Q2 2025 Financial Results
Date: 24 July 2025
Disclaimer
Nokia's business is exposed to various risks and uncertainties. Certain statements in this document are forward-looking, reflecting current expectations and views of future developments. These statements are based on management's assumptions and beliefs, and actual results may differ materially due to various internal and external factors. Nokia does not undertake any obligation to publicly update or revise forward-looking statements. Financial information is presented on reported, comparable, constant currency, and constant currency and portfolio bases. Comparable measures exclude items like intangible asset amortization, goodwill impairments, and restructuring charges. Constant currency reporting aims to better reflect underlying business performance by excluding exchange rate impacts. These measures are not defined by IFRS and may not be directly comparable with similar measures used by other companies. Nokia is a registered trademark of Nokia Corporation. Other product and company names mentioned are trademarks of their respective owners.
Business Highlights
Presented by: Justin Hotard
Title: President and Chief Executive Officer
CEO Key Messages – Q2 2025
- Stakeholder engagements have increased optimism about future opportunities. Nokia is uniquely positioned to lead connectivity in the AI supercycle, and customers expect engagement as one integrated company.
- Q2 delivered solid underlying financial performance, offset by currency and tariffs.
- Infinera acquisition is progressing well, with strong commercial momentum and on track for synergies.
- The demand environment remains supportive. Strong growth is expected in Network Infrastructure, growth in Cloud and Network Services, and largely stable net sales in Mobile Networks.
- Comparable operating profit outlook has been lowered to EUR 1.6 billion to EUR 2.1 billion due to currency and tariff headwinds. Free Cash Flow (FCF) conversion guidance remains unchanged at 50% to 80% of comparable operating profit.
Commercial Highlights in Q2 Across Business Groups
Network Infrastructure
- Optical Networks: Secured 800G ZR/ZR+ hyperscaler award and won business with a large US CSP.
- IP Networks: Achieved #1 position in SP Edge Routing and is partnering for EU AI Gigafactories.
- Fixed Networks: Strengthened #1 position in OLT.
Mobile Networks
- Secured 5G deals with Elisa and Optus.
- Extended T-Mobile US RAN.
- Established a defense partnership with Blackned.
Cloud and Network Services
- Core wins/deployments with Bharti Airtel, Elisa, O2 Czech Republic, and Vodafone Qatar.
- 57 Network API partners.
- Private 5G partnership with Verizon in UK.
2025 Outlook
Full Year 2025
- Comparable operating profit: EUR 1.6 billion to EUR 2.1 billion (previously EUR 1.9 billion to EUR 2.4 billion).
- Free cash flow: 50% to 80% conversion from comparable operating profit.
Comparable Operating Profit Bridge
This chart illustrates the bridge showing changes in the comparable operating profit outlook.
Initial 2025 Guide (as of 30 Jan): EUR 1.9 billion to EUR 2.4 billion.
Expected tariff impact: EUR 50 - 80 million.
EUR USD move (from 1.04 to 1.17): EUR 230 million (including EUR 90 million venture fund related impact).
Revised 2025 Guide (as of 24 Jul): EUR 1.6 billion to EUR 2.1 billion.
Q2 Financial Performance
Presented by: Marco Wirén
Title: Chief Financial Officer
Solid Performance Offset by Currency Impact
Key Q2 2025 Metrics
- Net Sales (EUR): 4.55bn (1% y-o-y)
- Gross Margin: 44.7% (--bps y-o-y)
- Operating Margin: 6.6% (290bps y-o-y)
- FCF (EUR): 0.1bn
- Net Cash (EUR): 2.9bn
Financial Performance Charts
All net sales changes are presented year-on-year on a constant currency and portfolio basis. Margins are on a comparable basis. Submarine Networks is now accounted for under discontinued operations. Charts show illustrative history excluding Submarine Networks for Q4 2022. Restated figures provided from Q1 2023 onwards.
