Nokia delivered mixed results for full-year 2025 with revenue of €19.9 billion (up 2% YoY, 3% reported) and comparable EPS of €0.29. Despite Q4 beating analyst estimates on operating profit, shares fell 6–10% post-announcement due to 2026 guidance trailing consensus expectations of €2.37 billion, with Nokia guiding €2.0–€2.5 billion operating profit range. Strong AI/Cloud momentum in Network Infrastructure offset mobile sector headwinds.
About Nokia
Nokia Oyj (NYSE: NOK) is a Finnish multinational telecommunications and technology company headquartered in Espoo, Finland, with a market capitalization of approximately €30.8 billion (or ~$33 billion USD equivalent) as of January 2026. Founded in 1865, Nokia has evolved from a mobile phone manufacturer into a global leader in 5G/6G network infrastructure, cloud services, and software licensing. The company operates through two main segments: Network Infrastructure (optical, IP, and fixed networks serving both CSPs and AI/Cloud customers) and Mobile Infrastructure (radio networks and core software). With approximately 86,700 employees worldwide, Nokia maintains critical R&D centers across North America, Europe, and Asia-Pacific. The company’s dividend yield is approximately 2.1%, and its P/E ratio is approximately 37.7x (indicating elevated valuation multiples).
Top Financial Highlights
- Full Year 2025 Revenue: €19.9 billion, up 2% YoY on constant currency/portfolio basis (+3% reported).
- Q4 2025 Revenue: €6.1 billion, up 3% YoY on a constant currency basis (+2% reported).
- Full Year Comparable Operating Profit: €2.0 billion, down 22% YoY; operating margin of 10.2% (down 320 bps).
- Full Year Reported Operating Profit: €0.885 billion, down 55% YoY; reported margin 4.4% (down 580 bps).
- Full Year Comparable EPS: €0.29, down 26% YoY; reported EPS €0.12, down 48% YoY.
- Q4 Comparable EPS: €0.16, down 11% YoY; reported EPS €0.10, down 33% YoY.
- Comparable Gross Margin (FY): 45.1%, down 200 bps YoY due to product mix headwinds.
- Q4 Comparable Gross Margin: 48.1%, up 90 bps YoY; strong product mix benefited Mobile Networks and Cloud Services.
- Free Cash Flow (FY): €1.5 billion, up 35.8% YoY; FCF conversion rate of 72%.
- Q4 Free Cash Flow: €0.226 billion; net cash balance of €3.4 billion (down from €4.9 billion YoY).
- Network Infrastructure Revenue (FY): €7.99 billion, up 9% YoY (constant currency basis); Optical Networks grew 14%.
- Mobile Networks Revenue (FY): €7.81 billion, flat YoY; segment stabilizing after prior-year softness.
- Cloud and Network Services Revenue (FY): €2.61 billion, up 6% YoY; strong performance outpacing declining market.
- Nokia Technologies Revenue (FY): €1.5 billion, down 21% YoY; but maintained €1.4 billion contracted annual run-rate.
- Proposed Dividend: €0.14 per share, unchanged YoY; board authorized up to €0.14 for 2025 distribution.
- Capital Expenditures Guidance (2026): €0.9–€1.0 billion, elevated due to optical manufacturing capacity expansion and real estate projects.
Beat or Miss?
| Metric | Reported | Consensus/ Estimate | Difference | Analysis |
| Q4 Net Sales (€ millions) | € 6,125 | €6,108 (FactSet) | +€17 (+0.3%) | Slight Beat: Revenue in line with expectations; reported basis showed 2% growth vs. consensus modeling |
| Q4 Comparable Operating Profit (€ millions) | € 1,058 | € 1,020 | +€38 (+3.7%) | Beat: Operating profit exceeded consensus by 3.7%; margin discipline offset growth investments |
| FY 2025 Revenue (€ millions) | € 19,889 | ~€19,800–€19,900 (guidance midpoint) | In Line | In Line: Achieved full-year guidance; 3% reported growth aligned with management expectations |
| FY 2025 Comparable Operating Profit (€ millions) | € 2,024 | ~€2,000–€2,050 (guidance midpoint) | Slightly Above | Slightly Above: Operating profit €2.024B vs. guidance range €2.0–€2.5B (above midpoint) |
| 2026 Operating Profit Guidance (€ millions) | €2,000–€2,500 (midpoint €2,250) | €2,370 (analyst consensus per J.P. Morgan) | €120B below (–5.3%) | Miss: 2026 guidance midpoint trails consensus by 5%, driving negative market reaction and 6–10% stock decline |
| Ordinary Dividend per Share | € 0.14 | € 0.14 | Even | In Line: Proposed dividend unchanged YoY; meets expectations for shareholder distributions |
While Nokia beat Q4 operating profit estimates, the subsequent 6–10% post-announcement stock decline was primarily driven by conservative 2026 operating profit guidance (€2.0–€2.5B range, midpoint €2.25B) falling 5% below J.P. Morgan’s consensus estimate of €2.37B. Management warned of Q1 2026 seasonality headwinds and cautious margin assumptions, signaling uncertainty despite strong AI/Cloud momentum.
