Nokia (NYSE: NOK) details 2025 growth and AI pivot in annual 20-F
Filing Impact
Filing Sentiment
Form Type
20-F
Nokia Corporation filed its 2025 annual report, showing net sales of EUR 19 889 million, around 3% growth, and about EUR 2 billion in comparable operating profit with EUR 1.5 billion of free cash flow. R&D spending reached EUR 4.9 billion, and total greenhouse gas emissions fell 27% from a 2019 base year.
The company closed its EUR 2.5 billion acquisition of Infinera to scale Optical Networks and deepen reach with AI & Cloud customers, and NVIDIA agreed to invest USD 1 billion as part of a strategic AI-RAN partnership. Orders from AI & Cloud customers totaled EUR 2.4 billion in 2025.
Nokia introduced a new AI-focused strategy, simplified into two operating segments—Network Infrastructure and Mobile Infrastructure—from 1 January 2026, and targets EUR 2.0–2.5 billion of comparable operating profit in 2026. The Board proposes authority to distribute up to EUR 0.14 per share, with 5 742 239 696 shares outstanding at year-end.
Positive
- None.
Negative
- None.
Insights
Nokia couples steady 2025 results with a sizable AI- and optical-focused pivot.
Nokia delivered EUR 19 889 million of 2025 net sales, roughly 3% growth, and around EUR 2 billion in comparable operating profit, while generating EUR 1.5 billion of free cash flow. R&D investment of EUR 4.9 billion underlines a technology-led strategy rather than short-term margin maximization.
Strategically, the EUR 2.5 billion Infinera acquisition and NVIDIA’s USD 1 billion investment reposition the business around optical transport and AI-native radio access networks, especially for hyperscalers. AI & Cloud orders of EUR 2.4 billion and a EUR 17 billion AI & Cloud serviceable market support this pivot.
The shift from four business groups to two operating segments—Network Infrastructure and Mobile Infrastructure—aims to simplify accountability and align with high-growth AI & Cloud and mission critical enterprise demand. For 2026, Nokia targets EUR 2.0–2.5 billion in comparable operating profit, framing expectations as it integrates Infinera and ramps AI-RAN partnerships.
Nokia Annual Report on Form 20-F 2025
2 | Annual Report |
As filed with the Securities and Exchange Commission on 5 March 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended 31 December 2025
Commission file number 1-13202
(Exact name of Registrant as specified in its charter)
Republic of Finland
(Jurisdiction of incorporation)
(Address of principal executive offices)
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the “Exchange Act”):
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
(1)Not for trading, but only in connection with the registration of American Depositary Shares representing these shares, pursuant to the requirements of the Securities and Exchange Commission.
Securities registered pursuant to Section 12(g) of the Exchange Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Exchange Act: None
Indicate the number of outstanding shares of each of the registrant’s classes of capital or common stock as of the close of the period covered by the annual report. Shares: 5 742 239 696 .
3 | Annual Report |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. | No ☐ | |
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. | Yes ☐ | |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | No ☐ | |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). | No ☐ | |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” or “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): |
Accelerated filer ☐ | |
Non-accelerated filer ☐ | Smaller reporting company ☐ |
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. | |
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. | |
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). | ☐ |
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: |
U.S. GAAP ☐ | |
Other ☐ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. | Item 17 ☐ | Item 18 ☐ |
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | Yes ☐ |
4 | Annual Report |
Cross-reference table to Form 20-F
Form 20-F Item Number | Form 20-F Heading | Section in Document | |
ITEM | 1 | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | N/A |
ITEM | 2 | OFFER STATISTICS AND EXPECTED TIMETABLE | N/A |
ITEM | 3 | KEY INFORMATION | |
3A | [Reserved] | ||
3B | Capitalization and Indebtedness | N/A | |
3C | Reasons for the Offer and Use of Proceeds | N/A | |
3D | Risk Factors | Operating and financial review and prospects—Risk factors | |
ITEM | 4 | INFORMATION ON THE COMPANY | |
4A | History and Development of the Company | Cover page; Business overview; Introduction and use of certain terms; Business overview—Nokia in 2025—Our 2025 highlights; Operating and financial review and prospects—Operating and financial review—Liquidity and capital resources; Operating and financial review and prospects—Shares and shareholders—Share details—Shares and share capital; General facts on Nokia—Alternative performance measures; Operating and financial review and prospects—Significant subsequent events; Financial statements—Notes to the consolidated financial statements—Note 6.2. Acquisitions; Other information—Investor information | |
4B | Business Overview | Business overview—Nokia in 2025; Business overview—Strategy; Business overview— Customers and partners; Operating and financial review and prospects—Operating and financial review—Results of segments; Operating and financial review and prospects—Risk Factors; Financial statements—Notes to the consolidated financial statements—Note 1.1. Corporate information; Financial statements—Notes to the consolidated financial statements—Note 2.2. Segment information; Financial statements—Notes to the consolidated financial statements—Note 2.6. Discontinued operations; General facts on Nokia—Government regulation | |
4C | Organizational Structure | Business overview—Nokia in 2025; Financial statements—Notes to the consolidated financial statements—Note 1.1. Corporate information; Financial statements— Notes to the consolidated financial statements—Note 2.2. Segment information; Financial statements—Notes to the consolidated financial statements—Note 2.6. Discontinued operations; Financial statements—Notes to the consolidated financial statements—Note 6.3. Principal Group companies | |
4D | Property, Plants and Equipment | Financial statements—Notes to the consolidated financial statements—Note 4.2. Property, plant and equipment; Financial statements—Notes to the consolidated financial statements—Note 4.3. Leases; Business overview—Customers and partners —Our supply chain | |
4A | UNRESOLVED STAFF COMMENTS | None | |
ITEM | 5 | OPERATING AND FINANCIAL REVIEW AND PROSPECTS | |
5A | Operating Results | Business overview—Strategy; General facts on Nokia—Government regulation; Financial statements—Notes to the consolidated financial statements—Section 2. Results for the year; Financial statements—Notes to the consolidated financial statements—Note 5.4. Financial risk management; Operating and financial review and prospects—Operating and financial review | |
Form 20-F Item Number | Form 20-F Heading | Section in Document | |
5B | Liquidity and Capital Resources | Operating and financial review and prospects—Operating and financial review— Liquidity and capital resources; Financial statements—Notes to the consolidated financial statements—Note 5.2. Financial assets and liabilities; Financial statements— Notes to the consolidated financial statements—Note 5.3. Derivative assets and liabilities; Financial statements—Notes to the consolidated financial statements— Note 6.1. Commitments, contingencies and legal proceedings; Financial statements— Notes to the consolidated financial statements—Note 5.4. Financial risk management | |
5C | Research and Development, Patents and Licenses etc. | Business overview—Strategy; Business overview—Nokia in 2025—Our operating model in 2025—Nokia Technologies; Operating and financial review and prospects— Operating and financial review—Results of operations; Operating and financial review and prospects—Operating and financial review—Results of segments | |
5D | Trend Information | Business overview—Nokia in 2025; Business overview—Strategy | |
5E | Critical Accounting Estimates | N/A | |
ITEM | 6 | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | |
6A | Directors and senior management | Corporate governance—Corporate governance Statement | |
6B | Compensation | Corporate governance—Remuneration; Financial statements—Notes to the consolidated financial statements—Note 6.4. Related party transactions; Financial Statements—Notes to the consolidated financial statements—Note 3.2. Remuneration of key management; Financial statements—Notes to the consolidated financial statements—Note 3.3. Share-based payments | |
6C | Board Practices | Corporate governance—Corporate governance statement; Corporate governance— Remuneration—Remuneration governance | |
6D | Employees | Business overview—Nokia in 2025; Operating and financial review and prospects— Operating and financial review—Results of operations—Cost savings program; Financial statements—Notes to the consolidated financial statements— Note 3.1. Summary of personnel expenses | |
6E | Share Ownership | Corporate governance—Remuneration—Remuneration Report 2025; Corporate governance—Corporate governance statement; Financial statements—Notes to the consolidated financial statements—Note 3.3. Share-based payments | |
6F | Disclosure of a registrant’s action to recover erroneously awarded compensation | N/A | |
ITEM | 7 | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | |
7A | Major Shareholders | Operating and financial review and prospects—Shares and shareholders | |
7B | Related Party Transactions | Financial statements—Notes to the consolidated financial statements—Note 6.4. Related party transactions | |
7C | Interests of Experts and Counsel | N/A | |
ITEM | 8 | FINANCIAL INFORMATION | |
8A | Consolidated Statements and Other Financial Information | Financial statements; Reports of independent registered public accounting firm; Operating and financial review and prospects—Shares and shareholders—Share details—Dividend and share buybacks; Financial statements—Notes to the consolidated financial statements—Note 6.1. Commitments, contingencies and legal proceedings | |
5 | Annual Report |
Form 20-F Item Number | Form 20-F Heading | Section in Document | |
8B | Significant Changes | Operating and financial review and prospects—Significant subsequent events; Financial statements—Notes to the consolidated financial statements—Note 6.5. Subsequent events | |
ITEM | 9 | THE OFFER AND LISTING | |
9A | Offer and Listing Details | Operating and financial review and prospects—Shares and shareholders; Financial statements—Notes to the consolidated financial statements—Note 1.1. Corporate information; Other information—Investor information—Stock exchanges | |
9B | Plan of Distribution | N/A | |
9C | Markets | Operating and financial review and prospects—Shares and shareholders; Financial statements—Notes to the consolidated financial statements—Note 1.1. Corporate information; Other information—Investor information—Stock exchanges | |
9D | Selling Shareholders | N/A | |
9E | Dilution | N/A | |
9F | Expenses of the Issue | N/A | |
ITEM | 10 | ADDITIONAL INFORMATION | |
10A | Share capital | N/A | |
10B | Memorandum and Articles of Association | Operating and financial review and prospects—Articles of Association; Other information—Exhibits | |
10C | Material Contracts | N/A | |
10D | Exchange Controls | General facts on Nokia—Controls and procedures—Exchange controls | |
10E | Taxation | General facts on Nokia—Taxation | |
10F | Dividends and Paying Agents | N/A | |
10G | Statement by Experts | N/A | |
10H | Documents on Display | Other information—Investor information—Documents on display | |
10I | Subsidiary Information | N/A | |
10J | Annual Report to Security Holders | N/A | |
ITEM | 11 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | Business overview—Strategy; Operating and financial review and prospects—Risk factors—Financial and tax-related uncertainties; Financial statements—Notes to the consolidated financial statements—Note 5.4. Financial risk management; Financial statements—Notes to the consolidated financial statements—Note 4.5. Trade receivables and other customer-related balances |
ITEM | 12 | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | |
12A | Debt Securities | N/A | |
12B | Warrants and Rights | N/A | |
12C | Other Securities | N/A | |
12D | American Depositary Shares | General facts on Nokia—American Depositary Shares; Introduction and use of certain terms | |
Form 20-F Item Number | Form 20-F Heading | Section in Document | |
ITEM | 13 | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES | None |
ITEM | 14 | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | None |
ITEM | 15 | CONTROLS AND PROCEDURES | Corporate governance—Corporate governance statement—Risk management, internal control and internal audit functions at Nokia; General facts on Nokia— Controls and procedures; Reports of independent registered public accounting firm |
ITEM | 16 | [Reserved] | |
16A | AUDIT COMMITTEE FINANCIAL EXPERT | Corporate governance—Corporate governance statement—Our main corporate governance bodies—Board of Directors—Committees of the Board of Directors | |
16B | CODE OF ETHICS | Corporate governance—Corporate governance statement—Regulatory framework; Operating and financial review and prospects—Business Integrity; Other information— Exhibits | |
16C | PRINCIPAL ACCOUNTANT FEES AND SERVICES | Corporate governance—Corporate governance statement—Auditor fees and services; Corporate governance—Corporate governance statement—Audit Committee pre- approval policies and procedures | |
16D | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES | None | |
16E | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS | Operating and financial review and prospects—Shares and shareholders—Share details—Purchases of equity securities by the Company and affiliated purchasers Corporate Governance—Remuneration | |
16F | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT | N/A | |
16G | CORPORATE GOVERNANCE | Corporate governance—Corporate governance statement—Regulatory framework | |
16H | MINE SAFETY DISCLOSURE | None | |
16I | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS | N/A | |
16J | INSIDER TRADING POLICIES | Corporate governance—Corporate governance statement—Main procedures relating to insider administration; Other information—Exhibits | |
16K | CYBERSECURITY | Corporate governance—Corporate Governance Statement—Risk management, internal control and internal audit functions at Nokia; Corporate governance statement—Our main corporate governance bodies—Board of Directors—Board oversight of cybersecurity; Operating and financial review and prospects—Risk factors —Risks impacting our competitiveness | |
ITEM | 17 | FINANCIAL STATEMENTS | Financial statements |
ITEM | 18 | FINANCIAL STATEMENTS | Financial statements |
ITEM | 19 | EXHIBITS | Other information—Exhibits |
6 | Annual Report |
Forward-looking
statements
Certain statements contained in this report constitute “forward-looking
statements.” Forward-looking statements provide Nokia's current expectations of
future events and trends based on certain assumptions and include any statement
that does not directly relate to any current or historical fact. The words “believe,”
“expect,” “expectations,” “anticipate,” “foresee,” “see,” “target,” “estimate,”
“designed,” “aim,” “plan,” “intend,” “influence,” “assumption,” “focus,” “continue,”
“project,” “should,” “is to,” “will,” “strive,” “may,” “could,” “forecast,” or similar
expressions as they relate to us or our management are intended to identify these
forward-looking statements, as well as statements regarding:
a)business strategies, planning assumptions, projects, market expansion, growth
management, and future industry trends and megatrends and our plans to
address them;
b)future performance of our businesses and any future distributions and
dividends;
c)expectations and targets regarding financial performance, results, operating
expenses, cash flows, tariffs, taxes, currency exchange rates, hedging, cost
savings and competitiveness, as well as results of operations including targeted
synergies and those related to market share, prices, net sales, income and
margins;
d)expectations, plans, timelines or benefits related to our transactions,
investments and changes in our organizational and operational structure;
e)market developments in our current and future markets and their seasonality
and cyclicality, including the telecommunication provider and AI & Cloud provider
markets, as well as general economic conditions, future regulatory
developments and the expected impact, timing and duration of potential global
pandemics and geopolitical conflicts on our businesses, our supply chain, our
customers’ businesses and the general market and economic conditions;
f)our position in the market, including product portfolio and geographical reach,
and our ability to use the same to develop the relevant business or market and
maintain our order pipeline over time;
g)any future collaboration or business collaboration agreements or patent license
agreements or arbitration awards, including income from any collaboration or
partnership, agreement or award;
h)timing of the development and delivery of our products and services;
i)the outcome of pending and threatened litigation, arbitration, disputes,
regulatory proceedings or investigations by authorities;
j)restructurings, investments, capital structure optimization efforts, divestments
and our ability to achieve the financial and operational targets set in connection
with any such restructurings, investments, and capital structure optimization
efforts including our ongoing cost savings program;
k)future capital expenditures, temporary incremental expenditures or other R&D
expenditures to develop or rollout new products; and
l)sustainability and corporate responsibility.
These statements are based on management’s best assumptions and beliefs in
light of the information currently available to it and are subject to a number of
known and unknown risks and uncertainties, many of which are beyond our control,
which could cause actual results to differ materially from such statements. These
statements are only predictions based upon our current expectations and views of
future events and developments and are subject to risks and uncertainties that are
difficult to predict because they relate to events and depend on circumstances that
will occur in the future. Risks and uncertainties that could affect these statements
include but are not limited to the risk factors specified under the section “Risk
factors” of this report and in our other filings or documents furnished with the U.S.
Securities and Exchange Commission. Other unknown or unpredictable factors or
underlying assumptions subsequently proven to be incorrect could cause actual
results to differ materially from those in the forward-looking statements. We do
not undertake any obligation to publicly update or revise forward-looking
statements, whether as a result of new information, future events or otherwise,
except to the extent legally required.
7 | Annual Report |
Introduction
and use of
certain terms
Nokia Corporation (“Parent Company”) is a public limited liability company
incorporated under the laws of the Republic of Finland and registered to the Finnish
Trade Register since 1896. In this Annual Report on Form 20-F, any reference to
“we,” “us,” “Nokia Group,” “the Group,” “the company” or “Nokia” means Nokia
Corporation and its consolidated subsidiaries and generally Nokia’s continuing
operations, except where we separately specify that the term means
Nokia Corporation or a particular subsidiary or business segment only or our
discontinued operations. References to “our shares,” matters relating to our shares
or matters of corporate governance refer to the shares and corporate governance
of Nokia Corporation.
Nokia Corporation has published its consolidated financial statements in euro
for periods beginning on or after 1 January 1999. In this Annual Report on Form 20-
F, references to “EUR,” “euro” or “€” are to the common currency of the European
Economic and Monetary Union, references to “dollars,” “US dollars,” “USD” or “$”
are to the official currency of the United States, references to “Chinese yuan” or
“CNY” are to the official currency of the People’s Republic of China, references to
“INR” or “Indian rupee” are to the official currency of the Republic of India,
references to “GBP” or “British pound” are to the official currency of the United
Kingdom and references to “Japanese yen” or “JPY” are to the official currency of
Japan.
Additional terms are defined in the “Glossary.”
The information contained in, or accessible through, the websites linked
throughout this Annual Report on Form 20-F is not incorporated by reference into
this document and should not be considered a part of this document.
Nokia Corporation furnishes Citibank, N.A., as Depositary, with its consolidated
financial statements and a related audit opinion of our independent auditors
annually. These financial statements are prepared in accordance with IFRS
Accounting Standards as issued by the International Accounting Standards Board
(IASB) and as adopted by the European Union (EU). In accordance with the rules and
regulations of the SEC, we do not provide a reconciliation of our consolidated
financial statements to the generally accepted accounting principles in the US, or
US GAAP.
We also furnish the Depositary with quarterly reports containing unaudited financial
information prepared in accordance with IAS 34, Interim Financial Reporting, as well
as all notices of shareholders’ meetings and other reports and communications
that are made available generally to our shareholders. The Depositary makes these
notices, reports and communications available for inspection by record holders of
American Depositary Receipts (ADRs), evidencing American Depositary Shares
(ADSs), and distributes to all record holders of ADR notices of shareholders’
meetings received by the Depositary.
In addition to the materials delivered to holders of ADRs by the Depositary, holders
can access our consolidated financial statements, and other information included
in our annual reports and proxy materials, at nokia.com/financials. This Annual
Report on Form 20-F is also available at nokia.com/financials as well as on
Citibank’s website at https://fs11.formsite.com/bHTsOU/r2piq0mgvd/index.
Holders may also request a hard copy of this annual report by calling the toll-free
number 1-877-NOKIA-ADR (1-877-665-4223), or by directing a written request to
Citibank, N.A., Shareholder Services, PO Box 43077, Providence, RI 02940-3081,
United States. With each annual distribution of our proxy materials, we offer our
record holders of ADRs the option of receiving all of these documents electronically
in the future.
1 | Nokia Annual Report on Form 20-F 2025 |
In this report
Business overview | 2 |
Nokia in 2025 | 3 |
Advancing connectivity to secure a brighter world | 3 |
Our 2025 highlights | 5 |
Interview with our President and CEO | 6 |
Our financial performance in 2025 | 9 |
Our operating model in 2025 | 10 |
Our business groups | 11 |
Strategy | 13 |
Our strategy | 13 |
Our technology vision | 19 |
Customers and partners | 21 |
Our customers | 21 |
Our supply chain | 24 |
Corporate governance | 25 |
Corporate governance statement | 26 |
Remuneration | 47 |
Operating and financial review and prospects | 65 |
Selected financial data | 66 |
Operating and financial review | 67 |
Business integrity | 79 |
Environment | 84 |
Shares and shareholders | 88 |
Articles of Association | 92 |
Risk factors | 94 |
Significant subsequent events | 113 |
General facts on Nokia | 114 |
American Depositary Shares | 115 |
Controls and procedures | 115 |
Government regulation | 116 |
Sales in United States-sanctioned countries | 116 |
Taxation | 117 |
Key ratios | 120 |
Alternative performance measures | 121 |
Financial statements | 124 |
Consolidated financial statements | 125 |
Notes to the consolidated financial statements | 130 |
Reports of independent registered public accounting firm | 188 |
Other information | 190 |
Exhibits | 191 |
Glossary | 192 |
Investor information | 195 |
Signatures | 196 |
2 | Nokia Annual Report on Form 20-F 2025 |
Nokia in 2025 | 3 |
Advancing connectivity to secure a brighter world | 3 |
Our 2025 highlights | 5 |
Interview with our President and CEO | 6 |
Our financial performance in 2025 | 9 |
Our operating model in 2025 | 10 |
Our business groups | 11 |
Strategy | 13 |
Our strategy | 13 |
Our technology vision | 19 |
Customers and partners | 21 |
Our customers | 21 |
Our supply chain | 24 |
3 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Advancing connectivity to
secure a brighter world
Nokia has long been trusted to provide the critical network infrastructure
the world relies on. Today, our technology is connecting intelligence –
powering our customers with advanced connectivity.
 |
 |
 |
Telecommunication
providers
Transforming legacy networks into
high performance, secure platforms to
meet the rising demands of AI
AI & Cloud
Delivering advanced optical and IP
data center connectivity to power AI
computing across continents
Mission Critical
Enterprise & Defense
Connecting the intelligence of
machines, devices, and people for
secure, AI-enabled operations
~€160bn+
R&D investments since 2000
15/20
of the world’s fastest 5G networks use Nokia RAN
+4.4bn
mobile subscriptions supported by Nokia networks
9/10
of the top global hyperscalers use Nokia’s
optical networks
4 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Regional split of
employees
North America
10 000
Europe
33 000
Greater China
7 200
Net sales, EURm
19 889
North America
Europe
Greater China
India
Asia Pacific
Latin America
Middle East & Africa
Countries of operation
~130
Average number of employees in 2025
~78 000
Latin America
2 800
Middle East & Africa
2 800
India
18 300
Asia Pacific
3 900
5 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Our 2025 highlights
New President and
CEO announced
February Justin Hotard was announced as
Nokia’s new President and CEO, joining us
on 1 April. Hotard has more than 25 years’
experience with global technology
companies, driving innovation, technology
leadership and revenue growth. He also
possesses vast expertise in the AI and data
center markets, which are critical for
Nokia’s future growth.
Closed acquisition
of Infinera
February The acquisition of Infinera
demonstrated our commitment to providing
the infrastructure underpinning the AI
supercycle and capturing the demand that
comes with it. It also improved the scale of our
Network Infrastructure business and allowed
us to pick up the pace of innovation to meet
the requirements of the AI era.
Milestones for Nokia
and Nokia Bell Labs
May Nokia celebrated its 160th birthday in
2025. The company has been through many
transformations over that time, but none has
been more consequential than the switch to
focusing on telecoms in the 1990s. That set us
on the path to becoming what we are today: a
trusted global provider of secure and advanced
connectivity for customers all over the world.
We also celebrated the 100th anniversary of
the world‑renowned research institution Nokia
Bell Labs.
State-of-the-art R&D
campus in Oulu, Finland
September We opened our new, state-of-the-
art campus in Oulu, Finland. The campus is the
world’s most advanced hub for 5G and 6G
radio innovation. On site, 3 000 staff design,
test and deliver next-generation networks.
Those staff draw on the expertise of a local
ecosystem including customers, universities,
start-ups, established technology providers
and NATO facilities.
Announced strategic
partnership with NVIDIA
October We announced that NVIDIA will
invest $1 billion in Nokia as part of a
strategic partnership between our two
companies. Together the two companies will
enable accelerated development and
deployment of next generation AI-native
mobile networks and AI networking
infrastructure.
The partnership will add NVIDIA-powered AI-
RAN products to Nokia’s industry-leading
RAN (radio access networks) portfolio. The
announcement marks the beginning of the
AI-native wireless era, providing the
foundation to support AI-powered
consumer experiences and enterprise
services at the edge.
Together with NVIDIA we will define the next
generation of global connectivity.
New strategy announced
at Capital Markets Day
November We welcomed investors and
analysts to our Capital Markets Day in New
York to share how we are connecting
intelligence and accelerating value creation
for our customers and investors. At the
event Nokia announced a new strategy, as
well as a simplified operating model, a new
long-term financial target, new strategic
KPIs and changes to its Group Leadership
Team.
Expansion with AI & Cloud
2025 We saw real progress in AI & Cloud. We
closed and integrated Infinera. We launched
new 800G pluggables, delivering excellent
optical performance for data centers in a
compact, low-power form factor. We
expanded our data center switching offer with
our new 7220 IXR H6 switching platform,
powered by Broadcom's Tomahawk 6 chipset.
And we generated EUR 2.4 billion in orders
from AI & Cloud customers across the year.
6 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Interview
with our
President
and CEO
How would you characterize Nokia’s
financial performance in 2025?
Overall, our performance was solid and in line with expectations.
We grew net sales by 3%, delivered approximately EUR 2 billion in
comparable operating profit(1) in line with guidance, and generated
free cash flow(1) of EUR 1.5 billion.
Beneath those headline results was disciplined execution. We
navigated significant foreign exchange headwinds, successfully
closed the Infinera acquisition, and accelerated growth in AI &
Cloud, generating more than EUR 2.4 billion of orders from this
customer segment. Our strong cash generation allowed us to
further strengthen the balance sheet, invest in growth, and fund
our dividend.
(1)Non-IFRS measure. For the definition and reconciliation of non-IFRS measures to the
most directly comparable IFRS measures, refer to the “Alternative performance
measures” section.
7 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
“Nokia changed the world once
by connecting people. Now we
can change it again by
connecting intelligence.”
Justin Hotard
President and CEO
What drove performance across the portfolio?
Within Network Infrastructure, we saw strong growth in Optical
Networks, solid performance in IP Networks, and stable results
in Fixed Networks as we repositioned the portfolio. The
integration of Infinera strengthened our competitive position,
particularly with AI & Cloud customers, and increased our
market share in North America.
Cloud and Network Services performed well, growing faster
than the market and improving profitability. Mobile Networks
showed signs of stabilization but remained below our long-
term expectations, and we are sharpening execution
accordingly. Nokia Technologies executed well with a slight
increase in our contracted net sales run-rate to EUR 1.4 billion
and delivered net sales of EUR 1.5 billion with strong
profitability and cash generation.
What strategic actions shaped the year?
2025 was about setting the strategy for where we see the
business going, and aligning the company accordingly. During
the year, we repositioned Nokia to sharpen execution and
focus on where we see the greatest long-term opportunities.
These changes were designed to increase our organizational
clock speed by reducing complexity and accelerating decision-
making.
At our Capital Markets Day in November, we introduced our
new strategy to position Nokia to lead in the AI-driven
transformation of networks and capture the value of the AI
supercycle. We simplified our operating model and reorganized
our business into two primary operating segments — Network
Infrastructure and Mobile Infrastructure — to better align to
customer needs and accelerate innovation as demand for
advanced connectivity increases. This reorganization took
effect as of 1 January 2026.
We also identified several businesses that, while attractive, are
not core to our strategy and decided to move them into
Portfolio Businesses to improve performance and explore
strategic alternatives.
We strengthened our position with telecommunication
providers, accelerated expansion in AI & Cloud, grew in mission
critical enterprise, and moved our defense activities into a
dedicated unit for incubation.
What are you doing to make
Nokia easier to work with?
There are three elements. It starts and ends with the customer.
First, as part of our simplified operating model, we established
a unified Global Sales and Customer Operations organization
for our telecommunication providers and mission critical
enterprise customers, while maintaining deep focus on AI &
Cloud within Network Infrastructure. The result is clearer
accountability and a simpler engagement model.
Second, we strengthened our partnerships — both go-to-
market and strategic technology partnerships. Our collaboration
with NVIDIA to build AI-native networks starting with AI-RAN
reflects our approach: focus our innovation where we
differentiate, and partner with best-of-breed leaders elsewhere.
Third, we simplified internally by consolidating functions,
eliminating overlaps, clarifying accountability, and reinforcing
functional excellence. This aligns with our Team Nokia culture
— clear roles, shared objectives, and collective focus on
delivering innovation that creates value for our customers.
How is AI & Cloud demand affecting Nokia’s
growth, and why does Nokia have a right to win?
AI & Cloud represent the leading edge of the AI supercycle.
Early applications are driving substantial infrastructure
investment in data centers and AI factories. We have focused
our roadmap, integrated Infinera to strengthen optical
capabilities, launched 800G ZR/ZR+ coherent pluggables,
invested in new fab capacity for our optical components, and
introduced our 7220 IXR platform AI-native architectures.
We offer AI & Cloud customers a differentiated alternative built
on performance, quality, and deep optical integration. Our
vertical integration across hardware and software allows us to
optimize power, scale, and reliability — advantages that matter
as AI infrastructure expands.
AI & Cloud customers are increasingly driving the leading edge
of network technology. That positions us to innovate at the
forefront and extend those capabilities across
telecommunications and enterprise markets. As a result, we
are continuing to invest in both our optical and IP networking
businesses for long-term growth and scale.
8 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
How are you approaching capital
allocation and investment discipline?
Our capital allocation principles remain consistent: invest
organically where returns are highest, complemented by
disciplined M&A and targeted minority investments.
Under our strategy, we are increasing investment in Optical
Networks and IP Networks, investing selectively in
differentiation within Mobile Infrastructure — including cloud-
native core, AI-native networks, and 6G — and reducing
exposure to lower-growth areas. We shifted from broad venture
funding to more targeted strategic minority investments.
At the same time, we remain committed to financial discipline
and shareholder returns, including the proposed EUR 0.14 per
share distribution.
What are your priorities for 2026 and beyond?
Our new strategy outlines five strategic priorities: accelerating
growth in AI & Cloud; leading in AI-native networks and 6G;
growing through co-innovation; deploying capital where we
differentiate; and unlocking sustainable returns.
Within that framework, I see three critical areas of focus for 2026.
First, capturing growth in Network Infrastructure, particularly
with AI & Cloud customers, while improving profitability in
Fixed Networks.
Second, improving gross margin, segment operating profit,
and cash flow in Mobile Infrastructure. While this is not a
structural growth market near-term, it should deliver
consistent returns while we invest in long-term technology
leadership for AI-native networks and 6G.
Third, driving efficiency and productivity across the company.
This includes disciplined cost management, embedding a
culture of continuous improvement, and investing in AI
internally to simplify processes, increase automation, and
accelerate time-to-value from R&D.
Delivering on these priorities is how we create long-term value
for our shareholders.
Do you view culture as a performance driver?
Absolutely. Nokia is a company built from multiple
transformations over time, and building a unified culture is
essential. We are doing this by engaging our leaders and our
entire employee base, so their voice is a part of our cultural
evolution and values.
Team Nokia means clear accountability, empowerment, and
shared objectives. It also means clear ownership and disciplined
follow-through, so that decisions translate into results. We are
making sure every employee understands how their goals and
actions connect directly to Nokia’s overall strategy.
We are reinforcing agility, continuous learning, and streamlined
processes so that innovation translates into measurable
performance and value for our customers and shareholders
and growth opportunities for our employees.
How do you see the outlook for 2026?
In financial terms, we target EUR 2.0 to 2.5 billion of
comparable operating profit(1) in 2026. We expect continued
strong demand trends in Network Infrastructure as we ramp
new products expanding our presence in AI & Cloud and invest
for long-term growth. In Mobile Infrastructure, we see a stable
market environment and are focused on efficiency and
improving profitability.
Overall, our objective in 2026 is to demonstrate clear progress
toward the long-term targets we set at our Capital Markets Day.
As you reflect on your first year as CEO,
how do you view Nokia’s direction?
2025 was my first year as CEO, and it was a year of decisive
action. We clarified our strategy, simplified the company, and
made changes to the leadership team to align accountability with
our strategic priorities and strengthen execution. I’m encouraged
by how the leadership team has stepped up during this transition
and how quickly we are operating as a unified group.
I am proud of the progress Team Nokia has made, and I want to
thank the entire team for their focus and commitment.
I also want to thank the Board, and in particular our Board Chair
Sari Baldauf — who has decided to step down — for her
leadership and support during this transition. I look forward to
continuing to work closely with the Board as we execute our
strategy and unlock Nokia’s full potential.
Nokia changed the world once by connecting people. Now we
can change it again by connecting intelligence.
(1)Non-IFRS measure. For the definition and reconciliation of non-IFRS measures
to the most directly comparable IFRS measures, refer to the “Alternative
performance measures” section.
9 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Our financial performance in 2025
Our performance in 2025 was a solid foundation for the launch of a new strategy that will position
Nokia to lead network transformation in the AI era and support long-term profitable growth.
Net sales (EURm)
Operating profit (EURm)
Free cash flow (EURm)(1)
Earnings per share (EUR)(2)
Proposed dividend per share (EUR)(3)
150+
Countries served with
Nokia connectivity
27%
Reduction of total GHG
emissions (scopes 1, 2, 3)
from a 2019 base year
€4.9bn
R&D investments in 2025
€2.1bn
Dividends paid since 2023
€1.6bn
Shares repurchased since 2023
(1)Non-IFRS measure. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS measures, refer to the “Alternative performance measures” section.
(2)Diluted earnings per share for continuing operations.
(3)The Board of Directors proposes to the Annual General Meeting 2026 to be authorized to decide in its discretion on the distribution of an aggregate maximum of EUR 0.14 per share as
dividend from the retained earnings and/or as assets from the reserve for invested unrestricted equity.
10 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Our operating model in 2025
In 2025, Nokia operated with four business groups as outlined below.
In November 2025, alongside the launch of its new strategy, Nokia announced that it would simplify its operating model into two
primary operating segments, Network Infrastructure and Mobile Infrastructure. This simplification took effect on 1 January 2026
with the new structure described on page 18.
Network Infrastructure
Network Infrastructure delivers optical
transport, IP routing and switching, and fixed
access technology for telecommunication
providers, mission critical enterprise and AI &
Cloud customers.
Segment net sales (EURm)
+23%
Segment operating margin
-190 bps
Cloud and Network Services
Cloud and Networks Services provides open,
secure, automated and scalable software that
accelerates our customers’ journeys to
autonomous networks and new value creation.
Segment net sales (EURm)
+1%
Segment operating margin
+500 bps
Mobile Networks
Mobile Networks creates high-performance
products and services that support advanced
connectivity across all 3GPP mobile
technology generations, enabling a seamless
evolution to future technologies.
Segment net sales (EURm)
-4%
Segment operating margin
-270 bps
Nokia Technologies
Nokia Technologies is responsible for
managing Nokia’s patent portfolio and
monetizing Nokia’s intellectual property,
including patents and technologies.
Segment net sales (EURm)
-22%
Segment operating margin
-790 bps
11 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Our business groups
Network Infrastructure |
Network Infrastructure provides reliable, high-performing, trusted solutions that power everything from everyday communications to AI and essential mission critical systems. |
Network Infrastructure delivered net sales of
EUR 8.0 billion in 2025 with a segment
operating margin of 9.8%.
We deliver industry-leading optical, IP, fixed
and data center networking solutions to
telecommunication providers, AI & Cloud
customers, mission critical enterprises,
wholesalers and public sector organizations.
Our trusted, purpose-built connectivity
solutions power the internet, drive the global
economy, and support the mission critical
industries that keep the world running.
Optical Networks
Optical is a critical component of the
infrastructure required to support AI at scale,
and we are investing with a long-term view. We
see rapid adoption of high-speed optical
transmission technology including 1.2T/1.6T
coherent transponders and 800G coherent
pluggables that can drive down cost, space, and
power per bit. The demand for 800G pluggables
is challenging the industry's supply chain. Our
focus is on driving market share gains across the
portfolio, building on our number two global
market position(1), increasing our presence in AI &
Cloud and taking steps to address new emerging
intra-data center component opportunities.
IP Networks
IP Networks continued to lead in its sector,
holding the number one global position in IP
edge routing(2). Key priorities for the business
include expanding our presence in data center
networks and driving growth in the mission
critical enterprise segment. We saw
encouraging proof points in the second half of
2025 for our data center business, with a
number of significant design wins and
increased order intake.
Fixed Networks
Fixed Networks focuses on advancing fiber
technologies by leading in residential Passive
Optical Networks (PON), innovating chipsets
and platforms, leveraging AI and automation
to increase margins, and expanding PON into
new sectors such as enterprises and data
centers. Continued innovation leadership in
next generation PON technologies, such as
10G, 25G, and 50G, enabled Fixed Networks to
sustain its global number one position in xPON
OLT for the sixth consecutive year. The
business is also number one in 10G (XGS PON)
ONT/OLT, underscoring its strength in high-
speed fiber connectivity solutions(1).
(1)Omdia and Dell’Oro Q3’25
(2)Dell’Oro Q3'25
Cloud and Network Services |
Cloud and Network Services delivers open, secure, automated, and scalable software that accelerates our customers’ journey to autonomous networks and new value creation. |
Cloud and Network Services (CNS) delivered
net sales of EUR 2.6 billion, with a segment
operating margin of 13.0%.
Cloud and Network Services’ portfolio includes
Core Network software, which is made up of
voice core, packet core, subscriber data
management, and signaling and policy
software for telecommunication providers.
The CNS portfolio also includes Autonomous
Network software which is made up of a
software fabric (called Autonomous Network
Fabric) that supports digital operations,
analytics and AI, and security software. CNS
customers include the largest
telecommunication providers and mission
critical enterprises in the world.
Telecommunication investments remained
stable in 2025 with providers focusing on 5G
expansion while investing in automation and AI
to optimize their networks, reduce costs, and
improve sustainability. Monetization of 5G
investments also remained a top priority
among the larger providers.
In Core Networks, we hold a leading position in
the telecommunications market, with our
technology present in 65% of
telecommunication providers’ 5G SA
networks. Omdia has ranked us number one in
portfolio competitiveness, Core SaaS, cloud-
native readiness, automation, and 5G deals,
with the highest number of 5G SA core
operator customers and live deployments
worldwide. We have achieved our position by
being early to invest in cloud innovation,
containerization, multi-cloud support, and
flexible deployment options.
In Autonomous Networks, we are a market
leader across various domains: ranked number
one in both AI Ops and Cross-Domain Service
Orchestration and number two in Network
Automation Software by Appledore; number
one in Automated Assurance and a leader in
Service Assurance by Analysys Mason; an
innovation leader in Telco Extended Detection
and Response (XDR) security by GigaOm; and a
Leader and Top Innovator for Telco API
platforms by ABI Research.
12 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview •Nokia in 2025 Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Our business groups
Mobile Networks |
Mobile Networks creates high-performing products and services that support advanced connectivity across all 3GPP mobile technology generations. |
Mobile Networks delivered net sales of EUR
7.8 billion in 2025 with a segment operating
margin of 2.8%.
Mobile Networks’ portfolio included products
for radio access networks (RAN) and
microwave radio for transport, network
management and a range of associated
services. We serve telecommunication
providers and mission critical enterprises,
including the defense sector and
governments. The demand environment was
largely stable in 2025.
In 2025, we reinforced our position as a global
RAN supplier, delivering the fastest 5G in 15 of
the 20 fastest 5G countries. Analyst firms like
Dell’Oro and Omdia ranked Nokia third in
global Mobile RAN market share for the first
three quarters.
By the end of the year, we had 408
commercial 5G agreements across key regions
and over 1 000 private wireless customers. In
2024 - 2025, we gained 18 new
telecommunication customers, seven of which
joined in 2025, expanded RAN market share
with 18 customers, and saw 13 existing
customers upgrade to 5G technologies.
Nokia has set itself apart from competitors by
pioneering AI-powered radio access networks
(AI-RAN) solutions in partnership with NVIDIA.
As the first supplier to introduce commercial-
grade AI-RAN products for 5G-Advanced and
6G networks, we leverage the NVIDIA ARC-Pro
accelerated computing platform to evolve our
Cloud RAN into a Cloud AI-RAN solution, and in
our AirScale RAN solutions. The upcoming AI-
RAN capacity plug-in unit for Nokia AirScale
baseband will be optimized for AI-native
traffic, allowing customers to capture greater
opportunities in the AI-driven market cycle.
T-Mobile U.S. is partnering with Nokia and
NVIDIA to drive and test AI-RAN technologies
within its commercial network. We are also
collaborating with NVIDIA on AI-RAN
innovation with SoftBank in Japan and Indosat
Ooredoo Hutchison in Indonesia. Additionally,
with KDDI in Japan, we are researching AI-
RAN’s practical applications and architectures
for future commercial viability.
Building on the achievements of 2025 and
embracing AI-driven networks and next-
generation 5G-Advanced and 6G, we are well
positioned to anticipate industry needs and
shape the future of global connectivity.
Nokia Technologies |
Nokia Technologies conducts research and standardization, protects our investments by securing patents, and enables other companies to build on our innovation through licensing. |
Nokia Technologies delivered net sales of EUR
1.5 billion, with a segment operating profit of
EUR 1.1 billion.
We continued to diversify our revenue pools
with further progress in our expansion areas,
including automotive, consumer electronics,
Internet of Things (IoT), and multimedia
services. In addition, we continued to invest in
our portfolio to future-proof our business.
Nokia has led wireless and multimedia
innovation for over 30 years, building one of
the industry’s largest high-quality patent
portfolios with more than 26 000 families,
including over 8 000 essential to 5G. Our
inventions range from AI and machine learning
for 5G-Advanced and 6G, to environmental
sustainability solutions, Multi-RAT Spectrum
Sharing, MIMO, and quantum security.
The business group shares Nokia’s technology
with a wide range of industries by licensing our
foundational wireless and multimedia
innovations. We have dedicated patent
licensing programs for mobile devices,
consumer electronics, IoT devices and
solutions, automotive, and multimedia
services.
The strength of our assets has made it
possible for us to successfully secure the vast
majority of our patent licensing agreements
without resorting to litigation. This solid
foundation also enables us to establish new
markets through pioneering agreements.
Whenever a device connects to a mobile
network or streams video, it’s powered by
Nokia’s technology. Our inventions are
integrated into more than a billion new devices
worldwide each year. They power entire
industries, enabling smartphones, laptops,
smart TVs, connected cars, smart home
appliances, video streaming platforms, and a
wide range of AR/VR applications.
Building on the strong performance of our
smartphone renewals and the momentum in
our expansion areas, we are well positioned
for continued stability. We have secured
annual contracted recurring revenue of over
EUR 800 million through 2030, providing a
healthy foundation for future success. Our
licensing programs in our expansion areas of
automotive, consumer electronics, IoT and
multimedia now contribute an annual revenue
run-rate of more than EUR 200 million.
13 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
n
Our strategy
Connecting
intelligence:
Powering
the AI era
We are in the middle of an AI
supercycle, a technology revolution in
which multiple waves of innovation will
build on each other.
As intelligence moves beyond the data center and into the
physical world the AI supercycle will transform how devices
interact, how industries operate, and how people live and
experience technology. This represents a moment of
disruption in which new leaders can emerge and substantial
new value can be created.
As the trusted western provider of secure and advanced
connectivity, our technology is powering the AI supercycle.
From fixed to mobile infrastructure we are developing
technology that accelerates value for our customers.
Significant value creation opportunity in the AI supercycle | |||||
Large AI supercycle market opportunity | A strong innovation roadmap | Key wins validating strategic milestones | |||
€60bn | €4.9bn | ~€2.4bn | |||
‘28 SAM, 9% CAGR(1) | R&D investment in 2025 | YTD AI & Cloud orders up 3X(2) | |||
(1) Serviceable addressable market. Nokia, analyst reports, excluding China/Russia; (2) YTD 2025 including Infinera from 1 January 2025. AI & Cloud includes AI and data center customers, neocloud, sovereign cloud, Tier 2/3 cloud providers. | |||||
14 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Our strategy evolution during 2025
Infinera acquisition
Nokia announced its intent to acquire Infinera, a leader in
optical networking solutions and advanced optical
semiconductors, on 26 June 2024 and the acquisition was
completed on 28 February 2025. Nokia acquired Infinera for a
purchase consideration of EUR 2.5 billion as described in more
detail on page 184. The transaction was aligned with Nokia’s
strategic direction and aimed to provide three primary strategic
benefits:
1.Increased scale in Optical Networks: The combination of
Nokia’s existing optical portfolio with Infinera’s has
created a business with the scale to better compete on all
fronts with the market leaders, and over time, improve
the operating margin and returns generated in the
business.
2.Expanded presence in North America: Nokia’s Optical
Networks business before the acquisition had a strong
position in many regions but the notable weakness was in
North America. This was the region of strength for Infinera
and the acquisition was highly complementary and creates a
stronger global presence.
3.Strengthened position in AI & Cloud: Nokia had only limited
presence in supplying the hyperscalers or even the broader AI &
Cloud markets. Infinera already had deep engagement with
hyperscalers and has built on that post acquisition.
Nokia moved quickly after the completion of the acquisition to
integrate the business. Within just over a month of closing the
acquisition, Nokia communicated to customers how the product
portfolio would evolve. The commercial momentum of the
combined optical business was strong through the rest of 2025.
Leadership transition
In February, Nokia announced a leadership transition that would
see Justin Hotard appointed as President and CEO, succeeding
Pekka Lundmark, with the change taking effect on 1 April 2025.
Following the leadership transition, Nokia entered a period of
strategic assessment. From the start the focus was on capital
allocation to ensure Nokia is investing sufficiently in the key
growth opportunities in the business but also driving for
efficiency across the organization.
While some conclusions of that process were already announced
earlier, Nokia’s new strategy was then fully communicated at
the Capital Markets Day in November 2025. The following pages
outline the strategy Nokia began implementing through 2025
and will focus on executing in 2026 and beyond.
Capital Markets Day 2025
On 19 November 2025, during our Capital Markets Day, we
announced our new strategy to position Nokia to lead in the AI-
driven transformation of networks and capture the value of the
AI supercycle. It laid out how we would take the lead in
connecting intelligence by becoming faster, more agile, more
focused and more execution-driven. Going forward we will be
guided by five strategic priorities:
▪Accelerate growth in AI & Cloud
▪Lead the next era of mobile connectivity with AI-native
networks and 6G
▪Grow by co-innovating with customers and partners
▪Focus capital where Nokia can differentiate
▪Unlock sustainable returns
To execute on our new strategic direction, we have simplified
Nokia’s operating model, effective from 1 January 2026. Nokia
has moved from four business groups to two primary operating
segments: Network Infrastructure and Mobile Infrastructure.
This simplification will streamline our organization, allowing us
to accelerate innovation, unlock operating leverage and move
faster.
Our ways of working will also change in order to reinforce our
strategic priorities. Going forward we are prioritizing clear roles,
accountability and the empowerment needed to execute at
pace. This will help us move faster, make better decisions, align
ourselves more closely with customers and focus our attention
on where we see the greatest opportunities. This
straightforward, cohesive, customer-focused approach has a
simple name: Team Nokia.
Nokia has already changed the world once. Now we have the
opportunity to change it again. This is the new chapter of Nokia:
focused, differentiated, trusted and already creating value in
the AI era.
15 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Our strategic
priorities in action
Strategic priority
01
Accelerate growth in
AI & Cloud
The AI supercycle is a multi-decade, multi-wave
technology transition. We are investing to grow in the
parts of our portfolio that power it, from data centers to
the intelligent edge. These investments, specifically in
Optical Networks and IP Networks, will help us to capture
the demand, growth and value that the AI supercycle is
generating.
Our acquisition of Infinera strengthened our position in
optical transport, enabling us to deliver ultra-fast, reliable
connectivity for hyperscale data centers and AI workloads.
Strategic partnerships with leading technology companies
such as NVIDIA, and investments in providers of sovereign
AI cloud infrastructure such as Nscale, ensure our
solutions are embedded at the heart of global innovation
and value creation.
AI network demand grid | ||||||||||||||||
Reliability | Downtime | Per‑port peak bandwidth | Mobile traffic | Latency | |||||||||||||
AI-native | Physical AI ▪Self-driving cars ▪General robotics | |||||||||||||||
Open | ||||||||||||||||
Trustworthy and secure | Perception AI ▪Speech recognition ▪Deep RecSys ▪Medical imaging | Generative AI ▪Digital marketing ▪Content creation | Agentic AI ▪Coding assistant ▪Customer service ▪Patient care | |||||||||||||
Extensible | Foundational AI ▪2012 AlexNet | |||||||||||||||
16 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Strategic priority
02 | Lead the next era of connectivity with AI-native networks and 6G |
We’re pioneering trusted, secure, AI-
powered networks.
Currently, most AI data traffic comes from
text-based applications such as large
language models (LLMs). In the future, that
traffic will become more diverse, based on
images, videos and physical devices with
embedded AI, such as augmented reality
glasses. In addition, AI is shifting network
traffic away from the traditional, downlink-
heavy model based on consuming content,
and towards a more balanced, uplink-and-
downlink model based on the creation,
interpretation and uploading of data. In the
AI supercycle networks must not only carry
this AI traffic but also use AI to optimize
performance, reliability, and energy
efficiency.
Our innovations in optical transport, IP
switching, and radio hardware and software
allow networks to meet these demanding
requirements, making it possible to achieve
ultra-low latency, massive capacity and
extreme scalability. Our AI-RAN partnership
with NVIDIA demonstrates our strategic
intent, while ongoing research and
standardization work mean we are already
shaping the qualities and capabilities of 6G.
By cloudifying core network functions,
collaborating with industry leaders and
developing the software that optimizes
networks for the reality of AI, we help our
customers to scale efficiently and securely
as AI traffic grows, agentic AI rolls out and
physical AI becomes more commonplace.
Strategic priority
03 | Grow by co-innovating with customers and partners |
Our best innovations are built together with
customers, partners and the broader
technology ecosystem. But we want to go
further. We will drive co-creation with our
ecosystem where customers or partner
competencies complement our own, aiming
to improve product performance, strengthen
our own competitiveness and further
differentiate us in a demanding market.
Recent examples of this approach include
partnership and investment in Nscale for AI
cloud infrastructure, and collaboration with
NestAI to advance autonomous systems in
defense.
These initiatives demonstrate our ability to
leverage our networking expertise while
integrating complementary capabilities from
partners.
Co-innovation accelerates time-to-market,
strengthens customer relationships, and
ensures solutions deliver measurable
outcomes. Nokia’s recently strengthened
partnership with NVIDIA demonstrates these
benefits – our largest US customer, T-Mobile
US, is an active participant in the
partnership, using it to drive and test AI-RAN
technologies and use cases.
From connecting people to connecting intelligence | ||||
Consumer AI traffic growth | Enterprise and industrial AI traffic growth | New network demands | ||
20% CAGR over the next decade | ~50% CAGR over the next decade | » Uplink intensity increasing » Traffic variability increasing » Latency sensitivity critical | ||
Synergy model |
Telecommunications,
Cloud, Industry,
Defense
Tailored
solutions
with
measurable
outcomes
Nokia
networking
expertise
Hyperscalers,
Industry Leaders,
Enterprises
16 | 2 | Nokia Annual Report on Form 20-F 2025 |
17 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Strategic priority
04 | Focus capital where Nokia can differentiate |
We will invest where we can truly differentiate
ourselves from our competitors, ensuring
resources are allocated to areas with clear
technological leadership and market
opportunity.
Elsewhere, we will partner with the best in
the industry to create more value. With our
Core portfolio, for example, we focused on
real software differentiation and partnered
with companies such as Red Hat instead of
building our own cloud stack.
We are pulling back from venture fund
investing in order to focus on selective and
strategic direct minority investments that
support or complement our commercial
endeavors and strategy to drive market
technology leadership.
Our strategy also takes account of
opportunities to achieve organic growth
through R&D, targeted capital expenditure
to expand critical capacity, and selective
mergers and acquisitions, such as our
acquisition of Infinera, that enhance our
capabilities in areas where we can lead. The
creation of our Portfolio Businesses segment
clarifies non-core activities and enables
evaluation of alternative ownership models.
Strategic priority
05 | Unlock sustainable returns |
We will empower Team Nokia, invest in AI-
enabled productivity and pursue consistent,
durable value for our shareholders.
Internally, our focus on operational
excellence, portfolio simplification and AI-
enabled productivity drives efficiency and
profitability across the organization.
Capital discipline supports balanced and
growing dividends and share buybacks, while
performance improvements and cost
efficiencies can reinforce market share
gains.
By executing our strategic priorities, we aim
to deliver earnings growth, cash generation
and total shareholder returns, further driving
innovation and value creation in the
technology ecosystem.
Capital allocation: approach and resulting opportunity | |||||
1 | Organic investment: R&D and CapEx | Focused | Near-term profit improvement | ||
2 | Inorganic investment: M&A and strategic investments | Prudent | |||
Long-term growth potential | |||||
3 | Dividends: recurring, stable and growing over time | ||||
Balanced | |||||
4 | Share buybacks: excess cash return | ||||
Creating long-term value for shareholders | ||||
Delivering profit expansion | Position Nokia for long-term growth | Maintaining disciplined approach to capital allocation | ||
18 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Framing Nokia’s future
Our strategy is clear, focused and
positions us to lead. To execute with
maximum efficiency, Nokia must align with
our customers - how they buy, how they
evolve and how they position themselves.
To better align with customer needs and accelerate innovation as
the AI supercycle increases demand for advanced connectivity,
Nokia announced that it would simplify its operating model into
two primary operating segments: Network Infrastructure and
Mobile Infrastructure. This reorganization took effect as of
1 January 2026. During 2025 Nokia still operated under the
previous structure as described on page 10.
The reorganization recognizes Network Infrastructure as a
growth segment, positioned to capitalize on the rapid, global AI
and data center build-out while continuing to innovate for its
telecommunications customer base. The segment consists of
three business units: Optical Networks, IP Networks and
Fixed Networks.
The new Mobile Infrastructure segment brings together Nokia’s
Core Software portfolio, Radio Networks portfolio and Technology
Standards, formerly Nokia Technologies. It will be positioned for
core and radio-network technology and services leadership to
lead the industry towards AI-native networks and 6G.
Nokia Defense is being launched as an incubation unit to serve
as the central go-to-market and R&D hub for Nokia’s defense
portfolio.
This new structure gives us the clarity and accountability we
need to execute with speed and discipline.
Nokia has conducted a thorough review of its business
portfolio. This process identified several units which, despite
some compelling growth opportunities, are not seen as core to
the future of the company’s strategy.
Nokia aims to conclude on a future direction for each unit
during 2026. During this transition, Nokia’s priority will be to
ensure continuity for customers and employees.
Portfolio Businesses include the following units:
▪Fixed Wireless Access CPE
▪Site Implementation and Outside Plant
▪Enterprise Campus Edge
▪Microwave Radio
Business structure: Two operating segments | Our customers | Creating long-term value for stakeholders | |||||||
Network Infrastructure Mobile Infrastructure | Telecommunication Providers AI & Cloud Mission Critical Enterprise & Defense Technology Licensees | Customer focus and co-innovation Embedding greater agility to position Nokia for long-term sales growth Driving profit growth through operational excellence and efficiency Maintain a disciplined approach to capital allocation | |||||||
19 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Our technology vision
Connecting
intelligence:
Enabling a
supercycle
LLMs, agents, autonomous vehicles – some of the
innovations to have emerged from the first phase of
the AI supercycle are already all around us. To fully
capture the value of that supercycle we must
understand what AI means for connectivity. AI will
blur the boundaries of the physical and the digital
worlds. The connected landscape will completely
change the demands placed on networks.
As a trusted Western provider of secure and advanced connectivity,
Nokia’s technology is powering the AI supercycle. Our technology
provides the infrastructure for AI systems to exchange and process data
in real time. This is vital but far from straightforward: the amount of
complex and diverse AI-native network traffic is increasing exponentially.
Connectivity that hits required KPIs for bandwidth, capacity and latency
will become a major value driver for telecommunication providers as data
flows both ways between data centers and AI-powered devices,
applications and autonomous vehicles.
20 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 •Strategy Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Enterprises must scale their adoption of AI. This means
networks must evolve from delivery channels to integral
components of the AI ecosystem. This is true not only to
capture opportunities enabled by 5G, but to prepare for 6G and
beyond.
But while grasping the potential of AI, enterprises also recognize
that the infrastructure enabling it must be secure and dependable.
Advanced connectivity allows for more devices, machines and
distributed systems to plug into networks. This increases the need
for trust, security and resilience across entire architectures.
Privacy, transparency, accountability and other responsible
principles must be prioritized throughout the development,
implementation and operation of AI models and tools.
For decades, Nokia technologies have driven the digitalization
of networks, from analog sound waves to bits, then to packet
switched technologies across radio, transport, IP switching
domains and the cloud edge. We have peerless visibility across
the network, based on unique datasets that allow us to train,
inference and fine-tune AI models built specifically for
networks.
In RAN, we recently reinforced our AnyRAN portfolio by
expanding our partnership with NVIDIA, bringing their GPUs into
our radio networks and embedding AI-based innovations into
the base bands. This brings GPU support to our proven field-
hardened software on the AI-RAN platform.
