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Highlights

  • Network Infrastructure sees 11% sales growth, boosting Q1 performance
  • Mobile Networks faces challenges but contract wins signal stability
  • Infinera acquisition strengthens Nokia’s position in Optical Networks and hyperscaler market

Nokia Corporation has released its Interim Report for the first quarter of 2025, highlighting notable shifts in its performance across various business segments. Despite a decline in overall net sales by 3% year-over-year (YoY), excluding last year’s licensing catch-up deals, Nokia's sales grew by 7%. The company's growth is largely attributed to its Network Infrastructure division, which saw an 11% increase in sales. This division’s performance reflects strong demand across all its business units and an expanding backlog.

The acquisition of Infinera during Q1 has significantly expanded Nokia's Optical Networks business. This move enhances its footprint with hyperscalers and positions Nokia for future growth in the optical space. The integration process of Infinera is underway, with key decisions regarding portfolio management already communicated to customers. The company is optimistic about achieving its synergy targets, which are expected to add value in the long term.

Mobile Networks, while growing at a modest 2%, encountered challenges due to a one-time contract settlement that negatively impacted profitability. This settlement, involving a project that started in 2019, had a EUR 120 million cost but is now fully resolved. On a positive note, Nokia secured an important contract extension with T-Mobile US, reinforcing its position in the mobile sector.

Cloud and Network Services also contributed to Q1's growth, with an 8% increase in net sales, driven by strong demand for 5G Core services. Nokia Technologies continued to execute well, signing additional deals that boosted the annual contracted sales run-rate to EUR 1.4 billion.

Looking forward, Nokia expects a challenging but relatively resilient market in 2025, with Network Infrastructure and Cloud services continuing to show growth. However, potential tariff impacts could affect operating profits, with an estimated EUR 20 to 30 million hit expected in Q2. The full-year outlook remains steady, with comparable operating profit projected to range between EUR 1.9 billion and 2.4 billion.