Disclaimer
This document contains forward-looking statements reflecting Nokia's current expectations and views of future developments. These statements are based on management's best assumptions and beliefs and involve risks and uncertainties that could cause actual results to differ materially. Factors, including risks and uncertainties, are detailed in Nokia's annual report on Form 20-F and other filings with the U.S. Securities and Exchange Commission. Nokia does not undertake any obligation to publicly update or revise forward-looking statements. Nokia presents financial information on reported, comparable, constant currency, and constant currency and portfolio bases. Comparable measures exclude intangible asset amortization, goodwill impairments, restructuring charges, and transaction costs. Constant currency reporting excludes the impact of exchange rate changes. These measures are not defined by IFRS and may not be comparable with similar measures used by other companies. Nokia uses these measures for assessing financial performance and believes they provide meaningful supplemental information. These financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with IFRS. Nokia is a registered trademark of Nokia Corporation. Other product and company names mentioned herein may be trademarks or trade names of their respective owners.
Business Highlights
Presented by Justin Hotard, President and Chief Executive Officer
- Stakeholder engagements have increased optimism about future opportunities. Nokia is positioned to lead connectivity in the AI supercycle, with customers expecting an integrated company experience.
- 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, with expectations of strong growth in Network Infrastructure and Cloud and Network Services, and largely stable net sales in Mobile Networks.
- Comparable operating profit outlook 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
- 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.
- Optical Networks: 800G ZR/ZR+ hyperscaler award, wins with large US CSPs.
- IP Networks: #1 in SP Edge Routing, partnering for EU AI Gigafactories.
- Fixed Networks: Strengthened #1 position in OLT.
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.
- 5G deals with Elisa and Optus.
- T-Mobile US RAN extension.
- Defense partnership with Blackened.
Cloud and Network Services
- Q2 growth driven by momentum in 5G SA Core.
- Both gross and operating margin benefit from mix and leverage.
- 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 (was EUR 1.9 billion to EUR 2.4 billion) |
| Free cash flow | 50% to 80% conversion from comparable operating profit |
Comparable Operating Profit Bridge
The bridge illustrates the changes in the comparable operating profit outlook:
- 2025 Guide as of 30 Jan: EUR 2.4 billion
- Expected tariff impact: EUR 50 - 80 million
- EUR USD move from 1.04 to 1.17: EUR 230 million (EUR 90 million venture fund related)
- 2025 Guide as of 24 Jul: EUR 1.6 billion
Note: Outlook is based on a EUR:USD rate of 1.17 for the remainder of the year.
Q2 Financial Performance
Presented by Marco Wirén, Chief Financial Officer
Key Financials (Q2 25 vs Q2 24)
- 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
Performance by Business Unit
Network Infrastructure
- Net Sales (EUR m): Q2 25: 1,904; Q2 24: 1,522 (YoY: 8%)
- Gross Profit: Q2 25: 728; Q2 24: 585
- Gross Margin: Q2 25: 38.2%; Q2 24: 38.4%
- Operating Profit: Q2 25: 109; Q2 24: 97
- Operating Margin: Q2 25: 5.7%; Q2 24: 6.4%
- Net sales growth by unit: Fixed Networks +17%, IP Networks +3%, Optical Networks +6%.
Mobile Networks
- Net Sales (EUR m): Q2 25: 1,732; Q2 24: 2,078 (YoY: -13%)
- Gross Profit: Q2 25: 711; Q2 24: 868
- Gross Margin: Q2 25: 41.1%; Q2 24: 41.8%
- Operating Profit: Q2 25: 77; Q2 24: 182
- Operating Margin: Q2 25: 4.4%; Q2 24: 8.8%
Cloud and Network Services
- Net Sales (EUR m): Q2 25: 557; Q2 24: 507 (YoY: 14%)
- Gross Profit: Q2 25: 238; Q2 24: 190
- Gross Margin: Q2 25: 42.7%; Q2 24: 37.5%
- Operating Profit: Q2 25: 9; Q2 24: (35)
- Operating Margin: Q2 25: 1.6%; Q2 24: (6.9)%
Nokia Technologies
- Continued momentum with several deals signed in the quarter.
- Steady progress towards EUR 1.4 to 1.5 billion run-rate target.
- Q4 2023 run-rate: €0.9-1.0bn
- Q2 2025 contracted run-rate: ~€1.4bn
- Mid-term expectation: €1.4-1.5bn
Note: This chart illustrates current financial planning assumptions. Actual outcomes may differ.
Mixed Performance Across Regions, Impacted by FX
Year-on-year on constant currency and portfolio basis:
- Americas: Latin America -22%, North America -3%
- APAC: Greater China -17%, 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 Q2 24: €4.5bn
- Total Q2 25: €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 paid.
- Free cash flow of EUR 0.1 billion generated.
- Q1 25 Adjusted profit: €3.0bn
- Change in net working capital: Receivables +€670mn, Inventories -€80mn, Liabilities -€680mn, Total NWC -€90mn
- Q2 25: €2.9bn
High Level of Natural Hedging Inherent in the Business
Currency Exposure (Q2'25)
- EUR: Net sales 25%, Total Costs 25%
- USD: Net sales 55%, Total Costs 50%
- 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
New York
19 November 2025
