Core Viewpoint - Nokia's stock surged by 10% to $6.105 following better-than-expected Q3 2025 earnings driven by growth in network infrastructure and optical networks [1] Financial Performance - Nokia's Q3 net sales increased by 12% year-on-year to €4.828 billion, surpassing analyst expectations of €4.64 billion [1] - Adjusted operating profit decreased by 10% year-on-year to €435 million, but exceeded analyst average expectations of €324 million [1] - Adjusted earnings per share remained flat at €0.06 compared to the same period last year [1] Business Drivers - The growth in performance was primarily driven by demand from artificial intelligence and cloud service customers [1] - After a period of sluggish 5G equipment sales, Nokia diversified its business by expanding into new areas such as AI and defense [1] Future Outlook - The company updated its full-year profit forecast to €1.7-2.2 billion, an upward revision from previous expectations [1]

Market Overview - U.S. stock market opened mixed with Nasdaq up 0.05%, S&P 500 up 0.1%, and Dow Jones down 0.03% [1] Company Performance - Tesla shares fell 4.6% as Q3 results showed mixed performance, with adjusted net profit down 29% year-over-year, marking the third consecutive quarterly decline [1] - IBM shares dropped 6.8% due to slowing revenue growth in the hybrid cloud segment, which fell short of investor expectations [1] - Nokia shares rose 7.4% after Q3 results exceeded expectations, with net sales in the network infrastructure business increasing by 28% year-over-year [1]

