Ericsson records 10% EMEA growth despite profit dip in Q1 2026

Ericsson has reported solid growth across Europe, the Middle East and Africa (EMEA), even as its overall earnings declined in the first quarter of 2026.

In its latest financial report released on Friday, the telecom equipment maker said organic sales in the EMEA region rose by 10 per cent, driven by increased investments in 5G networks, as well as ongoing network upgrades and expansion projects.

The report also showed strong performance in other regions, with South East Asia, Oceania and India recording a 12 per cent increase, largely due to higher network deliveries in India. North East Asia grew by 15 per cent, supported by project execution in Japan, while the Americas saw a two per cent decline following reduced spending in North America after earlier investment surges.

Ericsson said its Mobile Networks segment posted a seven per cent organic growth, reflecting strong demand in EMEA and parts of Asia. However, reported sales in the segment dropped by eight per cent to SEK 32.9 billion due to currency pressures.

In the Cloud Software and Services division, organic sales rose by four per cent, supported by improved delivery in core networks and managed services, despite a dip in reported figures.

The Enterprise segment also recorded four per cent organic growth, aided by its Global Communications Platform, although overall sales fell significantly following the divestment of iconectiv in 2025.

On the financial side, total reported sales declined by 10 per cent to SEK 49.3 billion, largely impacted by currency fluctuations. Gross income fell to SEK 23.3 billion from SEK 26.5 billion, while gross margin edged down to 47.2 per cent.

Restructuring costs increased sharply to SEK 3.8 billion, driven mainly by workforce reduction efforts. Adjusted earnings before interest, tax and amortisation (EBITA) came in at SEK 5.6 billion, with a margin of 11.3 per cent, down from SEK 6.9 billion and 12.6 per cent in the same period last year.

Despite the earnings pressure, free cash flow before mergers and acquisitions improved significantly to SEK 5.9 billion, up from SEK 2.7 billion, supported by stronger operational performance.

Commenting on the results, President and CEO, Börje Ekholm, said the company remained resilient despite global economic uncertainties.

He noted that ongoing investments in supply chain resilience have helped sustain performance, even as rising input costs—particularly for semiconductors driven by artificial intelligence demand—continue to pose challenges.

Looking ahead, Ericsson said it expects the Radio Access Network market to remain relatively stable but aims to outperform through innovation and expansion into enterprise and mission-critical services.

The company also announced plans to begin a share buyback programme of up to SEK 15 billion starting April 23, 2026.