Stockholm – October 15, 2026 -- Ericsson posted organic sales growth of 7% in the third quarter of 2026, lifting reported sales to SEK 59.5 billion from SEK 56.2 billion a year earlier, while net income fell to SEK 5.8 billion from SEK 11.3 billion because the prior-year period included a large divestment gain.
Networks drives growth in three of four market areas
Organic sales rose in three out of four market areas, primarily on higher sales in Networks. Adjusted gross income increased to SEK 28.4 billion from SEK 27.0 billion, driven by Mobile Networks. Reported gross income was SEK 28.0 billion, against SEK 26.8 billion a year earlier.
Adjusted gross margin slips to 47.7% on iconectiv divestment
Adjusted gross margin was 47.7%, down from 48.1%. Networks margin increased, supported by retroactive IPR revenues. Enterprise margin was lower due to the divestment of iconectiv, while Cloud Software and Services margin was stable. Reported gross margin was 47.1%, compared with 47.6% a year earlier.
Adjusted EBITA falls to SEK 10.1 billion against a capital-gain-inflated base
Adjusted EBITA was SEK 10.1 billion, a 17.0% margin, versus SEK 15.8 billion and 28.1% a year earlier. The prior-year figure included a capital gain of SEK 7.6 billion; excluding it, adjusted EBITA increased. Operating expenses decreased year on year. Reported EBITA was SEK 9.2 billion, a 15.5% margin, compared with SEK 15.5 billion and 27.6%.
Diluted earnings per share were SEK 1.77, down from SEK 3.33. The prior-year figure included a divestment gain of SEK 1.72 per share.
Free cash flow before M&A declines to SEK 4.9 billion
Free cash flow before M&A was SEK 4.9 billion, compared with SEK 6.6 billion in the year-earlier quarter. Ericsson returned SEK 4.8 billion to shareholders through share repurchases.
Component costs and flat RAN market cloud 2027 margin outlook
CEO Per Narvinger said the RAN market is flat, geopolitical uncertainty remains elevated and component costs will weigh on gross margin next year. Ericsson is pursuing portfolio optimization, pricing and efficiency measures to offset higher component costs and strengthen competitiveness.
The company also announced a simplification of its operating structure, intended to sharpen customer focus and deliver efficiencies over time. Narvinger said AI-enabled features in the portfolio are already producing efficiency gains in customer networks, and customers are asking for more intelligent and autonomous networks.
Ericsson cited customer wins and deployments across network modernization, differentiated connectivity and mission-critical networks.