Financial Performance - In Q3 2025, Nokia reported a 9% year-over-year growth in comparable net sales, reaching EUR 4.833 billion, with a reported growth of 12%[9]. - Nokia reported Q3 2025 net sales of EUR 4.828 billion, a 12% increase year-over-year compared to EUR 4.326 billion in Q3 2024[35]. - Reported net sales in Q3 2025 increased by 12% year-over-year, with comparable net sales up 9% on a constant currency basis, driven by 11% growth in Network Infrastructure[53][54]. - Total net sales for Q3 2025 reached EUR 4.828 billion, a 12% increase year-on-year, with significant growth in the Americas and APAC regions[86]. - Net sales to Communications Service Providers (CSP) increased by 7% year-on-year, while Enterprise net sales surged by 41%[89][91]. - Nokia's annual net sales run-rate for Technologies is approximately EUR 1.4 billion, with expectations of EUR 1.1 billion in operating profit from this segment[10]. - Nokia's annual net sales run-rate for Nokia Technologies remained approximately EUR 1.4 billion in Q3 2025[81]. - Nokia's net sales in the Americas for Q1-Q3 2025 were EUR 4,773 million, reflecting a 14% year-over-year increase[185]. Profitability Metrics - Comparable gross margin declined by 150 basis points year-over-year to 44.2%, while the comparable operating margin decreased by 220 basis points to 9.0%[9]. - Reported operating profit in Q3 2025 was EUR 239 million, representing 5.0% of net sales, down from 6.4% in Q3 2024[56]. - Comparable operating profit decreased by 10% to EUR 435 million, with a comparable operating margin of 9.0%, down from 11.2% in Q3 2024[57]. - Profit for the period was EUR 80 million in Q3 2025, down from EUR 175 million in Q3 2024, reflecting challenges in the market[132]. - Nokia's adjusted profit for the first nine months of 2025 was EUR 635 million, a significant decrease from EUR 1,109 million in the same period of 2024[108]. - Reported operating profit was EUR 345 million, or 2.5% of net sales, down from EUR 1,109 million or 8.4% in the first nine months of 2024[108]. Cash Flow and Financial Position - Free cash flow for Q3 2025 was EUR 0.4 billion, with a net cash balance of EUR 3.0 billion[9]. - Free cash flow for Q3 2025 was positive EUR 429 million, contributing to a net cash balance of EUR 3,001 million at the end of the quarter[64]. - Free cash flow was positive at EUR 1,238 million in the first nine months of 2025, despite a net cash decrease of EUR 1,853 million[114]. - Cash flows from operations amounted to EUR 691 million in Q3 2025, down 15.0% from EUR 813 million in Q3 2024[137]. - Net cash flows from operating activities for the first three quarters of 2025 totaled EUR 1,696 million, a decline of 25.7% compared to EUR 2,285 million in the same period of 2024[137]. - Cash and cash equivalents were EUR 4,892 million as of September 30, 2025, down from EUR 7,043 million in the previous year[134]. - The total financial liabilities as of September 30, 2025, are EUR 7.480 billion, with long-term interest-bearing liabilities at EUR 2.403 billion[198]. Segment Performance - The Network Infrastructure segment achieved a net sales growth of 11%, driven by a 19% increase in Optical Networks, primarily from AI & Cloud customers[8]. - Cloud and Network Services segment saw a 13% net sales growth, with strong operator investments in 5G Core[10]. - Optical Networks experienced a 19% growth in net sales, driven by AI and Cloud customers, with order intake trends remaining strong[39]. - Mobile Networks reported a 4% growth, with a stabilization in the market and a new agreement with VodafoneThree[40]. - Cloud and Network Services achieved a 13% increase in net sales, with a strong performance in 5G Core offerings[40]. - Mobile Networks net sales decreased by 1% on a reported basis but increased by 4% on a constant currency basis, primarily driven by growth in APAC[74]. Strategic Initiatives - Nokia plans to open a second semiconductor fabrication facility in San Jose to support growth in optical components[8]. - The company announced a strategic partnership with Nscale to become a preferred networking equipment vendor for their data center buildout[8]. - The company is on track to achieve its full-year outlook for 2025, with a focus on leveraging its portfolio for growth and operating leverage[44]. - The company initiated a strategic review of its venture fund investment activities, leading to a reclassification of related financial results starting Q3 2025[143]. - Nokia completed the acquisition of Infinera Corporation on February 28, 2025, enhancing its scale and profitability in optical networks[116]. - The acquisition of Infinera resulted in a total purchase consideration of EUR 2,496 million, which includes EUR 1,066 million in cash and EUR 785 million in convertible notes[173]. Market Challenges - The company faced competitive intensity and supply chain disturbances, impacting its ability to monetize network investments[128]. - Nokia is navigating macroeconomic uncertainties, including inflation and currency fluctuations, which may affect future performance[128]. - The company plans to scale down passive venture fund investments, changing their presentation in financials to impact financial income and expenses instead of operating profit[42]. Research and Development - Research and development expenses increased to EUR 1,174 million in Q3 2025 from EUR 1,116 million in Q3 2024, indicating continued investment in innovation[130]. - Nokia's Managed Services business was moved to the Mobile Networks segment effective January 1, 2025, aligning it better with the company's strategic focus[158]. Shareholder Information - The Board resolved to distribute a dividend of EUR 0.03 per share, with the record date on 28 October 2025[51]. - The Annual General Meeting on April 29, 2025, approved the financial statements and authorized the Board to resolve on a maximum dividend distribution of EUR 0.14 per share[122].

Core Insights - The company reported a strong growth of 9% on a constant currency basis, particularly in the network infrastructure business driven by optical networks and mobile infrastructure [1] - There is a significant focus on AI and data centers, with investments aimed at capturing opportunities in these areas [2][3] - Demand for AI and data center activities is robust and continues to accelerate, indicating a long-term growth trend rather than a temporary spike [6][8] Company Performance - The company experienced strong order growth in its optical networks business, contributing to overall positive performance [1] - Profit comparisons year-over-year are affected by a reversal from the previous year, but underlying performance remains flat when adjusted for this [1] - The company is actively innovating and shipping competitive products, such as the 800 gig ZRZR Plus pluggable, which is expected to enhance its market position [4][5] Market Trends - The demand for optical networks is growing across various sectors, including long-haul transport and metro networks [4] - Emerging demand in pluggable technology is seen as an exciting opportunity for the company [4] - The long-term potential of AI is viewed as a super cycle, with various applications still in early stages of penetration, suggesting sustained growth in the future [9][12] Strategic Focus - The company is directing investments towards AI and data centers to capitalize on the increasing demand in these sectors [2][3] - There is a belief that the current wave of spending from hyperscalers will not lead to a slowdown in the market, reinforcing confidence in long-term growth prospects [8][10] - The company is expanding its capabilities in fixed access and fiber technology to support both enterprise and residential customers [12][13]

