Hello everyone and welcome to the presentation of Ericsson's third quarter 2025 results. Joining us by video today is Börje Ekholm, our President and CEO, and in the studio I'm joined by Lars Sandström, our Chief Financial Officer. As usual, we'll have a short presentation followed by Q and A, and in order to ask a question, you'll need to join the conference by phone. Details can be found in today's earnings release and on the investor relations website. Please be advised that today's call is being recorded and that today's presentation may include forward-looking statements. These statements are based on our current expectations and certain planning assumptions which are subject to risks and uncertainties. Actual results may differ materially due to factors mentioned in today's press release and discussed in the conference call. We encourage you to read about these risks and uncertainties in our earnings report as well as in the annual report. I'll now hand the call over to Börje and Lars for their introductory comments. Thanks, Daniel, and good morning everyone, and a big thank you for joining us today. We delivered a strong Q3 with continued expansion in our EBITDA margin despite the FX headwinds. I would say that reflects our execution against both operational and strategic priorities over the last couple of years. We're optimistic about the growing demand for advanced mobile connectivity as AI is starting to be rolled out. By structurally improving our cost base, we have positioned Ericsson to deliver resilient margins also in the current market backdrop, which will give further benefits from improving operating leverage when growth comes back and actually comes in reality. Beyond operational improvements, of course we focus on technology innovation and that positions us well for the next key driver of our industry, the broader adoption of AI. As AI workloads move to the edge, demand on the network will increase significantly. These AI applications and AI devices will require wireless technology, but it will also place new demands on the connectivity such as ultra low latency, high dependability, guaranteed uplink, and very high security demands. Best effort connectivity, think of that as Wi-Fi, 4G, and 5G non-standalone, will simply not be enough. To cater to these new type of demands, operators will need to invest in and migrate to 5G standalone networks and later, of course, migrate into 6G. Their success here will depend on high performing programmable networks. Ericsson is a leader here. We're also seeing some frontrunner operators now starting to realize new monetization opportunities of network slices as well as efforts to provide differentiated connectivity to different segments and different type of applications. Now let me move on to some key financial and strategic takeaways before Lars dives into the numbers. Organic sales declined by 2%. We saw growth in three out of four market areas, with only the Americas reporting reduced sales following particularly strong deliveries in Q3 last year. FX continues to be a headwind and we had a negative year-over-year impact of SEK 4.2 billion this quarter. As mentioned, we saw positive development in our margins. Gross margin came in at 48.1% and we delivered another three-year high EBITDA margin of 14.7% excluding the capital gain from the iConnective sale. This is now starting to approach our long-term target. The margin expansion reflects actions we've taken over the last years to increase operational excellence and efficiency, including the work we've done on our cost base. Over the last year, we've reduced our headcount by some 6,000, leveraging new ways of working and that of course includes AI. As we plan for a flattish market also going forward, we will continue our cost measures on levels similar to what we've done in the past years. The effect of actions that we have taken over the past years are now kind of flowing through the P&L and establishing the profitability at a new level. Our continued focus on cost management will provide incremental benefits going forward, but it will also give operating leverage should the market improve. We ended the quarter with an elevated cash position that's driven by strong recurring cash flow, but also of course the iConnective sale. As a result, we see scope for increased shareholder returns through extra dividends and/or share buyback program. The board will revert with the proposal in time for the AGM. As you know, this is the practice or is the Swedish governance model. In parallel with strengthening the company operationally, we're continuing to execute on our strategy to capture a bigger share of the value created by connectivity. Let me expand that a bit further. In our core mobile infrastructure business, we signed new customer agreements in the strategically important Japanese market following our recent R&D investments. With Japan being one of the countries with a strong industrial base in such areas as automation and one of the densest networks that have still not built out 5G coverage, we see this as a key market going forward. We also increased our share in the UK with an eight-year partnership with Vodafone to supply a significant majority of the mobile networks and the entire core network. This morning we announced a five-year strategic agreement with Vodafone in Europe for programmable networks where we remain their primary vendor with more or less stable market share within the telco market. New monetization opportunities are needed to drive more network investments by