Strong Growth in Network Infrastructure and …
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Net Sales Growth: 9% growth in Q4 2024.
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Network Infrastructure Growth: 17% in Q4, with IP Networks growing 24%.
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Cloud and Network Services Growth: 7% in Q4, despite a 4 percentage point headwind from a prior disposal.
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Comparable Gross Margin: 47.2% in Q4 2024.
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Operating Margin: 19.1% in Q4 2024, highest since 2015.
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Free Cash Flow: EUR2 billion for the year.
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Net Cash Balance: EUR4.9 billion at year-end 2024.
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Mobile Networks Net Sales: Declined by 2% in Q4 2024.
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Cloud and Network Services Operating Margin: 22.4% in Q4 2024.
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Nokia Technologies Net Sales Growth: 85% in Q4 2024.
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Dividend Proposal: EUR0.14 per share for financial year 2024.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Nokia Oyj (NYSE:NOK) reported a strong fourth quarter with a 9% growth in net sales.
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Network Infrastructure grew by 17% in Q4, with IP Networks being a standout performer with 24% growth.
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The company achieved a comparable gross margin of 47.2% and an operating margin of 19.1%, the highest since 2015.
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Nokia Technologies saw an impressive 85% growth in net sales in Q4 due to new deals and catch-up payments.
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The company generated a strong free cash flow of EUR 2 billion, ending the year with a net cash balance of EUR 4.9 billion.
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Mobile Networks experienced a 2% decline in net sales during the quarter.
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Gross margin for Mobile Networks declined slightly by 20 basis points to 38.1%.
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The company faces a 4 percentage point headwind in Mobile Networks from a customer decision made in 2023.
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Enterprise sales declined by 4% in constant currency, partly due to lumpiness in Webscale deals.
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The competitive environment remains challenging in Latin America, impacting market stability.
Q: Can you comment on the visibility for 2025 and the expectations for Mobile Networks’ gross margin? A: Pekka Lundmark, CEO, stated that visibility for 2025 is better than a year ago, with a growing order backlog and robust customer CapEx commentary. While explicit net sales assumptions aren’t provided, strong growth is expected in Network Infrastructure (NI) and Cloud and Network Services (CNS), with stable sales in Mobile Networks (MN) despite a 4% headwind from AT&T. The underlying Mobile Networks gross margin in 2024 was 38% to 39%, excluding one-offs like the AT&T settlement.
Q: What are the short-term trends with hyperscalers, and how does AI impact telco customers? A: Lundmark highlighted hyperscalers and data centers as significant growth opportunities, with good deal traction, including with Microsoft and Nscale. The Infinera acquisition will enhance capabilities in optical networking. AI is impacting telcos in customer service, network management, and security. The edge compute market is a strategic focus, with telcos considering offering workload processing capabilities at the network edge.
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