Finland · Delayed Price · Currency is EUR Nokia Oyj Earnings Call Transcripts
Fiscal Year 2026
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Q2 2026 saw 9% net sales growth, margin expansion, and strong AI & Cloud momentum, with order intake reaching EUR 2.8 billion. Network Infrastructure led growth, while supply chain constraints and restructuring costs remain key risks. Guidance remains above midpoint for the year.
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New optical products and expanded indium phosphide capacity are set to drive growth from 2027, with strong Q1 order momentum and 18%-20% revenue growth guidance for IP and optical. Supply chain constraints remain the main risk, while accelerated synergies and a shift to software-centric strategies support margin improvement.
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Q1 saw 4% sales growth to EUR 4.5B, with strong AI/cloud demand driving 49% segment growth and EUR 1B in new orders, mainly in Optical Networks. Upgraded 2026 guidance for Network Infrastructure and Optical/IP Networks reflects robust demand and successful Infinera integration.
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OFC 2026 showcased major advances in optical networking, including four new DSPs and a modular building block approach enabling 13 tailored coherent solutions. Strong R&D investment, expanded fab capacity, and deep customer collaboration position the company for leadership in a rapidly growing, power-conscious market.
Fiscal Year 2025
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Q4 and full-year 2025 results met expectations, with net sales and operating profit slightly above guidance. Strong growth in Optical Networks and AI/cloud demand offset stable telco markets, while strategic investments and cost programs position for long-term margin expansion and growth.
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The discussion highlighted a strategic pivot toward AI and cloud, with disciplined growth targets and a focus on software-driven business models. Manufacturing regionalization and partnerships, such as with NVIDIA, are key to future competitiveness. Leadership changes and improved communication aim to reinforce the company's role as a critical infrastructure provider.
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Nokia is repositioning for the AI supercycle by focusing on AI-native networks, streamlining into two core business segments, and targeting double-digit operating profit growth through 2028. Key initiatives include deepening AI/cloud partnerships, expanding in mission-critical and defense sectors, and driving efficiency and portfolio focus.
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A major strategic partnership was announced, with Nvidia investing USD 1 billion to accelerate AI-native network development and become a significant shareholder. The collaboration targets AI-RAN innovation for 5G and 6G, with field trials in 2026 and commercial rollout by 2027.
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Q3 2025 saw 9% net sales growth year-over-year, with all business groups expanding and strong order intake from AI and cloud customers. Gross margin declined due to product mix, but profitability was in line with expectations. Integration of Infinera is ahead of schedule, and the company is on track to meet its full-year outlook.
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Strong technology and customer relationships are driving growth, with AI and optical infrastructure as key focus areas. U.S. and Europe lead in AI-driven demand, while investments in IP networking and photonics support innovation. Supply chain and market expansion remain priorities.
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Q2 2025 saw stable gross margins and growth in Network Infrastructure and Cloud and Network Services, offset by a decline in Mobile Networks. Currency headwinds and tariffs led to a lowered full-year profit outlook, but strong order intake and ongoing integration of Infinera support future growth.
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Q1 2025 saw adjusted net sales growth of 7% and strong order momentum, led by Network Infrastructure and Cloud and Network Services, despite headline declines and a one-off Mobile Networks charge. Guidance for 2025 is unchanged, but tariff risks and operational challenges remain.
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AI and data center growth are driving a new wave of investment and innovation in optical networks, with automation, security, and advanced fiber technologies at the forefront. The recent integration with Infinera expands scale and capabilities, positioning the company as a global leader across multiple market segments.
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Nokia announced a leadership transition with Justin Hotard set to become CEO in April 2025, focusing on accelerating growth in data centers, AI, and defense communications. The company targets €1 billion additional data center revenue by 2028 and continues to strengthen its position in 5G and network infrastructure.
Fiscal Year 2024
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Q4 2024 saw 9% net sales growth, record margins, and strong cash flow, driven by Network Infrastructure and Nokia Technologies. Strategic acquisitions and increased investment in IP Networks position the company for continued growth in 2025, with stable Mobile Networks and expanding opportunities in data centers and new tech segments.
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Q3 saw a 7% sales decline but a 490 bps gross margin improvement, strong free cash flow, and continued cost savings. Fixed and IP networks are recovering, while mobile and optical remain weak. The Infinera acquisition and new deals in data centers and enterprise are set to drive future growth.
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Industry challenges are giving way to renewed growth, driven by fiber, 5G, cloud, and AI trends. Technology leadership, strategic partnerships, and the Infinera acquisition position the business for mid-single-digit growth and margin expansion, with strong momentum in data center and optical markets.
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Q2 2024 saw an 18% sales decline, mainly due to India, but order intake improved and gross margin rose by 450 basis points. Cost savings and strong free cash flow supported a stable outlook, with the Infinera acquisition and submarine networks divestment set to reshape Network Infrastructure.
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The acquisition aims to accelerate scale and innovation in optical networking, targeting EUR 200 million in synergies by 2027 and strengthening presence in North America and web-scale markets. The deal is expected to be accretive to profit and EPS in year one, with strong stakeholder support.