Nokia posted solid fourth quarter revenue Thursday but disappointed Wall Street with conservative 2026 guidance, sending shares down 5.8% in early trading.
The Finnish equipment maker reported Q4 revenue of €6.1 billion, matching analyst forecasts. Year-over-year growth hit 3% on a constant currency basis, with AI and cloud customers driving the expansion.
CEO Justin Hotard’s pivot toward data center markets delivered results. The Network Infrastructure division grew 19% as demand for AI infrastructure accelerated. Optical Networks, critical for data center connectivity, posted 17% growth within that segment.
“Order intake was strong across Optical and IP Networks, with book-to-bill remaining above one, driven by demand from AI & Cloud customers,” Hotard stated.
Comparable operating profit reached €1.06 billion for the quarter, down from €1.09 billion a year earlier. Operating margin fell 90 basis points to 17.3%. Nokia attributed the compression to growth investments, including integrating Infinera, its recent optical networking acquisition.
The company reported €0.16 in comparable diluted EPS and €0.10 in reported diluted EPS. Net cash stood at €3.4 billion at quarter end.
Mobile Networks revenue dropped 1.7% as North American carrier spending weakened. Growth in the Middle East, Japan, and Indonesia partially offset the decline.
The unit’s gross margin improved to 40.1% from 37.3%, indicating stabilization despite revenue pressure. For full-year 2025, Nokia achieved 2% constant currency revenue growth with €2.0 billion in comparable operating profit and €1.5 billion in free cash flow.
Group comparable net profit hit €880 million, beating the €834 million consensus. The company took full ownership of its China joint venture during the quarter for €0.5 billion in cash.
Nokia’s 2026 outlook sparked the stock decline. The company guided for €2.0-€2.5 billion in comparable operating profit. The €2.25 billion midpoint trails consensus by roughly 5%.
J.P. Morgan analysts expect “mid-single digit downgrades to consensus” following the guidance miss.
Nokia projects 6-8% Network Infrastructure growth in 2026, aligning with long-term targets. However, management warned Q1 2026 revenue would decline more than seasonal norms, with operating margin rising only slightly year-over-year.
The board proposed €0.14 per share dividend authorization for 2025. Chair Sari Baldauf will step down, with Timo Ihamuotila nominated as replacement. Meredith Whittaker from Signal Technology Foundation received a board nomination.
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