Nokia Corporation Q4 and Full Year 2025 Financial Summary
Business Context and Reporting Period
This Form 6-K filing reports Nokia Corporation's financial results for the fourth quarter and full year ended December 31, 2025. The report was released on January 29, 2026. Nokia is transitioning its operating model effective January 1, 2026, simplifying its structure into two primary segments: Network Infrastructure and Mobile Infrastructure. The company completed the acquisition of Infinera in February 2025 and took full ownership of its China joint venture, Nokia Shanghai-Bell, in Q4 2025.
Key Financial Metrics
| Metric | Q4 2025 (Reported) | Q4 2025 (Comparable) | Full Year 2025 (Reported) | Full Year 2025 (Comparable) |
|---|---|---|---|---|
| Net Sales (EUR billion) | 6.13 | 6.13 | 19.89 | 19.90 |
| Gross Margin (%) | 44.9% | 48.1% | 43.5% | 45.1% |
| Operating Profit (EUR million) | 540 | 1,058 | 885 | 2,024 |
| Operating Margin (%) | 8.8% | 17.3% | 4.4% | 10.2% |
| Diluted EPS (EUR) | 0.10 | 0.16 | 0.12 | 0.29 |
| Free Cash Flow (EUR billion) | 0.23 | N/A | 1.47 | N/A |
| Net Cash Balance (EUR billion) | 3.38 | N/A | 3.38 | N/A |
Note: Comparable figures exclude restructuring charges, amortization of acquired intangibles, and other non-recurring items.
Material Changes vs. Prior Period
- Revenue Growth: Q4 comparable net sales grew 3% year-over-year (constant currency and portfolio basis), driven by 7% growth in Network Infrastructure and 6% in Mobile Networks. Full year comparable sales grew 2%.
- Profitability Decline (Reported): Reported operating profit fell 37% in Q4 and 55% for the full year compared to 2024. This was primarily due to EUR 299 million in restructuring charges in Q4 and EUR 478 million for the full year, alongside integration costs for Infinera.
- Comparable Performance: On a comparable basis, Q4 operating profit decreased slightly by 3% due to growth investments in Network Infrastructure. Full year comparable operating profit declined 22%.
- Segment Highlights: Optical Networks saw 17% growth in Q4. Mobile Networks grew 6% in Q4. Cloud and Network Services declined 4% in Q4. Nokia Technologies sales decreased 14% due to lower catch-up sales.
- Cash Flow: Full year free cash flow was EUR 1.5 billion (72% conversion). Net cash decreased by EUR 1.5 billion year-over-year, largely due to the Infinera acquisition and the purchase of the remaining stake in Nokia Shanghai-Bell.
Guidance, Outlook, and Management Commentary
- 2026 Guidance: Nokia targets EUR 2.0 to 2.5 billion in comparable operating profit for 2026. The outlook assumes a EUR:USD rate of 1.18.
- Long-Term Targets (2028): The company aims for EUR 2.7 to 3.2 billion in comparable operating profit by 2028. Network Infrastructure sales are targeted to grow at a 6-8% CAGR.
- Strategic Focus: Management emphasizes disciplined execution to capture growth in AI and Cloud. The new operating model (Network Infrastructure and Mobile Infrastructure) is designed to sharpen accountability and improve profitability.
- Dividend: The Board proposes a dividend authorization of EUR 0.14 per share for 2025. A quarterly dividend of EUR 0.03 per share was declared for payment in February 2026.
- Investments: Capital expenditures for 2026 are expected to be EUR 900-1,000 million, driven by manufacturing capacity for Optical Networks and real estate renewal.
Key Facts for Investor Verification
- Restructuring Impact: Verify the magnitude of one-time charges (EUR 299 million in Q4) that significantly depressed reported earnings versus underlying comparable performance.
- Infinera Integration: Assess the progress of integrating Infinera, which contributed EUR 1.26 billion in sales but an operating loss of EUR 215 million in 2025.
- China JV Transaction: Confirm the cash outflow of EUR 0.5 billion related to the full acquisition of Nokia Shanghai-Bell and the expected EUR 200 million in synergies.
- AI & Cloud Exposure: Monitor the growth trajectory of Optical and IP Networks, which are cited as critical for AI infrastructure, versus the decline in legacy Cloud and Network Services.
- 2026 Seasonality: Note management's expectation that Q1 2026 net sales will decline more than the historic 24% seasonal norm due to strong Q4 2025 performance.