47.6% | - | 45.8% | - | 46.7% | 47.8% | - |
| EBIT | 8.9 | 15.2 | -41% | 5.9 | 50% | 16.2 | 27.5 | -41% |
| EBIT margin | 14.9% | 26.9% | - | 11.2% | - | 10.0% | 16.4% | - |
| EBITA | 9.2 | 15.5 | -41% | 6.3 | 47% | 17.3 | 28.9 | -40% |
| EBITA margin | 15.5% | 27.6% | - | 11.9% | - | 10.7% | 17.3% | - |
| Net income | 5.8 | 11.3 | -49% | 4.1 | 42% | 10.8 | 20.1 | -47% |
| EPS diluted, SEK | 1.77 | 3.33 | -47% | 1.22 | 45% | 3.24 | 5.94 | -45% |
| Free cash flow before M&A | 4.9 | 6.6 | -26% | 0.4 | - | 11.2 | 11.9 | -6% |
| Net cash, end of period | 60.7 | 51.9 | 17% | 59.8 | 1% | 60.7 | 51.9 | 17% |
| Adjusted gross income | 28.4 | 27.0 | 5% | 25.5 | 11% | 77.6 | 80.7 | -4% |
| Adjusted gross margin | 47.7% | 48.1% | - | 48.4% | - | 48.0% | 48.2% | - |
| Adjusted EBIT | 9.8 | 15.5 | -37% | 6.5 | 50% | 21.5 | 28.7 | -25% |
| Adjusted EBIT margin | 16.4% | 27.5% | - | 12.4% | - | 13.3% | 17.2% | - |
| Adjusted EBITA | 10.1 | 15.8 | -36% | 6.9 | 47% | 22.6 | 30.2 | -25% |
| Adjusted EBITA margin | 17.0% | 28.1% | - | 13.1% | - | 14.0% | 18.0% | - |
| R&D expenses | -11.8 | -11.5 | 3% | -10.5 | 13% | -35.8 | -35.8 | 0% |
| Selling & administrative expenses | -7.4 | -7.9 | -6% | -7.7 | -4% | -23.3 | -24.7 | -6% |
| Other operating income & expenses | 0.1 | 7.7 | -99% | 0.1 | 4% | 0.2 | 7.8 | -97% |
| Financial income & expenses, net | -0.9 | -0.2 | - | -0.2 | - | -1.3 | -0.3 | - |
| Income tax | -2.2 | -3.6 | -41% | -1.7 | 30% | -4.2 | -7.1 | -41% |
| Restructuring charges | -0.9 | -0.3 | 195% | -0.6 | 49% | -5.3 | -1.2 | - |
Year to date (January–September)
Jan–Sep 2026 vs Jan–Sep 2025 (SEK b.)
Reported sales -4% including a SEK -9.6b currency impact; organic +4%
- ReportedReported sales SEK 161.5b (167.4b), -4%, including a negative currency impact of SEK -9.6b. Networks SEK 104.7b (106.8b), -2%; Cloud Software & Services SEK 42.4b (42.7b), -1%; Enterprise SEK 13.2b (16.5b), -20%, including a SEK -2.7b impact from the iconectiv divestment.
- ReportedOrganic sales +4%: Networks +4%, Cloud Software & Services +4%, Enterprise +3%. Three of four market areas grew; Americas declined slightly on high prior-year deliveries in North America. IPR licensing revenues SEK 10.4b (11.2b), as the prior year had more revenue from previously unlicensed periods.
- ReportedGross income SEK 75.4b (80.0b), hit by lower sales, a SEK -4.7b currency effect and restructuring of SEK -2.2b (-0.7b); gross margin 46.7% (47.8%). Adjusted gross income SEK 77.6b (80.7b), 48.0% (48.2%): stable in Networks, higher in Cloud Software & Services, lower in Enterprise mainly due to iconectiv.
- ReportedEBITA SEK 17.3b (28.9b), 10.7% (17.3%), impacted by lower sales, restructuring, the iconectiv divestment and a SEK -2.9b currency effect. Adjusted EBITA SEK 22.6b (30.2b), 14.0% (18.0%). EBIT SEK 16.2b (27.5b), 10.0%; adjusted EBIT SEK 21.5b (28.7b), 13.3%. Amortization SEK -1.1b (-1.5b).
