Ericsson (l.m.) Telephone Stock Earnings Reports

Key points for investors: Ericsson delivered a solid Q2 2026: net sales SEK 52.7bn (organic -1%, but +1% ex‑IPR one‑offs), adjusted gross margin ~48%, and EBITDA margin 13.1%. Networks sales were down (organic -4% excluding IPR one‑offs) while Cloud Software & Services grew (organic +5%) and reached new-high adjusted margins. Enterprise showed organic growth but reported sales were down due to the divestment of iconectiv. IPR revenues/trending are strengthening with a current run rate of ~SEK 13.5bn. Free cash flow before M&A was SEK 0.4bn; net cash ended at SEK 59.8bn after dividends and buybacks. Inventories increased (largely finished goods to support planned Q3 deliveries; a smaller portion relates to component cost inflation). Management highlighted rising component and memory cost pressure driven by the AI boom and semiconductors; mitigation actions include near‑term cost cuts, product substitution, supplier/SC measures, product redesign and selective price increases/renegotiations with customers. Q3 guidance assumes Networks sales growth above three‑year seasonality and Networks adjusted gross margin of 48–50% (some dilution expected from rollout mix). Leadership change: Börje Ekholm will step down and Per Narvinger will become CEO on October 1. Main investor risks remain component inflation, geopolitics/semiconductor supply, and timing of customer uptake for uplink/AI‑driven RAN demand.