Ericsson Reported Double-Digit Declines in Revenue and Profit

2026 had a rocky start for Ericsson. Swedish vendor faced obstacles in the first quarter of 2026, reporting double-digit declines in revenue and net profit.

Net sales fell 10% year-on-year to SEK49.3 billion ($5.4 billion), which it partly attributed to negative currency impact. Net income declined 79% to SEK887 million due to the same issue, along with restructuring costs. Breaking out segments, net sales in Mobile Networks dropped 8% to SEK32.9 billion, 9% in Cloud Software and Services to SEK11.8 billion, and 30% in Enterprise to SEK4.2 billion.

Ericsson noted sales in North America suffered due to accelerated network investments in the prior year, along with short-term reallocation of customer spend following network operator consolidation. 5G launches and network modernisation work boosted its performance in Europe, the Middle East, and Africa.

CEO Borje Ekholm warned that the vendor will face increasing costs, especially in semiconductors, caused by rising AI demand. Ekholm said the results demonstrated continued resilience in a dynamic market, while pointing to healthy gross margins and strong cash flow to reflect the progress we have made in recent years, reducing reliance on geographic mix and strengthening our foundations globally.

He added that multi-year investments in building a resilient, diversified supply chain were helping Ericsson deliver for customers during geopolitical and macroeconomic uncertainties. It plans to offset rising costs driven by AI demand by working closely with customers and suppliers, and through product substitution and efficiency actions. Ekholm also warned that the company continued to expect a flattish RAN market, pinning hopes that its mission-critical and Enterprise position will be able to grow faster than the mobile networks market.