Ericsson Gross Margins Impacted by Lowering IPR Revenues

Ercisson’s Digital sales also grew organically by 2% YoY with a strong growth in the cloud native 5G core. The total quarterly sales for Ericsson were 62.5 billion crowns compared to the previous quarter’s 54.9 billion crowns.

Highlights

  • Ericsson has just come out with the financial results of Q2 of 2022.
  • Borje Ekholm, President and CEO of Ericsson said the company’s gross margins fell because of lowering IPR revenues.
  • Ekholm said that 5G is the fastest scaling mobile technology in the world and its build-out will be larger and continue for a longer period than all the previous generation mobile technologies.

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Ericsson

Ericsson has just come out with the financial results for Q2 of 2022. The Swedish telecom gear manufacturer said that its gross margin for the quarter was 45.1% which is lesser than the previous quarter’s 47.9%.

Borje Ekholm, President and CEO of Ericsson, said the company’s gross margins fell because of lowering IPR revenues, increased logistics and component costs, and proactive investments in supply chain resilience. During the quarter, Ericsson’s network sales grew organically by 6%.

Ekholm shared that the company is investing in expanding and enhancing its offerings, and the R&D was increased in the quarter primarily for Cloud RAN.

Ericsson's Digital sales also grew organically by 2% YoY with strong growth in the cloud native 5G core. The total quarterly sales for Ericsson were 62.5 billion crowns compared to the previous quarter’s 54.9 billion crowns. Ericsson beat the estimates of 61.45 billion crowns in quarterly revenues.

Ericsson Says 5G is the Fastest Scaling Mobile Technology

Ekholm said that 5G is the fastest scaling mobile technology in the world, and its build-out will be larger and continue for a longer period than all the previous generation mobile technologies. With time, more and more new use-cases are expected to be discovered, which will be fuelled by 5G networks.

In terms of global penetration, 5G is still at an early stage, explained Ekholm.

“IPR licensing revenues were affected by several expiring patent license agreements pending renewal and by 5G license negotiations in the quarter. We are confident in our strong 5G position and leading patent portfolio, positioning us well to conclude pending and future license renewals,” Ekholm said.

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