Ericsson has just released its financial results for the second quarter of 2022. The Swedish telecom equipment maker said its gross margin for the quarter was 45.1%, down from the previous quarter’s 47.9%.
Borje Ekholm, President and CEO of Ericsson, said the company’s gross margins declined as a result of lower IPR revenues, higher logistics and component costs and proactive investments in supply chain resilience. During the quarter, Ericsson’s network revenue grew organically by 6%.
Ekholm said the company is investing in expanding and improving its offering, and R&D was increased in the quarter, primarily for Cloud RAN.
Ericsson’s digital revenue also grew organically at 2% year-over-year with strong cloud native growth 5G core. Total quarterly revenue for Ericsson was 62.5 billion kronor, compared to 54.9 billion kronor in the previous quarter. Ericsson beat estimates of kronor 61.45 billion in quarterly revenue.
Ericsson says 5G is the fastest scalable mobile technology
Ekholm said 5G is the fastest scalable mobile technology in the world, and that the build-out will be bigger and take longer than any of the previous-generation mobile technologies. With time, more and more new use cases are expected to be discovered, which will be powered by 5G networks.
In terms of global penetration, 5G is still in its early stages, explains Ekholm.
“IPR license revenues were impacted 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 industry-leading patent portfolio, which puts us well positioned to complete ongoing and future license renewals,” said Ekholm.