- ReportedNet income SEK 10.8b (20.1b), including restructuring charges of SEK -5.3b (-1.2b). Diluted EPS SEK 3.24 (5.94).
3. Market Areas
Organic sales growth by market area
Q3 2026 and year to date, year on year
Where the money comes from
Net sales by market area (SEK b.)
Top five countries (% of net sales)
Americas: -1% organic
ReportedNorth America grew slightly, supported by project phasing; Latin America was lower, mainly on the timing of rollout services. Networks declined slightly. Cloud Software & Services grew on accelerated project deliverables. Reported sales stable at SEK 19.8b.
Europe, Middle East & Africa: +4%
ReportedNetworks grew in the Middle East on modernization and expansion projects; Europe declined slightly as modernization projects complete. Cloud Software & Services grew across the region. Reported +4% to SEK 17.5b.
Announced: a multi-year 5G expansion agreement with stc in Saudi Arabia, and the start of a next-generation 5G Core rollout with VodafoneThree in the UK as part of a long-term partnership.
South East Asia, Oceania & India: +25%
ReportedNetworks grew on the timing of project deliveries in South East Asia and India (Vietnam cited on the call). Cloud Software & Services declined on project phasing. Reported +24% to SEK 8.8b.
Announced: Ericsson selected for the first stage of Queensland’s next-generation rail communications network, providing mission-critical private 5G for rail operations.
North East Asia: +22%
ReportedDriven primarily by Japan: higher Networks project deliveries and Cloud Software & Services milestones. Reported +19% to SEK 4.5b.
Announced: NTT DOCOMO selected and began deploying Ericsson’s next-generation RAN Compute platform for 5G Advanced and future AI-driven capabilities.
Market area Other: +7%
ReportedIncludes IPR licensing and almost all Enterprise sales. Growth from IPR (partly retroactive revenue for previously unlicensed periods) and a positive hedge effect; Enterprise broadly stable. Reported +1% to SEK 8.9b, held back by the iconectiv divestment.
View the market area data table
| SEK b. | Q3 2026 | Q3 2025 | YoY | Organic | Q2 2026 | QoQ | Jan-Sep 2026 | Jan-Sep 2025 | YoY | Organic | % of Q3 sales |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Americas | 19.8 | 19.8 | 0% | -1% | 18.8 | 5% | 55.7 | 60.5 | -8% | -1% | 33% |
| Europe, Middle East & Africa | 17.5 | 16.7 | 4% | 4% | 16.3 | 7% | 48.0 | 47.4 | 1% | 5% | 29% |
| South East Asia, Oceania & India | 8.8 | 7.1 | 24% | 25% | 5.4 | 63% | 21.1 | 19.8 | 7% | 14% | 15% |
| North East Asia | 4.5 | 3.8 | 19% | 22% | 3.7 | 22% | 11.4 | 10.8 | 5% | 15% | 8% |
| Other | 8.9 | 8.8 | 1% | 7% | 8.5 | 5% | 25.2 | 28.9 | -13% | 1% | 15% |
| of which IPR | 3.9 | 3.1 | 24% | - | 3.4 | 14% | 10.4 | 11.2 | -7% | - | - |
| Total | 59.5 | 56.2 | 6% | 7% | 52.7 | 13% | 161.5 | 167.4 | -4% | 4% | 100% |
Direction of YoY organic sales by segment (CFO presentation): Americas — Networks ↓, Cloud Software & Services ↑; EMEA — ↑ ↑; South East Asia, Oceania & India — Networks ↑, Cloud Software & Services ↓; North East Asia — ↑ ↑; Other — Networks ↑, Cloud Software & Services ↑, Enterprise ↑.
