20-F

Part of Ericsson Annual Report 2025 Financial Report Annual Report 2025 Financial Corporate Remuneration Report Governance Report Report

 

non-IFRS

AI may be the most impactful technology that mankind has ever seen. It will likely be a key driver of future productivity. Falling behind on AI adoption will hurt the competitiveness of companies and countries.

Until now, the AI race has revolved around semiconductors, data center and large models. The next phase in AI will be wide dissemination of devices and applications, which will drive the demand for flexible cellular connectivity and edge compute. New AI use cases will change the nature of traffic with more demand for higher uplink speeds, low latency and high availability.

Best-effort connectivity options like 5G 4G and cannot deliver the highest level of reliability, security or performance that AI will require. Guaranteed and differentiated connectivity for different use cases based on 5G standalone – and, over time, 6G – will be essential to provide the necessary uplink capacity, network performance and extreme connection density these use cases will require. This puts Ericsson at the center of AI developments and future growth opportunities.

Investments in communications infrastructure continue. At the end of 2025, around 370 communications service providers (CSPs) have launched commercial 5G services and around 90 have launched 5G standalone in public networks. An increasing number of CSPs are investing in 5G standalone, but there is still much more needed in order to scale AI.

It is worth noting that China has built out a very strong and dense 5G standalone network that has allowed the roll out of advanced use cases, such as factory automation, robotics and drones, where industrial AI leveraging efficient AI models provides significant advantages.

Ericsson is well positioned in this environment with around 37% market share, outside

China. At the end of 2025, Ericsson supplied 206 live 5G networks in 85 countries, including 55 live 5G standalone networks, with around 50% of all mobile traffic outside China carried over Ericsson networks. In addition, we were consistently recognized as the leader in RAN and 5G core networks by industry analysts.

Ericsson concluded the year with an adjusted gross margin of just over 48% and adjusted EBITA of SEK 42.9 billion. Excluding the gain from the iconectiv sale, the EBITA margin was 14.9%, bringing us close to our long-term ambition. Our solid financial performance underscores the competitiveness of our solutions, our commercial discipline and our continuous focus on operational improvements.

Technology leadership remains our foundation. To make the required investments, we must continuously drive operational efficiencies, including cost reduction initiatives. As a consequence, we reduced our head-count by 5,000 during 2025, making room for investments in our growth areas such as 5G Core, autonomous networks, mission critical, defense and enterprise.

Forging a path to growth

During 2025, Ericsson played a key role in helping communications service providers transition from their traditional best-effort mobile broadband to a new era of performance-based models built upon differentiated connectivity. This includes, among others, key agreements with Telstra and Vodafone, to transform their networks into programmable platforms for innovation that enable differentiated connectivity and new monetization opportunities.

We also focused on scaling the mobile platform to new use cases and new sectors. The most mature use case is Fixed Wireless Access (FWA), which during 2025 reached

over 150 million residential connections globally, with better customer satisfaction than other access technologies. Given this, I find it surprising that many countries still subsidize fiber rollout instead of a more cost efficient 5G rollout.

We are starting to see traction in mission critical applications, which we view as a key growth opportunity. During 2025, we executed multiple new agreements in the public safety sector and we’re also pursuing opportunities in national security and defense. Over the next year, we will ramp up investments in this area, with costs front-loaded.

On the enterprise side, we’re continuing to strengthen our position. The market for network APIs is starting to develop. In 2025, Vonage was first to offer aggregated access to network APIs across all three major US carriers – such as advanced fraud detection with significant customer interest. And our joint venture, Aduna, achieved full coverage in five countries namely the US, Spain, Germany, Canada, and the Netherlands. Following the decision in 2024 to exit a number of areas, it was encouraging to see that we returned to year-over-year growth while strengthening the gross margin in Q4. Our investments in building the market for network APIs will continue impacting near-term profitability.

In Enterprise Wireless Solutions, we’re seeing the market for private 5G starting to industrialize. One example is Airbus’s deployment of our private 5G solution at the production site in Hamburg with plans to extend private 5G across their strategic sites. Our wireless WAN business continues to grow with healthy gross margins. The most important strategic initiatives in Enterprise Wireless Solutions are to build a multi-channel model, and we expect to continue investing in this area, while continuing to reduce losses.

Looking ahead, new devices and applications will represent further opportunity.

CEO comment Positioned for growth Investments in market and technology leadership combined with disciplined strategy execution position Ericsson for the next phase of AI with industrialization of AI applications and devices.

–

Telstra programmable network (February 2025)

–

Japan R&D investment (May 2025)

–

AI factory in Sweden (May 2025)

–

India antenna manufacturing (June 2025)

–

Ericsson on Demand with Google Cloud (June 2025)

–

Level 4 autonomy certification (June 2025)

–

Vodafone Europe programmable network (October 2025)

–

Full coverage in the US for aggregated network APIs (November 2025)

In 2025, we commercially launched Ericsson’s connectivity management tool for 5G laptops. During the year we signed agreements with two leading mobile operators, secured an extension with our first customer in Asia, and onboarded the first US customer.

Through our investments in growth areas, we have been able to achieve modest growth despite a flat RAN market. Looking ahead, our high-performing, programmable and autonomous networks will enable our CSP customers to deliver differentiated performance and create new applications and use cases to monetize.

As an example, we partnered with Google Cloud during 2025 to develop a core network as a service (aaS) offering. Ericsson is a ground-breaking shift for the telecom industry for how network services can be deployed, managed and scaled. In addition, we are seeing interest from customers in other industry segments.

By delivering programmable networks, expanding use cases to enterprises and mission critical networks, and leveraging developers for new applications, Ericsson is forging a path to sustainable future growth. We will continue to build this ecosystem by partnering with hyperscalers, developers, and AI companies.

The next wave of connectivity

This is a very exciting moment for Ericsson as we enter an era of hyperconnectivity where everything that can be connected will be. Our strategy is to offer the best networks for AI, with AI, supporting applications and devices that need latency, faster uplink speeds and edge compute capabilities. We are also leveraging AI to improve performance, increase efficiency, enhance customer experience and enable new business models and use cases.

We are leading AI for telecom networks. In 2025, Ericsson and a consortium of Swedish companies, announced plans to build an AI factory to accelerate the training of domain-specific AI models and large-scale inference, so that AI can make large-scale predictions, classifications, or decisions.

AI will fundamentally change our business through autonomous and programmable networks, where operations can be aligned with business objectives. As networks evolve, AI will be inseparable from the underlying mobile technology and will be a critical enabler for autonomous operations. In June of 2025, Ericsson received the industry’s first verification of Level 4 autonomy – where the network can make full operational decisions with minimal human intervention.

Deployments of the next generation of mobile technology, 6G, are expected to begin before 2030. Our strategy is to be first and take a leading role in defining and standardizing 6G, leveraging the business foundation established through 5G monetization, such as network APIs and differentiated connectivity. Migration to 5G standalone is an essential first step as it provides the cloud-native architecture needed to fully enable automation and advanced network slicing. As mentioned earlier, China has bolstered its position in the global AI race through significant investments in 5G standalone.

Technology and geopolitics

Technology is at the heart of geopolitics and AI, together with cloud and mobile connectivity, is part of a digital stack which global powers are heavily investing in. Mobile connectivity is especially important as it provides the flexibility and necessary performance to scale cloud and AI. Consumers have already digitalized on the mobile platform and now it is time for enterprises.

Ericsson is a strong advocate of an open ecosystem. Our future-proof, hardware-agnostic software architecture, that already embeds AI, supports both Ericsson silicon and third-party CPUs and GPUs, and is already integrated with more than 10 third-party radios. This allows customers to choose the hardware stack that best fits their needs, while delivering the best performance and lowest total cost of ownership. We are strong advocates of an open ecosystem that supports faster innovation, robust security and greater resilience – all key issues for national security.

We are also bolstering our efforts to become a domestic champion in key markets such as the US, India and Japan, while also working to preserve an open and competitive ecosystem at scale. In 2025, we announced new R&D investments in Japan, antenna production in India as well as continued investments into our USA 5G Smart Factory in Texas, which also celebrated five years of 5G manufacturing.