our customers. We continue to execute on our strategy to create new use cases for mobile networks. For example, we're seeing good development in fixed wireless access where customer satisfaction is typically higher than for fiber due to the ease of use of cellular or wireless technology. In the quarter, we announced a contract with Bharti Airtel to support their fixed wireless access rollout with Ericsson's core network portfolio. We're starting to see good traction in mission critical, including of course, defense. We're also taking important steps in our strategy to create a market by exposing the capabilities of the networks through APIs. This remains one of the key opportunities for us to capture more of the value created on top of the networks. As you know, Arduna, our JV with the large operators for network APIs, closed this past quarter. Revenues are still small, but we see the uptake in Vonage API business is actually starting to come through and we see that in areas such as fraud protection as an early use case, but also in industrial applications, and today we have already applications live in the market. Also in Vonage, we're expanding our ecosystem partnerships with AWS and added marketplace presence and product integration. Now let me comment a bit further on the market development we saw in Q3. In market area Americas, sales declined by 8% year over year, with declines both in North and Latin America. This follows a very strong Q3 deliveries in 2024 where we had high deliveries to a number of large customers. Latin America continues to be a competitive market with overall low investment levels. Sales in Europe, Middle East and Africa grew by 3% year over year. If we look closer at the region, we saw a very strong development in Africa, partly driven by new 5G launches in Egypt and Morocco. In both the Middle East and Europe, sales declined and we continue to see European customers being cautious with investments. In Southeast Asia, Oceania and India, sales increased by 1% year over year and India continues to have rather low investment levels, but it actually grew quarter over quarter. We saw a decline in Networks, partly due to the low level of network investments in India, but also stiff competition in Southeast Asia. Cloud and Software and Services, on the other hand, saw an increase in sales. Lastly, sales in Northeast Asia increased by 10%. That was due to higher network investments and deliveries in Japan. In the quarter, we were awarded new agreements with customers in the Japanese market, including enhancement of SoftBank's 5G standalone network where we have clearly increased our market share overall. I would say that we continue to have good discussions with all our customers in Japan. With that, I hand over to Lars to go through the financials in more detail. All right, thank you. Net sales in Q3 totaled SEK 56.2 billion, with organic sales declining 2% year on year. Most regions grew, but North America declined, mainly reflecting tougher comparisons with a high period of customer investments last year at the same time. Reported sales decreased by 9%, impacted by a negative currency effect of SEK 4.2 billion. Taking a look at IPR licensing performance, revenue declined by SEK 0.4 billion year over year, now standing at SEK 3.1 billion for Q3. It's worth noting that last year's quarter included retroactive revenue, so that skews the comparison slightly. The run rate coming out of Q3 is still around SEK 13 billion. In Q3, adjusted gross income was SEK 27 billion, including a currency headwind of around SEK 2 billion. We saw an improvement in our adjusted gross margin reaching 48.1%. This positive development is a result of our cost reduction initiatives and operational excellence in both Networks and Cloud and Software and Services. Looking at gross margins sequentially, we held stable even though we lost a temporary boost from the Q2 IPR licensing settlement. Excluding IPR licensing, the improvement was around 2 percentage points. In Networks, this benefited from organizational effectiveness in the market areas with well-planned and executed service delivery. This helped also manage supply effectively and further optimize inventory. In Cloud and Software and Services, the improvement is mainly coming from services where we are continuously improving our delivery performance. On the cost side, we made steady progress. Operating expenses excluding restructuring charges dropped to SEK 19.3 billion, around SEK 2 billion lower year over year. Of this, about half came from our cost reduction initiatives and the rest is mainly currency, excluding the iConnective gain. Adjusted EBITDA came in at SEK 8.2 billion, up by SEK 0.4 billion, including a negative currency impact of SEK 1.2 billion. The EBITDA margin was up around 2 percentage points to 14.7%. Behind this improvement is the good progress we have seen in terms of optimizing operations and lowering our operating expenses. Cash flow before M&A was SEK 6.6 billion, driven by earnings with net operating assets broadly stable. Let's move to the segments. In Networks, sales decreased by 11% year over year to SEK 35.4 billion with a negative currency impact of SEK 2.8 billion. Organic sales decreased by 5%. We saw organic growth in market area Northeast Asia, driven largely by Japan, which Börje already mentioned. Europe, Middle East and Africa also grew. Driven by Africa, sales declined in Market Area Americas and in Southeast Asia and India. Networks adjusted gross margin increased to 50.1%, benefiting from cost reduction