4. Segment Results & IPR Licensing
Segment mix
Networks
SEK 38.7bNet sales+9% organic · YTD about +4%
50.3%Adj. gross margin50.1% a year ago
23.1%Adj. EBITA margin20.3%; SEK 9.0b (7.2b)
SEK 3.2bIPR in Networks2.6b a year ago
Networks net sales and adj. EBITA margin
Networks rolling four-quarter margins
Rolling adj. gross margin 50.1%; adj. EBITA margin 21.0%
- ReportedSales SEK 38.7b, +9% year on year (reported and organic). Year-to-date organic growth is about 4%. Growth came in every market area except Americas, where North America was slightly up and Latin America down.
- Q&AThree growth drivers: (1) commercial momentum over the past 12–18 months turning into share gains in strategic markets such as Japan; (2) some customers pulling spending forward ahead of price increases; (3) near-term sales and margin mitigation actions executed well.
- ReportedAdjusted gross margin 50.3% (50.1%), stable. Product mix and retroactive IPR offset part of the component cost increases. Adjusted gross income SEK 19.4b (17.8b). Reported gross margin 49.8% (50.0%).
- ReportedAdjusted EBITA SEK 9.0b (7.2b), 23.1% margin, mainly from higher sales. R&D rose slightly to support high-performance programmable networks, offset by lower SG&A. Restructuring SEK -0.5b (-0.1b).
- ReportedRolling four quarters: net sales SEK 148.9b, adjusted gross margin about 50% (50.1%) and adjusted EBITA margin about 21% (21.0%).
View the Networks data table
| SEK b. | Q3 2026 | Q3 2025 | YoY | Q2 2026 |
|---|---|---|---|---|
| Net sales | 38.7 | 35.4 | 9% | 33.0 |
| of which IPR licensing | 3.2 | 2.6 | 24% | 2.8 |
| Organic sales growth | - | - | 9% | - |
| Gross income | 19.3 | 17.7 | 9% | 16.0 |
| Gross margin | 49.8% | 50.0% | - | 48.3% |
| EBIT / EBITA | 8.4 | 7.1 | 19% | 6.0 |
| EBITA margin | 21.8% | 20.0% | - | 18.3% |
| Restructuring charges | -0.5 | -0.1 | - | 0.2 |
| Adjusted gross income | 19.4 | 17.8 | 10% | 16.6 |
| Adjusted gross margin | 50.3% | 50.1% | - | 50.4% |
| Adjusted EBITA | 9.0 | 7.2 | 25% | 5.8 |
| Adjusted EBITA margin | 23.1% | 20.3% | - | 17.7% |
Cloud Software & Services
SEK 15.8bNet sales+3% organic
43.5%Adj. gross margin43.6% a year ago
12.8%Adj. EBITA margin12.5%; SEK 2.0b (1.9b)
62%Services share of sales65% a year ago
Cloud Software & Services net sales and adj. EBITA margin
Rolling four-quarter margins
Rolling adj. gross margin 43.8%; adj. EBITA margin 13.1%
- ReportedSales SEK 15.8b, +3%, with growth in three of four market areas: Americas and EMEA on accelerated project deliverables, North East Asia on project milestones in Japan; South East Asia, Oceania & India declined on project phasing. Higher IPR (SEK 0.7b vs 0.6b), including retroactive revenue, supported sales.
- Q&AGrowth was helped by adjacencies: capabilities extended into verticals beyond communications service providers.
- ReportedAdjusted gross margin 43.5%, broadly stable, with improvements in delivery performance. Adjusted gross income SEK 6.9b (6.7b). Reported gross margin 42.4% (42.1%).
- ReportedAdjusted EBITA SEK 2.0b, up slightly, a 12.8% margin. Higher R&D investment was largely offset by lower SG&A. Restructuring SEK -0.3b (-0.2b).
- ReportedRolling four quarters: net sales SEK 62.4b, gross margin about 44% (43.8%) and EBITA margin about 13% (13.1%).
