Nokia ended 2024 on a high note, as net sales finally turn the cornerNokia ended 2024 on a high note, as net sales finally turn the corner

"We saw a strong finish to 2024 with 9% net sales growth year-on-year in Q4," said Nokia chief executive Pekka Lundmark. "I am optimistic that the improving market trends we are now seeing will persist into 2025."

Nokia's revenue for the three months to 31 December came in at €5.98 billion, up from €5.42 billion a year earlier, with Europe, North America and APAC all returning to growth.

It's a certainly a big improvement on Q4 2023, when net sales plummet by 23% due to subdued operator spending. It's also a better showing than Q3, when sales were down 7%.

Mobile Networks has almost managed to stop the rot. Sales dipped slightly to €2.43 billion from €2.45 billion, as a return to growth in the Americas and EMEA took the sting out of a sharp decline in APAC.

The division is in a much better place compared to 12 months ago, when Nokia was lamenting a 17% decline in revenue.

Nokia will also be encouraged by its Network Infrastructure business, where revenue jumped almost 19% year-on-year to €2.03 billion, driven by a particularly strong showing at the fixed-line, and IP networking divisions.

The latter is benefiting from the insatiable demand for data centre capacity, spurred on by AI fever. Nokia has revealed plans to increase its exposure to this market by investing an additional €100 million a year in 2025-2027. It expects this to pay off to the tune of €1 billion of incremental revenue by 2028.

"In the short-term this will moderate the pace of operating margin expansion in Network Infrastructure, but we anticipate a strong return on investment considering the momentum we already have today in the market," said Lundmark, citing the data centre switching deals Nokia won with Microsoft and Nscale in Q4, plus the new partnerships with Kyndryl and Lenovo.

On a regional basis, the performance in North America was driven by strong growth at IP Networks, and double-digit growth in both Mobile Networks, and Cloud and Network Services.

Meanwhile, solid Network Infrastructure sales in India offset a decline at the Mobile Networks unit, helping to drive an overall increase in APAC revenue.

In Europe, Nokia's patent-licensing arm, Technologies, had a strong quarter, while growth at Network Infrastructure and Mobile Networks also boosted its numbers.

Nokia's earnings are also up, with Q4 operating profit surging 38% on a like-for-like basis to €1.14 billion, while operating margin grew to 19.1% from 15.3%.

For the full year operating income jumped 12% to €2.62 billion, putting it almost precisely in the middle of Nokia's guidance range.

Speaking of which, in 2025, Nokia expects operating profit to land somewhere between €1.9 billion and €2.4 billion. This would be an improvement over 2024, when one-off items benefited Nokia to the tune of around €700 million.

Nokia also said it expects to convert 50%-80% of operating income into free-cash flow, and it reckons capex will come in at around €550 million.

"Looking further ahead into 2025, we expect the improved trends we have seen in Network Infrastructure in the second half of this year, to sustain and drive strong growth. Cloud and Network Services is also expected to grow with strong 5G Core momentum and growth in our Enterprise Campus Edge business. End markets in Mobile Networks are improving and we currently assume largely stable net sales. Nokia Technologies is expected to deliver approximately EUR 1.1 billion of operating profit," said Lundmark.

"Given the market volatility in 2024, our results demonstrate the responsiveness and capacity of the Nokia team to execute in all market conditions," he added.

It has been a long time coming, but with first Ericsson and now Nokia posting some encouraging Q4 numbers, the industry's big two finally seem to have recovered from their post-5G hangovers.