Nokia has reported that Q3 net sales grew 9 per cent YoY on a constant currency and portfolio basis (12 per cent reported) to €4.83 billion with all business groups contributing and particularly strong growth in Optical Networks growing 19 per cent.

Q3 profit stood at €80 million, down 54 per cent, despite the sales gains. Operating profit dropped 14 per cent from last year to €239 million, and comparable operating profit fell 10 per cent to €435 million. 

Justin Hotard, Nokia CEO, offered the following press statement:

We delivered a solid performance in Q3 with net sales growing 9 per cent and all business groups growing.

Network Infrastructure delivered 11% net sales growth. Optical Networks grew 19 per cent, coming largely from AI & Cloud customers. Order intake trends in Optical Networks and IP Networks remained strong with book-to-bill well above 1. Our new 800G ZR/ZR+ pluggables for data center interconnect became generally available and have started shipping to a large US customer. We are opening a second Indium Phosphide semiconductor fabrication facility in San Jose before the end of next year to support the growth opportunity we see in our optical components business. In the quarter we also announced an important strategic partnership with Nscale which will see us become a preferred networking equipment vendor for their data centre buildout. In Q3, AI and Cloud customers accounted for 6 per cent of our net sales at the group level and 14 per cent for Network Infrastructure.

Cloud and Network Services delivered 13 per cent net sales growth as operator investments in 5G Core remain strong. Our cloud-native 5G Core offering continues to gain traction, and we are gaining market share. In the first half of 2025 we took the #1 market share position in Voice Core (Dell ‘Oro excl. China). Mobile Networks delivered 4 per cent growth and we continue to see the market stabilise. Commercially, we announced an agreement with VodafoneThree, re-entering as a major radio supplier in their network. Nokia Technologies signed several new deals in the quarter, while our annual net sales run-rate is approximately €1.4 billion.

At a group level, gross margin declined 150 basis points compared to the prior year. This was due to the expected weaker software contribution in Mobile Networks, balancing the higher-than-normal contribution in Q2, and product mix effects in Network Infrastructure. Operating margin was stable year-on-year, excluding a one-time benefit seen in the prior year related to a provision reversal.

Following a strategic review, we have decided to scale down our passive venture fund investments. Therefore, we are also changing how we present these investments in our financials, they will now be within financial income and expenses instead of affecting operating profit. We may still make targeted minority investments, directly as Nokia, that can accelerate our strategy.

Looking forward, we are on track to achieve our full year outlook. The change in presentation of venture fund investments leads to a technical increase of €0.1 billion to our comparable operating profit outlook which is now €1.7 to 2.2 billion. We are tracking towards the midpoint of the range.

At our Capital Markets Day in New York on November 19th, we will share our strategy to unlock the full potential of our portfolio and the steps we are taking to focus the company to deliver growth and operating leverage. The AI supercycle is accelerating demand for providers of advanced and trusted connectivity. Nokia is uniquely positioned to be a leader in this market.

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