Ericsson sales grow 3% to SEK 68 billion in Q3

Ericsson said its revenue rose 3 percent in constant currency to SEK 68 billion in Q3 2022 driven primarily by Networks in North America. Vonage contributed SEK 2.9 billion revenue since July 21.
Ericsson CEO Borje Ekholm at MWC 2018
Ericsson said it signed significant network contracts with further increased geographic footprint. These and earlier signed contracts will continue to increase sales in Q4 and are expected to contribute with considerable volumes in 2023.

Ericsson generated Q3 revenue of SEK 48.1 billion from networks, SEK 14.2 billion in Cloud software and SEK 5.2 billion from Enterprise business.

Ericsson, the leading telecom equipment company, has increased RAN market share, excluding Mainland China, from 33 percent in 2027 to 39 percent and it had multiple contract wins across geographies in this quarter. “We will solidify our strong position in 5G to capture the considerable opportunities presented by the fastest scaling mobile generation.” Ericsson CEO Borje Ekholm said.

“After expected record operator Capex in 2022 in North America, we anticipate RAN Capex to hold up well in 2023, albeit at a lower level than this year. We are increasing our global footprint that will lead to overall growth in 2023,” Borje Ekholm said in its report.

The global 5G build-out is in its early stages with less than a quarter of global LTE nodes upgraded with mid-band.

“We expect to see many use cases for 5G where we already see Fixed Wireless Access gaining increasing traction. The consumer and enterprise applications of 5G will boost demand for network performance, hence we predict a longer investment cycle than for previous mobile generations,” Borje Ekholm said.

Ericsson is making pricing adjustments as well as leveraging product substitution to manage margins in the current inflationary environment. It is simplifying operations across the company and will be proactive in reviewing options to reduce costs.

Ericsson has set a target of EBITA margin of 15-18 percent no later than 2024. Ericsson will cut costs to secure delivery of this target. Ericsson said restructuring costs will increase in order to deliver on the cost reductions.