Last Tuesday, Ericsson Nikola Tesla published its 9M 2025 business performance and financial results. The company delivered stable results in a challenging macro and industry environment, balancing strong domestic growth and steady R&D performance against lower export activity following last year’s high base. Below, we bring you a detailed overview of Ericsson Nikola Tesla’s 9M 2025 performance and insights into the outlook for the remainder of the year.
Starting from the top-line, total sales revenue amounted to EUR 165.6m, down 1.5% YoY, primarily due to a 28.6% YoY decline in export markets as the large Telekom Kosova modernization project was completed in late 2024. Domestic sales, however, rose by 11.2% YoY to EUR 42.8m, driven by continued investments in 5G infrastructure and public sector digital transformation projects. Meanwhile, services to Ericsson remained stable at EUR 104.8m, reflecting sustained R&D engagement and the company’s role as one of Ericsson’s key 5G/6G RAN software development centers.
Breaking down performance by segment, Telecom revenue stood at EUR 46.1m (-2.5% YoY), as 5G implementation and mobile network modernization continued across Croatia, Bosnia and Herzegovina, Montenegro, and Kosovo. The Digital Society segment recorded EUR 14.7m (-10.4% YoY), reflecting a temporary slowdown in project cycles but reinforced by several newly signed contracts in Q3 with Croatian ministries and government agencies as the Ministry of Justice, Public Administration and Digital Transformation, the State Geodetic Administration, and the Ministry of Labor, Pension System, Family and Social Policy. The R&D and Services segment maintained EUR 104.8m in revenue (flat YoY), confirming Ericsson NT’s steady integration within the global Ericsson ecosystem.
Looking closer by market, domestic operations remained the key growth driver, benefiting from projects with Hrvatski Telekom and A1 on 5G and core network upgrades, as well as digitalization initiatives with the State Geodetic Administration, the Ministry of Justice, and the Ministry of Labor and Social Policy. In export markets, revenue amounted to EUR 18.0m (-28.6% YoY), as last year’s completion of Telekom Kosova’s full network modernization set a high base. The company maintained solid cooperation with IPKO, HT Mostar, and Crnogorski Telekom on network expansion and service modernization projects. Sales to the Ericsson market remained stable at EUR 104.8m, driven by the continuous delivery of advanced R&D and software development services.
Ericsson Nikola Tesla’s key financial indicators (9M 2024 vs 9M 2025, EURm)
Source: ERNT, InterCapital Research
Moving on to profitability, gross profit declined 6.1% YoY to EUR 20.9m, resulting in a gross margin of 12.6% (9M 2024: 13.3%), reflecting increased material and personnel costs. Operating profit reached EUR 16.0m (-10.7% YoY), with an operating margin of 9.7% (9M 2024: 10.7%), as SG&A expenses rose due to higher investments in new business opportunities. Despite lower operating profitability, net profit increased 13.7% YoY to EUR 13.5m, supported by a lower tax burden, leading to an improved net margin of 8.2% and Return on Sales up by 1.1 p.p. YoY.
Financially, Ericsson NT remains on a solid footing. The equity ratio stood at 42.3%, while cash and cash equivalents (including short-term financial assets) amounted to EUR 53.5m, representing 33.7% of total assets. Operating cash flow strengthened sharply to EUR 13.7m, reflecting better receivables collection and liquidity management.
In terms of shareholder returns, the company paid out a dividend of EUR 10.54 per share on July 23, 2025, implying a payout ratio of 67.5% and a dividend yield of approximately 5.7% at the price upon announcement.
Looking ahead, Ericsson Nikola Tesla remains focused on consolidating its domestic leadership while expanding its Digital Society portfolio and export footprint. Management continues to emphasize technological leadership in 5G/6G development, public sector digitalization, and AI-based automation, positioning the company for stable medium-term growth despite near-term margin headwinds from rising costs and project mix effects. However, from a market perspective, the company’s share price has remained broadly flat over the past 12 months, while the CROBEX10 index advanced roughly 25%, indicating that investors have yet to reprice the company’s fundamentals into market performance.