Nokia reported net sales of €6.1 billion in the fourth quarter of fiscal 2025, up 2% year-on-year and exceeding the €6.95 billion consensus adjusted for currency and portfolio effects. Growth was led by Optical Networks, which surged 17% year-on-year, and Network Infrastructure, which rose 7%. Comparable gross margin expanded by 90 basis points to 48.1%, reflecting a favorable product mix, while comparable operating margin contracted 90 basis points to 17.3% due to increased investments in Network Infrastructure. Comparable earnings per share were 16 euro cents, slightly below the 17-cent consensus estimate.

At quarter end, Nokia held a net cash balance of €3.4 billion and generated €0.2 billion of free cash flow. The board approved a dividend of 3 euro cents per share, payable February 12. For fiscal 2026, the company forecasts a comparable operating profit between €2.0 billion and €2.5 billion. It expects Network Infrastructure net sales to grow at its long-term 6%–8% CAGR target and combined IP & Optical Networks to expand 10%–12%. Given elevated seasonality in Q4, Nokia now anticipates first-quarter net sales will decline slightly more than usual, with operating margin remaining near last year’s level.

Analysts maintain a Strong Buy rating on Nokia, citing significant undervaluation relative to peers and robust financials. The company projects free cash flow of approximately €1.46 billion at the midpoint of its 2026 guidance despite higher capital expenditures and challenging macro conditions. Strategic partnerships—most notably NVIDIA’s equity stake and the AI-RAN collaboration—position Nokia to capture a leadership role in the AI supercycle, leveraging its strengths in defense, 6G and advanced connectivity solutions beyond traditional telecom markets.