Nokia reported strong third-quarter 2025 results, with comparable net sales rising 9% year-over-year on a constant currency and portfolio basis (+12% reported) to €4.83 billion. Growth came from all business groups, led by a 19% increase in Optical Networks within the Network Infrastructure segment. Cloud and Network Services grew 13%, while Mobile Networks gained 4%. Comparable operating profit reached €435 million, down 10% from a year ago, as gross margin slipped 150 basis points to 44.2% due to product mix in Network Infrastructure and Mobile Networks.
CEO Justin Hotard highlighted continued traction in AI and cloud-driven optical demand, noting that AI and Cloud customers now account for 14% of Network Infrastructure revenue. Nokia began shipping its new 800G ZR/ZR+ pluggables to a major U.S. customer and plans to open a second indium phosphide fab in San Jose by the end of next year to support optical component growth. Free cash flow reached €429 million, and the company ended the quarter with a net cash balance of €3.0 billion.
The Network Infrastructure unit delivered €1.95 billion in sales (+28% reported, +11% constant currency), reflecting gains across IP, optical, and fixed networks, including contributions from the Infinera acquisition. Cloud and Network Services posted €645 million (+13% constant currency), benefiting from 5G Core demand and improved service margins. Nokia Technologies revenue grew 14% on a constant currency basis to €391 million following new licensing agreements.
• Comparable operating margin: 9.0%, down 220 bps year-on-year
• Comparable diluted EPS: €0.06 (flat year-on-year)
• Network Infrastructure Optical Networks: +19% constant currency
• Mobile Networks: +4% constant currency
• Cloud & Network Services: +13% constant currency
• Dividend declared: €0.03 per share, payable November 6, 2025
• Comparable operating profit outlook: revised to €1.7–2.2 billion (from €1.6–2.1 billion)
“We delivered a solid performance in Q3 with net sales growing 9% and all business groups contributing,” said Hotard. “The AI supercycle is accelerating demand for providers of advanced and trusted connectivity, and Nokia is uniquely positioned to be a leader in this market.”
🌐 Analysis: Nokia’s Q3 confirms that AI and cloud infrastructure are reshaping its network mix, especially through the Infinera acquisition and optical platform expansion. While margins narrowed due to integration and mix, the company’s focus on high-capacity optical and 5G Core growth positions it competitively against peers like Ciena and Ericsson. The upcoming Capital Markets Day in November is expected to detail how Nokia will scale profitability through optical-semiconductor leverage and AI-related network demand.