In IP routing, our portfolio is built on robust software sitting on
top of unique silicon, as well as a comprehensive portfolio of
data center switches. We are also leaders in Indium Phosphide
photonic integrated circuits, differentiating us from our
competitors. In fixed access, we recently launched the world's
first 50-gig PON and are getting ready for ultra-fast broadband.
In Optical Networks, our innovation in material sciences helps us
achieve previously impossible capacities across fiber optical
cables, doubling previous throughput and interface
performance. Our pluggables give operators and hyperscalers
the flexibility and scalability that the AI era demands.
Tomorrow’s networks won’t just carry data. They will
continuously adapt, protect and improve. AI powers the
networks, and the networks power AI. The benefits will be felt by
network owners and their customers: businesses, public
services and communities, everywhere.
Nokia Bell Labs | ||
Nokia Bell Labs is one of the world’s premier industrial research labs. Celebrating its centenary in 2025 – the same year as Nokia’s 160th anniversary – it brings together mathematicians, engineers, physicists, programmers and other experts to work on some of technology’s biggest challenges. Nokia Bell Labs researches the fields of network fundamentals, automation, semiconductors and devices, and AI and software systems. Current focus areas include: Physical AI: We are building Physical AI models that can interpret a physical scene in real-time. These models allow users to ask “what is happening now?” and issue natural language commands in a variety of settings; the models will reply with an understanding of the physical world and the people and objects that inhabit it. | Space communications: In March 2025, in collaboration with NASA, Intuitive Machines and Lunar Outpost, we deployed the first cellular network on the Moon. AI-native networks and 6G: Throughout 2025 we advanced the 6G ecosystem in multiple domains through co-creation with customers and partners. Work included the exploration of interoperable, multi-vendor AI in wireless networks with Qualcomm Technologies; 6G radio receiver leveraging AI to extend uplink range and enhance coverage with Rohde & Schwarz; and driving innovation in 6G energy efficiency and network resiliency with KDDI Research. |
Our R&D, standardization, and IP strength | |||||
Innovation leadership Strong innovation roadmaps and co-innovation with customers and partners. | ~€160bn | €4.9bn | |||
R&D investments since 2000 | R&D investments in 2025 | ||||
Standards leadership Ecosystem leadership through standardization. Nokia holds key positions across all major standardization and industry groups. | 8 000+ | 6G | |||
patent families declared as essential to 5G standards | founding member of Next G Alliance and leadership in Hexa-X-II and 6G- ANNA projects | ||||
Patent leadership Constant renewal of industry- leading portfolio. | 26 000+ | ||||
patent families with vast majority still in force in ten years’ time | |||||
21 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 Strategy •Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Our customers
Delivering
value,
consistently
Nokia’s technology is an essential enabler
of the AI supercycle – a revolution that is
already reshaping demand from our
customers.
Telecommunication providers | Telecommunication providers | Telecommunication providers | ||
70% | 70% | 15/20 | ||
of the world’s 5G standalone networks include Nokia core platforms | of fiber broadband connections in North America use Nokia networks | of the world’s fastest 5G networks rely on our technology | ||
AI & Cloud | AI & Cloud | Mission critical enterprises | ||
9/10 | 100+ | 1 000+ | ||
of the top global hyperscalers use Nokia’s optical networks | customer relationships | momentum growing in utilities, transportation, public sector, manufacturing and health care | ||
Our customers are contending with the accelerating growth of
AI traffic and the new demands that AI applications are placing
on network performance.
As a trusted global provider of secure and advanced
connectivity, our technology helps our customers capture the
opportunities of an AI-enabled future. We also co-create
solutions with those customers to make sure our product
performance and business competitiveness are second to none.
Our customers comprise four broad groups: Telecommunication
Providers, AI & Cloud, Mission Critical Enterprise & Defense, and
Technology Licensees. Nokia discloses the combination of AI &
Cloud providers and Mission Critical Enterprise in the breakdown of
sales by customer type on page 135. This section analyzes the
current situation with each of those customer groups.
22 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 Strategy •Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
01 | |
Our customers Telecommunication Providers | |
Serviceable addressable market: €69 billion, up 2% year-on-year. |
Telecommunication providers offer voice and/or data services
through fixed and/or mobile connectivity to consumers,
enterprises, governments and other customers. To stay
competitive, telecommunication providers must unlock new
value, improve performance and bring new services to their
customers, transforming legacy networks into high performance
and secure platforms ready for the demands of the AI supercycle.
Nokia estimates that in 2025 our serviceable addressable
market (SAM) related to telecommunication providers was EUR
69 billion, having increased by 2% from 2024 to 2025, excluding
the impact of changes in foreign currency exchange rates. We
saw moderate market growth in all segments driven by North
America, Middle East, Africa and India.
We expect the SAM to grow moderately, at a 1% compound annual
growth rate (CAGR) between 2025 and 2028 excluding the impact of
changes in foreign currency exchange rates. We expect that fiber, IP
routing and optical networks will grow faster than the overall
telecommunication provider market, driven by the continuous
demand for higher speed access technologies. Meanwhile we expect
RAN investments to track the overall telecommunication provider
market, as 5G continues to roll out. This rollout will drive growth in
software, including 5G Core and all software segments supporting
5G operability and monetization. Long term, we expect growth in the
RAN market following the rise of AI-enabled devices and the demand
for intelligent applications at the edge.
Having invested billions in spectrum, access technologies and
transport infrastructure in recent years, we expect
telecommunication providers to remain focused on the
monetization and cost optimization of their assets. They are
also considering divesting from passive infrastructure and
transitioning towards network sharing models, which might
reduce demand for network vendor equipment. We have also
seen some telecommunication providers adopt cloud-based
operational and business models, which may allow for new
market entrants, accelerate innovation and create market share
opportunities for technology leaders, including Nokia.
02 | |
Our customers AI & Cloud | |
Serviceable addressable market: €17 billion, up 28% year-on-year. |
AI & Cloud providers are building the physical infrastructure of
the AI economy at unprecedented speed. To meet rising demand,
they need ultra-high-performance connectivity to deliver high
capacity hyperscale connectivity across continents and within the
data center. Increasingly, they rely on Nokia to power their AI
factories in some of the most complex networks ever seen – nine
of the world’s top 10 hyperscalers use Nokia’s optical technology.
We estimate that in 2025, Nokia’s SAM related to AI & Cloud
providers was EUR 17 billion, having increased by 28%,
excluding the impact of changes in foreign currency exchange
rates from 2024 to 2025. This was driven by an acceleration of
data center networking roll-outs, especially by hyperscalers.
Our SAM for AI & Cloud providers consists mainly of optical and
IP networks, providing conduits for the data and compute that
power AI training and real-time inference. Within optical
networks, we expect that data center interconnect will drive
strong growth, while the rapid increase in data traffic required
by AI & Cloud providers will necessitate the adoption of higher
bit rate technologies in IP networks.
The largest global AI & Cloud providers are structurally important
parts of the telecommunications ecosystem. As well as building the
AI factories that enable the AI supercycle, they partner with
telecommunication providers to co-locate edge stacks on-premises
and they aim to run telecommunications network workloads on
their cloud infrastructure. As such, AI & Cloud providers are
customers, partners and potential competitors in some areas.
We forecast this market to grow at 26% CAGR until 2028, excluding
the impact of changes in foreign currency exchange rates.
23 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 Strategy •Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
03 | Our customers Mission Critical Enterprise & Defense |
Serviceable addressable market: €13 billion, up 11% year-on- year. |
Mission critical enterprises are those in which connectivity is a
strategic asset helping to deliver persistent connectivity for
operations that simply cannot fail. They include public utilities,
rail and transportation, emergency services and militaries.
Mission critical enterprises demand the best, most reliable, most
resilient connectivity on the market, often in challenging
locations and situations. From emergency response and grid
restoration to real-time train control, they require networks that
deliver always-on connectivity across wide and indoor areas,
ultra-low latency for instant command and automation, and
robust end-to-end security. This is why mission critical
enterprises are replacing siloed legacy systems with higher-
performance dual-use technologies, such as 5G, which can be
optimized for specific use cases while remaining more affordable
and delivering higher performance than bespoke technologies.
We see defense as a particularly important part of the mission
critical enterprise market. Militaries are accelerating their
spending, including on robust, resilient and secure
communications technologies, especially those that are dual-
use. Nokia is a trusted partner to the defense community and
an innovation leader in cloud, fixed and wireless networks. We
provide best-in-class dual-use technologies that can enhance
defense communications and accelerate the digital
transformation of defense assets.
We estimate that in 2025, Nokia’s SAM related to mission critical
enterprises was EUR 13 billion, having increased by 11%,
excluding the impact of changes in foreign currency exchange
rates from 2024 to 2025. This was driven by strong growth in
both Network Infrastructure, especially in data center networks,
and Mobile Networks.
We forecast this market to grow at 14% CAGR until 2028,
excluding the impact of changes in foreign currency exchange
rates.
04 | Our customers Technology Licensees |
Total revenue: €1.5 billion down 22% year-on-year. |
Technology licensees are companies that have agreed licenses
to use Nokia’s intellectual property in their products. This
includes the licensing of Nokia’s industry leading patent
portfolio and the licensing of technologies for integration into
consumer devices.
The vast majority of Nokia Technologies’ revenue comes
from patent licensing. We have patent licensing agreements
with most of the world’s major smartphone vendors and
with most Western car makers.
In addition to mobile devices and automotive, we run patent
licensing programs for consumer electronics, video services and
the wider IoT domain.
In total, we have more than 250 licensees across all our
programs, including companies like Apple, Samsung, Lenovo,
and Mercedes-Benz.
24 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Nokia in 2025 Strategy •Customers and partners Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Own manufacturing As of 31 December 2025, the production capacity for sites owned by us is noted below: | ||
Country | Location and products(1) | Productive capacity, net (m2)(2) |
Finland | Oulu: Base Stations | 11 500 |
India | Chennai: Base Stations, Radio Controllers and Transmission Systems, Fixed Networks | 15 500 |
The United States | Sunnyvale, California(3): Compound Semiconductor Wafer Fab and Test Facility | 2 300 |
The United States | Allentown, Pennsylvania(4): Production and Development of Advanced Packaging and Test of Photonic integrated Circuits | 2 400 |
(1)We consider the production capacity of our manufacturing network to be sufficient to meet the requirements of our business. The extent of utilization of our manufacturing facilities varies from plant to plant and from time to time during the year. None of these facilities is subject to a material encumbrance. During 2025, there were no site disposals. During 2024, Nokia disposed of the following sites: 1) Calais: submarine cables (France), 61 000 m2 net productive capacity. 2) Greenwich: submarine cables (United Kingdom), 11 000 m2 net productive capacity. 3) Hannover: radio frequency systems (Germany), 23 500 m2 net productive capacity. 4) Suzhou: radio frequency systems (China), 13 500 m2 net productive capacity. During 2023, Nokia disposed of the following sites: 1) Trignac: radio frequency systems (France), 7 300 m2 net productive capacity. 2) Meriden: radio frequency systems (The United States), 31 000 m2 net productive capacity. 3) Bydgoszcz: remanufacturing, product integration (Poland), 15 200 m2 net productive capacity. (2)Production capacity equals the total area allotted to manufacturing and to the storage of manufacturing-related materials. (3)Leased site. (4)In addition to the Allentown site owned by Nokia, as of February 2026, Nokia has leased an additional site in Allentown that is expected to expand the production capacity by approximately 1 800 m2. In addition to the above-mentioned sites, Nokia has in February 2026 completed the purchase of a previously leased facility in San Jose, California (the United States) on which a new Compound Semiconductor Wafer Fab is expected to begin production in 2027 and additional construction will continue to expand the capacity of the site through 2028. The productive capacity of the site is expected to reach 2 600 m2. Funding of the California expansion includes USD 40 million of the total USD 93 million in direct funding from the U.S. Department of Commerce under the CHIPS Act and other federal, state, and local incentives (including available investment tax credits). Up to USD 53 million of the CHIPS Act grant funding and federal (including available investment tax credits) and state incentives, may also be used for a potential project in Pennsylvania relating to photonics packaging and testing. For more details, please refer to Note 4.2. Property, plant and equipment in the consolidated financial statements. | ||
Our supply chain
Trusted relationships
Nokia’s diversified and sustainable supply chain is a strategic
asset for us, our customers and consumers of connectivity.
Our end-to-end operations include sourcing, demand and
supply planning, manufacturing, distribution and logistics. In
2025, we purchased over EUR 11 billion worth of products and
services from around 9 000 suppliers.
While the operating environment remained challenging in 2025,
we continued to develop risk and cost management capabilities,
robust partnerships and a regional approach.
Focus on risk and cost management
Demand for our products remains volatile, driven by macro-
economic conditions and growth in AI & Cloud infrastructure. To
address market fluctuations and supply-chain disruptions, we
work with customers to develop robust mid- and long-term
forecasts, enabling effective risk management, cost-efficiency
prioritization and enhanced resilience. Our rigorous inventory-
management practices mitigate the risk of excess stock.
We continued to develop our risk management capabilities,
supported by increased digitalization and automation.
Inventories and safety buffers were largely kept upstream on a
component level, increasing the flexibility to react to any
potential short-term product type changes.
Building resilience
We continuously optimize our manufacturing, distribution and
supplier networks, ensuring several manufacturing sources for
key volume products. We also leverage AI capabilities to better
develop our supply chain and factory network.
Our geographically dispersed manufacturing network consists
of both our own manufacturing (4% of the network, based on
number of sites) and contract manufacturing partners. Our
network is strategically located around the world, and each year
our spending percentage varies depending on regional demand.
In 2025, our spend spread was: Europe 28%, Asia Pacific,
Japan/India 44%, China 16% and the Americas 12%.
The Infinera acquisition gave Nokia the capability to build key
optical semiconductor components with its internal Indium
Phosphide (InP) wafer fab capability in California, US. InP
components are a key element of Optical transceivers and
transponders. Having capability in-house derisks a critical
element of our supply chain. In addition, Nokia has a site for the
advanced packaging and testing of these components.
Sustainability enablement and innovation
We expect suppliers to follow our Third-party Code of Conduct
and Nokia Supplier Requirements. These cover topics such as
environment, responsible minerals and modern slavery and are
embedded in our due-diligence and supplier support efforts.
In 2025, we implemented 788 supply chain audits. The findings
and corrective actions give us confidence that we are reducing
risks related to safety, labor and human rights. We established a
Sustainability criteria in our Supply Chain Finance framework,
benefitting suppliers with strong sustainability performance.
We are committed to cutting 50% of our absolute scope 1, 2
and 3 greenhouse gas emissions by 2030. We are also
committed to overall net-zero by 2040 across our value chain.
In 2025, we reached a 100% share of renewable electricity in
our own factories.
We have increased recycled content in mechanical parts and aim
to reach at least 50% recycled aluminum, copper, steel, and
polymerics by 2030. We further strengthened the traceability
and conflict-free status of relevant minerals in our supply chain.
25 | Nokia Annual Report on Form 20-F 2025 |
Corporate governance statement | 26 |
Regulatory framework | 26 |
Main corporate governance bodies of Nokia | 27 |
General Meeting of Shareholders | 27 |
Board of Directors | 28 |
Group Leadership Team and the President and CEO | 40 |
Risk management, internal control and internal audit functions at Nokia | 44 |
Main procedures relating to insider administration | 46 |
Auditor fees and services | 46 |
Remuneration | 47 |
Highlights | 47 |
Remuneration Report 2025 | 48 |
Letter from the Chair of the Personnel Committee of the Board | 48 |
Introduction | 50 |
Pay for performance | 51 |
Global peer group | 51 |
Remuneration of the Board of Directors | 52 |
Remuneration of the President and CEO | 53 |
Remuneration Policy | 58 |
The updated Remuneration Policy for the Board of Directors | 58 |
The updated Remuneration Policy for the President and CEO | 59 |
Remuneration governance | 62 |
Remuneration of the Nokia Group Leadership Team in 2025 | 63 |
26 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Corporate governance statement
“Strong governance is the foundation of Nokia’s long-term success. In 2025, our Board of Directors continued to drive strategic
direction as well as support and oversee management performance, promoting transparency and accountability across all operations.”
Highlights in our corporate governance during 2025 ▪Justin Hotard was announced as Nokia’s new President and CEO, joining us on 1 April. Hotard has broad experience with global technology companies, driving technology leadership, innovation and revenue growth. ▪In March 2025, we published Nokia’s first sustainability statement aligned with the EU Corporate Sustainability Reporting Directive and Finnish regulation, marking a significant step in our ESG journey. ▪At the 2025 Annual General Meeting (AGM) our shareholders reaffirmed their support for the Board’s proposals with a record high overall vote turnout. Our shareholders were also able to follow the meeting via webcast and submit verbal and written questions. ▪We have continued our proactive stance on AI governance through our robust AI governance framework at Nokia. We have defined our guiding AI principles through Nokia Bell Labs, and mobilized our cross-functional teams to ensure readiness for every regulatory milestone. ▪We have had the pleasure to engage with several of our largest shareholders during 2025 to discuss Nokia’s sustainability, remuneration and governance practices, and their expectations in these areas. We also welcomed NVIDIA as our shareholder in connection with our strategic partnership agreement, reinforcing our commitment to innovation and collaboration. | ||
This corporate governance statement is prepared in accordance
with Chapter 7, Section 7 of the Finnish Securities Markets Act
(2012/746, as amended) and the Finnish Corporate Governance
Code 2025 (the “Finnish Corporate Governance Code”).
Regulatory framework
Our corporate governance practices comply with Finnish laws
and regulations, our Articles of Association approved by the
shareholders and our corporate governance guidelines
(“Corporate Governance Guidelines”) adopted by the Board of
Directors. The Corporate Governance Guidelines reflect our
commitment to strong corporate governance. They include the
directors’ responsibilities, the composition and election of the
members of the Board and its Committees, and certain other
matters relating to corporate governance. We also comply with
the Finnish Corporate Governance Code adopted by the
Securities Market Association.
We follow the rules and recommendations of Nasdaq Helsinki
due to the listing of our shares on this exchange (ticker code
“NOKIA”). During 2025 we also complied with the rules of
Euronext Paris prior to delisting our shares on 31 December
2025. Furthermore, due to the listing of our American
Depositary Shares on the New York Stock Exchange (NYSE)
(ticker code “NOK”) and our registration under the U.S.
Securities Exchange Act of 1934, we follow the applicable U.S.
federal securities laws and regulations, including the Sarbanes-
Oxley Act of 2002 as well as the rules of the NYSE, in particular
the corporate governance standards under Section 303A of the
NYSE Listed Company Manual. We comply with these standards
to the extent such provisions are applicable to us as a foreign
private issuer.
To the extent compliance with any non-domestic rules would
conflict with the laws of Finland, we are obliged to comply with
Finnish laws and applicable regulations. There are no significant
differences in the corporate governance practices applied by
Nokia compared with those applied by U.S. companies under the
NYSE corporate governance standards with the exception that
Nokia complies with Finnish law with respect to the approval of
equity compensation plans. Under Finnish law, stock option
plans require shareholder approval at the time of their launch.
All other plans that include the delivery of company stock in the
form of newly issued shares or treasury shares require
shareholder approval at the time of delivery of the shares
unless shareholder approval has been granted through an
authorization to the Board, a maximum of five years earlier. The
NYSE corporate governance standards require that equity
compensation plans are approved by the company’s
shareholders. Nokia aims to minimize the necessity for, or
consequences of, conflicts between the laws of Finland and
applicable non-domestic corporate governance standards.
In addition to the Corporate Governance Guidelines, the
Committees of the Board have adopted charters that define
each Committee’s main duties and operating principles. The
Board has also adopted the Code of Conduct that applies to
directors, executives, and employees of Nokia, as well as
employees of Nokia’s subsidiaries and affiliated companies
(such as joint ventures) in which Nokia owns a majority of the
shares or exercises effective control. Furthermore, the Board
has adopted the Code of Ethics and Executive Officer Clawback
Policy applicable to our key executives, including the President
and CEO, CFO and Corporate Controller.
27 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Our main corporate governance bodies
Pursuant to the provisions of the Finnish Limited Liability
Companies Act (2006/624, as amended) (the “Finnish
Companies Act”), the legislation under which Nokia operates,
and Nokia’s Articles of Association, the control and
management of Nokia are divided among shareholders at a
general meeting, the Board, the President and CEO and the
Group Leadership Team, chaired by the President and CEO.
General Meeting of Shareholders
Nokia’s shareholders play a key role in corporate governance,
with our Annual General Meeting offering a regular
opportunity to exercise their decision-making power in Nokia.
In addition, at the meeting the shareholders may exercise
their right to speak and ask questions.
Each Nokia share entitles a shareholder to one vote at general
meetings of Nokia. The Annual General Meeting decides,
among other things, on the election and remuneration of the
Board, the adoption of annual accounts, the authorization for
the Board to distribute dividend or other assets, discharging
the members of the Board and the President and CEO from
liability, as well as on the election and fees of the external
auditor and the sustainability reporting assurer. The
Remuneration Policy is presented to the general meeting at
least every four years and the Remuneration Report is
presented annually. Resolutions of the general meeting
regarding the policy and the report are advisory in nature.
In addition to the Annual General Meeting, an Extraordinary
General Meeting may be convened when the Board considers
such a meeting to be necessary, or when the provisions of the
Finnish Companies Act mandate that such a meeting must be
held.
The Finnish Companies Act was amended in 2022 to enable
limited liability companies to hold hybrid and virtual-only
general meetings. A virtual general meeting, as defined by the
Finnish Companies Act, is a meeting held without a physical
meeting venue, where shareholders must be able to exercise
their shareholder rights in full by virtual means, including
voting in real time and asking questions orally during the
meeting.
The Finnish legislation can be considered a leading example of
protecting shareholders’ rights in virtual general meetings. In
the future, virtual general meetings are expected to improve
the position of nominee-registered shareholders residing
outside of Finland, who may have been unable to attend the
general meeting in person or be represented by proxy. The
reduced carbon footprint is also one of the benefits of virtual
general meetings.
Annual General Meeting 2025 and 2026
The Annual General Meeting 2025 took place at Finlandia Hall,
Helsinki, on 29 April 2025. We were pleased to see the high
number of votes cast representing approximately 61.4% of all
outstanding shares and votes. For the fourth consecutive year,
the turnout for the vote stood at a record-high level.
Corporate governance framework | ||||||||||
General Meeting of Shareholders | ||||||||||
External Audit Sustainability Assurance | Board of Directors Audit, Corporate Governance and Nomination, Personnel, Strategy, Technology Committees | Internal Audit | ||||||||
President and CEO Group Leadership Team | ||||||||||
A total of 106 746 shareholders representing approximately
3 304 million shares and 58.9% of all the shares and votes in
the Company participated the Annual General Meeting. On the
other hand, we once more saw a lower number of shareholders
attending in person. To facilitate shareholder participation and
digital options to follow the meeting, the Company offered
the opportunity to cast votes in advance and to follow the
meeting and ask questions through a live webcast, both in
writing and orally.
Nokia Corporation’s Annual General Meeting 2026 is planned to
be held on 9 April 2026. The Board’s proposals to the Annual
General Meeting 2026 were published on 29 January 2026.
28 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Board of Directors
The operations of Nokia are managed under the direction of the
Board, within the framework set by the Finnish Companies Act,
Nokia’s Articles of Association and any complementary rules of
procedure as defined by the Board, such as the Corporate
Governance Guidelines and the charters of the Board’s
Committees.
Election of the Board of Directors
Pursuant to our Articles of Association, we have a Board that is
composed of a minimum of seven and a maximum of 12 members.
The members of the Board are elected at least annually at each
Annual General Meeting. The candidates are considered individually
and those receiving the most votes shall be elected pursuant to
the Finnish Companies Act. The term of the Board members begins
at the close of the general meeting at which they were elected and
expires at the close of the following Annual General Meeting.
The Annual General Meeting convenes by 30 June annually.
Our Board’s leadership structure consists of a Chair and Vice
Chair elected annually by the Board and confirmed by the
independent directors of the Board upon the recommendation
of the Corporate Governance and Nomination Committee. The
Chair of the Board has certain specific duties as stipulated by
Finnish law and our Corporate Governance Guidelines. The Vice
Chair assumes the duties of the Chair of the Board in the event
the Chair is prevented from performing his or her duties.
The independent directors of the new Board confirm the
election of the members and chairs for the Board’s Committees
from among the Board’s independent directors upon the
recommendation of the Corporate Governance and Nomination
Committee and based on each Committee’s qualification
standards. These elections take place at the Board’s assembly
meeting following the general meeting.
The Corporate Governance and Nomination Committee aims to
continually renew the Board to have an efficient Board of
international professionals with a mix of skills, experience and
other personal qualities in line with the diversity principles
established by the Board. The Committee considers potential
director candidates based on the short-term and long-term
needs of the Company. In the process of identifying and selecting
the candidates matching these needs and desired profiles, the
Committee engages recruitment firms and external advisers.
Board independence
In accordance with the Corporate Governance Guidelines
adopted by the Board of Directors, the Nokia Board shall have a
majority of directors who meet the criteria for independence as
defined by the Finnish Corporate Governance Code and the
rules of the NYSE. All members of the Board’s Audit, Personnel,
Corporate Governance and Nomination Committees as well as
the majority of the Strategy and Technology Committees shall
be independent Directors under the same criteria.
The Board will monitor its compliance with these requirements
for director independence on an ongoing basis. Each
independent director is expected to notify the Chair of the
Corporate Governance and Nomination Committee, as soon as
reasonably practicable, in the event that his or her personal
circumstances change in a manner that may affect the Board’s
evaluation of such director’s independence. The Board of
Directors evaluates the independence of its members annually
and, in addition to this, on a continuous basis with the assistance
of the Corporate Governance and Nomination Committee.
Board composition
The Board has adopted diversity principles, demonstrating our
commitment to promoting a well-balanced Board composition.
These principles are embedded in our processes and practices
for identifying and proposing new candidates for the Board, as
well as for the re-election of current members.
For Nokia, Board composition is not static, but evolves over time
based on the relevant business objectives and future needs. We
view Board diversity as one of factors that strengthen the
Board’s overall effectiveness rather than an end in itself.
Diversity of our Board is considered from a number of aspects
including, but not limited to, skills and experience, tenure, age,
nationality, cultural and educational backgrounds, gender, as
well as other individual qualities.
29 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Current members of the Board of Directors
The Annual General Meeting held on 29 April 2025 elected ten
members to the Board for a term ending at the close of the next
Annual General Meeting. Timo Ahopelto, Sari Baldauf, Elizabeth
Crain, Thomas Dannenfeldt, Lisa Hook, Mike McNamara, Thomas
Saueressig, and Kai Öistämö were re-elected as Board
members. Pernille Erenbjerg and Timo Ihamuotila were elected
as new Board members. Following the meeting, the Board re-
elected Sari Baldauf to serve as Chair and Timo Ihamuotila as
Vice Chair of the Board for the same term.
In the current Board composition, 40% of the Board members
are female. There are currently five different nationalities and a
rather wide age and tenure range represented on the Board.
The current members of the Board are all non-executive and for
the term that began at the Annual General Meeting 2025, all
Board members were determined to be independent of Nokia
and its significant shareholders under the Finnish Corporate
Governance Code and the NYSE rules, as applicable.
In addition to biographical information of the Board members,
the table in the upper right corner sets forth the number of
shares and American Depositary Shares (ADSs) held by the
Board members. At 31 December 2025, they held a total of
1 092 401 shares and ADSs in Nokia, representing
approximately 0.02% of our total shares and voting rights
excluding shares held by the Nokia Group.
Each Board member has a unique skill set that supports Nokia's
business. The primary areas of expertise of the current and
proposed Board members are highlighted in the skills matrix
shown to the right.
Biographical details of the Board members
Gender | Year of Birth | Nationality | Tenure(1) | Independent of the company and major shareholders | Shares(2) | ADSs(2) | |
Sari Baldauf (Chair) | Female | 1955 | Finnish | 7 | Independent | 385 046 | |
Timo Ihamuotila (Vice Chair as of 29 April 2025) | Male | 1966 | Finnish | 0 | Independent | 119 624 | |
Timo Ahopelto | Male | 1975 | Finnish | 2 | Independent | 62 082 | |
Elizabeth Crain | Female | 1964 | American | 2 | Independent | 67 467 | |
Thomas Dannenfeldt | Male | 1966 | German | 5 | Independent | 166 802 | |
Pernille Erenbjerg | Female | 1967 | Danish | 0 | Independent | 17 840 | |
Lisa Hook | Female | 1958 | American | 3 | Independent | 78 290 | |
Mike McNamara | Male | 1964 | Irish | 1 | Independent | 42 664 | |
Thomas Saueressig | Male | 1985 | German | 3 | Independent | 74 322 | |
Kai Öistämö | Male | 1964 | Finnish | 3 | Independent | 78 264 | |
(1)Terms as Nokia Board member before the Annual General Meeting on 29 April 2025. (2)The number of shares or ADSs includes shares and ADSs received as director compensation as well as shares and ADSs acquired through other means. Stock options or other equity awards that are deemed as being beneficially owned under the applicable SEC rules are not included. | |||||||
Experience and primary skills of the Board members
Business Exec. role with P&L responsibility | External boardroom roles/ Governance | Finance and accounting | Legal/Public policy/ Compliance | Telecommunication providers market segment | Enterprise market segment | Technology | Cybersecurity | Environmental /Social issues | |
Current Board members | |||||||||
Sari Baldauf | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||
Timo Ihamuotila | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||
Timo Ahopelto | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
Elizabeth Crain | ✔ | ✔ | ✔ | ✔ | |||||
Thomas Dannenfeldt | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
Pernille Erenbjerg | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||
Lisa Hook | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||
Mike McNamara | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
Thomas Saueressig | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||
Kai Öistämö | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||
Proposed new Board member | |||||||||
Meredith Whittaker | ✔ | ✔ | ✔ | ✔ | ✔ |
30 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Director time commitments
The Corporate Governance and Nomination Committee
monitors closely the time commitments of the Board members
and annually reviews the Directors’ attendance rate at the
Board and Committee meetings to ensure they are able to
devote the appropriate time to the Company to carry out their
duties and responsibilities.
The Corporate Governance Guidelines of the Board include
numerical limits and a process for pre-clearance of new roles in
public companies. Directors should not serve on more than four
other boards of public companies in addition to the Nokia
Board, and on no more than three other boards of public
companies in addition to the Nokia Board, in cases where they
serve as board chair or lead independent director outside the
Nokia Board. The Audit Committee members should not serve
on more than two other audit committees of public companies
in addition to the Nokia Audit Committee.
No positions in excess of these limits may be held without prior
consent by the Chair of the Board and the Chair of the
Corporate Governance and Nomination Committee determining
that such positions would not impair the Director’s service on
the Nokia Board or Audit Committee.
The Corporate Governance and Nomination Committee will
annually, ahead of preparing the proposal on the Board
composition, review and assess the Directors’ current and
planned time commitments outside the Company to seek
affirmation that all Directors acknowledge the time
commitment principles set forth in the Corporate Governance
Guidelines of the Board.
The Committee also reviews under its related guidelines and
procedures the proposed new Director candidates’ time
commitments during the proposed term to ensure that they are
able to dedicate sufficient time to their responsibilities on the
Nokia Board.
Proposed members of the Board of Directors
Proposals of the Board of Directors to the Annual General
Meeting 2026 were published on 29 January 2026. On the
recommendation of the Corporate Governance and Nomination
Committee, the Board proposes to the Annual General Meeting
that the number of Board members be ten. The Board Chair Sari
Baldauf has informed the Committee that she will no longer be
available to serve on the Nokia Board of Directors after the
Annual General Meeting.
Consequently, on the recommendation of the Corporate
Governance and Nomination Committee, the Board proposes
that the following nine current Board members be re-elected as
members of the Nokia Board of Directors for a term ending at
the close of the next Annual General Meeting: Timo Ahopelto,
Elizabeth Crain, Thomas Dannenfeldt, Pernille Erenbjerg, Lisa
Hook, Timo Ihamuotila, Mike McNamara, Thomas Saueressig and
Kai Öistämö.
Furthermore, the Board proposes, on the recommendation of
the Corporate Governance and Nomination Committee, that
Meredith Whittaker, a United States citizen and President of
Signal Technology Foundation, be elected as a new member of
the Board for a term ending at the close of the next Annual
General Meeting. If elected, Ms. Whittaker is expected to bring
valuable experience in artificial intelligence, digital risk, and
technology governance, thereby strengthening the Board’s
oversight of emerging technologies.
The Corporate Governance and Nomination Committee will
propose in the assembly meeting of the new Board of Directors
that Timo Ihamuotila be elected to serve as Chair of the Board
and Thomas Saueressig be elected to serve as Vice Chair of the
Board, subject to their election to the Board of Directors.
The Board composition proposed to the Annual General Meeting
2026 has representation of five nationalities and 40% of the
proposed members are female.
All Board member candidates, apart from Meredith Whittaker,
have been determined to be independent of the Company and
its significant shareholders for the term beginning from the
Annual General Meeting 2026 under the Finnish Corporate
Governance Code and the rules of the NYSE. Ms. Whittaker has
agreed to lead a strategic advising effort for Nokia Bell Labs,
Nokia’s global research arm, for a fixed fee and period of 12
months. Due to the research-focused advisory role, Ms.
Whittaker has been determined non-independent of the
Company. Nokia has strict and well-defined conflict-mitigation
measures in place, including the exclusion of Ms. Whittaker from
any business activities and operational decisions. Further, if
elected, Ms. Whittaker will refrain from joining Board
Committees other than the Technology Committee. Any
possible changes impacting the Board candidates’
independence would be assessed separately as at the date of
the Annual General Meeting.
Nokia is proud to continue to be among the first Finnish listed
companies providing its shareholders with the opportunity to
consider each Director candidate individually since our Annual
General Meeting 2023.
31 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Biographical details of our current Board members
 |  |  |  | |||||||||||||||
C | P | S | C | S | P | T | P | S | ||||||||||
Chair Sari Baldauf | Vice Chair Timo Ihamuotila | Timo Ahopelto | Elizabeth Crain | |||||||||||||||
b. 1955 | b. 1966 | b. 1975 | b. 1964 | |||||||||||||||
Chair of the Nokia Board since 2020.
Nokia Board member since 2018.
Member of the Corporate Governance
and Nomination Committee, the
Personnel Committee and the Strategy
Committee.
Master of Business Administration and
Bachelor of Science, Helsinki School of
Economics and Business
Administration, Finland. Honorary
doctorates in Technology (Helsinki
University of Technology, Finland) and
Business Administration (Turku School
of Economics and Business
Administration and Aalto University
School of Business, Finland).
Executive Vice President and General
Manager, Networks Business Group,
Nokia 1998–2005. Various executive
positions at Nokia in Finland and in the
United States 1983–1998.
Member of the Board of Directors of
the Finnish Climate Leadership
Coalition (CLC). Senior Advisor of DevCo
Partners Oy.
Member of the Board of Technology
Industries of Finland 2021–2023. Member
of the Board of Directors of Aalto
University 2018–2023. Member of the
Supervisory Board of Mercedes-Benz
Group AG 2008–2023. Member of the
Supervisory Board of Deutsche Telekom
AG 2012–2018. Chair of the Board of
Directors of Fortum Corporation 2011–
2018. Member of the Board of Directors
of Akzo Nobel 2012–2017.
Vice Chair of Nokia Board since 2025.
Nokia Board member since 2025. Chair
of the Corporate Governance and
Nomination Committee and member of
the Strategy Committee.
Licentiate of Science (Finance), Helsinki
School of Economics, Finland. Master of
Science (Economics), Helsinki School of
Economics, Finland.
Chief Financial Officer and Member of the
Group Executive Committee of ABB Ltd,
2017–2026 (until 31 Jan 2026). Executive
Vice President and Chief Financial Officer,
Nokia 2009–2016, member of the Nokia
Group Leadership Team 2007–2016 and
Interim President of Nokia between
September 2013 and May 2014.
Executive Vice President, Sales and
Markets, Nokia 2008–2009. Executive Vice
President, Sales and Portfolio
Management, Mobile Phones, Nokia 2007.
Senior Vice President, CDMA Business
Unit, Mobile Phones, Nokia 2004–2007.
Vice President, Finance, Corporate
Treasurer, Nokia 2000–2004. Director of
Corporate Finance, Nokia 1999–2000.
Vice President of Nordic Derivatives Sales,
Citibank plc 1996–1999. Manager of
Dealing & Risk Management, Nokia 1993–
1996. Analyst, Assets and Liability
Management, Kansallis-Osake-Pankki
1990–1993.
Member of the Board of Directors, Kone
Oyj. Member of the Board of Directors,
Oras Invest Oy. Member of the Board of
Directors, Uponor Oyj 2013–2017.
Founding Partner of Lifeline Ventures.
Nokia Board member since 2023.
Member of the Personnel Committee
and the Technology Committee.
Master’s degree in Industrial
Management, Helsinki University of
Technology, Finland.
Head of Strategy and Business
Development, Blyk 2006–2009.
Founding CEO and Vice President of
Worldwide Commercial Operations, CRF
Health 2000–2006. Consultant,
McKinsey & Company 1999–2000.
Chair of the Board of Directors, Canatu
Plc (former Lifeline SPAC I Plc). Chair of
the Board, Finnish Startup Community.
Various other board positions in private
companies.
Member of the Board of Directors,
Solidium Oy 2017–2025. Member of
the Board of Directors, Digital
Workforce Services Plc 2016–2025.
Member of the Board of Finnish
Business and Policy Forum EVA and
Research Institute for Finnish Economy
(ETLA) 2015–2024. Member of the
Board of Directors, Tietoevry
Corporation 2017–2023. Chair of the
Board, Slush Conference 2018–2023
and member of the Board 2013–2018.
Member of the Board, Business Finland
2014–2020. Member of the Board,
Startup Foundation 2015–2018.
Committee Key | ||
A | udit | |
C | orporate Governance and Nomination | |
P | ersonnel | |
S | trategy | |
T | echnology | |
Nokia Board member since 2023. Chair
of the Strategy Committee and
member of the Personnel Committee.
MBA, the Wharton School at the
University of Pennsylvania,
Pennsylvania, United States. Bachelor
of Science in Economics, Arizona State
University, Arizona, United States.
Advisory Partner, the Consello Group.
Chief Operating Officer and Founding
Partner, Moelis & Company 2007–2023.
Managing Director, Office of the CEO at
UBS Investment Bank 2005–2007. Chief
Operating Officer and Chief
Administrative Officer, the UBS
Investment Banking Department
Americas franchise 2001–2005.
Investment Principal, McCown De
Leeuw & Company 2000–2001.
Investment Principal, Morgan Stanley
Capital Partners 1997–2000. Vice
President, Investment Banking, Merrill
Lynch & Co. 1994–1997. Associate,
Investment Banking, J.P. Morgan
Securities 1992–1994. Analyst, Merrill
Lynch & Co. 1988–1990.
Member of the Board of Directors and
Chair of the Audit Committee, Core
Scientific, Inc. Trustee Emeritus, The
Royal Academy Trust, London.
Member of the Board of Directors,
Exscientia Plc 2021–2024. Member of
the Board of Directors, Moelis &
Company 2017–2021.
32 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Biographical details of our current Board members continued
 |  |  | |||||||||||
A | P | A | C | A | S | ||||||||
Thomas Dannenfeldt | Pernille Erenbjerg | Lisa Hook | |||||||||||
b. 1966 | b. 1967 | b. 1958 | |||||||||||
Nokia Board member since 2020. Chair
of the Personnel Committee and the
Audit Committee.
Degree in Mathematics, University of
Trier, Germany.
Chief Financial Officer, Deutsche
Telekom AG 2014–2018. Chief Financial
Officer, Deutsche Telekom AG’s
German operations 2010–2014.
Various operational positions, Deutsche
Telekom AG 1992–2010.
Member of the Board of Directors and
Chair of the Compensation Committee,
T-Mobile US, Inc.
Chair of the Supervisory Board,
CECONOMY AG 2021–2025. Member of
the Advisory Board, axxessio GmbH
2020–2025. Member of the Board of
Directors, T-Mobile US, Inc. 2013–2018.
Member of the Board of Directors, Buy-
In 2013–2018. Chair of the Board of
Directors, T-Systems International
2013–2018. Chair of the Board of
Directors, EE Ltd. 2014–2016.
Nokia Board member since 2025.
Member of the Audit Committee and
the Corporate Governance and
Nomination Committee.
Master of Science in Economics, the
Copenhagen Business School, Denmark.
Group CEO and President, TDC Group
2015–2018. Group CFO and Deputy
CEO, TDC Group 2011–2015. Executive
Vice President, TDC Group 2003–2011.
Equity Partner, Deloitte 2002–2003.
CPA, Arthur Andersen 1987–2002.
Member of the Board of Directors and
Chair of the Audit Committee, Genmab
A/S. Member of the Board of Directors
and Chair of the Audit Committee, RTL
Group SA. Chair of the Board of
Directors, KK Wind Solutions A/S.
Member of the Board of Directors,
GlobalConnect A/S.
Member of the Board of Directors,
Millicom S.A. 2019–2024. Chair of the
Board of Directors, Viaplay Group AB
(publ) 2021–2023 and Board member
2020–2021. Member of the Board of
Directors, Nordea Bank Oyj 2017–2021.
Member of the Board of Directors,
DFDS A/S 2014–2018. Member of the
Board of Directors, Royal Danish
Theatre 2011–2015.
Adjunct professor at Copenhagen
Business School.
Committee Key | ||
A | udit | |
C | orporate Governance and Nomination | |
P | ersonnel | |
S | trategy | |
T | echnology | |
Nokia Board member since 2022.
Member of the Audit Committee and
the Strategy Committee.
Juris Doctorate, Dickinson School of
Law at Pennsylvania State University,
Pennsylvania, United States. Bachelor’s
degree in Public Policy, Duke University,
North Carolina, United States.
President and CEO, Neustar, Inc. 2010–
2018. COO, Neustar, Inc 2008–2010.
President and CEO, SunRocket, Inc.
2006–2007. Executive positions,
America Online, Inc. 2000–2004.
Previous positions as Partner, Brera
Capital Partners; managing director,
Alpine Capital Group, LLC.; various
executive positions, Time Warner, Inc.;
legal adviser to the Chairman of the
Federal Communications Commission;
and General Counsel, the Cable Group
at Viacom International, Inc.
Member of the Board of Directors, FIS
Global Inc. Lead Independent Director
of the Board of Directors, Philip Morris
International. Member of the Board of
Directors, Zayo Group. Chair of
Advisory Board, Trilantic Capital
Partners. Member of the US National
Security Telecommunications Advisory
Committee since 2012.
Member of the Board of Directors of
Ritchie Bros. Auctioneers Inc. 2021–2023;
Ping Identity Holding Corp. 2019–2022;
Partners Group Holdings 2020–2021;
Unisys Corp. 2019–2021; Neustar, Inc.
2010–2019; and RELX Plc 2006–2016.
33 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Biographical details of our current Board members continued
 |  |  | |||||||||||
A | T | C | T | S | T | ||||||||
Mike McNamara | Thomas Saueressig | Kai Öistämö | |||||||||||
b. 1964 | b. 1985 | b. 1964 | |||||||||||
Nokia Board member since 2024.
Member of the Audit Committee and
the Technology Committee.
Bachelor of Engineering, University
College Dublin, Ireland.
Strategic Advisor, Target Corporation
2022–2023. Executive Vice President
and Chief Information Officer, Target
Corporation 2015–2022. Chief
Information Officer, Tesco 2011–2015.
Director of Operations Development
and IT, Tesco 2006–2011. Chief
Technology Officer Tesco.com, Tesco
1999–2006. Senior Manager, Accenture
1991–1998. Computer Programmer,
British Telecom 1989–1991.
Member of the Board of Directors,
Hawaiian Holdings, Inc. 2020–2024.
Member of the Executive Board of SAP
SE and Global Head of Customer
Services & Delivery Board. Nokia Board
member since 2022. Member of the
Corporate Governance and Nomination
Committee and the Technology
Committee.
Degree in Business Information
Technology, University of Cooperative
Education in Mannheim, Germany. Joint
Executive MBA from ESSEC, France and
Mannheim Business School, Germany.
Global Head of Product Engineering,
SAP SE 2019–2024. Chief Information
Officer, SAP SE 2016–2019. Vice
President, Global Head of IT Services of
SAP SE 2014–2016. Previous positions
at SAP SE in Germany since 2007,
including assignment in the SAP Labs
Silicon Valley in Palo Alto, California,
United States.
Member of the Young Global Leaders of
the World Economic Forum. Member of
the Industry Advisory Board of the
Munich Institute of Robotics and
Machine Intelligence (MIRMI).
Committee Key | ||
A | udit | |
C | orporate Governance and Nomination | |
P | ersonnel | |
S | trategy | |
T | echnology | |
President and CEO of Vaisala
Corporation. Nokia Board member
since 2022. Chair of the Technology
Committee and member of the
Strategy Committee.
PhD in computer science, Tampere
University of Technology, Finland.
Chief Operating Officer of InterDigital,
Inc. 2018–2020. Executive Partner of
Siris Capital Group 2016–2018. EVP,
Chief Development Officer at Nokia
2010–2014. EVP, Devices at Nokia
2008–2010. EVP, Mobile Phones
Business Group at Nokia 2006–2008.
Several previous positions at Nokia
1991–2006.
Venture Partner of Kvanted Oy.
Chairman of the Board, Fastems Group
2014–2022. Member of the Board of
Directors, Sanoma Group 2010–2021.
Chairman of the Board, Helvar Oy Ab
2014–2020. Member of the Board of
Directors, Mavenir Plc 2017–2018.
Member of the Board of Directors,
Digia / Qt Group Oyj 2015–2018.
Member of the Board of Directors,
InterDigital, Inc. 2015–2018. Member of
the Board of Directors, oikian solutions
Oy 2014–2018. Chairman of the Board,
Tampere University 2013–2017.
Chairman of the Board of Directors,
Tekes 2012–2014. Member of the
Board of Directors, Nokian Tyres plc
2008–2010.
34 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Operations of the Board of Directors
The Board represents and is accountable to the shareholders of
Nokia. While its ultimate statutory accountability is to the
shareholders, the Board also takes into account the interests of
Nokia’s other stakeholders. The Board’s responsibilities are
active, and include the responsibility to evaluate the strategic
direction of Nokia, its management policies and the
effectiveness of the implementation of such by the
management on a regular basis.
It is the responsibility of the members of the Board to act in
good faith and with due care, so as to exercise their business
judgment on an informed basis, in a manner that they
reasonably and honestly believe to be in the best interests of
Nokia and its shareholders. In discharging this obligation, the
members of the Board must inform themselves of all relevant
information reasonably available to them. The Board and each
Board Committee also has the power to appoint independent
legal, financial or other advisers as they deem necessary. The
Company will provide sufficient funding to the Board and to
each Committee to exercise their functions and provide
compensation for the services of their advisers.
The Board has the responsibility for appointing and discharging
the President and Chief Executive Officer, Chief Financial Officer
and Chief Legal Officer. The Board is ultimately responsible for,
and its duties include, monitoring and reviewing Nokia’s
financial reporting process, the effectiveness of related control
and audit functions and the independence of Nokia’s external
auditor, as well as monitoring the Company’s statutory audit.
The Board’s responsibilities also include overseeing the
structure and composition of our top management and
monitoring legal compliance and the management of risks
related to our operations. In doing so, the Board may set annual
ranges and/or individual limits for capital expenditures,
investments and divestitures and other financial and non-
financial commitments that may not be exceeded without a
separate Board approval.
In risk management, the Board’s role includes risk analysis and
assessment in connection with financial, strategy and business
reviews, updates and decision-making proposals. Risk
management policies and processes are an integral part of
Board deliberations and risk-related updates are provided to
the Board on a recurring basis. For a more detailed description
of our risk management policies and processes, refer to the
“Risk management, internal control and internal audit functions
at Nokia — Risk management principles” section.
The Board approves and the independent directors of the Board
confirm the compensation and terms of employment of the
President and CEO, subject to the requirements of Finnish law,
upon the recommendation of the Personnel Committee of the
Board. The compensation and terms of employment of the
other Group Leadership Team members are approved by the
Personnel Committee upon the recommendation of the
President and CEO.
Board oversight of environmental and social activities and
governance practices
Under Nokia’s Corporate Governance Guidelines, the Board
evaluates Nokia’s environmental and social activities and
governance practices, related risks and target setting, as well as
their implementation and effectiveness across the Company.
In 2025, the Board reviewed the progress and key milestones
for the sustainability targets, sustainability results for 2024,
sustainability-related risks and opportunities, the evolving
sustainability requirements and expectations, investor feedback
and Nokia’s approach to related disclosures. The Board also
provided direction on environmental and supply‑chain priorities,
the refreshed social impact strategy, and company‑wide
engagement and enablement efforts. Additionally, in January
2025, the Board approved the targets related to climate change
in the long-term incentive plan for 2025 and approved the
CEO’s targets on health and safety and diversity which are
included in his short-term incentive plan for 2025.
The Board Committees monitor ESG developments and
activities in the Company in their respective areas of
responsibilities.
The Audit Committee reviews sustainability disclosures annually,
as well as the information on the use of conflict minerals in
Nokia’s products presented in the annual reports and regulatory
filings. During 2025, the Audit Committee’s responsibilities
included the oversight of sustainability reporting, including the
double materiality assessment, regulatory developments
related to mandatory sustainability related disclosures, as well
as oversight of the ethics and compliance program.
The Personnel Committee oversees human capital
management, including personnel policies and practices related
to Nokia’s culture, physical safety, employee well-being,
workforce composition, recruiting, development and retention.
In 2025, the Committee focused on workforce demographics
and conducted a people risk review, including physical safety,
employee survey results and succession planning.
The Personnel Committee recommended that the Board
continue to include GHG emission reduction as a metric in the
long-term incentive plan. Additionally, the Committee
emphasized the importance of fostering a strong health and
safety culture and maintaining workforce diversity. To reinforce
accountability, the Personnel Committee recommended that
the Board retain discretion to make downward adjustments to
short-term incentives if company performance in these areas
falls short during the annual incentive period.
The Corporate Governance and Nomination Committee
assesses and advises the Board on ESG-related activities and
practices, aiming to enhance the governance structure
supporting them.
The Technology Committee reviews how the Company’s ESG
strategy embeds into its technology strategy and roadmaps.
35 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Nokia group-level security is set up in four domains: product,
service, information, and customer security. While the oversight of
security risks and their management, including cybersecurity, is a
Board level responsibility in the Company, the detailed reviews
of the different security domains are allocated to the
Committees of the Board. These Committees are responsible for
monitoring and assessing security, including cybersecurity-
related risks and reporting to the Board in their respective areas
of responsibilities. The responsibilities of the Audit Committee
include oversight of the management and processes related to
IT and services security risks and maturity, including security-
related controls, compliance, incident process, disclosures and
risk management. The Technology Committee oversees product
and customer security risk management. The Committees
report to the Board on a regular basis and prepare
The Board also receives regular updates on cybersecurity.
Board oversight of Artificial Intelligence (AI)
The proliferation of AI technologies is creating new
opportunities for innovation. To ensure the responsible use of
AI, particularly with respect to ethics, privacy, and security, we
have established a comprehensive AI governance framework at
Nokia, including a central steering committee and a separate AI
governance board for group-level policies and procedures,
incident reporting, coordination and related communication.
The Board’s oversight of AI development is based on principles
similar to those we apply to other advanced technologies. The
Technology Committee of the Board has reviewed the AI
governance framework before its adoption and is responsible
for overseeing that compliance with all relevant regulatory
frameworks for AI has been effectively arranged. The
Technology Committee will also monitor and stay informed on
the progress and challenges of using AI, both at a strategic and
operational level. The Technology Committee reports to the
Board on AI governance at Nokia and on AI-related topics on a
regular basis. In carrying out this oversight, the Board and the
Technology Committee are supported by their relevant
technology, data and security expertise and access to internal
and external experts. This enables the Board to effectively
assess AI‑related opportunities and risks, including ethical,
regulatory and security considerations, and to appropriately
challenge management.
36 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Board evaluation
In line with our Corporate Governance Guidelines, the Board
conducts a comprehensive annual performance evaluation,
which also includes evaluation of the Board Committees’ work,
the Board and Committee Chairs and individual Board members.
The Board evaluation is conducted as a self-evaluation, typically
with a detailed questionnaire, while an external evaluator is
periodically engaged. Feedback is also requested from selected
members of management as part of the Board evaluation
process. The questions aim to measure and elicit feedback on
the processes, structure, accountability, transparency, and
effectiveness of the Board and to gain an overview of the issues
that are areas of excellence, areas where the Board thinks
greater focus is warranted and determining areas where
performance could be enhanced.
Each year, the results of the evaluation are discussed and
analyzed by the entire Board and improvement actions are
agreed based on such discussions. In 2025, the evaluation
process was carried out as a thorough self-evaluation for a third
consecutive year by using an external evaluation platform that
included both numeric assessments and the possibility to
provide more detailed written comments. The questionnaire
comprised areas such as Nokia purpose and strategy, Board
agenda and meetings, and Board composition and dynamics, as
well as information, reporting and risk management.
Meetings of the Board of Directors
The Board of Directors constitutes a quorum if more than half
of its members are present. The Board held 23 meetings
excluding Committee meetings during 2025. In total 14 (64%)
of these meetings were regular meetings in person or by video
connection. The other nine meetings were held in writing.
Directors’ attendance at the Board and Committee meetings in 2025 is set forth in the table below: | |||||
Board meeting attendance | Board and Committee meeting attendance(1) | ||||
Member | Meetings | % | Meetings | % | |
Sari Baldauf (Chair) | 23/23 | 100% | 41/41 | 100% | |
Timo Ihamuotila (Vice Chair as of 29 April 2025) | 12/14 | 86% | 19/21 | 90% | |
Søren Skou (Vice Chair until 29 April 2025) | 9/9 | 100% | 13/15 | 87% | |
Timo Ahopelto | 22/23 | 96% | 32/33 | 97% | |
Elizabeth Crain | 23/23 | 100% | 35/35 | 100% | |
Thomas Dannenfeldt | 22/23 | 96% | 36/38 | 95% | |
Pernille Erenbjerg (as of 29 April 2025)(2) | 10/14 | 71% | 16/21 | 75% | |
Lisa Hook | 23/23 | 100% | 36/36 | 100% | |
Mike McNamara | 23/23 | 100% | 34/34 | 100% | |
Thomas Saueressig | 22/23 | 96% | 31/32 | 97% | |
Carla Smits-Nusteling (until 29 April 2025) | 8/9 | 89% | 13/14 | 93% | |
Kai Öistämö | 21/23 | 91% | 31/33 | 94% | |
Average attendance (%) | 95% | 95% | |||
(1)Any director who so wishes may attend, as a non-voting observer, meetings of committees of which they are not members. Figures exclude directors attending committee meetings as non-voting observers. (2)In her first year on the Board, Pernille Erenbjerg had pre-existing scheduling conflicts, and subsequent changes to the Board’s meeting calendar further impacted her ability to attend all meetings during 2025. | |||||
Directors meet without management in connection with each
regularly scheduled meeting. According to Board practices,
meetings without management present are only attended by
non-executive directors. These meetings are chaired by the
non-executive Chair of the Board. In cases where the non-
executive Chair of the Board is unable to chair these meetings,
the non-executive Vice Chair of the Board chairs the meeting.
Additionally, the independent directors would meet separately
at least once annually. In 2025, all members of the Board were
non-executive and determined to be independent from Nokia
and significant shareholders under the Finnish Corporate
Governance Code and the rules of the NYSE.
Committees of the Board of Directors
In 2025, the Board of Directors had five Committees that
assisted the Board in its duties pursuant to their respective
Committee charters. The Board may also establish new or ad
hoc committees for detailed reviews or consideration of
particular topics to be proposed for the approval of the Board.
Any director who so wishes may attend, as a non-voting
observer, meetings of Committees of which they are not
members.
37 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
The Audit Committee
The following table sets forth the members of the Audit
Committee and their meeting attendance in 2025:
Attendance | ||
Member | Meetings | % |
Carla Smits-Nusteling (Chair until 29 April 2025) | 3/3 | 100% |
Thomas Dannenfeldt (Chair as of 29 April 2025) | 6/6 | 100% |
Pernille Erenbjerg (as of 29 April 2025) | 3/3 | 100% |
Lisa Hook | 6/6 | 100% |
Mike McNamara | 6/6 | 100% |
Average attendance (%) | 100% | |
The Committee consists of a minimum of three members of the
Board who meet all applicable independence, financial literacy
and other requirements as stipulated by Finnish law, the Finnish
Corporate Governance Code and the rules of the NYSE.
