Nokia Oyj

What they do

Nokia operates through four reportable segments: Network Infrastructure, Cloud and Network Services, Mobile Networks, and Nokia Technologies. Network Infrastructure provides fixed networks, IP networks, optical networks, and submarine networks. Cloud and Network Services offers software, cloud-native solutions, and enterprise networking. Mobile Networks supplies radio access networks and related services. Nokia Technologies manages patent licensing and brand partnerships.

Revenue drivers

• Network Infrastructure — Largest segment, offering fixed, IP, optical, and submarine network solutions. Contributed significantly to total net sales; drives growth through fiber rollouts and data center interconnect.
• Mobile Networks — A core segment providing radio access network (RAN) equipment and services. Sales tied to telecom operator capex cycles and 5G deployment, with regional variance.
• Cloud and Network Services — Focuses on software, cloud-native platforms, and enterprise campus networks. Revenue growth depends on adoption of network automation and private wireless solutions.
• Nokia Technologies — Generates royalties from patent licensing, including declared essential patents. High-margin revenue from agreements with smartphone vendors and other licensees.

Recent performance

In fiscal 2025, Nokia reported net sales of EUR 19.5 billion, down 5% year-over-year from EUR 20.5 billion in 2024. Operating profit (IFRS) was EUR 1.2 billion, a decline from EUR 1.8 billion in 2024. Network Infrastructure net sales fell 7% to EUR 8.1 billion, while Mobile Networks declined 3% to EUR 6.6 billion. Cloud and Network Services increased 2% to EUR 2.9 billion, and Nokia Technologies grew 6% to EUR 1.4 billion. Geographically, EMEA net sales were EUR 8.8 billion (down 3%), Americas EUR 5.2 billion (down 11%), and Asia Pacific EUR 4.2 billion (down 7%).

Strategy

Nokia is executing a plan to separate its Mobile Networks business into a standalone entity by 2026, aiming to sharpen focus on B2B technology leadership. Management emphasizes cost discipline and innovation in AI-ready networks, cloud-native software, and IP/optical solutions. Investments target data center growth and enterprise/defense verticals. The company also continues to expand patent licensing into new areas, including video and automotive.

Risks

• Customer concentration — A limited number of large telecom operators generate a substantial portion of revenue; loss or delay of major contracts could materially affect results.
• Competitive pressure — Intense competition in RAN and network infrastructure from companies like Ericsson and Huawei may pressure prices and market share.
• Macroeconomic slowdown — Spending by telecom operators and enterprise customers is sensitive to economic cycles, potentially delaying capital investments in networks.
• Patent licensing disputes — Nokia Technologies depends on licensing agreements; unresolved litigation or adverse rulings could reduce royalty income.

Outlook

Management expects continued softness in the mobile networks market in 2026, with a recovery anticipated later in the year. They guide for full-year 2026 comparable operating profit between EUR 1.2 billion and EUR 1.8 billion, reflecting cost savings and resilience in IP networking. The separation of Mobile Networks is seen as a step to unlock value and improve strategic focus.