What Leadership Is Saying
“In the fourth quarter, sales growth was in line with our expectations, reflecting disciplined execution across the business. Fourth quarter net sales grew 3% to reach €6.1 billion. We delivered full year operating profit of €2.0 billion, slightly above the mid-point of our guidance. 2025 was a foundational year in repositioning Nokia for long-term value creation. We strengthened our portfolio with the acquisition of Infinera, simplified our operating model, and set a clear strategy at our Capital Markets Day to focus the company on the areas where we see opportunities for differentiation, scale, and sustainable market leadership. Looking ahead to 2026, our focus is on disciplined execution to capture growth in AI & Cloud, and increase efficiency while building a high performance culture across Team Nokia. We have fewer, clearer priorities, a simplified operating model, and a strategy we are executing with speed and accountability.” – CEO Justin Hotard on Strategic Positioning
“We delivered a fourth quarter which was in line with our expectations and guidance. Net sales were €6.1 billion, that’s up 3% on the prior year. Gross margin was 48.1%, an improvement of 90 basis points, driven by improvements in mobile networks and cloud and network services. In 2026, we expect measured margin expansion as we ramp new products and continue investing in the long-term growth opportunity we see in the business. Free cash flow conversion of 72% was also consistent with our guidance. For 2026, we target comparable operating profit of €2.0 to €2.5 billion. We see strong demand trends in Network Infrastructure as we ramp new products, expanding our presence in AI & Cloud and invest for long-term growth. In Mobile Infrastructure we see a stable market environment and are focused on efficiency and improving profitability.” – CFO Marco Wirén on Financial Performance and Margin Dynamics
Historical Performance (Q4 2025 vs. Q4 2024)
| Category | Q4 2025 | Q4 2024 | Change (%) | Constant Currency Change |
| Net Sales (€ millions) | €6,125 | €5,983 | +2.40% | +3.00% |
| Comparable Net Sales (€ millions) | €6,130 | €5,983 | +2.50% | +3.00% |
| Comparable Gross Margin (%) | 48.10% | 47.20% | +90 bps | – |
| Reported Gross Margin (%) | 44.90% | 46.10% | -120 bps | – |
| Comparable Operating Profit (€ millions) | €1,058 | €1,086 | -2.60% | – |
| Reported Operating Profit (€ millions) | €540 | €861 | -37.30% | – |
| Comparable Operating Margin (%) | 17.30% | 18.20% | -90 bps | – |
| Reported Operating Margin (%) | 8.80% | 14.40% | -560 bps | – |
| Comparable Diluted EPS (€) | €0.16 | €0.18 | -11.10% | – |
| Reported Diluted EPS (€) | €0.10 | €0.15 | -33.30% | – |
| Free Cash Flow (€ millions) | €226 | €200 | 12.70% | – |
| Network Infrastructure Sales (€ millions) | €2,407 | € 2,031 | +18.5% (reported); +7% constant currency | 7% |
| Mobile Networks Sales (€ millions) | €2,502 | €2,545 | -1.7% (reported); +6% constant currency | 6% |
| Cloud & Network Services Sales (€ millions) | €837 | €940 | -10.9% (reported); -4% constant currency | -4% |
Q4 showed strong topline resilience with comparable sales up 3% on constant currency basis, but profitability contracted due to growth investments in Network Infrastructure (including Infinera integration), higher restructuring charges, and margin compression in IP Networks. Comparable operating profit declined 2.6% despite revenue growth, reflecting deliberate investment posture in high-growth AI/Cloud segments. Free cash flow improved 12.7%, demonstrating operational cash generation strength despite earnings headwinds.
