Telefonaktiebolaget LM Ericsson (ERCA) Q3 2026 Earnings Report
DE:ERCA Q3 2026 EPS Results
- Actual EPS
- EUR 0.16
- Consensus EPS
- EUR 0.13
- Beat/Miss
- Beat by +EUR 0.03
- One Year Ago EPS
- EUR 0.31
DE:ERCA Q3 2026 Revenue Results
- Actual Revenue
- EUR 5.49B
- Expected Revenue
- EUR 4.98B
- Beat/Miss
- Beat by +EUR 508.68M
- YoY Revenue Growth
- +4.28%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/15/2026
- Time
- Before Open
- Conference Call
- Thursday, October 15, 2026
DE:ERCA Upcoming Earnings
Telefonaktiebolaget LM Ericsson's next earnings date is estimated for January 22, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
DE:ERCA Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was predominantly positive, supported by 7% organic sales growth, growth across nearly all segments, a 17% EBITA margin, strong Networks performance, improving operating expenses, solid cash generation and progress in AI-enabled products. However, management highlighted a broadly flat RAN market, rising component costs, a likely 2027 transition-year impact, negative Enterprise EBITA, elevated restructuring charges and macroeconomic uncertainty. The number and strength of the reported achievements outweighed the challenges.
Company Guidance
For Q4, assuming the exchange rates specified in the report, Ericsson expects sales growth in Networks and Cloud Software Services to be broadly similar to the 3-year average quarter-on-quarter seasonality and expects Networks adjusted gross margin to be in the range of 49% to 51%, benefiting from product mix; restructuring charges for 2026 will be elevated. The company said '27 could be such a transition period and is probably somewhat of a transition year as higher component costs flow through, with some impact and a dilution effect significant if action is not taken, while it works to pass on costs, implement structural actions and minimize the impact. Q4 OpEx is expected to show seasonality, and the direction for next year is to continue to offset salary increases; cash flow to net sales remains within the 9% to 12% target.
- Strong Third-Quarter Organic GrowthQ3 net sales totaled SEK 59.5 billion, with organic sales increasing 7% year-over-year and organic growth in all segments. Management attributed the growth to solid customer demand in strategic markets and effective commercial execution.
- Improved Profitability and Operating LeverageGross margin was 47.7% and EBITA margin was 17%. Adjusted EBITA was SEK 10.1 billion, and the 17% EBITA margin demonstrated the benefits of operating leverage with higher sales.
- Operating Expense ReductionOperating expenses excluding restructuring charges improved to SEK 18.4 billion, around SEK 0.7 billion lower year-over-year. Cost reduction actions were mitigating wage pressures.
- Networks Revenue and Earnings GrowthNetworks sales increased 9% year-over-year to SEK 38.7 billion, with year-to-date organic sales growth of 4%. Adjusted EBITA increased to SEK 9 billion from SEK 7.2 billion last year, mostly due to higher sales, while adjusted EBITA margin was 23.1%.
- Networks Margin ResilienceNetworks adjusted gross margin was stable at 50.3%, supported by product mix and retroactive IPR licensing revenues that offset some component cost increases. Adjusted gross income increased to SEK 19.4 billion.
- Cloud Software and Services GrowthCloud Software and Services sales increased 3% year-over-year to SEK 15.8 billion. Growth was broad-based across the company’s offerings and benefited from adjacencies and expansion into non-CSP verticals. Adjusted EBITA increased slightly to SEK 2.0 billion, with a margin close to 13%.
- IPR Revenue IncreaseIPR revenues were SEK 3.9 billion, an increase of SEK 0.8 billion year-over-year. Part of the increase was due to retroactive revenue related to previously unlicensed periods, and the current IPR run rate was approximately SEK 13.5 billion.
- Enterprise 5G Customer MomentumAlthough reported Enterprise sales were affected by the prior-year sale of iconectiv, organic Enterprise sales grew 1%. Management reported good customer momentum in enterprise 5G private networks.
- Enterprise Wireless Solutions ReorganizationEricsson will dissolve the Enterprise Wireless Solutions business area while continuing the portfolio and solutions. Neutral host and EP5G will move into Networks to capture R&D synergies, improve R&D scale and accelerate the journey toward profitability.
- Cradlepoint ImprovementThe business formerly known as Cradlepoint will remain a stand-alone unit within the Enterprise segment. Management said the business is showing strong improvements and is getting to black numbers.