Core Insights - Shares of Nokia increased approximately 8% in premarket trading following the announcement of third quarter adjusted profit that exceeded analyst expectations, driven by strong demand for AI and cloud services which positively impacted Optical Networks sales [5] Financial Performance - Nokia's third quarter adjusted operating profit decreased by 10% year-over-year, amounting to €435 million [5]

Financial Data and Key Metrics Changes - The company reported a 9% increase in net sales for Q3, with all business groups contributing to this growth [4][13] - Gross margin declined by 150 basis points year-on-year, primarily due to product mix issues in Network Infrastructure and Mobile Networks [13] - Operating margin was 9%, down 220 basis points from the previous year, largely due to a one-time benefit from a loss provision reversal in the prior year [13][14] - Free cash flow generated was EUR 429 million, with a net cash position of EUR 3 billion at the end of the quarter [14][18] Business Line Data and Key Metrics Changes - Network Infrastructure saw an 11% growth, with Optical Networks leading at 19% sales growth [15] - Cloud and Network Services experienced a 13% increase in sales, with gross margin improving by 380 basis points [16] - Mobile Networks net sales increased by 4%, driven by growth in Vietnam and the Middle East & Africa, but gross margin declined by 370 basis points due to a lower software contribution [17] - Nokia Technologies reported a 14% increase in net sales, maintaining an annual run rate of approximately EUR 1.4 billion [18] Market Data and Key Metrics Changes - In North America, strong growth was observed in Network Infrastructure and Cloud and Network Services, while Mobile Networks saw a slight decline [18] - APAC region, particularly India, showed growth in Network Infrastructure, while Mobile Networks returned to modest growth [18] - Europe remained stable, with no significant changes reported in Q3 [18] Company Strategy and Development Direction - The company is focused on operational leverage through continuous productivity improvement and digital instrumentation, rather than large restructuring programs [15][40] - The integration of the Infinera acquisition is ahead of schedule, contributing positively to net sales and order intake growth [5][11] - The company aims to unlock the full potential of its portfolio and deliver ongoing growth and operating leverage, with a strategy to be shared at the upcoming Capital Markets Day [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment, particularly in AI and cloud sectors, with a strong order intake and backlog coverage [4][5] - The company expects Q4 net sales to grow sequentially, slightly above historical seasonality of 22% [11] - Management highlighted the importance of focusing on innovation and technology leadership to improve returns in Mobile Networks [83] Other Important Information - The company is scaling down passive venture fund investments and will consider targeted direct minority investments to accelerate its strategy [10][11] - The AI supercycle is seen as a significant driver for demand in advanced connectivity solutions, positioning Nokia as a leader in this market [12] Q&A Session Summary Question: Progress on IP Networks and switching business - Management acknowledged positive design wins and emphasized that they are still a small player in the IP Networks space, with much work ahead [27] Question: Growth opportunities in AI and cloud - Management identified hyperscalers and sovereign clouds as significant growth opportunities, with current demand primarily driven by hyperscalers [29] Question: Insights on Scale Across for optics - Management noted that while Scale Across is not new, the increasing bandwidth demands from AI data centers create new opportunities for innovation [31][32] Question: Mobile Networks margins and future outlook - Management indicated that improving returns in Mobile Networks is a priority, focusing on customer engagement and innovation [83] Question: Demand in Europe and revenue decline - Management stated that demand in Europe is stabilizing, with potential upside if regulations address high-risk vendor status [77]

