Ericsson Reports 7% Organic Sales Growth in Q3 2026 on Stronger Networks Demand

Ericsson  reported a 7% year-on-year increase in organic sales in the third quarter of 2026, driven primarily by higher sales in its Networks business, as the Swedish telecommunications equipment maker recorded growth across three of its four market areas.

Net sales rose 6% to SEK 59.5 billion from SEK 56.2 billion in the same period of 2025. Compared with the second quarter of 2026, sales increased 13% from SEK 52.7 billion. However, reported sales for the first nine months of 2026 declined 4% year on year to SEK 161.5 billion.

Gross income increased 5% to SEK 28 billion, while adjusted gross income rose to SEK 28.4 billion from SEK 27 billion a year earlier. Ericsson’s reported gross margin declined to 47.1% from 47.6%, while its adjusted gross margin fell to 47.7% from 48.1%. The company attributed improved Networks margins partly to retroactive intellectual property rights (IPR) revenues. Enterprise margins were lower following the divestment of iconectiv, while margins in Cloud Software and Services remained stable.

Adjusted earnings before interest, taxes and amortisation (EBITA) fell 36% year on year to SEK 10.1 billion, compared with SEK 15.8 billion in the third quarter of 2025. Adjusted EBITA margin declined to 17% from 28.1%. However, Ericsson said adjusted EBITA increased when the previous year’s SEK 7.6 billion capital gain was excluded. Operating expenses also decreased year on year.

Reported EBITA fell 41% to SEK 9.2 billion, while net income declined 49% to SEK 5.8 billion from SEK 11.3 billion. Diluted earnings per share dropped to SEK 1.77 from SEK 3.33, with the prior-year figure including a SEK 1.72-per-share gain from a divestment.

Free cash flow before mergers and acquisitions stood at SEK 4.9 billion, down from SEK 6.6 billion a year earlier. The company ended the quarter with net cash of SEK 60.7 billion, up 17% year on year, and returned SEK 4.8 billion to shareholders through share repurchases.

Commenting on the results, President and CEO Per Narvinger said the company benefited from focused execution, its product portfolio and customer relationships, while demand for more intelligent and autonomous networks continued to feature in discussions with customers.

“We delivered strong third-quarter results, supported by focused execution, the strength of our portfolio, and the trust customers place in Ericsson. During the quarter, I met with many of our customers. A consistent theme was the need for more intelligent and autonomous networks to improve performance, efficiency, robustness and resilience. Ericsson is well positioned, and we are already seeing the efficiency gains from AI-enabled features in our portfolio being deployed in customer networks.”

– Per Narvinger, President and CEO, Ericsson

Narvinger also highlighted a simplification of Ericsson’s operating structure, saying the changes would strengthen customer focus, improve accountability and drive efficiencies over time.

Looking ahead, he said the radio access network (RAN) market remained flat, geopolitical uncertainty was elevated and component costs were expected to weigh on gross margins in 2027.

“Looking ahead, the RAN market is flat, geopolitical uncertainty remains elevated and component costs are a headwind to gross margin next year. We will stay close to our customers, continue to prioritize technology leadership and take disciplined actions to strengthen competitiveness. Ericsson remains well positioned to navigate these challenges and deliver profitable long-term growth, with all segments contributing.”

– Per Narvinger, President and CEO, Ericsson