Nokia Corporation has released its financial report for Q4 and 2024, revealing 9% net sales growth year-over-year (YoY), driven by strong performances across all business segments.
The telecom giant saw notable improvements in its financial metrics during the fourth quarter, with comparable gross margin rising by 250 basis points to 47.2%.
The comparable operating margin increased by 380 basis points to 19.1%, driven by higher gross margin, continued cost control, and amplified contributions from Nokia Technologies.
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2024 Financial Results
Nokia’s business groups delivered significant operational performance with the network infrastructure segment’s net sales growth accelerating to 17%. The IP networks segment grew by 24%, while the fixed network and optical network segments increased by 16% and 7% respectively. This growth reflects a strong recovery demand from communication service providers (CSPs), particularly in North America.
The mobile networks segment stabilized its net sales while maintaining gross margin. Nokia secured substantial deals, winning 18,000 additional base station sites since the start of 2024.
Despite a 4 percentage-point headwind from a prior business disposal, the net sales of the cloud and network services segment grew by 7% in Q4.
The report also outlined the robust growth of the telecom giant’s core network and enterprise campus edge segments. Moreover, Nokia’s acquisition of Rapid’s technology assets has boosted its research and development (R&D) capacity in its Network as Code segment and increased developer access.
Reporting an exceptionally active quarter, Nokia Technologies signed deals with Transsion, HP, and Samsung, among others. The annual net sales run-rate grew to approximately between EUR 1.3 and 1.4 billion in Q4, continuing towards its mid-term target of EUR 1.4-1.5 billion.
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Nokia’s 2025 Outlook
Looking ahead, Nokia expects a comparable operating profit between EUR 1.9 billion and 2.4 billion in 2025, with a free cash flow conversion from comparable operating profit of 50% to 80%.
Nokia’s President and CEO, Pekka Lundmark, expressed optimism about the improving market trends persisting into 2025. He highlighted the company’s solid cash performance throughout 2024, ending with a full year free cash flow of EUR 2.0 billion and a net cash of EUR 4.9 billion.
Lundmark stated, “Going forward, our target remains to maintain a net cash position of between 10-15% of annual net sales.”
Nokia’s progress in data center expansion is poised to continue in 2025, broadening the addressable market in data center IP networking. Lundmark revealed the company’s plan to invest up to an additional EUR 100 million in annual operating expenses to drive incremental net sales of EUR 1 billion by 2028.
Furthermore, Nokia Technologies is expected to deliver approximately EUR 1.1 billion in operating profit, driven by the growing momentum in market trends.
Nokia’s 2024 financial results demonstrate the company’s responsiveness and capacity to meet the growing demands of the market.
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