Business Context and Reporting Period
This Form 6-K filing by Nokia Corporation, dated July 22, 2025, serves as an inside information update regarding the company's full-year 2025 financial outlook. The report addresses preliminary second-quarter (Q2) 2025 performance and announces a downward revision to the annual operating profit guidance due to external macroeconomic factors.
Key Financial Metrics
- Preliminary Q2 2025 Net Sales: Approximately EUR 4.55 billion.
- Preliminary Q2 2025 Comparable Operating Profit: EUR 0.3 billion (includes a EUR 50 million negative impact from venture funds primarily related to currency).
- Updated Full-Year 2025 Comparable Operating Profit Guidance: EUR 1.6 billion to EUR 2.1 billion.
- Free Cash Flow Conversion: Remains at 50% to 80% of comparable operating profit.
- Exchange Rate Assumption: Guidance is now based on a EUR:USD rate of 1.17 (previously 1.04).
Material Changes Versus Prior Period
Nokia has lowered its full-year 2025 comparable operating profit guidance range from EUR 1.9 billion to EUR 2.4 billion to EUR 1.6 billion to EUR 2.1 billion. This adjustment is driven by two primary headwinds outside the company's control that have emerged since the January 2025 guidance was issued:
- Currency Fluctuations: A weaker USD is expected to have a negative impact of approximately EUR 230 million on the full year. This includes EUR 140 million in operational impacts and EUR 90 million from non-cash venture fund currency revaluations.
- Tariffs: The current tariff landscape is projected to reduce full-year operating profit by EUR 50 million to EUR 80 million.
Guidance, Outlook, and Risks
Management states that the underlying business performed as expected through the first half of 2025. However, the revised outlook reflects the prudent adjustment for currency and tariff headwinds. The company maintains its free cash flow conversion guidance. Nokia is scheduled to release its official Q2 and half-year 2025 financial results on July 24, 2025, followed by a conference call with analysts and investors.
Risks and Contingencies: The filing includes standard forward-looking statement disclaimers, noting that actual results may differ due to risks such as geopolitical conflicts, macroeconomic conditions, supply chain disruptions, and litigation outcomes.
Investor Verification Checklist
- Verify the official Q2 2025 financial results released on July 24, 2025, to confirm the preliminary net sales and operating profit figures.
- Monitor the EUR:USD exchange rate trajectory, as the guidance is sensitive to fluctuations from the assumed 1.17 rate.
- Assess the specific impact of tariffs on Nokia's supply chain and cost structure in the upcoming earnings call.
- Review the detailed breakdown of the EUR 50 million venture fund currency impact in the full Q2 report.