Europe faces a clear strategic challenge in the digital domain. Rather than framing the debate around an elusive notion of full digital sovereignty, a more pragmatic approach would be to recognize European strategic interdependence with US and like-minded technology ecosystems and focus on where Europe can realistically lead. That opportunity lies in the application layer. Europe has deep pools of entrepreneurial talent and domain expertise that can translate digital technologies into globally competitive solutions. To unlock this potential, Europe needs to accelerate investment across the digital stack, most notably in the connectivity layer, including widespread deployment of 5G standalone. Strengthening these foundations would position Europe to build distinctive leadership in applications, transforming structural interdependence into a world-leading platform for innovation and growth.

Summary

Connectivity is critical for AI to scale, and high-performing, programmable networks underpin accelerated digitization and new growth opportunities. Ericsson today is well positioned to capture value from deployment of AI in society.

Ericsson continues to invest in technology leadership, but it is not enough to just lead on technology, we must take the lead on culture as well. During the past year, we reinforced our culture to support and drive our strategy forward. We are convinced that diverse teams, where everyone feels included and safe, leads to better performance. By serving customers in over 175 countries, we have a deep talent pool with a rich range of backgrounds and perspectives. All our talent decisions are merit-based, and we have no tolerance for discrimination of any kind. Our commitment to diversity and inclusion remains rock solid.

We have also reached a significant milestone – the 150th anniversary of Ericsson’s founding. While that is worth celebrating, our efforts are focused on positioning Ericsson for the next 150 years. Through our focus on technology and innovation leadership, we have managed numerous technology transitions in the past, and we are committed to doing that for the future as well.

Before I conclude, I want to thank the incredible Ericsson team for all their efforts during 2025. Their hard work and perseverance have laid the foundation for an even stronger company. Ericsson is in a strong position. Our leadership in mobile networks, combined with investments to scale the mobile platform into new areas, will expand the market for connectivity and drive new monetization for us.

Börje Ekholm

President and CEO

AI-powered

Ericsson’s technology leadership in mobile networks is the foundation of its strategy. The Company has industry-leading hardware and software solutions for Communications Service Providers (CSPs) encompassing radio, core networks, transport and antennas, along with network management and support systems, network deployment and advanced network services. Ericsson is a trusted partner, delivering secure, open, 5G, and verifiable security within a multi-vendor, standards-aligned ecosystem.

Ericsson’s portfolio of mobile network solutions is constantly evolving to provide the best performance, security, and sustainability at the lowest total cost of ownership (TCO). In addition, the Company’s high-performing, and increasingly autonomous, networks are helping to break the energy curve of mobile networks and reduce CSPs’ energy use, costs and greenhouse gas emissions. Leadership in radio technology, including application specific semiconductors, will remain critical for the Company as AI functionality moves from the compute layer to radio access.

AI is transforming networks and Ericsson is embedding autonomous functions – including agentic AI – into its radio, core and orchestration layers. AI is improving operational efficiency and, more importantly, enabling differentiated, tailored services for different customer segments. Looking ahead, AI will be further embedded into the fabric of how networks are designed, built, and operated.

Ericsson is leading in the transition toward autonomous networks, which are more agile, reliable and cost-efficient compared to today’s manual or semi-automated operations. Today, Ericsson is the first vendor certified to deliver level 4 autonomy – where the network can plan, decide and execute operational tasks with minimal human intervention. Autonomous networks, powered by AI, are a prerequisite for delivering tailored experiences enabled by network slicing and programmable networks at scale.

In the future, networks will need to be more flexible to allow for new and differentiated services that will be critical for AI use cases and for further digitalization in

society. Ericsson has increased investments in programmable networks and in doing so is enabling a single network to be used for multiple use cases through network slices, where specific performance levels can be offered depending on the specific requirements of each application.

Consistent with Open RAN specifications, Ericsson has implemented a disaggregated architecture for its software and hardware in the compute layer of the network. This has allowed the Company to benefit from innovation in advanced silicon ecosystems and has enabled Ericsson’s software to run on the industry’s latest central processing (CPUs) and graphics processing units (GPUs).

As networks evolve towards 6G, the industry will see AI further embedded in every layer, enabling the networks to learn, predict and adapt in real time in order to deliver tailored, guaranteed experiences. The Company’s strategy is to be first and to lead in 6G, building on its strong position in 5G, including performance differentiation, cloudification, automation and new technologies such as sensing.

Technology leadership

Ericsson invests in technology as a key differentiator. Ericsson’s strategic investments in R&D include AI capabilities in its portfolio as well as purpose-built chipsets for its mobile network solutions. These investments position the Company to further extend its technology leadership in terms of cost and performance. In addition, the Company creates, secures, protects, and licenses a portfolio of patents – currently totaling more than 60,000 granted patents.

We are on an evolutionary path towards 6G, the next generation of mobile technology, which is now in the standardization phase. Mobile networks are being scaled to new sectors and use cases such as FWA and mission-critical networks, as well as by adding new capabilities through network APIs. 5G standalone networks and embedded AI are accelerating this transition. 6G will further extend these capabilities, with new spectrum and scaling capabilities such as uplink performance. 6G is by design, and AI will become a key enabler across the full technology lifecycle, enabling full network autonomy, breakthrough levels of performance, efficiency and resilience, tailored experiences at scale, and full support for capabilities beyond communication such as sensing. Ericsson is leading through innovation, research, and collaboration with global industry and academic partners, developing and energy-efficient network architectures. The Company’s strategy is to sustain

technology leadership into 6G with the first commercial deployments of 6G expected around 2030.

Trusted partner

By delivering advanced, secure and trusted 5G, and in the future 6G, to underpin an stack – which includes Cloud and AI - Ericsson is helping to ensure resilient, secure and trusted digital communications. The Company is committed to open interfaces, design and verifiable security within a multi-vendor, standards-aligned trusted stack. Ericsson works with customers, government agencies and partners to strengthen digital infrastructure while preserving an open and competitive ecosystem – at scale. Secure and reliable digital infrastructure protects critical systems and secures customer trust, with cybersecurity and data privacy at the core of operations and product development, and principles.

Intelligent operations

Ericsson strives to prudently manage its costs, investments and balance sheet while investing to enhance the technology leadership, market share and profitability. The focus on performance and cost leadership enables the Company to provide products and solutions with the lowest TCO to improve productivity and capital efficiency across the supply chain. Ericsson is driving extensive deployment

of AI for internal efficiency and has started to generate sustainable productivity gains across the Company.

In addition, Ericsson ensures supply chain stability through a diversified global footprint with production hubs in key regions, adapting to market changes and prioritizing ethical practices. Sustainability considerations are integrated into supply chain management through Ericsson’s Code of Conduct for Business Partners, supported by risk assessments and supplier audits. The Company also participates in industry initiatives to address systemic challenges such as labor rights, responsible mineral sourcing and health and safety in the value chain.

Global skill & scale

Ericsson’s global presence, skills and expertise, together with close customer partnerships, create opportunities for profitable growth and economies of scale. Ericsson’s unique engineering talent is key to maintaining technology leadership.

Ericsson prioritizes employee engagement, job satisfaction and well-being, together with a commitment to equal opportunities and work-life balance, to attract talent globally. Investments in continuous learning, and AI integration drive innovation and productivity. Merit-based recruitment and transparent compensation practices foster diversity and ensure a fair, enriching workplace, strengthening Ericsson’s culture, for long-term success.

 

 

Long-term targets

Ericsson’s goal is to enhance profitability by leveraging its leadership in mobile networks, expanding across sectors and scaling its network platform. The financial targets are expressed in terms of adjusted EBITA margin and free cash flow before mergers and acquisitions (M&A) as a percentage of net sales.

To drive value creation and competitiveness, Ericsson prioritizes strategic investments in research and development (R&D), ensuring that technology leadership is maintained and operational efficiency is enhanced. Financial discipline and a strong focus on profitability and returns are at the heart of every decision. The Company is committed to an investment grade credit rating, and strives for a solid net cash

 

position over time. The capital allocation principles are: (1) maintain technology leadership and ensure strong customer confidence through continued investments in R&D, even during periods of increased market volatility or low visibility, (2) stable to progressive ordinary dividends, (3) selective inorganic investments to complement the existing product portfolio and/or market footprint, (4) ensure capital discipline through distributing excess cash to shareholders.

