Nokia's Q3 Earnings Beat Estimates on Healthy Top Line Growth

Core Insights - Nokia Corporation reported stronger-than-expected third-quarter 2025 results, with both revenue and net income exceeding the Zacks Consensus Estimate. The growth was primarily driven by the Network Infrastructure segment, particularly in fixed and optical networks, along with improvements in Nokia Technologies and Cloud and Network services [1] Financial Performance - Nokia's net income from continuing operations was €80 million ($93.5 million), or €0.01 per share, down from €145 million or €0.03 per share in the same quarter last year. Increased operating and income tax expenses negatively impacted profits [2] - Comparable profit was €324 million ($378 million), or €0.06 per share, slightly down from €358 million or €0.06 in the previous year, marginally beating the Zacks Consensus Estimate of 6 cents [3] - Quarterly net sales reached €4.83 billion ($5.65 billion), a 12% increase from €4.32 billion in the year-ago quarter, surpassing the Zacks Consensus Estimate by $5.38 billion [4] Segment Performance - Net sales from Network Infrastructure totaled €1.95 billion ($2.28 billion), up from €1.52 billion in the year-ago quarter, beating the revenue estimate of €1.77 billion. IP Networks recorded 4% growth year over year, driven by demand from AI and cloud customers, while Optical Networks improved by 19% [5] - Mobile Networks generated revenues of €1.84 billion ($2.153 billion), down 1% year over year, but still beating the estimate of €1.74 billion, with growth supported by the Middle East, Africa, and APAC regions [6] - Cloud and Network Services reported net sales of €645 million ($754 million), an 8% increase year over year, although it missed the estimate of €700.9 million [7] - Nokia Technologies contributed €391 million ($457 million), up 14% year over year, benefiting from trends in automotive, consumer electronics, multimedia, and IoT [8] Regional Performance - EMEA region net sales increased to €1.936 billion from €1.832 billion in the previous year, with growth in all segments except Mobile Networks [9] - APAC region revenues rose to €1.17 billion, a 15% increase year over year, primarily due to Network Infrastructure growth [9] - Americas saw a 10% growth to €1.71 billion, driven by strong performance in Network Infrastructure and Cloud and Network services [9] Other Financial Metrics - The comparable gross margin was 44.2%, down from 45.7% in the previous year, with a comparable operating profit decrease of 10% year over year to €435 million ($508.4 million) [12] - Nokia generated €597 million ($697 million) in net cash from operating activities, down from €728 million in the prior-year quarter, and had €4.89 billion ($5.74 billion) in cash and cash equivalents as of September 30, 2025 [13] Outlook - For 2025, Nokia expects a comparable operating profit in the range of €1.7 billion to €2.2 billion, with free cash flow estimated at 50-80% of that range and capital expenditure projected at €650 million [14]