As of 29 April 2025, the Audit Committee has consisted of the
following four members of the Board: Thomas Dannenfeldt
(Chair), Pernille Erenbjerg, Lisa Hook and Mike McNamara.
The Committee is responsible for assisting the Board in the
oversight of:
▪the quality and integrity of the Company’s financial
statements, related disclosures and sustainability reporting;
▪the statutory audit of the Company’s financial statements,
related disclosures and sustainability reporting;
▪the qualifications and independence of the external auditor
and the sustainability reporting assurer;
▪the performance of the external auditor and the assurer
subject to the requirements of Finnish law;
▪the performance of the Company’s internal controls, risk
management and the assurance function;
▪the performance of the internal audit function;
▪the Company’s compliance with legal and regulatory
requirements, including the performance of its ethics and
compliance program;
▪the monitoring and assessment of any related party
transactions;
▪the pension liabilities and taxation of the Company; and
▪the processes and management related to the cybersecurity
of the Company, including information and services security.
In discharging its oversight role, the Audit Committee has full
access to all Company books, records, facilities and personnel.
The Audit Committee also maintains procedures for the receipt,
retention and treatment of complaints received by Nokia
regarding accounting, internal controls, auditing or
sustainability reporting matters and for the confidential,
anonymous submission by our employees of concerns relating
to accounting, auditing or sustainability reporting assurance
matters. Nokia’s disclosure controls and procedures, which are
reviewed by the Audit Committee and approved by the President
and CEO and the Chief Financial Officer, as well as the internal
controls over financial reporting, are designed to provide
reasonable assurance regarding the quality and integrity of
Nokia’s financial statements and related disclosures. For further
information on internal control over financial reporting, refer to
the section “Risk management, internal control and internal
audit functions at Nokia––Description of internal control
procedures in relation to the financial reporting process”.
Under the Finnish Companies Act, an external auditor and a
sustainability reporting assurer are elected by a simple majority
vote of the shareholders at the Annual General Meeting for one
year at a time. The Audit Committee prepares the proposal to
the shareholders for the election of the nominees, upon its
evaluation of the qualifications and independence of the
external auditor and the sustainability reporting assurer. Under
Finnish law, the fees of the external auditor and of the
sustainability reporting assurer are approved by the
shareholders by a simple majority vote at the Annual General
Meeting. The Committee prepares the proposals to the
shareholders in respect of the fees of the external auditor and
the sustainability reporting assurer, and approves their annual
fees under the guidance given by the Annual General Meeting.
For information about the fees paid to Nokia’s external auditor
and sustainability reporting assurer, Deloitte Oy, during 2025
refer to the section “Auditor fees and services”.
The Board has determined all current Committee members be
‘financially literate’ satisfying the applicable financial-
sophistication requirement by the New York Stock Exchange. In
addition, three Committee members, Thomas Dannenfeldt,
Pernille Erenbjerg and Lisa Hook, are determined to be ‘audit
committee financial experts’ as defined in the requirements of
Item 16A of the Annual Report on Form 20-F filed with the U.S.
Securities and Exchange Commission (SEC). All members of the
Audit Committee are “independent directors” as defined by
Finnish law, the Finnish Corporate Governance Code and in
Section 303A.02 of the NYSE Listed Company Manual.
The Audit Committee meets a minimum of four times a year.
The Committee meets separately with the representatives of
Nokia’s management, heads of the internal audit, and ethics and
compliance functions, and the external auditor in connection
with each regularly scheduled meeting. The head of the internal
audit function has, at all times, direct access to the Audit
Committee, without the involvement of management.
Audit Committee pre-approval policies and procedures
The Audit Committee of the Board is responsible, among other
matters, for oversight of the external auditor’s independence,
subject to the requirements of applicable legislation. The Audit
Committee has adopted a policy regarding an approval
procedure of audit services performed by the external auditors
of the Nokia Group and permissible non-audit services
performed by the principal external auditor of the Nokia Group
(the “Pre-approval Policy”).
Under the Pre-approval Policy, proposed services either: (i) may
be pre-approved by the Audit Committee in accordance with
certain service categories described in the Pre-approval Policy
(general pre-approval); or (ii) require the specific pre-approval
of the Audit Committee (specific pre-approval). The Pre-
approval Policy sets out the audit, audit-related, tax and other
services that have received the general pre-approval of the
Audit Committee. All other audit, audit-related (including
services related to internal controls and significant mergers and
acquisitions projects), tax and other services are subject to
specific pre-approval by the Audit Committee. All service
requests concerning generally pre-approved services are
submitted to an appointed Audit Committee delegate within
management, who determines whether the services are within
the generally pre-approved services. The Pre-approval Policy is
subject to annual review by the Audit Committee.
The Audit Committee establishes budgeted fee levels annually
for each of the categories of audit and non-audit services that
are pre-approved under the Pre-approval Policy, namely, audit,
audit-related, tax and other services. At each regular meeting of
the Audit Committee, the auditor provides a report in order for
the Audit Committee to review the services that the auditor is
providing, as well as the cost of those services.
38 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
The Corporate Governance and Nomination Committee
The following table sets forth the members of the Corporate
Governance and Nomination Committee and their meeting
attendance in 2025:
Attendance | ||
Member | Meetings | % |
Timo Ihamuotila (Chair as of 29 April 2025) | 4/4 | 100% |
Søren Skou (Chair until 29 April 2025) | 2/2 | 100% |
Sari Baldauf | 6/6 | 100% |
Pernille Erenbjerg (as of 29 April 2025) | 3/4 | 75% |
Lisa Hook (until 29 April 2025) | 2/2 | 100% |
Thomas Saueressig (as of 29 April 2025) | 4/4 | 100% |
Carla Smits-Nusteling (until 29 April 2025) | 2/2 | 100% |
Kai Öistämö (until 29 April 2025) | 2/2 | 100% |
Average attendance (%) | 96% | |
The Committee consists of three to five members of the Board
who meet all applicable independence requirements as
stipulated by Finnish law, the Finnish Corporate Governance
Code and the rules of the NYSE.
As of 29 April 2025, the Corporate Governance and Nomination
Committee has consisted of the following four members of the
Board: Timo Ihamuotila (Chair), Sari Baldauf, Pernille Erenbjerg
and Thomas Saueressig.
The Committee fulfills its responsibilities by:
▪actively identifying individuals qualified to be elected
members of the Board, as well as considering and evaluating
the appropriate level and structure of director remuneration;
▪preparing and evaluating the principles regarding Board
diversity;
▪preparing proposals to the shareholders on the director
nominees for election at the general meetings, as well as
director remuneration;
▪monitoring and assessing the directors’ current and planned
time commitments outside the Nokia Board and their
attendance at Nokia Board and Committee meetings;
▪monitoring significant developments in the law and practice
of corporate governance, including sustainability-related
governance trends and the directors’ duties and
responsibilities;
▪assisting the Board and each Committee of the Board in its
annual performance evaluation process, including
establishing criteria to be applied in connection with such
evaluations;
▪developing and administering Nokia’s Corporate Governance
Guidelines and giving recommendations regarding them to
the Board; and
▪reviewing Nokia’s disclosure in the corporate governance
statement.
The Committee has the power and practice to appoint a
recruitment firm to identify appropriate new director candidates.
The Personnel Committee
The following table sets forth the members of the Personnel
Committee and their meeting attendance in 2025:
Attendance | ||
Member | Meetings | % |
Thomas Dannenfeldt (Chair) | 5/5 | 100% |
Timo Ahopelto | 5/5 | 100% |
Sari Baldauf | 5/5 | 100% |
Elizabeth Crain | 5/5 | 100% |
Average attendance (%) | 100% | |
The Committee consists of a minimum of three members of the
Board who meet all applicable independence requirements as
stipulated by Finnish law, the Finnish Corporate Governance
Code and the rules of the NYSE.
As of 29 April 2025, the Personnel Committee has consisted of
the following four members of the Board: Thomas Dannenfeldt
(Chair), Timo Ahopelto, Sari Baldauf and Elizabeth Crain.
The Committee has overall responsibility for evaluating,
resolving and making recommendations to the Board regarding:
▪preparing the Remuneration Policy and the Remuneration
Report;
▪compensation and terms of employment of the Company’s
senior management;
▪human capital management;
▪all equity-based plans;
▪incentive compensation plans, policies and programs of the
Company affecting executives; and
▪possible other significant incentive plans.
The Committee is responsible for preparing the Remuneration
Policy, including Nokia’s compensation philosophy and
principles and ensuring that the Company’s compensation
programs are performance-based, designed to contribute to
long-term shareholder value creation in line with shareholders’
interests, properly motivate management and are aligned with
the Remuneration Policy, as well as supporting overall
corporate strategies.
The Committee also oversees human capital management and
periodically reviews the personnel policies and practices of
Nokia related to human capital management and social
responsibilities relating to its employees, including Company
culture, physical safety, employee wellbeing, morale, diversity,
talent management and development, succession planning,
resourcing, recruiting, attrition, retention and employee
engagement.
39 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
The Strategy Committee
The following table sets forth the members of the Strategy
Committee and their meeting attendance in 2025:
Attendance | ||
Member | Meetings | % |
Elizabeth Crain (Chair) | 7/7 | 100% |
Sari Baldauf | 7/7 | 100% |
Thomas Dannenfeldt (until 29 April 2025) | 3/4 | 75% |
Lisa Hook | 7/7 | 100% |
Timo Ihamuotila (as of 29 April 2025) | 3/3 | 100% |
Søren Skou (until 29 April 2025) | 2/4 | 50% |
Kai Öistämö (as of 29 April 2025) | 3/3 | 100% |
Average attendance (%) | 91% | |
The Committee consists of a minimum of three members of the
Board and the majority of them shall meet all applicable
independence requirements as stipulated by the Finnish
Corporate Governance Code and the rules of the NYSE.
As of 29 April 2025, the Strategy Committee has consisted of
the following five members of the Board: Elizabeth Crain (Chair),
Sari Baldauf, Lisa Hook, Timo Ihamuotila and Kai Öistämö.
The Committee is established by the Board primarily for the
purpose of assisting the Board with respect to various strategic
initiatives related to developing Nokia’s corporate and business
strategies and capturing the strategic opportunities identified
under them.
The Committee’s duties may include:
▪overseeing the preparation of strategies related to strategic
initiatives;
▪reviewing the prospective alternatives for the strategic
initiatives identified by management;
▪acting as a preparatory body for assessing the specific
strategic initiatives requiring the Board’s decision;
▪overseeing the implementation of the strategic initiatives;
and
▪evaluating the outcomes of the strategic initiatives, focusing
on their implementation, financial results and long-term
success.
The Technology Committee
The following table sets forth the members of the Technology
Committee and their meeting attendance in 2025:
Attendance | ||
Member | Meetings | % |
Kai Öistämö (Chair) | 5/5 | 100% |
Timo Ahopelto | 5/5 | 100% |
Mike McNamara | 5/5 | 100% |
Thomas Saueressig | 5/5 | 100% |
Average attendance (%) | 100% | |
The Committee consists of a minimum of three members of the
Board and the majority of them shall meet applicable
independence requirements as stipulated by Finnish law, the
Finnish Corporate Governance Code and the rules of the NYSE
and have such skills in innovation, technology and science
matters as the Board determines adequate from time to time.
As of 29 April 2025, the Technology Committee has consisted
of the following four members of the Board: Kai Öistämö (Chair),
Timo Ahopelto, Mike McNamara and Thomas Saueressig.
In its dialogue with and provision of feedback and advice to the
management, the Committee will periodically review:
▪the Company’s technological competitiveness and new
strategic technology initiatives as well as market trends,
considering both organic and inorganic options to retain or
attain competitiveness;
▪the Company’s approach to major technological innovations;
▪key technology trends that may result in disruptive threats
or opportunities and proposals on how to adequately
address them;
▪high-level risks and opportunities associated with the
Company’s Research and Development Programs;
▪embedding sustainability in the technology roadmaps; and
▪the processes and management related to the cybersecurity
of the Company, including product and customer security.
40 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Group Leadership Team and
the President and CEO
The Group Leadership Team is responsible for the operative
management of Nokia. The Group Leadership Team is chaired
by the President and CEO. The President and CEO’s rights and
responsibilities include those allotted to the President under
Finnish law.
At 31 December 2025, the Group Leadership Team consisted of
12 members, including the President and CEO, representing five
different nationalities. In total 25% of the Group Leadership
Team members were female. The table shown to the right sets
forth the biographical information of the Group Leadership
Team members.
At 31 December 2025, a total of 2 117 191 Nokia shares and a
total of 275 368 American Depositary Shares (ADSs) were held
by the Group Leadership Team members. These holdings
represented approximately 0.04% of our total shares and
voting rights excluding shares held by the Nokia Group. The
number of shares includes shares received as compensation as
well as shares acquired through other means. Stock options or
other equity awards that are deemed as being beneficially
owned under the applicable SEC rules are not included in the
table.
Summary of changes in the Group Leadership Team in 2025 | |
The following members stepped down from the Group Leadership Team: ▪Pekka Lundmark, President and Chief Executive Officer, as of 31 March 2025; ▪Lorna Gibb, Chief People Officer, as of 13 June 2025; ▪Federico Guillén, President of Network Infrastructure, as of 30 June 2025; ▪Nishant Batra, Chief Strategy and Technology Officer, as of 30 September 2025; and ▪Tommi Uitto, President of Mobile Networks, as of 31 December 2025. | The Group Leadership Team was complemented with five new appointments: ▪Justin Hotard, President and Chief Executive Officer, effective 1 April 2025; ▪Victoria Hanrahan, Chief of Staff to Nokia’s President and CEO, effective 16 June 2025; ▪David Heard, President of Network Infrastructure, effective 1 July 2025; ▪Pallavi Mahajan, Chief Technology and AI Officer, effective 1 October 2025; ▪Konstanty Owczarek, Chief Corporate Development Officer, effective 1 October 2025; and ▪Furthermore, on 10 November 2025, Nokia announced the appointment of Kristen Pressner as Chief People Officer, to take effect during the second quarter of 2026. |
Name | Position | Gender | Year of birth | Nationality | On GLT since | Shares | ADSs |
Justin Hotard | President and CEO | Male | 1974 | American | 2025 | 609 274 | |
Louise Fisk | Chief Communications Officer (currently Chief Communications and Marketing Officer) | Female | 1976 | British | 2024 | 52 063 | |
Patrik Hammarén | President of Nokia Technologies (currently President of Technology Standards) | Male | 1982 | Finnish | 2024 | 40 387 | |
Victoria Hanrahan | Chief of Staff to the President and CEO | Female | 1988 | American | 2025 | — | |
Mikko Hautala | Chief Geopolitical and Government Relations Officer | Male | 1972 | Finnish | 2024 | 2 800 | |
David Heard | President of Network Infrastructure | Male | 1968 | American | 2025 | 275 368 | |
Pallavi Mahajan | Chief Technology and AI Officer | Female | 1977 | Indian/American | 2025 | — | |
Esa Niinimäki | Chief Legal Officer (currently Chief Legal and Administrative Officer) and interim Chief People Officer | Male | 1976 | Finnish | 2023 | 79 281 | |
Konstanty Owczarek | Chief Corporate Development Officer | Male | 1979 | American | 2025 | — | |
Raghav Sahgal | President of Cloud and Network Services (currently Chief Customer Officer) | Male | 1962 | American | 2020 | 719 174 | |
Tommi Uitto | President of Mobile Networks | Male | 1969 | Finnish | 2019 | 256 042 | |
Marco Wirén | Chief Financial Officer | Male | 1966 | Finnish/Swedish | 2020 | 358 170 |
41 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Biographical details of the current members of the Nokia Group Leadership Team
 |  |  |  | |||
Justin Hotard | Louise Fisk | Patrik Hammarén | Victoria Hanrahan | |||
b. 1974 | b. 1976 | b. 1982 | b. 1988 | |||
President and Chief Executive Officer
(CEO) since 2025.
MBA from the MIT Sloan School of
Management, Massachusetts, United
States. Bachelor of Science in Electrical
Engineering from the University of Illinois
Urbana-Champaign, Illinois, United
States.
Executive Vice President and General
Manager, Data Center & AI Group, Intel
2024–2025. Executive Vice President
and General Manager, High-
Performance Computing, AI & Labs,
HPE, 2021–2024. Senior Vice President,
President and Managing Director of HPE
Japan and China, HPE 2019–2020.
Senior Vice President and General
Manager, Volume Global Business Unit,
HPE 2017–2019. Vice President,
Strategy, Planning & Operations, Data
Center Infrastructure Group, HPE 2015–
2016. President and General Manager,
Global Small Business Cloud Platform,
NCR Corporation 2013–2014. VP,
Corporate Development, NCR Corp.
2012–2013. Vice President and General
Manager, NCR Entertainment, NCR Corp.
2010–2012. Senior Director, Mergers &
Acquisitions, NCR Corp. 2007–2010.
Director, Product Management, Symbol
Technologies 2005–2007. Senior
Manager, Corporate Development,
Symbol Technologies 2003–2005.
Business Development Analyst, Surface
Logix 2002–2003. Senior Systems
Engineer, Motorola Inc. 1996–2000.
Chief Communications and Marketing
Officer (CCMO). Group Leadership
Team member since 2024. Joined
Nokia in 2020.
Advanced executive leadership
development, DUKE University, North
Carolina, United States. Advanced
global leadership, INSEAD business
school, France. Post graduate diploma
in PR & Journalism, University of Wales,
College of Cardiff, United Kingdom. BA
Hons in Communication, University of
Wales, College of Cardiff, United
Kingdom.
Vice President, Corporate Affairs
Programs & Corporate
Communications, Nokia 2020–2024.
Global leadership team,
Communications and Marketing
Director, BAE Systems Applied
Intelligence 2015–2019. Head of Global
Communications, Investor Relations
and Marketing, Innovation Group 2012–
2015. Global PR Director & Deputy
Communications Director, Logica
2006–2012. Partner & Associate
Director, LEWIS Communications 1999–
2006.
Trustee of the Williams Syndrome
Foundation.
President of Technology Standards.
Group Leadership Team member since
2024. Joined Nokia in 2007.
Master of Law, University of Helsinki,
Finland. Master of Science (Information
Networks), Aalto University, Finland.
Chief Licensing Officer Wireless
Technologies, Nokia Technologies
2024–2024. Vice President, Head of IoT
Licensing Program, Nokia Technologies
2022–2024. Head of Patent Licensing
Greater China, Nokia Technologies
2020–2022. Director, Patent Licensing,
Nokia Technologies 2018–2020.
Manager, Patent Licensing, Nokia
Technologies 2014–2018. Senior Legal
Counsel, HERE, Nokia 2013–2014. Legal
Counsel, HERE Nokia 2013–2013. Legal
Counsel, Central and East Europe, Nokia
2012–2013. Legal Counsel, Central
Europe, Nokia 2011–2012. Legal
Counsel, MeeGo & Open Source, Nokia
2007–2011.
Chief of Staff to Nokia’s President and
CEO. Group Leadership Team member
since 2025. Joined Nokia in 2025.
MBA from the University of Houston,
Texas, United States. Bachelor of
Business Administration, Texas A&M
University, Texas, United States.
Vice President, Global Marketing - High
Performance Compute & Artificial
Intelligence, HPE 2023–2024. Director,
Chief of Staff, HPC & AI Business Unit,
HPE 2021–2023. Manager, Marketing
Strategy, HPE 2019–2021. Senior
Product Marketing Manager, HPE 2015–
2019. Product Marketing Manager,
Neuromodulation Division, St. Jude
Medical 2013–2015. Marketing
Communications Coordinator, St. Jude
Medical 2010–2013.
42 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Biographical details of the current members of the Nokia Group Leadership Team continued
 |  |  |  | |||
Mikko Hautala | David Heard | Pallavi Mahajan | Esa Niinimäki | |||
b. 1972 | b. 1968 | b. 1977 | b. 1976 | |||
Chief Geopolitical & Government
Relations Officer, and Chairman, Nokia
Defense. Group Leadership Team
member since 2024. Joined Nokia in
2024.
Master of Social Sciences (Political
history), University of Helsinki, Finland.
Master of Philosophy (Slavic languages),
University of Helsinki, Finland.
Ambassador, Head of Mission, Embassy
of Finland, Washington DC 2020–2024.
Ambassador, Head of Mission, Embassy
of Finland, Moscow 2016–2020. Foreign
Policy Adviser to the President, Office
of the President of the Republic of
Finland, Helsinki 2012–2016. Minister,
Deputy Head of Mission, Embassy of
Finland, Moscow 2011–2012.
Diplomatic Adviser to the Minister of
Foreign Affairs, Ministry for Foreign
Affairs, Helsinki 2007–2011. First
Secretary, Permanent Representation
of Finland to the EU, Brussels 2002–
2007. Attaché, Ministry for Foreign
Affairs, Helsinki 2001–2002. Attaché,
Embassy of Finland, Kyiv 1999–2001.
Visa Officer, Embassy of Finland, Kyiv
1998–1999.
Board Member Support for Finnish
Society (SYT) foundation. Chairman of
the Council, The John Morton Center
for North American Studies, University
of Turku, Finland.
President of Network Infrastructure.
Group Leadership Team member since
2025. Joined Nokia in 2025.
Master’s degree in Management
Science (Sloan), Stanford University
Graduate School of Business, California,
United States. Master of Business
Administration (MBA), University of
Dayton, Ohio, United States. Bachelor
of Arts, Production & Operations
Management, Ohio State University,
Ohio, United States.
Chief Growth Officer at Network
Infrastructure, Nokia February–June
2025. Chief Executive Officer, Infinera
2020–2025. Chief Operations Officer
and various senior positions, Infinera
2017–2020. Cloud Service Provider
(Executive Consultant - External), Dell
2015-2016. President, Network &
Service (Software) Enablement, JDSU
2010–2015. Chief Operating Officer,
BigBand Networks 2007–2010.
President & CEO, Somera
Communications (Jabil) 2004–2006.
President, Switching Systems, Tekelec
(Oracle) 2003–2004. President & CEO,
Santera Systems Inc. (Oracle) 2003–
2004. General Manager & Vice
President Wireless, various positions,
Alcatel Lucent 1996–2000. Vice
President of Access, AT&T (Lucent
Technologies) 1990–1996.
Chief Technology and AI Officer. Group
Leadership Team member since 2025.
Joined Nokia in 2025.
Bachelor of Technology degree in
Computer Science, the National
Institute of Technology Kurukshetra,
India. Master degree in Science in
Software Systems from Birla Institute
of Technology and Science, India.
Advanced Leadership Program at
Stanford University Graduate School of
Business, California, United States.
Corporate Vice President & General
Manager, Data Center and AI Group,
Intel 2024–2025. Corporate Vice
President & GM, Network and Edge
Group, Intel 2022–2024. Vice President,
Solutions Engineering & Customer
Experience, High Performance
Compute, Hewlett Packard Enterprise
2021–2022. Vice President, Head of
Software Engineering for Compute,
Hewlett Packard Enterprise 2020–2021.
Vice President Engineering, Juniper
Networks 2016–2019. Several senior
positions, Juniper Networks 2003–
2016. Technical Lead, BayPackets
2001–2003. Research Engineer, Centre
for Development of Telematics (C-DOT)
1998–2001.
Chief Legal and Administrative Officer,
Interim Chief People Officer and Board
Secretary. Group Leadership Team
member since 2023. Joined Nokia in
2007.
Master of Laws, Fordham University,
School of Law, New York, United States.
Master of Law, University of Helsinki,
Finland.
Interim Chief Legal Officer, Nokia 2022–
2023. Deputy Chief Legal Officer, Vice
President, Corporate Legal and Board
Secretary, Nokia 2018–2023. General
Counsel, Global Services, Nokia 2015–
2018. Head of Corporate Legal, Nokia
Solutions and Networks and Head of
Finance & Labor Legal, Nokia 2013–
2015. Senior Legal Counsel, Legal and
IP, India, Middle East and Africa, Nokia
2012–2013. (Senior) Legal Counsel,
Corporate Legal, Nokia 2007–2011.
Group Legal Counsel, Metsä Group
2005–2007. Associate Lawyer, White &
Case LLP 2003–2005.
Chair of Legal Affairs Committee of the
Confederation of Finnish Industries.
Member of the Market Practice Board
of Securities Market Association and
the Policy Committee of the Directors’
Institute Finland.
43 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Biographical details of the current members of the Nokia Group Leadership Team continued
 |  |  | ||
Konstanty Owczarek | Raghav Sahgal | Marco Wirén | ||
b. 1979 | b. 1962 | b. 1966 | ||
Chief Corporate Development Officer
(CCDO). Group Leadership Team member
since 2025. Joined Nokia in 2025.
Master’s degree in Finance and Banking,
University of Lodz, Poland. Bachelor’s
degree in Business Administration, Emory
University, Georgia, United States.
Managing Partner and Founder, KJO
Advisors LLC 2024–2025. Chief
Strategy Officer and Chief Operating
Officer, High Performance Computing,
AI & Research business unit, Hewlett
Packard Enterprise 2022–2024. Head of
Strategy and Innovation and Head of
New Markets, AIG Life, American
International Group, Inc. 2020–2022.
Head of Mergers & Acquisitions and
Strategy, AIG Life & Retirement,
American International Group, Inc.
2018–2020. Director, AIG Corporate
Development, American International
Group, Inc. 2015–2017. Founding
Partner, Strategic Risk Capital Advisors,
LLC 2009–2015. Director, Integrated
Finance Ltd. (IFL) / Marakon Associates
2004–2009. Analyst, Technology, Media
and Telecommunications unit, Bear
Stearns & Co. 2003–2004.
Chief Customer Officer. Group
Leadership Team member since 2020.
Joined Nokia in 2017.
Master of Science in Computer Systems
Management, University of Maryland,
Maryland, United States. Bachelor of
Science in Computer Engineering,
Tulane University, Louisiana, United
States. Executive Business Certificate in
General Management, Harvard
University, Massachusetts, United
States.
President of Nokia Enterprise 2020.
Senior Vice President, Nokia Software
2017–2020. President, NICE Ltd. Asia
Pacific and the Middle East 2010–2017.
Advisory Board Member, Orga Systems
2010–2014. Vice President,
Communications Business Unit, Asia
Pacific & Japan, Oracle 2008–2010.
Chief Business Officer, Comverse
2005–2006. Executive Vice President,
Asia Pacific, CSG 2002–2005. Vice
President, Software Products Group
Asia Pacific, Lucent Technologies 2000–
2002.
Chief Financial Officer (CFO). Group
Leadership Team member since 2020.
Joined Nokia in 2020.
Master’s degree in Business
Administration, University of Uppsala,
Sweden. Studies in management and
strategic leadership, including at Duke
Business School, North Carolina, United
States; IMD, Switzerland and Stockholm
School of Economics, Sweden.
President, Wärtsilä Energy and
Executive Vice President, Wärtsilä
Group 2018–2020. Executive Vice
President and CFO, Wärtsilä Group
2013–2018. Executive Vice President
and CFO, SSAB Group 2008–2013. Vice
President, Business Control, SSAB
Group 2007–2008. CFO, Eltel Networks
2006–2007. Vice President of Business
Development, Eltel Networks 2004–
2005. Head of Service Division, Eltel
Networks 2003–2004. Vice President,
Corporate Development, Eltel Networks
2002–2003. Vice President, Strategy &
Business Development, NCC Group
1999–2002. Head of Strategic Planning,
NCC Group 1998–1999. Group
Controller, NCC Group 1996–1998.
Vice Chair of the Board of Directors of
Neste Corporation 2019–2023 and
member of the Board 2015–2023.
44 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Risk management, internal control and
internal audit functions at Nokia
Risk management principles
We have a systematic and structured approach to risk
management. It covers strategic, operational, financial,
compliance and reputational risks and opportunities, including
potentially material impacts to people and the environment. The
principles documented in the Nokia Enterprise Risk Management
(ERM) Policy, which is approved by the Audit Committee of the
Board, require risk management and its elements to be
integrated into key processes:
▪ERM is an integral part of Nokia’s objective setting and key
decision making
Key risks and opportunities are primarily identified against
business targets either in business operations or as an
integral part of strategy and financial planning. Those are
monitored as part of the management and business
performance information flow. Our overall risk management
concept is based on managing the key risks that would
prevent us from meeting our objectives, rather than
focusing on eliminating all risks.
▪ERM is a core component of Nokia’s corporate governance
ERM accountability runs through the Company and is
embedded into Nokia corporate governance. The Board of
Directors and the Group Leadership Team are committed to
effective risk management as a core management capability
that supports Nokia in achieving strategic, tactical and
operational business objectives and in managing business
performance.
▪Risk ownership follows business ownership
Nokia ERM is aligned to the overall Nokia governance model,
where Nokia’s businesses are accountable for meeting
approved plans and targets as agreed within Nokia. Each
business or function head is an owner of the risks in their
respective responsibility area and is responsible for
identifying and managing key risks and capturing
opportunities.
▪ERM is an area of continuous improvement
ERM is an area of continuous improvement for Nokia. The
Chief Financial Officer, who also functions as the Chief Risk
Officer, provides guidance and sponsors the development of
ERM practices and ERM improvement.
In addition to the principles defined in the Nokia Enterprise Risk
Management Policy, other key corporate level policies reflect
the implementation of specific aspects of risk management.
cybersecurity threats like ransomware, viruses, worms and
other malicious software, unauthorized modifications, or illegal
activities that may cause potential security risks and other harm
to Nokia, its customers or consumers and other end-users of
Nokia’s products and services. The dynamic nature of IT
technologies, including the introduction of AI technologies,
Cybersecurity incidents can lead to lengthy and costly incident
response, remediation of the attack affecting business
continuity, or breach and legal proceedings and fines imposed
on Nokia, as well as adverse effects to Nokia’s reputation and
brand value. Despite sustained investments, preventing,
detecting and containing cyber-attacks remain challenging.
Additionally, the regulatory framework around responding to
and disclosing such events is in flux and we may not be able to
comply with the regulations.
Although such risks have not materially affected us thus far,
including our business strategy, results of operations, or
financial condition, we have experienced threats to and
breaches of our data and systems, including malware and
computer virus attacks. We continue to address these
challenges, but there is no guarantee against future attacks.
overall security risk management framework. This integration is
achieved through the implementation of a security program set on
various processes, such as cybersecurity risk management, third-
party security risk management, security incident management and
business continuity and disaster recovery planning. In evaluation of
the effectiveness of our cybersecurity processes and their
alignment with the industry best practices, we have engaged and
The Chief Security Officer, who has the authority to establish
and oversee the Nokia information security program, keeps
Nokia’s executive leadership informed on program outcomes
and highlights information security risks which may affect Nokia
business and customers. Nokia’s executive leadership provides
direction and support and has the responsibility to execute the
program within their own domains. Key principles are
communicated through the Nokia Information Security Policy,
applicable also to third parties and collaborators and supported
selection processes, contracts and supplier (re)assessments
that are designed to ensure effective security is in place in our
supply chain and with our third-party partners. We are dedicated
to adhering to applicable laws, regulations, contractual
commitments, and industry best practices, including but not
limited to ISO 27001, NIST SP 800 series, the Cloud Security
Alliance Control Matrix, and the Information Security Forum.
Management Process, which covers all phases of incident
response, including preparation, identification, containment,
eradication, recovery and post-incident analysis. Each confirmed
cybersecurity-related incident is assessed against a classification
scheme (impact on confidentiality, integrity and availability of the
related asset, urgency, and priority of the security incident).
a cross-functional, executive management-level team , which is
responsible for making the necessary decisions and prioritizing
actions that can minimize the impact of the security incident to
Nokia and its customers. Members from the CFO and Legal,
the materiality of the security incident and promptly informing the
The Nokia management team for assessing and managing
cybersecurity threats includes members with training and
experience in security risk management, security governance, cyber
resilience, security incident management, information technology,
These activities are coordinated and overseen by the Chief Security
Officer, who leads the assessment of cybersecurity risks, ensures
the alignment between different functions to assess and manage
the risks and works with the designated risk owners through the
Cyber Risk Council and the Enterprise Risk Management framework.
The Chief Security Officer has extensive cybersecurity expertise,
having held cybersecurity‑related roles since 2012, and holds
undergraduate and post-graduate degrees in Engineering and
professional certifications in cyber security management. The
Cyber Risk Council includes members of our senior management
45 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
with significant working experience in technology, cybersecurity and
risk management. For an overview of the training and experience of
the members of the Board and our assessment of their experience
and skills related to cybersecurity, please see “Main corporate
Description of internal control procedures in
relation to the financial reporting process
Management is responsible for establishing and maintaining
adequate internal control over Nokia’s financial reporting. Our
internal control over financial reporting is designed to provide
reasonable assurance to management and the Board regarding
the reliability of financial reporting and the preparation and fair
presentation of published financial statements.
Management conducts a yearly assessment of Nokia’s internal
controls over financial reporting in accordance with the Committee
of Sponsoring Organizations framework (the “COSO framework”,
2013) and the Control Objectives for Information and Related
Technology (COBIT) framework of internal controls. The assessment
is performed based on a top-down risk assessment of our financial
statements covering significant accounts, processes and locations,
corporate-level controls and information systems’ general controls.
As part of its assessment, management has documented:
▪the corporate-level controls, which create the “tone from
the top” containing the Nokia values and Code of Conduct
and which provide discipline and structure to decision-
making processes and ways of working. Selected items from
our operational mode and governance principles are
separately documented as corporate-level controls;
▪the significant processes: (i) give a complete end-to-end
view of all financial processes; (ii) identify key control points;
(iii) identify involved organizations; (iv) ensure coverage for
important accounts and financial statement assertions; and
(v) enable internal control management within Nokia;
▪the control activities, which consist of policies and
procedures to ensure management’s directives are carried
out and the related documentation is stored according to
our document retention practices and local statutory
requirements; and
▪the information systems’ general controls to ensure that
sufficient IT general controls, including change management,
system development and computer operations, as well as
access and authorizations, are in place.
Further, management has also:
▪assessed the design of the controls in place aimed at
mitigating the financial reporting risks;
▪tested operating effectiveness of all key controls; and
▪evaluated all noted deficiencies in internal controls over
financial reporting in the interim and as of year end.
In 2025, Nokia has followed the procedures as described above
and has reported on the progress and assessments to
management and to the Audit Committee of the Board on a
quarterly basis.
Description of the organization of the internal
audit function
We have an internal audit function that examines and evaluates
the adequacy and effectiveness of our system of internal
control. Internal audit reports to the Audit Committee of the
Board. The head of the internal audit function has direct access
to the Audit Committee, without the involvement of
management. The internal audit staffing levels and annual
budget are approved by the Audit Committee. All authority of the
internal audit function is derived from the Board. The internal
audit aligns to the business by business group and function.
Annually, a risk-based internal audit plan is developed taking
into account key business risks, emerging risks, external factors
and input from management. This plan is approved by the Audit
Committee. Audits are completed across business groups and
functions. The results of each audit are reported to
management identifying issues, financial impact, if any, and the
correcting actions to be completed. Quarterly, the internal audit
function communicates the progress of the internal audit plan
completion, including the results of the closed audits, to the
Audit Committee. Any changes to the risk environment
impacting the internal audit plan are presented to the Audit
Committee for review and approval on a quarterly basis.
Internal audit also works closely with Internal Controls and
Ethics and Compliance offices to review any financial and
compliance concerns brought to light from various channels
and, where relevant, works with Enterprise Risk Management to
ensure priority risk areas are reviewed through audits.
46 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance •Corporate governance statement Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Related party transactions
We determine and monitor related parties in accordance with
the International Accounting Standards (IAS 24, Related Party
Disclosures) and other applicable regulations including the
applicable U.S. securities laws. We maintain information on our
related parties, as well as monitor and assess related party
transactions. As a main principle, all transactions should be
conducted at arm’s length and as part of the ordinary course of
business. In exceptional cases where these principles would be
deviated from, Nokia would set up a separate process to
determine the related parties in question and to seek relevant
approvals in accordance with internal guidelines and applicable
regulations.
administration
Our insider administration is organized according to the
applicable European Union and Finnish laws and regulations as
well as applicable U.S. securities laws and regulations. In
addition, Nokia has adopted the Nokia Insider Trading Policy,
approved by the Board of Directors, which sets out Nokia-wide
rules and practices to ensure full compliance with applicable
rules and that inside information is recognized and treated in an
appropriate manner and with the highest integrity. The Nokia
Insider Trading Policy is applicable to all directors, executives
and employees of Nokia.
Persons discharging managerial responsibilities
Nokia has identified members of the Board of Directors and the
Group Leadership Team as persons discharging managerial
responsibilities who, along with persons closely associated with
them, are required to notify Nokia and the Finnish Financial
Supervisory Authority of their transactions with Nokia’s financial
instruments. Nokia publishes the transaction notifications.
In addition, according to the Nokia Insider Trading Policy,
persons discharging managerial responsibilities are obligated to
clear a planned transaction in Nokia’s financial instruments in
advance with the person in charge of the insider administration.
It is also recommended that trading and other transactions in
Nokia’s financial instruments are carried out in times when the
information available to the market is as complete as possible.
Closed window
Persons discharging managerial responsibilities are subject to a
closed window period of 30 calendar days preceding the
disclosure of Nokia’s quarterly or annual result announcements,
as well as the day of the disclosure. During the closed window
period, persons discharging managerial responsibilities are
prohibited from dealing in Nokia’s financial instruments.
Nokia has imposed this closed window period also on separately
designated financial reporting persons who are recurrently
involved with the preparation of Nokia’s quarterly and annual
results announcements. These persons are separately notified
of their status as designated financial reporting persons.
Insider registers
Nokia does not maintain a permanent insider register. Insiders
are identified on a case-by-case basis for specific projects and
are notified of their insider status. Persons included in a project-
specific insider register are prohibited from dealing in Nokia’s
financial instruments until the project ends or is made public.
Supervision
Our insider administration’s responsibilities include, among
other matters, internal communications related to insider
matters and trading restrictions, setting up and maintaining our
insider registers and arranging related trainings, as well as
organizing and overseeing compliance with the insider rules.
Violations of the Nokia Insider Trading Policy must be reported
to the head of Corporate Legal. Nokia employees may also use
channels stated in the Nokia Code of Conduct for reporting
incidents involving suspected violations of the Nokia Insider
Trading Policy.
Auditor fees and services
Deloitte Oy, based in Helsinki, Finland, served as our auditor and
our sustainability reporting assurer for the financial year ended
31 December 2025 and for the financial year ended 31
December 2024. The auditor and the sustainability reporting
assurer are elected annually by our shareholders at the Annual
General Meeting for the next financial year commencing after
the election. On an annual basis, the Audit Committee of the
Board prepares a proposal to the shareholders regarding the
appointment of the auditor and the sustainability reporting
assurer based upon its evaluation of the qualifications and
independence of the auditor and the sustainability reporting
assurer to be proposed for election.
The following table presents fees by type paid to Deloitte’s
network of firms for the years ended 31 December:
EURm | 2025 | 2024 |
Audit fees(1) | 19.5 | 18.5 |
Audit-related fees(2) | 2.3 | 2.5 |
Tax fees(3) | 0.4 | 0.2 |
All other fees(4) | 0.3 | 0.1 |
Total | 22.5 | 21.3 |
(1)Audit fees consist of fees incurred for the annual audit of the Group’s
consolidated financial statements and the statutory financial statements of the
Group’s subsidiaries.
(2)Audit-related fees consist of fees billed for sustainability reporting assurance
approximately EUR 0.9 million (approximately EUR 1.4 million in 2024) as well as
other assurance and related services that are reasonably related to the
performance of the audit or review of the Group’s financial statements or that are
traditionally performed by the independent auditor, and include consultations
concerning financial accounting and reporting standards; advice and assistance in
connection with local statutory accounting requirements; due diligence related to
mergers and acquisitions; and audit procedures in connection with investigations
in the pre-litigation phase and compliance programs. They also include fees billed
for other audit services, which are those services that only the independent
auditor can reasonably provide, and include the provision of comfort letters and
consents in connection with statutory and regulatory filings and the review of
documents filed with the SEC and other capital markets or local financial reporting
regulatory bodies.
(3)Tax fees include fees billed for: (i) services related to tax compliance including
preparation and/or review of tax returns, preparation, review and/or filing of
various certificates and forms and consultation regarding tax returns and
assistance with revenue authority queries; compliance reviews, advice and
assistance on other indirect taxes; and transaction cost analysis; (ii) services
related to tax audits; (iii) services related to individual compliance (preparation of
individual tax returns and registrations for employees (non-executives), assistance
with applying for visas, residency, work permits and tax status for expatriates); (iv)
services related to technical guidance on tax matters; (v) services related to
transfer pricing advice and assistance with tax clearances; and (vi) tax consultation
and planning (advice on stock-based remuneration, local employer tax laws, social
security laws, employment laws and compensation programs and tax implications
on short-term international transfers).
(4)Other fees include fees billed for Company establishments, liquidations, forensic
accounting, data security, other consulting services and reference materials
and services.
47 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Remuneration
This section sets out our remuneration
governance, policies and how they have
been implemented within Nokia. It
includes our Remuneration Report
where we disclose the remuneration of
our Board members and the President
and CEO for 2025, which will be
presented to the Annual General
Meeting (AGM) 2026 for an advisory
vote.
Shareholders have approved of our proposed amendments to
the Remuneration Policy in the 2025 AGM. A summary of the
Policy is set out in this section of the report and the full version
of the Policy is available on our website.
Other remuneration-related information provided alongside the
Remuneration Report is not subject to a vote at the AGM 2026
but provides added information on the Nokia Remuneration
Policy and remuneration practices applied within Nokia as well
as on the remuneration of the Group Leadership Team
members.
We report information applicable to executive remuneration in
accordance with Finnish regulatory requirements and with
requirements set by the US Securities and Exchange
Commission that are applicable to us.
Highlights | ||||
▪Overall performance in 2025 was solid, with net sales growth, comparable operating profit(1) and strong free cash flow(1) delivered in line with expectations, which are reflected in the incentive payouts. Disciplined execution helped offset FX headwinds, complete the Infinera acquisition, accelerate AI & Cloud orders, and strengthen the balance sheet while funding investments and dividends. ▪Justin Hotard joined Nokia as President and CEO on 1 April 2025 at the same salary and variable pay opportunities as his predecessor and was invited to participate in a co-investment (eLTI) arrangement. In addition, he received compensation for the loss of forfeited awards on leaving his previous employer on a like-for-like basis. ▪Justin Hotard’s 2025 short-term incentive (STI) was subject to a score of operating profit, cash release(2), health & safety and diversity objectives and resulted in an overall STI payout of 129% of target opportunity. ▪Pekka Lundmark stepped down from the role of Nokia President and CEO on 31 March 2025 and continued as Advisor to the new President and CEO until 31 December 2025, to ensure a smooth leadership transition. | ▪The former CEO received his base salary, benefits and incentives throughout 2025. The remaining balance of his notice period of 12 months until 9 February 2026 was paid out together with his 2025 short-term incentive. ▪The long-term incentive (LTI) awards (performance shares) granted to Pekka Lundmark and other GLT members in 2022 fully lapsed following the end of the three-year performance period in 2025. ▪The 2026 STI for the CEO will be subject to comparable operating profit in constant currency(2) and free cash flow(1) measures, with potential Board downward discretion on health and safety and workforce composition. ▪The 2026 metrics for the LTI (performance shares) for Justin Hotard and the rest of the GLT will continue to be subject to a scorecard of relative Total Shareholder Return (“TSR”), cumulative reported Earnings Per Share (EPS) and greenhouse gas (GHG) emission reduction. ▪Justin Hotard received a salary increase of approximately 6.0% in 2026, to bring his total target remuneration closer to the market level, this will remain significantly below the US benchmark primarily due to the significantly lower LTI award. | |||
Further details of all of these matters are set out in the Remuneration Report. | ||||
(1)Non-IFRS measure. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS measures, refer to the “Alternative performance measures”
section
(2)Comparable operating profit in constant currency and cash flow less comparable operating profit (i.e. cash release) are financial measures used only in calculation of short-term
incentives for the President and CEO and the members of the Global Leadership Team. These measures are not used to communicate the management’s view of Nokia’s financial
performance, and hence they are not considered as alternative performance measures. For the definition and reconciliation of non-IFRS measures to the most directly comparable
IFRS measure, refer to the ”Alternative performance measures” section.
48 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Remuneration Report 2025
Letter from the Chair of the Personnel
Committee of the Board
“Dear Fellow Shareholder,
I am delighted to present our
Remuneration Report 2025
as the Chair of the Personnel
Committee of the Nokia Board.”
Our remuneration philosophy
At the core of Nokia’s philosophy lie two principles:
▪pay for performance and aligning the interests of employees
with shareholders; and
▪ensure that remuneration programs and policies support the
delivery of the corporate strategy and create long-term
sustainable shareholder value.
Shareholder support
Driven by the strategic shift to expand into new business areas such
as data centers, private wireless, and defense, particularly in North
America, the Nokia Board of Directors proposed amendments to
the Remuneration Policy (“Policy”) for approval by shareholders in
the 2025 Annual General Meeting (“AGM”). In developing the
proposal, engagement was undertaken with the company’s largest
shareholders in November 2024 and April 2025. The Board
welcomed the support received from the majority of shareholders
for the amendments at the AGM, while acknowledging that a
significant minority voted against the proposal.
In response to this outcome, and consistent with our commitment
to maintaining an open and constructive dialogue with our
shareholders, further engagement was conducted with
approximately 30% of our shareholders during Autumn 2025. The
principal concerns raised by investors related to the introduction of
restricted shares in the Policy and the perceived lack of clarity
around the use of underpins.
When considering the introduction of restricted shares, the
Personnel Committee of the Board of Directors (“Committee”)
carefully evaluated the strategic context in which Nokia operated,
particularly the growing importance of the North American market
and the need to remain competitive in attracting and retaining
senior leadership capable of delivering our long-term objectives.
The proportion of Nokia’s revenue generated in North America is
expected to increase as we expand in higher-growth businesses.
These areas, such as data centers, represent key drivers of the
company’s future development, and as part of this strategy, Nokia
completed the EUR 2.5 billion acquisition of Infinera Corporation in
2025, a US-based supplier of optical networking solutions and
advanced optical semiconductors. Justin Hotard, who headed the
Data Center & AI Group at Intel with more than 25 years of
experience in AI and data-center markets across major US
technology companies, was appointed as CEO in April 2025.
Against this backdrop, the Committee concluded that the
introduction of additional restricted share awards of up to 100% of
base salary was necessary to position the CEO’s total remuneration
closer to market levels for comparable US-based roles, to provide
the retention support expected in the North American executive
market and to ensure a healthy compression between the
remuneration of the CEO and that of his direct reports. With the
addition of restricted shares, more than two-thirds of the CEO’s
total target remuneration – and nearly 90% of variable
remuneration at maximum – will remain performance-based,
maintaining Nokia’s commitment to pay for performance.
Compensation of the new President and CEO
On 10 February 2025, Nokia announced that Justin Hotard
would be appointed as its new President and Chief Executive
Officer from 1 April 2025. The new President and CEO’s salary and
variable pay arrangement were the same as his predecessor.
Hotard received his salary for the period from 1 April 2025 to the
end of the financial year with a prorated STI payout over the same
period of 129% of target opportunity, based on the performance
of the company. He was granted LTI (performance share) award in
July 2025.
In addition, Justin Hotard received a one-time buy-out award of EUR
2.0 million in cash and EUR 6.0 million in restricted shares, vesting in
three tranches over a period of three years, both in lieu of his
forfeited unvested equity awards from the previous employer.
Additionally, Justin Hotard was given compensation for repayment
of previous employer’s sign-on bonus that he had to repay, of c.
EUR 1.0 million. Mr. Hotard was also invited to participate in the co-
investment-based long-term incentive arrangement (eLTI) , under
which he invested EUR 2 821 000 in Nokia shares in June 2025. In
return, he is offered two Performance Shares for each share
invested as a matching award. The invested shares must be held for
three years for the matching shares to vest, subject to the same
performance conditions as for the 2025 LTI Performance Shares.
49 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
This investment aligns the new President and CEO with shareholders
from the start and is a sign of his commitment to Nokia.
The Board has approved a 6.0% increase to Justin Hotard’s
base salary as of 1 January 2026, while maintaining his target
STI and performance share opportunities at their existing levels.
With this increase, the President and CEO’s total target
remuneration will remain below the US median benchmark.
Exit arrangements for the previous President and CEO
Pekka Lundmark continued to lead Nokia until 31 March 2025 and
remained employed during 2025 to support the transition of
leadership and relationships with our key customers and
stakeholders after stepping down as President and CEO.
Mr. Lundmark received his base salary and incentive throughout
2025. The remaining balance of his 12-month notice period base
pay and benefits until 9 February 2026 was paid out in cash in lieu
of notice, together with his 2025 STI based on actual performance.
He was not eligible for 2026 STI. Considering Mr. Lundmark’s
retirement from operational roles and his continued work to enable
a smooth leadership transition throughout 2025, on Board’s
discretion, Pekka Lundmark retained his outstanding long-term
incentives (performance shares 2022‒2024 and eLTI 2024). These
awards will vest on normal vesting dates prorated to his service at
the company until 31 December 2025 and subject to applicable
performance conditions.
The 2022 LTI (performance shares) was subject to the
predetermined dividend adjusted share price targets and a three-
year performance period which ended in January 2025. Based on
the dividend adjusted share price outcome of EUR 4.88, the award
lapsed in full for Pekka Lundmark and other GLT members who
received the grant in 2022.
STI performance outcome and payout for 2025
Justin Hotard’s 2025 STI, prorated for period worked, was subject
to a scorecard of operating profit, cash release(1), health & safety
and diversity objectives. Pekka Lundmark’s 2025 STI was subject to
the same scorecard of measures.
The comparable operating profit in constant currency(1) for 2025
was EUR 2 168 million, against the target of EUR 2 093 million. As a
result, the payout for this element was 115% of target. For the
cash release element (cash flow less comparable operating profit)(1),
the actual outcome was EUR -338 million, against the target of EUR
-1 238 million. This resulted in a payout of 198% of target for this
element.
The first gender diversity metric (female percentage in workforce)
achieved 22.9% for the full year, against the target of 23.9%, which
resulted in a payout of 0% of target for this element. The second
gender diversity metric (female percentage in leadership) achieved
17.2% for the full year, against the target of 18.2%, which resulted
in a payout of 0% of target for this element.
The health & safety metric of lost time injury frequency rate
measures how often lost time injuries occur that directly impacts
Nokia employees during the year. This metric achieved an outcome
of 0.055 lost time injury frequency rate (“LTIFR”) against the target
of 0.085, which resulted in a payout of 225% of target for this
element. However, as a result of five fatalities within Nokia’s control
during the year, the Board exercised downward discretion to reduce
the payout under this element by 10%, which resulted in the final
outcome of 203% for this metric.
As a result, a total of 129% of target STI was payable for the
financial year 2025.
STI and LTI performance conditions for 2026
During 2025, the Committee also undertook a review of the
performance metrics used for our STI and LTI plans and decided to
make changes for 2026 to ensure our incentive plans support our
strategy focused on growth and performance. Our 2026 incentive
plans for the President and CEO and the rest of the GLT will follow
the structure set out below.
Delivering the next year’s step in the strategic plan – STI | ||
Comparable Operating Profit in Constant Currency(1) 70% | Free Cash Flow(2) 30% | |
Continued focus on profitability | Achieve a strong cash position | |
Delivering sustainable value – LTI | ||
50% relative TSR, 40% cumulative reported EPS (adjusted for impairments and M&A), 10% GHG emission reduction (scope 1, 2 and 3) | ||
A more rounded and balanced approach reflecting performance over the long term in growing the business and in delivering shareholder value whilst working towards our 2030 goal of 50% GHG emission reduction | ||
For 2026, cash release(1) has been replaced with Free Cash
Flow(2), which provides a simpler and a more transparent view of
underlying cash generation. Additionally, health & safety and
diversity will no longer operate as standalone metrics within the
STI, as the Committee considers performance in these areas as an
integral part of the day-to-day responsibilities of the President and
CEO and senior leaders rather than a measure for variable
remuneration. These areas remain important to the company’s
long-term success, and the Committee will retain the ability to apply
a downward discretion to STI outcomes where performance in
these areas does not meet expectations. The STI weightings have
been adjusted for 2026 to reflect this updated framework.
The Committee reaffirmed the importance of a safety culture with
ongoing safety programs and targets aimed at raising awareness
and encouraging positive safety behaviors among subcontractors.
Nokia will continue to set internal safety targets for 2026.
Share ownership requirement
Our President and CEO is required to hold Nokia shares
equivalent to three times his annual base salary. Justin Hotard
currently maintains a total shareholding (including his
beneficially owned shares and unvested restricted shares) which
significantly exceeds the requirement. This demonstrates his
commitment to an alignment with Nokia’s long-term success
and our shareholder interests.
Conclusions
I thank shareholders who assisted the Committee in the
consultation process during 2025 and we remain committed to
maintaining an open and constructive dialogue. I look forward to
your continued support at our 2026 Annual General Meeting.
THOMAS DANNENFELDT,
CHAIR OF THE PERSONNEL COMMITTEE
(1) Comparable operating profit in constant currency and cash flow less comparable
operating profit (i.e. cash release) are financial measures used only in calculation of
short-term incentives for the President and CEO and the members of the Global
Leadership Team. These measures are not used to communicate the management’s
view of Nokia’s financial performance, and hence they are not considered as
alternative performance measures. For the definition and reconciliation of non-IFRS
measures to the most directly comparable IFRS measure, refer to the ”Alternative
performance measures” section.
(2) Non-IFRS measure. For the definition and reconciliation of non-IFRS measures to the
most directly comparable IFRS measures, refer to the “Alternative performance
measures” section.
50 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Introduction
This Remuneration Report of Nokia Corporation (the Report) has
been approved by the Company’s Board of Directors (the Board)
to be presented to the Annual General Meeting 2026. The
resolution of the Annual General Meeting on the Report is
advisory. The Report presents the remuneration of the Board
members and the President and CEO for the financial year 2025
in accordance with the Decree of the Finnish Ministry of Finance
608/2019 and the Finnish Corporate Governance Code 2025, as
well as other applicable Finnish laws and regulations. The
members of the Board and the President and CEO have been
remunerated in accordance with our approved Remuneration
Policy during the financial year 2025. No temporary or other
deviations from the Policy have been made and no clawback
provisions have been exercised during the financial year 2025.
In 2025, our remuneration structure promoted the Company’s
long-term financial success by setting the performance criteria
for short-term and long-term incentives to support the
Company’s short-term and long-term goals, as well as through
shareholding requirements set for the President and CEO, the
GLT and the Board members. Aligned with Nokia’s pay-for-
performance remuneration principle, performance-based
remuneration was emphasized over fixed base salary. The
setting and application of the performance criteria for incentive
programs executed the philosophy of pay-for-performance and
supported the delivery of the corporate strategy as well as the
creation of long-term sustainable shareholder value.
The table on the right compares the development of the
remuneration of our Board of Directors, President and CEO,
average employee pay and Company performance over a five-
year period.
The pay-for-performance remuneration principle applied to the
President and CEO, as well as the shareholding requirement of
the President and CEO and the Board members, as applicable,
contribute to an alignment of interests with shareholders, while
also promoting and incentivizing decisions that are in the long-
term interest of the Company.
Year | Aggregate remuneration of the Board of Directors (EUR)(1) | President and CEO actual remuneration (EUR)(2) | Average salaries and wages (EUR)(3)(5) | Net sales (EURm)(5) | Total shareholder return (rebased to 100 at 31 Dec 2020)(4) |
2021 | 1 821 000 | 4 908 244 | 70 411 | 22 202 | 176.90% |
2022 | 2 280 000 | 4 316 606 | 74 241 | 23 761 | 139.07% |
2023 | 2 503 000 | 3 738 560 | 69 096 | 21 138 | 101.13% |
2024 | 2 511 000 | 3 988 250 | 78 576 | 19 220 | 146.73% |
2025 | 2 499 000 | 7 286 861 | 80 367 | 19 889 | 197.49% |
(1)Aggregate total remuneration paid to the members of the Board during the financial year as annual fee and meeting fee, as applicable, and as approved by general meetings
of shareholders. The value depends on the number of members elected to the Board for each term as well as on the composition of the Board committees and travel required.
During the term that began from the Annual General Meeting 2021, the Board had eight members only, compared to ten members during the following terms.
(2)The President and CEO actual remuneration represents the aggregate total of the two President and CEOs in 2025.
(3)Average salaries and wages are based on average employee numbers and their total salaries and wages as reported in the Company’s financial statements.
(4)Total shareholder return on last trading day of the previous year.
(5)In June 2024, Nokia classified its Submarine Networks business as a discontinued operation. The comparative amounts for 2023 and 2022 have been recast accordingly.
