"Adjusted earnings before interest, tax and amortisation, EBITA, Ericsson's preferred measure of underlying profitability, fell 20% year-on-year to SEK 5.6 billion, with a margin of 11.3% against 12.6% in Q1 2025, slightly missing analyst expectations."
"CEO Börje Ekholm was direct about the source of the cost pressure: 'We are facing increasing input costs, especially in semiconductors, caused in part by AI demand,' he said in a statement accompanying the results."
"The Americas region declined after several quarters of elevated investment by US telecoms operators that had boosted Ericsson's results through 2025 unwound, compounded by operator consolidation effects in the market."
Ericsson reported a significant decline in profitability for Q1 2026, with adjusted EBITA falling 20% year-on-year to SEK 5.6 billion. The North American market, which had previously driven growth, saw a sharp reversal as telecom operators reduced spending. Revenue from the Networks segment fell 8% to SEK 32.9 billion. CEO Börje Ekholm attributed rising input costs, particularly in semiconductors, to increased AI demand. The adjusted gross margin narrowed slightly, reflecting cost pressures in the Networks segment, although Cloud Software and Services showed improved margins.
Read at TNW | Business
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