Nokia's stock surged after its Q4 earnings report.Shares of wireless industry veteran Nokia (NOK 6.19%) had a great day on Thursday. Following a robust earnings release early in the morning, the Finnish company's stock jumped as much as 9.5%. It had cooled off somewhat to a 7.3% gain by 1 p.m. ET.A mixed bag with a positive outlookThe average analyst expected fourth-quarter earnings near 0.14 euros per diluted share (approximately $0.15) on revenue in the neighborhood of 6.2 billion euros (around $6.46 bill ...

Financial Data and Key Metrics Changes - The company reported a net sales growth of 9% in Q4 2024, with a gross margin increase of 250 basis points to 47.2% and an operating margin of 19.1%, the highest since 2015 [10][12][16] - Free cash flow for the year was EUR2 billion, with a year-end net cash balance of EUR4.9 billion after returning EUR1.4 billion to shareholders [13][29] Business Line Data and Key Metrics Changes - Network Infrastructure grew by 17% in Q4, with IP networks growing 24% [11][17] - Mobile Networks saw a 2% decline in net sales, but trends stabilized with double-digit growth in North America [18][19] - Cloud and Network Services grew by 7%, despite a 4 percentage point headwind from a prior disposal [11][20] - Nokia Technologies experienced an impressive 85% growth in net sales in Q4, with a run rate of EUR1.3 billion to EUR1.4 billion [23][24] Market Data and Key Metrics Changes - North America and India were the biggest contributors to net sales growth, with strong demand from telecom operators in North America [25][26] - The competitive environment remains challenging in Latin America, while Europe showed resilient market performance mainly due to Nokia Technologies [26] Company Strategy and Development Direction - The company plans to accelerate investments in its IP networks business, targeting an additional EUR1 billion in net sales by 2028 through a EUR100 million annual operating expense increase [41][99] - The acquisition of Infinera is expected to strengthen Nokia's position in optical networking and data center markets [34][72] - The company aims to diversify its business and accelerate growth outside traditional service provider markets, with a focus on enterprise and defense sectors [37][110] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improved visibility for 2025, with a growing order backlog and robust CapEx commentary from customers [64] - The company expects strong growth in Network Infrastructure and stable sales in Mobile Networks, despite a headwind from AT&T [51][65] - Management highlighted the importance of private wireless and defense sectors as key growth areas moving forward [110][112] Other Important Information - The company returned EUR1.4 billion to shareholders in 2024, with EUR710 million through dividends and EUR680 million via buybacks [30][31] - A dividend authorization of EUR0.14 per share is proposed for the financial year 2024, an increase from EUR0.13 the previous year [31] Q&A Session Summary Question: Guidance on gross margin and visibility for 2025 - Management indicated improved visibility for 2025 compared to the previous year, with a growing order backlog and optimistic growth opportunities in enterprise markets [64][66] Question: Trends with hyperscalers and data centers - Management sees significant growth opportunities in the data center market, with good deal traction and plans to strengthen capabilities through the Infinera acquisition [71][72] Question: Growth trajectory in Network Infrastructure - Management expects strong growth across all segments of Network Infrastructure, particularly in optical, but refrained from providing specific figures [86][87] Question: Data center growth plans and operating expenses - Management confirmed plans to grow operating expenses by EUR100 million to achieve an additional EUR1 billion in sales by 2028, focusing on both R&D and go-to-market investments [99][100] Question: Mobile Networks business turnaround - Management acknowledged the need to drive top-line growth in Mobile Networks, emphasizing the importance of private wireless and defense sectors for future growth [108][110] Question: Opportunities in Nokia Technologies - Management highlighted growth opportunities in new areas such as automotive and multimedia, with ongoing investments in R&D [90][115]

Earnings Call Overview - Nokia held its Q4 2024 earnings conference call on January 30, 2025, with key participants including President and CEO Pekka Lundmark and CFO Marco Wiren [1][2] - The call included forward-looking statements regarding future business, transactions, and financial performance, with actual results subject to risks and uncertainties [3] - Growth rates and margins discussed during the call were based on constant currency and comparable reporting, with detailed financial results available in the Q4 report on the company's website [4] Call Agenda - Pekka Lundmark will present key messages for the quarter, followed by Marco Wiren discussing financial performance [5] - Pekka Lundmark will also highlight specific achievements or notable developments from the quarter [5]

Q4 2024 Financial results 30 January 2025 1 © 2025 Nokia Disclaimer It should be noted that Nokia and its business are exposed to various risks and uncertainties and certain statements herein that are not historical facts are forward-looking statements. These forward-looking statements reflect Nokia's current expectations and views of future developments and include statements preceded by "believe", "expect", "expectations", "commit", "envisage", "anticipate", "foresee", "see", "target", "estimate", "design ...

