Telefonaktiebolaget L M Ericsson (ERIC) Q2 2025 Earnings Call Highlights: Navigating Growth ...
Gross Margin: 48%, up from 43.9% in Q2 last year.
EBITA Margin: 13.2%, a three-year high.
Net Sales: SEK 56.1 billion, with a reported decline of 6% due to currency impact.
IPR Revenue: Increased to SEK 4.9 billion from SEK 3.2 billion in Q1.
Operating Expenses: SEK 20 billion, around SEK 3 billion lower than last year.
Free Cash Flow Before M&A: SEK 2.6 billion.
Networks Sales: Decreased by 5% year-on-year to SEK 35.7 billion.
Networks Adjusted Gross Margin: 49.5%.
Cloud and Software Services Sales: Declined by 5% year-on-year to SEK 14.4 billion.
Enterprise Sales: Decreased by 14%, with organic sales down 6%.
Net Cash: Decreased by SEK 2.6 billion compared to the previous quarter.
Warning! GuruFocus has detected 4 Warning Sign with ERIC.
Release Date: July 15, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Telefonaktiebolaget L M Ericsson (NASDAQ:ERIC) reported a 2% organic sales growth in Q2 2025, with significant contributions from the Americas and IPR segments.
The company achieved a three-year high in EBITA margin at 13.2%, demonstrating strong execution against operational and strategic priorities.
Gross margin improved to 48%, with broad-based margin improvements across all segments.
The company successfully signed up all three operators in Japan for its joint venture Aduna, expanding its market coverage.
Telefonaktiebolaget L M Ericsson (NASDAQ:ERIC) is investing in AI and 5G stand-alone networks, which are expected to drive future growth and innovation in connectivity solutions.
Sales in Southeast Asia, Oceania, and India decreased by 22% year over year, primarily due to temporary pauses in network investments in India.
The company faced a negative currency impact of SEK4.7 billion due to the strengthening of the Swedish krona against the US dollar and other currencies.
Sales in Northeast Asia declined by 15%, attributed to reduced customer investments in some 5G front-runner markets.
Free cash flow before M&A was SEK2.6 billion, down compared to last year, partly due to lower inventory levels and completion of large-scale rollout projects.
Restructuring costs are expected to remain elevated during the year, impacting overall financial performance.
Q: Can you explain the dynamics behind the robust gross margin guidance for the network's business in the next quarter? Are there specific deals or mix shifts contributing to this? A: The margin outlook is based on the current product and market mix, not related to IPR. It's more about the underlying margins we see coming into the quarter. We don't have high expectations for India in Q3 due to the temporary pause in investments.
Q: How do you see operating expenses (OpEx) trending for the rest of the year? A: The cost reduction activities from the past year are now reflected in our OpEx. We expect a similar level of OpEx in the second half of the year, with some seasonality potentially leading to higher costs. It takes time for cost reductions to fully impact the numbers.
Q: Can you provide more details on the tariff-related effects during the quarter and expectations for Q3? A: The impact of tariffs was around 1 percentage point, slightly lower than expected. We anticipate similar levels going forward, given current information. We are preparing for potential changes but have not made any major investment decisions yet.
Q: Could you elaborate on the trends in the North American market, particularly regarding inventory levels and mix changes? A: Inventory levels among operators are fairly balanced. We expect more services and rollout activities to contribute to revenue. While there may be quarterly margin shifts, we anticipate stable development for the full year.
Q: How do you see 5G standalone and AI investments impacting your business and product mix? A: 5G standalone is crucial for low latency and high-speed applications, but deployments are still limited. AI is fundamental for network operations and efficiency. We expect AI to drive traffic and connectivity needs as applications move to the edge.
Q: What opportunities do you see in defense and 5G for such areas? A: There is substantial potential for 5G technology in defense, as it can connect equipment and sensors. We are engaged in discussions globally and have launched the Ericsson Federal Technology Group in the US. Mission-critical applications for first responders also present significant opportunities.
Q: What measures are you taking to mitigate tariff impacts, and are there plans to realign your supply chain? A: We are preparing for potential changes but have not made firm decisions due to uncertainty. We are exploring options to adjust our supply chain and have already built a factory in the US to increase flexibility.
