Ericsson delivered mixed regional performance during the second quarter of 2025, with the telecommunications equipment manufacturer experiencing a six percent decline in Europe, Middle East, and Africa sales to SEK 16.2 billion. The company attributed reduced African and Middle Eastern revenues to delayed project deliveries and exits from managed services contracts. European markets showed modest improvement through network modernization initiatives. Regional organic sales growth fell one percent despite these varied outcomes. The EMEA results reflected broader challenges across diverse geographic territories.
Intellectual property rights licensing generated substantial revenue growth, climbing from SEK 3.9 billion to SEK 4.9 billion year-over-year. Settlement agreements for previously unlicensed periods drove this increase across Networks and Cloud Software divisions. The company achieved global organic sales growth of two percent while reported sales decreased six percent to SEK 56.1 billion due to currency fluctuations. Adjusted gross margin reached a three-year peak at 48.0 percent compared to 43.9 percent previously. Adjusted EBITA surged 83 percent to SEK 7.4 billion, demonstrating operational improvements.
Chief Executive Börje Ekholm emphasized strategic execution and cost reduction efforts while highlighting margin achievements. The company expanded artificial intelligence investments through its Swedish AI factory consortium. Network API platform Aduna successfully onboarded all major Japanese telecommunications operators. Free cash flow before mergers and acquisitions totaled SEK 2.6 billion, down from the previous year's SEK 7.6 billion. Net income reached SEK 4.6 billion, reversing an SEK 11.0 billion loss from the comparable quarter.
Intellectual property rights licensing generated substantial revenue growth, climbing from SEK 3.9 billion to SEK 4.9 billion year-over-year. Settlement agreements for previously unlicensed periods drove this increase across Networks and Cloud Software divisions. The company achieved global organic sales growth of two percent while reported sales decreased six percent to SEK 56.1 billion due to currency fluctuations. Adjusted gross margin reached a three-year peak at 48.0 percent compared to 43.9 percent previously. Adjusted EBITA surged 83 percent to SEK 7.4 billion, demonstrating operational improvements.
Chief Executive Börje Ekholm emphasized strategic execution and cost reduction efforts while highlighting margin achievements. The company expanded artificial intelligence investments through its Swedish AI factory consortium. Network API platform Aduna successfully onboarded all major Japanese telecommunications operators. Free cash flow before mergers and acquisitions totaled SEK 2.6 billion, down from the previous year's SEK 7.6 billion. Net income reached SEK 4.6 billion, reversing an SEK 11.0 billion loss from the comparable quarter.