View the Cloud Software & Services data table
| SEK b. | Q3 2026 | Q3 2025 | YoY | Q2 2026 |
|---|---|---|---|---|
| Net sales | 15.8 | 15.3 | 3% | 14.7 |
| of which IPR licensing | 0.7 | 0.6 | 24% | 0.6 |
| Organic sales growth | - | - | 3% | - |
| Gross income | 6.7 | 6.5 | 4% | 5.9 |
| Gross margin | 42.4% | 42.1% | - | 39.8% |
| EBIT / EBITA | 1.7 | 1.7 | 0% | 1.1 |
| EBITA margin | 10.9% | 11.2% | - | 7.8% |
| Restructuring charges | -0.3 | -0.2 | - | -0.7 |
| Adjusted gross income | 6.9 | 6.7 | 3% | 6.5 |
| Adjusted gross margin | 43.5% | 43.6% | - | 44.1% |
| Adjusted EBITA | 2.0 | 1.9 | 6% | 1.8 |
| Adjusted EBITA margin | 12.8% | 12.5% | - | 12.4% |
Enterprise
Enterprise net sales and organic growth
Reported sales fell after the iconectiv sale in Q3 2025; organic growth turned positive from Q4 2025
- ReportedReported sales SEK 4.6b (5.1b), -10% because iconectiv was sold in the prior year. Organic sales +1%, driven by Technologies and New Businesses.
- ReportedGlobal Communications Platform (Vonage) broadly stable: CPaaS and Network Powered Solutions growth offset declining legacy Applications. Enterprise Wireless Solutions declined slightly as subscription growth was offset by customer hardware order phasing. Q&ACustomer momentum is good in enterprise 5G private networks.
- ReportedAdjusted gross margin 50.0% (51.6%), reflecting the iconectiv divestment; adjusted gross income SEK 2.3b (2.6b).
- ReportedAdjusted EBITA SEK -0.5b (7.0b, including the iconectiv gain), an improvement on Q2 (SEK -0.8b), supported by efficiency actions. Adjusted EBITA margin -12.1%. Rolling four quarters: sales SEK 17.8b, adjusted EBITA margin -22.2%.
- Q&APath to profitability (answer to Handelsbanken): Cradlepoint is improving strongly and approaching profitability; Vonage (Global Communications Platform) has new leadership this quarter with a mandate to grow and cut cost; reaching profitability faster in Enterprise is a stated priority.
- GuidanceAmortization of intangible assets is expected at around SEK -0.4b per quarter in Enterprise.
View the Enterprise data table
| SEK b. | Q3 2026 | Q3 2025 | YoY | Q2 2026 |
|---|---|---|---|---|
| Net sales | 4.6 | 5.1 | -10% | 4.5 |
| Organic sales growth | - | - | 1% | - |
| Gross income | 2.3 | 2.6 | -13% | 2.3 |
| Gross margin | 50.0% | 51.6% | - | 50.7% |
| EBIT | -1.0 | 6.6 | - | -1.2 |
| EBITA | -0.6 | 7.0 | - | -0.9 |
| EBITA margin | -13.9% | 138.1% | - | -19.8% |
| Restructuring charges | -0.1 | 0.0 | - | -0.1 |
| Adjusted gross margin | 50.0% | 51.6% | - | 50.9% |
| Adjusted EBIT | -0.9 | 6.7 | - | -1.2 |
| Adjusted EBITA | -0.5 | 7.0 | - | -0.8 |
| Adjusted EBITA margin | -12.1% | 138.7% | - | -18.7% |
Segment Other
- ReportedSales stable at SEK 0.4b. Adjusted gross income SEK -0.3b (0.0b), reflecting a non-cash impairment charge of SEK -0.3b related to Red Bee Media. Adjusted EBITA SEK -0.3b (-0.3b); the prior-year period was hit by a revaluation of the Ericsson Ventures portfolio. Rolling four-quarter sales SEK 1.7b.
IPR licensing
IPR licensing revenues (SEK b.)
Q3 2026 includes retroactive revenue for previously unlicensed periods; Q2 2025 was also elevated
- ReportedIPR revenue SEK 3.9b, up SEK 0.8b year on year. Part of the increase is retroactive revenue for previously unlicensed periods. 82% of IPR revenue is reported in Networks, the rest in Cloud Software & Services.
- ReportedThe current annual recurring run rate is about SEK 13.5b.