We also present this data graphically:
Comparative data (rebased year-end 2020 = 100)
51 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Pay for performance
Core to our remuneration philosophy is a desire to pay for
performance.
Each year we review overall total shareholder return compared
with LTI vesting, mapping the performance of the plans against
the total shareholder return curve.
Looking at the performance of our long-term incentive plans
against total shareholder return, there is a reasonable
alignment with the performance of the plans declining as total
shareholder return declines.
The Board continues to actively monitor the performance of our
long-term incentive plans to ensure that they deliver value for
shareholders.
Share price and total shareholder return vs long-term incentive performance
Global peer group
During 2025, the global peer group used in our remuneration
benchmarking and relative TSR performance assessment was
reviewed and updated so that it consists of the following 24
companies. As part of this review, Atos was removed from the
(1)2023 LTI's performance period ended in January 2026. The vesting outcome of this award will be reported in the 2026 Remuneration Report.
(2)2024 and 2025 LTIs’ performance periods are not yet completed.
peer group following material changes to its business profile, and
both Juniper Networks and VMware were removed as they have
delisted.
ABB | Infineon Technologies |
Adobe | Kone |
Airbus | Motorola Solutions |
ASML | NXP Semiconductors |
BAE Systems | Oracle |
Capgemini | Philips |
Ciena | SAP |
Cisco Systems | Siemens Healthineers |
Corning | Vodafone Group |
Dell Technologies | Wärtsilä |
Ericsson | |
Hewlett Packard Enterprise | |
HP | |
IBM |
52 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Remuneration of the Board of Directors
The shareholders resolve annually on director remuneration
based on a proposal made by the Board of Directors on the
recommendation of the Board’s Corporate Governance and
Nomination Committee.
The aggregate amount of remuneration paid to the Board
members in 2025 equaled EUR 2 499 000 of which
EUR 2 390 000 consisted of annual fees and the rest of meeting
fees. In accordance with the resolution by the Annual General
Meeting 2025, approximately 40% of the annual fee from Board
and Board Committee work was paid in Nokia shares purchased
from the market on behalf of the Board members following the
Annual General Meeting.
The directors shall retain until the end of their directorship such
number of shares that corresponds to the number of shares
they have received as Board remuneration during their first
three years of service on the Board.
The rest of the annual fee was paid in cash, most of which was
used to cover taxes arising from the remuneration. All meeting
fees were paid in cash.
It is the Company’s policy that the non-executive members of
the Board do not participate in any of Nokia’s equity programs
and do not receive performance shares, restricted shares, or
any other variable remuneration for their duties as Board
members. No such variable remuneration was paid since all
persons acting as Board members during the financial year
2025 were non-executive.
Board remuneration for the term that began at the Annual General Meeting held on 29 April 2025 and ends at the close of the Annual
General Meeting in 2026 consisted of the following fees.
Annual fee | EUR |
Chair | 440 000 |
Vice Chair | 210 000 |
Member | 185 000 |
Chair of Audit Committee | 30 000 |
Member of Audit Committee | 15 000 |
Chair of Personnel Committee | 30 000 |
Member of Personnel Committee | 15 000 |
Chair of Strategy Committee | 20 000 |
Member of Strategy Committee | 10 000 |
Chair of Technology Committee | 20 000 |
Member of Technology Committee | 10 000 |
Meeting fee(1) | EUR |
Meeting requiring intercontinental travel | 5 000 |
Meeting requiring continental travel | 2 000 |
(1)Paid for a maximum of seven meetings per term.
The following table outlines the total annual remuneration paid in 2025 to the members of the Board for their services.
Annual fees (EUR) | Meeting fees (EUR)(1) | Total remuneration paid (EUR) | 60% of annual fees and all meeting fees paid in cash (EUR) | 40% of annual fees paid in shares (EUR) | Number of shares (approx. 40% of the annual fee)(2) | |
Sari Baldauf (Chair) | 465 000 | 10 000 | 475 000 | 289 000 | 186 000 | 41 478 |
Søren Skou (Vice Chair)(3) | — | 2 000 | 2 000 | 2 000 | — | — |
Timo Ihamuotila (Vice Chair as of 29 April 2025) | 220 000 | 9 000 | 229 000 | 141 000 | 88 000 | 19 624 |
Timo Ahopelto | 210 000 | 10 000 | 220 000 | 136 000 | 84 000 | 18 732 |
Elizabeth Crain | 220 000 | 12 000 | 232 000 | 144 000 | 88 000 | 19 624 |
Thomas Dannenfeldt | 245 000 | 14 000 | 259 000 | 161 000 | 98 000 | 21 854 |
Pernille Erenbjerg (as of 29 April 2025) | 200 000 | — | 200 000 | 120 000 | 80 000 | 17 840 |
Lisa Hook | 210 000 | 12 000 | 222 000 | 138 000 | 84 000 | 18 732 |
Mike McNamara (as of 3 April 2024) | 210 000 | 14 000 | 224 000 | 140 000 | 84 000 | 18 732 |
Thomas Saueressig | 195 000 | 14 000 | 209 000 | 131 000 | 78 000 | 17 394 |
Carla Smits-Nusteling(3) | — | 2 000 | 2 000 | 2 000 | — | — |
Kai Öistämö | 215 000 | 10 000 | 225 000 | 139 000 | 86 000 | 19 178 |
Total | 2 390 000 | 109 000 | 2 499 000 | 1 543 000 | 956 000 | 213 188 |
(1)Meeting fees include all meeting fees paid during the reported year 2025.
(2)40% of the annual fees after deducting the applicable transfer taxes.
(3)Stepped down at the Annual General Meeting on 29 April 2025 and received no annual fees in 2025.
53 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Remuneration of the President and CEO
The following table shows the actual remuneration received by the former and current President and CEO in 2025 and 2024. As our
CEO changed in the financial year 2025, both individual and aggregate figures are presented in respect of service as President and CEO
for comparison purposes. The 2024 LTI figure relates to the vesting of the 2021 LTI performance shares and the 2021 eLTI matching
performance shares. The 2025 LTI figure relates to the vesting of the 2022 LTI performance shares.
EUR | 2025 (Combined) | Pay mix(1) | 2025 (Hotard)(2) | Pay mix(1) | 2025 (Lundmark)(3) | Pay mix(1) | 2024 | Pay mix(1) |
Salary | 1 410 500 | 38% | 1 057 875 | 38% | 352 625 | 38% | 1 410 500 | 36% |
Short-term incentive(4) | 2 271 787 | 62% | 1 703 840 | 62% | 567 947 | 62% | 1 824 834 | 46% |
Long-term incentive(5) | — | 0% | — | 0% | — | 0% | 697 872 | 18% |
Other remuneration(6) | 3 604 574 | 3 584 877 | 19 697 | 55 044 | ||||
Total | 7 286 861 | 6 346 592 | 940 269 | 3 988 250 |
(1)Pay mix reflects the proportion of base salary, STI and LTI of total remuneration, excluding other remuneration.
(2)Justin Hotard’s compensation is shown in respect of his service as President and CEO from 1 April 2025.
(3)Pekka Lundmark’s compensation is shown in respect of his service as President and CEO to 31 March 2025. In addition, in respect of his services as an advisor between stepping
down as President and CEO on 31 March 2025 and his last day of work on 31 December 2025, he received EUR 1 057 875 salary and EUR 29 523 in benefits. The remaining balance
of his 12-month notice period base pay and benefits until 9 February 2026 was paid out in cash in lieu of notice, EUR 35 269, together with his 2025 STI based on actual
performance, which amounted to EUR 2 271 787 for the full year. Pekka Lundmark is not eligible for 2026 STI.
(4)STI represents the amounts earned in respect of financial year 2025, but that are paid in April 2026.
(5)LTI payments to Pekka Lundmark represents his 2022 performance share award, which fully lapsed.
(6)Other compensation for Pekka Lundmark includes telephone, car, driver, tax compliance support and medical insurance. For Justin Hotard, other compensation includes a one-
time buy-out award of EUR 2 000 000 in lieu of his forfeited unvested equity awards from the previous employer, compensation for repayment of previous employer’s sign-on
bonus that he had to repay of EUR 1 025 154, and other benefits including relocation and housing (including temporary housing), schooling fees, car, driver, telephone, medical
insurance and legal fees equaling to EUR 559 723.
Pursuant to Finnish legislation, Nokia is required to make contributions to the Finnish TyEL pension arrangements in respect of the
President and CEO. Such payments can be characterized as defined contribution payments. In 2025, payments to the Finnish state
pension system equaled EUR 39 291 for Pekka Lundmark in respect of his service as President and CEO (EUR 310 937 in 2024) and
EUR 490 275 for Justin Hotard. No supplementary pension arrangements were offered.
54 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Hire and 2025 arrangements for Justin Hotard
Justin Hotard was appointed as President and CEO from 1 April 2025. His hire arrangements are summarized below and are in
accordance with the Remuneration Policy (“Policy”).
Item | Action | Amount | Note |
Salary | Paid monthly from 1 April 2025 | EUR 1.4 m per annum, pro- rated for 2025 | In line with Policy and Executive Agreement |
Short-term incentive 2025 | Paid at actual for 2025 and prorated for period worked during the year | EUR 1.7 m | In line with Policy and STI plan rules |
Long-term incentive 2025 | Performance share award vests in 2028 subject to relative TSR (50%), cumulative earnings per share (40%) and GHG emission reduction (10%) | Target EUR 2.8 m | In line with Policy and LTI plan rules |
eLTI co-investment arrangement | In return for a purchase and continued holding of 2.8m EUR worth of Nokia shares, a 2:1 award of Nokia 2025 performance shares was made. These vest in 2028 subject to relative TSR (50%), cumulative earnings per share (40%) and GHG emission reduction (10%) and continued holding of the purchased shares | Target EUR 5.6 m | In line with Policy and same as arrangement provided to Pekka Lundmark, Justin Hotard was invited to participate in the eLTI co-investment arrangement. This required him to make a substantial personal investment in Nokia shares aligning his personal interests with those of shareholders from joining. |
Buyout of forfeited Restricted Stock awards | To compensate for the forfeiture of awards from the previous employer, and having duly considered the structure, time horizons, value and performance conditions of those forfeited awards, the Board granted the CEO EUR 6.0 million in restricted shares, vesting in three equal tranches in 2026, 2027 and 2028, as well as a cash payment of EUR 2.0 million, which was paid upon his commencement in April 2025. | EUR 8.0 m | In line with Policy and Executive Agreement and LTI Plan rules |
Compensation for repayment of previous employer’s sign-on bonus | Cash in recognition of the repayment of sign-on bonus to previous employer | EUR 1.0 m | In line with Policy and Executive Agreement |
Benefits | Paid from 1 April 2025 | Standard Finnish benefits plus relocation support, temporary accommodation support, housing allowance, schooling allowance, and legal fees | In line with Policy and Executive Agreement |
55 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
2025 Short-term Incentive of the President and CEO
Targets for the STI are set annually at or before the start of the year (adjusted for exceptional one-off items), balancing the need to
deliver value with the need to motivate and drive the performance of the Executive Team. Targets are determined for a set of strategic
metrics that align with driving sustainable value for shareholders and are set in the context of market expectations and analyst
consensus forecasts. For 2025, both Pekka Lundmark and Justin Hotard had a target STI opportunity of 125% of annual base salary.
Their 2025 STI framework was based on a scorecard of financial and non-financial objectives. Achievements against the 2025 targets
are set out in the table below. The outcomes for all metrics were calculated based on formulaic approach. For the health & safety
metric, lost time injury frequency rate achieved an outcome of 225% of target. However, as a result of five subcontractor fatalities
within Nokia’s control during the year, the Board exercised downward discretion to reduce the payout under this element by 10%,
which resulted in the final outcome of 203% for this metric.
Metric | Weight | Target | 2025 performance outcome | 2025 STI outcome (% of target) |
Comparable operating profit in constant currency(1) | 60% | EUR 2 093 m | EUR 2 168 m | 115% |
Cash release(1) | 20% | EUR – 1 238 m | EUR – 338 m | 198% |
Gender diversity – women in leadership | 5% | Female percentage of global leadership of 18.2% | 17.2% | 0% |
Gender diversity – women in workforce | 5% | Female percentage of global workforce 23.9% | 22.9% | 0% |
Health & safety | 10% | • Employee lost time injury frequency rate (LTIFR) of 0.085 • Fatality modifier (downward discretion in the event of fatalities, including all subcontractors) | LTIFR of 0.055 with 5 fatalities | 203% |
Total STI outcome | 100% | 129% |
(1)Comparable operating profit in constant currency and cash flow less comparable operating profit (i.e. cash release) are financial measures used only in calculation of short-term
incentives for the President and CEO and the members of the Global Leadership Team. These measures are not used to communicate the management’s view of Nokia’s financial
performance, and hence they are not considered as alternative performance measures. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS
measure, refer to the ”Alternative performance measures” section.
Accordingly, the total 2025 STI payout for Pekka Lundmark and Justin Hotard for their respective periods of service as the President
and CEO during 2025 was EUR 567 947 and EUR 1 703 840, respectively. Pekka Lundmark’s total STI for 2025, reflecting continued
service until year-end, amounted to EUR 2 271 787.
56 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Long-term Incentive awards granted to the President and CEO during 2025
In 2025, Justin Hotard was granted the following LTI (performance share) awards.
Targets for our LTI performance shares are set in a similar context to the STI. The performance shares targets are set at the start of
the performance period reflecting the business strategy and priorities over the three-year performance period. The performance
conditions for the 2025 performance shares are based on 50% relative TSR against our global peer group(1), 40% cumulative earnings
per share (EPS) and 10% GHG emission reduction targets over the three-year performance period from 2025 to 2028. During 2025,
Justin Hotard was invited to participate in the co-investment eLTI, under which he invested EUR 2.8 million in Nokia shares and
received two-for-one matching performance shares in return. The matching performance shares were subject to the same
performance conditions as set out above. Both the LTI performance shares and eLTI matching performance shares have a three-year
performance and vesting period. The targets for all metrics as well as the performance and vesting outcomes will be disclosed in the
2028 Remuneration Report.
Performance share awards(1) (2) | Units awarded | Grant date face value(3) (EUR) | Grant date | Vesting |
2025 LTI performance shares | 608 000 | 2 681 280 | 7 July 2025 | Q3 2028 |
2025 eLTI matching performance shares | 1 218 548 | 5 666 248 | 3 June 2025 | Q2 2028 |
(1)Global peer group consisted of 24 companies (see details under the “Global peer group” section).
(2)The maximum vesting is 200% of target if stretch performance targets are met.
(3)Grant date face value was calculated using the closing price of EUR 4.41 and EUR 4.65 on the date of grant for the 2025 performance shares and 2025 eLTI matching shares,
respectively.
As part of Justin Hotard’s joining arrangements as new President and CEO, he received a one-off buyout award of EUR 6.0 million in
restricted shares vesting in three tranches over a period of three years, in lieu of his forfeited unvested equity from the previous
employer. The value of this buyout award was determined taking account of the structure, time horizon, value and performance
conditions (where applicable) of his forfeited awards from the previous employer.
Restricted share awards | Units awarded | Grant date face value (EUR)(1) | Grant date | Vesting |
2025 LTI restricted shares (buyout) | 1 287 600 | 6 438 000 | 1 April 2025 | Q2 2026, Q2 2027, Q2 2028 |
(1)Grant date face value was calculated using the closing share price at the date of grant of EUR 5.00. The difference in the grant date face value and the originally agreed amount of
EUR 6.0 million is due to the different share price used to calculate the number of shares to be granted using Nokia’s averaging method.
Long-term Incentive awards and other equity awards vested for the President and CEO during 2025
Pekka Lundmark was granted LTI performance share award in March 2022. The award had a three-year performance period and was
subject to dividend adjusted share price targets over the performance period. However, as the threshold share price was not achieved, the
award lapsed in full on 6 July 2025.
Share awards vesting during the year | Units awarded | Target share price (EUR) | Share price achievement (EUR) | Vesting outcome (% of target) | Units vested | Value of vested award (EUR) |
2022 LTI performance shares | 543 900 | 6.50 | 4.88 | 0% | — | — |
57 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
The President and CEO’s share ownership and unvested share awards
Our share ownership policy requires that the President and CEO holds a minimum of three times his or her annual base salary in Nokia
shares in order to ensure alignment with shareholder interests over the long term. Justin Hotard significantly exceeds this requirement
with a holding of 597%(1) well within the five-year allotted period.
Justin Hotard | Units | Value(2) (EUR) |
Beneficially owned shares at 31 December 2025 | 609 274 | 3 393 656 |
Unvested shares under outstanding Nokia equity plans(3) | 3 114 148 | 17 345 804 |
Total | 3 723 422 | 20 739 460 |
(1)Shareholding of 597% of annual base salary as of 14 November 2025, using 12-month average share price. This includes all beneficially owned Nokia shares and unvested
restricted shares with no performance conditions.
(2)The values are based on the closing price of a Nokia share of EUR 5.57 on Nasdaq Helsinki on 30 December 2025.
(3)The number of units represents the number of unvested awards as of 31 December 2025.
The President and CEO’s termination provisions 2025
Termination by | Reason | Notice | Compensation |
Nokia | Cause | None | The President and CEO is entitled to no additional remuneration and all unvested equity awards would be forfeited after termination. |
Nokia | Reasons other than cause | Up to 12 months | The President and CEO is entitled to a severance payment equaling to 12 months’ remuneration (including annual base salary, benefits, and target short- term incentive). Unvested equity awards would be forfeited after termination, unless the Board determines otherwise. If termination occurs within three months before, or six months after a change of control event (double trigger), the CEO is entitled to shorten his notice period to three months, he receives 12 months’ remuneration and all his equity awards vest subject to performance and time proration until the expiry of the agreement. |
President and CEO | Any reason | 12 months | The President and CEO may terminate his service agreement at any time with 12 months’ notice. The President and CEO would either continue to receive salary and benefits during the notice period or, at Nokia’s discretion, a lump sum of equivalent value. Additionally, the President and CEO would be entitled to any short- or long-term incentives that would normally vest during the notice period. Any unvested equity awards would be forfeited after termination, except in the event of death, permanent disability and retirement, and unless the Board determines otherwise. |
President and CEO | Nokia’s material breach of the service agreement | Up to 12 months | In the event that the President and CEO terminates his service agreement based on Nokia’s material breach of the service agreement, he is entitled to reduce the notice period to two months, and to receive a severance payment equaling to 12 months’ remuneration including the notice period. All equity awards vest, subject to any applicable performance criteria and prorated until the expiry of the agreement. |
The President and CEO is subject to a 12-month non-competition and non-solicit obligation that applies after the termination of the
service agreement or the date when he is released from his obligations and responsibilities, whichever occurs earlier.
58 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Remuneration Policy
Nokia Corporation’s Remuneration Policy, which applies to the
governing bodies of the Company, i.e. the Board of Directors
and the President and CEO, was approved by shareholders at
the Annual General Meeting 2025, receiving 61.78% of votes in
favor. This Policy remained in force and unchanged during 2025.
The information below is provided as a summary for ease of
reference.
In addition to applying the Remuneration Policy to our President
and CEO, the principles of our policy extend to the Group
Leadership Team.
The Board regularly monitors the effectiveness of the measures
used in our incentive plans to ensure that they align with and
drive the strategy of the company.
The Remuneration Policy for the Board of
Directors
In accordance with the Remuneration Policy, the Board’s
Corporate Governance and Nomination Committee periodically
reviews the remuneration for the Chair and members of the
Board against companies of similar size and complexity. The
objective of the Corporate Governance and Nomination
Committee is to enable Nokia to compete for top-of-class
Board competence to maximize value creation for its
shareholders. The Committee’s aim is that the Company has an
efficient Board composed of international professionals
representing a diverse and relevant mix of skills, experience,
background and other personal qualities. Competitive Board
remuneration contributes to the achievement of this target.
The main structure of the Board remuneration as outlined in the
Remuneration Policy is set out in the following table.
Fees | Fees consist of annual fees and meeting fees. Approximately 40% of the annual fee is paid in Nokia shares purchased from the market on behalf of the Board members or alternatively delivered as treasury shares held by the Company. The balance is paid in cash, most of which is typically used to cover taxes arising from the paid remuneration. Meeting fees are paid in cash. |
Incentives | Non-executive directors are not eligible to participate in any Nokia incentive plans and do not receive performance shares, restricted shares or any other equity-based or other form of variable compensation for their duties as members of the Board. |
Pension | Non-executive directors do not participate in any Nokia pension plans. |
Share ownership requirement | Members of the Board shall normally retain until the end of their directorship such number of shares that corresponds to the number of shares they have received as Board remuneration during their first three years of service on the Board (the net amount received after deducting those shares needed to offset any costs relating to the acquisition of the shares, including taxes). |
Other | Directors are compensated for travel and accommodation expenses as well as other costs directly related to Board and Committee work. These are paid in cash. |
Proposals of the Board of Directors to the Annual General
Meeting 2026 were published on 29 January 2026. The
Corporate Governance and Nomination Committee has resolved
to recommend to the Board that the annual fees of Board
members would remain at an unchanged level. Consequently,
the Board proposes to the Annual General Meeting 2026 that
the annual fees payable for a term ending at the close of the
next Annual General Meeting be as follows:
▪EUR 440 000 for the Chair of the Board;
▪EUR 210 000 for the Vice Chair of the Board;
▪EUR 185 000 for each other member of the Board;
▪EUR 30 000 each for the Chairs of the Audit Committee and
the Personnel Committee and EUR 20 000 for the Chairs of
the Technology Committee and the Strategy Committee as
an additional annual fee; and
▪EUR 15 000 for each member of the Audit Committee and
the Personnel Committee and EUR 10 000 for each member
of the Technology Committee and the Strategy Committee
as an additional annual fee.
In addition, the Board of Directors proposes that the meeting
fees for Board and Committee meetings remain at the current
level. The meeting fees are based on potential travel required
between the Board member’s home location and the location of
a meeting and are paid for a maximum of seven meetings per
term as follows:
▪EUR 5 000 per meeting requiring intercontinental travel; and
▪EUR 2 000 per meeting requiring intracontinental travel.
Only one meeting fee is paid if the travel covered by the fee
includes several meetings of the Board and its Committees. The
Board also proposes that members of the Board shall be
compensated for travel and accommodation expenses as well as
other costs directly related to Board and Board Committee work.
59 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
The Remuneration Policy for the President and CEO
Remuneration elements | Purpose and link to strategy | Operation including maximum opportunity | Performance metrics |
Base salary | To attract and retain individuals with the requisite level of knowledge, skills and experience to lead our businesses | Base salary is normally reviewed annually taking into consideration a variety of factors, including, for example, performance of the Company and the individual, remuneration of our global peer group, changes in individual responsibilities and employee salary increases. | Whilst there are no performance targets attached to the payment of base salary, performance is considered as context in the annual salary review. |
Pension | To provide retirement benefit aligned with local country practice | Pension arrangements reflect the relevant market practice and may evolve year- on-year. The President and CEO may participate in the applicable pension programs available to other executives in the country of employment. Details of the actual pension arrangement will be shown in the annual Remuneration Report. In Finland, the President and CEO participates in the Finnish statutory Employee’s Pension Act (TyEL), and there is no supplementary pension plan. | N/A |
Other benefits | To provide a competitive level of benefits and to support recruitment and retention | Benefits will be provided in line with local market practice in the country of employment and may evolve year-on-year. Benefits may include, for example, a company car (or cash equivalent), risk benefits (for example life and disability insurance) and employer contributions to insurance plans (for example medical insurance). Additional benefits and allowances may be offered in certain circumstances such as relocation support, expatriate allowances, and temporary living and transportation expenses aligned with Nokia’s mobility policy. The President and CEO is also eligible to participate in similar programs which may be offered to Nokia’s other employees such as the voluntary all-employee share purchase plan. | N/A |
Short-term incentive (STI) | To incentivize and reward performance against delivery of the annual business plan | STI is based on performance against one-year financial and non-financial targets and normally paid in cash. Minimum payout is 0% of base salary. Target opportunity is 125% of base salary. Maximum opportunity is 281.25% of base salary. The malus and clawback conditions apply in accordance with Company clawback policies. | Performance measures, weightings and targets for the selected measures are set annually by the Board to ensure they continue to support Nokia’s short-term business strategy. These measures can vary from year to year to reflect business priorities and may include a balance of financial, key operational and non-financial measures (including but not limited to strategic, customer satisfaction, employee engagement, environmental, social, governance or other sustainability-related measures). Although the performance measures and weighting may differ year to year reflecting the business priorities, in any given year, a minimum of 60% of measures will be based on financial criteria. Targets for the short-term incentives are set at the start of the year, in the context of analyst expectations and the annual plan, selecting measures that align to the delivery of Nokia’s strategy. The performance metrics and weightings are disclosed retrospectively in the annual Remuneration Report. |
60 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Remuneration elements | Purpose and link to strategy | Operation including maximum opportunity | Performance metrics |
Long-term incentive (LTI) – performance share award | To reward for delivery of sustainable long-term performance, align the President and CEO’s interests with those of shareholders, and aid retention | Long-term incentive awards may be made annually in performance shares, vesting normally after three years dependent on the achievement of performance conditions measured over a three-year period. Target award level is 200% of base salary at the date of grant, with maximum vesting of 400% of base salary. The malus and clawback conditions apply in accordance with Company clawback policies. | Performance measures, weightings and target metrics for the selected measures are set by the Board to ensure they continue to support Nokia’s long-term business strategy and financial success. Targets are set in the context of Nokia’s long-term plans and analyst forecasts, ensuring that they are considered both achievable and sufficiently stretching. The Board may choose different measures and weightings each year based on the business plan. The measures consist of at least 60% financial and/or share price- related measures. The Performance metrics and weightings are disclosed retrospectively in the annual Remuneration Report. |
Long-term incentive (LTI) - restricted share award | To incentivize longer-term decision making for sustainable shareholder value creation and to aid retention | Restricted share awards of up to 100% of base salary may be granted, vesting after at least three years, subject to financial underpins and continued service. The malus and clawback conditions apply in accordance with Company clawback policies. | Financial underpins are determined by the Board to ensure alignment with underlying company performance and shareholder experience. The Board may choose different financial underpins for each grant based on the business plan and strategic priority. |
Enhanced LTI (eLTI) – co-investment arrangement | To further align the President and CEO’s interests with Nokia’s long-term success and shareholder interests | Unlike the LTI performance share award, this is not an annual award and is only granted in exceptional circumstances. The President and CEO may be invited, at the discretion of the Board, to purchase investment shares of up to 200% of base salary, and in return, receive two matching shares for every one investment share purchased. The matching shares are delivered in the form of performance shares, typically subject to the same performance conditions as for the LTI performance share award, with a three-year performance and vesting period. The minimum vesting of the matching shares is 0% of base salary and maximum vesting is two times grant level. The malus and clawback conditions apply in accordance with Company clawback policies. | The performance metrics, targets and weightings for the matching shares are typically the same as those for LTI performance shares granted in the same year. |
Shareholding requirement | Align the President and CEO’s interests with those of shareholders and ensure any decisions made are in the long-term interest of the Company | The President and CEO is required to build and maintain a shareholding equivalent to 300% of base salary, to be achieved normally within five years of appointment. | N/A |
61 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Pay mix and remuneration scenarios for the President and CEO
Aligned with Nokia’s pay-for-performance remuneration
principle, performance-based remuneration is emphasized over
base salary. The chart below illustrates how the proportion of
the President and CEO’s remuneration package varies at the
minimum, target and maximum levels of performance. A
significant proportion of remuneration is linked to performance,
especially at maximum performance levels. Actual pay mix is
influenced by the extent to which the performance targets set
for the STI and LTI are achieved and may vary from the
scenarios below.
The long-term incentive vesting outcomes in the chart below
ignore share price movement from grant to vest. The eLTI is not
included in this analysis as it is not an annual award and is only
granted in exceptional circumstances. The vesting outcome of
the matching performance shares under the eLTI would be
dependent, besides the performance, on the value of the
investment, which could range from 0% to 200% of base salary
for the President and CEO. The minimum and maximum vesting
levels for the matching performance shares are provided in the
above summary table of the remuneration elements.
President and CEO pay mix scenarios
Share ownership requirement
Nokia believes that it is desirable for its executives to own
shares in Nokia to align their interests with those of
shareholders and to ensure that their decisions are in the long-
term interest of the Company. The President and CEO is
required to own three times his or her annual base salary in
Nokia shares and is given a period of five years from
appointment to achieve the required level of share ownership.
Malus and clawback
The malus and clawback conditions apply in accordance with
Company’s clawback policies to the short-term and long-term
incentives for all participants, including the President and CEO.
Nokia’s Executive Officer Clawback Policy is applied in the case
of any erroneously awarded compensation due to restatement
in the Company’s Financial Statements with a three-year
lookback period, resulting in the reclaiming of amounts then-
outstanding or previously paid.
Additionally, under the Nokia Incentive Compensation Clawback
Policy, unless the Personnel Committee otherwise decides, the
recoupment of previously awarded, paid or received
compensation is triggered in situations of reputational damage,
willful breach of internal control procedures, gross misconduct
and restatement of financial statement (clawback triggers) with
a recoupment period not exceeding three years in total.
Remuneration on recruitment
Our policy on recruitment is to offer a remuneration package
that is sufficient to attract, retain and motivate the individual
57%
with the right skills for the required role.
On occasion, we may offer buy-out awards to compensate for a
candidate’s forfeited awards on leaving a previous employer.
24%
Such buy-out awards would, where possible, reflect the nature
of the forfeited awards in terms of delivery mechanism, time
100%
19%
horizons, attributed expected value and performance
conditions.
Termination provisions
In the event of a termination of employment, any payable
remuneration is determined in line with legal advice regarding
local legislation, country policies, contractual obligations and
the rules of the applicable incentive and benefit plans. Payment
in lieu of notice will not typically exceed the value of 12 months’
remuneration (including base salary, benefits, STI and pension
contribution, if applicable). The treatment of equity incentive
awards may depend on the circumstances of the departure. In
the event of death, permanent disability or retirement,
unvested awards are normally allowed to be retained. These
awards will vest either on departure or at normal vesting date,
subject to performance (if applicable) and time proration, unless
the Board of Directors determines otherwise. Current
termination provisions of the President and CEO’s service
agreement are described in the Remuneration Report.
Change of control arrangements, if any, are based on a double
trigger structure, which means that both a specified change of
control event and termination of the individual’s employment
must take place for any change of control-based severance
payment to materialize.
62 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Remuneration governance
We manage our remuneration through clearly defined
processes, with well-defined governance principles, ensuring
that no individual is involved in the decision making related to
their own remuneration, and that there is appropriate oversight
of any remuneration decision. Remuneration of the Board is
annually presented to shareholders for approval at the Annual
General Meeting. The Board submits its proposal to the Annual
General Meeting on the recommendation of the Board’s
Corporate Governance and Nomination Committee, which
actively considers and evaluates the appropriate level and
structure of directors’ remuneration. Shareholders also
authorize the Board to resolve to issue shares, for example to
settle Nokia’s equity-based incentive plans, based on the
proposal of the Board.
The Board of Directors approves, and the independent
members of the Board confirm, the remuneration of the
President and CEO, upon recommendation of the Personnel
Committee.
The Personnel Committee consults regularly with the President
and CEO and the Chief People Officer. The President and CEO
has an active role in the remuneration governance and
performance management processes for the GLT and the wider
employee population at Nokia. However, the President and CEO
or the Chief Personnel Officer are not present when their own
remuneration is reviewed or discussed. This enables the
Personnel Committee to be mindful of employee pay and
conditions across the broader employee population.
The Committee has the power, in its sole discretion, to retain
remuneration advisers to assist the Personnel Committee in
evaluating executive remuneration. During 2025, the Personnel
Committee engaged Alvarez & Marsal, an independent external
adviser, to assist in the review and determination of executive
remuneration and program design, as well as to provide insight
into market trends. Willis Towers Watson was retained as a
market data provider for the Committee.
The Personnel Committee Chair regularly engages with
shareholders to discuss their views on our remuneration
policies, programs and associated disclosures and reflects on
their feedback. These insights are taken account of in the
Committee’s and Board’s decision-making process for executive
remuneration.
Work of the Personnel Committee
The Personnel Committee convened five times during
2025 with a general theme for each meeting
1 Approvals & reporting
2 Philosophy & structure
3 Long-term direction & market review
4 Planning
January
▪2024 STI performance outcome
▪2025 STI and LTI metrics and target setting
▪President and CEO remuneration review
▪Equity plan vesting and granting during 2025
▪Remuneration Report for 2024
June
▪2025 Annual General Meeting season review
▪GLT remuneration review
▪Culture update
▪GLT succession planning
July
▪Remuneration Policy review
▪GLT succession planning
▪Inflight LTI awards performance update
▪Market practice update
▪People risks including physical safety review
September
▪Workforce demographics
▪2026 STI and LTI performance metrics initial discussion
December
▪Preliminary review of metrics and targets for 2026 STI
and LTI
▪2026 equity plan budget and allocation
▪Proxy agency and shareholder consultation feedback
▪Planning of Remuneration Report for 2025
▪Annual GLT and CEO benchmarking
▪Executive shareholding assessment
▪Personnel Committee charter review
63 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Remuneration of the Nokia Group
Leadership Team in 2025
The remuneration of the members of the GLT (excluding the
President and CEO) consists of base salary, other benefits, and
short-term and long-term incentives. Short-term incentive
plans are based on rewarding the delivery of business
performance utilizing certain, or all, of the following metrics as
appropriate to the member’s role: comparable operating profit
in constant currency(1), cash release(1) and ESG-related
measures such as health & safety.
Executives in the GLT are subject to the same remuneration
policy framework as the President and CEO. This includes being
subject to the malus and clawback conditions and shareholding
requirements. The shareholding requirement for members of
the GLT is two times their annual base salary, built within a
period of five years of their appointment.
At the end of 2025, the Group Leadership Team consisted of 12 persons split between Finland, UK and the United States. For
information regarding the current Group Leadership Team composition, refer to the Corporate Governance Statement.
Name | Position in 2025 | Appointment date |
Justin Hotard | President and CEO | 1 April 2025 |
Louise Fisk | Chief Communications Officer (currently Chief Communications and Marketing Officer) | 18 October 2024 |
Patrik Hammarén | President of Nokia Technologies (currently President of Technology Standards) | 18 October 2024 |
Victoria Hanrahan | Chief of Staff to the President and CEO | 16 June 2025 |
Mikko Hautala | Chief Geopolitical and Government Relations Officer | 1 November 2024 |
David Heard | President of Network Infrastructure | 1 July 2025 |
Pallavi Mahajan | Chief Technology and AI Officer | 1 October 2025 |
Esa Niinimäki | Chief Legal Officer (currently Chief Legal and Administrative Officer) and interim Chief People Officer | 25 January 2023 |
Konstanty Owczarek | Chief Corporate Development Officer | 1 October 2025 |
Raghav Sahgal | President of Cloud and Network Services (currently Chief Customer Officer) | 1 June 2020 |
Tommi Uitto | President of Mobile Networks | 31 January 2019 |
Marco Wirén | Chief Financial Officer | 1 September 2020 |
Remuneration of the Group Leadership Team members in 2025
Remuneration of the Group Leadership Team (excluding the President and CEO) in 2024 and 2025, in the aggregate, was as follows:
EURm⁽¹⁾ | 2025 | 2024 |
Salary, short-term incentives and other compensation(2) | 14.3 | 11.3 |
Long-term incentives(3) | 3.1 | 3.9 |
Total | 17.4 | 15.2 |
(1)The values represent each member’s time on the Group Leadership Team.
(2)Short-term incentives represent amounts earned in respect of 2025 performance. Other compensation includes mobility-related payments, local benefits and pension costs.
(3)The amounts represent the equity awards that vested in 2025 and 2024.
The members of the Group Leadership Team (excluding the President and CEO) were awarded the following equity awards under the
Nokia equity program in 2025:
Award | Units awarded(1) | Grant date fair value (EUR) | Grant date | Vesting |
Performance share award(2) | 2 552 690 | 11 289 683 | 7 July 2025, 13 October 2025 | Q3 & Q4 2028 |
Restricted share award(3) | 1 957 270 | 8 663 881 | 7 July 2025, 13 October 2025 | Q3 & Q4 2026, Q3 & Q4 2027, Q3 & Q4 2028 |
(1) Comparable operating profit in constant currency and cash flow less comparable
operating profit (i.e. cash release) are financial measures used only in calculation
of short-term incentives for the President and CEO and the members of the Global
Leadership Team. These measures are not used to communicate the
management’s view of Nokia’s financial performance, and hence they are not
considered as alternative performance measures. For the definition and
reconciliation of non-IFRS measures to the most directly comparable IFRS
measure, refer to the ”Alternative performance measures” section.
(1)Includes units awarded to persons who were Group Leadership Team members during 2025.
(2)The 2025 performance shares have a three-year performance period based on 50% relative total shareholder return, 40% three-year cumulative EPS and 10% GHG emission
reduction scope 1, 2 and 3 targets. The maximum payout is 200% of target subject to maximum performance against the performance criteria. Vesting is subject to continued
employment.
(3)Vesting of each tranche of the restricted share awards is conditional on continued employment.
64 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Corporate governance statement •Remuneration Operating and financial review and prospects General facts on Nokia Financial statements Other information |
Unvested equity awards held by the Group Leadership Team, including the President and CEO
The following table sets forth the potential aggregate ownership interest through the holding of equity-based long-term incentives of
the Group Leadership Team in office, including the President and CEO, at 31 December 2025:
Shares receivable through performance shares at grant | Shares receivable through performance shares at maximum(4) | Shares receivable through restricted shares | |
Number of equity awards held by the Group Leadership Team(1) | 7 659 499 | 15 307 998 | 6 545 123 |
% of the outstanding shares(2) | 0.14% | 0.27% | 0.12% |
% of the total outstanding equity incentives (per instrument)(3) | 19.25% | 20.09% | 4.67% |
(1)Includes the 12 members of the Group Leadership Team in office at 31 December 2025.
(2)The percentages are calculated in relation to the outstanding number of shares and total voting rights of Nokia at 31 December 2025, excluding shares held by the Nokia Group.
No member of the Group Leadership Team owned more than 1% of the outstanding Nokia shares.
(3)The percentages are calculated in relation to the total outstanding equity incentives per instrument.
(4)At maximum performance, under the performance share plans outstanding at 31 December 2025, the payout would be 200% and the table reflects this potential maximum
payout.
Employee Share Purchase Plan
All eligible Nokia employees, including the President and CEO and our GLT members, can participate in the Employee Share Purchase
Plan, by making contributions from their monthly net salaries (up to a cap) to purchase Nokia shares at market value. Participants will
receive one matching share for every two purchased shares they still hold at the end of the applicable annual plan cycle. Until the
matching shares are delivered, the participants have no shareholder rights, such as voting or dividend rights associated with the
matching shares.
65 | Nokia Annual Report on Form 20-F 2025 |
Operating and financial
review and prospects
Selected financial data | 66 |
Operating and financial review | 67 |
Results of operations | 67 |
Discontinued operations | 70 |
Results of segments | 71 |
Network Infrastructure | 71 |
Cloud and Network Services | 72 |
Mobile Networks | 73 |
Nokia Technologies | 74 |
Group Common and Other | 75 |
Liquidity and capital resources | 76 |
Financial position | 76 |
Cash flow | 76 |
Financial assets and debt | 77 |
Venture fund investments and commitments | 78 |
Treasury policy | 78 |
Foreign exchange impact | 78 |
Business integrity | 79 |
Environment | 84 |
Shares and shareholders | 88 |
Share details | 88 |
Shareholders | 91 |
Articles of Association | 92 |
Risk factors | 94 |
Significant subsequent events | 113 |
66 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects •Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Selected financial data
The below table presents selected financial and other measures for the Nokia Group as of and for the financial years ended on 31 December 2025, 2024 and 2023.
The information has been derived from Nokia’s consolidated financial statements prepared in accordance with IFRS Accounting Standards.
EURm (except for percentage and personnel data) | 2025 | 2024 | 2023 |
From the consolidated income statement | |||
Net sales | 19 889 | 19 220 | 21 138 |
Operating profit(1) | 885 | 1 970 | 1 733 |
% of net sales | 4.4% | 10.2% | 8.2% |
Profit before tax | 915 | 2 091 | 1 469 |
Profit from continuing operations | 638 | 1 711 | 649 |
Profit/(loss) from discontinued operations | 22 | (427) | 30 |
Profit for the year | 660 | 1 284 | 679 |
From the consolidated statement of financial position | |||
Non-current assets | 21 805 | 21 162 | 21 694 |
Current assets | 15 792 | 17 987 | 18 087 |
Assets held for sale | — | — | 79 |
Total assets | 37 597 | 39 149 | 39 860 |
Total shareholders' equity | 20 967 | 20 657 | 20 537 |
Non-controlling interests | 91 | 90 | 91 |
Total equity | 21 058 | 20 747 | 20 628 |
Interest-bearing liabilities(2) | 3 413 | 3 887 | 4 191 |
Lease liabilities(2) | 1 000 | 863 | 997 |
Provisions(2) | 1 416 | 1 228 | 1 262 |
Other liabilities(2) | 10 710 | 12 424 | 12 782 |
Total shareholders’ equity and liabilities | 37 597 | 39 149 | 39 860 |
Other information | |||
Research and development expenses(3) | (4 855) | (4 512) | (4 277) |
% of net sales | (24.4)% | (23.5)% | (20.2)% |
Capital expenditure(4) | (606) | (472) | (652) |
% of net sales | (3.0)% | (2.5)% | (3.1)% |
Personnel expenses(3) | 7 831 | 7 563 | 7 294 |
Average number of employees(3) | 78 005 | 78 434 | 84 795 |
Order backlog, EUR billion(5) | 19.5 | 20.0 | 22.0 |
EURm (except for percentage and personnel data) | 2025 | 2024 | 2023 |
Key financial indicators and ratios | |||
Earnings per share attributable to equity holders of the parent | |||
Basic earnings per share, EUR | |||
Continuing operations | 0.12 | 0.31 | 0.11 |
Profit for the year | 0.12 | 0.23 | 0.12 |
Diluted earnings per share, EUR | |||
Continuing operations | 0.11 | 0.31 | 0.11 |
Profit for the year | 0.12 | 0.23 | 0.12 |
Proposed dividend per share, EUR(6) | 0.14 | 0.14 | 0.13 |
Return on capital employed %(4) | 4.3% | 9.3% | 6.6% |
Return on shareholders’ equity %(4) | 3.1% | 6.2% | 3.2% |
Equity ratio %(4) | 56.0% | 53.0% | 51.8% |
Net debt to equity (gearing) %(4) | (16.0)% | (23.4)% | (21.0)% |
Cash and cash equivalents | 5 462 | 6 623 | 6 234 |
Total cash and interest-bearing financial investments(4) | 6 791 | 8 741 | 8 514 |
Net cash and interest-bearing financial investments(4) | 3 378 | 4 854 | 4 323 |
Net cash flows from operating activities | 2 071 | 2 493 | 1 317 |
Free cash flow(4) | 1 465 | 2 021 | 665 |
(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and administrative
expenses and other operating income to financial income. The comparative amounts for 2024 and 2023 have been recast
accordingly. For more information, refer to Note 1.2. General accounting policies in the consolidated financial statements.
(2)Includes both current and non-current liabilities in the consolidated statement of financial position.
(3)Presented for continuing operations.
(4)Non-IFRS measures. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS measures,
refer to the ”Alternative performance measures” section.
(5)Order backlog includes EUR 1.7 billion in 2023 related to discontinued operations sold in 2024.
(6)The Board of Directors proposes to the Annual General Meeting 2026 to be authorized to decide in its discretion on the
distribution of an aggregate maximum of EUR 0.14 per share as dividend from the retained earnings and/or as assets from the
reserve for invested unrestricted equity.
67 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Operating and financial review
The financial information included in this “Operating and financial review” section as of and for the
years ended 31 December 2025 and 2024 has been derived from, and should be read in
conjunction with, Nokia’s consolidated financial statements included in this report. For discussion
of the year ended 31 December 2024 compared to the year ended 31 December 2023, please refer
to this section of Nokia’s Annual Report on Form 20-F for the year ended 31 December 2024.
On 28 February 2025, Nokia completed the acquisition of Infinera Corporation (Infinera), pursuant
to the definitive agreement announced on 27 June 2024. Infinera, a San Jose based global supplier
of innovative open optical networking solutions and advanced optical semiconductors, became part
of the Nokia group effective as of the closing, with Nokia holding 100% of its equity and voting
rights. The acquisition is expected to significantly improve Nokia’s scale and profitability in optical
networks, and accelerate Nokia’s growth strategy in data centers and strengthen its presence both
in North America and with hyperscalers. Nokia is reporting the acquired business as part of its
Network Infrastructure segment. For more information, refer to Note 6.2. Acquisitions in the
consolidated financial statements.
In 2025, Nokia completed a strategic review of its venture fund investment activities. As a result,
Nokia no longer views broad-based venture fund investments as having a strategic role and has
initiated a process to scale down these investments. Consequently, the presentation of the results
of venture fund investments as operating activities is no longer considered relevant, and therefore
Nokia is presenting the gains and losses from venture fund investments, including the changes in
fair value and the fund management fees, as financial income. For the segment reporting purposes,
the results of venture fund investments had previously been included in the operating results of
Group Common and Other. The comparative financial information has been recast accordingly. As a
result of the recast, in 2024, selling, general and administrative costs decreased by EUR 18 million,
other operating income decreased by EUR 47 million and financial income increased by EUR 29
million.
Results of operations
Nokia Group
The following table sets forth the segment operating results and the percentage of net sales for
the years indicated.
For the year ended 31 December 2025 compared to the year ended 31 December 2024
2025 | 2024 | |||||
EURm | % of net sales | EURm | % of net sales | Change % | ||
Net sales | 19 889 | 100.0% | 19 220 | 100.0% | 3% | |
Cost of sales | (11 230) | (56.5)% | (10 356) | (53.9)% | 8% | |
Gross profit | 8 659 | 43.5% | 8 864 | 46.1% | (2)% | |
Research and development expenses | (4 855) | (24.4)% | (4 512) | (23.5)% | 8% | |
Selling, general and administrative expenses(1) | (3 073) | (15.5)% | (2 872) | (14.9)% | 7% | |
Other operating income and expenses(1) | 154 | 0.8% | 490 | 2.5% | (69)% | |
Operating profit(1) | 885 | 4.4% | 1 970 | 10.2% | (55)% | |
Share of results of associated companies and joint ventures | 19 | 0.1% | 7 | 0.0% | 171% | |
Financial income and expenses(1) | 11 | 0.1% | 114 | 0.6% | (90)% | |
Profit before tax | 915 | 4.6% | 2 091 | 10.9% | (56)% | |
Income tax expense | (277) | (1.4)% | (380) | (2.0)% | (27)% | |
Profit from continuing operations | 638 | 3.2% | 1 711 | 8.9% | (63)% | |
Profit/(loss) from discontinued operations | 22 | 0.1% | (427) | (2.2)% | (105)% | |
Profit for the year | 660 | 3.3% | 1 284 | 6.7% | (49)% | |
Attributable to: | ||||||
Equity holders of the parent | 651 | 3.3% | 1 277 | 6.6% | (49)% | |
Non-controlling interests | 9 | 0.0% | 7 | 0.0% | 29% | |
(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and administrative
expenses and other operating income to financial income. The comparative amounts for 2024 have been recast accordingly. For
more information, refer to Note 1.2. General accounting policies in the consolidated financial statements.
68 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Net sales
Net sales in 2025 were EUR 19 889 million, an increase of EUR 669 million, or 3%, compared to EUR
19 220 million in 2024. The acquisition of Infinera contributed EUR 1 258 million to net sales and
changes in foreign exchange rates had a negative impact on net sales of approximately 4%. Beyond
these impacts, the net sales increase was driven by a strong performance in Network
Infrastructure, particularly in Optical Networks with strong demand trends among AI & Cloud
customers.
The following table sets forth distribution of net sales by region for the years indicated.
EURm | 2025 | 2024 | Change % |
Americas | 6 985 | 6 276 | 11% |
Latin America | 784 | 895 | (12)% |
North America | 6 201 | 5 381 | 15% |
APAC | 4 639 | 4 549 | 2% |
Greater China | 913 | 1 134 | (19)% |
India | 1 534 | 1 373 | 12% |
Rest of APAC | 2 192 | 2 042 | 7% |
EMEA | 8 265 | 8 395 | (2)% |
Europe(1) | 6 165 | 6 362 | (3)% |
Middle East & Africa | 2 100 | 2 033 | 3% |
Total | 19 889 | 19 220 | 3% |
(1)All Nokia Technologies IPR and licensing net sales are allocated to Finland.
The following table sets forth distribution of net sales by customer type for the years indicated.
EURm | 2025 | 2024 | Change % |
Telecom providers | 15 313 | 15 085 | 2% |
AI & Cloud and Mission Critical Enterprise & Defense | 3 085 | 2 180 | 42% |
Licensees | 1 501 | 1 928 | (22)% |
Other(1) | (10) | 27 | (137)% |
Total | 19 889 | 19 220 | 3% |
(1)In 2025, includes eliminations of inter-segment revenues, unallocated items and certain other items. In 2024, includes net sales of
Radio Frequency Systems (RFS), which was managed as a separate entity, and certain other items, such as eliminations of inter-
segment revenues. RFS net sales also include revenue from telecom providers and AI & Cloud and Mission Critical Enterprise &
Defense.
Gross profit
Gross profit in 2025 was EUR 8 659 million, a decrease of EUR 205 million, or 2%, compared to EUR
8 864 million in 2024. The decrease in gross profit was primarily related to a reduction in the profit
contribution from Nokia Technologies which benefited from more than EUR 400 million of one-time
catch up net sales in 2024 and to lesser extent attributable to acquisition related charges of the
Infinera acquisition and a provision for a contractual claim. This was partly offset by the increase in
gross profit related to the Infinera acquisition. Gross profit in 2025 also reflected relatively stable
restructuring and associated charges, which amounted to EUR 148 million in 2025, compared to
EUR 155 million in 2024. Gross margin in 2025 was 43.5%, compared to 46.1% in 2024 due to
these same factors.
Operating expenses
Research and development expenses in 2025 were EUR 4 855 million, an increase of
EUR 343 million, or 8%, compared to EUR 4 512 million in 2024. Research and development
expenses represented 24.4% of the net sales in 2025 compared to 23.5% in 2024. The increase in
research and development expenses was primarily related to the acquisition of Infinera and higher
investment in Network Infrastructure which offset cost savings elsewhere in the business. Research
and development expenses in 2025 contained similar levels of restructuring and associated
charges, which amounted to EUR 137 million in 2025, compared to EUR 135 million in 2024.
Selling, general and administrative expenses in 2025 were EUR 3 073 million, an increase of EUR
201 million compared to EUR 2 872 million in 2024. Selling, general and administrative expenses
represented 15.5% of the net sales in 2025 compared to 14.9% in 2024. The increase in selling,
general and administrative expenses was driven by higher costs associated with the acquisition of
Infinera. This was somewhat offset by ongoing cost savings actions. 2025 included restructuring
and associated charges of EUR 191 million, compared to EUR 145 million in 2024. In 2025, selling,
general and administrative expenses included amortization and depreciation of acquired intangible
assets and property, plant and equipment of EUR 358 million, compared to EUR 294 million in 2024.
Other operating income and expenses in 2025 were a net income of EUR 154 million, a decrease of
EUR 336 million, compared to a net income of EUR 490 million in 2024. The decrease in other
operating income and expenses was primarily driven by the absence of a gain on sale of TD Tech and
a gain on sale of the Device Management and Service Management Platform businesses of EUR 191
million and EUR 68 million, respectively, that benefited 2024. In addition, the reversals of expected
credit losses on trade receivables reduced by EUR 77 million and gains on sale of property, plant and
equipment decreased by EUR 73 million, compared to 2024. The decrease in other operating income
and expenses was partially offset by the impact of hedging which was positive EUR 81 million in
2025, compared to a positive impact of EUR 23 million in 2024.
69 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Operating profit
Operating profit in 2025 was EUR 885 million, a decrease of EUR 1 085 million, compared to an
operating profit of EUR 1 970 million in 2024. The decrease in operating profit was due to lower
gross profit as described above, and the net negative fluctuation in other operating income and
expenses, in addition to which research and development expenses and selling, general and
administrative expenses were higher related to the Infinera acquisition. Operating margin in 2025
was 4.4%, compared to 10.2% in 2024.
Financial income and expenses
Financial income and expenses were a net income of EUR 11 million in 2025, a negative fluctuation
of EUR 103 million, compared to a net income of EUR 114 million in 2024. The net negative
fluctuation in financial income and expenses mainly resulted from decrease in interest income on
financial investments of EUR 135 million and net negative fluctuation in the results of venture fund
investments of EUR 95 million partly offset by decrease in interest expense on interest-bearing
liabilities of EUR 68 million.
Profit before tax
Profit before tax in 2025 was EUR 915 million, a decrease of EUR 1 176 million, compared to
EUR 2 091 million in 2024.
Income tax
Income taxes were a net expense of EUR 277 million in 2025, a net positive fluctuation of EUR 103
million compared to a net expense of EUR 380 million in 2024. The positive fluctuation in net
income taxes was primarily attributable to decrease in the profit before tax year-over-year, and to
lesser extent to the change in geographical sales and profit mix. For more details on these items,
please refer to Note 2.5. Income taxes in the consolidated financial statements.
Profit from continuing operations
Profit from continuing operations in 2025 was EUR 638 million, a decrease of EUR 1 073 million,
compared to a profit of EUR 1 711 million in 2024. The change was due to the lower operating
profit and the net negative fluctuation in financial income and expenses, partially offset by the
lower income tax expenses.
EPS from continuing operations in 2025 was EUR 0.12 (basic) and EUR 0.11 (diluted) compared to
EUR 0.31 (basic) and EUR 0.31 (diluted) in 2024.
Profit/loss from discontinued operations
Profit from discontinued operations in 2025 was EUR 22 million, a change of EUR 449 million,
compared to a loss of EUR 427 million in 2024. For discussion of results on discontinued
operations, refer to Discontinued operations section below.
Profit for the year
Profit for the year in 2025 was EUR 660 million, a decrease of EUR 624 million, compared to a profit
of EUR 1 284 million in 2024. The change in profit for the year was primarily due to the lower profit
from continuing operations.
EPS in 2025 was EUR 0.12 (basic) and EUR 0.12 (diluted) compared to EUR 0.23 (basic) and EUR 0.23
(diluted) in 2024.
Order backlog
At 31 December 2025, the order backlog amounted to EUR 19.5 billion compared to EUR 20.0
billion at 31 December 2024. The slight decline in order backlog year-on-year primarily related to
changes in foreign exchange rates as a significant portion of Nokia’s orders are in US Dollars. Nokia
Technologies backlog declined due to its normal contract cycle as Nokia recognises revenue over
time from multi-year contracts. Backlog increased in Network Infrastructure and Mobile Networks
and decreased in Cloud and Network Services.
Management has estimated that the order backlog will be recognized as revenue as follows:
2025 | 2024 | |
Within 1 year | 57% | 53% |
2-3 years | 28% | 27% |
More than 3 years | 15% | 20% |
Total | 100% | 100% |
70 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Cost savings program
On 19 October 2023, Nokia announced actions being taken across segments to address the
challenging market environment that the company faced. The company will reduce its cost base
and increase operational efficiency while protecting its R&D capacity and commitment to
technology leadership. Nokia targets to lower its cost base on a gross basis (i.e. before inflation) by
between EUR 800 million and EUR 1 200 million by the end of 2026 compared to 2023, assuming
on-target variable pay in both periods. This represents a 10-15% reduction in personnel expenses.
The program is expected to lead to a 72 000–77 000 employee organization compared to the
86 000 employees Nokia had when the program was announced. The headcount figures represent
the originally planned headcount targets and do not take into consideration the completed
divestment of Submarine Networks or planned divestments or acquisitions.
Actual headcount at 31 December 2024 was 75 600. The plan does not reflect the additional
headcount coming from the acquisition of Infinera which was completed in Q1 2025. The
headcount at 31 December 2025 would have been 74 100 had Nokia not acquired Infinera.
The program is expected to deliver savings on a net basis but the magnitude will depend on
inflation. The cost savings are expected to primarily be achieved in Mobile Networks, Cloud and
Network Services and Nokia’s corporate functions. One-time restructuring charges and cash
outflows of the program are expected to be similar to the annual cost savings achieved.
The current plan envisages achieving gross cost savings of EUR 1 200 million within the 2024–2026
program although this remains subject to change depending on the evolution of end market
demand. This includes the expected gross cost savings along with the associated restructuring
charges and cash outflows for the program. Nokia expects approximately 70% of the savings to be
achieved within operating expenses and 30% within cost of sales. By segments, approximately
50-60% of the savings are expected to be achieved within Mobile Networks, 30% within Cloud and
Network Services and the remaining 10-20% between Network Infrastructure and corporate center.