Sustainability goals are integral to Ericsson’s strategy, helping to build resilience across the Company. By addressing climate change and prioritizing health and safety, the Company believes it is mitigating material impacts and risks throughout its operations and value chain.

2025 marks yet another exceptional year for Ericsson. The external environment saw increased geopolitical tension, including threats of steep tariffs, outlining a new set of rules for global trade. Naturally, this is impacting global businesses, and the Board has spent a significant amount of time navigating the changing conditions. At the same time, the world is fast approaching the next phase in the AI era. This will include applications and devices and can create a truly hyperconnected society. These developments will require advanced wireless connectivity – an area where Ericsson is the world’s leader.

Against this fast-paced and dynamic external backdrop, Ericsson has demonstrated resilience and progress, underscored by a number of significant achievements around the world and across the business.

Strategy and Technology

In 2025, the Company continued to execute on its strategy to lead in mobile networks and to scale the mobile platform to new use cases and new sectors. Today, Ericsson is recognized as an industry leader, and our customers rely on our world-leading products and solutions to allow them to offer differentiated services and increase monetization opportunities. We saw several key agreements in the mobile infrastructure business as well as good traction in new sectors, including mission critical applications and enterprise solutions. Successful execution of this strategy, will put Ericsson on a growth trajectory, and the Board works actively with the management team to capitalize on this momentum.

Although the next phase in the AI era will require advanced wireless connectivity, short-term, we still see little or no growth in our core mobile infrastructure market. This means that we have to plan accordingly. Thus, the

Company is continuing to strengthen operational excellence and structurally improve the business through cost management and by improving working capital.

At the foundation of Ericsson’s success is technology leadership. Safeguarding this position is the key priority for the Board. This includes ensuring that the Company can continue to make critical investments to lead in the 6G and AI era and preserve customer confidence throughout varied market environments, as well as securing the ability to make selective acquisitions. To this end, we’re happy to enter 2026 in a strong position with a solid financial position, allowing the Company to continue critical investments in R&D while at the same time increasing shareholder returns.

Capital structure

For the full-year 2025, the Company reported net sales of SEK 236.7 billion, an adjusted gross margin of 48.1%, an adjusted EBITA margin of 14.9% (excluding the capital gain from the iconectiv sale) and free cash flow before M&A came in at 26.8 billion. This means the Company reached its cash flow generation target of 9–12% of net sales before M&A and is tracking very close to its long-term EBITA target of 15–18%. The Company ended the year with a net cash position of SEK 61.2 billion. These results reflect Ericsson’s competitive portfolio and the actions taken in recent years to strengthen the position of the business.

A key focus of the Board over 2025 has been capital allocation. During the year, the Board has worked to more clearly define its view on capital allocation and to articulate what we see as a desirable balance sheet. The overarching aim is to maintain a solid net cash position to secure technology leadership.

In conjunction with the Company’s Q4 earnings report, the Board presented its key capital allocation principles which are:

In line with these principles, for the financial year 2025, the Board recommended total shareholder return of approximately SEK 25 billion consisting of an increased dividend of SEK 3.00 per share and a share buyback program of up to SEK 15 billion. This represents the largest shareholder return in Ericsson’s history and reflects both the Board’s confidence in Ericsson’s strategy execution and its view that excess cash should be distributed to shareholders.

Sustainability, people and culture leadership

Throughout 2025, Ericsson continued to embed sustainability and responsible business practices into its operations. This includes driving the industry’s shift toward high-performing networks with a reduced carbon footprint. As reduced energy consumption can reduce our customers’ total cost of ownership, our work in this area provides a competitive advantage for the Company while also supporting our own journey towards Net Zero greenhouse gas (GHG) emissions.

Comment from the Chair of the Board

A prerequisite for Ericsson’s technology leadership is its people and leading engineering skills. To this end, the Company remains focused on making sure it can attract, retain and motivate the right employees in today’s increasingly competitive global talent market. As a truly global company our talent decisions are merit-based and made without discrimination.

During 2025, we’ve seen a significant shift in the global ESG landscape, particularly in the US, which is our largest market and accounts for 40% of total revenue. Like all businesses, we have had to carefully consider balancing regulatory risks and business imperatives. As a result, the Board will propose to the AGM to focus our sustainability target in our 2026 Long Term Variable compensation program entirely on climate. In this changing ESG landscape, Ericsson remains fully committed to fostering an inclusive workplace across all levels of the organization.

Ericsson continues to strengthen its ethics and compliance program; fully embedding it in the business and fostering accountability remain top priorities for the Company. The Board continues to be actively involved in overseeing the compliance program and supporting management in this crucial work.

Governance

Throughout the year, the work of the Board and its committees has proceeded well, covering a wide range of crucial topics for the Company and its strategy. Our current directors bring a wide variety of qualifications, perspectives and skills that support the Board’s ability to carry out its oversight role on behalf of the shareholders.

In 2025, I have continued the dialogue with major Swedish and international shareholders, to discuss topics important to our owners, including our long-term compensation programs. These discussions continue to be very productive and provide the Board with valuable feedback as we make decisions for the future direction of Ericsson.

Concluding remarks

Lars Magnus Ericsson founded his company in 1876 with the firm belief that communication is a basic human need. This year, which marks the Company’s anniversary, we can reflect on a history of innovation, industry leadership and investment in transformative technologies. These are innovations that have brought people closer and improved societies all over the world. With Ericsson’s current focus on programmable, networks and sustained R&D investments, the Company is well positioned to capture further value and continue driving opportunities as the digital economy expands.

The Board remains fully supportive of Ericsson’s management as they execute on the strategy and commitment to long-term technology leadership. We are confident in the company’s momentum in programmable networks and new connectivity markets. Although it might take time to show in sales, we believe we are entering a pivotal period as connectivity in the AI era will become more important. On behalf of the Board, I want to express my sincere thanks to CEO Börje Ekholm, the management team and all employees for their commitment and contributions during 2025.

Chair of the Board

 

150 years of connectivity

From a small workshop in 1876 to a global leader in communications, Ericsson’s history is defined by relentless innovation, standards leadership and investments in technology that have transformed the telecommunications industry.

An innovation star is born

Ericsson’s story begins in 1876, when Lars Magnus Ericsson opened a small Stockholm workshop repairing telegraph instruments and other electrical and mechanical equipment. Shortly thereafter, the Company began manufacturing its first telephones and by 1896 Ericsson had produced over 100,000 phones and had 500 employees.

 International expansion quickly followed. Ericsson entered neighboring Norway and Finland and secured major contracts in Russia and Great Britain. By the early 1900s, the Company had also expanded beyond Europe, building a production plant in the US and played a formative role in building Shanghai’s telephone network. By the early 1900s Ericsson had established offices in Mexico, Argentina and Poland, cementing its legacy as a global telecommunications leader.