Q: Can you elaborate on your confidence in gaining market share, particularly in the North American market? A: We are focusing on strengthening our position in key markets like the US, India, and Japan. Investments in local R&D and manufacturing facilities are part of our strategy to enhance market presence and competitiveness.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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Analysts and former Intel executives said it's crucial for the company to prove it can execute 18A to draw in outside customers to use its manufacturing business in what's known as a foundry. 'We raise concern on future competitiveness of both Products and Foundry, driven by constant roadmap changes, employee churn, as well as reduced investments in future products/nodes — pivotal in l-t [long term] market share and positioning,' Bank of America analyst Vivek Arya wrote. Wall Street remained skeptical of Intel (INTC) after the company left the future of its manufacturing business unclear during an earnings call late Thursday. Intel stock dropped Friday despite its financial results beating expectations. 'While the headline numbers look decent vs expectations, we don't think the numbers really mattered all that much,' Bernstein analyst Stacy Rasgon wrote in a note to clients Friday, saying instead that investors are focused on Intel's manufacturing roadmap. Intel, once a leading global chipmaker, has fallen behind its rivals, both with its own products and in its attempt to manufacture chips for outside customers. Truist analyst William Stein said, 'The road to recovery is long & uncertain' for Intel. That's because Intel had promised that its new manufacturing process, 18A, would bring in external customers to its cash-bleeding manufacturing business, which its former CEO Pat Gelsinger launched in 2021. Now, Intel says it will use 18A only for internal products, reaching peak production at the beginning of the next decade, and that it could 'potentially' get 'external customers at some point,' as CFO David Zinsner put it. Meanwhile, Intel also left the future of its successor to 18A, the manufacturing process it calls 14A, unclear and contingent upon it getting an external customer on board. Analysts and former Intel executives said it's crucial for the company to prove it can execute 18A to draw in outside customers to use its manufacturing business in what's known as a foundry. 'We raise concern on future competitiveness of both Products and Foundry, driven by constant roadmap changes, employee churn, as well as reduced investments in future products/nodes — pivotal in l-t [long term] market share and positioning,' Bank of America analyst Vivek Arya wrote. Crypto stocks fall as dollar moves higher Crypto stocks fell Friday — save for Robinhood (HOOD) and PayPal (PYPL). The largest corporate holder of bitcoin, Strategy (MSTR), dropped 2.5%, while crypto exchange Coinbase (COIN) fell 2% and bitcoin miner MARA Holdings (MARA) dipped 2.6%. Riot Platforms (RIOT) declined 3.6%. The moves come as the US Dollar ( strengthens amid news surrounding US trade deals and as President Trump backed off from firing Fed Chair Jerome Powell after an unusual visit to the Federal Reserve. Crypto stocks fell Friday — save for Robinhood (HOOD) and PayPal (PYPL). The largest corporate holder of bitcoin, Strategy (MSTR), dropped 2.5%, while crypto exchange Coinbase (COIN) fell 2% and bitcoin miner MARA Holdings (MARA) dipped 2.6%. Riot Platforms (RIOT) declined 3.6%. The moves come as the US Dollar ( strengthens amid news surrounding US trade deals and as President Trump backed off from firing Fed Chair Jerome Powell after an unusual visit to the Federal Reserve. Stocks crawl higher at the open US stocks inched higher, near all-time highs, at the open on Friday after a week of major earnings and trade deals. The Dow Jones Industrial Average (^DJI) ticked up around 0.15%, while the S&P 500 (^GSPC) rose just over 0.1%. The tech-heavy Nasdaq Composite (^IXIC) traded just above the flat line. US stocks inched higher, near all-time highs, at the open on Friday after a week of major earnings and trade deals. The Dow Jones Industrial Average (^DJI) ticked up around 0.15%, while the S&P 500 (^GSPC) rose just over 0.1%. The tech-heavy Nasdaq Composite (^IXIC) traded just above the flat line. Dollar gains steam after Trump downplays clash with Fed Chair Powell The US dollar ( strengthened on Friday morning after President Trump downplayed a clash with Federal Reserve Chair Jerome Powell on Thursday that was part of an unusual visit to survey the Fed's building renovations. The visit came after several weeks of Trump criticizing Powell and, at one point, threatening to fire him. Trump told reporters on Friday, "I don't want to be personal" and said that the Fed visit was about helping finish the project. Later, Trump said of firing Powell: "To do that is a big move, and I just don't think it's necessary." Meanwhile, gold futures (GC=F) declined about 1% to trade at $3,341.90 per ounce as concerns about Fed independence eased. The US dollar ( strengthened on Friday morning after President Trump downplayed a clash with Federal Reserve Chair Jerome Powell on Thursday that was part of an unusual visit to survey the