Ericsson(US:ERIC) Prnewswire·2026-01-23 06:52Core Insights - The company demonstrated solid execution of its strategic priorities, achieving organic growth in a flat RAN market through efforts in mission-critical networks, 5G core, and enterprise solutions [3] - The operational improvements over recent years have led to enhanced margins and cash flow, marking the ninth consecutive quarter of year-over-year adjusted EBITA margin expansion [3][4] - The company plans to increase investments in defense while optimizing its cost base to support margins and cash flow generation in the upcoming years [5] Fourth Quarter Highlights - Organic sales growth was achieved in all segments, with a notable 12% growth in the Cloud Software and Services segment [4] - Reported sales for Q4 were SEK 69.3 billion, a decrease from SEK 72.9 billion year-over-year, while adjusted gross income was SEK 33.2 billion, slightly down from SEK 33.7 billion [4][7] - Adjusted EBITA for Q4 was SEK 12.7 billion, reflecting an 18.3% margin, benefiting from improved segment margins in Mobile Networks [4][7] Full-Year Highlights - For the full year, reported sales were SEK 236.7 billion, down from SEK 247.9 billion, with adjusted gross income increasing to SEK 113.9 billion despite a SEK -7.2 billion currency headwind [4][7] - The adjusted gross margin improved to 48.1%, up from 44.9%, driven by enhancements in Mobile Networks [4][7] - Net income for the year was SEK 28.7 billion, with diluted EPS of SEK 8.51, a significant increase from SEK 0.01 the previous year [4][7] Financial Position - The company generated strong free cash flow, with SEK 14.9 billion before M&A in Q4 and SEK 26.8 billion for the full year, resulting in a cash flow to net sales ratio of 11.3% [4][7] - Net cash at the end of 2025 was SEK 61.2 billion, a substantial increase from SEK 37.8 billion the previous year [4][7] - The Board proposed an increased dividend of SEK 3.00 per share and a share buyback program of SEK 15 billion [4][5]