actions and operational efficiencies despite change in the market and product mix. Looking at the right-hand graph, the rolling 4/4 adjusted gross margin reached 49.9% and stabilized at the new level. Adjusted EBITDA in Networks decreased by $0.9 billion to $7.2 billion, including a negative currency impact of $1.1 billion. EBITDA margin at 20.3% remained stable compared to last year. Moving to Cloud and Software and Services, sales increased by 3% year over year to $15.3 billion, which includes a negative currency impact of $0.9 billion. Organically, sales grew by 9%, mostly driven by higher core sales across all market areas. Sales growth was helped sequentially by a softer Q2 as well. Adjusted gross margin came in very strong in the quarter at 43.6%, an improvement of 5 percentage points compared to last year. This was a result of the continued focus on automation efficiency, commercial discipline, and delivery performance. Looking at the right-hand graph, the rolling 4/4 adjusted gross margin reached 41.3%. At a new high level, adjusted EBITDA increased to $1.9 billion with a margin of 12.5%, supported by higher gross income, lower operating expenses, and the effective implementation of our strategic initiatives including AI and automation investments and our commercial discipline. In Enterprise, sales decreased by 20%, impacted by divestments and currency. Organic sales were down by 7%. Global Communications Platform declined by 9%, reflecting the decision to scale back activities in some countries last year. The financial impact of this is now largely behind us, and we expect Enterprise sales to stabilize on an organic basis. In Q4, adjusted gross margin declined to 51.6%, driven by the iConnective divestment. Margins improved in both Global Communications Platform and Enterprise Wireless Solutions. Taking out the contribution from Arduna and iConnective, which were divested in the quarter, adjusted EBITDA landed at minus $1.1 billion. Turning to free cash flow, which was $6.6 billion before M&A, this declined from $12.9 billion in Q3 2024. Last year, our cash flow received a boost from a reduction of operating working capital driven by the completion of large-scale rollout projects and lower inventories. Operating cash flow was SEK 7.9 billion in the third quarter this year, driven by earnings with net operating fairly stable. Net cash increased by SEK 15.8 billion compared to last year, of which around SEK 10 billion was from max. Net cash has now reached SEK 51.9 billion. Next, I will cover the outlook. The outlook assumes stable exchange rates and no changes in tariffs for Networks and Cloud and Software and Services. We expect Q4 sales growth to be broadly similar to the three-year average quarter-on-quarter seasonality, and as mentioned before, we expect Enterprise sales to stabilize year over year on an organic basis. Next, Networks gross margin: we expect Networks adjusted gross margin to be in the range of 49% to 51% for Q4. Restructuring charges for 2025 are expected to remain at an elevated level, and with a flat R&D, market cost out remains an important lever also for next year. With that, I will hand back to you, Börje. Okay, thank you Lars. Our Q3 report highlights our laser focus on both strategic and operating priorities. Our strong results are a reflection of the actions we've taken to structurally improve our business in the past few years. This of course includes both the work we've done to improve our cost base and the way we run the business with greater operational efficiency and commercial discipline. The results of these efforts are now clearly visible in our P&L, and we expect them to continue supporting performance going forward. On the commercial side, we continue to strengthen our competitive position in mobile networks, and we're seeing good traction in key markets. This is a reflection of our technology leadership and the strength of our portfolio, and that has most recently been reconfirmed by both Gartner as well as Omdia. With programmable high-performance networks, our customers are well prepared for the growth in AI applications by having the best network for AI traffic. Our Open RAN-ready portfolio includes over 130 radio models and our future-proof, hardware-agnostic software architecture that is AI native supports both our own Ericsson silicon and third-party CPUs and GPUs, and is already integrated with more than 10 third-party radios. To put Ericsson on a growth trajectory, we're executing on our strategy to expand the monetization opportunities of the network. Here, we're taking some important steps, including our work in fixed wireless access, mission-critical, as well as, maybe more importantly, we're exposing to developers the network features through network APIs to drive innovation. This will make it possible for Ericsson and our CSP customers to capture an increasing share of the value created from connectivity, which so far, as you all know, has been going to hyperscalers and over-the-top players. Of course, creating new use cases and new markets takes time, but we're moving from proof of concept into commercial deployment, and this is reflected in our Enterprise segment, which we expect to stabilize in Q4. We will continue to invest in technology leadership to ensure that Ericsson is leading in both its core mobile infrastructure business by having the best network for AI, and of course, into 6G, but also leading the development of new use cases and new applications of wireless networks. Looking ahead, we expect AI applications