Ericsson's Q4 2024 and Full-Year Results Show Strong Growth and Strategic Momentum

Ericsson Reports Successful Q4 2024 and Full-Year Results

Ericsson, a leading global telecommunications company, has recently announced its financial results for the fourth quarter and the entire year of 2024. The report highlights a series of strategic achievements and operational priorities that have positioned the company for future growth and success.

Strategic Highlights

The company continues to uphold its leadership in programmable networks. In October 2024, Ericsson launched its new 5G Advanced software which has driven considerable interest among customers. This focus on advanced technology also includes network APIs that cater to applications such as financial fraud protection and Quality on Demand. Additionally, the company signed another patent licensing agreement in Q4, further boosting its intellectual property revenue generation through 2024.

Q4 Highlights – Growth in Networks and Profitability

In the fourth quarter, Ericsson recorded a 2% year-on-year increase in sales, reaching SEK 72.9 billion, with a remarkable 54% growth in the North American market. Sales in regions like Europe and Latin America also reported growth, although other areas saw declines. The adjusted gross income experienced a significant rise to SEK 33.7 billion, buoyed by an improved gross margin that expanded to 49.1%. The report highlights efficient supply chain management and thoughtful strategic decisions that helped achieve an adjusted gross margin of 46.3%.

Furthermore, the adjusted EBITA increased to SEK 10.2 billion, translating to a margin of 14.1%, and a net income rise to SEK 4.9 billion was recorded. Noteworthy was the free cash flow before mergers and acquisitions, which increased to SEK 15.8 billion, underlined by earnings growth and improved working capital.

Full-Year Performance – North America Leads the Charge

For the full year, Ericsson experienced a slight decline in sales of 5%, predominantly due to a 6% drop in Networks. The reported sales stood at SEK 247.9 billion, with the adjusted gross income climbing to SEK 111.4 billion, supported by contributions from all market segments.

Adjusted EBITA surged to 27.2 billion, marking a significant increase from the previous year. Despite facing challenges, the company saw its net income stabilize with SEK 0.4 billion, a remarkable recovery from a loss in the previous year. Free cash flow improved significantly to SEK 40.0 billion, thanks in part to effective working capital management.

Outlook for 2025 – Continued Strategic Focus

Ericsson's President and CEO, Börje Ekholm, expressed optimism about the company’s performance. He noted, “Q4 marks a strong end to 2024 for Ericsson. We progressed well against our strategic plan and generated strong free cash flow. Customers are increasingly recognizing the benefits of making mobile networks more accessible through APIs.”

Looking forward, Ericsson aims to maintain its competitive edge in the Network sector, focusing on product innovation and energy efficiency in its offerings. The company’s commitment to furnishing high-performing programmable networks remains pivotal to its future strategies.

In addition, the Board of Directors has proposed a dividend of SEK 2.85 per share for 2024, reflecting confidence in sustained performance.

As Erickson continues to navigate the changing landscape of telecommunications, its focus on innovation and operational excellence will be crucial in capitalizing on future opportunities. "We see further signs that the overall RAN market is now stabilizing," Ekholm noted, providing a clear indication that the company is poised for a fruitful 2025.