ERICSSON LM TELEPHONE CO Earnings Summary — Q2 2026

• Net income surged 359% sequentially to SEK 4,076 million, demonstrating a sharp recovery from Q1 2026 lows.
• Operating income rose significantly to SEK 5,919 million, driven by reduced R&D and SG&A expenses compared to the previous quarter.
• The revenue of SEK 52,691 million reflects a 6.8% sequential growth, though market conditions remain pressured compared to historical highs.
• Operating margins expanded to 11.23% as the company benefited from the 'focused strategy' aimed at restoring gross profitability.
• Research & Development costs were curtailed to SEK 10,480 million from SEK 13,489 million in Q1, aiding bottom-line performance.
• While sequential growth is strong, Net Income is down 11.9% year-over-year compared to the SEK 4,626 million reported in Q2 2025.
• Management continues to navigate a cyclical downturn in mobile infrastructure spending while pivoting toward Enterprise APIs.

Management is focused on navigating a severe cyclical downturn in mobile infrastructure while executing a strategic pivot toward enterprise APIs through Vonage. The 'focused strategy' remains the primary driver for restoring gross margins despite the cooling of 5G capex in major markets like India and North America.

Improving

While year-over-year comparisons remain slightly negative, the sharp sequential recovery in operating income and net profit suggests that cost-tightening measures are offsetting the broader market slowdown.

The outlook remains challenged by telco inventory adjustments and high customer concentration. However, technological leadership in 5G and the ongoing shift toward higher-margin software and enterprise services provide a mid-term stabilization narrative.