- Q&AThe retroactive IPR cash has not been collected yet; it will come mainly in coming quarters (answer to Bernstein).
5. Cash Flow, Balance Sheet & Shareholder Returns
Free cash flow before M&A
With rolling four-quarter FCF as % of sales
Net cash (SEK b.)
Q3 buybacks reduced net cash; bond proceeds lifted gross cash
Inventory build-up (SEK b.)
Higher component prices, Q4 finished-goods build and longer-lead-time markets
- ReportedCash flow from operating activities SEK 6.5b (7.9b), supported by earnings but reduced by higher operating net assets (SEK -3.7b), mainly inventories. Prior-year earnings included the iconectiv contribution.
- Q&AInventory build-up had three causes: higher component prices; the usual finished-goods build ahead of Q4; and supply-chain resilience and market-mix effects, since some markets have longer lead times.
- ReportedRolling four-quarter FCF was 11% of sales, within the 9–12% target.
- ReportedCash flow from investing SEK 1.2b (3.2b), driven by interest-bearing securities; the prior year had the one-time iconectiv proceeds. Cash flow from financing SEK 0.4b (-1.2b), including SEK 4.5b of share repurchases and SEK 5.5b of new borrowings.
- ReportedGross cash reached SEK 98.0b (+6.7b sequentially), including a EUR 500m bond issued in September to prepare for upcoming maturities. Net cash rose to SEK 60.7b (59.8b in Q2). Average maturity of parent company borrowings 2.9 years (2.5 years at 30 June).
- ReportedPost-employment benefit liabilities fell to SEK 14.3b (18.0b at 30 June). Using Swedish covered mortgage bonds instead of government bonds as the discount rate would cut the liability to about SEK 6.6b, SEK 7.7b lower.
- ReportedEquity SEK 111.3b; equity ratio 36.9%; return on capital employed 16.5%; capital turnover 1.4x; operating working capital days 22 (inventory turnover 87 days).
Shareholder returns
Buybacks
- Q3: 49,225,701 Class B shares repurchased for SEK 4.8b (SEK 4.5b cash outflow in the quarter)
- Year to date: 78,761,682 shares (about 79m) for SEK 8.1b
- Treasury shares 114,080,663 at 30 Sep (38,002,276 at 31 Dec 2025)
Dividends
- 2025 dividend of SEK 3.00 per share approved at the 31 March 2026 AGM
- Paid in two SEK 1.50 instalments: 9 April and 2 October 2026
- About SEK 5b paid in dividends so far in 2026
Authorisation
- AGM authorised Class B buybacks until the 2027 AGM
- Holdings may not exceed 10% of all shares
- Repurchased shares reduce the average share count used in EPS
View the cash flow and financial position tables
| Free cash flow bridge, SEK b. | Q3 2026 | Q3 2025 | Q2 2026 | Jan-Sep 2026 | Jan-Sep 2025 |
|---|---|---|---|---|---|
| Adjusted EBITA | 10.1 | 15.8 | 6.9 | 22.6 | 30.2 |
| Depreciation & amortization of non-acquired assets | 1.8 | 1.8 | 1.6 | 5.1 | 5.6 |
| Restructuring charges | -0.9 | -0.3 | -0.6 | -5.3 | -1.2 |
| Changes in operating net assets | -3.7 | -0.5 | -4.4 | -2.5 | -6.0 |
| Interest, taxes paid and other | -0.8 | -8.9 | -1.6 | -4.0 | -12.1 |
| Cash flow from operating activities | 6.5 | 7.9 | 1.9 | 15.8 | 16.4 |
| Net capex and other investing | -1.1 | -0.8 | -1.0 | -3.2 | -2.9 |
| Repayment of lease liabilities | -0.5 | -0.5 | -0.5 | -1.4 | -1.7 |
| Free cash flow before M&A | 4.9 | 6.6 | 0.4 | 11.2 | 11.9 |
| Cash flow from investing activities | 1.2 | 3.2 | -3.7 | -0.7 | -6.4 |
| Cash flow from financing activities | 0.4 | -1.2 | -9.2 | -11.1 | -5.4 |
| Financial position, SEK b. | 30 Sep 2026 | 30 Sep 2025 | 30 Jun 2026 |
|---|---|---|---|
| Gross cash | 98.0 | 88.4 | 91.3 |
| Borrowings, current | 9.5 | 6.7 | 9.5 |
| Borrowings, non-current | 27.8 | 29.9 | 22.0 |
| Net cash | 60.7 | 51.9 | 59.8 |
| Equity | 111.3 | 102.5 | 104.8 |
| Equity ratio | 36.9% | 36.3% | 36.4% |
| Capital turnover (times) | 1.4 | 1.5 | 1.4 |
| Return on capital employed | 16.5% | 22.5% | 20.7% |
6. Outlook & Guidance
Context. Global uncertainty remains elevated, including the semiconductor situation. The industry is entering a period of higher input costs, and the financial impact will build up over the coming quarters. Near-term mitigation, mainly commercial measures, is working so far; longer-term structural actions will be implemented gradually.
