Charles EstherEricsson has reported a remarkable 61% year-over-year increase in net income for the first quarter of 2025.
The Swedish telecom giant recorded a profit of SEK 4.217 billion ($384 million), up from SEK 2.613 billion in Q1 2024.
This surge was primarily driven by a 20% increase in sales in North America, where clients rushed to purchase equipment ahead of anticipated U.S. tariffs.
Improved Margins and Operational Gains
Total revenue rose 3% to SEK 55.025 billion.
Gross margin improved from 42.7% to 48.2%, while EBITA profit jumped 36% to SEK 6.652 billion.
The company credited the gains to higher demand for mobile infrastructure and enterprise wireless solutions, including private 5G networks.
Enterprise Deals Help Drive Growth
Ericsson’s enterprise wireless segment posted a 20% increase in sales.
Recent enterprise wins include deals with Jaguar Land Rover and sports organization SailGP, showcasing growing interest in Ericsson’s private network capabilities.
These contracts contributed significantly to the company’s profitability this quarter.
CEO Börje Ekholm’s Future in Question
Despite the strong financial performance, CEO Börje Ekholm’s leadership is reportedly under review.
Sources suggest friction between Ekholm and major shareholders, largely due to the controversial $6.2 billion acquisition of Vonage in 2021.
Although the deal was meant to bolster Ericsson’s position in the enterprise software market, some investors believe it has yet to deliver the expected returns.
Tariff Concerns Loom Over Future Outlook
While Ericsson saw a boost from U.S. demand this quarter, concerns about upcoming tariffs remain.
CFO Lars Sandström warned that new U.S. trade restrictions could reduce the company’s margins by approximately 1% in the second quarter.
This could affect pricing and supply chain dynamics moving forward.
Investor Reaction and Market Impact
Following the earnings announcement, Ericsson’s U.S.-listed shares jumped more than 7%, signaling investor confidence.
However, the stock remains under watch as speculation grows around possible leadership changes and global economic headwinds.
Looking Ahead
Ericsson plans to maintain momentum by investing further in network technology and enterprise solutions.
The company is also expected to address governance concerns and clarify its long-term strategic direction amid growing scrutiny from investors and analysts alike.
Conclusion
Ericsson’s strong Q1 results reaffirm its resilience and market position, especially in the North American sector.
But with CEO uncertainty and tariff risks ahead, the telecom giant’s leadership must navigate both opportunity and pressure in equal measure.