 

Read more at ericsson.com

 

The mobile miracle Ericsson had experimented with mobility early on. Its first ”mobile” phone in 1956 weighed around 40 kilos. But it was AXE that made cellular networks viable at national and eventually global scale. A major breakthrough came in 1981 with NMT, the Nordic Mobile Telephone system. It was the world’s first mobile network that enabled multinational roaming, and it established Ericsson as a serious player in mobile technology. The development and industry adoption of the GSM standard transformed mobile phones from niche devices into mass-market consumer products. Across Europe, having one common technology made roaming possible and the economies of scale reduced costs significantly. GSM also improved efficiency and capacity and included a new feature – Short Message Service (SMS) – that would once again transform how the world communicates. By 1995, GSM networks served some 10 million subscribers worldwide, and mobile handset sales exceeded total handset sales for the entire 1980s. By the year 2000, network equipment sales accounted for roughly 65 percent of Ericsson’s revenue, reflecting the company’s leadership position. As networks continued to evolve, the focus of mobile communication went from carrying voice conversations to enabling the democratization of information. 2000–2015 The internet in your pocket During the early 2000s, as the dot-com bubble burst and a global economic downturn battered the telecom sector, Ericsson weathered the crisis and continued to invest in R&D and product development. In 2001, Ericsson emerged as a 3G technology leader, leveraging its telecom platforms and standards leadership. As packet-based technologies matured, Ericsson committed to the Long-Term Evolution (LTE) standard and in December 2009, together with TeliaSonera, launched one of the world’s first commercial 4G networks. The next generation of mobile technology saw the emergence of smartphones and the app economy. 4G delivered the throughput and capacity improvements needed for video streaming, social platforms, and accelerating consumer demand and platform innovation. By 2015, mobile broadband subscriptions had grown substantially, underpinning new services and revenue streams for the industry. What comes next Mobile innovation has delivered exponential increases in capacity and capability and 5G has become critical digital infrastructure – enabling differentiated services for consumers, enterprises and society. The next generation of mobile technology, 6G, will be AI-native with embedded intelligence across the network enabling real-time adaptation, new devices, greater spectrum and energy efficiency, as well as new value streams such as integrated sensing and immersive services. Over its 150-year history, one thing has remained constant: Ericsson’s commitment to connecting people and organizations through innovation in communications. Through sustained R&D investment, standards leadership, selective M&A and close operator partnerships – Ericsson has established a strong position to deliver long-term value for shareholders, customers and society. As the digital economy grows, Ericsson aims to leverage its scale, portfolio and ecosystem position to capture further value through programmable, AI-powered networks that continue to enable economic and social opportunity. 2015–2025 A generation like no other In order to serve both consumers and enterprises, Ericsson began releasing 5G-capable products in 2015 and contributed significantly to 3GPP standardization efforts. This early engagement positioned the company to capture rapid adoption when commercial 5G networks were launched in 2018. By 2020, 5G was the fastest-adopted mobile generation in history, reaching one billion subscribers in three years. Ericsson networks now power the majority of global 5G traffic outside China. Importantly, 5G has expanded the addressable market beyond consumer mobile broadband to include mission critical networks, industrial automation, AR/VR, and AI-driven enterprise applications. Fixed Wireless Access (FWA) has also emerged as a clear commercial use case, offering operators a path to extend high-speed broadband without full fiber rollouts. Ericsson has also begun reaching out to a new set of network consumers: application developers. The 2022 acquisition of Vonage enables Ericsson to expose advanced network capabilities via network APIs, making advanced capabilities, such as low-latency connectivity and precise positioning, easier for enterprises and developers to integrate and monetize. To further accelerate the network API market, Ericsson co-founded Aduna in 2024 – a joint venture with leading telecom operators – to aggregate and standardize network APIs and simplify enterprise adoption at scale. Together, these strategic moves have put Ericsson at the center of enterprise digitalization.

Net sales

Net sales decreased by SEK –11.2 billion, or
–5%, to SEK 236.7 (247.9) billion, including a currency impact of SEK –13.9 billion. Organic sales grew by 2%. Networks sales declined by –5% to SEK 151.0 billion, while organic sales grew by 1%. Cloud Software and Services sales were stable at SEK 62.7 billion, while organic sales grew by 6%. Enterprise sales declined by –15% to SEK 21.1 billion, while organic sales declined by –5%. Sales in segment Other declined by –16% to
SEK 1.8 billion, while organic sales declined by
–13%.

Sales declined in all market areas. In Americas sales increase in North America was offset by lower sales in Latin America. In market area Europe, Middle East and Africa sales growth in Africa was offset by lower sales in Middle East and Europe. Sales declined in the other market areas, with the largest reduction in market area South East Asia, Oceania and India, primarily due to reduced investment levels in India.

IPR licensing revenues increased to SEK 14.5 (14.0) billion as a result of new 5G license agreements and renewals.

The sales mix by commodity was 37% (38%) hardware, 23% (23%) software and 39% (39%) services.

Gross income and margin

Gross income increased to SEK 112.7 (109.4) billion with a gross margin of 47.6% (44.1%). The improved gross margin was driven by cost-reduction actions and operational efficiency as well as favorable market mix. Gross income included a year-over-year currency impact of SEK –7.2 billion.

Adjusted gross income increased to SEK 113.9 (111.4) billion. Adjusted gross margin increased to 48.1% (44.9%).

Research and Development (R&D) expenses

R&D expenses decreased to SEK –48.9 (–53.5) billion, including restructuring charges of
SEK –0.6 (–2.1) billion and a currency benefit of SEK 1.2 billion. In 2024, R&D expenses were impacted by an impairment of intangible assets of SEK –1.4 billion. When adjusted for restructuring, currency and impairment impacts, R&D expenses decreased by SEK –0.5 billion year-over-year. Investments in R&D, for technology leadership and operational resilience, were more than offset by savings from cost-reduction actions in Cloud Software and Services.

The number of granted patents exceeded 60,000.

Net sales

 

 

Gross income and margin

 

 

Networks

Networks represented 64% (64%) of Group net sales in 2025. The segment offers hardware, software, and services for intelligent, reliable and flexible 5G networks. It includes RAN with an software architecture deployable on Ericsson silicon and third-party CPUs/GPUs, cost-efficient transport networks, and advanced active/passive antennas. The services portfolio covers deployment and lifecycle management.

Net sales

Sales decreased by –5% to SEK 151.0 (158.2) billion, including a currency impact of SEK –9.2 billion. Sales were broadly stable in market area Europe, Middle East and Africa. Sales growth in Africa and the Middle East, driven by ongoing network modernization and new 5G launches, was largely offset by a sales decline in Europe.

Sales declined in the other market areas. In Americas, sales growth in North America was offset by lower sales in Latin America. Sales declined in South East Asia, Oceania and India, primarily in India. In North East Asia sales declined in certain 5G front-runner markets. Organic sales growth was 1%.

Gross income and margin

Gross margin increased to 49.7% (46.6%) as a result of continued cost-reduction actions and operational efficiency. Gross income increased to SEK 75.1 (73.6) billion, despite lower net sales and a currency impact of SEK–5.0 billion. Adjusted gross income increased to SEK 75.5 (74.7) billion, with an adjusted gross margin of 50.0% (47.2%).

EBIT and EBITA

EBIT increased to SEK 29.8 (25.7) billion, with an EBIT margin of 19.7% (16.2%). EBITA increased to SEK 30.2 (25.9) billion, with an EBITA margin of 20.0% (16.3%). The increase was supported by higher gross income and lower operating expenses. Operating expenses decreased, benefiting from continued efficiency improvements and positive currency impacts. R&D investments remained stable, supporting the strategy of building the best high-performing, programmable networks and maintaining technology leadership.

EBIT and EBITA included restructuring charges of SEK –1.0 (–1.9) billion. They were also impacted by a currency effect of
SEK –3.9 billion.

Adjusted EBIT increased to SEK 30.8 (27.6) billion, with an adjusted EBIT margin of 20.4% (17.4%), while adjusted EBITA increased to SEK 31.2 (27.8) billion, with an adjusted EBITA margin 20.7% (17.5%).

Cloud Software and Services

Cloud Software and Services represented 26% (25%) of Group net sales in 2025. The segment provides core networks, network management, business and operations support systems, and network operations delivered as managed services. Offerings include secure data and voice connectivity, service monetization and orchestration tools, and network management with intent-based operations to improve network performance, business agility and operational efficiency.

Net sales

Sales were stable at SEK 62.7 (62.6) billion, including a currency impact of SEK –3.4 billion. Services accounted for 62% (64%) of net sales. Core network sales grew across all market areas.

Sales grew in market area South East Asia, Oceania and India, driven by India. In market area North East Asia, sales growth was driven by Japan. In market area Americas, growth in North America was offset by lower sales in Latin America. In market area Europe, Middle East and Africa, growth in Europe and Africa was offset by a decline in the Middle East. Organic sales growth was 6%.

Gross income and margin

Gross margin increased to 41.7% (36.8%) benefiting from strong strategy execution with improved delivery efficiency and performance, higher share of software sales and continued focus on commercial discipline. Gross income increased to SEK 26.1 (23.0) billion despite a SEK –1.5 billion currency impact.

