TLDR
- Nokia delivered €6.1 billion in Q4 2025 revenue, marking a 3% constant currency increase as AI and data center demand offset telecom weakness
- The company’s comparable operating profit reached €1.06 billion in Q4 with a 17.3% margin, down from €1.09 billion the previous year
- AI and cloud-focused Network Infrastructure division surged 19% while traditional Mobile Networks business declined 1.7% year-over-year
- Full-year 2025 results showed 2% revenue growth with €2.0 billion comparable operating profit and €1.5 billion free cash flow
- Stock plunged 5.8% as 2026 operating profit guidance of €2.0-€2.5 billion came in roughly 5% below Street estimates
Nokia’s bet on artificial intelligence and data centers is paying off in sales, but not enough to satisfy investors who sent the stock down nearly 6% after the company reported quarterly results Thursday.
The telecom equipment manufacturer posted fourth quarter revenue of €6.1 billion. That matched analyst predictions compiled by FactSet. On a constant currency basis, the figure represented 3% growth compared to the year-ago period.
CEO Justin Hotard’s restructuring strategy around AI infrastructure showed tangible progress. The Network Infrastructure segment, which targets data center and cloud customers, recorded 19% revenue expansion. Within that division, Optical Networks grew 17% as hyperscalers built out capacity for AI workloads.
The company’s book-to-bill ratio stayed above one across its Optical and IP Networks products. This indicates Nokia is winning orders faster than it’s shipping equipment, a positive signal for future quarters.
Fourth quarter comparable operating profit totaled €1.06 billion. That’s down from €1.09 billion in Q4 2024. The operating margin compressed 90 basis points to 17.3% as Nokia invested in growth initiatives and absorbed costs from integrating Infinera, an optical networking company it recently acquired.
Nokia reported comparable diluted EPS of €0.16 for the quarter. Reported diluted EPS came in at €0.10. The company maintained a solid balance sheet with €3.4 billion in net cash at quarter end.
Traditional Telecom Business Finds Footing
The Mobile Networks unit, serving traditional wireless carriers, saw revenue slip 1.7% from the prior year. Regional markets in the Middle East, Japan, and Indonesia delivered growth. North American sales weakened as carriers pulled back on spending.
Despite the revenue decline, profitability improved in the segment. Gross margin expanded to 40.1% from 37.3%, suggesting the business is stabilizing even as it shrinks. This margin improvement helped cushion the overall profit impact.
For all of 2025, Nokia generated 2% constant currency revenue growth. The company produced €2.0 billion in comparable operating profit. Free cash flow reached €1.5 billion for the year.
Group comparable net profit attributable to shareholders hit €880 million in Q4. That represented an 11% drop year-over-year but exceeded the €834 million consensus estimate. The company performed a corporate action during the quarter, taking full control of its China joint venture for a €0.5 billion cash payment.
Forward Outlook Triggers Weakness
The stock’s decline stemmed entirely from Nokia’s 2026 forecast. Management projected comparable operating profit between €2.0 billion and €2.5 billion. The €2.25 billion midpoint trails analyst expectations of €2.37 billion by approximately 5%.
J.P. Morgan analysts told clients they expect consensus estimates to move lower. “For 2026, we expect to see consensus down to reflect the guidance – on operating profit, we expect mid-single digit downgrades to consensus,” they wrote.
Nokia expects its Network Infrastructure division to grow 6-8% in 2026. This matches the company’s long-term growth targets for the segment. The guidance suggests Hotard’s transformation plan remains on track, even if profitability isn’t ramping as quickly as Wall Street hoped.
The company warned first quarter 2026 revenue would fall more than typical seasonal patterns. Operating margin should rise only slightly compared to Q1 2025. This near-term weakness likely contributed to investor disappointment.
Nokia’s board recommended a dividend authorization of €0.14 per share for 2025. The company also announced governance changes with Chair Sari Baldauf departing and board member Timo Ihamuotila nominated as her replacement. Meredith Whittaker from Signal Technology Foundation received a nomination to join the board.
