Ericsson Stock Earnings Reports

Ericsson reported a solid Q2 2026 with SEK 52.7bn in sales and 48% adjusted gross margin (48.4% reported adjusted). Organic sales were down ~1% year‑on‑year but would be +1% excluding the one‑off IPR settlement in Q2 2025. Networks sales declined (reported -8%, organic -4%) while Cloud Software & Services grew (+3% reported, +5% organic) and achieved double‑digit adjusted EBITDA margin (14.2%). Enterprise was still loss‑making on a reported basis (impacted by the divestment of iconectiv) but showed organic growth. Adjusted EBITDA was SEK 6.9bn and EBITDA margin 13.1%. Free cash flow before M&A was SEK 0.4bn; net cash ended at SEK 59.8bn after dividends and buybacks. Inventories built ~SEK 5bn in the quarter, largely finished goods staged for Q3 deliveries; component cost inflation (notably memory/semiconductor) is increasing and will gradually pressure margins. Management is mitigating via near‑term cost actions, product substitutions, supply‑chain measures and longer‑term structural steps including price increases in new tenders and renegotiations with existing customers. Q3 guidance: Networks sales growth above historical seasonality, Networks adjusted gross margin 48–50% (slightly down on mix), continued elevated restructuring charges for 2026. Leadership transition: Börje Ekholm will step down as CEO (this was his last call) and Per Narvinger will become CEO on Oct 1; management emphasizes continuity and a focus on capturing AI‑driven uplink/low‑latency demand in mobile networks.