Ericsson warns of future price rises in Ekholm’s final quarterly results

• Ericsson saw core profit above market predictions, but revenue fell in Q2
• Departing CEO warns component cost inflation could lead to price rises
• Ericsson posted better margins in mobile networks

After a turbulent quarter, Ericsson has announced falling sales – and while it is seeing higher margins in key areas such as mobile networks, the Swedish vendor warned of the impact the rising costs of components could have.

As part of its Q2 financial results (which you can see in full here), Ericsson announced a rise in core profit above market expectations, boosted by cloud services. Adjusted operating profit came in at 6.52bn Swedish krona (SEK) (€590m), up on the average market expectation of around SEK 6.42bn. However, net sales were down by 6% year on year to SEK 52.7bn – though Ericsson noted that excluding a one-time intellectual property rights settlement, this would have risen 1%.

This should come as no surprise – Ericsson’s sales have been fairly flat for some time, with departing CEO Börje Ekholm instead focusing on improving Ericsson’s margins. Adjusted gross margin for the quarter was 48.4%, up from 48% in Q2 2025, which the vendor credited to improved margins in its Networks and Cloud Software and Services division.

Ericsson’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at SEK 6.9bn, down from SEK 7.4bn in 2025, though the margin remained flat. This was achieved despite the increased cost of components, thanks to a reduction in operating expenditure and the divestment of iconectiv.

It was Ekholm’s last financial quarter as CEO, with the Ericsson chief set to leave the company in October after nearly a decade at the helm. He will be replaced by head of networks Per Narvinger, who takes the reins on 1 October.

Ekholm said Ericsson has become more resilient in the past few years: “The actions we’ve taken over the recent years have made Ericsson much more resilient and it’s actually enabling us to sustain healthy margins in varying market conditions.”

Referring to the leadership transition, he added: “I will always be proud of the progress Team Ericsson has made in strengthening our technology leadership, improving our operational execution and positioning us for long-term success now that AI actually moves into the physical world, which I think will provide us with a lot of growth opportunities going forward.”

Speaking on an earnings call on Tuesday morning, Ekholm also revealed that the company had taken “action to mitigate component cost inflation” in Q2 in order to maintain its margins, such as substituting products and redesigning them where possible.

But Ericsson CFO Lars Sandstrom warned that the vendor may have to raise prices on new tenders and also re-negotiate price rises into existing contracts, due to the impact of inflation on component costs.

“In the longer term, we cannot [absorb component cost rises] all alone – it is what we can do with customers to ensure we get [them] the best performing solutions but also at the right price point.”

- James Pearce, Contributing Editor, TelecomTV