Adjusted gross income increased to SEK 26.9 (23.9) billion, with an adjusted gross margin of 43.0% (38.2%).

EBIT and EBITA

EBIT and EBITA were both SEK 6.0 (–0.4) billion. EBIT margin was 9.6% (–0.7%) and EBITA margin 9.6% (–0.6%). EBIT and EBITA were supported by higher gross income and lower operating expenses, reflecting strong strategy execution. Operating expenses decreased, benefiting from continued efficiency improvements and positive currency impacts, more than offsetting the increased investments in technology leadership. EBIT and EBITA included restructuring charges of SEK –1.2
(–2.4) billion. They were also impacted by a currency effect of SEK –0.9 billion. Adjusted EBIT and adjusted EBITA increased to SEK 7.2 (2.0) billion, with an adjusted margin of 11.4% (3.2%).

Sales share by segment

 

 

Networks

 

 

Cloud Software and Services

 

 

Enterprise

Enterprise represented 9% (10%) of Group net sales in 2025. Enterprise provides secure, reliable connectivity through private 5G, indoor coverage and Wireless WAN, while orchestrating cloud-managed wireless platforms with security and real-time optimization. The offerings also include next-generation, network-aware communications solutions that expose advanced mobile network capabilities to developers and support enterprise hyperconnectivity. The portfolio includes Global Communications Platform, Wireless Wide Area Networks (WWAN) and private 5G networks.

Net sales

Sales decreased by –15% to SEK 21.1 (24.9) billion, including a currency impact of
SEK –1.2 billion. Sales were impacted by the divestment of iconectiv in Q3 2025. Sales in Global Communications Platform declined reflecting the 2024 decision to reduce activities in some countries as well as lower sales in legacy solutions. Sales in Enterprise Wireless Solutions declined slightly, mainly due to lower sales in private 5G solutions. Organic sales declined by –5%.

Gross income and margin

Gross margin increased to 53.9% (51.4%), benefiting from the decision to focus on more profitable markets in Global Communications Platform and a stronger product mix in Enterprise Wireless Solutions. Gross income decreased to SEK 11.4 (12.8) billion primarily reflecting the divestment of iconectiv in Q3 2025 and a currency impact of SEK –0.6 billion.

EBIT (loss) and EBITA(loss)

EBIT (loss) was SEK 3.2 (–22.1) billion, with an EBIT margin of 15.3% (–88.8%). EBITA (loss) was 4.7 (–4.5) billion, with an EBITA margin of 22.3% (–18.0%). EBIT and EBITA increased, primarily driven by the SEK 7.6 billion capital gain from the divestment of iconectiv, and were also supported by operational improvements in Enterprise Wireless Solutions. In 2024 EBIT was impacted by a impairment charge of SEK –15.3 billion mainly related to the Vonage acquisition. EBIT and EBITA included restructuring charges of SEK –0.1
(–0.5) billion. EBIT was also impacted by a SEK –0.1 billion currency effect, while there was no currency impact on EBITA. Adjusted EBIT (loss) was SEK 3.4 (–21.6) billion with an EBIT margin of 16.0% (–86.8%). Adjusted EBITA (loss) was SEK 4.9 (–4.0) billion, with an adjusted EBITA margin of 23.0% (–16.0%).

Other

Other represented 1% (1%) of Group net sales in 2025. It comprises media businesses and other activities.

Net sales

Sales declined to SEK 1.8 (2.2) billion, primarily due to the divestment of the IoT business.

Gross income

Gross income was SEK 0.1 (–0.1) billion with a gross margin of 3.0% (–4.2%).

Adjusted gross income was SEK 0.1 (0.0) billion, with an adjusted gross margin of 4.8%
(–1.5%).

EBIT (loss) and EBITA (loss)

EBIT(loss) and EBITA(loss) were SEK –0.4 (1.2) billion. 2024 included a gain of SEK 1.9 billion from the resolution of a commercial dispute. EBIT and EBITA were impacted by restructuring charges of SEK 0.0 (–0.2) billion.

Adjusted EBIT(loss) and adjusted EBITA(loss) were SEK –0.4 (1.3) billion.

Enterprise

 

 

Other

 

 

Market area Americas

Sales decreased by –3% to SEK 83.4 billion, including a currency impact of SEK –5.5 billion. Networks sales declined by –3%. Growth in North America, as a result of increased market share and selective network investments by some large customers in the US and in Canada, was more than offset by lower sales in Latin America due to continued intense competition and reduced customer network investments. Cloud Software and Services sales decreased by –2%, as growth in core networks in North America was offset by a decline in Latin America. Organic sales increased by 4% year-over-year.

Market Area Europe, Middle East
and Africa

Sales decreased by –1% to SEK 70.7 billion, including a currency impact of SEK –2.6 billion. Sales were supported by growth in mission-critical networks. Network sales were broadly stable. Strong growth in Middle East and Africa, primarily driven by ongoing network modernization in Saudi Arabia and Algeria, as well as new 5G launches in Egypt and Morocco, was partly offset by lower sales in Europe. In Europe, sales increase from recent contract wins in the UK and Spain and a new 5G rollout in Turkey, offset sales decline due to the completion of modernization projects elsewhere. Cloud Software and Services sales increased in Europe, driven by recent market share wins in the UK as well as in Africa. This growth was offset by a decline in Middle East. Organic sales increased by 3% year-over-year.

Market area South East Asia, Oceania and India

Sales declined by –11% to SEK 28.8 billion, including a currency impact of SEK –2.2 billion. Networks sales declined, primarily due to reduced network investment levels in India, as well as increased competition in South East Asia. Sales in Cloud Software and Services grew, primarily driven by timing of project deliverables. Organic sales decreased by –4% year-over-year.

Market area North East Asia

Sales declined by –15% to SEK 16.0 billion, including a currency impact of SEK –1.0 billion. Networks sales declined due to reduced customer investments in some 5G front-runner markets. Cloud Software and Services sales grew, reflecting recent core networks contract wins. Organic sales declined by –9% year-over-year.

Market area Other

Market area Other primarily includes IPR licensing revenues and almost all sales in segment Enterprise. Sales declined by –5% to SEK 37.7 billion. IPR licensing revenues increased to SEK 14.5 (14.0) billion as a result of new 5G license agreements and renewals. Opportunities to further grow IPR licensing revenues remain. The increase in IPR licensing revenues were offset by decline in Enterprise sales mainly due to the divestment of iconectiv. Organic sales increased by 5%.

Sales share by market area

 

 

Corporate governance

In accordance with the Swedish Annual Accounts Act and the Swedish Corporate Governance Code, a separate Corporate Governance Report, including an internal control section, has been prepared and appended to this Financial Report.

Shareholder engagement

As part of Ericsson’s ongoing shareholder engagement, and in addition to the ordinary course communication between shareholders and Ericsson’s Investor Relations and management team throughout the year, during the first and fourth financial quarters of 2025, the Chair of Ericsson’s Board, Jan Carlson, had dialogues with shareholders and held Company-initiated substantive discussions with shareholders representing approximately 65% of shares outstanding. These are typically focused on a broad range of governance topics with the objective to understand and receive shareholder feedback and respond to questions. Further information about shareholder engagement is included on page 5 of the Corporate Governance Report.

Risk management

Risk management is an important element of strategic decision-making and value creation. Ericsson strives to capture the opportunities and threats relating to the Company’s strategic objectives. Ericsson’s risk management activities operate in tandem with the development and deployment of Ericsson’s business plans and operational strategies. The Company has made significant strides in recent years toward ensuring that strategic, external and internal risks are properly identified, assessed, internally reported, escalated, and effectively addressed.

Financial risk management is overseen by the Finance function. For further information on financial risk management, see Notes to the consolidated financial statements – note F1 “Financial risk management” in the Financial Report.

For information on risks that could impact the fulfilment of objectives, and form the basis for mitigating activities, see the other sections of the Board of Directors’ Report, notes A2 “Critical accounting estimates and judgments”, F1 “Financial risk management”, F4 “Interest bearing liabilities” and the chapter Risk factors. Further information about risk management is included on pages 4–5 of the Corporate Governance Report.

