Financial Data and Key Metrics Changes - Q2 2025 net sales were €4,550,000,000, reflecting a 1% decline on a constant currency and portfolio basis [15] - Gross margin remained stable at 44.7% compared to the previous year [15] - Operating margin decreased to 6.6% due to negative currency impacts and tariffs, which were expected to affect operating profit by €50,000,000 to €80,000,000 for the full year [16][13] - Free cash flow for the quarter was €88,000,000, contributing to a net cash position of €2,900,000,000 [21] Business Line Data and Key Metrics Changes - Network infrastructure experienced 8% growth, with fixed networks growing 17%, optical networks growing 6%, and IP networks growing 3% [16] - Mobile networks saw a 13% decline in net sales, primarily due to accelerated revenue recognition from a contract settlement in the previous year [18] - Cloud and network services net sales grew by 14%, driven by strong performance in core networks [19] - Nokia Technologies net sales increased by 3% on a constant currency basis, maintaining a run rate of approximately €1,400,000,000 [20] Market Data and Key Metrics Changes - Hyperscalers accounted for 5% of net sales in Q2, with strong demand driving order intake [9] - North America saw a decline in mobile networks but double-digit growth in network infrastructure and cloud services [20] - APAC region experienced flat sales in India due to a pause in mobile network investments, offset by growth in fixed networks [20] - Europe showed growth across all business lines, indicating a broad-based recovery [41] Company Strategy and Development Direction - The company is focusing on unifying corporate functions to improve productivity and customer value [5] - Investments are being made in optical networking and AI infrastructure to capitalize on market transitions [6][9] - The company plans to discuss its full value creation strategy at the Capital Markets Day on November 19 [6] - There is an emphasis on building closer relationships with hyperscalers and enhancing product offerings to meet their needs [32][36] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the demand environment, with no major impacts from geopolitical uncertainties [8] - The company expects strong growth in network infrastructure and cloud services, with stable net sales in mobile networks for the full year [8] - Currency fluctuations and tariffs are significant headwinds, prompting a revision of the operating profit outlook for 2025 [12][13] - The company aims for a free cash flow conversion of 50% to 80% of comparable operating profit for the year [14] Other Important Information - The company experienced a non-cash negative impact of $50,000,000 from venture funds, including a €60,000,000 negative impact from currency [6] - The integration of Infinera is progressing well, with a strong book-to-bill ratio indicating commercial momentum [7] - The company is actively participating in EU programs to build AI gigafactories, reflecting its commitment to innovation [10] Q&A Session Summary Question: What is required to win large hyperscaler deals? - Management emphasized the importance of customer relationships and understanding customer needs to increase sales to hyperscalers [30][32] Question: Will the fiber build programs from U.S. Telcos accelerate into 2026? - Management expressed optimism about growth opportunities in fiber builds, particularly in the U.S. and Europe [35] Question: Clarification on guidance revision and uncertainties? - Management explained that the guidance was lowered due to currency shifts and tariff impacts, while underlying operations remain stable [43][45] Question: Insights on network infrastructure performance in Q2? - Management noted that supply chain constraints affected growth, but a strong book-to-bill ratio indicates future potential [50][52] Question: Any changes in pricing dynamics in mobile networks? - Management reported no abnormal pricing changes but acknowledged regional market dynamics affecting competition [96][98]