as well as AI devices to be increasingly the key driver of further investments in the networks. At the same time, we're facing a dynamic external environment with geopolitical uncertainty and the RAN market that has been flat for the last couple of decades. We continue to take actions to structurally improve our business through rigorous cost management, including, of course, leveraging AI to change ways of working internally. This way, we're ensuring that Ericsson will continue to succeed across varying market conditions. Before we turn to Q&A, I would like to say a big thank you to all my colleagues for all their hard work in making these results possible. With that, let's open up for Q&A. Back to you, Daniel. Thanks, Börje. We'll now move to the Q&A section of the presentation. As a reminder, to ask a question, you'll need to press Star one and one on your telephone and wait for your name to be announced. If you're streaming the webcast, please could you mute the webcast audio while asking a question, so that minimizes the audio feedback? As usual, can I just request one question per participant, please, so we have time to hear from as many of you as possible? Operator, we're ready to open the line for the first question. The first question this morning will come from Andrew Gardiner at Citi. Please go ahead, Andrew. The line's open. Thank you, Daniel. Good morning all. I wanted to follow up, Börje, on the point you were making about the level of sustainable margins that you're achieving at the moment. Another quarter where you're at the top end of the guidance range that you'd provided back at Q2. I was just thinking, historically, oftentimes when Ericsson would talk about gross margins, and in particular talking to us in the financial market about what we could expect into the future, it was all about mix, and in particular regional mix. You've seen over the last year or so that regional mix has been dynamic, as you suggest, and yet you're still delivering pretty consistent gross margins quarter after quarter. Should we be looking less at the regional dynamics as we look into 2026 and beyond? If so, can you just help us understand what within the business, particularly around the cost cutting and the product cost, that you've now been able to get to sort of this sustainable level of gross margins regardless of whether U.S. is up or down or India is up or down? A bit more detail there would be really helpful in terms of thinking to next year. Thank you. Thanks, Andrew. Great question. I would, if just I start, maybe Lars fill in, but the reality is we've been working over a number of years to structurally improve a couple of things in the business. One is the way we operate our supply chain. Clearly, that's been, you know, of course, Covid disturbed it a bit, but those improvements we've been working on for a couple of years, and the last, I would say, year we've had more Covid-free supply chain, and that has, of course, helped, and that's what you see now coming through. I would say that's one of the key parts. The other is on service delivery, where we have improved the way we operate internally by structurally taking out costs. All of these improvements we've done in a way actually takes out a bit of the mix dependency. We still have a mix dependency on software, services, and hardware in reality, but it's less so of a geographic exposure. That's why, you know, when you look going forward, you know there is still a mix dependency for sure, geographic. The underlying improvements are coming through in other areas where we still have a bit more to do. I think we can be even better on service delivery and actually leverage automation much more, and we can for sure be better on OpEx, but that you've seen come through already. I think we have more to do there, primarily by leveraging AI and changing our ways of working. I don't know what you want to add, Lars. I think you covered the full P&L pretty well, and I think as you highlighted there, it is really the product mix in the market that can vary between quarters depending on share of software, hardware, etc. That is driving customers moving more and more into our advanced products, with the margins that will come. That is also making it more even between different regions. Thanks for the question, Andrew. Thank you. Moving to the next question, please. The next question today will come from Eric Lindholm Rochtal from SEB. Eric, please go ahead. The line's open. Yes, good morning guys. One question from me. You mentioned Edge AI being a key driver to future network investments, and I just wanted to hear your thoughts here. I mean, is this something you are seeing in discussions with operators already today and that operators are sort of acting on, or is this more of something you see in the coming years? Thank you. Yeah. If you look at so far, most of the AI investments have in reality been in the data center part for developing and training models. Right. We see the market increasingly moving towards inference and that, I would say, is going to be much more latency sensitive and therefore it will start to move out towards the edge. Here, I wouldn't point to an operator that has done investments, but we're starting to see certain applications demanding edge compute and edge AI or whatever you want to call it. I'm actually relatively hopeful that this will come through. It's not going to be next quarter, it's not going to be Q1 or Q2. The amount of capital going into the big data centers, that's going to continue. As applications start