Material contracts

Material contractual obligations are outlined in note D4, “Contractual obligations”. These are primarily related to leases of office and production facilities, certain customer

contracts, purchase contracts for outsourced manufacturing, R&D and IT operations, as well as the purchase of components for Ericsson’s own manufacturing.

Ericsson is party to certain agreements, which include provisions that may take effect or be altered or invalidated by a change in control of the Company as a result of a public takeover offer. Such provisions are not unusual for certain types of agreements, such as financing agreements and certain license agreements. However, considering, among other things, Ericsson’s strong financial position, the Company believes that none of the agreements currently in effect would in and of itself entail any material consequence for Ericsson due to a change in control of the Company.

Legal proceedings involving governmental authorities

In February 2022, Ericsson publicly disclosed that an internal investigation in 2019 included a review of the conduct of Ericsson employees, vendors and suppliers in Iraq during the period between 2011 to 2019. The investigators could not determine the ultimate recipients of any payments, nor identify that any Ericsson employee was directly involved in financing terrorist organizations. The Company’s 2019 internal Iraq investigation did not conclude that Ericsson made or was responsible for any payments to any terrorist organization.

The Company continues to fully cooperate with the US Department of Justice (DOJ) in its investigation into matters discussed in the 2019 internal Iraq investigation report and related topics concerning jurisdictions including Iraq, and the Company is providing additional documents and other information which continue to be requested by the DOJ. As additional information continues to be identified and evaluated in continued cooperation with the DOJ during its ongoing investigation, it is expected that there will not be any conclusive determinations on the outcome until the investigation is completed. The scope and duration of the investigation remain uncertain.

In April 2019, Ericsson was informed by China’s State Administration for Market Regulation Anti-monopoly Bureau (SAMR) that SAMR has initiated an investigation into Ericsson’s patent licensing practices in China. Ericsson is cooperating with the investigation, which is still in a fact-finding phase. The next steps include continued fact-finding and meetings with SAMR in order to facilitate the authority’s assessment and conclusions. In case of adverse findings, SAMR has the power to impose behavioral and financial remedies.

Legal proceedings not involving governmental authorities

In August 2022, a civil lawsuit was filed in the United States District Court for the District of Columbia against Telefonaktiebolaget LM Ericsson and Ericsson Inc. (collectively, the “Ericsson defendants”). The lawsuit was brought by US military service members, employees of US government contractors and other civilians who were killed or injured in terrorist attacks in Iraq, Afghanistan and Syria from 2005 to 2021, as well as by their family members. The lawsuit asserts claims against the Ericsson defendants under the U.S. Anti-Terrorism Act alleging that the Ericsson defendants made payments that ultimately aided the terrorist organizations that committed, planned or authorized the attacks. In November 2022, the Ericsson defendants filed a motion to dismiss the complaint. On December 20, 2022, plaintiffs filed an amended complaint, which added additional plaintiffs, including a plaintiff injured in Turkey, and also named Ericsson AB (collectively with the Ericsson defendants, the “Ericsson corporate defendants”), President and CEO Börje Ekholm and a former employee (who has not been served with process) as additional defendants and also asserted additional allegations and claims. In March 2023, the Ericsson corporate defendants and Mr. Ekholm filed motions to dismiss the amended complaint. Plaintiffs filed their oppositions to defendants’ motions to dismiss the amended complaint in June 2023, and defendants filed reply briefs in support of their motions to dismiss in July 2023. All briefing has been submitted, and resolution of the matter is pending with the District Court. All defendants will continue to vigorously defend this matter.

In February 2024, a second civil lawsuit also alleging violations of the U.S. Anti-Terrorism Act was filed in the United States District Court for the District of Columbia. The lawsuit was filed by the same law firm and involves substantially similar factual allegations and claims as those made in the Anti-Terrorism Act lawsuit originally filed in August 2022, and similarly names the same Ericsson corporate defendants, President and CEO Börje Ekholm and a former employee as defendants. The new lawsuit was brought by additional US military service members, employees of US government contractors and other civilians who were killed or injured in terrorist attacks in Iraq, Afghanistan, Syria, Turkey, Niger, and France from 2005 to 2021, as well as by their family members. The District Court for the District of Columbia has stayed the proceedings in this matter pending its decision on the motions to dismiss in the earlier-filed suit. The defendants will vigorously defend this matter.

In November 2025, a third civil lawsuit also alleging violations of the US Anti-Terrorism Act was filed in the US District Court for the District of Columbia. The lawsuit was filed by a law firm not involved in the August 2022 and February 2024 lawsuits and involves substantially similar factual allegations and claims to those made in the Anti-Terrorism Act lawsuits filed in August 2022 and February 2024, and similarly names the same Ericsson corporate defendants, CEO Börje Ekholm and a former employee as defendants. The new lawsuit was brought by additional US military service members, employees of US government contractors and other civilians who were killed or injured in terrorist attacks in France, Afghanistan, and Belgium from 2012 to 2018, as well as by their family members. The District Court for the District of Columbia has stayed the proceedings in this matter pending its decision on the motions to dismiss in the earlier-filed suit. The defendants will vigorously defend this matter.

Beginning on August 4, 2023, a number of civil lawsuits have been filed against Telefonaktiebolaget LM Ericsson in Solna District Court, Sweden. 93 claimants have filed suit, which are coordinated and financed by a litigation funder. The claimants consist of a group of funds and financial institutions that allegedly are or have been shareholders of the Company. Their damages claims are primarily based on alleged inadequate disclosure of the contents of the Company’s 2019 internal Iraq investigation report. Ericsson filed its statement of defense on March 15, 2024. On February 14, 2025, the District Court ordered Ericsson to produce the 2019 internal Iraq investigation report to the claimants’ external counsel. Ericsson appealed the decision and on August 15, 2025, the Court of Appeal overturned the District Court’s decision. The claimants have appealed the decision to the Supreme Court. Proceedings on the merits of the case are stayed pending final resolution of the document production issue. Ericsson will continue to vigorously defend this matter.

The Company actively manages its IPR portfolio and its need for third-party licenses and is involved from time to time, in the ordinary course of business, in litigation related thereto, as plaintiff, defendant and other capacities.

In addition to the proceedings discussed above, the Company is, and in the future may be, involved in various other regulatory investigations, enforcement actions, lawsuits, claims (including claims by third-parties the Company has indemnified against infringement liability or provided guarantees to) and proceedings incidental to the ordinary course of business and transactions.

Group structure

The Group is comprised of more than 200 legal entities, and approximately 90 branch offices, and serves customers in more than 175 countries.

Parent Company

Telefonaktiebolaget LM Ericsson’s (the Parent Company) business consists mainly of corporate management, holding company functions, internal banking activities and customer credit management.

Financial information

Income after financial items was SEK 31.3 (6.6) billion. The Parent Company had no sales in 2025 or 2024 to subsidiaries, while 27% (37%) of total purchases of goods and services were from subsidiaries.

Significant changes in the Parent Company’s financial position for the year included:

At the end of the year, equity amounted to SEK 43.1 (22.3) billion, and total equity amounted to SEK 91.4 (70.6) billion.

Share information

As of December 31, 2025, the total number of shares issued was 3,371,351,735, of which 261,755,983 were Class A shares, each carrying one vote, and 3,109,595,752 were Class B shares, each carrying one tenth of one vote. Both classes of shares have the same rights of participation in the net assets and earnings. The largest shareholders of the

Parent Company at were Investor AB with approximately 24.8% of the votes (9.9% of the shares), AB Industrivärden with approximately 15.0% of the votes (2.6% of the shares) and AMF Tjänstepension and AMF Fonder with approximately 5.1% of the votes (3.2% of the shares). In accordance with the conditions of the Long-Term Variable Compensation Program (LTV) for Ericsson employees, 677,285 treasury shares were distributed to employees or sold in 2025. The quotient value of these shares was SEK 5.00 per share, totaling SEK 3.4 million, representing less than 1% of capital stock, and compensation received for shares sold amounted to SEK 6 million. The holding of treasury stock on December 31, 2025 was 38,002,276 Class B shares. The quotient value of these shares is SEK 5.00, totaling SEK 190.0 million, representing 1.13% of capital stock, and the purchase price amounts to SEK 190.0 million.

