Nokia delivered a strong Q4 2024, reporting a 9% year-over-year increase in net sales, marking a turnaround in market trends that CEO Pekka Lundmark believes will carry into 2025. The Network Infrastructure segment led the charge, growing 17% YoY, with IP Networks up 24%, Fixed Networks up 16%, and Optical Networks up 7%—signaling a recovery in demand from service providers, particularly in North America. Nokia’s comparable operating margin expanded to 19.1%, a 380-basis-point increase YoY, driven by cost controls and a stronger contribution from its Nokia Technologies unit, which saw 84% growth in Q4.
Lundmark emphasized Nokia’s expansion into AI-driven networking, cloud-based services, and next-gen optical solutions, stating, “We are seeing improving market conditions, and our team’s execution across all business segments has positioned us for a strong 2025. The Infinera acquisition, which is progressing well, will enhance our leadership in optical networking and expand our addressable market.”
The pending $1.7 billion Infinera deal is expected to close in Q1 2025, pending regulatory approvals from the EU and Taiwan.
To offset share dilution, Nokia has already repurchased over 19 million shares as part of a €900 million buyback program.
Looking ahead, Nokia expects to generate €1.9 billion to €2.4 billion in comparable operating profit in 2025, with continued strength in Network Infrastructure and Cloud & Network Services (CNS). The company is making strategic investments in data center networking, including a €100 million boost in R&D to drive an additional €1 billion in net sales by 2028. With a strong cash position of €4.9 billion, ongoing AI-driven networking initiatives, and expansion in cloud-native solutions, Nokia is poised for a more profitable and diversified 2025.
Key Business Unit Performance & Market Trends
Overall Financial Performance (Q4 & Full-Year 2024)
• Q4 net sales: €5.98 billion (+9% YoY in constant currency).
• Q4 comparable operating margin: 19.1%, up 380bps YoY.
• Q4 comparable diluted EPS: €0.18.
• Full-year comparable operating profit: €2.6 billion (midpoint of guidance).
• Full-year free cash flow: €2.0 billion.
• Net cash balance: €4.9 billion.
Network Infrastructure (Strongest Growth Segment)
• Q4 net sales: €2.03 billion (+17% YoY).
• IP Networks: +24% YoY.
• Fixed Networks: +16% YoY.
• Optical Networks: +7% YoY, bolstered by strong demand in North America.
Mobile Networks (Stabilizing with Growth in Base Stations)
• Q4 net sales: €2.43 billion (flat YoY).
• 18,000 additional base station sites added since early 2024.
• Maintained commercial and pricing discipline to protect gross margins.
Cloud and Network Services (CNS) Expansion & AI-Driven Growth)
• Q4 net sales: €1.05 billion (+7% YoY).
• Core Networks and Enterprise Campus Edge growth accelerating.
• Q4 acquisition of Rapid’s technology assets to enhance “Network as Code” and automation.
• New partnerships with Microsoft, Nscale, Kyndryl, and Lenovo for data center expansion.
• €100 million investment in data center networking to drive €1 billion in net sales by 2028.
Nokia Technologies (Licensing Strength Boosts Margins)
• Q4 net sales: €463 million (+84% YoY).
• New licensing deals signed with HP, Samsung, and Transsion.
• Annualized run-rate target of €1.4 billion to €1.5 billion.
Infinera Acquisition Update (€1.7 Billion Deal Expected to Close in Q1 2025)
• All major regulatory approvals secured except for the EU and Taiwan.
• US pre-merger review waiting period expired, DOJ chose not to investigate.
• Infinera shareholders approved the deal on October 1, 2024.
• Share buyback program (€900 million) initiated to offset share dilution; 19 million shares repurchased so far.
Shareholder Returns & Cash Flow
• Dividend proposal: €0.14 per share for 2024, up from €0.13 in 2023.
• Share buyback program accelerated to complete €600 million repurchase by end of 2024.
2025 Outlook & Strategic Initiatives
• Comparable operating profit target: €1.9 billion – €2.4 billion.
• Free cash flow conversion: 50% – 80% of comparable operating profit.
• Continued investments in AI-powered automation, cloud-native networking, and optical expansion.