to pick up, I think the need for edge compute will be clear. If you start to think about it, the next step is we've been smartphone centric in the past, we may well move into other types of form factors. Think about AI glasses that will require much more low latency performance to be really usable. As we start to see that coming through and there have been some launches of devices that actually will require a new form factor and will require new capabilities in the network. I do think this is starting to happen. I would still say we take a bit of a prudent look at the market, adjust our cost structure to that prudent outlook, and then when the demand comes, we'll be well positioned to capture that through our technology leadership. Excellent, thank you. Thanks for the question, Eric. Moving to the next question, please. The next question will come from the line of Sébastien Sztabowicz at Kepler Cheuvreux, please. Go ahead, Sébastien. The line's open. Yeah. Hello everyone. Thank you for taking my question. On Cloud and Software and Services, your business has accelerated quite substantially in the third quarter with a ramp of 5G core deployments in many areas. You still see 5G core picking up again in the fourth quarter and moving into 2020. Is it something that could trigger some upgrades to 5G advanced in the coming quarters, and could it have some positive implication to your mix and gross margin in the coming quarters? Thank you. Do you want to take this one, Lars? No, on the financials then you can fill in on the 5G connection there. I think when it comes to core we see a good development there and have seen for quite some time and that is coming through now. When other parts of the portfolio are stabilizing here when it comes to managed service, etc. As I mentioned before also Q2 versus Q3, Q2 was a bit slow, so we got a bit of a boost in the growth rate here in the third quarter. Having said that, we still see a good development going forward also in managed services or in Cloud and Software and Services including then of course core that we highlight here where we are seeing good position, good reception in market and the focus on stable, resilient network is very high among our customers and I think we see that we have a good position there. I don't know if you want to add more on top of that, but I can add. The one thing which is important is of course that the operators need to migrate to 5G standalone and that is something that's going to be required in order to deliver the capabilities of 5G. When we have spoken in the past of low latency, very high bandwidth network slices, etc., it's all depending on being on 5G SA and so far it's, I would say, 1 in 5 operators or 1 in 5 networks maybe are upgraded. There are a couple of big operators that have really solid 5G SA networks now and they are also starting to realize extra revenues from network slices from differentiated offerings. We're seeing that they need to do that migration and when it happens it will help our business both in mid band coverage, but it will also of course be in 5G core. The position we have in 5G core is clearly today the world leading and I would say we stand to benefit from that migration that's going to happen over the next few years. I actually think in that sense we can be, we should be optimistic about the prospects still. We run the business based on more flat assumptions so we run the right cost structure and get the full operating leverage when growth comes. A little bit of the explanation of the better margins in Q3 is actually the operating leverage we get from growth as well. Thanks for the question Sébastien. Moving to the next question please. Next question is coming from the line of Andreas Joelsson at Carnegie. Please go ahead Andreas. Thanks a lot and good morning everyone. I have a question on the cash flow. Börje, in the CEO statement you mentioned that it's recurring cash flow, which is a phrase at least I have not seen before when it comes to Ericsson. Can you explain a little bit what you mean with recurring cash flow? Is it because of a better cost base that makes the cash flow less volatile, or how should we see that recurring cash flow? Thank you. I could start, maybe. So. That is, you know, the key is that we are a project business, right? And have been. I think we have put more efforts into a couple of things here. One is to improve the cost base so we have less exposure to that. We're also gradually changing the way we sell our product. I will increase the portion of software revenues coming in different models and kind of advanced services also coming in different models. When you put all of that together, we feel more comfortable about the stability of our cash flow generation going forward. Therefore we start to talk about the recurring underlying ability to generate cash flow. It comes out of a couple of changes to cost structure and business model. Thanks for the question, Andreas. Lars, anything to add? No, I think that comment is. Of course we will have. There can be swings within one or two quarters. That is normal in the project business that we have. As Börje said, we are working actively to sort out, we have more the terms and conditions in a way that also support more solid cash flow and reduce volatility. That is what we have been working with for quite some time, and I think we can see the result coming out of that. Thank you. Moving on to the next question, please. Next question is coming from Sandeep Deshpande at JPMorgan. Sandeep, please go ahead. Hi, can you