The Annual General Meeting 2025 resolved to approve the transfer of treasury stock to employees and on an exchange, a directed share issue of 23.1 million Class C shares and an authorization for the Board of Directors to decide on an acquisition offer for the previously resolved LTV 2025 and 2024 for Ericsson’s Top Management. In accordance with the authorization from the Annual General Meeting, in the second quarter 2025, the Board of Directors resolved to repurchase the newly issued shares, which were subsequently converted into Class B shares. The quotient value of the repurchased shares was SEK 5.00, totaling SEK 115.5 million, representing 0.7% of capital stock, and the acquisition cost was SEK 115.7 million.

Proposed disposition of earnings

The Board of Directors will propose to the Annual General Meeting (AGM) an ordinary dividend of SEK 3.00 (2.85) per share. The dividend is proposed to be paid in two installments, SEK 1.50 per share with the record date April 2, 2026 (payment date April 9, 2026), and SEK 1.50 per share with the record date September 29, 2026 (payment date October 2, 2026). For the Parent Company’s treasury shares of Class B, no dividend will be distributed.

The Board of Directors proposes that earnings be distributed as follows (assuming that no treasury shares are held on the record date):

 

As a basis for its dividend proposal, the Board of Directors has made an assessment in accordance with Chapter 18, Section 4 of the Swedish Companies Act of the Parent Company’s and the Group’s need for financial resources as well as the Parent Company’s and the Group’s liquidity, financial position in other respects and long-term ability to meet their commitments. As of 31 December 2025, the Group’s equity ratio amounted to 39.5% (31.8%) and the net cash amounted to SEK 61.2 (37.8) billion.

The Parent Company’s equity would have been approximately SEK 0.86 billion lower if assets and liabilities had not been valued at fair value pursuant to Chapter 4, Section 14a of the Swedish Annual Accounts Act.

The Board of Directors has also considered the Parent Company’s result and financial position and the Group’s position in general. In this respect, the Board of Directors has taken into account known circumstances that may have an impact on the financial positions of the Parent Company and its subsidiaries.

 

The proposed dividend does not limit the Group’s ability to make investments or raise funds. It is the Board of Directors’ assessment that the proposed dividend is justified considering the requirements that the nature, scope and risks of the business impose on the Parent Company’s and Group’s equity, as well as the Parent Company’s and the Group’s consolidation level, liquidity, and position in general, considering coming years’ business plans and economic development.

Proposed share buyback program

The Board of Directors will further propose to the AGM to authorize the Board to initiate a share buyback program to repurchase shares, with purchases expected to begin following the publication of the Q1 2026 report. The proposed program targets to return up to SEK 15 billion of cash to shareholders over the period extending to the 2027 AGM at the latest, with a formal mandate to buy back a maximum of 10% of shares outstanding. The share repurchase is proposed to include Class B shares traded on Nasdaq Stockholm. The repurchased shares are expected to be cancelled or partially used to fund approved LTV programs.

Introduction

These Guidelines for Remuneration to Group Management (the “”) apply to the Executive Team of Telefonaktiebolaget LM Ericsson (the “” or “”), including the President and Chief Executive Officer (the “ and ”) (“”). These Guidelines apply to remuneration agreed and changes to previously agreed remuneration after the date of approval of the Guidelines and are intended to remain in place for four years until the Annual General Meeting of shareholders 2027. For employments outside of Sweden, due adaptations may be made to comply with mandatory local rules or established local practices. In such cases, the overall purpose of these Guidelines shall be accommodated to the largest extent possible. These Guidelines do not cover remuneration resolved by the general meeting of shareholders, such as long-term variable compensation programs (“”).

Objective

These Guidelines aim to ensure alignment with the current remuneration philosophy and practices applicable for the Company’s employees based on the principles of competitiveness, fairness, transparency, and performance. In particular to:

The Guidelines and the Company’s strategy and sustainable long-term interest

A successful implementation of the Company’s strategy and sustainable long-term interests requires that the Company can attract, retain, and motivate the right talent and can offer competitive remuneration. These Guidelines aim to allow the Company to offer the members of the Group Management attractive and competitive total remuneration. Variable compensation covered by these

guidelines shall be awarded against specific and measurable business targets derived from the short and long-term business plan approved by the Board of Directors. Targets will include financial targets at Group, Business Area and/or Market Area level. In addition, strategic targets, operational targets, employee engagement targets, customer satisfaction targets, sustainability and corporate responsibility targets or other lead indicator targets will be applied as deemed appropriate by the Remuneration Committee.

The Company operates long-term variable compensation programs for the Group Management as approved by the Annual General Meeting (“”). Such decisions are not covered by these Guidelines. Details of Ericsson’s current remuneration policy and how we deliver on our policy and guidelines and information on previously decided long-term variable compensation programs that have not yet become due for payment, including applicable performance criteria, can be found in the Remuneration Report and in Note G2, “Information regarding members of the Board of Directors, the Group management” and Note G3, “Share-based compensation” in the annual report.

Governance of remuneration to Group Management

The Board has established a Remuneration Committee (the “”) to handle compensation policies and principles and matters concerning remuneration to Group Management. The Board has authorized the Committee to determine and handle certain issues in specific areas. The Board may also on occasion provide extended authorization for the Committee to determine specific matters.

The Committee is authorized to review and prepare for resolution by the Board salary and other remuneration for the President and CEO. Further, the Committee shall prepare for resolution by the Board proposals to the AGM on Guidelines for Remuneration to Group Management at least every fourth year and on Long-term Variable compensation programs and similar equity arrangements.

The Committee has the mandate to resolve salary and other remuneration for the other members of Group Management except for the President and CEO, including targets for short-term variable compensation (“”), and payout of STV based on achievements and performance.

To conduct its responsibilities, the Committee considers trends in remuneration, legislative changes, disclosure rules and the general global executive remuneration

environment. Before preparing salary adjustment recommendations for the President and CEO for resolution by the Board and approving any salary adjustments for the other members of Group Management the Committee reviews salary survey data, Company results and individual performance. No employee is present at the Committee’s meetings when issues relating to their own remuneration are being discussed. Similarly, the President and CEO is not present at Board meetings when issues relating to the President and CEO’s own remuneration are being discussed. The Committee may appoint independent expert advisors to assist and advise in its work.

The Chair of the Remuneration Committee along with the Chair of the Board work together with Ericsson’s Investor Relations team, striving to ensure that healthy contact is maintained as necessary and appropriate with shareholders regarding remuneration to Group Management.

Overview of remuneration package covered by these Guidelines

For Group Management the remuneration package may consist of fixed salary, short-term and long-term variable compensation (STV and LTV), pension and other benefits.

Below are the key components of remuneration of Group Management covered by these Guidelines, including why they are used, their operation, opportunity levels and related performance measures. In addition, the AGM has resolved and may in the future decide to implement LTV for Group Management. The ongoing share-based LTV programs resolved by the AGM have been designed to provide long-term incentives for the members of Group Management and to incentivize the Company’s performance creating long-term value. The aim is to attract, retain and motivate executives in a competitive market through performance-based share related incentives and to encourage the of significant equity holdings to align the interests of the members of Group Management with those of shareholders. The vesting period under the ongoing share-based LTV programs resolved by the shareholders is three years and vesting is subject to the satisfaction of identified performance criteria. Although LTV is an important component of the remuneration of Group Management, it is not covered by these Guidelines, because these programs are resolved separately by the AGM.

Consideration of remuneration offered to the Company’s employees

When developing these Guidelines, the Board and the Committee have considered the total remuneration and employment conditions of the Company’s employees by reviewing the application of Ericsson’s remuneration policy for the wider employee population to ensure consistency.

There is clear alignment in the remuneration components for the members of Group Management and the Company’s employees in the way that remuneration policy is applied as well as the methods followed in determining fixed salaries, short-term and long-term variable compensation, pension, and benefits, which are to be applied broadly and consistently throughout the Company. The targets under short-term variable compensation are similar and the performance measures under long-term variable compensation program are the same for the members of Group Management and other eligible employees of the Company. However, the proportion of pay that is linked to performance is typically higher for Group Management in line with market practice and the higher levels of total compensation applicable at that level.

