Nokia(US:NOK)2025-10-23 11:28Financial 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].