Telefonaktiebolaget L M Ericsson - ADR

Q2 headline performance (resilience + margins) - Net sales SEK 52.7bn, -1% organic YoY (but +1% organic YoY excluding the Q2’25 one-off IPR settlement). - Gross margin 48% (+2pp vs last year excluding one-off IPR effects); EBITDA margin 13.1% (in line). - Demonstrated disciplined execution and healthy margin delivery despite a tough environment.

Segment dynamics (where growth came from / where it didn’t) - Networks: sales SEK 33bn, -8% YoY (-4% organic). Organic decline mainly reflects IPR one-offs last year; margin 17.7% EBITDA margin (slightly down YoY). - Cloud Software & Services: sales SEK 14.7bn, +3% YoY; +5% organic (all market areas; improved delivery efficiency). EBITDA margin 14.2% (improved; rolling 4Q adjusted EBITDA margin ~13%, “new high”). - Enterprise: reported sales -19% YoY (impacted by divestment of iconectiv + FX). Organic +3%; however profitability weakened with divestment/product mix (EBITDA SEK -0.8bn).

Cash flow / balance sheet (what matters for investors) - Cash flow before M&A: SEK 0.4bn in Q2, driven by earnings but hit by higher inventories (inventory build for planned Q3 deliveries). - Rolling 4Q cash flow to net sales ~12%, within/upper-end of target 9–12%. - Net cash down SEK 8.3bn sequentially to SEK 59.8bn, mainly due to dividend payments and share repurchases (share buybacks are an explicit capital-return driver mentioned).