Nokia’s Network Infrastructure segment delivered standout performance in Q2 2025 with 8% year-over-year growth on a constant currency and portfolio basis, driven by strong demand in optical and edge routing solutions. Orders from hyperscalers for 800G pluggables and transport upgrades contributed to a book-to-bill ratio above 1.0 in Optical Networks. The results reflect broader enterprise and hyperscaler investment in AI-era connectivity, positioning Nokia at the center of emerging data center and national network upgrades.
Despite the robust infrastructure performance, Nokia’s overall results were dampened by currency headwinds and a sharp 13% decline in Mobile Networks revenue, which had benefited from a contract settlement in the prior year. Comparable net sales declined 1% year-over-year to EUR 4.55 billion. Comparable operating margin fell to 6.6%, impacted by a EUR 60 million non-cash FX revaluation and EUR 50–80 million in tariffs. Full-year profit guidance was lowered accordingly.
CEO Justin Hotard cited commercial momentum in key segments, especially in Optical Networks and Cloud and Network Services, alongside early success in the integration of Infinera. Nokia expects stronger performance in Q4 and maintained its free cash flow conversion outlook of 50%–80% of operating profit for the year.
Business Unit Performance – Q2 2025 (Comparable, Constant Currency & Portfolio Basis)
Network Infrastructure
- Net sales: EUR 1.9 billion (+8% y-o-y)
- Optical Networks: +6%, driven by strong hyperscaler orders and 800G pluggable wins
- IP Networks: +3%, reaffirmed #1 SP Edge Routing position (Dell’Oro)
- Fixed Networks: +17%, strengthened #1 position in OLT
- Operating margin: 5.7%
- Book-to-bill ratio in Optical Networks: well above 1
Mobile Networks
- Net sales: EUR 1.73 billion (-13% y-o-y)
- Decline driven by prior-year contract settlement and project timing in India
- Operating margin: 4.4% (down from 8.8% in Q2 2024)
- Gross margin remained strong at 41.1% due to favorable mix
- Commercial wins included 5G deals with Elisa and Optus
Cloud and Network Services
- Net sales: EUR 557 million (+14% y-o-y)
- Growth fueled by demand for 5G standalone core (SA Core)
- Operating margin: 1.6% (rebounded from -6.9% in Q2 2024)
- Improved profitability driven by product mix and scale
- Key customer deployments with Bharti Airtel, Elisa, Vodafone Qatar, and O2 Czech Republic
Nokia Technologies
- Net sales: EUR 357 million (+3% y-o-y)
- Operating margin: 71.4%
- Maintained 100% gross margin; several licensing agreements signed
- Tracking toward EUR 1.4–1.5 billion annualized run-rate
- Continued steady execution on IP monetization strategy
Financial Summary
- Q2 comparable net sales: EUR 4.55 billion
- Comparable operating profit: EUR 301 million (down 29% y-o-y)
- Comparable EPS: EUR 0.04
- Free cash flow: EUR 0.1 billion
- Net cash: EUR 2.9 billion
- Dividend: EUR 0.04 per share payable August 7, 2025
“We have a great opportunity to drive a unified vision for the future of networks, and I am looking forward to discussing our strategy and full value creation story at our Capital Markets Day in New York on November 19,” said Justin Hotard, Nokia President and CEO.
🌐 Why it Matters: Nokia’s leadership in optical and edge infrastructure is gaining strategic importance as AI workloads redefine network performance needs. Currency volatility remains a challenge, but the long-term upside from the Infinera acquisition and hyperscaler momentum reinforces Nokia’s trajectory.
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