Net Sales (EUR million)
Bar chart showing Net Sales by quarter from Q2 23 to Q2 25. Values: Q2 23 (~5.5bn), Q3 23 (~5.0bn), Q4 23 (~4.5bn), Q1 24 (~4.0bn), Q2 24 (~4.55bn), Q3 24 (~4.5bn), Q4 24 (~4.5bn), Q1 25 (~4.5bn), Q2 25 (~4.55bn). A -1% year-on-year change is indicated.
Gross Profit (EUR million) and Margin (%)
Bar chart for Gross Profit and line graph for Gross Margin and 4Q rolling margin by quarter from Q2 23 to Q2 25. Gross Profit ranges from approximately EUR 1.9bn to EUR 2.5bn. Gross Margin is around 38-55%, with the 4Q rolling margin closely following the quarterly trend.
Operating Profit (EUR million) and Margin (%)
Bar chart for Operating Profit and line graph for Operating Margin and 4Q rolling margin by quarter from Q2 23 to Q2 25. Operating Profit ranges from approximately EUR 100m to EUR 1.0bn. Operating Margin ranges from approximately 4% to 18%, with the 4Q rolling margin showing a similar trend.
Network Infrastructure
- Net sales growth across the three business units.
- Optical Networks growth impacted by supply constraints.
- Optical Networks book-to-bill ratio is well above 1.
Performance Data
| Q2 25 | Q2 24 | YoY | |
|---|---|---|---|
| Net Sales (EUR m) | 1,904 | 1,522 | 8% |
| Gross Profit | 728 | 585 | |
| Gross Margin | 38.2% | 38.4% | |
| Operating Profit | 109 | 97 | |
| Operating Margin | 5.7% | 6.4% |
Network Infrastructure Charts
All net sales changes presented on this slide are on a constant currency and portfolio basis.
Network Infrastructure Net Sales by Quarter (EUR million)
Bar chart showing Net Sales by quarter from Q2 23 to Q2 25. Values range from approximately EUR 1.5bn to EUR 2.0bn.
Net Sales Growth by Unit
Shows percentage growth for business units: Fixed Networks +17%, IP Networks +3%, Optical Networks +6%.
Gross Profit (EUR million) and Margin (%)
Bar chart for Gross Profit and line graph for Gross Margin and 4Q rolling margin by quarter from Q2 23 to Q2 25. Gross Profit ranges from approximately EUR 500m to EUR 750m. Gross Margin is around 30-40%.
Operating Profit (EUR million) and Margin (%)
Bar chart for Operating Profit and line graph for Operating Margin and 4Q rolling margin by quarter from Q2 23 to Q2 25. Operating Profit ranges from approximately EUR 100m to EUR 250m. Operating Margin is around 5-12%.
Mobile Networks
- Decline primarily driven by contract settlement in the year-ago quarter.
- Project timing delay in India.
- Favorable mix benefiting gross margin in Q2 2025.
Performance Data
| Q2 25 | Q2 24 | YoY | |
|---|---|---|---|
| Net Sales (EUR m) | 1,732 | 2,078 | (13)% |
| Gross Profit | 711 | 868 | |
| Gross Margin | 41.1% | 41.8% | |
| Operating Profit | 77 | 182 | |
| Operating Margin | 4.4% | 8.8% |
Mobile Networks Charts
All net sales changes presented on this slide are in constant currency.
Mobile Networks Net Sales by Quarter (EUR million)
Bar chart showing Net Sales by quarter from Q2 23 to Q2 25. Values range from approximately EUR 1.6bn to EUR 2.8bn. A -13% year-on-year change is indicated.
Gross Profit (EUR million) and Margin (%)
Bar chart for Gross Profit and line graph for Gross Margin and 4Q rolling margin by quarter from Q2 23 to Q2 25. Gross Profit ranges from approximately EUR 650m to EUR 1.0bn. Gross Margin is around 38-45%.
Operating Profit (EUR million) and Margin (%)
Bar chart for Operating Profit and line graph for Operating Margin and 4Q rolling margin by quarter from Q2 23 to Q2 25. Operating Profit ranges from approximately EUR 50m to EUR 300m. Operating Margin is around 3-10%.
Cloud and Network Services
- Q2 growth driven by momentum in 5G SA Core.
