Strategic highlights - operational excellence and enhanced financial flexibility  

• Strong commercial momentum with significant customer agreements including in India, Japan and the UK.  

• Operational excellence and cost efficiency actions driving gross margins to strong sustainable levels.  

• 5G Open RAN-ready portfolio breadth and technology leadership position reaffirmed by Gartner and Omdia.  

Financial highlights - further profitability growth   

• Organic sales declined by -2%, with growth in three out of four market areas. Reported sales were SEK 56.2 (61.8) b., with an FX impact of SEK -4.2 b.  

• Adjusted[1] gross income decreased to SEK 27.0 (28.6) b. as currency headwinds offset strong operational execution. Reported gross income was SEK 26.8 (28.2) b.  

• Adjusted[1] gross margin was 48.1% (46.3%) driven by improvements in Networks and Cloud Software and Services. Reported gross margin was 47.6% (45.6%).   

• Adjusted[1] EBITA was SEK 15.8 (7.8) b. with a 28.1% (12.6%) margin, including a SEK 7.6 b. capital gain benefit from the divestment of iconectiv. Reported EBITA was SEK 15.5 (6.2) b. with a 27.6% (10.0%) margin.  

• Net income was SEK 11.3 (3.9) b. including a benefit from the capital gain. EPS diluted was SEK 3.33 (1.14).    

• Free cash flow before M&A was SEK 6.6 (12.9) b. Net cash increased to SEK 51.9 b.  

Börje Ekholm, President and CEO, said: "In Q3, we established margins at a new long-term level following strong operational execution over the past few years. Cloud Software and Services sales grew 9%*, driven by strong growth in core networks. 

Our solid progress on technology initiatives continues. Gartner and Omdia reconfirmed our 5G solutions are industry leading. Our Open RAN-ready portfolio includes an AI native, future proof software architecture which is hardware agnostic. The portfolio integrates with third-party radios and supports Ericsson silicon and third-party CPU/GPUs.   

Looking ahead, we expect Enterprise organic sales to stabilize in Q4 and the RAN market to remain broadly stable. Solid recurring cash flow and the iconectiv sale contributed to a strong Q3 cash position, offering scope for increased shareholder distributions. The Board's recommendation on the scale and mechanism for the distribution will be included in the Q4 report for decision at the AGM." 

* Sales adjusted for the impact of acquisitions and divestments and effects of foreign currency fluctuations.  

[1] Adjusted metrics are adjusted to exclude restructuring charges. 

[2] Non-IFRS financial measures are reconciled at the end of this report to the most directly reconcilable line items in the financial statement.  

NOTES TO EDITORS 

You find the complete report with tables in the attached PDF or on www.ericsson.com/investors

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This is information that Telefonaktiebolaget LM Ericsson is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 07:00 CEST on October 14, 2025.