How did Nokia's revenue and expenses shift in Q4 2024 compared to previous quarters?

Nokia's revenue and expenses in Q4 2024 showed notable shifts compared to previous quarters, reflecting both challenges and opportunities.

1. Revenue Shifts:
   • Growth in Select Segments: Nokia's Network Infrastructure net sales grew strongly, with all units contributing to the growth. Nokia Technologies also experienced significant growth, and Cloud and Network Services grew in Q4.
   • Regional Mix Impact: There was a notable shift in the regional mix of Nokia's Mobile Networks, which affected revenue. Normalization of 5G deployments in India and constrained spending in North America impacted revenues negatively.
   • Comparative Performance: Nokia's Q4 net sales increased by 9% year-over-year in constant currency, with a reported growth of 10%. This is a positive indicator of the company's performance, despite the challenges posed by the macroeconomic environment.

NOK Total Revenue YoY, Total Revenue

2. Expense Management:
   • Cost Control: Nokia managed its operating expenses effectively, which was reflected in the improved comparable operating margin. This was partly due to lower operating expenses and higher other operating income.
   • Gross Margin Improvement: The comparable gross margin in Q4 increased by 250 basis points year-over-year to 47.2%, with a strong contribution from Nokia Technologies. This indicates improved profitability margins.

3. Financial Metrics:
   • Profitability: Nokia reported a Q4 net income of €33 million ($35.51 million), a significant decrease from the income of €3,152 million in the year-earlier quarter. The comparable profit for the quarter was €568 million ($611.2 million), down from €929 million in the previous year.
   • Cash Flow: Nokia's Q4 free cash flow was positive at €0.05 billion, and the net cash balance stood at €4.9 billion.
4. Strategic Outlook: Nokia expects a full-year 2025 net sales range of between €23.2 billion and €24.6 billion, with a comparable operating margin between 11.5% and 13.0%. This outlook suggests a cautious optimism, with Nokia focusing on cost management and operational efficiency to achieve its financial goals.

In conclusion, Nokia's Q4 2024 financial performance showed resilience amidst macroeconomic challenges, with strong growth in certain segments and effective cost management contributing to improved profitability. However, the company also faced headwinds from regional shifts in demand and competitive pressures, as evidenced by the decline in net sales and net income compared to the previous year.