Discontinued operations
For the year ended 31 December 2025 compared to the year ended 31 December 2024
The following table sets forth the results for discontinued operations, and the percentage of net
sales for the years indicated. On 27 June 2024, Nokia announced it had entered into a put option
agreement to sell its wholly owned subsidiary Alcatel Submarine Networks (ASN) to the French
State. As a result, Nokia classified the Submarine Networks business as a discontinued operation
and recast the comparative amounts accordingly. The sale was completed on 31 December 2024.
2025 | 2024 | |||||
EURm | % of net sales | EURm | % of net sales | Change % | ||
Net sales | — | 100.0% | 1 059 | 100.0% | (100)% | |
Expenses | — | 0.0% | (989) | (93.4)% | (100)% | |
Operating profit | — | 0.0% | 70 | 6.6% | (100)% | |
Financial income and expenses | — | 0.0% | (7) | (0.7)% | (100)% | |
Impairment loss recognized on the remeasurement to fair value less costs to sell | — | 0.0% | (514) | (48.5)% | (100)% | |
Gain on sale | 22 | 0.0% | 29 | 2.7% | (24)% | |
Profit/(loss) from discontinued operations before tax | 22 | 0.0% | (422) | (39.8)% | (105)% | |
Income tax expense | — | 0.0% | (5) | (0.5)% | (100)% | |
Profit/(loss) from discontinued operations⁽¹⁾ | 22 | 0.0% | (427) | (40.3)% | (105)% | |
(1)Profit/loss from discontinued operations is attributable to the equity holders of the parent in its entirety.
Considering Nokia had completed the sale of ASN by the end of 2024, Nokia had no functioning
discontinued operations during 2025. The only impact to Nokia’s financial performance in 2025
from discontinued operations was a EUR 22 million gain on sale which relates to positive post-
closing purchase price adjustments and an earn-out mechanism related to ASN’s financial
performance during 2025 exceeding the targets.
71 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Results of segments
During 2025, Nokia had four operating and reportable segments for financial reporting purposes:
(1) Network Infrastructure, (2) Cloud and Network Services, (3) Mobile Networks and (4) Nokia
Technologies. Nokia also presents segment-level information for Group Common and Other. The
amounts presented in this “Results of segments” section for each reportable segment and Group
Common and Other represent the amounts reported to the management for the purpose of
assessing performance and making decisions about resource allocation. Certain costs and revenue
adjustments are not allocated to the segments for this purpose. For more information on Nokia’s
operational and reporting structure as well as the reconciliation of reportable segment measures to
those of the Nokia Group, refer to Note 2.2. Segment information, in the consolidated financial
statements.
Network Infrastructure
For the year ended 31 December 2025 compared to the year ended 31 December 2024
The following table sets forth the segment operating results and the percentage of net sales for
the years indicated.
2025 | 2024 | |||||
EURm | % of net sales | EURm | % of net sales | Change % | ||
Net sales(1) | 7 986 | 100.0% | 6 518 | 100.0% | 23% | |
Cost of sales | (4 700) | (58.9)% | (3 781) | (58.0)% | 24% | |
Gross profit | 3 286 | 41.1% | 2 737 | 42.0% | 20% | |
Research and development expenses | (1 536) | (19.2)% | (1 207) | (18.5)% | 27% | |
Selling, general and administrative expenses | (985) | (12.3)% | (815) | (12.5)% | 21% | |
Other operating income and expenses | 15 | 0.2% | 46 | 0.7% | (67)% | |
Operating profit | 780 | 9.8% | 761 | 11.7% | 2% | |
(1)In 2025, net sales include Optical Networks net sales of EUR 3 019 million, IP Networks net sales of EUR 2 594 million and Fixed
Networks net sales of EUR 2 373 million. In 2024, net sales include Optical Networks net sales of EUR 1 636 million, IP Networks
net sales of EUR 2 583 million and Fixed Networks net sales of EUR 2 299 million.
Net sales
Network Infrastructure net sales in 2025 were EUR 7 986 million, an increase of EUR 1 468 million,
or 23%, compared to EUR 6 518 million in 2024. The acquisition of Infinera at the end of February
contributed EUR 1 273 million in net sales growth. Nokia saw growth on an organic basis in all three
of the units within Network Infrastructure while foreign exchange rate fluctuations had an
approximately 4% negative impact on net sales for Network Infrastructure.
Optical Networks net sales were EUR 3 019 million in 2025, an increase of EUR 1 383 million, or
85%, compared to EUR 1 636 million in 2024. The acquisition of Infinera at the end of February
contributed EUR 1 273 million in net sales growth. Foreign exchange rate fluctuations had an
approximately 5% negative impact on net sales. Demand increased from AI & Cloud and Mission
Critical Enterprise & Defense customers while demand from telecom providers remained largely
stable.
IP Networks net sales were EUR 2 594 million in 2025, an increase of EUR 11 million compared to
EUR 2 583 million in 2024. Foreign exchange rate fluctuations had an approximately 5% negative
impact on net sales. Net sales in IP Networks increased in 2025, as growth in sales to AI & Cloud and
Mission Critical Enterprise & Defense offset a slight decline in sales to telecom providers.
Fixed Networks net sales were EUR 2 373 million in 2025, an increase of EUR 74 million, or 3%,
compared to EUR 2 299 million in 2024. Foreign exchange rate fluctuations had an approximately
4% negative impact on net sales. The increase in Fixed Networks net sales reflected growth in the
fiber product families and fixed wireless access, offsetting some declines in product areas that are
being deprioritized such as Site Implementation and Outside Plant.
The following table sets forth distribution of net sales by region for the years indicated.
EURm | 2025 | 2024 | Change % |
Americas | 3 688 | 2 726 | 35% |
APAC | 1 648 | 1 426 | 16% |
EMEA | 2 650 | 2 366 | 12% |
Total | 7 986 | 6 518 | 23% |
Gross profit
Network Infrastructure gross profit in 2025 was EUR 3 286 million, an increase of EUR 549 million,
or 20%, compared to EUR 2 737 million in 2024. Network Infrastructure gross margin in 2025 was
41.1%, compared to 42.0% in 2024. Gross profit increased primarily related to the acquisition of
Infinera. Gross margin declined, reflecting changes in product mix in the year.
Operating expenses
Network Infrastructure research and development expenses were EUR 1 536 million in 2025, an
increase of EUR 329 million, or 27% compared to EUR 1 207 million in 2024. The increase in
research and development expenses reflected the acquisition of Infinera and investments in future
growth opportunities.
Network Infrastructure selling, general and administrative expenses were EUR 985 million in 2025,
an increase of EUR 170 million, or 21%, compared to EUR 815 million in 2024. The increase in
selling, general and administrative expenses largely reflected the acquisition of Infinera and
investments in sales resources for future growth opportunities.
Network Infrastructure other operating income and expenses was an income of EUR 15 million in
2025, a change of EUR 31 million compared to an income of EUR 46 million in 2024. The change in
other operating income and expenses was mainly due to lower proceeds from the sale of digital
assets. The other operating income was primarily related to hedging.
Operating profit
Network Infrastructure operating profit was EUR 780 million in 2025, an increase of EUR 19 million,
or 2%, compared to EUR 761 million in 2024. Network Infrastructure operating margin in 2025 was
9.8%, compared to 11.7% in 2024.
72 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Cloud and Network Services
For the year ended 31 December 2025 compared to the year ended 31 December 2024
The following table sets forth the segment operating results and the percentage of net sales for
the years indicated.
2025 | 2024⁽¹⁾ | |||||
EURm | % of net sales | EURm | % of net sales | Change % | ||
Net sales | 2 606 | 100.0% | 2 589 | 100.0% | 1% | |
Cost of sales | (1 307) | (50.2)% | (1 432) | (55.3)% | (9)% | |
Gross profit | 1 299 | 49.8% | 1 157 | 44.7% | 12% | |
Research and development expenses | (567) | (21.8)% | (550) | (21.3)% | 3% | |
Selling, general and administrative expenses | (421) | (16.2)% | (444) | (17.2)% | (5)% | |
Other operating income and expenses | 27 | 1.0% | 43 | 1.7% | (37)% | |
Operating profit | 338 | 13.0% | 206 | 8.0% | 64% | |
(1)In 2025, Nokia moved Managed Services business from Cloud and Network Services to Mobile Networks. The comparative amounts
for 2024 have been recast accordingly. For more information, refer to Note 2.2. Segment information in the consolidated financial
statements.
Net sales
Cloud and Network Services net sales in 2025 were EUR 2 606 million, an increase of EUR 17 million,
or 1%, compared to EUR 2 589 million in 2024. Foreign exchange rate fluctuations had an
approximately 5% negative impact on net sales. Enterprise Campus Edge and Core Networks grew,
but this was partially offset by the impact of the disposal of the Device Management and Service
Management Platform businesses during 2024.
The following table sets forth distribution of net sales by region for the years indicated.
EURm | 2025 | 2024 | Change % |
Americas | 1 120 | 1 153 | (3)% |
APAC | 529 | 517 | 2% |
EMEA | 957 | 919 | 4% |
Total | 2 606 | 2 589 | 1% |
Gross profit
Cloud and Network Services gross profit in 2025 was EUR 1 299 million, an increase of
EUR 142 million, or 12%, compared to EUR 1 157 million in 2024. Cloud and Network Services gross
margin in 2025 was 49.8%, compared to 44.7% in 2024. Gross profit increased mainly as a result
of higher gross margin reflecting favorable product mix.
Operating expenses
Cloud and Network Services research and development expenses were EUR 567 million in 2025, an
increase of EUR 17 million or 3%, compared to EUR 550 million in 2024. The increase in research
and development expenses largely reflected increased investments in Core Networks.
Cloud and Network Services selling, general and administrative expenses were EUR 421 million in
2025, a decrease of EUR 23 million, or 5%, compared to EUR 444 million in 2024. The decrease in
selling, general and administrative expenses largely reflected continued discipline on cost control.
Cloud and Network Services other operating income and expenses was an income of EUR 27 million
in 2025, a change of EUR 16 million compared to an income of EUR 43 million in 2024.
Operating profit
Cloud and Network Services operating profit was EUR 338 million in 2025, an increase of
EUR 132 million, compared to EUR 206 million in 2024. Cloud and Network Services operating
margin in 2025 was 13.0% compared to 8.0% in 2024.
73 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Mobile Networks
For the year ended 31 December 2025 compared to the year ended 31 December 2024
The following table sets forth the segment operating results and the percentage of net sales for
the years indicated.
2025 | 2024⁽¹⁾ | |||||
EURm | % of net sales | EURm | % of net sales | Change % | ||
Net sales | 7 806 | 100.0% | 8 158 | 100.0% | (4)% | |
Cost of sales | (4 914) | (63.0)% | (4 939) | (60.5)% | (1)% | |
Gross profit | 2 892 | 37.0% | 3 219 | 39.5% | (10)% | |
Research and development expenses | (2 076) | (26.6)% | (2 160) | (26.5)% | (4)% | |
Selling, general and administrative expenses | (687) | (8.8)% | (756) | (9.3)% | (9)% | |
Other operating income and expenses | 91 | 1.2% | 149 | 1.8% | (39)% | |
Operating profit | 220 | 2.8% | 452 | 5.5% | (51)% | |
(1)In 2025, Nokia moved Managed Services business from Cloud and Network Services to Mobile Networks. The comparative amounts
for 2024 have been recast accordingly. For more information, refer to Note 2.2. Segment information in the consolidated financial
statements.
Net sales
Mobile Networks net sales in 2025 were EUR 7 806 million, a decrease of EUR 352 million, or 4%,
compared to EUR 8 158 million in 2024. Foreign exchange rate fluctuations had an approximately
4% negative impact on net sales. Net sales declined in the America’s region and APAC. Sales in
APAC declined in Greater China, partially offset by increase in the rest of APAC. Sales in EMEA were
stable.
The following table sets forth distribution of net sales by region for the years indicated.
EURm | 2025 | 2024 | Change % |
Americas | 2 182 | 2 396 | (9)% |
APAC | 2 464 | 2 593 | (5)% |
EMEA | 3 160 | 3 169 | 0% |
Total | 7 806 | 8 158 | (4)% |
Gross profit
Mobile Networks gross profit in 2025 was EUR 2 892 million, a decrease of EUR 327 million, or 10%,
compared to EUR 3 219 million in 2024. Mobile Networks gross margin in 2025 was 37.0%,
compared to 39.5% in 2024. The decrease in gross profit and gross margin was mainly driven by
two one-time factors. In 2024, Nokia benefited from EUR 150 million of accelerated revenue
recognition related to the AT&T settlement. In 2025, Nokia had a one-time contract settlement
related to a project that started in 2019 which had a net negative effect of EUR 120 million on
gross profit.
Operating expenses
Mobile Networks research and development expenses were EUR 2 076 million in 2025, a decrease
of EUR 84 million, or 4% compared to EUR 2 160 million in 2024. The lower research and
development expenses mainly reflected underlying cost reductions and foreign exchange rate
fluctuations.
Mobile Networks selling, general and administrative expenses were EUR 687 million in 2025, a
decrease of EUR 69 million, or 9%, compared to EUR 756 million in 2024. The decrease in selling,
general and administrative expenses mainly reflected underlying cost reductions and foreign
exchange rate fluctuations.
Mobile Networks other operating income and expenses was an income of EUR 91 million in 2025, a
decline of EUR 58 million compared to an income of EUR 149 million in 2024. The change in other
operating income and expenses was primarily due to lower proceeds from the sale of digital assets.
Operating profit
Mobile Networks operating profit was EUR 220 million in 2025, a decrease of EUR 232 million,
compared to EUR 452 million in 2024. Mobile Networks operating margin was 2.8% in 2025
compared to 5.5% in 2024.
74 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Nokia Technologies
For the year ended 31 December 2025 compared to the year ended 31 December 2024
The following table sets forth the segment operating results and the percentage of net sales for
the years indicated.
2025 | 2024 | |||||
EURm | % of net sales | EURm | % of net sales | Change % | ||
Net sales | 1 501 | 100.0% | 1 928 | 100.0% | (22)% | |
Cost of sales | — | 0.0% | (2) | (0.1)% | (100)% | |
Gross profit | 1 501 | 100.0% | 1 926 | 99.9% | (22)% | |
Research and development expenses | (309) | (20.6)% | (250) | (13.0)% | 24% | |
Selling, general and administrative expenses | (149) | (9.9)% | (163) | (8.5)% | (9)% | |
Other operating income and expenses | 16 | 1.1% | 1 | 0.1% | 1 500% | |
Operating profit | 1 059 | 70.6% | 1 514 | 78.5% | (30)% | |
Net sales
Nokia Technologies net sales in 2025 were EUR 1 501 million, a decrease of EUR 427 million, or
22%, compared to EUR 1 928 million in 2024. Foreign exchange rate fluctuations had an
approximately 1% negative impact on net sales. The decline in Nokia Technologies net sales was
primarily due to more than EUR 400 million catch-up net sales recognized in 2024, partially offset
by new multimedia deals signed in 2025. Nokia Technologies continued to make good progress in
expanding in areas such as automotive, consumer electronics, IoT and multimedia.
Gross profit
Nokia Technologies gross profit in 2025 was EUR 1 501 million, a decrease of EUR 425 million, or
22%, compared to EUR 1 926 million in 2024. The lower gross profit was due to lower net sales.
Operating expenses
Nokia Technologies research and development expenses in 2025 were EUR 309 million, an increase
of EUR 59 million, or 24%, compared to EUR 250 million in 2024. The increase in research and
development expenses was primarily due to higher investments to drive the creation of intellectual
property and an approximately EUR 20 million impairment charge to previously acquired assets.
Nokia Technologies selling, general and administrative expenses in 2025 were EUR 149 million, a
decrease of EUR 14 million, or 9%, compared to EUR 163 million in 2024. The decrease in selling,
general and administrative expenses was primarily due to lower litigation costs.
Nokia Technologies other operating income and expenses in 2025 was an income of EUR 16 million,
a change of EUR 15 million compared to an income of EUR 1 million in 2024. The change in other
operating income and expenses was primarily related to currency hedging.
Operating profit
Nokia Technologies operating profit in 2025 was EUR 1 059 million, a decrease of EUR 455 million,
or 30%, compared to an operating profit of EUR 1 514 million in 2024. Nokia Technologies
operating margin in 2025 was 70.6% compared to 78.5% in 2024.
75 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Group Common and Other
For the year ended 31 December 2025 compared to the year ended 31 December 2024
The following table sets forth the operating results for Group Common and Other, and the
percentage of net sales for the years indicated.
2025 | 2024 | |||||
EURm | % of net sales | EURm | % of net sales | Change % | ||
Net sales | 17 | 100.0% | 34 | 100.0% | (50)% | |
Cost of sales | (21) | (123.5)% | (29) | (85.3)% | (28)% | |
Gross profit | (4) | (23.5)% | 5 | 14.7% | (180)% | |
Research and development expenses | (126) | (741.2)% | (131) | (385.3)% | (4)% | |
Selling, general and administrative expenses(1) | (243) | (1 429.4)% | (227) | (667.6)% | 7% | |
Other operating income and expenses(1) | — | 0.0% | 4 | 11.8% | (100)% | |
Operating loss(1) | (373) | (2 194.1)% | (349) | (1 026.5)% | 7% | |
(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and
administrative expenses and other operating income to financial income. The comparative amounts for 2024 have been recast
accordingly. For more information, refer to Note 1.2. General accounting policies in the consolidated financial statements.
Net sales
Group Common and Other net sales in 2025 were EUR 17 million, a decrease of EUR 17 million, or
50%, compared to EUR 34 million in 2024. The decrease in Group Common and Other net sales was
related to Radio Frequency Systems, which was substantially divested in 2024.
Gross profit
Group Common and Other gross profit in 2025 was negative EUR 4 million, compared to positive
EUR 5 million in 2024.
Operating expenses
Group Common and Other research and development expenses in 2025 were EUR 126 million, a
decrease of EUR 5 million, or 4%, compared to EUR 131 million in 2024.
Group Common and Other selling, general and administrative expenses in 2025 were EUR 243
million, an increase of EUR 16 million, or 7%, compared to EUR 227 million in 2024.
Group Common and Other other operating income and expenses in 2025 were zero, a net negative
fluctuation of EUR 4 million compared to an income of EUR 4 million in 2024.
Operating loss
Group Common and Other operating loss in 2025 was EUR 373 million, an increase of EUR 24
million, compared to an operating loss of EUR 349 million in 2024.
76 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Liquidity and capital resources
Financial position
Cash and cash equivalents
At 31 December 2025, Nokia’s cash and cash equivalents equaled EUR 5 462 million, a decrease of
EUR 1 161 million compared to EUR 6 623 million as of 31 December 2024. The decrease was
primarily attributable to acquisition of businesses of EUR 1 730 million, dividends of EUR 759
million, net cash outflow related to long-term borrowings of EUR 724 million, share repurchases of
EUR 624 million, capital expenditure of EUR 606 million, purchase of unowned share of Nokia
Shanghai Bell of EUR 501 million, partially offset by net cash inflow from operating activities of EUR
2 071 million, proceeds from issuance of shares to NVIDIA of EUR 859 million and net cash inflow
related to interest-bearing financial investments of EUR 765 million.
Total cash and interest-bearing financial investments(1)
At 31 December 2025, Nokia’s total cash and interest-bearing financial investments(1) equaled
EUR 6 791 million, a decrease of EUR 1 950 million, compared to EUR 8 741 million as of 31
December 2024. Decrease was attributable to the decrease in cash and cash equivalents of EUR
1 161 million, current interest-bearing financial investments of EUR 700 million and non-current
interest-bearing financial investments of EUR 89 million.
Net cash and interest-bearing financial investments(1)
At 31 December 2025, Nokia’s net cash and interest-bearing financial investments(1) equaled
EUR 3 378 million, a decrease of EUR 1 476 million, compared to EUR 4 854 million as of 31
December 2024. Decrease was attributable to the decrease in cash and cash equivalents of EUR
1 161 million, current interest-bearing financial investments of EUR 700 million, non-current
interest-bearing financial investments of EUR 89 million and an increase in short-term interest-
bearing liabilities of EUR 115 million, partially offset by a decrease in long-term interest-bearing
liabilities of EUR 589 million.
(1)Non-IFRS measures. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS measures,
refer to the “Alternative performance measures” section.
Cash flow
Operating activities
The cash inflow from operating activities in 2025 was EUR 2 071 million, a decrease of
EUR 422 million compared to a cash inflow of EUR 2 493 million in 2024. The decrease was primarily
attributed to a decrease of EUR 716 million in net profit, adjusted for non-cash items, which
equaled EUR 2 725 million compared to EUR 3 441 million in 2024, which was offset by a decrease
in cash tied-up to net working capital of EUR 209 million, compared to EUR 569 million cash tied-up
in 2024. The primary drivers for the decrease in cash tied-up to net working capital were related to
a decrease in liabilities of EUR 333 million compared to a decrease of EUR 609 million in 2024 and
an increase in receivables of EUR 25 million compared to an increase in receivables of EUR 364
million in 2024. This was partly offset by a decrease in inventories of EUR 149 million compared to
a decrease of EUR 404 million in 2024. The increase in receivables during 2025 was primarily driven
by account receivables. The decrease in liabilities during 2025 was primarily due to restructuring
and associated cash outflows and a decrease in trade payables.
In 2025, the cash inflow from operating activities included paid taxes of EUR 396 million, an
increase of EUR 54 million compared to EUR 342 million in 2024, interest received of
EUR 163 million compared to EUR 226 million in 2024 and interest paid of EUR 212 million
compared to EUR 263 million in 2024.
Investing activities
The cash outflow from investing activities was EUR 1 396 million in 2025, compared to a
EUR 117 million cash outflow in 2024. Cash outflows from investing activities was primarily driven
by acquisition of businesses of EUR 1 730 million compared to EUR 37 million in 2024, capital
expenditure of EUR 606 million compared to EUR 472 million in 2024 and purchase of shares in
associated companies of EUR 50 million. These were partially offset by net cash inflow of EUR 765
million of interest-bearing financial investments compared to net cash inflows of EUR 214 million in
2024 and net cash inflow from other financial assets of EUR 69 million compared to EUR 210 million
in 2024.
Major items of capital expenditure in 2025 included investments in R&D and test equipment, lab
and factory infrastructure, strategic patent portfolios and repairs or improvements of sites.
Financing activities
In 2025, the cash outflow from financing activities was EUR 1 610 million, compared to a
EUR 2 003 million cash outflow in 2024. The cash outflows was driven by repayments of long-term
borrowings of EUR 875 million compared to EUR 462 million in 2024, dividend payments of EUR 759
million, compared to EUR 723 million in 2024, share repurchases of EUR 624 million compared to
EUR 680 million in 2024, purchase of unowned share of Nokia Shanghai Bell of EUR 501 million and
payments of the principal portion of lease liabilities of EUR 221 million, compared to EUR 233
million in 2024. These were partially offset by proceeds from issuance of shares to NVIDIA of EUR
859 million and proceeds from long-term borrowings of EUR 151 million, compared to EUR 101
million in 2024.
77 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Financial assets and debt
At 31 December 2025, Nokia’s net cash and interest-bearing financial investments(1) equaled
EUR 3 378 million consisting of EUR 6 791 million in total cash and interest-bearing financial
investments(1), and EUR 3 413 million of long-term and short-term interest-bearing liabilities.
Nokia holds total cash and interest-bearing financial investments(1) predominantly in euro.
Interest-bearing financial investments mainly include high-quality money market and fixed income
instruments with strict maturity limits and diversified counterparty risk limits. Nokia also has EUR
2 000 million revolving credit facilities available for liquidity purposes. The facilities have no
financial covenants and remain undrawn.
At 31 December 2025, Nokia’s interest-bearing liabilities consisted of the following liabilities:
Instrument | Currency | Final maturity | Nominal (million) |
2.00% Senior Notes | EUR | 3/2026 | 630 |
4.375% Senior Notes | USD | 6/2027 | 500 |
6.50% Senior Notes | USD | 1/2028 | 74 |
3.125% Senior Notes | EUR | 5/2028 | 500 |
6.45% Senior Notes | USD | 3/2029 | 206 |
4.375% Sustainability-linked Senior Notes | EUR | 8/2031 | 500 |
NIB R&D loan | EUR | 10/2032 | 250 |
6.625% Senior Notes | USD | 5/2039 | 500 |
Other borrowings | EUR | 466 |
The EUR notes maturing in 2026, 2028 and 2031, as well as the USD notes maturing in 2027 and
2039, are issued by Nokia Corporation, while the USD notes maturing in 2028 and 2029 are issued
by Lucent Technologies Inc., a predecessor to Nokia of America Corporation (Nokia’s wholly-owned
subsidiary, formerly known as Alcatel-Lucent USA Inc.). The loan from the Nordic Investment Bank
(NIB) is drawn by Nokia Corporation. For more information on the interest-bearing liabilities, refer
to Note 5.2. Financial assets and liabilities in the consolidated financial statements.
In March 2025, Nokia established a new EUR 500 million revolving credit facility maturing in March
2027. This facility has a one-year extension option, its pricing is linked to Nokia’s credit ratings, it
has no financial covenants and the facility remains undrawn as of 31 December 2025.(2)
In June 2025, Nokia refinanced its undrawn EUR 1 412 million revolving credit facility maturing in
June 2026 with a new facility in size of EUR 1 500 million maturing in June 2030. The new facility
has two one-year extension options, its pricing is linked to Nokia’s key sustainability targets in
addition to credit ratings, it has no financial covenants and the facility remains undrawn as of 31
December 2025.
In December 2025, Nokia signed a loan facility agreement of EUR 435 million for financing research
and development with the European Investment Bank (EIB). The availability period of the loan
facility ends in December 2027. The loan facility was not disbursed as of 31 December 2025 and
will have an average maturity of approximately seven years after disbursement.
Nokia considers that with EUR 6 791 million of total cash and interest-bearing financial
investments(1) and with its undrawn revolving credit facilities, it has sufficient funds to satisfy its
future working capital needs, capital expenditure, R&D investments, structured finance, venture
fund commitments, acquisitions and debt service requirements, at least through 2026. Nokia
further considers that with its current credit ratings of BBB- (stable) by Fitch, Ba1 (positive) by
Moody’s, and BBB- (stable) by S&P Global, it has access to the capital markets should any funding
needs arise in 2026.
Nokia aims to maintain investment grade credit ratings.
Off-balance sheet arrangements
There are no material off-balance sheet arrangements that have, or are reasonably likely to have, a
current or future effect on Nokia’s financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to investors, except for the
purchase obligations and lease commitments, as well as guarantees and financing commitments
disclosed in Note 6.1. Commitments, contingencies and legal proceedings, and in Note 5.4.
Financial risk management, of the consolidated financial statements.
(1)Non-IFRS measures. For the definition and reconciliation of non-IFRS measures to the most directly comparable IFRS measures,
refer to “Alternative performance measures” section.
(2)On 3 March 2026, Nokia voluntarily canceled the EUR 500 million revolving credit facility with the effective date of 6 March 2026.
78 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data •Operating and financial review Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Venture fund investments and commitments
Nokia makes financing commitments to a number of unlisted venture funds that make technology-
related investments. The majority of the investments are managed by NGP Capital, a global venture
capital firm backing exceptional entrepreneurs focused on Deeptech opportunities in data
infrastructure, AI, semiconductors and space. In 2025, Nokia completed a strategic review of its
venture fund investment activities. As a result, it no longer views broad-based venture fund
investments as having a strategic role and has initiated a process to scale down these investments.
This also led to a change in the presentation of the results of venture fund investments from
operating activities to financial income.
As of 31 December 2025, the fair value of the venture fund investments and similar investments
equaled EUR 857 million, compared to EUR 865 million as of 31 December 2024. For more
information on the fair value of the venture fund investments, refer to Note 5.2. Financial assets
and liabilities in the consolidated financial statements.
As of 31 December 2025, Nokia’s investment commitments equaled EUR 221 million, compared to
EUR 306 million as of 31 December 2024. As a limited partner in venture funds, Nokia is committed
to capital contributions and entitled to cash distributions according to the respective partnership
agreements and underlying fund activities. For more information on venture fund commitments,
refer to Note 6.1. Commitments, contingencies and legal proceedings in the consolidated financial
statements.
Treasury Policy
Treasury activities are governed by the Nokia Treasury Policy approved by the President and CEO
and supplemented by operating procedures approved by the Chief Financial Officer, covering
specific areas such as foreign exchange risk, interest rate risk, credit risk and liquidity risk. The
objective of treasury’s liquidity and capital structure management activities is to ensure that Nokia
has sufficient liquidity to go through unfavorable periods without being severely constrained by the
availability of funds to execute Nokia’s business plans and implement Nokia’s long-term business
strategy. Nokia is risk-averse in its treasury activities.
Foreign exchange impact
Nokia is a company with global operations and net sales derived from various countries, invoiced in
various currencies. Therefore, Nokia’s business and results from operations are exposed to
changes in exchange rates between the euro, Nokia’s reporting currency, and other currencies,
such as the US dollar. The magnitude of foreign exchange exposures changes over time as a
function of Nokia’s net sales and costs in different markets, as well as the prevalent currencies
used for transactions in those markets. Significant changes in exchange rates may also impact
Nokia’s competitive position and related price pressures through their impact on its competitors.
To mitigate the impact of changes in exchange rates on its results, Nokia hedges material net
foreign exchange exposures (net sales less costs in a currency) typically with a hedging horizon of
approximately 12 months. For the majority of these hedges, hedge accounting is applied to reduce
income statement volatility.
In 2025, Group net sales were mostly denominated in US dollars, euros and Indian rupee and total
costs mostly in US dollars, euros, Indian rupee and Chinese yuan.
The average currency mix for Group net sales and total costs:
2025 | 2024 | ||||
Currency | Net sales | Total costs | Net sales | Total costs | |
EUR | ~25% | ~25% | ~25% | ~30% | |
USD | ~55% | ~50% | ~55% | ~45% | |
CNY | ~0% | ~5% | ~5% | ~5% | |
INR | ~5% | ~5% | ~0% | ~5% | |
Other | ~15% | ~15% | ~15% | ~15% | |
Total | ~100% | ~100% | ~100% | ~100% | |
For the full year 2025 compared to the previous year, the US dollar was weaker against the euro.
The weaker US dollar in 2025 on a year-on-year basis had a significantly negative impact on Nokia’s
net sales reported in euros. However, the weaker US dollar also contributed to lower costs of sales
and slightly lower operating expenses on a year-on-year basis. In total, before hedging, the weaker
US dollar on a year-on-year basis had a negative effect on Nokia’s operating profit in 2025.
For a discussion of the instruments used by Nokia in connection with its hedging activities, refer to
Note 5.4. Financial risk management in the consolidated financial statements. Refer also to the
“Risk factors” section.
79 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review •Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Business
integrity
Management of business conduct
Culture of integrity
Nokia is consistently recognized as one of the World’s Most
Ethical Companies® by Ethisphere. Nokia upholds high ethical
standards through its Code of Conduct, training, processes, and
controls. The company promotes integrity and encourages
employees to voice concerns without fear of retaliation. Every
employee in the company is responsible for adhering to our
Code of Conduct and is held accountable for violations.
The Code of Conduct includes a section that outlines leader and
manager expectations for cultivating Nokia’s culture of integrity
within their respective organizations. Many resources are available
to educate managers about these responsibilities and to facilitate
discussions with team members about compliance risks. Nokia
measures the level of manager engagement via an annual survey.
Nokia’s corporate culture of integrity is supported by its
comprehensive compliance training program, including its annual
mandatory “Ethical Business Training” course. The topics within
the mandatory training program are rotated every year to raise
awareness on high-risk areas, emerging risks, and key focus areas.
Nokia’s culture of integrity helps to prevent unlawful or unethical
behavior and reduces risks related to anti-corruption, competition,
bribery, fraud, money laundering, privacy and data protection,
human rights and other high-risk areas. Training and awareness
initiatives make it clear that Nokia expects employees to follow laws
and policies, and they will be subject to discipline, up to and including
termination of employment, for unlawful or unethical behavior.
Compliance Program governance
Nokia’s compliance program is supported by its Ethics and
Regulatory Compliance team, comprised of approximately 100
experienced compliance professionals, which is led by the Chief
Compliance Officer, who reports to the Chief Legal and
Administrative Officer. The team includes several distinct
functions, including regional and business-specific compliance
leaders, a risk assessment function and a global team of
dedicated investigators, who are independent from Nokia’s
business segments to ensure utmost objectivity, discreteness
and confidentiality and are responsible for compliance concerns
that are reported to Nokia.
The organization also includes an Anti-Corruption Center of
Excellence that is responsible for conducting due diligence of
commercial third parties, customers, and high risk suppliers and
oversees the due diligence of high-risk transactions. It is also
responsible for Nokia’s global Anti-Corruption Program, which
includes policies and processes, controls, and training.
The Chief Compliance Officer has direct access to the Audit
Committee of the Board, which provides oversight of Nokia’s
Compliance Program. The Chief Compliance Officer meets at
least quarterly with the Audit Committee and as needed based
on specific matters. The Chief Compliance Officer also meets at
least annually with the full Board of Directors.
Nokia has robust policies and processes to avoid unlawful
behavior and unethical acts by its employees or by third parties
with which Nokia does business. With respect to anti-corruption
and bribery, the key risk is that a rogue employee or a third party
with which Nokia does business (primarily high-risk suppliers or
commercial third parties) engages in behavior that violates
Nokia’s anti-corruption policies and/or applicable laws or fails to
comply with or circumvents one of Nokia’s anti-corruption
processes or control points. Potential violations of anti-
corruption laws may result in investigations; and if a violation is
substantiated, the results may include reputational damage, fines
and forfeiture awards, and potential criminal action against
individuals involved, as well as against those who should have
been aware that a violation was occurring. Nokia strives to stay
abreast of geopolitical changes, business models and strategies
that may increase the risk of corruption, such as planned
expansion in a high-risk market or segment. As these are
identified, the Ethics & Regulatory Compliance organization works
closely with the business to develop risk mitigants proactively to
minimize residual risk. These efforts may include targeted and
focused training, the implementation of additional control
points and processes, and increased review and monitoring.
Anti-corruption and bribery risks can exist in many aspects of
our operations, including certain go-to-market sales models and
in project delivery and execution. To effectively mitigate these
risks, the Ethics and Regulatory Compliance organization has
compliance professionals who partner closely with various parts
of our business. Through this collaboration, the organization
proactively manages these changing risks by continually
evolving the Anti-Corruption Compliance Framework and
Program. Business activity presents risk with respect to the
possibility of third parties engaging in violations of anti-
corruption laws. The third parties with the highest risk include
80 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review •Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
certain high-risk suppliers (those dealing in customs, site
acquisition work, or other engagements with governmental
agencies) and commercial third parties (distributors, resellers
and indirect resellers). To mitigate this risk, Nokia provides
training to those third parties with the highest risk and requires
annual compliance acknowledgments, as well as
acknowledgment of Nokia’s Third-Party Code of Conduct. These
actions, as well as clear contractual provisions including
compliance with laws, are designed to ensure that third parties
understand the expectations for compliant behavior. In
addition, suppliers and commercial third parties must
successfully complete a risk-based due diligence vetting
process. This vetting process often results in approval with risk
mitigants, such as periodic review of transactions, additional
contractual terms, or monitoring.
Business conduct policies and corporate
culture
Nokia’s clear and readily accessible policies and standard
operating procedures (SOPs) guide our employees on how to
behave and mitigate the risk of unlawful or unethical behavior.
Nokia’s policy framework begins with the Nokia Code of
Conduct, which includes the company’s basic principles of
business conduct and high-level policy statements related to
critical business topics. Policy documents further define,
support and explain specific areas of focus. SOPs are created,
where needed, to instruct employees on specific procedures to
implement the policies. Finally, supplemental guidelines (e.g.,
country-specific guidance) or other training materials may be
created for specific implementation of certain procedures. The
full set of supporting policies and related procedures for the
Code of Conduct’s risk areas are available online to Nokia’s
employees.
Employees and third parties that fail to behave ethically and
lawfully are held accountable. A dedicated intranet page
provides an overview of company level policies and SOPs. The
available policies are aligned with all business segments and
corporate functions and are disseminated to employees in
several ways, including:
▪Training programs, both online and live; online training
typically includes quiz questions to test comprehension.
▪The central SOP/policy repository on the company intranet.
▪Quarterly global communications from the Chief Compliance
Officer and targeted communications from regional and
business compliance leaders.
▪Examples and real cases to highlight the importance of
compliance both for Nokia and the individual employee.
Nokia’s Code of Conduct is available in a web-based format in
20 languages. It enforces Nokia’s values and expectations,
outlines Nokia’s 14 key compliance policy statements and
unites all Nokia employees around a common vision. The Code
serves as a guiding framework that provides clarity and
consistency in decision making and defines the principles of
ethical and compliant business practices that all employees and
managers are expected to follow. Everyone in the company is
required to review and acknowledge the Code annually as part
of mandatory compliance training.
A separate Code of Ethics is in place for Nokia’s President and
CEO, Nokia’s Chief Financial Officer, and Nokia’s Corporate
Controller. The purpose of the Code of Ethics is to reinforce
ethical behavior, promote high standards of corporate
governance, and highlight the additional responsibilities of these
functions. It complements Nokia’s Code of Conduct and Insider
Trading Policy, as well as other applicable company guidelines.
Nokia’s Third-Party Code of Conduct requires Nokia’s third-
party business partners to follow similar ethical practices to
those included in Nokia’s Code of Conduct.
Nokia nurtures, promotes and evaluates its compliance culture
using varied mediums. It uses multiple feedback channels,
discussions and training courses to drive continuous
improvement in Nokia’s Compliance Program. Nokia gauges
employee attitudes, perceptions, and experiences regarding the
compliance culture using survey results and other collected
inputs. These results are shared with relevant business/regional
teams, managed through mitigation plans, and integrated into
the annual risk assessment and training and communications
planning for ongoing management of Nokia’s ethical culture.
Beyond a company-wide survey, Nokia also uses other means to
gauge the effectiveness of our Compliance Program, including
short pulse surveys on specific topics for more frequent
feedback on the overall climate in the company as it relates to
Nokia’s essentials: open, fearless, and empowered. As an
example, Nokia’s 2025 mandatory Ethical Business Training
course integrated anonymous questions related to fear of
retaliation, usage of Nokia’s Code of Conduct, reporting
concerns, specific policies, and line manager engagement. 75%
of respondents to the voluntary 2025 survey indicated that their
manager discussed ethics and compliance with their team.
Below are some of the resources, platforms and methods that
Nokia uses to regularly reinforce its culture of doing business
with integrity:
▪Nokia Code of Conduct
▪Manager internal posts and news articles
▪Social media posts from subject matter topical experts,
Nokia’s Chief Compliance Officer and other senior leaders
▪Internal news articles with topic-related links and resources
▪Awareness campaigns and resources (i.e. speaking up and
anti-retaliation)
▪Ombuds program, dedicated resources, and campaigns
▪Dedicated web pages for Compliance Program elements with
related resource documents and contacts
▪Quarterly newsletter
▪Podcasts, animations, videos, posters, brochures
▪Annual Integrity Day event: senior leader/Group Leadership
Team participation and web event, local events around the
world, global-level and local messaging, compliance awards,
compliance games
Reporting channels and investigations process
Nokia provides multiple channels to report compliance concerns:
Legal, Compliance and Sustainability, Ombuds leaders, People
organization, a dedicated email, and an Ethics Helpline (EU
Whistleblower Directive compliant) with online and country-
specific options. Internal and external webpages also support
concern reporting. The external reporting web page explains the
reporting process and provides links and information about all
the available reporting options. The Ethics Helpline allows for
anonymous reporting and is open to employees and external
stakeholders.
Nokia’s Ombuds network is a critical element of Nokia’s
Compliance Program and is available to employees, in addition to
the Nokia Ethics Helpline and/or consulting with the Legal,
Compliance and Sustainability team, the People organization, or
managers. Ombuds leaders sit outside of the Legal, Compliance
and Sustainability team, and People organization and serve as
confidential, neutral, supplemental resources for employees to
81 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review •Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
raise compliance questions, concerns and requests for guidance.
They expand the reach of Nokia’s Compliance Program and
provide another means to report suspected policy and law
violations, as well as assist in preventing, detecting, and
addressing wrongdoing. At the end of 2025, Nokia had 215
Ombuds leaders around the world, and 80 percent of Nokia’s
employees worked in locations with an on-site Ombuds leader. It is
important to note that the full Ombuds network is available to
support all employees globally and is not restricted to
employees within their respective location and/or organization.
The Ethics and Regulatory Compliance Investigations Group is
primarily responsible for managing the intake of all compliance
concerns in the company across multiple channels, as well as
case assignment, investigation, closure, and follow-up with
respect to remediation and discipline. Nokia’s team of
dedicated investigators, which sits centrally within the Ethics
and Regulatory Compliance function, is not attached to any
particular business segment or function and reports into the
Legal Compliance and Sustainability leadership. The investigator
of any matter is fully independent of the chain of management
of the alleged subject and the individual raising the concern.
In 2025, Nokia's Ethics and Regulatory Compliance
Investigations Group received a total of 884 reports, of which
346 were investigated by the Investigations Group as suspected
violations of applicable law, policy, or Nokia’s Code of Conduct.
In 2025, the Investigations Group closed 313 investigations into
alleged violations of Nokia’s Code of Conduct, of which 118
were substantiated with cause found after investigation. Nokia
implemented corrective actions including 24 dismissals and 32
written warnings. Beyond individual discipline, detailed root
cause analysis was conducted for substantiated cases, and
unsubstantiated cases as appropriate, to identify, implement
and monitor remedial measures and improvements.
Nokia integrates its investigation process into its corporate
culture by regularly communicating major findings and trends in
a transparent fashion and raising awareness about the reporting
process and the importance of speaking up. Regular read-outs
about investigation statistics, key findings, and trends are
provided to several internal groups, including regional/business
segment compliance leaders, who include investigations
findings in the reporting for their respective jurisdictions and
share this information with business leadership several times
per year; Ombuds leaders, who share this type of information
with employees in local awareness sessions; and senior
management, as well as the Board of Directors and external
auditors. Global trends and anonymized real cases are shared
with all employees in Nokia’s internal quarterly company-wide
Ethics and Regulatory Compliance newsletter (“Integrity
Matters”). Additionally, annual investigation statistics by
category, as well as links to anonymized case examples are
provided externally. Each quarter, the Chief Compliance Officer
updates the Audit Committee regarding significant allegations
and outcomes of investigations and once per year reports this
information to the Board and the Group Leadership Team.
Protecting against retaliation
Nokia has always positioned itself as a company committed to
combating and avoiding all forms of retaliation and maintaining
a culture in which its employees and partners feel comfortable
raising concerns about suspected violations of Nokia’s Code of
Conduct and policies, or applicable laws or regulations. Nokia
will not tolerate any adverse treatment of an employee or
partner (to the extent reasonably within Nokia’s control for a
non-employee) who raises a concern in good faith or provides
evidence in support of such a concern. Any employee who
retaliates or participates in retaliating against another employee
for raising a compliance concern or for assisting in an
investigation will be subject to discipline, up to and including
termination of employment.
In a clear, widely-disseminated and readily-accessible manner,
Nokia provides employees with many avenues to report
concerns, as well as resource documents and information on
external reporting channels. This includes region- and location-
specific external reporting options. Annual comprehensive
campaigns (consisting of various training initiatives, media and
communications) remind and train employees on reporting
concerns, available resources, and Nokia’s anti-retaliation
policy. Managers are provided additional resources, including a
toolkit and checklist, for handling concern reporting. A
dedicated internal web page on retaliation provides employees
with valuable resource information and guidance, including
employee and manager anti-retaliation guides.
Training
The Ethics and Regulatory Compliance organization maintains a
three-year strategic approach and roadmap for training. Nokia’s
Ethical Business Training course is updated every year and
required annually for all employees. It was one of the three
mandatory, web-based training courses deployed in the
mandatory 2025 curriculum, with the other modules covering
information security and privacy awareness and safety and
security. The Ethical Business Training course included a review
and acknowledgment of Nokia’s Code of Conduct and the
related 14 policy areas; a requirement to declare potential
conflicts of interest; and short reviews of key topics including
competitive intelligence, purchasing policy and process, use of
AI tools, ESG, working with government officials, use of
corporate credit cards, and a reminder of managers’ compliance
responsibilities. In 2025, 98% (target 95%) of Nokia’s
employees completed the Ethical Business Training module.
New employees are assigned a new-hire training curriculum that
includes the current annual mandatory training curriculum.
In 2025, Nokia also provided training (online and in-person) and
communications on emerging risks along with important
reminders about roles and responsibilities. Examples include:
1.Just-in-time training videos to provide information at the time most needed, triggered by specific employee requests or actions (e.g., employees who are involved in indirect sales transactions receive a three-minute video on the required due diligence process). |
2.Risk-specific training and communications on privacy, anti- corruption, competition law, site permitting, human rights due diligence, and Nokia’s indirect sales process. |
3.Anti-retaliation awareness messaging, videos and resources to heighten awareness of potential retaliatory behaviors and available support channels. |
4.Launched targeted training on anti-corruption and competition law to individuals in sales roles. |
5.New awareness videos on corruption and conflicts of interest, and micro-learning to emphasize the importance of bystander reporting. |
These resources were supplemented by live training sessions
delivered to target audiences on various compliance topics
throughout the year.
82 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review •Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Nokia opportunity: Anti-Corruption and Anti-Bribery Program
Nokia has a robust Anti-Corruption Program that focuses on identifying and mitigating compliance risks associated with third parties
and multi-layer transactions, as well as geopolitical events that may pose a risk under applicable laws, including anti-corruption.
Nokia’s Global Anti-Corruption Program | ||||||
Nokia’s Code of Conduct | Policies supporting the anti-corruption program | |||||
Covers the following topics: ▪Dealing with Government Officials ▪Improper Payments ▪Working with Third Parties ▪Controllership ▪Speaking up (our whistleblowing program) | Various policies are available to all employees on Nokia’s intranet site, including the following: ▪Anti-Corruption Policy ▪Conflict of Interest Policy ▪No PO/No Pay Policy ▪Travel Policy ▪Dealing with Government Officials contained in our Code of Conduct ▪Controllership contained in our Code of Conduct ▪Working With Third Parties contained in our Code of Conduct ▪Improper payments contained in our Code of Conduct ▪Corporate Hospitality and Gift SOP ▪Global Donations, Other Contributions and Sponsorships SOP ▪Third-Party Risk Management SOP ▪Prohibition of Facilitation Payments SOP ▪Site Acquisition Permitting and Site Access Fees SOP | |||||
Third party code of conduct | ||||||
▪Includes Nokia’s expectations relating to anti- corruption and bribery | ||||||
Training specific to anti-corruption and bribery | ||||||
▪Included in Nokia’s annual mandatory Ethical Business Training required of all employees ▪Focused training on anti-corruption and bribery that is assigned to high-risk employee populations, such as training for employees involved in projects requiring site acquisition and customer-facing sales teams | ||||||
Nokia also has monitoring processes in place to identify
possible process gaps, including: monitoring our customer
relationship management and deal opportunity tool to ensure in
scope commercial third parties have been screened by Nokia’s
Anti-Corruption Center of Excellence; monitoring expense
reimbursement claims relating to hospitality to third parties to
ensure that the gifts, travel and entertainment (‘GTE’) pre-
approval process was followed; reviewing spend reports to
ensure that any high-risk suppliers have been vetted at the
appropriate due diligence level; conducting risk-based due
diligence on all third parties to identify any red flags or risk
before engaging in business with them, with a three-year re-
screening required; and reviewing any concerns that are raised
relating to improper payments through Nokia’s whistleblower
system.
The groups of employees deemed to be highest risk with
respect to Nokia’s business include:
▪sales and pre-sales employees
▪employees working with government officials
▪employees involved in site acquisition and site access
permitting
▪employees involved with customs clearance and logistics
vendors
▪employees involved with tax advisors and related services
▪the Geopolitics and Government Relation team and
▪the Finance team, since they have a key controllership role
83 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review •Business integrity Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Training specific to anti-corruption and bribery is included in
Nokia’s annual, mandatory Ethical Business Training course and
is required of 100% of Nokia employees: all administrative,
management and supervisory bodies. Anti-corruption is
highlighted in this course given the potential high-risk exposure
and is rolled out not only to all employees but also to Nokia’s
Board of Directors. Nokia also has a separate standalone course
that focuses on corruption risk and speak-up channels.
All suspected breaches in procedures and standards of anti-
corruption and anti-bribery are investigated. When an
investigation concludes that there has been a violation of Nokia’s
policies, including Nokia’s Anti-Corruption and Anti-Bribery
policy, appropriate disciplinary action is taken. Such actions may
include financial loss, termination of employment, demotion or
role change, a written warning, and/or mandatory training.
Nokia’s Anti-Corruption Center of Excellence has a
comprehensive, multifaceted, risk-based approach to help
identify and mitigate risks to the company while empowering
Nokia’s business teams to sell Nokia products and services
responsibly.
Actions
Actions taken to support Nokia’s Compliance Program and culture:
1.Everyone in the company is required to review and
acknowledge the Nokia Code of Conduct annually and
disclose any conflicts of interest as part of annual mandatory
Ethical Business compliance training. The topics within the
mandatory training are rotated every year to spread
awareness on high-risk areas, emerging risks, and key
current topics. Anti-corruption is highlighted in the same
course because it is a high-risk area, and Nokia also has a
separate standalone course that focuses on corruption risk
and speak-up channels. In addition to annual mandatory
training, Nokia supplements training and awareness with
numerous live and recorded training sessions delivered to
smaller target audiences on various compliance topics
throughout the year.
2.Nokia combats and prohibits all forms of retaliation and is
committed to maintaining a culture in which its employees
feel comfortable raising concerns about suspected violations
of the Code of Conduct, and related company policies or laws
and regulations. Nokia will not tolerate any adverse
employment action against an employee who raises a
compliance concern or assists in an investigation in good
faith.
3.Nokia provides multiple channels to report compliance
concerns: Legal, Compliance and Sustainability, Ombuds
leaders, the People organization, a dedicated email, and an
Ethics Helpline (EU Whistleblower Directive compliant) with
online and country-specific options. Nokia has internal and
external web pages dedicated to concern reporting and
whistleblowing resources.
4.Nokia’s Anti-Corruption Program focuses on identifying and
mitigating compliance risks associated with third parties and
multi-layer transactions, as well as geopolitical events that
may pose a risk under applicable laws, including anti-
corruption. The Anti-Corruption Program includes various
elements, such as training, monitoring, policies, and
processes.
5.All suspected breaches in procedures and standards of anti-
corruption and anti-bribery are investigated. When an
investigation concludes that there has been a violation of
Nokia’s policies, including Nokia’s Anti-Corruption and Anti-
Bribery Policy, appropriate disciplinary action is taken. Such
actions may include financial loss, termination, demotion or
role change, written warnings, and/or mandatory training.
6.The Chief Compliance Officer presents separately and
independently on the status and effectiveness of Nokia’s
Compliance Program to the full Board of Directors at least
once per year, to the Audit Committee at least four times per
year and to the Group Leadership Team at least once per
year, and as needed.
7.Nokia gauges employee attitudes, perceptions, and
experiences regarding the compliance culture using survey
results and other collected inputs. These results are shared
with relevant stakeholders and managed through mitigation
plans with an eye toward continuous improvement.
Targets and progress towards
achievement
Nokia establishes targets as one of the vehicles to drive and
measure a robust Compliance Program. Nokia holds its leaders
accountable for driving a strong culture of compliance within
their organizations by promoting a strong culture of
compliance, leading by example, and meeting (with the goal to
exceed) established compliance targets.
Ethical Business Training course
Target: Ethical Business Training course, which includes ESG
(Environmental, Social, Governance) training, completed by
95%
of employees by 31 October 2025
Result for the year ended 31 December 2025:
Ethical Business Training course, which includes ESG
(Environmental, Social, Governance) training, completed by
98%
of employees.
Training specific to anti-corruption and bribery is included in the
Ethical Business Training course.
Line manager engagement
Target:
85%
favorability of employee/line manager engagement on ethics
and compliance by the year 2030. This target covers Nokia’s line
managers and their direct reports.
Result for the year ended 31 December 2025:
75%
of respondents to the voluntary survey.
84 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity •Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Environment
This section covers how Nokia
addresses its own environmental
footprint, including its focus on both
climate and circularity. Nokia’s net‑zero
transition plan guides emission
reductions, while its circular strategy
focuses on resource efficiency and
waste reduction—directly lowering
embodied emissions and supporting
path to net-zero. Nokia believes its
technology plays important role in
helping its customers, other industries
and society decarbonize in the AI era.
Environmental policies
Nokia has policies and procedures in place to manage its
material impacts, risks, and opportunities related to climate
change and energy. Nokia tries to prevent environmental
pollution along its value chain, as outlined in its Environmental
policy and its Code of Conduct. Nokia is committed to reducing
GHG emissions across the value chain, in line with its GHG
emissions reduction targets.
Environmental management and ongoing environmental
performance are governed by the certified ISO 14001
Environmental Management System. This ensures a holistic and
structured approach in managing Nokia’s material
environmental matters. In 2025, Environmental Management
Systems covered 47% of Nokia’s sites and 87% of employees.
Climate
Climate change has been a focus for Nokia Group for more than
a decade, and as such consistent efforts are made to develop
and refine Nokia’s approach to understanding and tackling the
risks and opportunities that climate change presents to its
business. As part of this approach, Nokia has set a target to
reach net-zero greenhouse gas emissions by 2040 across its
value chain. This includes decarbonization of Nokia’s own
operations, as well as its supply chain, enhancing product
energy efficiency to break the energy vs. capacity curve and
sustainably support the AI supercycle, and strengthen the
Design for Environment process within R&D. Sustainability
topics, including decarbonization and the circular transition, are
integral to Nokia’s sustainability strategy and are reflected in
how Nokia operates as a company and the business decisions
that are taken. Research in Nokia Bell Labs also contributes
towards these goals.
Transition plan and actions related to climate
change policies
Nokia has set a target to reduce its total global greenhouse gas
emissions (GHG) to net zero across the value chain by 2040.
The Net-Zero target was approved by the Science Based
Targets Initiative (SBTi) in January 2025.
Nokia has defined a net-zero pathway that will help it reduce
emissions across its value chain. Nokia’s GHG emissions and the
estimated decarbonization levers to achieve its 2030 and 2040
targets fall into three main categories:
▪Own operations, including energy use in facilities and fleet,
which contribute to scope 1 and 2 emissions
▪Upstream activities, including purchased goods and services,
capital goods, logistics and business travel, which contribute
to scope 3 emissions category 1, 2, 4 and 6
▪Downstream activities, including the use phase of Nokia
products and solutions, which contribute to scope 3
emissions category 11
Additionally, electricity grid decarbonization has a significant
impact on the reduction of Nokia’s GHG emissions. The net-zero
pathway also requires governance, monitoring and reporting
actions.
The commitment to net-zero by 2040 was approved by the
Nokia Group Leadership team and the Board of Directors was
informed about the commitment.
85 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity •Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
The main decarbonization levers and examples of key actions taken and planned in the net-zero pathway are described and illustrated below. The actions described below reflect Nokia’s current plans of
potential actions to be taken in the future and are, therefore, forward-looking statements.
2025 | 2030 | 2040 | ||||
Decarbonization levers | Targets: RE100 (scope 2 facilities) 80% reduction scope 1-2 | Targets: 90% reduction scope 1-2 SBT: 50% reduction scope 1-2-3 | Targets: SBT Net-Zero by 2040 (scope 1-2-3) | |||
Own operations: Facilities and fleet (scope 1-2) | Targeted 100% renewable electricity (RE100) | 100% electrification of car fleet | Neutralize residual emissions | |||
Upstream: Embodied (scope 3, cat 1 and 2) | Engage key suppliers to plan and track decarbonization, circular products & services | 100% decarbonization for final assembly suppliers, 50% for other key suppliers | Circular and low-carbon materials product design | |||
Upstream: Logistics and business air travel (scope 3, cat 4 and 6) | Optimizing transportation modes to minimize emissions | Bio-fuel blend agreements for logistics | Significant reduction in air freight emissions | |||
Downstream: Product use phase (scope 3, cat 11) | Engage with customers to ensure wide uptake of renewables | Development of the product portfolio for energy efficiency gains | Develop decarbonized site energy solutions. Secure investments in long-term research and disruption | |||
Electricity grid (scope 3, cat 1 and 11) | Climate dialogue with stakeholders | Value chain dialogue and customer specific factors. Grid decarbonization leading to GHG emission reductions(1) | Grid decarbonization leading to further GHG emission reductions(2) | |||
Governance, monitoring and reporting | Continuous reporting process development including further digitalization of the emissions data | Enter carbon market to purchase removals | Neutralize residual emissions |
(1)Assumption: Grid decarbonization leading to 48% smaller emission factor compared to base year 2019 based on IEA WEO2023 – Announced Pledges Scenario.
