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Ericsson's Fourth Quarter Results: Strong Performance in 2024

On January 24, 2025, Ericsson announced its financial results for the fourth quarter and the year 2024. The telecommunications giant showcased achievements in strategic and operational priorities, emphasizing its commitment to enhancing programmable networks through innovative technologies, including the recently launched 5G Advanced software.

Strategic Highlights

Ericsson's leadership in programmable networks remains pivotal, with a notable increase in interest regarding network APIs. The growing demand for applications focused on financial fraud protection and Quality on Demand reflects a positive trend in the company's endeavors. Additionally, a further patent licensing agreement signed in Q4 significantly contributed to the income derived from intellectual property rights, indicating successful monetization strategies.

Q4 Financial Highlights

In Q4 2024, Ericsson reported a sales increase of 2% year-on-year, reaching SEK 72.9 billion, with an impressive 54% growth in the North American market. Sales figures from Europe and Latin America also showed positive growth, contrasting with others that faced declines. The adjusted gross income surged to SEK 33.7 billion, driven primarily by a substantial enhancement in the Networks division. The adjusted gross margin for Q4 expanded to 46.3%, emphasizing operational efficiency and strategic commercial discipline.

The net income for the quarter reached SEK 4.9 billion, reflecting a 43% increase from the previous year. Diluted earnings per share also improved to SEK 1.44, showcasing the company’s robust profitability.

Full-Year Performance

Looking at the overall year, total sales decreased by 5% compared to 2023, with reported sales totaling SEK 247.9 billion. Despite this decline, the adjusted gross income increased to SEK 111.4 billion, highlighting improved contributions across all segments. Moreover, the adjusted EBITA for the year saw remarkable growth to SEK 27.2 billion, underlining Ericsson's recovery and strength in financial operations.

The company also reported a significant free cash flow of SEK 40.0 billion, marking a stark contrast from -1.1 billion the previous year. The strategic enhancements in working capital and supply chain efficiency efficiently bolstered cash flow during the challenging economic climate.

CEO Remarks

Börje Ekholm, President and CEO of Ericsson, commented on the results: "The fourth quarter represents a strong finish for 2024, emphasizing our progress against strategic goals. The momentum surrounding programmable networks continues to accelerate, with clients increasingly recognizing the advantages offered via our APIs. Our recent collaboration with MasOrange in Europe marks a significant milestone for programmable networks."

Ekholm pointed out that they are starting to see stabilization in the Radio Access Network (RAN) market, with strong indicators of sales growth returning in North America, aligned with Ericsson's ambitions to maintain product leadership.

For 2025, Eriksson plans to consolidate its position in the Networks sector, particularly focusing on providing industry-leading energy efficiency and performance. The Enterprise segment will see efforts directed towards stabilizing commercial function and expanding in critical mission areas.

Conclusion

Ericsson's fourth-quarter and full-year results depict a company on the rise, demonstrating resilience in revenue generation and strategic positioning in the market. With continuing investments in technology and innovative applications, Ericsson is poised for a stronger 2025, as it leads in programmable network solutions and explores new growth pathways.

For more details, visit Ericsson's Investor Relations page.