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]

Nokia (NYSE:NOK) Q3 2025 Earnings Call October 23, 2025 04:30 AM ET Speaker3Good morning, ladies and gentlemen. Welcome to Nokia's third quarter 2025 results call. I'm David Mulholland, Head of Nokia Investor Relations, and today with me is Justin Hotard, our President and CEO, along with Marco Wirén, our CFO. Before we get started, a quick disclaimer: during this call, we will be making forward-looking statements regarding our future business and financial performance, and these statements are predictions ...