Company Performance - Nokia's stock has been underperforming and largely overlooked by investors due to a disappointing decade of stagnation in revenue, despite the broader technology sector experiencing significant growth [1] Industry Context - The technology sector has seen a golden era of growth, but Nokia has failed to capitalize on technological advancements, leading to its revenue stagnation [1] Analyst Perspective - The author, a senior data analyst, focuses on identifying growth opportunities in technology-related sectors and manages a tech-focused portfolio that has consistently outperformed the market [1]

Press Release StarHub and Nokia partner on network APIs to drive 5G and 4G application development in enterprise verticals Working closely with developers, the two companies are targeting new applications for enterprises in banking, finance, ports, online streaming, and the public sector.StarHub’s 5G and 4G networks will connect to Nokia’s Network as Code platform with developer portal to give developers a seamless pathway for creating new applications. 23 January 2025 Espoo, Finland — StarHub, one of Sing ...

Stock Performance - Nokia stock has increased by 37% since January 2024, outperforming the S&P 500 which gained 22% over the same period [1] - Ericsson stock also increased by 36% during the same period [1] - Nokia's annual returns have been volatile: 59% in 2021, -24% in 2022, -24% in 2023, and 34% in 2024 [2] Financial Results - Nokia's Q3 2024 net sales declined 8% y-o-y to €4.3 billion ($4.7 billion), but net income increased 22% to €358 million ($389 million) [1] - Earnings per share were €0.06 ($0.07) [1] - Gross margin improvement and cost management helped mitigate slower sales recovery [1] Regional Sales Dynamics - Sales to the U.S. market declined due to customers working through existing 5G equipment inventory [1] - Sales to India surged significantly due to accelerating 5G deployments [1] Guidance and Valuation - Nokia projects FY 2024 operating profit between €2.3 billion to €2.9 billion ($2.5 billion to $3.2 billion) [3] - Full-year free cash flow is expected to represent 30% to 60% of operating profit [3] - Nokia stock trades at 11x consensus 2025 earnings, compared to Ericsson's 15x forward earnings [4] - The company is valued at $4.52 per share, in line with the current market price of $4.51 [4] Business Diversification - Nokia has seen increased demand in optical networks, IP networks, and submarine networks [4] - The company's presence in the fixed-line space may help handle a potential slowdown in wireless infrastructure spending [4]

Group 1: Core Insights - Nokia has signed a multi-year patent license agreement with Samsung, allowing Samsung to use Nokia's video technologies in its TVs, which will generate royalty fees for Nokia [1] - Nokia has invested €150 billion in research and development since 2000, establishing a strong foundation in multimedia technology, including video coding and immersive audio services [2] - The new licensing agreement is separate from a previous 5G license agreement signed in January 2023 between Nokia and Samsung [3] Group 2: Licensing and Market Position - Nokia holds around 20,000 patents, with approximately 7,000 essential for 5G, serving various industries including smartphones and IoT devices [4] - Approximately 250 companies, including major players like Apple and Samsung, utilize Nokia's technologies, indicating a strong market presence [4] - The company is focusing on capital allocation and technology leadership to achieve sustainable growth, with positive momentum in software and enterprise sectors [5] Group 3: Stock Performance - Nokia's shares have increased by 28.5% over the past year, while the industry has seen a growth of 33.3% [7]

Core Points - Nokia has signed a multi-year patent license agreement with Samsung for the use of its video technologies in Samsung's televisions, with Samsung making royalty payments to Nokia [1][5] - The agreement is distinct from the existing 5G patent license agreement between Nokia and Samsung [5] - Nokia's Chief Licensing Officer highlighted the agreement as a testament to Nokia's leadership in video and multimedia technologies, supported by significant investments in R&D [2] Company Overview - Nokia is recognized as a leader in video and multimedia technologies, having developed nearly 5,000 inventions in this field over the past 25 years [2] - The company has invested approximately €150 billion in R&D since 2000, including over €4 billion in 2023, focusing on advanced technologies such as cellular and multimedia [2] - Nokia's expertise in multimedia and video research is underpinned by continuous investment aimed at advancing the industry [2]

Core Viewpoint - Nokia Corporation has been selected by Openreach to construct the One Network Platform, an open-access fiber network aimed at connecting millions of homes and businesses in the UK, with a goal to increase connected premises from 17 million to 25 million by the end of 2026 [1][6]. Group 1: Partnership Details - Openreach's wholesale broadband network connects around 300 communication service providers, delivering ultrafast fiber services to various locations, including urban areas and remote rural locations [2]. - The integration of Nokia's Altiplano and Network Services Platform is expected to create a large-scale, multi-service open-access network, reducing power and space requirements at Ethernet access exchange sites by over 50% [2]. - The modular design of the solution is adaptable to different population densities, facilitating easier connections for communication providers [2]. Group 2: Technological Advancements - Nokia's network controllers will enhance Openreach's automation capabilities across multiple broadband technologies, simplifying network operations and reducing operational complexity by up to 85% [3]. - The platform provides real-time performance data through streaming telemetry, optimizing network efficiency and reliability [3]. - Nokia will also deploy its 7250 IXR family of routers, which will improve fault detection, reduce operational costs, and increase network efficiency [4]. Group 3: Market Position and Financial Implications - The collaboration is expected to generate incremental revenue for Nokia and may lead to similar deals with other carriers, strengthening Nokia's position as a leading telecommunications equipment provider [6]. - Over the past year, Nokia's shares have gained 28.5%, outperforming the industry's growth of 27.3% [7].