hear me? Thank you. Yeah, hi, thank you for letting me on. My question is you're guiding to seasonal growth in both Networks and the Cloud and Software and Services business into the next quarter, but also flagging increased uncertainty. Does this mean that if there was increased uncertainty that there will be a change to this growth in the fourth quarter, or which is the areas in which this increased uncertainty is coming from? If there is incremental increased uncertainty that you're pointing to, or it is just ongoing uncertainty. Lars, when it comes to the guidance for the fourth quarter, this is what we see now coming into the fourth quarter. As you know, for us, our business is very back end heavy in the quarter. This is still what we see now. When it comes to increased uncertainty, it's not so much maybe in the quarter per se, but really a little bit long term. There is an ongoing discussion on tariffs, as we all follow, that could impact us or our customers, etc. I think that is more what we are pointing to in that area. Do you mean that if the increased uncertainty diminishes, you should do better than normal seasonality in the fourth quarter? No, that is not what we are saying. We are pointing to the reality that we live in. Thank you. Thanks, Sandeep. Moving to the next question, please. Next question is coming from Daniel Djoerberg at Handelsbanken. Daniel, please go ahead. Thank you, Daniel, and good morning, and congratulations to every report. Yeah, coming back to recurring changed business model on Cloud and Software and Services. Can you share with us, ballpark, the percentage of revenue that you consider being of a recurring nature or at least a large part of the 5G core revenues that is recurring? Thanks. No, we don't go into those kind of agreements, but what we can say, or shares let's say, but what we can see evolving here going forward continuously, what we are doing is moving into more and more recurring but also a model based on more connected to the utilization, which as utilization of networks increase also has an impact on our revenues, and that is maybe a little bit shift from what we have had historically where we had more kind of fixed price models. I think that is also supporting our revenue going forward. Thank you. Thanks Daniel. Moving to the next question please. The next question is coming from Jakob Bluestone at Exane BNP. Please go ahead Jakob. Thanks, Daniel. I had a question on your OPEX. I was wondering if you could maybe give us a little bit of an update on what your sort of current thinking is in terms of OPEX evolution, I guess second half or Q4. I think you previously said you expected better than normal sort of H on H for the second half, but up to that Q3 now, which is pretty good. Just any thoughts around OPEX next quarter and also how you see that perhaps evolving a little bit longer term as well. Yeah, when it comes to Q4, I think what we say is we had quite a big impact last year connected to incentives provisioning there, and that was sort of hurting or impacting the numbers there. Otherwise, it's rather normal seasonal. There is normally a bit of an uptick from Q3 going into Q4. That is what we expect there as well this year. When it comes to going forward, as we talk about, we live in a flat R&D market. That is our sort of planning assumption, and that means that we need to continuously fight with inflation coming through, including salary increases, and just to keep flat will require further activities on the cost side. We will do that also going forward. I think it is also part of the outlook that we say that remaining elevated levels and that work will need to continue. As Börje mentioned, we have, just compared to a year ago, we are some 6,000 people less in the group, and that work will need to continue also going into next year. Thank you. Thanks for the question, Jakob. Moving to the next question, please. Next question is coming from the line of Felix Henriksson from Nordea. Please go ahead, Felix. Hi, thanks for taking my question. It's on the North American market. We've seen some increased appetite for mobile spectrum as witnessed by, for example, AT&T's spectrum acquisition from Ecostar recently. When you discuss with your local clients in North America, how do you expect this sort of to translate into random equipment demand for you guys in the coming years? Thank you. Thanks for the question. As you note, spectrum is the lifeline of our industry and what keeps it ticking, and it's the scarcest resource in the industry. You know what the strategies are of our customers, how to deploy that spectrum. I think they should answer. I'll keep an answer more on a generic level. This is clearly something that, of course, spectrum and spectrum free up is important for an industry. What we've seen in other markets, typically it depends on your spectrum portfolio. How does it fit into your spectrum portfolio? Is it adjacent to some existing spectrum? If it is, you can most likely use some of existing equipment. If it's actually other spectrum, you will need more hardware, you will need software upgrades. What we have typically seen in other markets is it actually drives CapEx in the total market because clearly you're going to have more capacity, better performance of the network as you use more spectrum, and therefore other operators to match that typically need also to invest a bit more. Overall, getting into a market where spectrum is actually increasing deployed will typically help the total market and will actually help the