TLDR
- Nokia delivered €6.1 billion in Q4 2025 revenue, representing 3% constant currency growth as AI infrastructure sales compensated for telecom weakness
- Q4 comparable operating profit of €1.06 billion fell short of last year’s €1.09 billion with margins sliding to 17.3%
- AI-focused Network Infrastructure surged 19% while traditional Mobile Networks dropped 1.7% year-over-year
- 2026 comparable operating profit guidance of €2.0-€2.5 billion disappointed investors, missing consensus by approximately 5%
- Shares tumbled 5.8% in European markets as traders focused on the underwhelming forward outlook
Nokia unveiled mixed quarterly results Thursday that sent the stock tumbling despite strong performance in its AI-focused business units.
The telecom equipment provider reported fourth quarter revenue of €6.1 billion. The figure met analyst expectations and marked 3% growth on a constant currency basis compared to the year-ago period.
CEO Justin Hotard’s strategic shift toward artificial intelligence and data centers showed clear momentum. Network Infrastructure revenue jumped 19% as hyperscalers and cloud providers expanded capacity. The Optical Networks business within that division grew 17%, benefiting from robust data center buildouts.
The company maintained strong order momentum with book-to-bill ratios above one across Optical and IP Networks products. This suggests continued demand from AI and cloud customers heading into 2026.
Q4 comparable operating profit totaled €1.06 billion compared to €1.09 billion in the prior year quarter. Operating margin contracted 90 basis points to 17.3% as Nokia invested in growth initiatives and absorbed integration costs from its Infinera acquisition.
Comparable diluted EPS came in at €0.16 while reported diluted EPS hit €0.10. The company maintained a healthy balance sheet with €3.4 billion in net cash after completing a China joint venture transaction.
Telecom Business Shows Margin Improvement
The Mobile Networks division serving traditional wireless carriers saw revenue decline 1.7%. Sales fell in North America while markets including the Middle East, Japan, and Indonesia posted gains.
Despite the revenue drop, gross margin in the segment expanded to 40.1% from 37.3%. This improvement suggests Nokia is successfully managing profitability even as carrier spending remains subdued.
For the full year, Nokia achieved 2% constant currency revenue growth. The company generated €2.0 billion in comparable operating profit and €1.5 billion in free cash flow.
Group comparable net profit reached €880 million in Q4, down 11% but exceeding the €834 million analyst consensus. Nokia completed the acquisition of full ownership in its China joint venture for €0.5 billion during the quarter.
Conservative Outlook Disappoints Market
The stock’s decline centered on Nokia’s 2026 guidance. Management projects comparable operating profit between €2.0 billion and €2.5 billion. At the midpoint of €2.25 billion, this falls roughly 5% below Wall Street’s €2.37 billion estimate.
Analysts at J.P. Morgan indicated they expect consensus estimates to decline following the announcement. “For 2026, we expect to see consensus down to reflect the guidance – on operating profit, we expect mid-single digit downgrades to consensus,” the firm wrote.
Nokia expects Network Infrastructure to grow 6-8% in 2026, consistent with its long-term targets. Management cautioned that first quarter revenue would decline more than typical seasonal patterns, with operating margins rising only modestly year-over-year.
The board recommended €0.14 per share dividend authorization for 2025. Leadership changes include Sari Baldauf stepping down as chair with Timo Ihamuotila proposed as her successor. Meredith Whittaker from Signal Technology Foundation received a nomination to join the board.
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