Competitive Landscape
Ericsson and Cisco Performance (Q4 2025 vs. Q4 2024)
| Category | Nokia Q4 2025 | Ericsson Q4 2025 | Cisco Q4 FY2025 | YoY Change (Nokia) | YoY Change (Ericsson) | YoY Change (Cisco) |
| Revenue (Local Currency) | €6.1B | SEK 69.3B (~€6.4B) | $14.7B (~€13.3B) | +3% CC | +6% organic | +8% |
| Gross Margin (Comparable/Adj.) | 48.10% | 44.30% | 68.4% (non-GAAP) | +90 bps | +500 bps | +50 bps |
| Operating Profit | €1.06B (comparable) | SEK 3.7B (~€341M) | $5.0B (~€4.5B) EBITDA adj. | –3% YoY | +68% YoY | +13% YoY |
| Operating Margin | 17.3% (comparable) | 18.60% | 34.3% (non-GAAP) | –90 bps | Strong improvement | Slight decline |
| Diluted EPS | €0.16 (comparable) | SEK 8.51 (~€0.79) | $0.99 (non-GAAP) | –11% YoY | +114% YoY | +14% YoY |
| Segment Highlights | Optical +17%; Mobile +6% | Enterprise +12%; CSP stable | Networking +12%; AI infrastructure $800M+ | Strong in AI/Cloud networks | Recovery in Enterprise | Broad-based growth |
| Stock Reaction | –6% to –10% post-announcement | Positive (stock surge) | Strong performance | Guidance miss (2026) | Beat expectations | Guidance strong |
Comparative Assessment: Ericsson significantly outperformed both Nokia and the broader market in Q4 2025, with EPS growth of +114% YoY and operating margin expansion of 500+ bps, driven by cost reduction initiatives and strong organic growth in enterprise segments. Nokia’s 3% revenue growth trailed Ericsson’s 6% organic growth but exceeded Cisco’s earlier-reported Q4 momentum, though Cisco’s full-year FY2025 revenue growth of 5% and continued AI infrastructure acceleration ($2B+ in AI orders) suggest broader market strength. Nokia’s valuation multiple (P/E 37.7x) now appears stretched relative to its earnings trajectory, whereas Ericsson’s operational leverage and Cisco’s recurring revenue model (31.1B ARR) demonstrate more sustainable margin profiles.
How the Market Reacted
Nokia’s stock declined by 6–10% in premarket and early trading on January 29, 2026, despite the company beating Q4 operating profit estimates. The sell-off was primarily driven by disappointing 2026 guidance, with Nokia’s operating profit target of €2.0–€2.5 billion (midpoint €2.25B) falling approximately 5% below analyst consensus of €2.37 billion, according to J.P. Morgan. While fourth-quarter results were solid—revenue beat FactSet expectations and comparable operating profit exceeded consensus by 3.7%—management’s cautionary tone regarding Q1 2026 seasonality (warning of below-normal sales decline) and modest margin assumptions spooked investors already concerned about valuation multiples. A broader market sell-off of AI and technology stocks on January 28–29 also affected Nokia, with some analysts citing potential headwinds from U.S.–Europe trade tensions mentioned by CEO Justin Hotard in post-earnings interviews, which dampened sentiment despite the company’s strong positioning in AI/Cloud infrastructure networks.
Strategic Initiatives & 2026 Outlook
AI & Cloud Leadership: Nokia’s Network Infrastructure segment continues to drive growth, with Optical Networks revenue surging 14% YoY on strong demand from AI and cloud customers. The company’s Q4 partnership announcement with NVIDIA positions Nokia favorably for AI-native network transitions and 6G development. Enterprise customer wins, now totaling 1,000+ private wireless deployments, signal expanding TAM beyond traditional CSP relationships.
Operating Model Simplification: Effective 2026, Nokia consolidated its business into two segments, Network Infrastructure and Mobile Infrastructure, thereby reducing reporting complexity and enhancing accountability. The Mobile Infrastructure segment now unifies Core Software, Radio Networks, and Technology Standards, positioning the company for improved profitability and 6G technology leadership.
Capital Allocation: The company maintained its €0.14 per share annual dividend and announced a €1 billion share buyback program for 2026, signalling management confidence in long-term value creation despite near-term guidance conservatism. Elevated capex guidance of €0.9–€1.0 billion reflects investments in optical manufacturing capacity to support AI/Cloud infrastructure growth.
Long-Term Targets (2028 Ambition): Nokia aims for comparable operating profit of €2.7–€3.2 billion by end-2028, implying 5–10% CAGR from 2025 baseline, with Network Infrastructure targeting 13–17% operating margins and 6–8% revenue CAGR. Free cash flow conversion remains targeted at 65–75%.
Bottom Line for Investors
Nokia’s Q4 2025 and full-year results underscore a company undergoing strategic repositioning rather than delivering near-term earnings acceleration. While the company achieved guidance and demonstrated resilience in Network Infrastructure (particularly Optical Networks serving AI/Cloud customers), the 2026 outlook reflects management’s prudent stance amid geopolitical trade tensions and near-term Mobile Infrastructure headwinds from prior contract losses. The stock’s post-earnings decline to ~€6.30 (down from €7+) may present a buying opportunity for long-term investors focused on AI infrastructure tailwinds and 6G positioning, but near-term volatility remains elevated given elevated valuation multiples (P/E 37.7x) and guidance misses relative to consensus. Compared with Ericsson’s stronger margin trajectory and Cisco’s diversified recurring revenue model, these alternatives are less speculative within the networking equipment sector.
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