Fed's building renovations. The visit came after several weeks of Trump criticizing Powell and, at one point, threatening to fire him. Trump told reporters on Friday, "I don't want to be personal" and said that the Fed visit was about helping finish the project. Later, Trump said of firing Powell: "To do that is a big move, and I just don't think it's necessary." Meanwhile, gold futures (GC=F) declined about 1% to trade at $3,341.90 per ounce as concerns about Fed independence eased. Phillips 66 stock rises after beating profit estimates on higher refining margins Phillips 66 (PSX) stock rose about 2.7% in premarket trading after the US refiner reported an adjusted profit of $2.38 per share, beating Wall Street EPS estimates of about $1.71. During the quarter, Phillips 66 returned $906 million to shareholders through dividends and share buybacks. Reuters reports that fuelmakers have seen an unexpected boost in profit from key products in recent months, offering relief as earnings retreated from 2022 highs, driven by a post-pandemic demand rebound and supply disruptions following Russia's invasion of Ukraine. The company's realized margin per barrel rose 12.4% to $11.25 in the quarter from a year ago. Its crude capacity utilization was 98%, while adjusted earnings from its refining segment rose about 30% at $392 million. Phillips 66 (PSX) stock rose about 2.7% in premarket trading after the US refiner reported an adjusted profit of $2.38 per share, beating Wall Street EPS estimates of about $1.71. During the quarter, Phillips 66 returned $906 million to shareholders through dividends and share buybacks. Reuters reports that fuelmakers have seen an unexpected boost in profit from key products in recent months, offering relief as earnings retreated from 2022 highs, driven by a post-pandemic demand rebound and supply disruptions following Russia's invasion of Ukraine. The company's realized margin per barrel rose 12.4% to $11.25 in the quarter from a year ago. Its crude capacity utilization was 98%, while adjusted earnings from its refining segment rose about 30% at $392 million. Health insurer Centene reports surprise quarterly loss Centene's (CNC) stock fell 12% before the bell on Friday after the health insurance company reported a quarterly loss and warned of a revenue slump from government-backed plans. Read more here. Centene's (CNC) stock fell 12% before the bell on Friday after the health insurance company reported a quarterly loss and warned of a revenue slump from government-backed plans. Read more here. Google Search is readying the next generation for AI Alphabet (GOOG, GOOGL) not only posted a stellar quarter, it succeeded in advancing another urgent mission: convincing investors it can transition its search empire into an AI-infused one. Yahoo Finance's Hamza Shaban lays it out in today's Morning Brief: Read more here. Alphabet (GOOG, GOOGL) not only posted a stellar quarter, it succeeded in advancing another urgent mission: convincing investors it can transition its search empire into an AI-infused one. Yahoo Finance's Hamza Shaban lays it out in today's Morning Brief: Read more here. Good morning. Here's what's happening today. Economic data: Durable goods orders (June preliminary) Earnings: Charter Communications (CHTR) Here are some of the biggest stories you may have missed overnight and early this morning: Intel stock falls as chipmaker cuts jobs, drops factory plans Google Search is readying the next generation for AI Trump: Australia has agreed to accept American beef Who benefits if Trump drops capital gains tax on home sales Americans are struggling to pay bills and feeling anxious about it Japan pushes back against US view of trade-deal profit split Trump and Powell clash in public — then Trump takes softer tone Amazon scraps plans for $350M cloud facility in Ireland Health insurer Centene's stock falls after surprise Q2 loss Economic data: Durable goods orders (June preliminary) Earnings: Charter Communications (CHTR) Here are some of the biggest stories you may have missed overnight and early this morning: Intel stock falls as chipmaker cuts jobs, drops factory plans Google Search is readying the next generation for AI Trump: Australia has agreed to accept American beef Who benefits if Trump drops capital gains tax on home sales Americans are struggling to pay bills and feeling anxious about it Japan pushes back against US view of trade-deal profit split Trump and Powell clash in public — then Trump takes softer tone Amazon scraps plans for $350M cloud facility in Ireland Health insurer Centene's stock falls after surprise Q2 loss Trending tickers: Deckers, Strategy and centene Here are some top stocks trending on Yahoo Finance in premarket trading: Deckers Outdoor corporation (DECK) stock rose 12% before the bell after reporting that its earnings had been boosted by Ugg boots and Hoka running shoes. Net sales for both brands surpassed analysts' estimates in the fiscal first quarter ended June 30. Strategy (MSTR) stock fell over 1% premarket today. Bloomberg reported on Friday how the company launched a new kind of preferred stock and upsized the deal from $500 million to $2.8 billion, according to a person familiar with the transaction who asked not to be identified. Centene (CNC) stock fell 10% in premarket trading after the health insurance company reported a quarterly loss. Here are some top stocks trending on Yahoo Finance in premarket trading: Deckers Outdoor corporation (DECK) stock rose 12% before the bell after reporting that its earnings had been boosted by Ugg boots and Hoka running shoes. Net sales for both brands surpassed analysts' estimates in the fiscal first quarter ended June 30. Strategy (MSTR) stock fell over 1% premarket today. Bloomberg reported on Friday how the company launched a new kind of preferred stock and upsized the deal from $500 million to $2.8 billion, according to a person familiar with the transaction who asked not to be identified. Centene (CNC) stock fell 10% in premarket trading after the health insurance company reported a quarterly loss. Intel stock slides amid plans to cut 15% of workforce, cancel factories Intel (INTC) shares slid almost 6% in premarket after the struggling chipmaker said it will cut its workforce and drop plans for factories in Europe as it pursues a comeback. While the company posted a second quarter revenue beat late Thursday, its earnings fell short. Its profit forecast for the current quarter was also more downbeat than hoped: It expects to break even, rather than deliver the $0.04 earnings per share estimated. Yahoo Finance's Daniel Howley reports: Read more here. Intel (INTC) shares slid almost 6% in premarket after the struggling chipmaker said it will cut its workforce and drop plans for factories in Europe as it pursues a comeback. While the company posted a second quarter revenue beat late Thursday, its earnings fell short. Its profit forecast for the current quarter was also more downbeat than hoped: It expects to break even, rather than deliver the $0.04 earnings per share estimated. Yahoo Finance's Daniel Howley reports: Read more here. Oil steady as investors weigh trade optimism against potential Venezuelan supply increase Oil prices climbed overnight Thursday, driven by renewed optimism over global trade negotiations, which bolstered confidence in economic growth and energy demand. The wave of positivity managing to overshadow concerns about a possible increase in Venezuelan oil supply. Reuters reports: Read more here. Oil prices climbed overnight Thursday, driven by renewed optimism over global trade negotiations, which bolstered confidence in economic growth and energy demand. The wave of positivity managing to overshadow concerns about a possible increase in Venezuelan oil supply. Reuters reports: Read more here. Sign in to access your portfolio
Fast Company
11 minutes ago
- Fast Company
Think your ChatGPT therapy sessions are private? Think again.
If you've been confessing your deepest secrets to an AI chatbot, it might be time to reevaluate. With more people turning to AI for instant life coaching, tools like ChatGPT are sucking up massive amounts of personal information on their users. While that data stays private under ideal circumstances, it could be dredged up in court – a scenario that OpenAI CEO Sam Altman warned users in an appearance on Theo Von's popular podcast this week. 'One example that we've been thinking about a lot… people talk about the most personal shit in their lives to ChatGPT,' Altman said. 'Young people especially, use it as a therapist, as a life coach, 'I'm having these relationship problems, what should I do?' And right now, if you talk to a therapist or a lawyer or a doctor about those problems, there's legal privilege for it, there's doctor patient confidentiality, there's legal confidentiality.' Altman says that as a society we 'haven't figured that out yet' for ChatGPT. Altman called for a policy framework for AI, though in reality OpenAI and its peers have lobbied for a regulatory light touch. 'If you go talk to ChatGPT about your most sensitive stuff and then there's a lawsuit or whatever, we could be required to produce that, and I think that's very screwed up,' Altman told Von, arguing that AI conversations should be treated with the same level of privacy as a chat with a therapist. While interactions with doctors and therapists are protected by federal privacy laws in the U.S., exceptions exist for instances in which someone is a threat to themselves or others. And even with those strong privacy protections, relevant medical information can be surfaced by court order, subpoena or a warrant. Altman's argument seems to be that from a regulatory perspective, ChatGPT shares more in common with licensed, trained specialists than it does with a search engine. 'I think we should have the same concept of privacy for your conversations with AI that we do with a therapist,' he said. Altman also expressed concerns about how AI will adversely impact mental health, even as people seek its advice in lieu of the real thing. 'Another thing I'm afraid of… is just what this is going to mean for users' mental health. There's a lot of people that talk to ChatGPT all day long,' Altman said. 'There are these new AI companions that people talk to like they would a girlfriend or boyfriend. 'I don't think we know yet the ways in which [AI] is going to have those negative impacts, but I feel for sure it's going to have some, and we'll have to, I hope, we can learn to mitigate it quickly.'
