Nokia released its first financial results since its landmark Nvidia deal and restructuring into two primary operating segments.

Nokia now functions under the two umbrellas of Network Infrastructure and Mobile Infrastructure. The change, announced in November, was part of a company restructure to help Nokia reach $3.2 billion in profitability by 2028.

In its report for Q4 2025 and full year 2025, Nokia disclosed a comparable operating profit of $1.2 billion for the quarter, representing a drop of 3% year-on-year (YoY). Comparable operating profit for the year in total was $2.29 billion, down 22%.

While the Nokia reorganization took effect this month, the results for last year were retrospectively organized under the firm’s new brackets. Net sales in the quarter for Network Infrastructure, comprising Optical Networks, IP Networks, and Fixed Networks, rose 7% YoY to $8.6 million, with Optical Networks seeing a 17% jump YoY due to AI demand, and IP Networks leaping by 24% YoY. Fixed Networks remained flat.

After a 6% growth YoY, Mobile Infrastructure, made up of Core Software, Radio Networks, and Technology Standards, saw net sales of $12.8 million in the quarter.

Portfolio Business net sales – encompassing Fixed Wireless Access CPE, Site Implementation and Outside Plant, Enterprise Campus Edge, and Microwave Radio – amounted to $955.4 million, which was an 18% rise across the year. Group Common & Other, meanwhile, saw net sales of $18.1 million, applying to corporate-level costs and items not allocated to operating segments.

Nvidia & AI

Perhaps surprisingly, references to Nvidia were thin on the ground during the earnings call, in spite of the landmark deal between it and Nokia announced last year.

Nokia CEO Justin Hotard did comment that Nvidia was on track to begin joint trials and proofs of concept on AI-augmented RAN (AI-RAN) later in the year. Hotard added Nokia would also meet silicon demand despite various supply chain issues blighting the industry, mentioning Nokia’s Infinera-inherited fab in California, where it also has been investing in bringing a new indium phosphide fab online.

“We’re certainly well on track to consume capacity in the existing [fab], and we absolutely need the new fab to come online to support the demand that we’re seeing and to meet our forecast,” Hotard said.

In his official statement accompanying the results, Hotard stressed "networks will require performance, security, and reliability to support everything from large language models to intelligent agents, augmented reality devices, and autonomous robots." He added Nokia believes "AI is a long-term structural shift that is expanding the role of networks as intelligence moves beyond data centers into real-world systems," with AI-RAN playing a part alongside Nokia's bread and butter of IP routing and optical transport.

The chief's comments came days after Nokia partnered with AI chip makers Blaize on an Asia-focused AI infrastructure deal. That deal centered on powering AI inference for the Asia Pacific market, primarily for physical AI deployments as typified by drones and autonomous vehicles.

“It’s clear that Nvidia will be the solution for big central racks of computing, but a small chip at the edge could be supported by a different player,” Joe Madden, lead analyst at Mobile Experts, told SDxCentral this week. “That’s where Blaize may be able to offer something at lower cost and lower power consumption. It’s good to see competition for that socket, as the cost really needs to come down for market adoption.

“In short, the partnership is very sensible for Nokia, as they move into an uncertain future where the ideal inference architecture is not clear.”

Madden added Nokia is “betting the farm” on the future of physical AI, with the hope of being the leading network provider in supporting physical AI automation in a mobile environment.

“The architecture required to make this work is not clear today, but it’s clear that inference models running on mobile devices (phones, drones, cars, robots) will need some kind of assistance from the network,” explained Madden. “Blaize is in position to provide chips, if the need is for AI inference in the network edge. That may be needed for some applications.

“In other cases, the inference may run quite well on the mobile device itself, but will need reference or training data available at low latency at the edge. In that case, a different edge computing resource may be needed.”

China conquests

This week's report also revealed Nokia's first financials for its newfound China division, following the firm's inheritance of Nokia Shanghai Bell in December, with a net cash outflow $600 million in the fourth quarter. This largely equated to the portion of net cash in the joint venture owned by China Huaxin Post & Telecommunications Technology, claimed Nokia. As recently explored by SDxCentral, Nokia bought out its remaining shares in the Chinese joint venture from China Huaxin, giving it a wholly Western-owned stake in China's telecom market for the first time ever.

Hotard said the Chinese move gave Nokia “greater operational flexibility, and we will bring it into full alignment with Nokia’s global operating model.

“As a part of that integration, we expect to deliver approximately ($216 million) of run-rate cost synergies, with integration costs of ($378 million–$432 million),” he added.

China will likely remain an uphill struggle for the firm. According to Dell’Oro VP RAN analyst Stefan Pongratz, combined radio access network (RAN) revenue share for Nokia and Ericsson currently stands at around 3% in total.

As revealed by the financials, sales in Greater China fell for Nokia by 26% during the quarter.

Cloudy questions

While the financials were the first to make Nokia’s reorganization official, question marks remain over whether products such as Nokia Digital Automation Cloud (DAC), which provides private wireless 4G/LTE and 5G networking, will remain core to the company going forward. Nokia’s report claimed it has achieved 1,000 private wireless customers to date, reflecting an uptick in sales divulged by Nokia’s partner sales manager for Europe to SDxCentral last year.

But during the earnings call, Hotard spoke more about 5G Advanced opportunities, as well as interest from customers of the Nokia Defence division for 4G and 5G technology in military environments, in both national security and tactical applications.

The CEO said defence was an area “where we are continuing to invest,” presumably for the North American market where it goes up against Ericsson Federal and, until recently, BT Federal, which was sold this month to 22nd Century Technologies as British operator BT continues its U.K-centric consolidation.