- Both gross and operating margin benefit from mix and leverage.
Performance Data
| Q2 25 | Q2 24 | YoY | |
|---|---|---|---|
| Net Sales (EUR m) | 557 | 507 | 14% |
| Gross Profit | 238 | 190 | |
| Gross Margin | 42.7% | 37.5% | |
| Operating Profit | 9 | (35) | |
| Operating Margin | 1.6% | (6.9)% |
Cloud and Network Services Charts
All net sales changes presented on this slide are in constant currency.
Cloud and Network Services Net Sales by Quarter (EUR million)
Bar chart showing Net Sales by quarter from Q2 23 to Q2 25. Values range from approximately EUR 0.5bn to EUR 0.9bn. A 14% year-on-year change is indicated.
Gross Profit (EUR million) and Margin (%)
Bar chart for Gross Profit and line graph for Gross Margin and 4Q rolling margin by quarter from Q2 23 to Q2 25. Gross Profit ranges from approximately EUR 190m to EUR 400m. Gross Margin is around 30-55%.
Operating Profit (EUR million) and Margin (%)
Bar chart for Operating Profit and line graph for Operating Margin and 4Q rolling margin by quarter from Q2 23 to Q2 25. Operating Profit ranges from approximately EUR -50m to EUR 200m. Operating Margin ranges from approximately -10% to 22%.
Nokia Technologies
- Continued momentum with several deals signed in the quarter.
- Steady progress towards EUR 1.4 to 1.5 billion run-rate target.
Performance Data
| Q2 25 | Q2 24 | YoY | |
|---|---|---|---|
| Net Sales (EUR m) | 357 | 356 | 3% |
| Gross Profit | 357 | 356 | |
| Gross Margin | 100% | 100% | |
| Operating Profit | 255 | 258 | |
| Operating Margin | 71.4% | 72.5% |
Run-Rate Targets Chart
This chart illustrates current financial planning assumptions and is not indicative of deal valuations. Actual outcomes may differ. All net sales changes presented are in constant currency.
Bar chart showing run-rate targets:
- Q4 2023 run-rate: €0.9-1.0bn
- Q2 2025 contracted run-rate: ~€1.4bn
- Mid-term expectation: €1.4-1.5bn
Mixed Performance Across Regions, Impacted by FX
Year-on-year on constant currency and portfolio basis: 2% reported, -1% constant currency and portfolio.
Regional Performance:
- Americas: Latin America -22%, North America -3%, Greater China -17%.
- APAC: India 0%, Rest of APAC 5%.
- EMEA: Europe 6%, Middle East & Africa -1%.
- Nokia Technologies: 3%, Europe ex. Tech: 7%.
- FX and portfolio impact: -1%.
Total Net Sales for Q2 24 was €4.5bn, and for Q2 25 was €4.5bn.
Working Capital Management Well Managed in Q2
- Working capital is well managed, with receivables offsetting 2024 variable pay outflows.
- EUR 0.2 billion in dividends were paid.
- Free cash flow for the quarter was EUR 0.1 billion.
Net Working Capital Changes
Bar chart showing changes in net working capital:
- Q1 25 Adjusted Profit: €3.0bn
- Change in net working capital components: Receivables +€670mn, Inventories -€80mn, Liabilities -€680mn, Total NWC -€90mn.
- Q2 25 Net Working Capital: €2.9bn
High Level of Natural Hedging Inherent in the Business
Currency Exposure (Q2'25)
Bar chart showing currency exposure for Net Sales and Total Costs:
- EUR: Net Sales 25%, Total Costs 25%
- USD: Net Sales 25%, Total Costs 55%
- INR: Net Sales 5%, Total Costs 5%
- CNY: Net Sales 0%, Total Costs 5%
- Other: Net Sales 15%, Total Costs 15%
Impact of Currency Changes
Change in EUR/USD: 10% weaker USD.
Net sales impact: -5%.
Operating margin impact before hedging: Slightly negative.
Q&A / Save the Date
Nokia Capital Markets Day 2025
Location: New York
Date: 19 November 2025