(2)Assumption: Grid decarbonization leading to 82% smaller emission factor compared to base year 2019 based on IEA WEO2023 – Announced Pledges Scenario.
▪Own operations - Facilities and fleet (scope 1 and 2): Nokia
aims for decarbonization in its facilities and car fleet. Nokia
achieved 96% renewable electricity across all owned and
leased facilities in 2025 and continues its commitment to
target 100% renewable electricity in its own facilities. As
regards Nokia’s car fleet, the aim is to reach the target for
own operations' emissions by continuing to introduce low-
emission vehicles and transitioning to 100% electric vehicles
by 2030.
▪Upstream - Embodied (scope 3, categories 1 and 2): Nokia
will focus on reducing the embodied emissions of its
products, for example by offering circular products, adding
recycled material content into new products, and designing
products that use less material, while having increased
throughput capacity and functionality. At the same time,
Nokia collaborates with suppliers on their journey to
decarbonizing their own operations.
▪Upstream - Logistics and business air travel (scope 3,
categories 4 and 6): Nokia’s action plans include optimizing
transportation modes and route planning, use of
decarbonized fuels in logistics, and reducing air freight.
▪Downstream - Product use phase (scope 3, category 11):
With 94% of emissions resulting from products in use in our
customers’ networks, the greatest efforts remain
concentrated on product design and innovation, to reduce
the power consumption and improve energy efficiency of
products across Nokia’s portfolio.
▪Electricity grid (scope 3, categories 1 and 11): Nokia is
engaging with stakeholders to push for grid decarbonization
and provides digitalization solutions to support renewables
generation and grid transformation in the energy sector.
Nokia also collaborates with its value chain members on their
own journey to transitioning to renewable energy sources as
countries decarbonize their electricity grids.
▪Governance, monitoring and reporting - Carbon removals:
Credible, permanent carbon removals and storage are
expected to be required to neutralize residual emissions to
reach net-zero. Nokia has been examining credible solutions
for carbon removals to support long-term net-zero targets.
This examination has included a pilot to acquire the first
carbon removal credits in 2025.
86 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity •Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Progress in implementing the transition plan
and actions taken in 2025
Nokia has set short-term, medium-term and long-term climate
targets in key areas. Short-term and medium-term targets are
put in place to track and show a pathway towards the long-term
goal.
Nokia has set the target to reach net-zero by 2040, covering
scope 1, 2 and 3 GHG emissions. The GHG emission targets are
for all Nokia business groups, covering various business
activities, such as R&D, logistics, operations and suppliers. The
targets do not have any geographical exclusions.
The consistency and completeness of the near-term (2030) and
long-term (2040) net-zero targets with Nokia’s GHG inventory
boundaries is ensured by meeting the SBTi requirements and
having the targets validated by SBTi. The baseline will be
updated in line with Nokia financial reporting consolidation and
environment data reporting principles whenever significant
changes in business, such as mergers and acquisitions, and
improvements in the data coverage and calculation take place.
Net-Zero target
Nokia’s Net-Zero target is approved by SBTi. This includes
Nokia’s commitment to reach net-zero GHG emissions across
the value chain by 2040.
The long-term target is to reduce absolute scope 1, 2 and scope
3 GHG emissions 90% by 2040 from a 2019 base year. Scope 3
includes the following significant categories to Nokia: category
1 – purchased goods and services, category 2 – capital goods,
category 4 – upstream transportation and distribution, category
6 – business travel and category 11 – use of sold products. As
defined in the current corporate Net-Zero standards (SBT) V1.2,
after a company has achieved its long-term target to cut
emissions, it can use permanent carbon removal and storage to
counterbalance residual emissions up to 10%.
The net-zero target also includes the near-term target to
reduce scope 1, 2 and scope 3 categories 1, 2, 4, 6 and 11 GHG
emissions 50% by 2030 from a 2019 base year. The progress is
on track.
Nokia’s total GHG emissions were 30 490 080 tCO2eq in 2025.
This represents an increase of 17% over the previous year, and
a 27% reduction compared to the base year 2019. Both the
increase compared to the previous year, as well as the decrease
from the base year 2019 were mainly driven by changes in
scope 3 category 11 use of sold products. These GHG emissions
increased by 16% compared to 2024, due to higher sales
volumes, changed product mix and the Infinera acquisition. The
category 11 emissions have decreased by 21% compared to the
base year 2019.
Additionally, Nokia has the following interim and sub-targets:
▪GHG emission reduction of 80% from scope 1 and scope 2
market-based emissions by 2025 from a 2019 base year
▪GHG emissions reduction of 90% from scope 1 and scope 2
market-based emissions by 2030 from a 2019 base year
▪Nokia’s final assembly suppliers (part of scope 3 category 1)
reach zero emissions by 2030 from a 2019 base year
▪Nokia’s suppliers (scope 3 category 1) reduce GHG emissions
by 50% by 2030 from a 2019 base year
▪Nokia’s logistics' GHG emissions (scope 3 category 4)
reduced by 73% by 2030 from a 2019 base year.
Own operations (scope 1 and 2)
Scope 1 and 2 emissions decreased by 37% compared to 2024,
and by 86% compared to the base year 2019. Nokia continued
to increase use of renewable electricity to reduce scope 2
market-based GHG emissions, and reached 96% share of
renewable electricity used in Nokia’s facilities. As an example of
emissions reduction, the renewable usage of district cooling in
Tampere, Finland was validated.
Upstream: Embodied emissions (scope 3, cat 1 and 2)
Nokia works closely with suppliers to improve supplier maturity
around emissions measurement, target setting, roadmaps and
good practice. For final assembly suppliers, Nokia is tracking the
execution of their roadmap at business review meetings
throughout the year, given their target to reach zero emissions
by 2030 for their own scope 1 and 2 emissions. Nokia engages
regularly with approximately 500 of its larger suppliers, taking
into account the CDP Climate program cycle. In addition, close
collaboration is pursued with Nokia’s Joint Design
Manufacturing suppliers, as well as supplier categories with high
emission intensity, such as semiconductor and PWB suppliers.
In 2025, 390 of Nokia’s key suppliers responded to CDP’s
request to disclose their climate performance information, while
258 also provided emissions-reduction targets.
As a result of Nokia’s supplier engagement, a gradual reduction
of Nokia’s scope 3 category 1 (Purchased goods and services)
emissions has been observed since the base year. In 2025, the
total supplier emissions (category 1) increased by 57%
compared to 2024, and reduced by 66% compared to the base
year 2019. Final assembly supplier emissions have increased by
32% compared to 2024, and reduced by 42% from the baseline
year 2019. The main reasons for the year-on-year increase of
category 1 emissions are: Infinera’s acquisition and the
inclusion of its share of emissions in Nokia’s 2025 reporting
(+9% impact), the increase in production volumes, and further
data coverage improvement in suppliers’ own Scope 3 upstream
emissions.
Upstream: Logistics and business air travel (scope 3, cat 4 and 6)
GHG emissions from scope 3 category 4 upstream
transportation and distribution have increased by 39%
compared to 2024, and have reduced by 42% compared to the
base year 2019. The change from 2024 to 2025 was due to
Infinera’s emissions being included in Nokia’s 2025 emissions,
as well as to the increased volumes and air transportation
during 2025, compared to the previous year.
GHG emissions from scope 3 category 6 business travel were
increased by 16% compared to 2024, and decreased by 55%
compared to the base year 2019. The change from 2024 to
2025 was mainly due to the inclusion of Infinera’s emissions in
the 2025 amount.
87 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity •Environment Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Downstream: Product use phase (scope 3, cat 11)
Many of Nokia’s customers are intent on reducing their power
consumption and their emissions. Nokia considers energy
efficiency to be one of the key factors in product
competitiveness. Some of Nokia’s customers are also
interested in examining new business opportunities that spring
from decarbonization. These developments create new
business opportunities for the company and Nokia is releasing
and delivering innovations that cater for that demand.
One of the key actions required for reducing GHG emissions
during the product use phase is product energy efficiency
improvements in product development. Key actions taken in
2025 include:
▪Nokia continued to improve the energy efficiency of its
products through incremental, as well as generational
hardware improvements;
▪Key innovations, including:
▪Extreme deep sleep mode in 5G AirScale radios
▪AI-optimized RAN energy savings and KPIs
▪Traffic-aware sleep modes in mobile backhaul
▪Energy-efficient site solutions
GHG emissions from scope 3 category 11 “use of sold
products” increased by 16% compared to 2024, and reduced by
21% compared to the base year 2019. The increase from 2024
to 2025 is due to higher sales volumes and a changed product
mix. GHG emissions increased by 4% due to the inclusion of
Infinera’s emissions in 2025 reporting. This increase was offset
by a 1% decrease in the global emission factor, which reflects
the decarbonization development of the global electricity grid.
Nokia’s carbon footprint (scope 1, 2 and 3)
Emission Source | Metric tons CO2eq | % of total | ||||
 | Energy use in facilities and by fleet | 56 764 | 0.2% | Scope 1 and 2 market- based emissions | ||
94% use of sold products |  | Use of sold products | 28 607 919 | 94% | Scope 3 emissions | |
 | Purchased goods and services | 1 507 366 | 5% | |||
 | Upstream transportation and distribution | 222 182 | 0.7% | |||
 | Capital goods | 61 671 | 0.2% | |||
 | Business travel | 34 178 | 0.1% | |||
Total scope 1, 2 and 3 emissions | 30 490 080 | 100% | ||||
Nokia’s carbon footprint (scope 1 and 2)
Emission Source | Metric tons CO2eq | % of total | |||
| Facilities, direct emissions | 26 849 | 47% | Scope 1 emissions | |
| Car Fleet | 16 090 | 28% | ||
| Facilities, indirect emissions from purchased energy, market-based | 13 825 | 24% | Scope 2 emissions | |
Total scope 1 and 2 emissions | 56 764 | 100% | |||
Circularity
Nokia aims to be a driver of circular practices in its industry.
The company focuses on opportunities to promote hardware
circularity by managing the sourcing and reuse of key source
materials. Nokia builds on its existing waste processes and
circular products and services offering, the take-back of
products from customer modernization projects and end-of-life
equipment and increasing the availability and sales of
refurbished products. Nokia also looks to increase the use of
recycled materials in its products, augmenting the inclusion of
recycled plastics, steel, copper and aluminum in product design.
Nokia has set a target to reach 95% waste circularity rate by
2030. The purpose is to improve waste management practices
by maximizing waste utilization and minimizing disposal.
Circularity rate includes waste from Nokia’s offices, labs, manu-
facturing, site installation, product take-back and final assembly
suppliers. Annual waste circularity outcome for 2025 was 90%.
Nokia has recognized areas where high circularity rate has
already been achieved and also areas requiring further action.
88 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment •Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Shares and shareholders
Share details
Shares and share capital
Nokia has one class of shares. Each Nokia share entitles the holder to one vote at general meetings
of Nokia.
At 31 December 2025, the share capital of Nokia Corporation equaled EUR 245 896 461.96 and the
total number of shares issued was 5 742 239 696. At 31 December 2025, the total number of
shares included 159 705 525 shares owned by Group companies representing approximately 2.8%
of the total number of shares and the total voting rights.
In November 2024, under the authorization granted to the Board of Directors by the Annual
General Meeting 2024, the Board of Directors resolved on an issuance of 150 000 000 new shares
without consideration to itself. Additionally, the Board of Directors resolved on a subsequent
directed issuance of a maximum number of 150 000 000 shares held by the Company as a result of
the aforementioned issuance, to settle its commitments under the merger agreement related to
the Infinera acquisition in respect of shares delivered to eligible stockholders of Infinera. The share
issuance was completed in February 2025. To the extent that the shares were not needed to settle
Nokia’s obligations related to the completion of the acquisition, the Board of Directors resolved on
a directed share issuance of the aforementioned shares without consideration to participants of
Nokia's and Infinera's equity programs the latter of which were assumed by Nokia upon the
completion of the acquisition.
In October 2025, under the authorization granted to the Board of Directors by the Annual General
Meeting 2025, the Board of Directors resolved on an issuance of 120 000 000 new shares without
consideration to itself and resolved on a subsequent directed issuance of a maximum number of
120 000 000 shares held by the Company as a result of the aforementioned issuance, to settle its
commitments under the equity-based incentive plans and the employee share purchase plan in
respect of shares to be delivered during the year 2025, 2026 and 2027. The shares were issued
without consideration.
In October 2025, under the authorization granted to the Board of Directors by the Annual General
Meeting 2025, the Board of Directors resolved on a directed share issuance of 166 389 351 new
shares to enable NVIDIA Corporation to make a USD 1.0 billion equity investment in Nokia. The new
shares were delivered to NVIDIA Corporation in the form of American Depositary Shares in
November 2025.
During 2025, Nokia transferred a total of 46 374 440 treasury shares without consideration to
employees, including certain members of the Group Leadership Team, as settlement under Parent
Company equity-based incentive plans and the employee share purchase plan in accordance with
the rules of the plans. The transfers were based on the resolutions of the Board of Directors in
November 2024 to issue shares held by the Company to settle its commitments to participants of
the plans.
Information on the authorizations held by the Board of Directors in 2025 to issue shares and
special rights entitling to shares, to transfer shares and repurchase own shares, as well as
information on related party transactions, the shareholders and share-based incentives is available
in this section “Shares and shareholders” and additionally in Notes 3.2. Remuneration of key
management, 3.3. Share-based payments, 5.1. Equity and 6.4. Related party transactions in the
consolidated financial statements.
In April 2025, the Board of Directors decided to cancel 150 000 000 Nokia shares held
by the Company and repurchased under the share buyback program initiated in November 2024 and
completed in April 2025. The cancellation did not affect the Company’s share capital nor total equity.
The Board of Directors held at 31 December 2025 a total of 1 092 401 shares and ADSs in Nokia,
which represented approximately 0.02% of our total shares and voting rights excluding shares held
by the Nokia Group. The President and CEO owned at 31 December 2025 a total of 609 274 shares.
There were no public takeover offers by third parties for Nokia’s shares during financial years 2025
and 2024. On 28 February 2025, Nokia completed the acquisition of Infinera. The aggregated
consideration transferred included 127 434 986 Nokia shares held by Nokia Corporation. For more
information, refer to Note 6.2. Acquisitions in the consolidated financial statements.
Nokia does not have minimum or maximum share capital or a par value of a share.
31 December | 2025 | 2024 | 2023 | 2022 | 2021 |
Share capital, EURm | 246 | 246 | 246 | 246 | 246 |
Shares, (000s) | 5 742 240 | 5 605 850 | 5 613 497 | 5 632 298 | 5 675 461 |
Shares held by the Group, (000s) | 159 706 | 232 701 | 87 896 | 45 282 | 40 468 |
Number of shares excluding shares held by the Group, (000s) | 5 582 534 | 5 373 149 | 5 525 601 | 5 587 016 | 5 634 993 |
Average number of shares excluding shares held by the Group during the year | |||||
Basic, (000s)(1) | 5 415 876 | 5 475 817 | 5 549 468 | 5 614 182 | 5 630 025 |
Diluted, (000s)(1) | 5 502 782 | 5 530 603 | 5 585 923 | 5 670 020 | 5 684 235 |
Number of registered shareholders(2) | 224 893 | 224 196 | 247 893 | 238 359 | 233 844 |
(1)Used in calculation of earnings per share attributable to equity holders of the parent.
(2)Each account operator is included in the figure as only one registered shareholder.
89 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment •Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Key ratios
For the year ended 31 December | 2025 | 2024 | 2023 | 2022 | 2021 |
Earnings per share, basic, EUR | |||||
Continuing operations(1) | 0.12 | 0.31 | 0.11 | 0.75 | N/A |
Discontinued operations(1) | 0.00 | (0.08) | 0.01 | 0.01 | N/A |
Profit for the year | 0.12 | 0.23 | 0.12 | 0.76 | 0.29 |
Earnings per share, diluted, EUR | |||||
Continuing operations(1) | 0.11 | 0.31 | 0.11 | 0.74 | N/A |
Discontinued operations(1) | 0.00 | (0.08) | 0.01 | 0.01 | N/A |
Profit for the year | 0.12 | 0.23 | 0.12 | 0.75 | 0.29 |
Proposed dividend per share, EUR(2) | 0.14 | 0.14 | 0.13 | 0.12 | 0.08 |
Dividend payout ratio(3) | 116.7% | 45.2% | 118.2% | 16.0% | N/A |
Total dividends, EURm(4) | 804 | 785 | 730 | 676 | 449 |
31 December | 2025 | 2024 | 2023 | 2022 | 2021 |
Shareholders’ equity per share, EUR | 3.76 | 3.84 | 3.72 | 3.82 | 3.08 |
Share price, EUR(5) | 5.57 | 4.27 | 3.05 | 4.33 | 5.57 |
Price-to-earnings ratio(3) | 46.42 | 13.77 | 27.73 | 5.77 | N/A |
Dividend yield(1) | 2.51% | 3.28% | 4.26% | 2.77% | 1.44% |
Market capitalization, EURm | 31 095 | 22 943 | 16 853 | 24 192 | 31 409 |
(1)In June 2024, Nokia classified its Submarine Networks business as a discontinued operation. The comparative amounts for 2023
and 2022 have been recast accordingly, however, due to undue cost and effort required to recast historical accounting records the
comparative amounts for 2021 have not been recast.
(2)The Board of Directors proposes to the Annual General Meeting 2026 to be authorized to decide in its discretion on the
distribution of an aggregate maximum of EUR 0.14 per share as dividend from the retained earnings and/or as assets from the
reserve for invested unrestricted equity.
(3)Calculated based on the basic earnings per share from continuing operations.
(4)In 2025, total dividends is calculated based on the proposed Annual General Meeting authorization to the Board of a maximum
distribution of EUR 0.14 per share for the financial year 2025, and the total number of shares on the date of issuing the financial
statements for 2025. On the date of issuing the financial statements for 2025 the total number of Nokia shares is 5 742 239 696.
Comparative amounts represent the actual total distribution to equity holders of the parent for the financial year presented.
(5)Closing Nokia share price at year end on Nasdaq Helsinki.
Share turnover
For the year ended 31 December | 2025 | 2024 | 2023 | 2022 | 2021 |
Number of shares traded during the year (000s)(1) | 9 969 841 | 7 175 750 | 7 754 279 | 10 294 615 | 16 560 334 |
Average number of shares excluding shares held by the Group during the year (000s) | 5 415 876 | 5 475 817 | 5 549 468 | 5 614 182 | 5 630 025 |
Share turnover % | 184 | 131 | 140 | 183 | 294 |
(1)Source: Nasdaq Helsinki, the NYSE composite tape and Euronext Paris.
The principal trading markets for the shares are Nasdaq Helsinki in the form of shares, and the
NYSE, in the form of ADSs. In 2025, Nokia also maintained a listing on Euronext Paris Stock
Exchange but decided to apply for delisting in November 2025. The final day of trading of Nokia’s
shares on Euronext Paris was 30 December 2025.
Share price development
Nasdaq Helsinki
EUR | High | Low | Value |
2025 Full year High/Low | 6.65 | 3.42 | |
2025 Full year Average (Volume-weighted) | 4.65 | ||
Year-end value 31 December 2025 | 5.57 | ||
Year-end value 31 December 2024 | 4.27 | ||
Change from 31 December 2024 to 31 December 2025 | 30.4% |
New York Stock Exchange
USD | High | Low | Value |
2025 Full year High/Low | 8.19 | 4.00 | |
2025 Full year Average (Volume-weighted) | 5.47 | ||
Year-end value 31 December 2025 | 6.47 | ||
Year-end value 31 December 2024 | 4.43 | ||
Change from 31 December 2024 to 31 December 2025 | 46.0% |
Euronext Paris
EUR | High | Low | Value |
2025 Full year High/Low | 6.64 | 3.46 | |
2025 Full year Average (Volume-weighted) | 4.78 | ||
Year-end value 30 December 2025(1) | 5.55 | ||
Year-end value 31 December 2024 | 4.26 | ||
Change from 31 December 2024 to 30 December 2025(1) | 30.3% |
(1) The final day of trading of Nokia’s shares on Euronext Paris was 30 December 2025.
90 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment •Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Stock option exercises
Since 2019, Nokia has not administered any stock option plans.
Dividend and share buybacks
The dividend to shareholders is Nokia’s principal method of distributing earnings to shareholders.
The dividend policy was updated at the Capital Markets Day in March 2021 to read as follows: “We
target recurring, stable and over time growing ordinary dividend payments, taking into account the
previous year’s earnings as well as the company’s financial position and business outlook”.
The Board of Directors proposes to the Annual General Meeting 2026 that based on the balance
sheet to be adopted for the financial year ended on 31 December 2025, no dividend is distributed
by a resolution of the Annual General Meeting. Instead, the Board of Directors proposes to be
authorized to resolve in its discretion on the distribution of an aggregate maximum of EUR 0.14 per
share as dividend from the retained earnings and/or as assets from the reserve for invested
unrestricted equity. The authorization would be used to distribute dividend from the retained
earnings and/or assets from the reserve for invested unrestricted equity in four installments during
the authorization period, in connection with the quarterly results, unless the Board of Directors
decides otherwise for a justified reason. The proposed total authorization for distribution of
dividend and/or assets from the reserve for invested unrestricted equity is in line with the
Company’s dividend policy. The authorization would be valid until the opening of the next Annual
General Meeting. The Board would make separate resolutions on the amount and timing of each
distribution of dividend and/or assets from the reserve for invested unrestricted equity.
In November 2024, under the authorization granted to the Board of Directors by the Annual
General Meeting 2024, Nokia launched a share buyback program to offset the dilutive effect of the
acquisition of Infinera announced in June 2024 targeting to repurchase 150 million shares for an
aggregate purchase price not exceeding EUR 900 million. The repurchases commenced in
November 2024 and ended in April 2025. The repurchased shares were cancelled in April 2025.
Nokia distributes distributable funds, if any, within the limits set by the Finnish Companies Act as
defined below. Nokia makes and calculates the distribution, if any, in the form of cash dividends,
assets from the reserve for invested unrestricted equity, share buybacks, or in some other form, or
a combination of these. There is no specific formula by which the amount of a distribution is
determined, although some limits set by law are discussed below. The timing and amount of future
distributions of retained earnings and/or assets from the reserve for invested unrestricted equity,
if any, will depend on Nokia’s future results and financial conditions.
Under the Finnish Companies Act, Nokia may distribute retained earnings and/or assets from the
reserve for invested unrestricted equity on our shares only upon a shareholders’ resolution and in
the amount proposed by the Board, subject to limited exceptions. The amount of any distribution is
limited to the amount of distributable earnings of the Parent Company pursuant to the last audited
financial statements approved by our shareholders, taking into account the material changes in the
financial situation of the Parent Company after the end of the last financial period and a statutory
requirement that the distribution of earnings must not result in insolvency of the Parent Company.
Subject to exceptions relating to the right of minority shareholders to request a certain minimum
distribution, the distribution may not exceed the amount proposed by the Board of Directors.
Purchases of equity securities by the Company and affiliated purchasers
The table below presents additional information on the purchases of treasury shares in 2025:
Period | Total number of shares purchased | Average price paid per share, EUR | Total number of shares purchased as part of publicly announced plans or programs | Maximum value of shares that may yet be purchased under the plans or programs, EUR |
January(1) | 18 313 953 | 4.41 | 18 313 953 | 739 939 153 |
February | 26 686 823 | 4.70 | 26 686 823 | 614 496 274 |
March | 78 864 331 | 4.86 | 78 864 331 | 231 451 624 |
April | 6 948 847 | 4.96 | 6 948 847 | — |
May | — | — | — | — |
June | — | — | — | — |
July | — | — | — | — |
August | — | — | — | — |
September | — | — | — | — |
October | — | — | — | — |
November | — | — | — | — |
December | — | — | — | — |
Total | 130 813 954 | 4.77 | 130 813 954 | — |
(1)On 22 November 2024, Nokia announced that its Board of Directors initiates a share buyback program to offset dilutive effect of
acquisition of Infinera pursuant to an authorization from the Annual General Meeting 2024. The program targeted to repurchase
150 million shares for an aggregate price not exceeding EUR 900 million. The repurchases started on 25 November 2024 and
ended on 2 April 2025.
91 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment •Shares and shareholders Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Shareholders
At 31 December 2025, shareholders registered in Finland represented approximately 24% and
shareholders registered in the name of a nominee represented approximately 76% of the total
number of shares of Nokia Corporation. The number of directly registered shareholders was
224 893 at 31 December 2025. Each account operator (12) is included in this figure as only one
registered shareholder.
Largest shareholders registered in Finland at 31 December 2025(1)
Shareholder | Total number of shares 000s | % of all shares | % of all voting rights |
Solidium Oy | 325 000 | 5.66% | 5.66% |
Keskinäinen Työeläkevakuutusyhtiö Varma | 91 266 | 1.59% | 1.59% |
Keskinäinen Eläkevakuutusyhtiö Ilmarinen | 79 261 | 1.38% | 1.38% |
Keskinäinen Työeläkevakuutusyhtiö Elo | 36 242 | 0.63% | 0.63% |
Valtion Eläkerahasto | 27 000 | 0.47% | 0.47% |
Oy Lival Ab | 18 050 | 0.31% | 0.31% |
Svenska litteratursällskapet i Finland r.f. | 14 603 | 0.25% | 0.25% |
Nordea Bank Abp | 11 692 | 0.20% | 0.20% |
Nordea Pro Finland Fund | 10 567 | 0.18% | 0.18% |
OP Finland Index | 10 371 | 0.18% | 0.18% |
(1)Excluding nominee-registered shares and shares owned by Nokia Corporation. Nokia Corporation owned 148 246 864 shares at
31 December 2025.
Breakdown of share ownership at 31 December 2025(1)
By number of shares owned | Number of shareholders | % of shareholders | Total number of shares | % of all shares |
1–100 | 66 740 | 29.68% | 3 032 534 | 0.05% |
101–1 000 | 100 869 | 44.85% | 43 713 215 | 0.76% |
1 001–10 000 | 50 826 | 22.60% | 157 345 733 | 2.74% |
10 001–100 000 | 6 057 | 2.69% | 146 570 263 | 2.55% |
100 001–500 000 | 303 | 0.13% | 58 419 999 | 1.02% |
500 001–1 000 000 | 33 | 0.02% | 24 034 154 | 0.42% |
1 000 001–5 000 000 | 40 | 0.02% | 91 326 590 | 1.59% |
Over 5 000 000 | 25 | 0.01% | 5 217 797 208 | 90.87% |
Total | 224 893 | 100.00% | 5 742 239 696 | 100.00% |
(1)The breakdown covers only shareholders registered in Finland, and each account operator (12) is included in the number of
shareholders as only one registered shareholder. As a result, the breakdown is not illustrative of the entire shareholder base of
Nokia.
By nationality | % of shares |
Non-Finnish shareholders | 76.49% |
Finnish shareholders | 23.51% |
Total | 100.00% |
By shareholder category (Finnish shareholders) | % of shares |
Corporations | 4.06% |
Households | 6.18% |
Financial and insurance institutions | 2.20% |
Non-profit organizations | 1.06% |
Governmental bodies (incl. pension insurance companies) | 10.01% |
Total | 23.51% |
At 31 December 2025, a total of 1 117 743 012 ADSs (equivalent to the same number of shares or
approximately 19% of the total shares) were outstanding and held of record by 82 307 registered
holders in the United States. Nokia is aware that many ADSs are held of record by brokers and other
nominees, and accordingly the above number of holders is not necessarily representative of the
actual number of persons who are beneficial holders of ADSs or the number of ADSs beneficially
held by such persons. Based on information available from Broadridge Financial Solutions, Inc., the
number of beneficial owners of ADSs at 31 December 2025 was 748 358.
Based on the most recent information available to Nokia, at 1 July 2025, BlackRock, Inc. beneficially
owned 373 750 775 Nokia shares and 9 252 262 Nokia ADSs, which at that time corresponded to
approximately 6.85% and 0.16%, respectively, of the total number of shares and voting rights of
Nokia.
According to the notification received by Nokia, the holdings of FMR LLC in Nokia on 2 March 2026
were equivalent to a total of 289 538 191 shares and 277 150 920 voting rights, corresponding to
approximately 5.04% of the total number of shares and 4.83% of voting rights of Nokia.
To the best of its knowledge, Nokia is not directly or indirectly owned or controlled by any other
corporation or any government, and there are no arrangements that may result in a change of
control of Nokia.
Shares owned by the members of the Board and the Group Leadership Team
At 31 December 2025, the members of our Board and the Group Leadership Team held a total of
3 484 960 shares and ADSs in Nokia, which represented approximately 0.06% of our shares and
total voting rights excluding shares held by the Nokia Group.
Offer and listing details
Nokia’s capital consists of shares traded on Nasdaq Helsinki under the symbol “NOKIA”. Nokia’s
ADSs, each representing one share, are traded on the NYSE under the symbol “NOK”. The ADSs are
evidenced by American Depositary Receipts (ADRs) issued by Citibank, N.A.
In 2025, Nokia shares were also traded on Euronext Paris under the symbol “NOKIA” until the
delisting of the shares. The final day of trading of Nokia’s shares on Euronext Paris was 30
December 2025.
92 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders •Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Articles of Association
Articles of Association
Amendment of Nokia’s Articles of Association requires a
resolution of the general meeting of shareholders, supported by
two-thirds of the votes cast and two-thirds of the shares
represented at the meeting.
Registration
Nokia Corporation is organized under the laws of the Republic of
Finland and registered in the Finnish Trade Register under
business identity code 0112038-9. Under its current Articles of
Association, Nokia’s object is to research, develop, manufacture,
market, sell and deliver products, software and services related
to, among others, communication and enterprise networks. The
company may also create, acquire and license intellectual property
as well as engage in other industrial and commercial operations,
including securities trading and other investment activities. The
company may carry on its business operations directly, through
subsidiary companies, affiliate companies and joint ventures.
Directors’ voting powers
Under Finnish law, resolutions of the Board shall be made by a
majority vote. A director shall refrain from taking any part in the
consideration of an agreement between the director and the
company or a third party, or any other issue that may provide any
material benefit to him or her and which may be contradictory to
the interests of the company. Under Finnish law, there is no age
limit requirement for directors, and there are no requirements
under Finnish law that a director must own a minimum number of
shares in order to qualify to act as a director. However, in
accordance with the current Company policy, approximately 40%
of the annual fee payable to the Board members is paid in Nokia
shares purchased from the market or alternatively by using
treasury shares held by Nokia, and the directors shall retain until
the end of their directorship such number of shares that
corresponds to the number of shares they have received as Board
remuneration during their first three years of service (the net
amount received after deducting those shares used for offsetting
any costs relating to the acquisition of the shares, including taxes).
Share rights, preferences and
restrictions
Each share confers the right to one vote at general meetings.
According to Finnish law, a company generally must hold an
Annual General Meeting called by the Board within six months
from the end of the financial year. Additionally, the Board is
obliged to call an Extraordinary General Meeting whenever such
meeting is deemed necessary, or at the request of the auditor
or shareholders representing a minimum of one-tenth of all
outstanding shares. Under our Articles of Association, the Board
is elected at least annually at the Annual General Meeting of
shareholders for a term until the close of the next Annual
General Meeting.
Under Finnish law, shareholders may attend and vote at general
meetings in person or by proxy. It is not customary in Finland
for a company to issue forms of proxy to its shareholders.
Accordingly, Nokia does not do so. However, registered holders
and beneficial owners of ADSs are issued forms of proxy by the
Depositary.
To attend and vote at a general meeting, a shareholder must be
registered in the register of shareholders in the Finnish book-
entry system on or prior to the record date set forth in the
notice of the general meeting. A registered holder or a
beneficial owner of the ADSs, like other beneficial owners whose
shares are registered in the Company’s register of shareholders
in the name of a nominee, may vote with their shares provided
that they arrange to have their name entered in the temporary
register of shareholders for the general meeting.
The record date is the eighth business day preceding the
meeting. To be entered in the temporary register of
shareholders for the general meeting, a holder of ADSs must
provide the Depositary, or have their broker or other custodian
provide the Depositary, on or before the voting deadline, as
defined in the proxy material issued by the Depositary, a proxy
with the following information: the name, address, and social
security number or another corresponding personal
identification number of the holder of the ADSs, the number of
shares to be voted by the holder of the ADSs and the voting
instructions. The register of shareholders as of the record date
of each general meeting is public until the end of the respective
meeting. Other nominee-registered shareholders can attend
and vote at general meetings by instructing their broker or other
custodian to register the shareholder in Nokia’s temporary
register of shareholders and give the voting instructions in
accordance with the broker’s or custodian’s instructions.
By completing and returning the form of proxy provided by the
Depositary, a holder of ADSs also authorizes the Depositary to
give notice to us, required by our Articles of Association, of the
holder’s intention to attend the general meeting.
The rights of shareholders are related to the shares as set forth
in the Finnish Companies Act and our Articles of Association.
Neither Finnish law nor our Articles of Association set limitations
on the rights to own Nokia securities, including the rights of
foreign shareholders to hold or exercise voting rights in the said
securities. Amendment of the Articles of Association requires a
decision of the general meeting of shareholders, supported by
two-thirds of the votes cast and two-thirds of the shares
represented at the meeting.
Each of our shares confers equal rights to share in the
distribution of the Company’s funds. Under Finnish law, dividend
entitlement lapses after three years if a dividend remains
unclaimed for that period, in which case the unclaimed dividend
will be recognized as income by Nokia.
93 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders •Articles of Association Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Disclosure obligation of shareholder
ownership or voting power
According to the Finnish Securities Market Act, a shareholder
shall disclose their ownership or voting power to the company
and the Finnish Financial Supervisory Authority when the
ownership or voting power reaches, exceeds or falls below 5, 10,
15, 20, 25, 30, 50 or 90% of all the shares or the voting rights.
The term “ownership” includes ownership by the shareholder,
as well as selected related parties calculated in accordance with
the Finnish Securities Market Act, and calculating the ownership
or voting power covers agreements or other arrangements,
which when concluded would cause the proportion of voting
rights or number of shares to reach, exceed or fall below the
aforementioned limits. Upon receiving such notice, the
company shall disclose it by a stock exchange release without
undue delay.
Purchase obligation
Nokia’s Articles of Association require a shareholder whose
holding equals or exceeds one-third or one-half of all of our
shares to purchase the shares of all other shareholders that so
request. A shareholder who becomes subject to the purchase
obligation is also obligated to purchase any subscription rights,
stock options or convertible bonds issued by the company if so
requested by the holder. The purchase price of the shares under
our Articles of Association is the higher of: (a) the weighted
average trading price of the shares on Nasdaq Helsinki during
the ten business days prior to the day on which we have been
notified by the purchaser that its holding has reached or
exceeded the threshold referred to above or, in the absence of
such notification or its failure to arrive within the specified
period, the day on which our Board otherwise becomes aware of
this; or (b) the average price, weighted by the number of shares,
which the purchaser has paid for the shares it has acquired
during the last 12 months preceding the date referred to in (a).
Under the Finnish Securities Market Act, a shareholder whose
voting power exceeds 30% or 50% of the total voting rights in a
company shall, within one month, offer to purchase the
remaining shares of the company, as well as any other rights
entitling to the shares issued by the company, such as
subscription rights, convertible bonds or stock options issued
by the company. The purchase price shall be the market price of
the securities in question. Subject to certain exceptions, the
market price is determined on the basis of the highest price
paid for the security during the preceding six months by the
shareholder or any party in close connection to the shareholder.
Subject to certain exceptions, if the shareholder or any related
party has not during the six months preceding the offer
acquired any securities that are the target for the offer, the
market price is determined based on the average of the prices
paid for the security in public trading during the preceding
three months weighted by the volume of trade.
Under the Finnish Companies Act, a shareholder whose holding
exceeds nine-tenths of the total number of shares or voting
rights in a company has both the right and, upon a request from
the minority shareholders, the obligation to purchase all the
shares of the minority shareholders for the then current market
price. The market price is determined, among other things, on
the basis of the recent market price of the shares. The purchase
procedure under the Finnish Companies Act differs, and the
purchase price may differ, from the purchase procedure and
price under the Finnish Securities Market Act, as discussed
above. However, if the threshold of nine-tenths has been
exceeded through either a mandatory or a voluntary public offer
pursuant to the Finnish Securities Market Act, the market price
under the Finnish Companies Act is deemed to be the price
offered in the public offer, unless there are specific reasons to
deviate from it.
Pre-emptive rights
In connection with any offering of shares, the existing
shareholders have a pre-emptive right to subscribe for shares
offered in proportion to the amount of shares in their
possession. However, a general meeting of shareholders may
vote, by a majority of two-thirds of the votes cast and two-
thirds of the shares represented at the meeting, to waive this
pre-emptive right provided that, from the company’s
perspective, weighty financial grounds exist.
Monitoring of Foreign Corporate
Acquisitions
Under the Finnish Act on the Monitoring of Foreign Corporate
Acquisitions (2012/172 as amended), a notification to the
Ministry of Economic Affairs and Employment is required for a
non-resident of Finland, directly or indirectly, when acquiring
one-tenth or more of the voting power or corresponding factual
influence in a company. The Ministry of Economic Affairs and
Employment has to confirm the acquisition unless the
acquisition would jeopardize important national interests, in
which case the matter is referred to the Council of State. If the
company in question is operating in the defense sector, an
approval by the Ministry of Economic Affairs and Employment is
required before the acquisition is made. These requirements are
not applicable if, for instance, the voting power is acquired in a
share issue that is proportional to the holder’s ownership of the
shares. Moreover, the requirements do not apply to residents of
countries in the European Economic Area or EFTA countries,
except where at least one-tenth of shares or other controlling
right in such resident are held by a party not resident in the
European Economic Area or EFTA.
94 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects Selected financial data Operating and financial review Business integrity Environment Shares and shareholders Articles of Association •Risk factors Significant subsequent events General facts on Nokia Financial statements Other information |
Risk factors
Set forth below is a description of risk
factors that could affect our business.
Shareholders and potential investors
should carefully review the following risk
factors, in addition to other information
contained in this report. The risk factors
described below should not be construed
as exhaustive. There may be additional
risks that are unknown to us, and other
risks currently believed to be immaterial
that could turn out to be material.
These risks, either individually or collectively, could adversely
affect our business, competitiveness, market share, sales,
costs, expenses, results of operations, profitability, financial
condition, liquidity, reputation, brand and share price. Unless
otherwise indicated or the context otherwise requires,
references in these risk factors to “Nokia”, the “Nokia Group”,
“Group”, “we”, “us” and “our” mean Nokia’s consolidated
operating segments. Certain risks or events may be more
prevalent with respect to the Group or a certain business group,
business or part of the Group.
In evaluating the risks, one should not rely exclusively on the
bullets in the below summary but read the full risk factor
discussion. This report also contains forward-looking
statements that involve risks and uncertainties presented in
“Forward-looking statements” above.
Risk factors summary
Our capability to compete and remain a leading provider of
technology, software and services in the industries and markets
in which we operate is dependent on multiple external and
internal factors, partially outside our control, such as:
Risks related to our strategy and its execution
▪Our success in executing the new strategy, correctly identifying and
pursuing opportunities and mitigating risks and in improving the
operational and financial performance, including:
–Positioning ourselves to lead in the Artificial Intelligence-driven
transformation of networks;
–Dependency on sustained traffic growth in customers’ networks and
data centers (DC), introduction of new use cases and low-latency
services to drive the demand for network intelligence and growth in
AI & Cloud;
–Realizing the benefits of the new operating model, delivering
operational continuity and efficiency;
–The degree our investments, including business ventures, result in
technologies, products or services that achieve or retain broad or
timely market acceptance, answer to the expanding needs or
preferences of our customers or consumers, or in breakthrough
innovations, research assets, and intellectual property that we could
otherwise utilize for value creation;
–Our success in acquiring or divesting businesses and technologies,
integrating acquisitions and transitioning divestments, entering into
licensing arrangements, minority investments, forming and managing
joint ventures or partnerships and in realizing the anticipated
business plans, benefits, synergies, cost savings or efficiencies from
these efforts;
–Our ability to realize the anticipated benefits, synergies, cost savings
or efficiencies from acquisitions and to avoid unforeseen integration
obstacles;
–Dependency on the performance of our partners and success in
forming partnering arrangements with third parties;
–Our success in identifying and implementing the appropriate
measures to improve operational performance and cost-efficiency in
order to continue investments in R&D and future capabilities,
including 5G-Advanced and 6G, intra- and inter-data center
solutions, enterprise, cloud, artificial intelligence, automation,
digitalization, security and development of new standard essential
patents and to reach targeted results, benefits and other
improvements; and
–Our ability to meet our own sustainability targets, identify, evaluate
and address sustainability related risks and opportunities
appropriately, and to comply with stakeholder and societal
expectations and practices and with the increasing number of
regulatory requirements related to sustainability, including
mandatory transparency and disclosure requirements, impact to
human rights, and considering our reliance on global supply chains
and the challenges and limitations in the availability of accurate
information contributing to measurement uncertainty in provided
quantitative metrics and monetary amounts in our sustainability
related disclosures.
Surrounding economic, financial and competitive environment
▪General economic and financial market conditions, such as the level of
inflation and unemployment, increased global macroeconomic uncertainty,
major currency fluctuations, higher interest rates and financing costs,
and other developments in the economies and industries where we, our
customers, partners and suppliers operate, including adverse
developments in the policies governing international trade or markets
such as export and import controls, including increases in tariffs, and any
geopolitical escalation such as in the US-China relations, in tensions in
East Asia, Venezuela and ongoing situations in Ukraine and the Middle
East;
▪Intense competition and development of the industries and markets in
which we operate, including:
–The cyclical nature of the markets;
–Technological changes, such as acceleration of AI/automation, and
the speed of technological adoption;
–Competitor behavior and the breadth of the qualified supplier pool;
–Customer consolidation, customer spending appetite and purchase
behavior, deployments and rollout timing;
–Period of high inflation and our ability to pass increased costs to our
pricing;
–Price erosion largely driven by competition challenging the
connectivity business models of our customers;
▪Our dependency on a limited number of big customers and large multi-
year agreements, a single customer or a contract loss, and
competitiveness of, or developments regarding, pricing and contractual
terms we offer or have in place with the customer; and
▪Developments with respect to customer financing, extended payment
terms or credit lines that we provide our customers, such as willingness
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of banks or other institutions to provide guarantees or financing to our
customers or to purchase our receivables.
Our competitiveness
▪Our success in the development of new technologies, services and
upgrades, their rollout and commercialization in a timely manner,
including:
–Our ability to adapt to changing business models, rapid technological
advances and to meet new competition, such as new AI-native
companies or existing competitors leveraging AI more effectively;
–Shifts and trends, such as AI-driven transformation of networks,
cloudification, Open RAN and openness in general, virtualization and
disaggregation, and our ability to integrate advanced AI capabilities
into Nokia's core products and solutions with potential impact on the
attractiveness of our portfolio of products and services, competitive
landscape, business models and our margin profile;
–Our ability to invest in new competitive high-quality products and
services, such as 5G-Advanced, Open RAN, 6G, AI-native networks,
intra-DC and inter-DC connectivity, next-generation broadband
access, the Internet of Things (IoT), the cloud or software, upgrades
and technologies that have accurately anticipated technological,
regulatory and market trends;
–Certain technology limits in key technologies or adoption of
unforeseen disruptive technologies by our competitors, that might
change demand patterns for our products and services and the
competitive dynamics;
–Our capabilities to manage end-to-end costs related to our portfolio
of products and services, meeting evolving expectations and
complying with regulatory requirements and standards;
▪Severity of inefficiencies, operational incidents, malfunctions or
disruptions of our information technology systems and processes or
disruptions of services relying on our own or third-party IT;
▪Actual or perceived security or privacy breaches, including cybersecurity
threats and incidents, data leakage, defects, errors or vulnerabilities in
our technology and services and that of third-party providers;
▪Our manufacturing, service creation, delivery, logistics or supply chain to
operate without significant interruptions or shortages, including the
impacts of geopolitical tensions and open conflicts feeding uncertainty in
the global supply chain;
▪Performance capabilities of our partners and suppliers, and their high
standards to meet product quality, health, safety or security
requirements or comply with other regulations or local laws, such as
environmental or labor laws;
▪Natural or man-made disasters, military actions, wars, labor unrest, civil
unrest or health crises, impacting our service delivery or production sites
or the production sites of our suppliers, which are geographically
concentrated; and
▪Our ability to retain, motivate, develop, reskill and recruit appropriately
skilled employees and to balance our workforce.
Intellectual property rights and licensing
▪Our ability to protect our innovations and to maintain the strength of our
intellectual property portfolio, such as;
–Our ability to create new relevant technologies, products and
services through our R&D,
–Our ability to monetize our intellectual property for instance, due to
market, regulatory and other developments, or court rulings in
intellectual property-related litigation and other disputes;
–Uncertainty relating to the evolving geopolitical environment, global
regulatory and standardization landscape relating to intellectual
property;
–Developments in the concentrated smartphone market, the source
of a significant portion of our patent licensing income;
▪Our ability to renew existing license agreements and conclude new
license agreements regarding our intellectual property that we license to
others on acceptable commercial terms, and the timing, cost, and
potential need for litigation to achieve such renewals and new license
agreements; and
▪Our ability to renew or finalize licenses regarding technologies that are
licensed to us on acceptable commercial terms and to handle claims that
we have allegedly infringed third parties’ IPR.
Geopolitical, legal, regulatory and compliance environment
▪Complexity of direct and indirect regulation, and exposure to political
developments affecting trade, such as:
–Unfavorable or unpredictable treatment in relation to trade
sanctions, tariffs, tax matters and export controls, such as the
changes in the U.S. and multilateral trade policies, including the
export and import controls and laws, particularly with regard to
China, Mexico, Canada and the EU and regulation favoring local
industry participants;
–Complex regulatory frameworks impacting taxation, national
security, competition law, exchange controls, sanctions, cyber
security, communications technology, supply chains, environmental,
social and governance (ESG) topics, including integrity and anti-
corruption;
–Geopolitical tensions, escalations or expansions into open conflicts,
such as potential further developments related to the situations in
Ukraine and in the Middle East and risks related to tensions in
Venezuela, East Asia and in the countries in the Sahel and West
Africa;
–Our level of dependence on emerging markets subject to political
and regulatory changes and economic volatility;
–Changes in existing regulations or in their application, and emerging
new regulation impacting our products, services or business,
including:
–Roll back of certain legislative acts and initiatives, variation in
national implementation of EU legislation and divergence of
regulatory frameworks in the EU, the U.S. and other relevant jurisdictions;
–Emerging new regulations applicable to current or new technologies,
products or telecommunications and technology sectors in general;
–Our products, services and operations meeting all relevant quality,
health, safety or security standards and other recommendations
globally and compliance with laws and regulations, such as related to
digital economy, sustainability, responsible AI, telecommunications
and technology, security and privacy, including network and product
security, protection and transfer of personal data, data access and
use;
▪Uncertainty on the outcome of inspections, investigations, claims, and
government proceedings which we may be subject to at any given time
due to the global nature of our business;
▪Disruptiveness of litigation, arbitration, agreement-related disputes or
product liability-related allegations;
▪Our ability to maintain an effective system of governance and
compliance processes, disclosure controls and internal control over
financial and sustainability reporting and influence those of third parties
whose performance we may be held liable for; and
▪The degree of control and level of influence in the joint ventures where
Nokia is the minority partner and other affiliated companies where Nokia
does not have direct management control, or which are not fully
integrated into its operational infrastructure.
Financial and tax-related uncertainties
▪Complexity of tax laws and rules, including any changes in the aforesaid,
as well as diverse tax authority practices and interpretations;
▪Our ability to utilize our tax attributes and deferred tax assets;
▪Having access to sources of funding on favorable terms or at all;
▪Our ability to maintain our investment grade credit ratings;
▪Exchange rate fluctuations impacting our net sales, costs and results of
operations, as well as the US dollar value of our dividends and market
price of our ADSs;
▪Our pension and other post-employment benefit obligations and the
potential need for increased funding; and
▪Recoverability of the carrying amount of our goodwill, which could result
in significant impairment charges.
Ownership of our shares
▪Uncertainty of the amount of dividend and/or repayment of capital and
other profit distributions such as share buybacks to shareholders for
each financial period;
▪Volatility of the trading price of our shares and ADSs, including as a result
of factors outside our control; and
▪Requirement for non-Finnish shareholders to provide detailed
information in order to obtain advantageous withholding tax treatment
for dividends.
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Full risk factor discussion
Risks related to our strategy and its execution
We may be unable to successfully implement our strategic
plans, sustain or improve the operational and financial
performance of our business groups, correctly identify or
successfully pursue business opportunities, correctly
anticipate or successfully mitigate technological disruptions or
otherwise grow our business.
Our success depends on our ability to become and remain a
leading provider of technology, software and services in the
industries and markets in which we operate. However, there can
be no assurance that we will correctly identify trends,
opportunities or threats that we need to pursue or mitigate to
achieve our goals or targets. For example, the aim of our new
strategy is to position ourselves to lead in the Artificial
Intelligence (AI)-driven transformation of networks and capture
the value of the “AI supercycle” focusing on five strategic
priorities; (i) accelerating growth in AI & Cloud; (ii) leading the
next era of mobile connectivity with AI-native networks and 6G;
(iii) growing by co-innovating with customers and partners; (iv)
focusing capital where Nokia can differentiate; and (v) unlocking
sustainable returns. AI supercycle is driving an unprecedented
demand for network capacity, requiring networks to be more
performant, automated, and optimized for specific AI traffic
patterns, with a strong focus on low latency, high throughput,
and energy efficiency.
As part of the updated strategy, we have transitioned to a new
operating model effective 1 January 2026 with two primary
segments – Networks Infrastructure and Mobile Infrastructure -
and a Portfolio Businesses group for non-core assets. The
realignment is intended to accelerate growth opportunities
from the global “AI supercycle” and enhance focus on AI-native
networks, 6G, cloud infrastructure and software-defined
networking. The revised strategy, with its sharper focus on
capital allocation and AI-centric business models, entails
enhanced operational and execution risks, including the
challenges of scaling new AI & Cloud solutions, responding to
competitive threats including technology-driven entrants
benefiting from lower barriers of entry or disruptive business
modes, and adapting to rapid shifts in customer demand for
network intelligence, low latency applications, security, and
sustainability requirements.
There is no assurance that we will effectively manage the
transition and execute new strategy effectively, deliver
operational continuity, or avoid unforeseen integration
obstacles as resources, leadership and activities are reallocated
across the new structure.
Our path to continued technology leadership lies in long-term
research and development to drive innovation across a
comprehensive portfolio of network equipment, software,
services and licensing. We are investing, for instance, in 5G-
Advanced and 6G research, autonomous networks, data center
interconnect, intra-data center solutions spanning data center
fabrics and optics, silicon and systems leadership, security and
the in development of new standard-essential patents. The R&D
of innovative products, services and technologies is a complex
and uncertain process, and there can be no assurance that our
investments will result in technologies, products or services that
achieve or retain broad or timely market acceptance, are
commercially successful, answer to the expanding needs or
preferences of our customers or consumers, or lead to
breakthrough innovations that we could use for value creation.
As part of implementing our strategic plans we, for instance,
enter into licensing arrangements, partner with third parties and
have entered into a number of and may engage in the future in
transactions, such as divestments and acquisitions, mergers,
joint ventures and minority investments that could complement
or improve our existing operations or technologies, sharpen our
business focus and enable us to grow our business. There can
be no assurance that our efforts to continuously improve our
operations and realize efficiencies will or continue to generate
the expected results or improvements, or that we will achieve
intended targets or financial objectives related to such efforts.
For instance, the underlying rationale, initial assumptions or the
business case in terms of profits, revenue, strategic impact or
otherwise justifying the creation or continuation of a certain
arrangement may not be realized. We may also encounter issues
or inefficiencies related to our organizational and operational
structure, including being unable to successfully implement the
business plans. Also, the planned transactions may not ultimately
be completed on favorable terms or at all, or transactions may
result in liabilities or claims, such as indemnification or breach
of contract claims. The divestment or investment decisions we
make may subject us to litigation arising from minority
shareholders’ actions and investor dissatisfaction with the
activities of our business. Shareholder disputes, if resolved
against us, could have a material adverse effect on us.
We are also engaged in business ventures, including technology
innovation and incubation. Such business areas or plans may be
adversely affected by adverse industry and market developments
in the numerous diverse markets in which we operate, and the
investments we make may not achieve the targeted scale,
intended benefits or yield expected rates of return.
We may be unable to realize the anticipated benefits,
synergies, cost savings or efficiencies from acquisitions, and
we may encounter issues or inefficiencies related to our
organizational and operational structure including being
unable to successfully implement related business plans.
The level of effort required for successful integration of
acquired businesses or assets depends on the complexity of the
acquired business or asset. There can be no assurance that we
will be able to realize the intended organizational and
operational benefits and potentially targeted cost savings
related to our business plans in the manner or within the
timeframe currently anticipated. The risks and uncertainties
relating to the integration include, among others, the
distraction of our management’s attention from our business
resulting in performance shortfalls, the disruption of our
ongoing business, interference with our ability to maintain our
relationships with customers, vendors, regulators and
employees, and inconsistencies in our services, standards,
quality, product road maps, controls, procedures and policies,
any of which could have a material adverse effect on our
business, financial condition and results of operations.
These failures could be triggered, among others, by the following
factors impacting the integration of process and operations:
▪adverse contractual issues or disputes with respect to
various agreements with third parties, employment
agreements, or pension and other post-employment
benefits-related funding or liability issues;
▪our failure to identify issues and liabilities at the target
business or assets during the due diligence and pre-
acquisition process by which we may be exposed to
unknown, larger or contingent liabilities of acquired
businesses, such as those related to contractual obligations,
taxes, pensions, environmental liabilities, disputes and
compliance matters;
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▪disruptions caused, for instance, by reorganizations, which
may result in inefficiency within the new organization
through loss of key employees or delays in implementing our
intended structural changes, among other issues;
▪inability to rationalize or streamline our organization or
product lines/services, or to retire legacy products and
related services as a result of pre-existing customer
commitments;
▪loss of, or lower volume of, business from key customers, or
the inability to renew agreements with existing customers or
establish new customer relationships, including limitations
linked to customer policies with respect to aggregate vendor
share or supplier diversity policies or increased efforts from
competitors aiming to capitalize on disruptions;
▪conditions and burdens imposed by laws, regulators or
industry standards on our business, or adverse regulatory or
industry developments or litigation affecting us;
▪unanticipated changes in business, industry or general
economic conditions that affect the assumptions underlying
the acquisition;
▪issues relating to fraud, non-compliance with applicable laws
and regulations, improper accounting policies, improper
internal control or other improper activities;
▪challenges relating to the consolidation or ongoing
integration of corporate, financial data and reporting,
control and administrative functions;
▪the coordination of R&D, marketing and other support
functions of the combined business may fail or cause
inefficiencies or other administrative burdens;
▪our inability to eliminate the complexity of our corporate
structure following the acquisition; and
▪impairments related to goodwill and other intangible assets,
for instance, due to business performance after an
acquisition or differences in evaluating the goodwill with
respect to the acquired businesses.
Additionally, the anticipated cost reductions and other benefits
expected to arise from the acquisitions and integration of
businesses, as well as related costs to implement such
measures, are derived from our estimates, which are uncertain.
The underlying assumptions are inherently uncertain and
subject to a variety of significant business, economic, and
competitive factors, risks and uncertainties that could cause
our actual results to differ materially from those contained in
the expected synergy benefits and related cost estimates.
Performance failures of our partners as well as failures to
agree to partnering arrangements with third parties could
adversely affect us.
We are increasingly collaborating and partnering with third
parties to develop technologies, products and services, as well
as seeking new revenue streams through partnering
arrangements. We also depend on partners in our efforts to
monetize our technologies, including those of Nokia and Nokia
Bell Labs, and we have outsourced various functions to third
parties and are relying on them to provide certain services to us.
Although the objective of the collaborative and partnering
arrangements is a mutually beneficial outcome for each party,
our ability to introduce and provide technologies, products and
services in a timely manner and so that those are commercially
viable and meet our, our customers’ and consumers’ quality,
safety, security and other standards could be hampered by
performance or other failures of our partners or the companies
we collaborate with. For instance, if a partner acts inconsistently
with our ethical, sustainability, compliance, brand or quality
standards, this can negatively affect our reputation, the value of
our brand and the business outcome of our partnerships.
