In its Q1 2025 results presentation yesterday, Börje Ekholm, Ericsson (NASDAQ: ERIC) President and CEO, commented, “In the evolving global trade landscape and macro volatility, we continue to focus on controlling what we can control and delivering to our customers. We are not immune, but we are resilient, with well diversified production close to the customer and the flexibility to adapt to changing conditions over time.”
For the quarter, Ericsson reported net sales of $5.7 billion, up three percent year-over-year from $5.5 billion in 1Q24. Organic growth, however, was flat compared to the same period a year ago. Adjusted EBITDA for the quarter was $714 million, up 36 percent YoY. The company invested $1.2 billion in 1Q25 or 22 percent of sales in research and development. That figure was up by four percent YoY as the company has maintained its R&D investment level above 20 percent of sales. On the strength of that investment, Ericsson claims it has extended its technology leadership position further and is on track to offer a portfolio of 130 radios this year that support programmable networks.
Ericsson’s Mobile Networks sales, comprising mainly RAN equipment, grew by six percent YoY to $3.7 billion and accounted for 65 percent of the company’s total sales in the quarter. Cloud Software and Services, and Enterprise business units, which together accounted for 35 percent of sales, each experienced a one percent YoY decline. Ekholm commented that going forward the company remains confident of its strong position in Mobile Networks and expects Enterprise to stabilize during 2025.
The company’s sales in the Americas region increased by 20 percent YoY, with growth in North America partly offset by lower sales in Latin America. In North America, Ericsson reported that its Mobile Networks sales grew strongly. It acknowledges it is benefiting from previous contract wins, particularly with the Big 3 MNOs, and accelerated network investments by other MNO customers, in part reflecting tariff uncertainty. The company saw declines in all other regional markets, particularly those where carrier normalization is taking place such as in India, and where macroeconomic factors are slowing network investments.
The company cautioned that there remains increased uncertainty on the outlook for Q2 2025, both in terms of potential for further tariff changes as well as in the broader macroeconomic environment. It expects sales growth in Q2 2025 for its Networks and Cloud Software and Services business units to be “to be broadly similar to 3-year average seasonality.”
By John Celentano, Inside Towers Business Editor
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