Nokia reported fourth-quarter net sales of €6.1 billion, up 2% year-on-year and exceeding consensus of €6.95 billion in dollar terms. On a comparable basis—adjusted for currency and portfolio effects—net sales rose 3% led by Network Infrastructure and Mobile Networks. Comparable EPS came in at €0.16 versus the €0.17 consensus in dollars, while gross margin expanded by 90 basis points to 48.1% and operating margin contracted by 90 basis points to 17.3% due to increased growth investments. Optical Networks sales surged 17% year-on-year, Network Infrastructure overall grew 7%, and Mobile Networks rose 6%, offset by a 4% decline in Cloud and Network Services. Despite the top-line beat, shares fell double digits premarket—reflecting the EPS shortfall and guidance for a slightly sharper seasonal Q1 sales decline.

Analysts highlight Nokia’s undervaluation given its strong net cash position of €3.4 billion and projected free cash flow of around €1.46 billion by 2026, even with elevated CAPEX to support 6G and AI-native networks. Recent collaborations with NVIDIA—including a strategic equity stake and joint AI-RAN development—position Nokia to capture growth from surging demand among data-center and AI customers. Sales from AI and cloud clients recorded a sharp uptick this quarter, underlining potential for Optical and IP networks to benefit from the global AI build-out. Investors point to a long-term target of 10%–12% growth in combined IP and Optical Networks and 6%–8% CAGR in Network Infrastructure for FY26.

Effective January 1, 2026, Nokia reorganized into two primary segments—Network Infrastructure (Optical, IP, Fixed) and Mobile Infrastructure (Core Software, Radio Networks, Technology Standards)—plus a Portfolio Businesses unit for non-core assets. In recast 2025 results, Network Infrastructure delivered €7.65 billion in net sales with 42.9% gross margin and a 10.1% operating margin, while Mobile Infrastructure achieved €11.41 billion in sales with 48.3% gross margin and 13.4% operating margin. For FY26, management forecasts comparable operating profit of €2.0–2.5 billion, Network Infrastructure sales growth in line with its long-term targets, and a modest seasonal Q1 sales dip with operating margin roughly flat year-over-year. The board approved a dividend of €0.03 per share payable February 12.