Ericson records high profit in 2025 amid weak sales

Ericsson, a multinational telecommunications company on Friday, reported strong profitability and margin expansion for the fourth quarter and full year 2025, despite modest sales growth and currency headwinds.

Ericsson made this known in its 2025 fourth quarter report.

It said improved operational execution, growth in cloud software and services drove earnings, cash flow and shareholder returns.

The company said for the fourth quarter, Ericsson’s sales rose by six per cent year-on-year, with growth recorded in Europe, the Middle East and Africa, as well as South East Asia, Oceania and India.

According to Ericsson, reported sales stood at SEK 69.3 billion (about ₦11.1 trillion), compared with SEK 72.9 billion in the corresponding period of 2024.

It noted that adjusted gross income was SEK 33.2 billion (₦5.3 trillion), while adjusted gross margin improved to 48.0 per cent from 46.3 per cent, largely driven by stronger performance in Cloud Software and Services.

“Adjusted earnings before interest, tax and amortisation (EBITA) rose to SEK 12.7 billion ( ₦2.0 trillion), representing an 18.3 per cent margin, up from 14.1 per cent a year earlier.

“Net income for the quarter increased to SEK 8.6 billion (₦1.4 trillion), compared with SEK 4.9 billion in the same period of 2024.

“Free cash flow before mergers and acquisitions was SEK 14.9 billion ( ₦2.4 trillion), ” Ericsson said.

It said for the full year 2025, Ericsson reported two per cent organic sales growth, supported mainly by its Networks and Cloud Software and Services segments.

The company noted that reported full-year sales amounted to SEK 236.7 billion (₦37.9 trillion).

Ericsson said that adjusted gross income rose to SEK 113.9 billion (₦18.2 trillion), despite currency headwinds estimated at SEK 7.2 billion (₦1.2 trillion).

The company noted that adjusted gross margin improved to 48.1 per cent, up from 44.9 per cent in the previous year.

Adjusted EBITA increased significantly to SEK 42.9 billion ( ₦6.9 trillion), translating to an 18.1 per cent margin, compared with 11.0 per cent in 2024.

The report said net income for the year stood at SEK 28.7 billion (₦4.6 trillion), compared with SEK 0.4 billion in the previous year.

Ericsson said its board of directors would propose a dividend of SEK 3.00 per share (about ₦480) for the 2025 financial year.

The board also planned to seek approval for a share buyback programme of up to SEK 15 billion (₦2.4 trillion) at the company’s Annual General Meeting.

Commenting on the results, Ericsson President and Chief Executive Officer, Börje Ekholm said the company delivered organic growth in a largely flat radio access network (RAN) market through increased focus on mission-critical networks, 5G core and enterprise solutions.

Ekholm said the company would continue investing in technology leadership, particularly in AI-native and secure mobile networks.

“Looking ahead to 2026, Ericsson expects the global RAN market to remain flat, while mission-critical and enterprise markets are projected to grow, ” Ekholm said.

He added that the company planned to increase investments in defence-related communications during the year, while continuing cost optimisation to protect margins and cash flow.