CNET
11 minutes ago
- CNET
Even OpenAI's CEO Says Be Careful What You Share With ChatGPT
Maybe don't spill your deepest, darkest secrets with an AI chatbot. You don't have to take my word for it. Take it from the guy behind the most popular generative AI model on the market. Sam Altman, the CEO of ChatGPT maker OpenAI, raised the issue this week in an interview with host Theo Von on the This Past Weekend podcast. He suggested that your conversations with AI should have similar protections as those you have with your doctor or lawyer. At one point, Von said one reason he was hesitant to use some AI tools is because he "didn't know who's going to have" his personal information. "I think that makes sense," Altman said, "to really want the privacy clarity before you use it a lot, the legal clarity." More and more AI users are treating chatbots like their therapists, doctors or lawyers, and that's created a serious privacy problem for them. There are no confidentiality rules and the actual mechanics of what happens to those conversations are startlingly unclear. Of course, there are other problems with using AI as a therapist or confidant, like how bots can give terrible advice or how they can reinforce stereotypes or stigma. (My colleague Nelson Aguilar has compiled a list of the 11 things you should never do with ChatGPT and why.) Altman's clearly aware of the issues here, and seems at least a bit troubled by it. "People use it, young people especially, use it as a therapist, a life coach, I'm having these relationship problems, what should I do?" he said. "Right now, if you talk to a therapist or a lawyer or a doctor about those problems, there's legal privilege for it." The question came up during a part of the conversation about whether there should be more rules or regulations around AI. Rules that stifle AI companies and the tech's development are unlikely to gain favor in Washington these days, as President Donald Trump's AI Action Plan released this week expressed a desire to regulate this technology less, not more. But rules to protect them might find favor. Read more: AI Essentials: 29 Ways You Can Make Gen AI Work for You, According to Our Experts Altman seemed most worried about a lack of legal protections for companies like his to keep them from being forced to turn over private conversations in lawsuits. OpenAI has objected to requests to retain user conversations during a lawsuit with the New York Times over copyright infringement and intellectual property issues. (Disclosure: Ziff Davis, CNET's parent company, in April filed a lawsuit against OpenAI, alleging it infringed Ziff Davis copyrights in training and operating its AI systems.) "If you go talk to ChatGPT about the most sensitive stuff and then there's a lawsuit or whatever, we could be required to produce that," Altman said. "I think that's very screwed up. I think we should have the same concept of privacy for your conversations with AI that you do with your therapist or whatever." Be careful what you tell AI about yourself For you, the issue isn't so much that OpenAI might have to turn your conversations over in a lawsuit. It's a question of whom you trust with your secrets. William Agnew, a researcher at Carnegie Mellon University who was part of a team that evaluated chatbots on their performance dealing with therapy-like questions, told me recently that privacy is a paramount issue when confiding in AI tools. The uncertainty around how models work -- and how your conversations are kept from appearing in other people's chats -- is reason enough to be hesitant. "Even if these companies are trying to be careful with your data, these models are well known to regurgitate information," Agnew said. If ChatGPT or another tool regurgitates information from your therapy session or from medical questions you asked, that could appear if your insurance company or someone else with an interest in your personal life asks the same tool about you. "People should really think about privacy more and just know that almost everything they tell these chatbots is not private," Agnew said. "It will be used in all sorts of ways."