Employment contracts and termination of employment

The members of Group Management are employed on permanent rolling contracts. The maximum mutual notice period is no more than 12 months. In case of termination by the employee, the employee has no right to severance pay.

In any case, the fixed salary paid during the notice period plus any severance pay payable will not together exceed an amount equivalent to the individual’s 24 months fixed salary unless otherwise determined by local legislation or collective bargaining agreements.

The employee may be entitled to severance pay up until the agreed retirement age or, if a retirement age has not been agreed, until the month when the employee turns 65. In a case where the employee is entitled to severance pay from a date later than 12 months prior to retirement, the severance pay shall be reduced in proportion to the time remaining and calculated only for the time as of the date when the employee’s employment ceases (i.e., the end of the period of notice) and until the time of retirement.

Severance pay shall be reduced by 50 percent of the remuneration or equivalent compensation the employee receives, or has become entitled to, from any other employer or from his/her own or other activities during

the period that severance is paid to the employee by the Company.

The Company shall have the right to terminate the employment contract and dismiss the employee with immediate effect, without giving any advance notice and entitlement to severance pay, if the employee commits a serious breach of his/her obligations towards the Company.

Normally disputes regarding employment agreements or any other agreements concerning the employment of the members of Group Management, the way such agreements have been arrived at, interpreted, or applied, as well as any other litigation proceedings from legal relations based on such agreements, shall be settled by arbitration by three arbitrators in accordance with the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce. Irrespective of the outcome of any arbitral award, the Company may, in the relation between the parties, carry all fees and expenses charged by the arbitrators and all of its own litigation costs (including attorney’s fees), except in the event the arbitration proceedings were initiated by the employee without reasonable cause.

Recruitment policy for new members of Group Management

In determining the remuneration of a new member of Group Management, the Board and the Committee shall take into consideration all relevant factors to ensure that arrangements are in the best interests of the Company and its shareholders. These factors include:

Additional arrangements

By way of exception, additional arrangements can be made when deemed appropriate and necessary to recruit or retain an individual. Such arrangement could be in the form of short-term or long-term variable compensation or fixed component and can be renewed, but each such arrangement shall be limited in time and shall not exceed a period of 36 months and twice the annual fixed salary that the individual would have received

if no additional arrangements were made. In addition, if appropriate, different measures and targets may be applied to the new appointment’s incentives in the first year.

In addition, it may on a basis be decided by the Board and the Committee respectively to compensate an individual for remuneration forfeited from a previous employer during recruitment. The Board and the Committee will consider on a basis if all or some of the remuneration including incentives forfeited need to be If there is a of forfeited incentives, this will take into account relevant factors including the form they were granted (cash vs. shares), performance conditions attached to these awards and the time they would have vested/paid. Generally, awards will be made on a comparable basis to those forfeited.

In the event of an internal candidate being promoted to Group Management, legacy terms and conditions may be honored, including pension and benefit entitlements and any outstanding incentive awards. If a Group Management member is appointed following a merger or acquisition with/of another company, legacy terms and conditions may also be honored for a maximum period of 36 months.

Board of Directors’ discretions

The Board upon recommendation from the Committee may in a specific case decide to temporarily deviate from these Guidelines in whole or in part based on its full discretion in unusual circumstances such as:

The Committee is responsible for preparing matters for resolution by the Board, and this includes matters relating to deviations from these Guidelines. Any such deviation will be disclosed in the Remuneration Report for the relevant year.

Events after the reporting period

Ericsson announces a proposed staff reduction in Sweden

On January 15, 2026, Ericsson announced a proposed headcount reduction in Sweden. Ericsson has submitted a notice to the Swedish Public Employment Service. Approximately 1,600 positions could be impacted in Sweden.

Ericsson’s Board of Directors proposes a share buyback program

On January 23, 2026, Ericsson announced that a share buyback program up to SEK 15 billion will be proposed to the AGM by the Board of Directors. For more information, see note E1 ”Equity”.

The Board of Directors and the CEO certify that the consolidated financial statements have been prepared in accordance with IFRS Accounting Standards, as adopted by the EU, and give a true and fair view of the Group’s position and results of operations. The annual report have been prepared in accordance with generally accepted accounting principles in Sweden and give a true and fair view of the Parent Company’s position and results of operations.

The Board of Directors’ Report for the Group and the Parent Company provides a fair view of the development of the Group’s and the Parent Company’s operations, position and results of operations and describes material risks and uncertainties facing the Parent Company and the companies included in the Group.

The Board of Directors and the CEO certify that the Sustainability Statement has been prepared in accordance with European Sustainability Reporting Standards (ESRS) and the specifications adopted pursuant to the EU Taxonomy Regulation, as adopted by the EU.

Report

firm

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Telefonaktiebolaget LM Ericsson (publ) and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated March 12, 2026, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,

testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/Deloitte AB

Stockholm, Sweden

March 12, 2026

independent

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Telefonaktiebolaget LM Ericsson (publ) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income (loss), changes in equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March , 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue recognition from large contracts with customers

– Refer to Notes B1 and B2 to the financial statements

Ericsson generates revenues primarily from sales of hardware, software, and services to its customers. The majority of these revenues are related to large multi-year framework agreements with customers which often include discount and incentive arrangements. The associated customers issue purchase orders under these framework agreements that in combination constitute a contract and commitment to purchases of products and services over the duration of the agreement with the customer. These large contracts with customers may give rise to a risk of material misstatement due to incorrect amount and timing of revenue recognition for the respective obligation, that could have a material impact on the financial statements.

Ericsson conducts an assessment at contract inception to determine which promised goods and services in a contract are distinct and accordingly identified as performance obligations. The amount and timing of revenue recognized is determined in relation to the individual performance obligations of the contract.

Application of accounting standards for revenue recognition of large contracts with customers is associated with complexity in determining the amount and timing of revenue recognized in relation to individual elements of the contracts and involves inherent management judgment. We identified revenue recognition from large contracts with customers as a critical audit matter due to the significant degree of audit effort, especially in evaluating the sufficiency of audit evidence, in performing audit procedures to evaluate the adherence to the accounting standards.

Our audit procedures related to the amount and timing of revenue recognized in relation to large contracts included, but were not limited to the following:

Valuation of acquired customer relationships, intellectual property rights and other intangible assets, including goodwill related to Global Communications Platform (Vonage) — Refer to Note C1 to the financial statements

Acquired customer relationships, intellectual property rights and other intangible assets, including goodwill, related to Global Communications Platform (Vonage) are collectively significant assets in the consolidated balance sheet. The Company’s evaluation of these acquired customer relationships, intellectual property rights and other intangible assets, including goodwill, for impairment involves the comparison of the recoverable amount to its carrying value. The Company’s assessment of the recoverable amount is based on discounted future cash flow models derived from internal business plans covering five years followed by a gradually declining cash flow development in the following period to its terminal value. The assessment requires management to make significant estimates and assumptions regarding forecasts of future sales growth, operating income, working capital and capital expenditure requirements, as well as assumptions on discount rates and terminal growth rates.

We identified valuation of acquired customer relationships, intellectual property rights and other intangible assets, including goodwill related to Global Communications Platform (Vonage) as a critical audit matter due to the significant judgments and estimates used in determining the forecasts of future sales growth, operating income, working capital and capital expenditure requirements, as well as assumptions on discount and terminal growth rates. Changes in these assumptions could have a significant impact on either the recoverable amount, the amount of any impairment charge, or both. The assessment of management’s assumptions regarding recoverable amount requires a high degree of auditor judgment, including an increased extent of audit effort and the need to involve our valuation specialists.

Our audit procedures related to the assumptions regarding recoverable amount of acquired customer relationships, intellectual property rights and other intangible assets, including goodwill related to Global Communications Platform (Vonage) included, but were not limited to the following:

/s/ Deloitte AB

Stockholm, Sweden

March , 2026

We have served as the Company’s auditor since 2020.

Consolidated financial statements