- Strategic Focus on Vonage ProfitabilityManagement stated that Vonage is targeting both growth and cost improvements, with a priority on reaching black numbers faster in the Enterprise segment.
- Market Area and Executive Team SimplificationFrom January, Ericsson will create Market Area Asia Pacific by combining Northeast Asia with Southeast Asia, Oceania and India. The changes are intended to improve effectiveness across the region while maintaining country-level customer focus and will create a leaner executive team with clearer accountability.
- Cash Flow and Balance Sheet StrengthCash flow before M&A was SEK 4.9 billion, supported by earnings. Rolling-four-quarter cash flow to net sales was 11%, within the 9% to 12% target, and net cash increased sequentially to SEK 60.7 billion. Ericsson also raised a EUR 500 million bond in Q3 to prepare for upcoming maturities.
- Shareholder ReturnsThe share buyback continued in Q3, using SEK 4.5 billion of cash flow. Year-to-date, Ericsson had returned SEK 8 billion to shareholders through buybacks, with 79 million shares repurchased, alongside SEK 5 billion of dividends.
- AI-Native Network Functionality Already Commercially DeployedEricsson’s AI-native link adaptation feature provides a 10% gain in spectrum efficiency. It is commercially deployed with 3 operators and running on more than 60,000 base stations.
- AI and Custom Silicon OpportunityManagement said Ericsson’s purpose-built silicon enables customers to obtain more from spectrum assets without increasing power consumption. AI functionality is viewed as a potential upsell and differentiator, and the company said models can be deployed on basebands already in the field without requiring new hardware.
- Positioning for AI-Driven Connectivity DemandManagement expects AI applications to increase demand for reliable and resilient mobile networks and said Ericsson is well positioned through its technology, customer relationships and continued investment in technology leadership.
- Satellite and Terrestrial Connectivity OpportunityEricsson views satellite communication as a positive addition to terrestrial networks. Management emphasized the importance of seamless, high-performing connectivity between outdoor and indoor environments and said customers cannot rely on satellite alone and will also need terrestrial coverage.
- Cost and Commercial Mitigation ActionsEricsson has mitigated higher component costs through product substitution, upselling, portfolio steering and other commercial measures. The company is also pursuing portfolio optimization, price increases, supply-chain measures and efficiency improvements.
- Q4 Networks Margin OutlookFor Q4, Ericsson expects Networks adjusted gross margin to be in the range of 49% to 51%, benefiting from product mix. For Networks and Cloud Software and Services, sales growth is expected to be broadly similar to the three-year average quarter-on-quarter seasonality.
- 6G Upgrade FlexibilityEricsson expects much of its portfolio to be upgradeable to 6G, allowing reuse of basebands and radios. Management expects some new spectrum bands to require new radios, while also anticipating that existing products will support 6G alongside new 6G products.
- Emerging Programmable and Mission-Critical Network Use CasesSome customers are beginning to use 5G standalone functionality, although management said volume is not yet significant. Mission-critical networks, including blue-light networks, were described as a good business already, while quality-on-demand and network-slicing use cases are expected to develop over time.
DE:ERCA Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Jan 22, 2027 | 2026 (Q4) | 0.23- | 0.25 | ― | ― |
| Oct 15, 2026 | 2026 (Q3) | 0.130.16 | 0.31 | -49.00% (-0.15) | |
| Jul 14, 2026 | 2026 (Q2) | 0.110.11 | 0.13 | -9.93% (-0.01) | |
| Apr 17, 2026 | 2026 (Q1) | 0.100.03 | 0.11 | -76.19% (-0.09) | |
| Jan 23, 2026 | 2025 (Q4) | 0.170.25 | 0.12 | 115.91% (+0.14) | |
| Oct 14, 2025 | 2025 (Q3) | 0.250.31 | 0.1 | 217.27% (+0.21) | |
| Jul 15, 2025 | 2025 (Q2) | 0.100.13 | -0.28 | 144.48% (+0.41) | |
| Apr 15, 2025 | 2025 (Q1) | 0.060.11 | 0.06 | 80.00% (+0.05) | |
| Jan 24, 2025 | 2024 (Q4) | 0.180.12 | 0.09 | 36.08% (+0.03) | |
| Oct 15, 2024 | 2024 (Q3) | 0.080.10 | -0.75 | 113.03% (+0.85) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat Missed