customer experience at the end of the day. In this case, let AT&T comment on their strategy. I think it is worthwhile also to say that we had, as you may know, no market share with Dish. Let's see where this pans out. AT&T talks about their own plans. Thanks for the question, Felix. Thank you. Moving to the next question, please. Next question is coming from the line of Ulrich Rathe from Bernstein. Go ahead Ulrich, please. Yeah, thanks very much. I want to latch on to an earlier question on OPEX development in the R&D spending that's down 12% year on year. You're highlighting in the report 3%. That's still a very material cut on the R&D spend. Could you comment what measures you use to make sure that you're not under investing? Because there is of course in history in the industry, in the equipment industry, of under investment and sort of resulting competitive issues. How do you make sure that the R&D cutbacks don't lead you into that future? Thank you. I can just give you a comment on the financials first before you answer as well. I think you need to remember the currency impact on the OPEX that we have, and as I mentioned there in the beginning, we have around $1 billion in currency impact, and that is of course also in R&D. If we look at Networks, R&D spending taking out FX is actually rather stable, whereas in Cloud and Software and Services we have done work last years to reduce in some areas in the R&D and made prioritization in the product portfolio, and we had some extra cost on the transition that we did within R&D in Cloud and Software and Services. It was last year, so they were a little bit elevated. You should not see this as a big reduction in R&D spend actually. Having said that, we continuously evaluate the different parts of the portfolio where we spend our R&D and make decisions in that. Anything you would like to add as. Just to be clear on a couple of things. Yes, to actually turn around BSS we needed to focus the portfolio a bit, so we actually said in a couple of areas we're not going to compete. Those we have actually exited, and that helps the R&D spend. It doesn't impact necessarily the output where you need to win. That we've done. Then, as Lars said, in a bit of cryptic, the geopolitical situation has required us to shift resources a bit politically. That led to, as we went through that whole transition, duplicating a large part of R&D spend that now we don't need to have anymore as we have relocated R&D. So, rebalanced R&D. That actually is another part. Yes, your question is well taken. We should always worry that to be competitive we need to spend enough to do that, and we need to really be competitive with the Chinese. Our ambition is clearly to benchmark ourselves there. It's going to be their ambitions that drive our scaling of R&D. That's been the case for the last several years, at least during my tenure, and it will continue to be the case going forward. We are not going to jeopardize technology leadership, and if we feel that there is any risk, and that's a risk I don't see today, then we would of course need to reassess. As I see it, this is a natural—the FX part you can take out, but the other one, actually of removing duplication, that's been the key driver and something that was in the plans to do. Just didn't want to talk about it until it was done. Thanks Ulrich, thanks for the question. Thank you. Thank you very much. Thanks. Moving to the next question please. Next question is going to come from the line of Simon Granath, ABG. Please go ahead Simon. On Cloud and Software and Services, it once again delivers a quarter with year-on-year growth and strengthening margins. Now the rolling 12-month margin is at some 8%, so I'm curious to hear on what sort of ballpark levels we could expect in the medium term. A question connecting to this: you continue to emphasize that 5G standalone is needed for the operators to fully leverage the Networks. With 5G, there has clearly been a mismatch between deployment of 5G standalone and non-standalone. As we look into entering 6G in a couple of years, do you think that the matching will be better and thus the leverage of the Networks? Thank you. Maybe Lars, briefly first on the margin. We have said to ourselves to work towards a solid double-digit mod in Cloud and Software and Services. That is the first step that we're working on, and you can see here in this quarter you really see the impact on having a bit of growth on top and the leverage impact that gives, together with continued tight ship on the cost side, it really pays off. That is continued work on that end. On the 5G standalone and 6G question there by, yeah. 6G will most likely be defined in the next few years, right. With first commercial sales, everybody talks about 2030. I think it will be a bit earlier than that. Having said that, I think it's important to keep in mind what I do think is that the big change between 5G NSA and 5G standalone is that with 5G NSA, or non-standalone, the market kind of continued to sell 4G Plus. It was the established business model of most operators around the world. It became very natural to take that step that didn't give and then use 5G almost as a marketing icon on the phone. In reality, it didn't give the extra capabilities. To get the extra capabilities, the operators would have needed or need to go to 5G SA. I have no doubt that the new capabilities, call it network slicing, call it low latency, call it improved security, will be critical in applications over the next two, three years that will require the