Furthermore, if we fail to achieve the collaboration or partnering
arrangements needed to succeed, we may be unable to bring
our products, services or technologies to market successfully or
in a timely manner. It is also possible that the parties we
currently collaborate with, turn into our competitors.
In many areas, including R&D, IT, finance and human resources-
related arrangements, a failure to maintain an efficient
relationship with the selected partner may lead to ongoing
operational problems or even to severe business disruptions,
and the availability of the processes and services upon which we
rely may be interrupted. Performance problems may result in
missed reporting deadlines, internal controls challenges,
financial losses, missed business opportunities and reputational
harm. In addition, as management’s focus shifts from a direct to
an indirect operational control in these areas, there is a risk that
without active management and monitoring of the relationship,
the services provided may be below appropriate quality
standards. Partners may not meet agreed service levels, in
which case, depending on the impacted service, our contractual
remedies may not fully cure all of the damages we may suffer.
This is particularly true for any deficiencies that would impact
the reporting requirements applicable to us as a company listed
on multiple stock exchanges. In outsourcing projects, we may
encounter disruption to business resulting from broken
processes and distraction of our employees that may need to
train the partner’s staff or be trained in the partner’s systems.
Adjustments to staff size and transfer of employees to the
partner’s companies could have an adverse effect on us, for
instance, through impacting the morale of our employees,
raising complex labor law issues and resulting in the loss of key
personnel. Additionally, partnering and outsourcing
arrangements can create a dependency on a given partner
causing issues in our ability to learn from day-to-day
responsibilities, gain hands-on experience, adapt to changing
business needs and properly transfer the specific know-how to
the new outsourcing partners. Concerns could equally arise
from giving third parties access to confidential data, strategic
technology applications and books and records. There is also a
risk that we may not be able to determine whether internal
controls have been effectively implemented, and whether the
partner company’s performance and controls monitoring
reports are accurate.
Our efforts aimed at managing and improving our financial or
operational performance may not lead to targeted results,
benefits, cost savings or improvements in our
competitiveness.
We are continuously targeting increased efficiency of our
operations. The strategic and operational changes to our
business and a program to reset our cost base while protecting
our R&D capacity and commitment to technology leadership
continue.
Failure by us to determine the appropriate operational
structure, prioritization of operating expenses and other costs,
to identify and implement the appropriate measures to increase
simplicity and improve cost-efficiency, or to maintain achieved
efficiency levels, could limit our future investments and have a
material adverse effect on our competitiveness, results of
operations and financial condition. Our current and future cost-
saving measures may be costly, potentially disruptive to
operations, and may not lead to sustainable improvements in
our overall competitiveness and profitability, and there can be
no assurance that such measures will be met as planned in
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contemplated timeframes or at all. Our plans may be altered in
the future, including adjusting any projected financial or other
targets. The anticipated costs or the level of disruption
expected from implementing such plans or restructurings may
be higher than expected. Efforts to plan and implement cost-
saving initiatives may divert management attention from the
rest of the business and adversely affect our business.
There are also several other factors that may prevent or delay a
successful implementation of any cost-saving or efficiency
improvement initiatives, including, among others, the following:
▪the need to make additional investments in other areas such
as 5G-Advanced and 6G, enterprise, security, cloud, artificial
intelligence, development of new standard essential patents
and automation/digitalization of services and our own
operations;
▪inaccuracy in our expectations with respect to market
growth, customer demand and other trends;
▪legislative constraints or unfavorable changes in legislation
in the markets in which we operate influencing timing, costs
and expected savings of certain contemplated initiatives;
▪our ability to align and adjust resources, systems and tools,
including digitalization and automation of processes, related
to implementation of planned organizational changes;
▪intended business plans may require us to inform or consult
with employees and labor representatives, and such
processes may influence the timing, costs and extent of
expected savings and the feasibility of certain contemplated
initiatives;
▪inflation driving increase in cost base; and
▪bargaining power of our suppliers which may prevent us
from achieving targeted procurement savings.
Furthermore, cost-saving initiatives may negatively affect our
ability to develop new or improve existing products and
compete effectively in certain markets, and there is no
guarantee that we will continue to be able to successfully
innovate or remain technologically competitive.
We may be subject to increased scrutiny related to our
sustainability activities and disclosures. Our results, reputation
and brand as well as the willingness of customers and suppliers
to do business with us could be harmed if we fail to meet the
regulatory sustainability-related requirements, stakeholder
and societal expectations and our sustainability targets.
Our business could be negatively impacted if we fail to
appropriately address existing and emerging sustainability
matters, including related market pressure. We may fail or be
unable to fully achieve one or more of our sustainability targets,
such as our greenhouse gas emission commitments, due to a
range of factors within or beyond our control, and we may
adjust or modify our targets in light of new information,
adjusted projections, or a change in business strategy, any of
which could negatively impact our brand, reputation, and
business. For instance, our decarbonization efforts are heavily
dependent on the supply and use of renewable energy and
biofuels which may not be available for our customers or supply
chain in all markets or may not reach affordable cost levels for
the actors in our value chain. It is also possible that
stakeholders may be dissatisfied with our sustainability
practices and targets or the speed of their implementation
which could result in action against Nokia by regulators or other
third parties or negative pressure on us or our stock.
The sustainability regulatory environment is complex and
volatile with new requirements proposed or adopted by various
regulators worldwide requiring continuous and consistent
monitoring of regulatory developments and evaluation to
determine applicability to Nokia. Potential failure to, or
perception of a failure to, adapt, disclose relevant metrics, set
targets and implement actions and controls that are rigorous
enough or otherwise in compliance with applicable regulations,
or to prioritize the most material sustainability actions and
targets, could negatively impact our brand, reputation, and
business. We could also incur additional costs and require
additional resources to address evolving regulatory
requirements and to monitor and report on our sustainability
performance programs, and those of our value chain partners, as
required, and to comply with various sustainability practices and
disclosure requirements. For instance, growing country-level
regulatory requirements demand country-specific reporting that
requires robust data collection, systems, controls, processes and
sufficient resource availability. The high number of data points
to be provided and the lack of global harmonization of standards
in the ESG data disclosures makes ESG-related reporting difficult
and resource consuming, which may contribute to challenges for
investors to correctly assess disclosures or our ability to comply
with each disclosure requirement. It is also possible that third
parties rating our ESG practices and performance may make
unfavorable, inaccurate or unsubstantiated interpretations of
our ESG practices and performance based on their own
assessments and publish such interpretations with or without
offering us the possibility to comment.
We may be unable to evaluate climate- and other sustainability-
related risks and opportunities accurately and to identify and
implement strategies for long-term resilience. We foresee that
the global rate of technology adoption will be partially driven by
sustainability matters, such as environmental impact of products
and processes, energy efficiency, security, social and governance
issues. For instance, increasing customer demands for sustainable
products may necessitate significant investments in R&D,
sourcing and relevant processes. Uncertainty, complexity and
volatility of regulatory requirements in countries where our
suppliers do business could impact negatively our suppliers’
ability to meet local and extraterritorial regulatory requirements
which are either directly or indirectly applicable to them, which
could lead to the need for Nokia to re-assess supplier
relationships and sourcing options in order to remain compliant.
Geopolitics, social and political unrest and climate change may
lead to increased labor migration and to political and climate
refugees pushing informal labor into supply chain. Extreme
weather events or other climate-related disruptions could impact
our customers, potentially leading to increased expectations
regarding the resilience of our products and solutions. As artificial
intelligence becomes part of both our product offerings, as well
as of our processes, concerns regarding legally compliant,
sustainable and ethical AI could lead to reputational damage or
regulatory sanctions.
A portion of our product portfolio and customer base relates to
defense and dual-use applications, including secure and mission
critical communications, tactical communications, cyber
capabilities, and private wireless network. These activities may
increase exposure to risks in the area of human rights and export
controls. We conduct Human Rights Due Diligence (HRDD), guided
by international standards such as those of the UN Guiding
Principles, the Organization for Economic Co-operation and
Development (OECD), prior to sales to identify, assess, and
mitigate potential human rights impacts, particularly concerning
sales into higher-risk geographies or use cases that may be
subject to evolving export controls, sanctions, procurement
standards, and stakeholder scrutiny. While we implement
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escalation and approval thresholds, contractual controls,
employee training, and post-sale monitoring where feasible, these
measures have inherent limitations, including constraints on
visibility into end use and the potential for rapid geopolitical
change to outpace existing controls.
Potential failure, or perceived failure, to meet sustainability
disclosure regulations, ethical standards and practices, due
diligence criteria, stakeholder or societal expectations, or to
achieve sustainability targets could result in regulatory
inquiries, enforcement, fines or other sanctions, as well as
negatively impact our reputation, access to financing, employee
retention, or access to financing, compromise our stakeholder
relationships and the willingness of our customers and suppliers
to do business with us.
Risks related to the general economic and
financial market conditions and to the
industries and markets in which we operate
Our sales and profitability have been and may in the future be
materially and adversely affected by general economic and
financial market conditions, such as inflation, increased global
macroeconomic uncertainty, major currency fluctuations,
higher interest rates and financing costs, and other
developments in the economies where we operate.
We are a global company with sales, R&D, manufacturing
facilities, partners and suppliers located in various countries
around the world. Adverse developments in and the weakness of
global economic conditions in general have an adverse effect on
us and the spending of our customers. Further, rising political
tensions could reduce trade volume, investment, technological
exchange and other economic activities between major
international economies, resulting in a material adverse effect
on global economic conditions and the stability of global
financial markets. For instance, the uncertain nature,
magnitude, and duration of hostilities stemming from Russia’s
military invasion of Ukraine, including the potential effects of
sanctions, retaliatory attacks on the world economy and
markets, and any other geopolitical escalation, for instance in
the US-China relations, in Venezuela, in the Middle East or East
Asia, and adverse developments in policies governing
international trade such as export and import controls, including
increases in tariffs, could contribute to increased market
volatility and uncertainty, which could have an adverse impact
on macroeconomic factors affecting market demand,
inflationary development and supply.
We are dependent on the purchase behavior of final end-users.
Any adverse developments in economies, such as increases in
the level of inflation, interest rates or unemployment, may
affect market demand for consumables, such as mobile devices,
mobile subscriptions and both the services that end-users
subscribe to and the usage levels of such services, which may
lead telecommunication providers to invest less in related
infrastructure and services or to invest in low-margin products
and services. This may further be mirrored as an adverse effect
on the business of our patent licensees and our patent licensing
income. Likewise, adverse developments in economic conditions
may lead certain customer segments, such as webscale
companies, transportation & logistics, energy, manufacturing,
and public sector verticals, to invest less or delay spend in
infrastructure and services to digitize their operations or to
invest in low-margin products and services. Further, the
purchasing power of our customers, particularly in developing
markets, depends to a greater extent on the price development
of basic commodities and currency fluctuations, which may
render our products or services unaffordable. Economic
slowdown may also lead to an overcapacity in supply and
inflated inventories, and to delays and shortages in case of
sharp recovery and ramp-up of demand with a potentially
adverse effect on our ability and our suppliers’ ability to deliver
products and services in time. Increasing inflation and other
current market conditions are driving cost increases in
operations, materials and labor, and may also result in strikes
and other industrial actions.
General uncertainty and adverse developments in the financial
markets could have a material adverse effect on our
customers’, suppliers’ and other partners’ ability to obtain
sufficient or affordable financing on satisfying terms. Higher
interest rates increase cost of financing. Uncertain market
conditions may increase the price of financing or decrease its
availability if the banks and investors were to tighten lending
standards or increase interest rates, or if certain assets would
decline in value, which could lead to difficulties in raising funds
or accessing liquidity necessary to maintain our financial
condition and ongoing operations.
We face intense competition and are dependent on
development of the industries and markets in which we
operate. The markets are cyclical and are affected by many
factors, including the general economic environment,
technological changes or the speed of technological adoption,
competitor behavior, customer consolidation, customers’
spending appetite and purchase behavior, including mix of
supply, deployments and rollout timing. Our existing
competition and new competition challenging the connectivity
business models of our customers are driving price erosion.
The competitive environment in the markets in which we
operate, including the related services markets, is characterized
by maturing industry technologies, 5G and related new
technologies, acceleration of AI/automation, diversification of
supplier ecosystems, equipment price erosion and aggressive
price competition. Our competition endeavors to gain market
share in selected regions where Nokia has a large footprint. In
our entry to data center market, we compete against large
incumbent players, as well as operate in a very complex
ecosystem with varying degrees of competition making
expansion challenging. Despite strong growth in mobile data
traffic, most of our customer base has been facing persistent
erosion in unit revenue and is reverting to vendors to
compensate for it. Competition for new customers, as well as
for new infrastructure deployment, is particularly intense and
focused on the favorability of price and agreement terms. We
compete with companies that have large overall scale, which
affords such companies more flexibility compared to us. In
addition, new competition may be entering the network
infrastructure and related services business through adoption
of new technologies or business models, such as virtualized RAN
and Open RAN or as-a-service models for products or services.
We are particularly dependent on the investments made by
telecommunication providers in mobile connectivity, network
infrastructure and related services. The pace and size of such
investments are in turn dependent on the ability of
telecommunication providers to increase their subscriber
numbers, reduce churn, maintain or increase their average
revenue per user, and compete with business models eroding
revenue from traditional voice, messaging and data transport
services. For instance, our plans assume sustained growth in
traffic over our customers’ networks and in data center loads.
For this to happen, video streaming needs to continue to grow
significantly, or new high-data use cases (for instance, Virtual
Reality or Augmented Reality) need to be developed and drive
high concurrency traffic and demand for low latency services.In
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addition, we need to be able to drive down power and cost per
bit while increasing scale, agility and resiliency. Should these not
materialize, demand for our products and services could be
negatively affected.
The financial condition of telecommunication providers has
driven them to cost containment actions and merger activity
that have in the past constricted capital expenditure, and may
continue to do so in the future, resulting in further competition
and pressure on pricing and profitability. In addition, the
investments of the telecommunication providers in the new
spectrum assets may reduce their funds available for investing
in the new network infrastructure and related services.
Furthermore, the level of demand by telecommunication
providers, enterprise and other customers that purchase our
products and services is dependent on their ability to monetize
their investment and introduce new use cases and can therefore
change quickly and vary over short periods of time.
Telecommunication providers may also consolidate their
supplier base to our disadvantage — all the way to a one-
supplier model, for instance in a specific product area. In
addition, a portion of our revenues is driven by the timing of
completion and customer acceptances. As a result of the
uncertainty and variations in the telecommunications and
vertical industries, accurate forecasting of revenues, results and
cash flow remains difficult. Furthermore, significant reduction
of business with us could result in the loss of benefits related to
economies of scale.
We may be unable to respond successfully to technological
changes or to alternative technologies in the markets in which
we operate. Market developments favoring new technological
solutions, such as cloud, virtualization, edge computing,
programmable networks, AI-enabled automation and
alternatives such as satellite communications may result in
reduced spending to the benefit of our competitors who have,
or may have, a stronger position in such technologies. The
technological viability of standardized, low-margin hardware
products in combination with the virtualization of functions can
induce a change in purchase behavior, resulting in favoring
other vendors or in higher bargaining power versus Nokia due to
more alternative vendors. Our customers may prefer best-of-
breed from multiple vendors, a single vendor or turn to
alternative vendors to maintain end-to-end services.
Additionally, new competitors may enter the industry as a result
of acquisitions or shifts in technology. Furthermore, some
companies, including webscale companies, may drive a faster
pace of innovation in telecommunications infrastructure
through more collaborative approaches and open technologies
across access, backhaul, core and management.
We expect to generate a significant share of our growth from
new customers, including webscale companies and vertical
customers, for example in transportation & logistics, energy,
manufacturing, defense and public sector verticals. Each of
these sectors may face adverse industry developments, which
may significantly impact the size of investments addressable by
us and our ability to address these investments, in terms of
both having the right products available and being able to
obtain new customers and having the right go-to-market
capabilities and expertise to address the specific needs of these
sectors. Furthermore, there are various incumbent and new
actors competing with Nokia in these customer groups we
strategically target. With these types of customers, the nature
of competition and the required capabilities can be significantly
different from the telecommunication provider market,
including competition based on access network, core network,
cloud infrastructure, platforms, applications and devices, and
related services.
Competitive intensity remains high in the market as competitors
seek to take share in 5G rollouts, which is creating a risk of
persistent high price erosion in the industry. If domestic and
global economic conditions worsen, overall spending on 5G
infrastructure may be reduced or delayed, and spending in our
other network products and services might be even more
rapidly reduced to preserve the customer investment in 5G,
which would adversely impact demand for our products and
services in these markets. Further, any reduction in our market
share in 5G compared with our installed base in 4G due to
decisions to protect our profitability, inability to meet the
customers’ requirements or other reasons, may have a material
negative effect on our scale and profitability.
We are dependent on a limited number of big customers and
large multi-year agreements. The loss of a single customer or
contract, operator consolidation, unfavorable contract terms
or other issues related to a single agreement may have a
material adverse effect on our business and financial
condition.
A significant proportion of the net sales and profits that we
generate have historically been derived from a limited number
of customers. As consolidation among existing customers
continues, it is possible that an even greater portion of our net
sales will be attributable to a smaller number of large
telecommunication providers. These developments are also
likely to increase the impact on our net sales based on the
outcome of certain individual agreement tenders.
Telecommunication providers are also increasingly entering into
asset sharing arrangements, as well as joint procurement
agreements, which may reduce their investments and the
number of networks available for us to service. Furthermore,
procurement organizations of certain large telecommunication
providers sell consulting services to enhance the negotiating
position of small operators with their vendors.
As a result of the intense competition in the industry, we may
increasingly be required to agree to less favorable contractual
terms in order to remain competitive. Any unfavorable
developments in relation to, or any change in the agreement
terms applicable to, a major customer may have a material
adverse effect on our business, results of operations and
financial condition. Also, agreements in the networks business
are typically complex and long-term in nature and it is possible
that over time the contract terms of the agreement may prove
less favorable to us than originally expected, for instance due to
changes in costs and product portfolio decisions, and those may
be difficult to amend promptly to address new developments,
such as the recent period of accelerating inflation. Furthermore,
in particular given the bargaining power of our customers or
limited legal ability to deviate from the standard governmental
contract terms, we may be exposed to onerous terms and
liabilities in our customer contracts.
Loss of a single customer, its significant business or contract,
or other issues related to a single agreement, may have a
material adverse effect on our business and financial condition.
We have lost customers and contracts in the past and the same
may happen in the future. Furthermore, any suspension,
termination or non-performance by us under an agreement’s
terms may have a material adverse effect on us, for example
due to penalties for breaches, early termination or reduced
orders or customer footprint. In addition, we may lose existing
agreements, or we may be unable to renew or gain new
agreements, for instance due to customer policies that limit the
ability of customers to have one network provider exceeding a
certain threshold of business in a given market or as a result of
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merger activity where the customer may decide to concentrate
their spending elsewhere.
The timing of sales and results of operations associated with
large multi-year agreements or turnkey projects may differ
significantly from expectations. For instance, recognition of
sales and related costs in network implementation projects are
often linked with achievement of customer acceptances, which
may delay for reasons that may or may not be attributable to
us. Moreover, such agreements often require dedication of
substantial amounts of working capital and other resources,
which may adversely affect our cash flow, particularly in the
early stages of an agreement’s term, or may require us to
continue to sell certain products and services, or to sell in
certain markets that would otherwise be discontinued or exited,
thereby diverting resources from developing more profitable or
strategically important products and services, or focusing on
more profitable or strategically important markets.
Furthermore, our customer agreements may involve complex
transformation of the networks as the customers deploy new
technologies and the related costs and scope of required
deliverables may differ from our expectations at the time we
enter into such agreements.
We may be adversely affected by developments with respect
to customer financing or extended payment terms that we
provide to our customers. Unwillingness of banks or other
institutions to provide guarantees or financing to our
customers or purchase our receivables could impair our
capability to enter agreements with new customers or
markets, to mitigate payment risk and to manage our liquidity.
Requests for customer financing and extended payment terms
are typical for our industry and uncertainty or lack of liquidity in
the financing markets, among other things, may result in
increased customer financing requests. In the event that export
credit agencies face constraints on their ability or willingness to
provide guarantees or financing to our customers, or there is
insufficient demand from banks or other financial institutions to
purchase receivables, such events could have a material adverse
effect on our business and financial condition. Furthermore,
reduced availability of credits by export credit agencies
supporting our sales could affect our ability to attract
customers and enter new markets thus facing the possibility of
reduced sales.
In certain cases, the amounts and duration of these financings
and trade credits, and the associated impact on our working
capital, may be significant. We have agreed to extended
payment terms for a number of our customers and may
continue to do so in the future. Extended payment terms may
result in a material aggregate amount of trade credits and even
when the associated risk is mitigated by a diversified customer
portfolio, defaults in the aggregate could have a material
adverse effect on us.
Our ability to manage our total customer financing and trade
credit exposure depends on a number of factors, including, but
not limited to, the market conditions affecting our customers,
the levels and terms of credit available to us and our customers,
the cooperation of export credit agencies and our ability to
mitigate exposure on acceptable terms. We may be
unsuccessful in managing the challenges associated with the
customer financing and trade credit exposure that we may face
from time to time, particularly in difficult financial conditions in
the market. While defaults under financings, guarantees and
trade credits to our customers resulting in impairment charges
and credit losses have not been significant for us in the past,
these may increase in the future. Further, commercial banks
may not continue to be able or willing to provide sufficient long-
term financing, even if backed by export credit agency
guarantees, due to their own constraints, and certain of our
competitors may also have greater access to such financing,
which could adversely affect our competitiveness. Additionally,
we have sold certain receivables to banks or other financial
institutions, and any significant change in our ability to continue
this practice could impair our capability to mitigate such
payment risk and to manage our liquidity.
Nokia also arranges bank guarantees and bonds in customers’
favor in relation to our business. In the event we are unable to
collect outstanding guarantees and bonds, this could limit our
possibilities to issue new guarantees and bonds, which are
required in customer agreements or practices. We also face a risk
that such commercial guarantees/bonds may be unfairly called.
Risks impacting our competitiveness
We may fail to invest effectively and profitably in new
competitive high-quality products, services, upgrades and
technologies or bring them to the market in a timely manner.
We also may fail to adapt to changing business models.
The industries in which we operate are characterized by rapidly
evolving technologies, frequent new technological requirements,
product feature introductions and evolving industry standards
impacting company competitive position. The participants in the
markets where we operate compete on the basis of product and
service offerings, technical capabilities and quality in addition to
price and affordability. As an example, virtualization and
cloudification of core and radio networks and the convergence
of IT and telecommunications may lower barriers of entry for IT
and webscale companies in the traditional telecommunications
industry, or they may build up tight strategic partnerships with
our traditional competitors or our telecommunication provider
customers. New AI-native companies or existing competitors
leveraging AI more effectively could challenge Nokia's market
share in various segments, including network automation,
software, and services.This enhanced competition may lead to
increased price competition and negatively affect our margins.
Virtualization and disaggregation might also affect other parts
of our portfolio and lead to changes in competitive landscape,
business models, and margin profile. Fast emergence of new
standards shortens technology cycles which may render current
products obsolete. Failure to integrate advanced AI capabilities
into Nokia's core products and solutions (e.g., 5G/6G , network
infrastructure and cloud, enterprise solutions) could render
them less competitive or outdated compared to AI-enhanced
alternatives. Also, reaching certain technology limits, for
example in Optical or in spectral efficiency gains in 6G, might
adversely change the demand pattern and competitive dynamics
for our products and services.
Our business performance and results of operations will depend
to a significant extent on our ability to succeed in the following
areas:
▪maintaining and developing a competitive product portfolio
and service capability that is attractive to our customers, for
instance by keeping pace with technological advances in our
industry and pursuing technologies that become
commercially accepted and price competitive, such as the
AI- nativity of networks;
▪maintaining compliance with regulatory requirements and
standards;
▪introducing new products, services and upgrades of current
products and doing so on a cost-efficient and timely basis;
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▪developing new or enhancing existing processes and tools
for our service offerings;
▪optimizing the amount of customer or market-specific
technology, product and feature variants in our product
portfolio;
▪continuing to meet evolving expectations and enhancing the
quality of our products and services, complying with
emerging industry standards as well as introducing products
and services that have desired features and attributes, such
as energy efficiency;
▪maintaining and building up strategic partnerships in our
value creation chain (e.g., in product creation, project
delivery and go-to-market approach); and
▪leveraging our technological strengths and addressing
competing technological and product developments carried
out by competitors while keeping prices and costs at
competitive levels.
The R&D of new, innovative and technologically advanced
products and software, as well as upgrades to current products
and new generations of technologies, such as 5G-Advanced,
Open RAN, AI-native networks, 6G, co-packaged optics, data
center fabrics, next-generation broadband access and IoT, is a
complex and an uncertain process requiring high levels of
innovation and investment, including trying to accurately
anticipate technological, regulatory and market trends. We may
focus our resources on products and technologies that do not
become widely accepted or ultimately prove unviable.
Additionally, many of our current and planned products are
highly complex and may contain defects or errors that are, for
instance, detected only after deployment in
telecommunications networks. Even if we invest in new
competitive products, services, upgrades or technologies and
proactively manage the costs related to our portfolio of
products and services, including component sourcing,
manufacturing, logistics and other operations, we may still fail
to maintain or improve our market position, competitiveness or
scale, keep prices and costs at competitive levels or provide
high-quality products and services.
Certain of our competitors have significant resources to invest
in market exploration and may seek new monetization models
or drive industry development and capture value in areas
where we may not currently be competitive or do not have
similar resources available to us. These areas may include
monetization models linked to large amounts of consumer data,
large connected communities, home or other entertainment
services, alternative payment mechanisms or marketing
products. We also face competition from various companies
that may be able to develop technologies or products that
become preferred over those developed by us or result in
adverse effects on us through, for instance, developing
technological innovations that make our innovations less
relevant. In addition, reduced government funding and support
for our R&D activities could affect our ability to develop new
technology or products.
Inefficiencies, operational incidents, malfunctions or
disruptions of information technology systems and processes
could have a material adverse effect on our business and
results of operations. As our business operations, including
those we have outsourced, rely on complex IT core systems,
networks and related services, our reliance on the precautions
taken by us and external companies to ensure the reliability of
our own and third-party IT systems, networks and related
services is increasing. Consequently, certain disruptions in IT
systems and networks affecting us and our external providers
could also have a material adverse effect on our business.
All IT systems, networks and processes are potentially
vulnerable to damage, incidents, malfunction or interruption
from a variety of sources. Our own and customer-facing
operations rely on the efficient and uninterrupted operation of
complex and centralized IT systems, networks and processes,
which are integrated with those of third parties.
We are, to a significant extent, relying on third parties for the
provision of IT services. While we have outsourced certain
functions, we have also increased our dependence on the
reliability of external providers as well as on the security of
communication with them. We may experience disruptions if our
partners do not deliver as expected or if we are unable to
successfully manage systems and processes together with our
business partners. We will often need to use new service
providers and may, due to technical developments or choices
regarding technology, increase our reliance on certain new
technologies, such as cloud/SaaS, and certain other services
that are used over the internet rather than using a traditional
licensing model. Switching to new service providers and
introducing new technologies is inherently risky and may expose
us to an increased risk of disruptions in our operations, for
instance due to network inefficiency or outage, a cybersecurity
or a compliance incident, malfunctions, failure in disaster
recovery or IT service continuity or other disruptions resulting
from IT systems and processes.
We are committed to continuously enhancing the quality,
resilience, and security of our IT systems, supported by ongoing
investments, in-sourcing and robust risk-management
practices. However, despite precautions taken by us, we may fail
to successfully secure our IT. Our IT systems have in the past
and may in the future, be affected by external factors such as
telecommunications outages or evolving cybersecurity threats,
including malware or ransomware. Any malfunction or disruption
of our current or future systems, processes, networks or data
leakages, could have a material adverse effect on our business,
results of operations and brand value. A disruption of services
relying on our IT, for instance, could cause significant
discontent among customers and their end-users and may
result in claims, contractual penalties or deterioration of our
brand value. We are steadily modernizing our IT landscape as
part of our digital transformation strategy. However, the legacy
IT systems waiting for upgrades may be gradually more
vulnerable to malfunction, disruptions or security incidents than
the new IT systems replacing them.
We are exposed to risks related to information security. Our
business model relies on solutions for distribution of services
and software or data storage, which entail inherent risks relating
to applicable regulatory regimes, cybersecurity incidents and
other unauthorized access to network or data. Our business and
operations rely on data confidentiality and security incidents
may adversely affect privacy and/or our business.
Our business and operations rely on confidentiality of
proprietary and other sensitive information, for instance related
to our employees and our customers, including our government
customers. Our business models rely on certain centralized data
processing solutions and cloud or remote delivery-based
services for distribution of services and software or data
storage, accessible by our partners or subcontractors according
to the roles and responsibilities defined.
We, our service companies and joint ventures, products and
online services, marketing and developer sites and third parties
that we contract have been and may in the future be subject to
cybersecurity incidents, including hacking, ransomware, viruses,
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worms and other malicious software, unauthorized
modifications, or other illegal activities that may cause potential
security risks and other harm to us, our customers or
consumers and other end-users of our products and services.
Information Technology is rapidly evolving, the techniques used
to obtain unauthorized access or sabotage systems change
frequently and the parties behind cyber-attacks and other types
of industrial espionage are sophisticated and have extensive
resources, and it is not commercially or technically feasible to
mitigate all known vulnerabilities in a timely manner or to
eliminate all risk of cyber-attacks and data breaches. The
widespread availability of artificial intelligence capabilities adds
an extra dimension to cyber threats resulting into more
sophisticated attack executed at scale. Additionally, we contract
with multiple third parties in various jurisdictions who collect
and use certain data on our behalf. Although we have processes
in place designed to ensure appropriate collection, handling and
use of such data, third parties may use the data inappropriately
or breach laws and agreements in collecting, handling or using
or leaking such data. Our business is also vulnerable to theft,
fraud or other forms of deception, sabotage and intentional
acts of vandalism and espionage by third parties and
employees. Further, compared to our fully integrated group
companies, our ability to mitigate and oversee risk of cyber-
attacks and data breaches may be more limited in our joint
venture companies and other group companies having their own
governance and system infrastructure, such as our local service
companies focusing on network field services.
Cybersecurity incidents can lead to lengthy and costly incident
response, remediation of the attack or breach, legal
proceedings and fines imposed on us, as well as adverse effects
to our reputation and brand value. Additionally, cyber-attacks
can be difficult to prevent, detect or contain. Certain cyber-
attacks have been and may in the future be successful and
evade our detection. We continue to invest in risk mitigating
actions to keep pace with the fast evolution of the threat
landscape; however, there can be no assurance that such
investments and actions will prevent, detect or contain future
cyber-attacks. Additionally, the cost and operational
consequences of implementing further information system
protection measures, especially if prescribed by national
authorities, could be significant. We may not be successful in
implementing such measures in due course, which could lead to
business disruptions and the implementation to be more
expensive, time-consuming and resource intensive. There are
increasing regulatory requirements globally mandating how
incidents should be managed and reported. Multi-faceted,
multi-jurisdictional reporting requirements may be difficult to
comply within the timescales required or regulation may have an
adverse impact on our ability to deal with the underlying event.
In connection with providing products and services to our
customers, certain data is collected, stored and processed
through us, either by us or by our business partners or
subcontractors in various jurisdictions. Loss, improper
disclosure or processing or leakage of any data collected by us,
or which is made available to us or our partners or
subcontractors or stored in or through our products and
services, could have a material adverse effect on us and harm
our reputation and brand. Additionally, governmental
authorities may seek to misuse our network products to access
the personal data of individuals without our involvement; for
example, through the generic lawful intercept capabilities of
network infrastructure, impairing our reputation.
We may face problems or disruptions in manufacturing, service
creation, delivery, logistics or supply chain. Such challenges
include securing availability of resources or components to
meet demand, ability to adapt supply, defects in products or
related software or services, and achieving required
efficiencies and flexibility.
We have an extensive supply network, including a geographically
dispersed manufacturing network consisting of both our own
manufacturing and contract manufacturing partners. We, or
third parties that we have outsourced manufacturing and
services delivery to, may experience difficulties in adapting
supply to meet fluctuating customer demand, ramping up and
down production, adjusting network implementation capabilities
as needed on a timely basis, maintaining an optimal inventory
level, adopting new manufacturing processes, finding the most
timely way to develop the best technical manufacturing
solutions for new products, managing the increasingly complex
manufacturing process, service creation and delivery process
and/or achieving required efficiencies and flexibility. In addition,
these operations are exposed to various risks and potential
liabilities, including those related to geopolitics, transition to a
low carbon economy, compliance with laws and regulations,
exposure to environmental non-compliance and liabilities and/
or other claims. In addition to operational complexity, these
factors may increase costs related to our supply chain.
Our manufacturing operations depend on obtaining sufficient
quantities of fully functional products, components, sub-
assemblies, software, services, energy, and other resources on
a timely basis. In certain cases, a particular component or
service may be available only from a limited number of suppliers
or from a single supplier in the supply chain. Suppliers have and
may, from time to time, extend lead times, limit supplies,
change their partner preferences, increase prices, provide poor
quality supplies or be unable to adapt to changes in demand due
to capacity constraints or other factors, which could adversely
affect our ability to deliver our products and services on a
timely basis or increase our costs. For example, the past global
semiconductor components shortage constrained our deliveries
and led to increase in procurement prices. Forecasts showing
extreme and rapidly accelerating demand for 800G pluggables,
as the market is shifting from 400G as the standard to 800G,
indicate that demand will outstrip supply in the coming years
while the supply chain suffers from long lead times for critical
components, single-source dependencies, and the complexities
of ramping up new product manufacturing and qualification.The
semiconductor supply chains are also highly interdependent and
sensitive to policy disruptions. The continuing concerns around
components and raw material availability, including postponed
restrictions set by the Chinese government to export of
computer chips containing rare earth materials, and potential
energy shortages in the market, if realized may have an impact
on our ability to deliver to our customers, as well as increase our
costs. We are working closely not only with our suppliers to
ensure component availability but also with our customers to
ensure we can meet their needs. We are also continuously
optimizing our critical material buffer to prepare for balancing
short-term disruptions. Many of our competitors and also
companies from other industries utilize the same contract
manufacturers, component suppliers and service vendors. If
they have purchased capacity or components ahead of us, or if
there is significant consolidation in the relevant supplier base,
this could prevent us from acquiring the required components
or services, which could limit our ability to supply our customers
and increase our costs. Our increasing involvement in defense
related projects may trigger the need to involve specialized and
unique suppliers. Disruptions in this specialized supply chain
may adversely impact our ability to fulfill contractual
obligations.
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Our products are highly complex and defects in their design,
manufacture and associated hardware, software, content and
installation have occurred in the past and may continue to occur
in the future. Quality issues may cause, for instance, delays in
deliveries, loss of intellectual property, liabilities for network
outages, court fees and fines due to breaches of significantly
increasing regulatory privacy requirements and related negative
publicity, and additional repair, product replacement or warranty
costs to us, and harm our reputation and our ability to sustain or
obtain business with our current and potential customers. With
respect to our services, quality issues may relate to the
challenges of having the services fully operational at the time
they are made available to our customers and maintaining them
on an ongoing basis. We may also be subject to damages due to
product liability claims arising from defective products and
components. We make provisions to cover our estimated
warranty costs for our products and pending liability claims. We
believe our provisions are appropriate, although the ultimate
outcome may materially differ from the provisions that are
provided for, which could have a material adverse effect on us.
Our suppliers and partners may fail to meet product quality,
health, safety or security requirements or comply with other
regulations or local laws, such as environmental, social or
labor laws.
A large proportion of our manufacturing, service creation and
delivery is carried out by third-party suppliers. These vary in size
and often engage a number of tiers of suppliers, which limits
our direct control. Suppliers may fail to meet our supplier
requirements or customer expectations, such as related to
product quality, safety and security. Certain suppliers may not
comply with local laws, including, among others, local labor law,
health and safety or environmental requirements. The activities
we manage or that are managed by third parties for us may also
be subject to negative publicity and purchasing boycotts, strikes
or other forms of social, political, economic or environmental
activism. These all can lead to exposure in the form of litigation,
product recalls or brand damage through association.
Adverse events, such as geopolitical disruptions, natural or
man-made disasters, civil unrest or health crises, have and
may continue to have an impact on our service delivery,
production sites and/or the production sites of our suppliers
and partners which are geographically concentrated.
Many of our production sites or the production sites of our
suppliers and partners are geographically concentrated, with a
majority of such suppliers and partners based in Asia. With
Infinera acquisition we gained ownership of semiconductor
manufacturing facilities in California. We rely on efficient
logistics chain elements, such as regional distribution hubs and
transport chain elements (main ports, streets and airways). In
the recent years, we have regionalized our supply network to
increase resilience. However, in the event that any of these
geographic areas are affected by any adverse conditions that
disrupt production or deliveries from our suppliers and partners,
which includes trade restrictions, severe impacts of
environmental events, geopolitical events such as tensions by
the Red Sea, man-made or natural disasters (for instance,
flooding, heavy rain, earthquakes, or extreme heat that climate
change is expected to further intensify), war, civil unrest or
health crises, our ability to deliver our products on a timely basis
could be adversely affected. In a similar manner, these adverse
conditions may also cause disruption to our service creation and
delivery, which, in either case, may lead to a material adverse
effect on our business and results of operations.
Competition for employees and leaders is increasing globally.
We may be unable to retain, motivate, develop, reskill and
recruit appropriately skilled employees or we may fail in
workforce balancing. Employees may face change fatigue or
reduction in motivation and energy as our efforts to evolve our
business and improve efficiency continue.
Our success in executing our strategy, to address opportunities
in new technologies, business models and customer segments
in particular, requires and is dependent on our ability to retain,
motivate, develop, reskill and recruit appropriately skilled
employees and, in particular, those with relevant technical
expertise. Competition for employees and leaders particularly in
some critical technology functions and niche markets such as
system-on-chip and artificial intelligence is increasing globally.
Our workforce has fluctuated over recent years as we have
introduced changes in our strategy to respond to our business
targets and endeavors. We continue with the strategic and
operational changes announced in October 2023. The related
program is expected to lead to a 72 000 to 77 000-employee
organization. Such changes and uncertainty may cause
disruption, fatigue and dissatisfaction among employees as our
efforts to evolve our business and maximize operational
efficiency continue. Employee motivation, energy, focus, morale
and productivity may be reduced, causing inefficiencies and
other problems across the organization and potentially resulting
in the loss of key employees and increased costs in resolving
and addressing such matters. The loss of key employees could
result in resource gaps, some of which may only be noticed after
a certain period of time or which negatively impact our
relationship with customers, vendors or other business partners.
Our efforts to rebalance our workforce as planned may fail, for
instance due to legal restrictions or collective bargaining
agreements, which may result in a non-optimal workforce,
larger than expected costs and not meeting our financial
targets for such plans. Our inability to negotiate successfully
with employee representatives or failures in our relationships
with such representatives could result in strikes and other
industrial actions by the employees which may in turn result in
significant disruption in our day-to-day operations and higher
ongoing labor costs. The market for skilled employees is
increasingly competitive, particularly given the similar
technology trends affecting various industries simultaneously
and increased remote working expanding the job market for
individual employees. We have encountered, and may in the
future encounter, shortages of appropriately skilled employees
or lose key employees or senior management. There can be no
assurances that we will be able to implement measures
successfully to retain or hire the employees we need. This may
require significant time, attention and resources from our
senior management and other key employees within our
organization and may result in increased costs or otherwise
have a material adverse effect on us.
Our continued transformation towards a high-performance,
technology-driven organization presents reputational and cultural
risks. If our initiatives in building the desired culture are deemed
aggressive, it may cause reputational harm and affect employer
brand and stakeholder perception. If these cultural changes are
not widely adopted or fully integrated into everyday business
practices, there is a risk of misalignment between strategic
objectives and employee behaviors. Insufficient engagement or
poor integration of the new cultural mindset could undermine
the progress of our business transformation efforts.
Risks associated with intellectual property
rights and licensing
Our patent licensing income and other intellectual property-
related revenues are subject to risks and uncertainties such as
our ability to maintain our existing sources of intellectual
property-related revenue, establish new sources of revenue
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and protect our intellectual property from infringement. A
proportionally significant share of the current patent licensing
income is generated from the smartphone market, which is
rapidly changing and features a limited number of large vendors.
The continued strength of our intellectual property portfolios
depends on our ability to create new relevant technologies,
products and services through our R&D activities and to protect
and, where necessary, enforce our intellectual property rights
(IPR). If those technologies, products and services do not
become relevant, and therefore attractive to potential
licensees, the strength of our intellectual property portfolios
could be reduced. Despite the steps that we have taken to
protect our technology investments with IPR, we cannot be
certain that any rights or pending applications will be granted or
that the rights granted in connection with any future patents or
other IPR will be valid and sufficiently broad to protect our
innovations and maintain the relative strength of our portfolio.
Third parties may infringe our intellectual property relating to
our proprietary technologies or disregard their obligation to
seek necessary licenses under our patents or seek to pay less
than reasonable licensing fees. As a result, we may be unable to
continue to develop or protect our intellectual property-related
revenue or establish new sources of revenue.
Regulatory, geopolitical and other developments regarding
protection awarded to technology innovations, compensation
trends with respect to licensing and the underlying businesses
of our licensees, over which we have limited control, may impact
our ability to protect, monetize or divest our intellectual
property. Any patents or other IPR may be challenged,
invalidated or circumvented, and any right granted under our
patents may not provide competitive advantages for us. In the
technology sector generally, certain licensees are actively
avoiding concluding license agreements on fair and reasonable
commercial terms, or are withholding making license payments,
while some suggest that licensors may be able to collect
unreasonably high license payments, with both behaviors
attracting regulatory attention. Authorities in various countries
have increasingly monitored patent monetization and may aim
to influence the terms on which patent licensing arrangements
or patent divestments may be executed, which could
compromise control over or protection of our technology and
proprietary information. Such terms may be limited to a certain
country or region, which may, for example, lead to
fragmentation of the global framework for licensing of global
technology standards; however, authorities could potentially
seek to widen the scope and even impose global terms,
potentially resulting in further an adverse effect on our ability
to monetize our patent portfolios.
There is no assurance that past levels are indicative of future
levels of intellectual property-related revenue. Poor
performance by any of Nokia’s patent or technology licensees
may impact Nokia financially, for example, if a licensee’s ability
to pay is reduced, the licensee decides to divest or scale back a
particular part of its business or it becomes insolvent or
bankrupt. Additionally, poor performance of potential or current
licensees may limit a licensee’s motivation to seek new or renew
existing licensing arrangements with us. Furthermore, patent
license agreements can cover both past and future sales of
licensees, and the portion of the income that relates to
licensees’ past sales is not expected to have a recurring benefit.
Ongoing patent income from licensing is generally subject to
various factors (for instance, sales by the licensees) that we
have little or no control over, and it can vary considerably from
time to time based on factors such as the terms of agreements
we enter into with licensees.
We continue to expand the scope of our licensing activities to
other areas, in particular those that implement mobile
communications and multimedia technologies, such as the
automotive, consumer electronics, IoT, certain services and
multimedia. The actors in some of these industries may not
have traditionally paid intellectual property-related royalties
and the expansion of our licensing activities into such industries
may involve litigation. In addition, entering highly fragmented
markets or markets with a high volume of licensees may affect
our effectiveness and/or profitability.
We also enter into business agreements on behalf of our
business groups, which may grant certain licenses to our
patents. Some of these agreements may inadvertently grant
licenses to our patents with a broader scope than intended, or
they may otherwise make the licensing and enforcement of our
patents more difficult.
To renew existing license agreements and conclude new
license agreements with potential licensees, we may and have
engaged in legal actions to enforce our intellectual property
rights against unlawful infringement, the outcomes of which
are uncertain.
Although the majority of our license agreements are concluded
amicably, and while we strive to reach negotiated settlements of
any disputes in relation to license agreements with companies
using our intellectual property, sometimes it is necessary to
engage in litigation or arbitration in order to renew existing
license agreements which have expired or to conclude new
license agreements with unlicensed parties. In certain cases, we
have engaged in litigation or arbitration proceedings to enforce
our rights, for instance to enforce our patents or to establish
the terms of a patent license agreement. Due to the nature of
litigation and arbitration proceedings, there can be no
assurances as to the final outcome, timing or costs involved in
such litigation or arbitration proceedings or as to our ability to
renew existing license agreements or conclude new license
agreements with potential licensees on acceptable commercial
terms. Such litigation may also have an adverse effect on
customer relationships.
In other cases, other companies have commenced and may
continue to commence actions against us seeking to challenge
the validity of our intellectual property, including our patents, or
to contest our licensing practices or file competition law
complaints with courts or competition authorities. In the event
that one or more of our patents is challenged, a court may
invalidate the patent or determine that the patent is not
enforceable. The outcome of court proceedings is difficult to
predict and, consequently, our ability to use intellectual
property for revenue generation may from time to time depend
on favorable court rulings. Additionally, if any of our patents is
invalidated, or if the scope of the claims in any patents is limited
by a court decision, we could be prevented from using such
patents as a basis for product differentiation or from licensing
the invalidated or limited portion of our IPR. Even if such a
patent challenge is not successful, the related proceedings
could be expensive and time-consuming, divert the attention of
our management and technical experts from our business and
have an adverse effect on our reputation. Any diminution in the
protection of our IPR could cause us to lose certain benefits of
our R&D investments.
Our products, services and business models depend on
technologies that we have developed as well as technologies
that are licensed to us by certain third parties. As a result,
evaluating the rights related to the technologies we use or
intend to use is increasingly challenging, and we expect to
continue to face claims that we have allegedly infringed third
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parties’ IPR. The use of these technologies may also result in
increased licensing costs for us, restrictions on our ability to
use certain technologies in our products and/or costly and
time-consuming litigation.
Our products and services include increasingly complex
technologies that we have developed or that have been licensed
to us by certain third parties. The amount of such proprietary
technologies and the number of parties claiming to own
relevant IPR continue to increase. The holders of patents and
other IPR potentially relevant to these complex technologies
may be unknown to us, may have different business models,
may refuse to grant licenses to their proprietary rights or may
otherwise make it difficult for us to acquire a license on
commercially acceptable terms. If licensing agreements are not
available on commercially acceptable terms, we could be
precluded from making and selling the affected products or
could face increased licensing costs. As new features are added
to our products, we may need to acquire further licenses,
including from new and sometimes unidentified owners of
intellectual property. The lack of availability of licenses for
copyrighted content, delayed negotiations or restrictive IPR
license terms may have a material adverse effect on the cost or
timing of content-related services and products offered by us,
mobile network operators or third-party service providers. The
cumulative costs of obtaining any necessary licenses are
difficult to predict and may be significant.
Additionally, although we endeavor to ensure that we and the
companies collaborating with us possess appropriate IPR or
licenses, we cannot fully avoid the risks of IPR infringement by
suppliers of components, processes and other various layers in
our products, or by companies with which we collaborate.
Similarly, we and our customers may face claims of
infringement in connection with the use of our products. Any
restrictions on our ability to sell our products due to expected
or alleged infringements of third-party IPR and any IPR claims,
regardless of merit, could result in a material loss of profits,
costly litigation, the obligation to pay damages and other
compensation, the diversion of the attention of our key
employees, product shipment delays or the need for us to
develop non-infringing technology or to enter into a licensing
agreement on unfavorable commercial terms.
In line with standard practice in our industry, we generally
indemnify our customers for certain intellectual property-
related infringement claims initiated by third parties relating to
products or services purchased from us. These may include
claims from non-practicing entities having no product or service
business. If such claims are made directly against our
customers, we may in certain cases have limited opportunities
to participate in the process addressing such claims including in
negotiations and in defenses, or to evaluate the outcomes and
resolutions in advance. All IPR indemnifications can result in
significant payment obligations for us that are difficult to
estimate in advance. Moreover, our indemnification
responsibilities typically arise whether or not the IPR assertions
against our customers have merit.
Since all technology standards that we use and rely on, including
mobile communication technologies such as the Universal
Mobile Telecommunications System (UMTS), Long-Term
Evolution (LTE) and 5G, or fixed line communication
technologies, include certain IPR, we cannot avoid risks of facing
claims for infringement of such rights due to our reliance on
such standards. We believe the number of third parties
declaring their patents to be potentially relevant to these
standards is increasing, which may increase the likelihood that
we will be subject to such claims in the future. As the number of
market entrants and the complexity of technologies increase, it
remains likely that we will need to obtain licenses with respect
to existing and new standards from other licensors. While we
believe most of such IPR actually found to be essential to a
particular standard carries an obligation to be licensed on fair,
reasonable and non-discriminatory terms, not all intellectual
property owners agree to apply such terms, nor do all owners
agree on what is fair, reasonable and non-discriminatory. As a
result, we have experienced costly and time-consuming
litigation proceedings against us and our customers or suppliers
over such issues, and we may continue to experience such
litigation in the future.
From time to time, certain existing patent licenses may expire
or otherwise become subject to renegotiation. The inability to
renew or finalize such arrangements or renew licenses with
acceptable commercial terms may result in litigation, which may
be expensive and time-consuming and divert the efforts of our
management and technical experts from our business and, if
decided against us, could result in unfavorable judgments or
restrictions on our ability to sell certain of our products or
require us to pay increased licensing fees, fines or other
penalties and expenses, and/or to enter into costly settlements.
Our patent license agreements may not cover all the future
businesses that we may enter, our existing business may not
necessarily be covered by our patent license agreements if
there are changes in our corporate structure or our subsidiaries,
or our newly acquired businesses may already have patent
license agreements with terms that differ from similar terms in
our patent license agreements. This may result in increased
costs, restrictions in the use of certain technologies or time-
consuming and costly disputes whenever there are changes in
our corporate structure or our subsidiaries, or whenever we
enter into new business areas or acquire new businesses.
We make accruals and provisions to cover our estimated total
direct IPR costs for our allegedly infringing products. Our
estimated total direct IPR costs take into account items such as
payments to licensors, accrued expenses under existing
agreements and provisions for potential liabilities. We believe
our accruals and provisions are at an appropriate level. The
ultimate outcome, however, may differ from the provided level,
which could have an adverse impact on us.
Risks stemming from geopolitical, legal,
regulatory and compliance environment
Current international trends show increased enforcement
activity in areas such as national security, competition law,
export control and sanctions, privacy, cybersecurity, climate
change, human rights and anti-corruption. Furthermore, we
have observed an increase in the adoption of surveillance, data
localization, national sourcing and national hiring requirements,
regulations and policies, as well as regulators’ increased interest
in regulatory reform and reorganization and their growing
appetite for tackling topics such as non-personal data, artificial
intelligence, open access and net neutrality.
We conduct our business globally, being subject to direct and
indirect regulation and exposed to geopolitical and regulatory
risks, such as complex regulatory frameworks, unfavorable or
unpredictable treatment in relation to trade sanctions, tariffs,
tax matters and export controls (such as the changes in the
U.S. and multilateral trade policies, including the export and
import controls and laws, particularly with regard to China,
Mexico, Canada and the EU), exchange controls and other
restrictions. We are also exposed to geopolitical conflicts and
military actions, labor unrest, civil unrest, and public security
and safety threats. These all could have a material adverse
effect on us and our supply chain and our ability to sell or
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supply products and services, including network infrastructure
equipment and components manufactured in such countries.
We have witnessed political unrest and open conflicts in the
past in various markets in which we conduct business or in which
we have operations, which have adversely affected our sales,
profitability or operations in these markets, including the safety
and security of our employees, and also in certain cases
affected us outside these countries or regions. Any recurrence
or escalation of such unrest could have a further material
adverse effect on our people, sales or results of operations. For
instance, an expansion of the current tensions in the Middle
East with open conflict in the region or any further deterioration
of the security situation in countries in the Sahel and West
Africa, could impact our business on multiple levels such as
market access over supply chain, general economic
developments, security and safety of our operations in
concerned countries, potential sanctions or boycotts, and
reputational impacts. Escalating tensions in Venezuela, East Asia
and territorial disputes by the South China Sea could lead to
various risks, including short- or long-term supply chain
disruptions from Taiwan. Should we decide to exit or otherwise
alter our presence in a particular market, this may have an
adverse effect on us through, for example, disruption to our
operations in the event we need to relocate significant parts of
our operations, triggered investigations, tax audits by
authorities, claims by contracting parties or reputational
damage.
At Nokia, we make our sales in a transparent, regulated and
compliant manner and in accordance with applicable laws and
regulations. Notwithstanding our compliance measures, there
exists a risk that the equipment we sell may subsequently be
misused, relocated or resold without our knowledge or consent.
The results and costs of investigations or claims against our
international operations may be difficult to predict and could
lead to lengthy disputes, fines or fees, indemnities or costly
settlements.
The regulatory, trade controls and sanctions legal environment
can be difficult to navigate for companies with global
operations, impacting ability to grow or maintain business in
specific markets or enter new markets. As a global operator,
Nokia conducts business subject to export controls regulations
and in countries subject to various sanctions and our business
may be impacted by new, existing or tightened export control
regulations, sanctions, embargoes or other forms of economic
and trade restrictions imposed on certain countries, regions and
entities. Although we strive to conduct all operations of Nokia,
and in particular any operations undertaken in countries
targeted by sanctions, in accordance with our compliance
program, we cannot ensure that breaches will not occur.
Export controls, tariffs or other fees or levies imposed on our
products and environmental, health, product safety, data
protection and security, consumer protection, money
laundering and other regulations that adversely affect the
export, import, technical design, pricing or costs of our
products could adversely affect our sales and results of
operations. Further, we rely on multilateral trade regimes to
help ensure a balanced playing field. Conflicts between
countries and geopolitical tensions may lead to implementation
of multiple and possibly conflicting unilateral measures or
uncertainties impacting trade of products and services and
which may also affect our customers’ ability or willingness to
invest in capital expenditures and increase our costs or have
adverse impacts on our operations and supply chain. For
instance, we use products, components and sub-assemblies
that are sourced from China, Mexico and Canada and are
therefore subject to risks associated with international trade
conflicts including between the U.S. and such countries,
particularly with respect to export and import controls and laws,
such as additional tariffs on foreign products implemented by
the U.S. government. Increasing tariffs could impact raw
material prices, the cost of component parts and
transportation. Any of the foregoing could have an adverse
effect on our business, prospects, financial condition and
results of operations.
We have a significant presence in emerging markets in which the
political, economic, legal and regulatory systems are less
predictable than in countries with more developed institutions.
These markets represent a significant portion of our total sales,
and a significant portion of expected future industry growth.
Most of our suppliers are located in, and our products are
manufactured and assembled in, emerging markets, particularly
in Asia. Our business and investments in these markets may be
subject to risks and uncertainties, including unfavorable or
unpredictable treatment in relation to tax matters, exchange
controls, restrictions affecting our ability to make cross-border
transfers of funds, regulatory proceedings, unsound or
unethical business practices, challenges in protecting our IPR,
information security, nationalization, inflation, currency
fluctuations or the absence of or unexpected changes in
regulation, as well as other unforeseeable operational risks.
Our business and results of operations may be adversely
affected by regulation favoring the local industry participants,
as well as other measures with potentially protectionist
objectives or outcomes that host governments in various
countries may take, including the introduction of local technical
standards that divert from the globally adopted standards.
Governments and regulators, particularly after changes in
political regimes, may make legal and regulatory changes, slow
down or reverse the adoption of favorable policy measures, or
interpret and apply existing laws in ways that make our products
and services less appealing to customers or require us to incur
substantial costs, change our business practices or prevent us
from offering our products and services. In particular, there is a
growing trend in many countries to require minimum local
content in products and/or services, and we may be required to
invest in certain movement of operations or joint ventures to
retain market share. Restrictive government policies or actions
or limitations on visas or work permits for certain foreign
workers, may make it difficult for us to move our employees
into and out of these jurisdictions. Our operations as well as
employee recruitment and retention depend on our ability to
obtain the necessary visas and work permits for our employees
to travel and work in the jurisdictions in which we operate. The
impact of changes in or uncertainties related to general
regulation and trade policies could adversely affect our business
and results of operations even in cases where the regulations do
not directly apply to us or our products and services.
Changes in various existing regulations or in their application
and emerging new regulation in areas such as security, privacy,
artificial intelligence, digital economy and sustainability,
including rolling back, variation and divergence of certain
legislative acts, impacting current or new technologies, products
or telecommunications and technology sectors in general, may
adversely affect our operations and business results.
