In sum – what to know
Weak quarter, bright spots – Nokia missed Q1 expectations with a 36% shortfall in operating profit, driven by a one-off €120m charge in Mobile Networks, despite strong growth in enterprise and regional US sales.
Enterprise and Infinera gains – enterprise sales surged 27% on private 5G and fibre supplies, contributing 13.5% of total revenue; Network Infrastructure, bolstered by Infinera, saw 11% growth with hyperscaler demand.
US push, EMEA drag – Nokia’s T-Mobile US deal strengthens its position in the US, where it’s clawing back share; but a 20% drop in EMEA sales and ongoing tariff uncertainty cast shadows over its 2025 outlook.
Nokia opened 2025 with a disappointing financial performance, falling short of market expectations despite signs of segment-specific growth and the integration of its Infinera acquisition, completed in the period. The company posted a comparable operating profit of €156 million for the first quarter, way below the €243.83 million expected by analysts surveyed by LSEG – a 36 percent miss (as reported by Reuters).
As a note, expanded below, Nokia claimed another bumper quarter for private 5G sales, referencing its big deal with marine terminal operator by Carrix (as reported already; and nothing else) and a total customer-count of 890 deals (indexed as customers by region, as per the official GSA scores, not as network deployment contracts).
The shortfall was primarily attributed to an “unexpected one-time contract settlement” of €120 million in its Mobile Networks division, including its cellular core and radio access (RAN) network products – which was tied to a “historical project” with a “single customer” from back in 2019. Its total net income declined to €87 million, down 73 percent from €322 million in the first quarter of 2024.
Comparable operating margin also declined substantially, falling 990 basis points year-on-year to 3.6 percent. This was due to lower margins in its Nokia Technologies division, its licensing business, and increased operating expenses tied to growth investments. In terms of revenue, net sales were €4.39 billion on a constant currency basis (excluding exchange rate effects), down three percent year-over-year.
On a reported basis, net sales totaled €5.08 billion, representing a one percent decline from the year-ago quarter. Segment performance was uneven. Network Infrastructure, covering optical and fiber technologies, saw net sales rise 11 percent on a constant currency basis, aided by a “strong order intake for Infinera driven by growth in hyperscalers”. All in, it cited “positive momentum” for optical and fiber gear, driving sales in North America, notably.
Its Mobile Networks units posted growth of two percent (with profitability hampered by the one-time charge). Its Cloud and Network Services, covering its cloud-based / software-defined network solutions, as well as its private networks and enterprise sales, posted growth of eight percent. Nokia Technologies posted a sharp decline of 52%, on the grounds the year-ago results were unusually strong.
The Finnish firm’s results stand in contrast to rival Ericsson’s, which claimed a 61 percent surge in net income and a 48.2 percent jump in gross margin for the same period. Most of Ericsson’s upside in the quarter was from network sales in North America, whether to public operators or private enterprises. Sales in the ‘Americas’ region constituted about a third of its total, and rose 26 percent compared to the year-ago period.
Ericsson’s sales slipped in every other region, including in Latin America, in the period. Reviewing its results last week, analysts put Ericsson’s showing down to pre-tariff stockpiling in the US mobile industry, as well. For its part, Nokia said it expects short-term disruption with US tariffs. It will leverage its global manufacturing network, it said, to minimize their impact, but anticipates a €20-€30 million hit to its operating profit in the second quarter.
Nokia’s performance in North America, where its position was severely damaged when Ericsson swept up the initial non-standalone 5G (NSA) contracts with big operators in 2019/20, was very decent, with total regional net sales growth of 21 percent (from €1.031 billion to €1.319 billion year-on-year), comprising double-digit growth in optical networks, IP networks, and mobile networks. A new deal with T-Mobile US, covered below, has helped.
Reports say Nokia has even increased its market share in the US in recent quarters – without saying much about where; but its play in fiber and optical networks is a developing focus. By contrast, net sales in EMEA slumped by 20 percent, from €2.293 billion to €1.844 billion (“impacted by challenging prior year comparison”). APAC was up 12 percent to €1.064 billion. Meanwhile, enterprise sales, including private wireless, soared 27 percent in the quarter.
In total, Nokia sold €597 million of enterprise network componentry of various kinds, from €443 million a year ago. Enterprise sales constituted 13.5 percent of its total quarterly revenues, compared to 10 percent a year ago – equivalent to about 17.5 percent of total operator sales (versus 13.5 percent a year ago). Nokia cited “strong growth with both hyperscale and other enterprise customers”.
It explained: “This was particularly evident in Network Infrastructure, with Optical Networks benefiting from the Infinera acquisition and IP Networks benefiting from recent commercial momentum. Nokia continues to expand its presence in private wireless, now with 890 customers.” It cited an optical networking deal with Dutch offshore transmission system operator TenneT (for eight new 2-gigawatt offshore wind platforms in the North Sea), plus data centre setups with German duo Hetzner and DE-CIX and Malaysian firm Maxis. The private 5G (actually 4G) deal with Carrix is also mentioned in the quarterly report.
By contrast, Ericsson said last week its enterprise wireless sales, covering wireless wide-area network (WAN) and private-network and neutral-host systems, has grown by 20 percent year-on-year, driven by higher subscription and product sales in wireless WAN and “growth in private 5G and neutral host solutions”. It highlighted (also, again) its contracts with automaker Jaguar Land Rover and mining company Newmont.
Nokia reaffirmed its full-year 2025 outlook, targeting a comparable operating profit between €1.9 billion and €2.4 billion, albeit acknowledging that achieving the upper end of this range has become more challenging.
Justin Hotard, brand new chief executive at Nokia, reflected: “My early focus is on capital allocation to ensure we both drive efficiency and invest sufficiently in the right growth segments for long-term value creation… It is clear we… have the potential to expand our presence in hyperscale, enterprise, and defense markets… [The Infinera] acquisition has significant value creation potential for Nokia… We continue to see positive signs of stabilization with further wins… including an important contract extension with T-Mobile US.”
Details of the new deal with T-Mobile US are as follows: Nokia has signed a “multi-year” extension with T-Mobile for baseband and radio technologies to support its 5G SA network expansion in the US. Nokia will supply its AirScale RAN portfolio (including Habrok Massive MIMO and Levante baseband) and its MantaRay SON and AutoPilot AI self-organizing network (SON) solutions. Nokia is T-Mobile’s long-standing partner for RAN infrastructure in the US.
The arrangement covers T-Mobile’s AI-RAN initiatives, including the ongoing technology partnership at T-Mobile’s AI-RAN Innovation Center launched last year. Ulf Ewaldsson, president of technology at T-Mobile US, said: “T-Mobile’s nationwide 5G SA network has solidified our global leadership by delivering tangible benefits to our customers. This new agreement with Nokia will further enhance our current network capabilities.”