Networks sales, Q4 2026
GuidanceBroadly similar to 3-year average seasonality. For Q3 to Q4 that average is +17%.
Cloud Software & Services sales, Q4 2026
GuidanceBroadly similar to 3-year average seasonality. For Q3 to Q4 that average is +29%.
Networks adj. gross margin, Q4 2026
Guidance49% to 51%, helped by product mix.
Restructuring charges, 2026
GuidanceExpected at elevated levels. Year to date: SEK 5.3b (1.2b).
Currency assumptions
GuidanceUSD:SEK 10.0 and EUR:SEK 11.3. In 2025, about half of sales were USD-denominated, over 15% EUR, and INR, JPY, GBP, CNY and AUD together about 15%.
Tax and amortization
GuidanceFull-year tax rate of about 28% (2025: 25%), reflecting elevated restructuring and provisions for tax-matter resolutions. Enterprise amortization about SEK -0.4b per quarter.
RAN market
ReportedDell’Oro (May 2026) expects the global RAN equipment market to remain stable in 2026. Management’s view: broadly flat.
3-year average seasonality (%)
Quarter-on-quarter reported sales change, 2023–2025
Restructuring charges (SEK b.)
SEK 5.3b in Jan–Sep 2026 vs 1.2b a year earlier
7. Component Costs, Pricing & Margins (Q&A)
Tactical actions (short term)
- Product substitution
- Upselling, including software
- Steering sales toward products that use less of the costly components, for example memory
- Selling newer products, priced at current cost levels
- These cannot continue indefinitely
Structural actions
- Portfolio optimisation
- Price increases
- Supply-chain measures
- Efficiency improvements
- Contracts are 3–5-year frame agreements, so price increases come through only gradually as contracts renew
- Q&A2027 is flagged as a possible transition year. Management sees the cost increase as structural and industry-wide, to be passed on to operators and then to end users. It is a question of timing.
- Q&AWithout mitigation, margin dilution in 2027 would be significant. The server and memory market gives a sense of the scale. No figure was given. The CEO also said component costs are a headwind to gross margin next year.
- Q&AOperators understand the situation but dislike it, because many are struggling with return on capital employed.
- Q&ASuppliers: frequent pricing meetings. In some areas Ericsson commits to volumes to secure supply resilience. Management called it an intense year for sourcing.
8. Demand, Market & Opex (Q&A)
Pull-ins
Q&ACustomers buying ahead of price increases is one of the three growth drivers. Not quantified, but management said it is not large and has no material effect on 2027.
Q3 vs seasonality
Q&AQ2 was weak and Q3 strong. Year-to-date Networks growth of about 4% shows stabilisation. One quarter is too short to judge share gains.
RAN market
Q&AView unchanged: broadly flat. The ambition is to keep winning share and growing in adjacencies in 2027, as in 2026.
Opex (UBS)
- Q4 opex will show the usual seasonality
- Aim to offset salary inflation through ongoing efficiency work
- Component costs may prompt further action
- No explicit direction given for 2027
9. Organisation & Announcements
ReportedAnnounced on 15 October 2026 as a simplification of the Group structure to strengthen customer focus, move faster, improve accountability and drive efficiencies over time.