operators to build out 5G SA. By the way, when they have built out 5G SA, they will put themselves on the journey to upgrade to 6G. When that happens, 6G will be much more AI cloud dependent. Actually, what you do in 5G SA paves the way into that world. What's more important, by being in 5G SA, you create the monetization models that will be needed in 6G as well. You go through what I would call the business development portion and the changes in your go-to-market capabilities that you're doing during 5G, and then you leverage that into 6G. That will again provide better and stronger capabilities, but it will depend on new type of monetization. That needs to happen. Thanks for the question, Simon. Moving to the next question, please. Next question is coming from the line of Sami Sarkamies at Danske Bank. Please go ahead, Sami. Hi. I still wanted to go back to the strong performance at Cloud and Software and Services. I guess you didn't call out any large deals, but were there any positive one-time factors impacting third quarter? Thinking forward, can we assume that the 8% run rate you've been able to achieve during the past four quarters is something that you've been able to attain on a permanent basis? In the quarter in Cloud and Software and Services? On the question around, let's say, one-time items, I think it was actually quite a straightforward quarter. There's always a bit of product mix, etc., but it was, I would say, a normal quarter to a large extent. That is on that. The run rate, I think what we're trying to say is that we see that we have managed to increase our gross margins and keep costs stable here and continue to work on that. That gives us a good foundation going forward. We don't give guidance on run rate margins per se, per segments, etc., but I think we are coming out here in the quarter, and as you have seen the step up over the last quarters, we have come to a new level that I think is good going forward as well. Okay, thanks. The only thing I would add there, Daniel, is the one big effect normally on the margins tends to be our IPR agreements. That is nothing that impacts this quarter. No. Yeah, thanks Sami. We'll move to the next question please. Next question is coming from Richard Kramer at Arete. Please go ahead Richard. Thanks very much guys. I don't know if you can flesh this out at all, but you mentioned that you want to keep a solid net cash position, and while you're considering what to do with the SEK 52 billion you've piled up on the balance sheet, can you talk through what the parameters of a solid net cash position are? Is it a portion or percentage of your OpEx? Is it something to do with the working capital demands? Can investors assume that Ericsson will not be deploying some of that SEK 52 billion to M&A after your experience with Vonage? Thanks. When it comes to our net cash position, I think the message is that we want to have a solid net cash position and that is foundational to ensure that we can maintain our R&D and our technology leadership, make sure that we have the trust of the customers. It is important that we as a partner with our customers have financial strength to deliver long term over the contracts and commitments we have together. I think that is foundational for us. If there are volatilities happening in the market, we should also handle those kinds of movements. That is not a change in that sense. We are coming to a position where we talk now about excess cash and that we need to manage also here after now the divestment of iConnective coming into our net cash position. That is the signal and the comment we do here in the report now, that this is work that has been ongoing by the board since that was announced at the last AGM and that work continues. I think there is good work progressing. We give the highlight here now in the quarterly report that we're looking at it. We're looking at the options of extra dividend and/or buybacks. In Sweden, as we are a listed company here, the decision is made at the Annual General Meeting which is taking place that spring. Normally there is a proposal from the board coming in connection with the fourth quarter report on that topic. That's why it's coming at that stage. When it comes to your question around M&A as well, that has also not changed. We see we have the product portfolio we need to a large extent. There could be some bolt-on acquisitions coming into the product portfolio or when it comes to geographical spread, but no major ones. That is also unchanged. Okay, thanks. Thanks, Richard. We have time for one brief final question, so one more question, please. Into the queue. Final question today is coming from Rob Sanders at Deutsche Bank. Please go ahead. Rob. Hi. Thanks for squeezing me in. I was just interested in an update on Germany. Given there has been some push to swap out Huawei and ZTE. There is this 2029 shut off date, but it seems to be some resistance amongst the German telcos to actually go through with a full cleaning out of Chinese vendors. I was just interested in an update on that region where clearly your share is below what it is globally. Thanks. Börje, anything you'd add? You're right. I would first say that there is certain need to swap out Chinese vendors by 2029. You should keep in mind that's why it's a slow moving. I would say there is no real progress on that. The legislation is rather clear that it allows high risk vendors in the 5G network beyond 2029. Got it. Thank you. Thanks, Rob. Thanks everyone for joining us. That concludes the conference call today.