Financial Data and Key Metrics Changes - The company reported a 9% increase in net sales for Q3, with all business groups contributing to growth [3][11] - Gross margin for the group declined by 150 basis points year-on-year, primarily due to product mix [11] - Operating margin was 9%, down 220 basis points from the previous year, mainly due to a one-time benefit from a loss provision reversal in the prior year [11][12] - Free cash flow generated was $429 million, with a net cash position of $3 billion at the end of the quarter [11][16] Business Line Data and Key Metrics Changes - Network Infrastructure saw an 11% growth, with Optical Networks leading at 19% sales growth [12] - Cloud and Network Services experienced a 13% increase in sales, with gross margin improving by 380 basis points [13] - Mobile Networks net sales increased by 4%, driven by growth in Vietnam and the Middle East & Africa, but gross margin declined by 370 basis points [15] - Nokia Technologies reported a 14% increase in net sales, maintaining an annual run rate of approximately €1.4 billion [16] Market Data and Key Metrics Changes - In North America, strong growth was noted in Network Infrastructure and Cloud and Network Services, while Mobile Networks saw a slight decline [16] - In APAC, India experienced growth in Network Infrastructure, driven by demand for fixed wireless, while Mobile Networks returned to modest growth [16] - Europe remained stable, with no significant changes reported in the quarter [16] Company Strategy and Development Direction - The company is focused on operational leverage through continuous productivity improvement and digital instrumentation rather than large restructuring programs [12][37] - Strategic partnerships, such as with N-Scale and Supermicro, are aimed at enhancing networking technologies and expanding the footprint of Nokia's network operating system [5] - The company is optimistic about growth opportunities in AI and cloud, particularly with hyperscalers and sovereign clouds [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year outlooks, expecting Q4 net sales to grow sequentially above historical seasonality [4][9] - The demand environment remains healthy, with strong order intake in AI and cloud sectors [3][4] - Management acknowledged the need for continued innovation and collaboration with customers to improve returns in Mobile Networks [78] Other Important Information - The company is ahead of schedule with the integration of the Infinera acquisition, contributing positively to net sales and order intake growth [4] - A strategic review of venture fund investments led to a decision to scale down passive investments, focusing instead on targeted direct minority investments [8] Q&A Session Summary Question: Progress on IP Networks and switching business - Management noted positive metrics and wins in IP Networks but acknowledged that they are still a small player in the market [23] Question: Growth opportunities in AI and cloud - The biggest opportunities are seen in hyperscalers and sovereign clouds, with significant demand driving growth [25] Question: Impact of Scale Across for optics - Management indicated that while the technology is not new, the demand for innovation is increasing due to bandwidth demands driven by AI data centers [27][28] Question: 6G mobility investments - Investment in 6G standardization has already started, with ongoing work in pre-standard 6G radio technology [32] Question: Factors driving positive surprise in Q3 - Improved gross margins in Cloud and Network Services and successful traction in 5G standalone core implementations contributed to the positive surprise [40] Question: Demand in Europe - Management indicated that demand is stabilizing, with potential upside if regulations address high-risk vendor status [73]

