Organically, meaning before currency effects are applied, the company grew sales by 6% across all its divisions. That is genuinely good performance. But because the Swedish krona became significantly stronger against other currencies, the revenue figure that actually shows up in the books fell by 10%. Reported net sales came in at SEK 49.3 billion, about $5.21 billion, below the $5.48 billion analysts had expected.

The currency drag alone amounted to SEK 7.8 billion. Earnings per share hit $0.0285, missing the consensus estimate of $0.1152 by 75%, though much of that gap is explained by currency revaluations and adjustments to long-term employee stock programmes rather than weak operations.

The underlying business held up well. The adjusted gross margin was 48.1%, showing the company is managing its costs tightly. The overall EBITA margin (a measure of operating profit) reached 11.3%, and the Networks division, which sells mobile infrastructure to carriers, posted a healthy 19% margin on its own. Free cash flow remained solid at SEK 5.9 billion, and the company’s net cash reserves grew to SEK 68.1 billion.

New Tech, Share Buyback Promise Better Days Ahead

CEO Börje Ekholm pointed to strong execution in both the Networks and Enterprise segments. In mid-April, Ericsson launched what it describes as the world’s first fully digital indoor 5G system in Oslo, Norway. The system allows multiple mobile operators to share the same physical infrastructure while keeping their networks separate, a significant development for dense environments like airports, stadiums, and office buildings.

Looking ahead, Ericsson spent SEK 10.9 billion on research and development this quarter, signalling that it is investing heavily in 5G-Advanced and AI-driven energy efficiency technologies. The board approved a SEK 15 billion share buyback, essentially returning cash to shareholders as a sign of confidence in long-term performance.

North American demand has slowed, and geopolitical uncertainty continues to cloud the outlook, but management believes its organic momentum will eventually show through in the reported numbers once currency conditions stabilise.

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