New market area Asia-Pacific
From January, North East Asia combines with South East Asia, Oceania & India. Country-level customer focus will be kept.
Enterprise Wireless Solutions dissolved
- Neutral host and EP5G (private 5G) move to Networks
- Cradlepoint remains a standalone unit in Enterprise, led by the Head of Americas
- Indoor R&D consolidated into Networks
Leaner Executive Team
Clearer accountability, faster decision-making and cost synergies. Vonage (Global Communications Platform) also has new leadership this quarter.
Press releases in the period
- 21 July 2026: Ericsson announces change to the Executive Team
- 15 October 2026: Ericsson announces simplification of Group structure and changes to the Executive Team
Headcount (employees, end of period)
Down 4,481 year on year; 37,744 in EMEA (12,634 in Sweden), 24,923 in SEA, Oceania & India, 13,815 in Americas, 8,935 in North East Asia
Strategic highlights reported for the quarter: customer wins and deployments across network modernization, differentiated connectivity and mission-critical networks; and portfolio optimization, pricing and efficiency measures to help offset higher component costs and strengthen competitiveness.
10. Technology: AI, Custom Silicon, Satellite, 6G & 5G SA
Ericsson says AI gains are already live in customer networks on its own silicon, with 6G and 5G standalone as the next growth levers.
~10%Spectral efficiency gainAI-native link adaptation
3Operators liveCommercial deployments
60,000+Base stationsRunning the feature
~USD 800mIllustrative value10% of a ~USD 8b spectrum buy
AI and intelligent networks
- Customers consistently ask for intelligent, autonomous networks that improve performance, efficiency, robustness, resilience and customer experience. Many new AI applications will depend on mobile connectivity, so networks must be more reliable and resilient.
- AI models built for operator use cases, combined with Ericsson’s purpose-built silicon (ASICs), get more out of spectrum assets without raising power consumption.
- ReportedAI-native link adaptation replaces a function the industry has tuned for more than 30 years. It gives about a 10% spectral efficiency gain and is commercially deployed with 3 operators on more than 60,000 base stations. Management’s point: AI is happening now in networks, not in 2028.
- Q&AMonetisation (Bank of America): the CEO cited SpaceX’s recent purchase of spectrum for about USD 8b; a 10% efficiency gain on that would be worth about USD 800m. Ericsson expects some of that value to come back as upsell and sees AI features as a competitive differentiator.
Custom silicon vs GPUs (Deutsche Bank, Bank of America)
- Ericsson says it is not philosophically opposed to any platform. Its software and hardware are disaggregated, keeping future platform options open.
- Its own ASICs bring fast feature delivery and cost competitiveness. AI features run on basebands already deployed in the field with no site visit; a GPU approach would need new hardware at each site.
- GPUs are not ruled out in the future; the choice is evaluated continuously on cost efficiency.
Satellite and non-terrestrial networks (ABG)
- Satellite is a valuable addition to terrestrial networks for end users, but it cannot replace them. The key challenge is seamless outdoor-to-indoor connectivity, which satellites find hard.
- Ericsson sees the development as positive overall because it shows how important connectivity is. This is one reason indoor R&D is being consolidated: Enterprise Wireless activities move into Networks.
6G (Kepler Cheuvreux)
- The ambition is that most of the portfolio will be 6G-upgradable, with basebands and radios reused. New 6G spectrum bands will need new radios, similar to the 5G transition, meaning some additional capex.
- 6G will allow dynamic uplink/downlink allocation, which suits the uplink-heavy traffic expected from AI devices. The open question is when new services and use cases will actually materialise.
5G standalone, slicing and new growth areas (Handelsbanken, Danske Bank)
- Customers are starting to use 5G standalone features such as quality-on-demand and network slicing, for example in Germany and Italy. Volumes are not there yet.
- Mission-critical / public-safety networks are good business today. Each is a whole network, so it is either won or not.
- The CEO argues that dependence on AI agents will require guaranteed quality, ending the best-effort model and favouring slicing.