Financial Data and Key Metrics Changes - The company reported a 9% increase in net sales for Q3 2025, with all business groups contributing to this growth [4][17] - Gross margin for the group declined by 150 basis points year-on-year, primarily due to product mix issues within Network Infrastructure and Mobile Networks [17] - Operating margin was reported at 9%, which is 220 basis points lower than the previous year, largely due to a one-time benefit from the prior year [17][18] - Free cash flow generated was $429 million, with a net cash position of $3 billion at the end of the quarter [18][23] Business Line Data and Key Metrics Changes - Network Infrastructure saw an 11% growth, with Optical Networks leading at 19% sales growth [19] - Cloud and Network Services experienced a 13% increase in sales, with gross margin improving by 380 basis points [20] - Mobile Networks net sales increased by 4%, driven by growth in Vietnam and the Middle East and Africa, although gross margin declined by 370 basis points [21][22] - Nokia Technologies reported a 14% increase in net sales, maintaining an annual run rate of approximately $400 million [22] Market Data and Key Metrics Changes - In North America, strong growth was observed in Network Infrastructure and Cloud and Network Services, while Mobile Networks saw a slight decline [23] - In APAC, India experienced growth in Network Infrastructure, driven by demand for fixed wireless, while Mobile Networks returned to modest growth [23] - Europe remained stable, with no significant changes reported in Q3 [23] Company Strategy and Development Direction - The company is focused on leveraging AI and cloud technologies, with a strategic emphasis on partnerships, such as with EnScale and Super Micro [8][15] - Nokia is transitioning to a continuous improvement culture, emphasizing operational leverage and cost discipline rather than large restructuring programs [18][68] - The company is optimistic about the potential of AI and data center business, particularly in the EU and US markets [101] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the full-year outlook, with expectations for sequential net sales growth in Q4 slightly above historical seasonality [7][15] - The demand environment is described as healthy, with strong order intake particularly in AI and cloud sectors [5][6] - Management acknowledged the need for ongoing innovation and technology leadership to improve returns in Mobile Networks [108] Other Important Information - The integration of the Infinera acquisition is ahead of schedule, contributing positively to net sales and order intake growth [6][71] - A strategic review of venture fund investments led to a decision to scale down passive investments, focusing instead on targeted direct minority investments [14] Q&A Session Summary Question: Progress on IP networks and switching business - Management acknowledged positive metrics and wins in IP networks but noted that they are still a small player in the market, indicating more work is needed [34][35] Question: Growth opportunities in AI and cloud - The biggest opportunities are seen in hyperscalers and sovereign clouds, with significant demand currently coming from these segments [38] Question: Scale across for optics and its implications - Management indicated that while the technology is not new, the demand for innovation is increasing due to bandwidth demands driven by AI data centers [41] Question: Six G mobility investments - Investments in six G technology standardization have already begun, with ongoing R&D efforts [45][46] Question: Factors driving positive surprise in Q3 - Improved gross margins in Cloud and Network Services and successful market share gains in five G standalone core implementations were highlighted [58] Question: Demand in Europe and its implications - Management noted that while demand is stabilizing, the majority of investment is currently happening in the US, with potential upside in Europe if regulations change [101]

Core Insights - Nokia's stock rose over 7% to $5.95 following the announcement of its earnings, which showed adjusted operating profit of €435 million for Q3 2025, significantly exceeding analyst expectations of €324 million [1] - The CEO, Justin Hsu, attributed the growth primarily to increased demand from AI and cloud service customers [1] - After a period of weak 5G equipment sales, Nokia diversified its business by expanding into new areas such as AI and defense [1] - The company updated its full-year profit forecast to €1.7 billion to €2.2 billion, an upward revision from previous estimates [1] Financial Performance - Adjusted operating profit for Q3 2025 reached €435 million, surpassing the expected €324 million [1] - Full-year profit forecast revised to €1.7 billion to €2.2 billion, indicating a positive outlook despite previous downward adjustments due to U.S. tariff policies [1] Market Reaction - Nokia's stock price increased by 7.21% in pre-market trading, reflecting investor confidence following the earnings report [2] - The closing price before the announcement was $5.58, with a pre-market price of $5.95 [2] - The stock has a market capitalization of approximately $29.854 billion [2]

Financial Performance Highlights - Nokia reported strong net sales growth of 9% in Q3 2025[8], reaching EUR 48 billion[52] - The company's Q3 2025 gross margin was 442%[23] - Q3 2025 free cash flow (FCF) was EUR 04 billion[23] - Nokia's Q3 2025 net cash stood at 9%[23] Segment Performance - Network Infrastructure net sales increased by 11% year-over-year to EUR 1953 million[29], driven by Optical Networks which grew by 19%[32] - Cloud and Network Services net sales grew by 13% year-over-year to EUR 645 million[36] - Mobile Networks net sales saw a 4% increase year-over-year to EUR 1842 million[41] - Nokia Technologies net sales increased by 14% year-over-year to EUR 391 million[47] Strategic Progress - Net sales from AI & Cloud accounted for 6% of Nokia's total net sales in Q3 2025[10, 12] - Nokia is on track to achieve its full-year 2025 outlook, targeting the mid-point of its operating profit outlook range of EUR 17 billion to EUR 22 billion[8, 19] - Nokia Technologies maintains a contracted annual net sales run-rate of approximately EUR 14 billion[50]