Ericsson posts strong Q1 but warns of rising trade and tariff risks

April 17, 2025 02:14 PM

Ericsson flagged rising trade friction and macro uncertainty in its Q1 results — but the Swedish vendor says its global production model is helping it stay resilient, even as growth lags outside the Americas.

In its earnings for Q1 2025, Ericsson posted a 61% year-on-year rise in net income to SEK 4.2 billion (USD$433 million), with gross margins climbing to 48.5% thanks to strong execution and an expanding portfolio of energy-efficient network gear.

The telco giant saw a noticeable increase in equipment sales in North America sales as customers sought to get ahead of the tariffs, as Ericsson’s President and CEO Börje Ekholm said: “We are not immune, but we are resilient.”

The regional upswing in North America helped offset softer performance in other markets, leaving overall organic sales flat.

The company’s adjusted EBITA margin improved, though, up 12.6% from 9.6% a year earlier, highlighting Ericsson’s continued focus on profitability amid a tough macro environment.

“We sustained solid momentum in Q1, despite a challenging and fast-changing macro backdrop, and our results highlight our competitiveness,” Ekholm said. “Our solid execution contributed to a strong 48.5% adjusted gross margin and adjusted EBITA margin.”

Ericsson’s total net sales for the quarter rose 3% year-on-year to SEK 55.0 billion ($5.68 billion), up from SEK 53.3 billion ($5.5 billion) a year earlier.

Net income, meanwhile, totalled SEK 4.2 billion ($434 million), compared to SEK 2.6 billion ($268 million) the previous year.

Ericsson’s reported gross income rose to SEK 26.5 billion ($2.7 billion), with adjusted gross income at SEK 26.7 billion ($2.75 billion).

Free cash flow before M&A fell to SEK 2.7 billion ($279 million), down from SEK 3.7 billion a year earlier and well below the SEK 15.8 billion posted in Q4, reflecting typical seasonal patterns and ongoing investment.

Diluted earnings per share came in at SEK 1.24 ($0.13), up from SEK 0.77 a year earlier.

Alongside the financial results, Ericsson pointed to progress on its programmable network strategy, with a major partnership inked with Telstra to roll out the first such deployment in Asia Pacific.

The quarter also saw all three major US operators adopt Ericsson’s API-based fraud detection tools, part of a broader push to monetise 5G network capabilities beyond connectivity.