- Long-term growth buckets: market-share gains; helping customers launch new use cases that raise their revenue; and business development in mission-critical networks, sensing (including defense), Enterprise and network APIs. The biggest long-term challenge is finding growth in a flat market.
11. Ericsson Mobility Report & IPR Licensing (Appendix)
50%Lack 5G coverageHalf the world outside mainland China
3b+5G subscriptionsNow exceeded 3 billion
22%Mobile data traffic growthQ1 2025 to Q1 2026
2bFixed broadband by 2031Incl. 350m FWA, 33m satellite
Population coverage outside mainland China
- ReportedAnnual recurring IPR licensing revenue of about SEK 13.5b.
- ReportedSolid strategic execution: a new licence with a top-10 smartphone vendor, plus several new licence agreements in automotive and point-of-sale.
- ReportedGrowth opportunities remain in new market segments and through increased penetration of the smartphone market. Optimising terms and value of new agreements and renewals remains a priority. The presentation’s licensing graphic covers five segments: smartphones, automotive, consumer electronics, media services and cellular IoT.
12. NextGComm View: What It Means for Operators
NextGComm viewThis section is NextGComm’s advisory perspective for mobile network operators and telecom leadership. It is linked to the company-reported evidence above and is not company guidance.
- Plan for vendor price increases in 2027 renewals.Evidence: management called the cost increase structural, to be passed to operators, arriving gradually through 3–5-year frame agreements. Timing: budget cycles for 2027.
- Negotiate price-protection and component-index clauses now.Evidence: tactical mitigation “cannot continue indefinitely”; 2027 flagged as a possible transition year. Timing: Q4 2026–H1 2027.
- Decide deliberately on pull-forward purchases.Evidence: some customers already buy ahead of price increases; management says the effect is not large. Timing: before Q1 2027 price changes.
- Price AI features on measured spectrum value.Evidence: ~10% spectral efficiency on 60,000+ base stations; Ericsson expects to monetise via upsell. Ask for trial data and performance-linked terms.
- Prefer software-upgradable paths to 6G and AI.Evidence: AI features run on deployed basebands without site visits; most of the portfolio is planned to be 6G-upgradable, but new bands need new radios.
- Map account changes from January.Evidence: new Asia-Pacific market area; neutral host and private 5G move to Networks; Cradlepoint under the Head of Americas.
What was not quantified
- Size of the 2027 margin dilution without mitigation
- Size of customer pull-ins in Q3
- Amount of retroactive IPR revenue and timing of its cash collection (beyond ‘coming quarters’)
- Opex direction for 2027
- Cost synergies from the new organisation
- Revenue volumes from 5G standalone, slicing and network APIs
Watch list
- Q4 Networks adjusted gross margin against the 49–51% range
- Q4 sales versus +17% (Networks) and +29% (Cloud Software & Services) seasonality
- Collection of retroactive IPR cash
- Price-increase commentary and 2027 margin framing at the 22 January 2027 report
- Enterprise path to profitability (Cradlepoint, Vonage)
13. Sources
- Ericsson, Third quarter report 2026 (interim report, 43 pp.), 15 October 2026. ericsson.com/investors
- Ericsson, Third quarter 2026 CEO and CFO presentation, 15 October 2026, including appendices (Ericsson Mobility Report, June 2026; licensing progress Q3 2026).
- Ericsson Q3 2026 earnings conference call and webcast, 15 October 2026, 09:00 CEST, with Per Narvinger (President & CEO), Lars Sandström (CFO) and Daniel Morris (Head of Investor Relations). Analyst questions referenced: Bernstein, Handelsbanken, Bank of America, Deutsche Bank, UBS, ABG, Kepler Cheuvreux, Danske Bank.
- NextGComm Market Insight Division, Ericsson Q3 2026 earnings call notes, 24 October 2026.
Source note: figures are as reported by Ericsson; derived figures are arithmetic on reported numbers. Rounding differences may occur. This briefing contains forward-looking statements made by Ericsson management, which are subject to risks and uncertainties; actual results may differ materially. Ericsson’s full forward-looking statement disclaimer is in its report and presentation.
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