This performance was supported by a SEK 7.6 billion capital gain from the divestment of iconectiv and rigorous cost-reduction measures that improved adjusted gross margins to 48.1%.
In its 2025 Annual Report, Ericsson highlighted a year of strategic transition, emphasizing its leadership in mobile networks and its growing role in the AI-driven industrial landscape. Despite a 5% decline in net sales to SEK 236.7 billion, the company achieved a major profitability turnaround, reporting a net income of SEK 28.7 billion compared to SEK 0.4 billion in the previous year. This performance was supported by a SEK 7.6 billion capital gain from the divestment of iconectiv and rigorous cost-reduction measures that improved adjusted gross margins to 48.1%.
Focus on AI and 5G Standalone
Ericsson is prioritizing the deployment of AI across devices and applications, a shift that relies on high-performance, low-latency connectivity provided by 5G standalone (SA) and future 6G networks. The company maintained a 37% share of the global RAN market outside China and powers 206 live 5G networks across 85 countries. A notable milestone in 2025 was achieving Level 4 network autonomy, enabling networks to make operational decisions with minimal human intervention.
Programmable Networks and Strategic Agreements
The company signed landmark agreements with Telstra and Vodafone to transform traditional mobile broadband into programmable platforms, opening new opportunities for innovation. While overall sales were impacted by reduced investment in India and a flat global RAN market, Ericsson achieved 2% organic growth.
Segment Performance
The Networks segment remained the largest contributor, accounting for 64% of group sales (SEK 151.0 billion) with 1% organic growth. Cloud Software and Services achieved 6% organic growth, driven by demand for automated and cognitive network solutions, reaching SEK 62.7 billion in sales. The Enterprise segment declined 15% to SEK 21.1 billion following strategic exits but showed signs of recovery in the fourth quarter with improved margins.
Sustainability and Workforce Initiatives
Sustainability continues to be integrated into Ericsson’s operations and executive compensation. In 2025, 10% of long-term variable pay for the Executive Team was tied to ESG targets, split evenly between greenhouse gas reduction and increasing female leadership representation. The company also surpassed 60,000 granted patents, underscoring its commitment to R&D-led growth.
Looking ahead to 2026, Ericsson plans to reduce its Swedish workforce by approximately 1,600 positions as part of ongoing efficiency efforts. The Board has proposed a dividend of SEK 3.00 per share and a share buyback program of up to SEK 15 billion to reward shareholders.
