Ericsson Plans SEK 25 Billion Shareholder Returns as Margins Improve Despite Flat Network Market

Sweden’s telecom equipment giant Ericsson announced plans to significantly boost shareholder returns after reporting a sharp rise in net cash and continued margin improvements, even as the global mobile network market remains flat. In its fourth-quarter earnings report, Ericsson said it will propose a SEK 15 billion share buyback program and increase its annual dividend, reflecting stronger cash flow and operational efficiency.

Ericsson’s net cash surged to SEK 61.2 billion, up from SEK 37.8 billion a year earlier, providing the foundation for total proposed shareholder returns of up to SEK 25 billion for the 2025 financial year. The company plans to raise its dividend to SEK 3 per share, compared with SEK 2.85 previously. The buyback program is expected to run through the 2027 Annual General Meeting, with share repurchases likely to begin after the release of the first-quarter 2026 results.

Fourth-quarter organic sales grew 6%, while adjusted EBITA rose to SEK 12.7 billion, delivering a strong margin of 18.3%. This marked the ninth consecutive quarter of year-over-year margin expansion, underscoring Ericsson’s focus on cost discipline and higher-margin businesses. However, reported sales declined 5% to SEK 69.3 billion due to unfavorable currency movements.

For the full year, adjusted EBITA increased to SEK 42.9 billion, with margins expanding to 18.1% from 11% in the previous year. Reported annual sales fell 5% to SEK 236.7 billion, a figure that includes gains from the third-quarter divestment of iconectiv.

Growth was supported by strong performance in Cloud Software and Services, where adjusted gross margins climbed to 44.3% on higher software sales. Networks also delivered margin gains despite regional and product mix challenges. Enterprise sales declined mainly due to the iconectiv divestment, though organic growth remained positive.

Looking ahead, Ericsson expects the RAN market to remain flat in 2026 but sees growth opportunities in mission-critical networks, 5G core, enterprise solutions, and defense investments. The company also plans to continue optimizing its cost base while managing elevated restructuring charges to protect margins and cash flow.