Ericsson’s Q3 2024 report showcases major advancements in strategic and operational priorities, including growth in programmable networks and mobile network contract wins across multiple markets. A notable development was the establishment of a joint venture with leading mobile network operators to secure a global supply of Network APIs. Additionally, Ericsson signed further 5G patent licensing agreements, with projected intellectual property rights (IPR) revenues expected to reach at least SEK 13 billion in 2024.
Financially, Ericsson reported a slight year-over-year sales decline of 1%, totaling SEK 61.8 billion, despite a robust 55% increase in North America. Adjusted gross income rose to SEK 28.6 billion, supported by a significant increase in Networks segment gross margin to 48.7%. The reported gross margin improved to 45.6%, reflecting effective cost management and a favorable market mix.
The adjusted EBITA reached SEK 7.8 billion, with a 12.6% margin, benefiting from cost reduction initiatives. Net income improved to SEK 3.9 billion, compared to a loss of SEK 30.5 billion in the previous year, with diluted earnings per share (EPS) at SEK 1.14. Free cash flow before mergers and acquisitions was strong at SEK 12.9 billion, highlighting effective inventory management.
Börje Ekholm, President and CEO, commented: “Q3 marks a period of intense focus on executing our strategic plan. We are seeing increasing customer momentum around programmable networks that deliver differentiated performance, and expect further traction, supported by the joint venture we’ve announced with 12 of the world’s largest telecom operators. This JV will aggregate network APIs, accelerating commercialization and creating new opportunities for network monetization.
We’re seeing signs of market stabilization, particularly in North America, which, as an early adopter market, is returning to growth. While market conditions are largely determined by our customers, we are committed to operational excellence regardless of external factors. Our Q3 results highlight our progress, with strong gross margin expansion and consistent free cash flow, driven by our commercial discipline and operational efficiency.
Looking ahead to Q4, we expect our Networks sales to stabilize year-on-year, supported by continued growth in North America. However, we anticipate near-term sales pressure in our Enterprise segment as we focus on profitable areas. To improve performance, we launched a new private 5G enterprise product portfolio in Q3, which remains a top priority for us.”