We develop our products based on existing regulations and
technical standards. In the case of new technology, we must
often rely on our predictions for and interpretation of
unfinished technical standards and upcoming or draft
regulations or, in certain cases, have products developed in the
absence of applicable regulations and standards. Fragmentation
of rules, lengthy legislative processes and unpredictability of
regulatory changes present a particular challenge. Due in part to
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this fragmentation, we face a risk in the inability to meet
regulatory or market expectations, such as on security and
privacy in our products and services, and perceived or actual
breaches of our information systems or customer information
systems if fault is attributable to Nokia. The regulatory
simplification effort launched in 2025 by the European
Commission in the field of sustainability and the digital
economy could fail to find the right balance between political
ambitions and practical considerations, which might negatively
affect Nokia due to volatility, lack of harmonization and
conflicting regulatory requirements. From a spectrum policy
perspective, unrealistic spectrum pricing, failure to enable
access to additional spectrum in various bands and/or failure to
achieve frequency band harmonization could also adversely
impact Nokia’s customers and Nokia itself.
New developments and changes in applicable non-personal data
and privacy-related regulatory frameworks, such as the EU
General Data Protection Regulation (GDPR), the EU Data Act and
the recent adoption of EU AI Act, and similar regulations in other
jurisdictions could have a significant impact on our business.
This includes possible changes that increase operational costs,
limit or restrict possibilities to offer products or services, or
reduce or could be seen to reduce the data protection aspects
of our offerings. For instance, data use rights and restrictions
are increasingly country and customer specific requiring
bespoke operational support and creating a risk of contractual
or regulatory non-compliance. Due to geopolitical tensions,
more customers are requiring extensive information about
supply chain personnel for background checks, creating a risk of
privacy law breach. Also, countries could require governmental
interception capabilities or issue regulations aimed at allowing
direct government access to data for the products and services
we offer diminishing our privacy assurances and potentially
limiting our ability to use components, products or software
that we have developed or sourced from other companies. We
may also be adversely affected if we decide to reduce our sales
to such markets.
Our current business models and operations rely on certain
centralized data processing solutions and cloud or remote
delivery-based services for distribution of services and software
or data storage, which have certain inherent risks, including
those stemming from applicable regulatory regimes, including
data protection or data localization, that may cause limitations
in implementing such business models or conducting business.
An increase in the protectionist stances of governments around
the world, which impact the free flow of data across borders,
has already affected and may further affect our global service
delivery model. Furthermore, we observe that enforcement
actions and investigations by regulatory authorities related to
data security incidents and privacy violations continue to
increase. Unauthorized disclosure, transfer or loss of sensitive
or confidential data, whether through systems failure, employee
negligence, fraud or misappropriation, by us, our vendors or
other parties with whom we do business (if they fail to meet the
standards we impose) could subject us to significant litigation,
monetary damages, regulatory enforcement actions, fines and
criminal prosecution in one or more jurisdictions. In addition,
our involvement in defense related projects results in the
applicability of defense industry regulations.
In addition to the existing data protection regulations, we
recognize the increasing importance of security regulations that
impact various aspects of our operations. These regulations are
not limited to data protection but also encompass network
security, product compliance, and associated costs. Current and
future regulatory moves in various jurisdictions highlight the need
for compliance with security standards that affect our product
lines and operational decisions. These regulations may lead to
increased costs and complexities due to the lack of harmonization
across different jurisdictions. While these regulations may not
directly impact us at present, they have indirect effects on our
business operations and strategic planning.
Artificial intelligence has the potential to revolutionize our
operations by providing valuable tools that augment our
capabilities and enable the delivery of higher-performing
products and services. By leveraging AI, we can efficiently and
reliably process large volumes of data, automate tasks that are
too complex or time-consuming to perform manually, and
unlock new insights that inform our decision making. While AI
adoption offers numerous benefits, it also presents several
risks and challenges. One of the main risks is the potential for
non-responsible use of AI, which could lead to non-compliance
with relevant regulations, such as the new EU AI Act, loss of
sensitive data or intellectual property, or inadvertent
infringement of third-party rights. Additionally, careless use of
AI or poor governance of underlying data can lead to accidental
use of personal or sensitive data, misuse of proprietary or
confidential inputs, errors in work product and create new
vulnerabilities in our systems, which could be exploited by
malicious actors, leading to data breaches or other security
incidents. Another risk associated with AI is the potential for
bias in AI decision making. AI systems can perpetuate existing
biases and discriminatory practices, which could lead to unfair
treatment of customers or employees. Furthermore, the
regulatory landscape around artificial intelligence is evolving
and there is a risk that regulation outside the EU may be less
robust and more permissive, which could reduce our innovative
agility and competitiveness. Governments that are seeking
national control of AI and digital systems are causing
fragmented operations and reducing global scale.
Despite the perceived simplification and de-prioritization of
sustainability by the EU and the U.S. governing authorities, we
are still seeing an increase in climate and other sustainability-
related regulations and customer requirements globally and an
increase in related litigation by affected stakeholders. Even with
simplification of regulatory requirements, expectations for
Nokia as a large multinational remain high and are increasingly
tied to financing and operating permissions. For instance, In the
EU the December 2025 Omnibus deal simplifies the Corporate
Sustainability Reporting Directive and the Corporate
Sustainability Due Diligence Directive by raising applicability
thresholds but does not remove obligations for large companies
like Nokia maintaining the due diligence expectations across
global value chains.
The adoption of the ISSB issued sustainability reporting
standards by a large number of jurisdictions around the world is
resulting in a patchwork of different national reporting
requirements in several jurisdictions relevant to Nokia. The
regulatory environment around sustainability remains highly
volatile and the uncertainty is only increasing given the divergent
views of the U.S. (including between the states inside the U.S.)
and the EU. Irrespective of that, Nokia is required to fulfill its
legal obligations in the countries where it does business, with
sustainability reporting being still a major compliance focus.
Changes to existing regulation related to sustainable finance,
such as the EU Taxonomy Regulation and its delegated acts, the
California Corporate Data Accountability Act, the Climate Related
Financial Risk Act and the Australian mandatory climate risk
reporting laws will lead to increased reporting obligations,
controls and documentation requirements.
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We operate in many jurisdictions around the world, and we are
subject to various legal frameworks addressing corruption,
fraud, competition, privacy, security, trade policies,
environment, human rights, supply chains and other risk areas.
At any given time, we may be subject to inspections,
investigations, claims, and government proceedings, and the
extent and outcome of such proceedings may be difficult to
estimate with any certainty. We may be subject to material fines,
penalties and other sanctions as a result of such investigations.
Bribery and anti-corruption laws in effect in many countries
prohibit companies and their intermediaries from making
improper payments to public officials or private individuals for
the purpose of obtaining new business, maintaining existing
business relationships or gaining any business advantage.
Certain anti-corruption laws such as the United States Foreign
Corrupt Practices Act (FCPA) also require the maintenance of
proper books and records, and the implementation of controls
and procedures in order to ensure that a company’s operations
do not involve corrupt payments. Since we operate throughout
the world and given that some of our customers are
government-owned entities and that our projects and
agreements often require approvals from public officials, there
is a risk that our employees, suppliers or commercial third-party
representatives may take actions that are in violation of our
compliance policies and of applicable anti-corruption laws.
In many parts of the world where we operate, local practices and
customs may be inconsistent with our policies, including the Nokia
Code of Conduct, and could violate anti-corruption laws, including
the FCPA and the UK Bribery Act 2010, and applicable European
Union regulations, as well as applicable economic sanctions,
embargoes and applicable competition and privacy laws. Our
employees, or other parties acting on our behalf, could violate
policies and procedures intended to promote compliance with
anti-corruption laws, economic sanctions, competition or privacy
laws or other applicable regulations. Violations of these laws by
our employees or other parties acting on our behalf, regardless
of whether we had participated in such acts or had knowledge of
such acts, could result in us or our employees becoming subject to
criminal or civil enforcement actions, including fines or penalties,
disgorgement of profits and suspension or disqualification of
sales. Additionally, violations of law or allegations of violations,
such as against human rights, may result in reputational harm and
loss of business and adversely affect our brand and reputation.
Detecting, investigating and resolving such situations may also
result in significant costs, including the need to engage external
advisers, and consume significant time, attention and resources
from our management and other key employees. The results and
costs of such investigations or claims may be difficult to predict
and could lead to, for instance, lengthy disputes, fines, fees or
indemnities, costly settlement or the deterioration of the Nokia
brand. Furthermore, even without allegations of misconduct
against us, our employees or other parties acting on our behalf,
we may face loss of business as a result of improper conduct or
alleged improper conduct by our competitors.
As part of mergers and acquisitions, we may be subject to
claims, fines, investigations or assessments for conduct that we
failed to or were unable to discover or identify in the course of
performing our due diligence, including unknown or unasserted
liabilities and issues relating to fraud, trade compliance, non-
compliance with applicable laws and regulations, improper
accounting policies or other improper activities.
We are subject to litigation proceedings, which may be
disruptive and expensive. In addition, an unfavorable outcome
of litigation, arbitration, agreement-related disputes or
product liability-related allegations against our business could
have a material adverse effect on us.
We are a party to lawsuits, arbitration proceedings, agreement-
related disputes and product liability-related allegations in the
normal course of our business. Litigation, arbitration or
agreement-related disputes can be expensive, lengthy and
disruptive to normal business operations and divert the efforts
of our management. Moreover, the outcomes of complex legal
proceedings or agreement-related disputes are difficult to
predict. An unfavorable resolution of a particular lawsuit,
arbitration proceeding or agreement-related dispute could have
a material adverse effect on us.
Although our products are designed to meet all relevant safety
standards and other recommendations and regulatory
requirements globally, we cannot guarantee we will not become
subject to product liability claims or be held liable for such
claims, which could have a material adverse effect on us. Even a
perceived risk of adverse health effects connected to our
products could have a material adverse effect on us, for
instance, through a reduction in the demand for mobile networks
or increased difficulty in obtaining sites for base stations.
We record provisions for pending claims when we determine
that an unfavorable outcome is likely and the loss can
reasonably be estimated. Although we believe our provisions for
pending claims are appropriate, due to the inherent uncertain
nature of legal proceedings, the ultimate outcome or actual
cost of settlement may materially differ from estimates.
For a more detailed discussion of litigation to which we are a
party, refer to Note 6.1. Commitments, contingencies and legal
proceedings, in our consolidated financial statements.
Our governance, internal controls and compliance processes
could fail to detect errors or wrongdoings and to prevent
regulatory penalties at corporate level, in operating
subsidiaries and joint ventures.
Nokia is a publicly listed company and, as such, subject to various
securities, reporting and accounting rules and regulations. For
instance, we must monitor and assess our internal control over
financial and sustainability reporting and the compliance of those
with the applicable rules and regulations. Furthermore, the maturity
of our internal control over sustainability reporting is still to reach
the maturity level of internal control over financial reporting. A
failure of our corporate functions, our business groups, our
operating subsidiaries or our joint ventures to maintain effective
internal control over financial and sustainability reporting, or to
comply with the applicable securities, reporting and accounting
rules and regulations, could adversely affect the accuracy and
timeliness of our financial reporting, which could result, for instance,
in loss of confidence in us or in the accuracy and completeness
of our financial reports and the Sustainability Statement, or
otherwise in the imposition of fines or other regulatory
measures, which could have a material adverse effect on us.
Integrity and high ethical standards are an essential part of our
culture. However, despite our Group-wide compliance measures,
including ethical business trainings and other actions (including
towards our suppliers and other parties with which we conduct
business), we may not be able to prevent breaches of law or
governance standards within our business, subsidiaries, joint
ventures or in our supply chain. If we fail to or are unable to comply
with applicable law and regulations, we could experience penalties
and adverse rulings in enforcement and other proceedings.
We are involved in joint ventures and other affiliated companies
with their own governance and system infrastructure and are
exposed to risks inherent to companies under joint
management or not having direct management control.
We have a number of joint ventures, including those where Nokia is
the minority partner, and other affiliated companies with their own
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governance and system infrastructure where Nokia does not have
direct management control. The agreements related to our joint
ventures may require unanimous consent or the affirmative vote of
a qualified majority of the shareholders to take certain actions,
thereby possibly slowing down the decision-making process or
impairing our ability to implement our key policies and practices,
such as our compliance processes and culture, in a comprehensive
or timely manner. In addition, joint venture companies and other
affiliated companies having their own governance and system
infrastructure, such as our local service companies focusing on
networks field services, involve inherent risks such as those
associated with a complex corporate governance structure, lack of
transparency or uniform controls and procedures and consequent
risks of compliance breaches or other similar issues, or issues in
dissolving such entities or divesting their shareholdings, assets and
liabilities, and may also involve negative public perceptions caused
by the joint venture partner that are adverse to us.
Financial and tax-related uncertainties
We have operations in many countries with different tax laws
and rules, which may result in complex tax issues and disputes.
Taxation or other fees collected by governments or
governmental agencies may result in unexpected payment
obligations, and in response to prevailing difficult economic
conditions in the public sector, coupled with already enacted
and proposed fundamental changes in international tax
regulations, there may be an increased aggressiveness in
collecting such fees or taxes. We may be obliged to pay
additional taxes for past periods as a result of changes in law, or
changes of tax authority practice or interpretation (possibly
with retroactive effect in certain cases), or inaccurate
interpretations of tax laws by us resulting potentially in a
material adverse effect on our cash flow and financial position.
In particular, potential changes in reallocation of taxing rights
and other fundamental international tax principles, the OECD
Pillar project and digital business-related initiatives, our wide
geographical footprint of operations and activities and changes
in tax laws or global laws regarding transfer pricing could
adversely impact our business, operating results and overall tax
burden. There may also be unforeseen tax expenses that turn
out to have an unfavorable impact on us, adverse tax
consequences related to past acquisitions and divestments, and
potential tax liabilities that we are currently not aware of. As a
result, and given the inherently unpredictable nature of
taxation, our tax rate may change from its current level and our
cash flows regarding taxes may not be stable.
As a company with global operations, we are subject to tax
investigations in various jurisdictions, and such proceedings can
be lengthy, involve actions that can hinder local operations and
affect unrelated parts of our business, and the outcome of such
proceedings is difficult to predict. While we have made
provisions for certain tax issues, the provisions we have made
may not be adequate to cover such increases.
In the context of our sale of the Devices & Services business to
Microsoft, we are required to indemnify Microsoft for certain
tax liabilities, including (i) tax liabilities of the Nokia entities
acquired by Microsoft in connection with the closing of the sale
of the Devices & Services business; (ii) tax liabilities associated
with the assets acquired by Microsoft and attributable to tax
periods ending on or prior to the closing date of the sale of the
Devices & Services business; and (iii) tax liabilities relating to the
pre-closing portion of any taxable period that includes the
closing date of the sale of the Devices & Services business.
Our actual or anticipated performance, among other factors,
could reduce our ability to utilize our tax attributes and
deferred tax assets.
Deferred tax assets recognized on tax losses, unused tax
credits and tax-deductible temporary differences are
dependent on our ability to offset such items against future
taxable income within the relevant tax jurisdiction. Such
deferred tax assets are also based on our assumptions on
future taxable earnings, and these may not be realized as
expected which may cause the deferred tax assets to be
materially reduced. Any such reduction could have a material
effect on us. As an example, Nokia derecognized EUR 2.9 billion
deferred tax assets related to Finland in 2020 and
re-recognized EUR 2.5 billion of deferred tax assets related to
Finland in 2022. Additionally, our earnings have been
unfavorably affected in the past, and may continue to be in the
future, in the event that no tax benefits are recognized for
certain deferred tax items.
We may not have access to sources of funding on favorable
terms, or at all.
In periods when the capital and credit markets experience
significant volatility, the amounts, sources and cost of capital
available to us may be adversely affected. Deteriorating
economic conditions or financial uncertainty in any of the
markets in which we sell our products could reduce business
confidence and adversely impact spending patterns, and thereby
could adversely affect the amounts, sources and cost of capital
available to us. Our business requires a significant amount of
cash as we continue to invest in our R&D and other future
capabilities. We rely on multiple sources of funding for short-
term and long-term capital and aim to minimize the liquidity risk
by maintaining a sufficient cash position and having committed
credit lines in place. However, if economic conditions deteriorate
or the credit market tightens, there can be no assurances that
we will be able to generate sufficient amounts of capital or to
maintain an efficient capital structure from time to time.
We also may not be able to have access to additional sources of
funds that we may need from time to time with reasonable
terms, or at all. If we cannot access capital or sell receivables on
a commercially viable basis, our business, financial condition
and cash flow could materially suffer.
We may not be able to maintain our investment grade credit
ratings
Credit rating agencies, such as Moody’s, S&P Global Ratings and
Fitch have assigned credit ratings to us. Our goal is to maintain
our investment grade credit ratings. However, there can be no
assurances that we will be able to maintain our current
investment grade credit ratings.
In the event our credit rating is downgraded, it could have a
material adverse effect, for instance, on our cost of funds and
related margins, our business and results of operations,
financial condition, liquidity, or access to capital markets.
Due to our global operations, our net sales, costs and results
of operations, as well as the US dollar value of our dividends
and market price of our ADSs, are affected by exchange
rate fluctuations.
We operate globally and are therefore exposed to foreign exchange
risks in the form of both transaction risks and translation risks. Our
policy is to monitor and hedge foreign exchange rate exposures
within defined exposure identification horizons. We manage our
operations to mitigate, but not to eliminate, the impacts of
exchange rate fluctuations and our hedging activities may prove
unsuccessful in mitigating the potentially negative impact of
exchange rate fluctuations. Additionally, significant volatility in the
relevant exchange rates and interest rates may increase our
hedging costs, as well as limit our ability to hedge our exchange rate
exposures including, in particular certain emerging market
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currencies. Furthermore, exchange rate fluctuations may have an
adverse effect on our net sales, costs and results of operations, as
well as our competitive position, through their impact on our
customers, suppliers and competitors.
We also experience other financial market-related risks,
including changes in interest rates and in prices of marketable
securities that we own. We may use derivative financial
instruments to reduce certain of these risks. If our strategies to
reduce such risks are not successful, our financial condition and
results of operations may be harmed.
Additionally, exchange rate fluctuations may materially affect
the US dollar value of any dividends or other distributions that
are paid in euro, as well as the market price of our ADSs.
Our pension and other post-employment benefit obligations
are subject to numerous factors that could result in a need for
increased funding, adversely affecting our results of
operations and cash flow.
We are exposed to various employee cost-related risks,
including those related to pension, and other post-employment
benefits (OPEB). In the US, we maintain significant employee
pension benefit plans and a significant retiree welfare benefit
plan (providing post-employment healthcare benefits and post-
employment life insurance coverage). Outside the US, we
contribute to pension schemes for large numbers of current
and former employees. The US and non-US plans and schemes
have funding requirements that depend on, among other things,
various legal requirements, how assets set aside to pay for
those obligations are invested, the performance of financial
markets, interest rates, assumptions regarding the life
expectancy of covered employees and retirees, and medical
cost inflation and medical care utilization. To the extent that
any of those variables change, the funding required for those
plans and schemes may increase, adversely affecting our results
of operations and cash flow.
The most significantly underfunded plans are in Germany which
do not currently have minimum regulatory funding
requirements. With respect to other significantly underfunded
plans, there are the OPEB plans in the US where Nokia is able to
fund the liabilities by utilizing IRC Section 420 transfers from
the US pension surplus up until 2032. More details about these
plans can be found in Note 3.4. Pensions and other post-
employment benefits in our consolidated financial statements.
The carrying amount of our goodwill may not be recoverable.
We assess the carrying amount of goodwill annually, or more
frequently if events or changes in circumstances indicate that such
carrying amount may not be recoverable. We assess the carrying
amount of other identifiable assets if events or changes in
circumstances indicate that their carrying amounts may not be
recoverable, for instance, if we would not generate revenues from
our businesses as anticipated, or if our businesses would not
generate sufficient positive operating cash flows. These, or other
factors, may lead to a decrease in the value of our assets, including
intangible assets and the goodwill attributed to our businesses,
resulting in impairment charges that may adversely affect our net
profit for the year. While we believe the estimated recoverable
values are reasonable, actual performance in the short- and long-
term and our assumptions on which we base our calculations could
materially differ from our forecasts, which could impact future
estimates of our businesses’ recoverable values, and may result
in impairment charges.
Risks associated with ownership of our shares
The amount of dividend and/or repayment of capital and other
profit distributions such as share buybacks to shareholders for
each financial period is uncertain.
As announced on 29 January 2026, our Board proposes that the
Annual General Meeting 2026 authorizes the Board to resolve
on the distribution of an aggregate maximum of EUR 0.14 per
share as dividend from the retained earnings and/or as assets
from the reserve for invested unrestricted equity in respect of
financial year 2025.
Our Annual General Meeting 2025, held on 29 April 2025,
authorized the Board to resolve on the distribution of an
aggregate maximum of EUR 0.14 per share as dividend from the
retained earnings and/or as assets from the reserve for invested
unrestricted equity in respect of the financial year 2024.
Furthermore, in November 2024, the Board initiated a share
buyback program under the authorization granted by the Annual
General Meeting 2024 to offset the dilutive effect of the Infinera
acquisition. The program targeted to repurchase 150 million shares
for an aggregate purchase price not exceeding EUR 900 million. The
repurchases commenced in November 2024 and the program was
completed in April 2025 reducing the company’s unrestricted
equity by approximately EUR 703 million.
We cannot assure that we will distribute dividends and/or capital
repayments on the shares issued by us, nor is there any
assurance as to the amount of any dividend and/or repayment
of capital we may pay, including but not limited to situations
where we make commitments to increase our dividends. Neither
can we guarantee that we finalize the announced share buyback
program. The payment and the amount of any dividend and/or
repayment of capital as well as additional share buyback
programs is subject to the discretion of the general meeting of
our shareholders and our Board, and will depend on available
cash balances, expected cash flow generation, anticipated cash
needs, retained earnings, the results of our operations and our
financial condition and terms of outstanding indebtedness, as
well as other relevant factors such as restrictions, prohibitions
or limitations imposed by applicable laws. Further, even if any
conditions or factors covering the issuance or distribution of
dividends are met, the Board or the shareholders have in the
past decided, and may going forward decide, not to issue or
distribute dividends or initiate additional buyback programs.
Our share and/or ADS price may be volatile and subject to
fluctuations.
Our share and/or ADS price may be volatile and could be subject to
fluctuations in response to various factors, some of which are
beyond our control. In addition to the factors described in this “Risk
Factors” section, other factors that could cause fluctuations in our
share price include, among others, high volatility in the securities
markets generally and volatility in telecommunications and
technology companies’ securities in particular, trading volumes,
speculation in the media or retail or institutional investment
communities regarding the Company and our prospects, future
developments in our industry and competitors, our financial results
and the expectations of financial analysts, as well as the timing or
content of any public communications, including reports of
operating results, by us or our competitors. Further, factors in the
public trading market for our stock may produce price movements
that may or may not comport with macro, industry or company-
specific fundamentals, including, without limitation, the sentiment
of retail investors (including as may be expressed on financial
trading and other social media sites and online forums), the direct
access by retail investors to broadly available trading platforms, the
amount and status of short interest in our securities, access to
margin debt, trading in options and other derivatives on our
common stock and any related hedging and other trading factors.
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The capital markets have experienced extreme volatility that
has often been unrelated to the operating performance of
particular companies. In addition, in the past, following periods
of volatility in the market price of a company’s securities,
stockholders often institute securities class action litigation
against that company. This type of litigation could result in
substantial costs and divert our management’s attention and
resources, which could have a material adverse effect on our
cash flows, our ability to execute our business strategy and our
ability to make distributions to our stockholders.
Requirement for non-Finnish shareholders to provide detailed
information to obtain advantageous withholding tax treatment
for dividends.
As described in more detail under “General facts on Nokia–
Taxation”, non-Finnish shareholders are required to provide
certain information in order to benefit from the reduced
dividend withholding tax rates set out in the applicable tax
treaties. Furthermore, custodians are required to fulfill certain
strict requirements, take over certain responsibilities and
assume liability for incorrectly applied withholding tax, or a
higher withholding tax rate will apply. Such requirements will
likely impose an additional administrative burden on
shareholders or result in the higher withholding rate becoming
applicable for non-Finnish shareholders.
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Significant subsequent events
Nokia to operate with two primary operating segments
Nokia announced on 19 November 2025, together with its new
strategy, that it will reorganize its business into two primary
operating segments to better align to customer needs and
accelerate innovation as the AI supercycle increases demand for
advanced connectivity. This reorganization took effect as of 1
January 2026.
The reorganization recognizes Network Infrastructure as a
growth segment, positioned to capitalize on the rapid, global AI
and data center build-out while continuing to innovate for its
telecommunications customer base. The segment consists of
three business units Optical Networks, IP Networks and Fixed
Networks and is led by David Heard.
The new Mobile Infrastructure segment brings together Nokia’s
Core Networks portfolio, Radio Networks portfolio and
Technology Standards (formerly Nokia Technologies). It is
positioned for core and radio network technology and services
leadership to lead the industry to AI-native networks and 6G.
The new segment brings together a portfolio whose value
creation is founded on mobile communication technologies
based on 3GPP standards with a strong cash flow position
underpinned by IP licensing. It is led by Justin Hotard on an
interim basis and consists of three business units Core
Software, Radio Networks and Technology Standards.
In addition, as part of its strategy work, Nokia identified several
units which are not seen as core to the future of the company’s
strategy. These units were moved into a dedicated operating
segment called Portfolio Businesses while the company
assesses the best value creating opportunity for them. The
units moved were:
▪Fixed Wireless Access CPE (previously in Fixed Networks in
Network Infrastructure)
▪Site Implementation and Outside Plant (previously in Fixed
Networks in Network Infrastructure)
▪Enterprise Campus Edge (previously in Cloud and Network
Services)
▪Microwave Radio (previously in Mobile Networks)
114 | Nokia Annual Report on Form 20-F 2025 |
General facts
on Nokia
American Depositary Shares | 115 |
Controls and procedures | 115 |
Government regulation | 116 |
Sales in United States-sanctioned countries | 116 |
Taxation | 117 |
Key ratios | 120 |
Alternative performance measures | 121 |
115 | Nokia Annual Report on Form 20-F 2025 |
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American Depositary Shares
Fees and charges
ADS holders may have to pay the following service fees to the
Depositary:
Service | Fees, USD |
Issuance of ADSs | Up to 5 cents per ADS(1) |
Cancellation of ADSs | Up to 5 cents per ADS(1) |
Distribution of cash dividends or other cash distributions | Up to 2 cents per ADS |
Distribution of ADSs pursuant to (i) stock dividends, free stock distributions or (ii) exercises of rights to purchase additional ADSs | Up to 5 cents per ADS |
Distribution of securities other than ADSs or rights to purchase additional ADSs | Up to 5 cents per ADS(1) |
ADS transfer fee | 1.50 cents per transfer(1) |
(1)These fees are typically paid to the Depositary by the brokers on behalf of their
clients receiving the newly issued ADSs from the Depositary and by the brokers on
behalf of their clients delivering the ADSs to the Depositary for cancellation. The
brokers in turn charge these transaction fees to their clients.
Additionally, ADS holders are responsible for certain fees and
expenses incurred by the Depositary on their behalf and certain
governmental charges such as taxes and registration fees,
transmission and delivery expenses, conversion of foreign
currency and fees relating to compliance with exchange control
regulations. The fees and charges may vary over time.
In the event of refusal to pay the depositary fees, the
Depositary may, under the terms of the deposit agreement,
refuse the requested service until payment is received or may
set off the amount of the depositary fees from any distribution
to be made to the ADS holder.
Payments
In 2025, our Depositary made the following payments on our
behalf in relation to our ADS program:
Category | Payment, USD |
Settlement infrastructure fees (including the Depositary Trust Company fees) | 1 091 650.64 |
Proxy process expenses (including printing, postage and distribution) | 1 411 882.51 |
Legal fees | 159 427.50 |
NYSE listing fees | 500 000.00 |
Investor relations expenses | 569 933.72 |
Total | 3 732 894.37 |
Additionally for 2025, our Depositary reimbursed us
USD 11 500 000 mainly related to contributions towards our
investor relations activities, including investor meetings and
conferences and fees of investor relations service vendors, and
other miscellaneous expenses related to the listing of our ADSs
in the United States.
Controls and procedures
Our management, with the participation of our President and
CEO and our Chief Financial Officer, conducted an evaluation
pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the Exchange Act), of the
effectiveness of our disclosure controls and procedures at 31
December 2025. Based on such evaluation, our President and
CEO and our Chief Financial Officer have concluded that our
disclosure controls and procedures were effective.
Disclosure controls and procedures mean controls and other
procedures that are designed to ensure that information
required to be disclosed by us in the reports that we file or
submit under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in
the Commission’s rules and forms, and that such information
required to be disclosed by us in the reports that we file or
submit under the Exchange Act is accumulated and
communicated to our management, including our President and
CEO and our Chief Financial Officer, or persons performing
similar functions, as appropriate to allow timely decisions
regarding required disclosures.
Management’s annual report on internal control
over financial reporting
Our management is responsible for establishing and
maintaining adequate internal control over financial reporting
for Nokia. Our internal control over financial reporting is
designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation and fair
presentation of published financial statements. Because of its
inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Our management evaluated the effectiveness of our internal
control over financial reporting using the criteria described in
Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on this evaluation, our management
has assessed the effectiveness of Nokia’s internal control over
financial reporting at 31 December 2025 and concluded that
such internal control over financial reporting was effective.
The effectiveness of our internal control over financial reporting
at 31 December 2025 has been audited by Deloitte Oy, an
independent registered public accounting firm. Refer to section
“Reports of independent registered public accounting firm”.
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Changes in internal control over financial
reporting
There have been no changes in our internal control over
financial reporting during 2025 that have materially affected, or
are reasonably likely to materially affect, our internal control
over financial reporting.
Attestation report of the registered public
accounting firm
Refer to section ‘Reports of independent registered public
accounting firm’.
Exchange controls
There are currently no Finnish laws that may affect the import
or export of capital, or the remittance of dividends, interest or
other payments.
Government regulation
Nokia and its businesses are subject to direct and indirect
regulation in each of the countries in which we and our customers
do business. As a result, changes in or uncertainties related to
various types of regulations applicable to current or new
technologies, intellectual property, products, services, company
operations and business environment (e.g., labor laws, taxation)
could affect our business adversely. Moreover, the implementation
of technological or legal requirements could impact our products
and services, technology and patent licensing activities,
manufacturing and distribution processes, and could affect the
timing of product and services introductions and the cost of our
production, products and services, as well as their commercial
success. Also, our business is subject to the impacts of changes in
economic and trade policies. Export control, tariffs or other fees or
levies imposed on our products and services and environmental,
product safety and security and other regulations that adversely
affect the export, import, pricing or costs of our products and
services, as well as export prohibitions (sanctions) enacted by the
EU, the United States or other countries or regions could adversely
affect our net sales and results of operations. Further, potential
governmental intervention in supply chain (e.g., prohibiting imports
from certain geographies or imposing certain criteria on selection
of suppliers) may impact Nokia’s operations.
For example, depending on the geography, our products and
services are subject to a wide range of government regulations that
might have a direct impact on our business, including, but not limited
to, regulation related to product certification, standards, spectrum
management, provision of telecommunications services, privacy and
data protection, competition and sustainability. The EU-level or local
member state regulation has a direct impact on many areas of our
business, markets and customers within the EU. The European
regulation influences, for example, conditions for innovation for
telecommunications infrastructure and internet and related services,
as well as technology and patent licensing, investment in fixed and
wireless broadband communication infrastructure and operation of
global data flows. Additionally, with respect to certain developing
market countries, the business environment we operate in can be
affected by localization requirements.
We proactively exchange views and address the impact of any
planned changes to the regulatory environment on our business
activities with state agencies, regulators and other decision-
makers either through our government relations
representatives in various geographies and through our experts,
or indirectly through memberships in industry associations.
Sales in United States-sanctioned
countries
General
We are a global company and have sales in most countries of the
world. Nokia is committed to the highest standards of ethical
conduct, and adheres to all applicable national and international
trade-related laws. As a leading international telecommunications
company with global operations, Nokia has a presence also in
countries subject to international sanctions. All operations of
Nokia, and in particular any operations undertaken in countries
targeted by sanctions, are conducted in accordance with our
comprehensive and robust internal compliance program to
ensure that they are in full compliance with all applicable laws and
regulations. In addition, we continuously monitor international
developments and assess the appropriateness of our presence
and business in these, and all, markets. Nevertheless, business in
these markets is marked by complexity and uncertainty.
We cannot exclude the possibility that third parties may
unlawfully divert our products to these countries from other
countries in which we sell them, or that, for services distributed
through the internet, third parties could have accessed them in
markets or countries for which they are not intended by
circumventing the industry standard protective mechanisms,
such as IP address blocks, despite our efforts in implementing
measures to prevent such actions.
Disclosure pursuant to Section 219 of the Iran
Threat Reduction and Syria Human Rights Act
of 2012
We operate in Iran in compliance with applicable economic
sanctions and other trade-related laws. We ceased providing
telecommunications equipment and services to any of our
former customers including but not limited to network operator
customers and internet service providers. We never delivered
equipment and services to Iran for military purposes, or for the
purpose of limiting political discourse, blocking legitimate forms
of free speech or conducting surveillance of individuals.
In connection with the activities relating to Iran, we have a local
office in Iran that employed one employee at the end of 2025
through a branch of a Finnish subsidiary. Nokia is the controlling
shareholder in Pishahang Communications Network
Development Company (Pishahang). The other minority
shareholder in Pishahang is Information Technology Application
Development TACFAM Company (Tacfam).
We continue to maintain routine contacts with governmental
agencies in Iran as required, for example, to maintain a legal
presence and office facilities in Iran, pay taxes and employ an
Iranian national.
In 2025, we had no sale activity in Iran.
Although it is difficult to evaluate with any reasonable degree of
certainty, we have concluded that we cannot exclude the
possibility that Tacfam is owned or controlled, directly or
indirectly, by the government of Iran. None of our activities involve
US affiliates of Nokia, or any persons from the United States.
Nokia does not normally allocate net profit on a country-by-
country or activity-by-activity basis, other than as set forth in
Nokia’s consolidated financial statements prepared in
accordance with IFRS. Therefore, for this exercise in the past,
Nokia reflected its sales margin in lieu of the net profit/loss. In
2025, we recognized no sales or sales margin from any customer.
Although we evaluate our business activities on an ongoing
basis, we intend to continue not accepting any new business
in Iran in 2026.
117 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries •Taxation Key ratios Alternative performance measures Financial statements Other information |
Taxation
General
The statements of the United States and Finnish tax laws set
out below are based on the laws in force as of the date of this
report and may be subject to any changes in US or Finnish law,
and in any double taxation convention or treaty between the
United States and Finland, occurring after that date, possibly
with retroactive effect.
For purposes of this discussion, “US Holders” are beneficial
owners of ADSs that: (i) hold the ADSs as capital assets; (ii) are
citizens or residents of the United States, corporations created
in or organized under US law, estates whose income is subject
to US federal income tax, or trusts that elect to be treated as a
US person or are both subject to the primary supervision of a
US court and controlled by a US person; and (iii) in each case,
are considered residents of the United States for purposes of
the current income tax convention between the United States
and Finland, referred to as the “Treaty”, and the limitation on
benefits provisions therein. Special rules apply to US Holders
that are also residents of Finland and to citizens or residents of
the United States that do not maintain a substantial presence,
permanent home or habitual abode in the United States. For
purposes of this discussion, it is assumed that the Depositary
and its custodian will perform all actions as required by the
deposit agreement with the Depositary and other related
agreements between the Depositary and Nokia.
If a partnership holds ADSs (including for this purpose any entity
or arrangement treated as a partnership for US federal income
tax purposes), the tax treatment of a partner will depend upon
the status of the partner and activities of the partnership. If a
US Holder is a partnership or a partner in a partnership that
holds ADSs, the holder is urged to consult its own tax adviser
regarding the specific tax consequences of owning and
disposing of its ADSs.
Because this summary is not exhaustive of all possible tax
considerations – such as situations involving financial
institutions, banks, tax-exempt entities, pension funds, US
expatriates, real estate investment trusts, persons that are
dealers in securities, persons who own (directly, indirectly or by
attribution) 10% or more of the share capital or voting stock of
Nokia, persons who acquired their ADSs pursuant to the
exercise of employee stock options or otherwise as
compensation, or US Holders whose functional currency is not
the US dollar, who may be subject to special rules that are not
discussed herein – holders of shares or ADSs that are US
Holders are advised to satisfy themselves as to the overall US
federal, state and local tax consequences, as well as to the
overall Finnish and other applicable non-US tax consequences,
of their ownership of ADSs and the underlying shares by
consulting their own tax advisers. This summary does not
discuss the treatment of ADSs that are held in connection with a
permanent establishment or fixed base in Finland, and it does
not address the US Medicare tax on certain investment income.
For the purposes of both the Treaty and the US Internal
Revenue Code of 1986, as amended, referred to as the “Code”,
US Holders of ADSs will be treated as the owners of the
underlying shares that are represented by those ADSs.
Accordingly, the following discussion, except where otherwise
expressly noted, applies equally to US Holders of ADSs, on the
one hand, and to shares on the other.
The holders of ADSs will, for Finnish tax purposes, be treated as
the owners of the shares that are represented by the ADSs. The
Finnish tax consequences for the holders of shares, as
discussed below, also apply to the holders of ADSs.
US taxation of cash dividends
For US federal income tax purposes, the gross amount of
dividends paid to US Holders of shares or ADSs out of our current
or accumulated earnings and profits, including any related
Finnish withholding tax, generally will be included in gross income
as foreign source dividend income. We do not expect to maintain
calculations of our earnings and profits under US federal income
tax principles; therefore, US Holders should expect that the
entire amount of any distribution generally will be reported as
dividend income. Dividends will not be eligible for the dividends
received deduction allowed to corporations under the Code. The
amount includible in income (including any Finnish withholding
tax) will equal the US dollar value of the payment, determined at
the time such payment is received by the Depositary (in the case
of ADSs) or by the US Holder (in the case of shares), regardless of
whether the payment is in fact converted into US dollars.
Generally, any gain or loss resulting from currency exchange
rate fluctuations during the period between the time such
payment is received and the date the dividend payment is
converted into US dollars will be treated as US source ordinary
income or loss to a US Holder.
Special rules govern and specific elections are available to
accrual method taxpayers to determine the US dollar amount
includible in income in the case of a dividend paid (and taxes
withheld) in foreign currency. Accrual basis taxpayers are urged
to consult their own tax advisers regarding the requirements
and elections applicable in this regard.
Dividends received generally will constitute foreign source
“passive category income” for foreign tax credit purposes.
Subject to certain limitations, Finnish taxes withheld may be
eligible for credit (not in excess of the applicable Treaty rate)
against a US Holder’s US federal income tax liability.
Additionally, if Nokia makes a distribution from its reserve for
invested unrestricted equity when it does not have current or
accumulated earnings and profits, a US Holder may not be able
to claim such credit.
In lieu of a credit, a US Holder may elect to claim a deduction in
respect of its Finnish income taxes provided the deduction is
claimed for all of the foreign taxes paid by the US Holder in that
particular taxable year. A deduction does not reduce US tax on a
dollar-for-dollar basis like a tax credit. The deduction, however,
is not subject to the limitations applicable to foreign tax credits.
Provided that certain holding period and other requirements are
met, individuals and certain other non-corporate US Holders are
eligible for reduced rates of US federal income tax at a
maximum rate of 20% in respect of “qualified dividend income”.
Dividends that Nokia pays with respect to its shares and ADSs
generally will be qualified dividend income if certain holding
periods are met and Nokia was neither a passive foreign
investment company (PFIC) in the taxable year prior to the year
in which the dividend was paid nor in the taxable year in which
the dividend is paid. Nokia currently believes that dividends it
pays with respect to its shares and ADSs will constitute qualified
dividend income for US federal income tax purposes; however,
this is a factual matter and is subject to change. Nokia
anticipates that its dividends will be reported as qualified
dividends on Forms 1099-DIV delivered to US Holders. US
Holders of shares or ADSs are urged to consult their own tax
advisers regarding the availability to them of the reduced
dividend tax rate in light of their own particular situation and the
computations of their foreign tax credit limitation with respect
to any qualified dividends paid to them, as applicable.
118 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries •Taxation Key ratios Alternative performance measures Financial statements Other information |
We believe we should not be classified as a PFIC for US federal
income tax purposes for the taxable year ended 31 December
2024 and we do not expect to become a PFIC in the foreseeable
future. US Holders are advised, however, that this conclusion is
a factual determination that must be made annually and thus
may be subject to change. If we were to be classified as a PFIC,
the tax on distributions on our shares or ADSs and on any gains
realized upon the disposition of our shares or ADSs generally
would be less favorable than as described herein. Dividends paid
by a PFIC are not “qualified dividend income” and are not
eligible for reduced rates of taxation. Additionally, US persons
who are shareholders in a PFIC generally will be required to file
an annual report disclosing the ownership of such shares and
certain other information. US Holders should consult their own
tax advisers regarding the application of the PFIC rules,
including the related reporting requirements, to their ownership
of our shares or ADSs.
Finnish withholding taxes on cash dividends
Under the Finnish Income Tax Act and Act on Taxation of
Non-residents’ Income, non-residents of Finland are generally
subject to a withholding tax at a rate of 30% on dividends paid
by a Finnish resident company. Further, under the Finnish
Prepayment Act, 50% preliminary tax must be withheld on
dividends paid in certain situations. However, pursuant to the
Treaty, dividends paid to US Holders are generally subject to
Finnish withholding tax at reduced rates. Under the Finnish
Income Tax Act and tax court practice, the distribution of funds
from reserves for invested unrestricted equity by a listed
company such as Nokia is taxed as a distribution of a dividend.
As of 1 January 2021, nominee-registered shares are generally
subject to a withholding tax at a rate of 35% on dividends paid
by Nokia. This withholding tax regime is based on OECD’s TRACE
(Treaty Relief and Compliance Enhancement) model. Under the
rules, the 35% withholding tax will generally be applied on
dividend distributions on nominee-registered shares by listed
companies such as Nokia, unless custodians fulfill certain strict
requirements and are willing to take over certain responsibilities
(e.g., registration with the Finnish Tax Administration (so-called
authorized intermediary), identification of the beneficial owner
of the dividend and collecting and submitting detailed recipient
information to the Finnish Tax Administration using specific
filing procedures). Furthermore, application of reduced
withholding tax rates at source require that the custodian and
dividend distributor are willing to assume liability of incorrectly
applied withholding tax. If the custodian only registers with the
Finnish Tax Administration and submits (or undertakes to
submit) the detailed recipient details to the Finnish Tax
Administration, the 30% withholding tax rate can be applied,
instead of 35%.
Any tax withheld in excess can be reclaimed after the calendar
year of the dividend payment by submitting a refund application
to the Finnish Tax Administration no later than by the end of the
third calendar year following the dividend payment year. During
the year of dividend payment, the refund can be processed if
custodians and dividend distributor fulfill the above-mentioned
requirements laid down for actual dividend distribution.
It is exceptionally also possible that any tax not withheld at
source is later assessed directly to the shareholder by the
Finnish Tax Administration, in cases where the failure to
withhold tax at source is not due to negligence of the custodian
or the dividend distributor.
Holders of shares or ADSs are urged to consult their own
custodian regarding the availability of reduced withholding tax
rates in light of their own particular situation and approach their
custodian in terms of their responsibilities, as well as consult
their own tax advisers regarding the availability to them of the
tax credit from dividend withholding tax.
US and Finnish tax on sale or other disposition
A US Holder generally will recognize taxable capital gain or loss
on the sale or other disposition of ADSs in an amount equal to
the difference between the US dollar value of the amount
realized and the adjusted tax basis (determined in US dollars) in
the ADSs. If the ADSs are held as a capital asset, this gain or loss
generally will be long-term capital gain or loss if, at the time of
the sale, the ADSs have been held for more than one year. Any
capital gain or loss, for foreign tax credit purposes, generally
will constitute US source gain or loss. In the case of a US Holder
that is an individual, long-term capital gain generally is subject
to US federal income tax at preferential rates. The deductibility
of capital losses is subject to significant limitations.
The deposit or withdrawal by a US Holder of shares in exchange
for ADSs or of ADSs for shares under the deposit agreement
generally will not be subject to US federal income tax or Finnish
income tax.
The sale by a US Holder of the ADSs or the underlying shares,
other than an individual who, by reason of his residence in
Finland for a period exceeding six months, is or becomes liable
for Finnish income tax according to the relevant provisions of
Finnish tax law, generally will not be subject to income tax in
Finland, in accordance with Finnish tax law and the Treaty.
Finnish transfer tax
The transfer of our shares and ADSs for cash through a broker
or other appropriate intermediary is generally not subject to
Finnish transfer tax. Non-brokered transfers will generally be
exempted from the transfer tax if the transferee has been
approved as a trading party in the market where the transfer is
executed, or other conditions are met. Transfers of ADSs on the
New York Stock Exchange are exempt. Where the transfer does
not fulfill the above requirements, and either the buyer or the
seller is a Finnish resident or a Finnish branch office of a
specified foreign financial service provider, the buyer is liable to
pay transfer tax of 1.5% of the transaction price where the
resulting tax is at least EUR 10. Selling shareholders should
consult their tax advisers regarding the specific tax
considerations of a sale of our shares or ADSs.
Finnish inheritance and gift taxes
A transfer of an underlying share by gift or by reason of the
death of a US Holder and the transfer of an ADS are not subject
to Finnish gift or inheritance tax, provided that none of the
deceased person, the donor, the beneficiary of the deceased
person or the recipient of the gift is resident in Finland.
119 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries •Taxation Key ratios Alternative performance measures Financial statements Other information |
Non-residents of the United States
Beneficial owners of ADSs that are not US Holders will not be
subject to US federal income tax on dividends received with
respect to ADSs unless such dividend income is effectively
connected with the conduct of a trade or business within the
United States. Similarly, non-US Holders generally will not be
subject to US federal income tax on any gain realized on the sale
or other disposition of ADSs, unless (a) the gain is effectively
connected with the conduct of a trade or business in the United
States or (b) in the case of an individual, that individual is
present in the United States for 183 days or more in the taxable
year of the disposition and other conditions are met.
The United States information reporting and
backup withholding
Dividend payments with respect to shares or ADSs and
proceeds from the sale or other disposition of shares or ADSs
may be subject to information reporting to the Internal Revenue
Service and possible US backup withholding. Backup withholding
will not apply to a holder if the holder furnishes a correct
taxpayer identification number or certificate of foreign status
and makes any other required certification in connection
therewith, or if it is a recipient otherwise exempt from backup
withholding (such as a corporation). Any US persons required to
establish their exempt status generally must furnish a duly
completed IRS Form W-9 (Request for Taxpayer Identification
Number and Certification). Non-US holders generally are not
subject to US information reporting or backup withholding.
However, such holders may be required to provide certification
of non-US status (generally on IRS Form W-8BEN for individuals
and Form W-8BEN-E for corporations) in connection with
payments received in the United States or through certain
US-related financial intermediaries. Backup withholding is not
an additional tax. Amounts withheld as backup withholding may
be credited against a holder’s US federal income tax liability,
and the holder may obtain a refund of any excess amounts
withheld under the backup withholding rules by timely filing the
appropriate claim for refund with the Internal Revenue Service
and furnishing the proper required information.
120 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries Taxation •Key ratios Alternative performance measures Financial statements Other information |
Key ratios
Earnings per share (basic)
Profit/(loss) attributable to equity holders of the parent
Weighted average number of shares outstanding during the year
Earnings per share (diluted)
Profit/(loss) attributable to equity holders of the parent adjusted for the effect of dilution
Adjusted weighted average number of shares during the year
P/E ratio
Closing share price at 31 December
Earnings per share (basic) for continuing operations
Payout ratio
Proposed dividend per share
Earnings per share (basic) for continuing operations
Dividend yield %
Proposed dividend per share
Closing share price at 31 December
Shareholders’ equity per share
Capital and reserves attributable to equity holders of the parent
Number of shares at 31 December – number of treasury shares at 31 December
Market capitalization
(Number of shares at 31 December – number of treasury shares at 31 December) x closing share price at 31 December
Share turnover %
Number of shares traded during the year
Average number of shares during the year
121 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries Taxation Key ratios •Alternative performance measures Financial statements Other information |
Alternative performance measures
Certain financial measures presented in this report are not measures of financial performance,
financial position or cash flows defined in IFRS Accounting Standards. As these measures are not
defined in IFRS Accounting Standards, they may not be directly comparable with financial measures
used by other companies, including those in the same industry. The primary rationale for
presenting these measures is that the management uses these measures in assessing the financial
performance of Nokia and believes that these measures provide meaningful supplemental
information on the underlying business performance of Nokia. These financial measures should not
be considered in isolation from, or as a substitute for, financial information presented in
compliance with IFRS Accounting Standards.
Return on capital employed %
Definition
Return on capital employed is defined as (Profit before tax + Interest expense on interest-bearing
liabilities) / (Average capital and reserves attributable to equity holders of the parent + average
non-controlling interests + average interest-bearing liabilities).
Purpose
Return on capital employed indicates how efficiently Nokia uses its capital to generate profits.
Composition of return on capital employed %:
EURm | 2025 | 2024 | 2023 |
Profit before tax | 915 | 2 091 | 1 469 |
Interest expense on interest-bearing liabilities | 141 | 209 | 201 |
Total | 1 056 | 2 300 | 1 670 |
Average capital and reserves attributable to equity holders of the parent(1) | 20 812 | 20 597 | 20 935 |
Average non-controlling interests(1) | 91 | 91 | 92 |
Average interest-bearing liabilities(1) | 3 650 | 4 040 | 4 334 |
Total capital employed | 24 553 | 24 728 | 25 361 |
Return on capital employed % | 4.3% | 9.3% | 6.6% |
(1)Calculated as the average of opening and closing balance for the year as presented in the consolidated statement of financial
position. Refer to the consolidated financial statements.
Return on shareholders’ equity %
Definition
Return on shareholders’ equity is defined as Profit/(loss) for the year attributable to equity holders
of the parent / Average capital and reserves attributable to equity holders of the parent.
Purpose
Return on shareholders’ equity indicates how efficiently Nokia uses the capital invested by its
shareholders to generate profits.
Composition of return on shareholders’ equity %:
EURm | 2025 | 2024 | 2023 |
Profit for the year attributable to equity holders of the parent | 651 | 1 277 | 665 |
Average capital and reserves attributable to equity holders of the parent(1) | 20 812 | 20 597 | 20 935 |
Return on shareholders’ equity % | 3.1% | 6.2% | 3.2% |
(1)Calculated as the average of opening and closing balance for the year as presented in the consolidated statement of financial
position. Refer to the consolidated financial statements.
Equity ratio %
Definition
Equity ratio % is defined as (Total capital and reserves attributable to equity holders of the parent
+ non-controlling interests) / Total assets.
Purpose
Equity ratio indicates the proportion of assets financed by the capital provided by the equity
holders of the parent to the total assets of Nokia.
Composition of equity ratio %:
EURm | 2025 | 2024 | 2023 |
Total capital and reserves attributable to equity holders of the parent | 20 967 | 20 657 | 20 537 |
Non-controlling interests | 91 | 90 | 91 |
Shareholders’ equity | 21 058 | 20 747 | 20 628 |
Total assets | 37 597 | 39 149 | 39 860 |
Equity ratio % | 56.0% | 53.0% | 51.8% |
122 | Nokia Annual Report on Form 20-F 2025 |
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Total cash and interest-bearing financial investments
Definition
Total cash and interest-bearing financial investments consist of cash and cash equivalents, current
interest-bearing financial investments and non-current interest-bearing financial investments.
Purpose
Total cash and interest-bearing financial investments is used to indicate funds available to Nokia to
run its current and invest in future business activities as well as provide return for security holders.
Composition of total cash and interest-bearing financial investments:
EURm | 2025 | 2024 | 2023 |
Cash and cash equivalents | 5 462 | 6 623 | 6 234 |
Current interest-bearing financial investments | 961 | 1 661 | 1 565 |
Non-current interest-bearing financial investments | 368 | 457 | 715 |
Total cash and interest-bearing financial investments | 6 791 | 8 741 | 8 514 |
Net cash and interest-bearing financial investments
Definition
Net cash and interest-bearing financial investments equals total cash and interest-bearing financial
investments less long-term and short-term interest-bearing liabilities.
Purpose
Net cash and interest-bearing financial investments is used to indicate Nokia’s liquidity position
after cash required to settle the interest-bearing liabilities.
Composition of net cash and interest-bearing financial investments:
EURm | 2025 | 2024 | 2023 |
Total cash and interest-bearing financial investments | |||
Cash and cash equivalents | 5 462 | 6 623 | 6 234 |
Current interest-bearing financial investments | 961 | 1 661 | 1 565 |
Non-current interest-bearing financial investments | 368 | 457 | 715 |
Interest-bearing liabilities | |||
Long-term interest-bearing liabilities | (2 329) | (2 918) | (3 637) |
Short-term interest-bearing liabilities | (1 084) | (969) | (554) |
Net cash and interest-bearing financial investments | 3 378 | 4 854 | 4 323 |
Net debt to equity (gearing) %
Definition
Net debt to equity (gearing) % is defined as Interest-bearing liabilities less Total cash and interest-
bearing financial investments / (Total capital and reserves attributable to the equity holders of the
parent + Non-controlling interests).
Purpose
Net debt to equity ratio presents the relative proportion of shareholders’ equity and interest-
bearing liabilities used to finance Nokia’s assets and indicates the leverage of Nokia’s business.
Composition of net debt to equity (gearing) %:
EURm | 2025 | 2024 | 2023 |
Interest-bearing liabilities | |||
Long-term interest-bearing liabilities | 2 329 | 2 918 | 3 637 |
Short-term interest-bearing liabilities | 1 084 | 969 | 554 |
Total cash and interest-bearing financial investments | |||
Cash and cash equivalents | (5 462) | (6 623) | (6 234) |
Current interest-bearing financial investments | (961) | (1 661) | (1 565) |
Non-current interest-bearing financial investments | (368) | (457) | (715) |
Net debt | (3 378) | (4 854) | (4 323) |
Total capital and reserves attributable to equity holders of the parent | 20 967 | 20 657 | 20 537 |
Non-controlling interests | 91 | 90 | 91 |
Shareholders’ equity | 21 058 | 20 747 | 20 628 |
Net debt to equity (gearing) % | (16.0)% | (23.4)% | (21.0)% |
Free cash flow
Definition
Free cash flow is defined as Net cash flows from operating activities less purchases of property,
plant and equipment and intangible assets (capital expenditures).
Purpose
Free cash flow is the cash that Nokia generates after investments in property, plant and equipment
and intangible assets, and we believe it provides meaningful supplemental information as it
represents the cash available to service and repay interest-bearing financial liabilities, including
lease liabilities, make investments to grow business and distribute funds to shareholders. It is a
measure of cash generation, working capital efficiency and capital discipline of the business.
Composition of free cash flow:
EURm | 2025 | 2024 | 2023 |
Net cash flows from operating activities | 2 071 | 2 493 | 1 317 |
Purchase of property, plant and equipment and intangible assets (capital expenditures) | (606) | (472) | (652) |
Free cash flow | 1 465 | 2 021 | 665 |
123 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia American Depositary Shares Controls and procedures Government regulation Sales in United States- sanctioned countries Taxation Key ratios •Alternative performance measures Financial statements Other information |
Capital expenditure
Definition
Purchases of property, plant and equipment and intangible assets (excluding assets acquired under
business combinations).
Purpose
Capital expenditure is used to describe investments in future profit-generating activities.
Composition of capital expenditure:
EURm | 2025 | 2024 | 2023 |
Purchase of property, plant and equipment and intangible assets | (606) | (472) | (652) |
Capital expenditure | (606) | (472) | (652) |
Comparable operating profit
Definition
Comparable operating profit excludes intangible asset amortization and other purchase price fair
value adjustments, goodwill impairments, restructuring-related charges, transaction and related
costs, including integration costs, and certain other items affecting comparability.
Purpose
We believe that the comparable operating profit provides meaningful supplemental information
to both management and investors regarding Nokia’s underlying business performance by
excluding certain items of income and expenses that may not be indicative of Nokia’s business
operating results. Comparable operating profit is used also in determining management
remuneration.
Composition of comparable operating profit:
EURm | 2025 | 2024 | 2023 |
Operating profit(1) | 885 | 1 970 | 1 733 |
Restructuring and associated charges | 478 | 445 | 356 |
Amortization and depreciation of acquired intangible assets and property, plant and equipment | 444 | 314 | 341 |
Release of acquisition-related fair value adjustments to deferred revenue and inventory | 88 | — | — |
Provision for contractual claims | 66 | — | — |
Transaction and related costs, including integration costs | 33 | 23 | — |
Loss on defined benefit plan amendment | 24 | — | — |
Disposal of businesses | 6 | (67) | (20) |
Divestment of associates | — | (190) | — |
Impairment and write-off of assets, net of reversals | — | 89 | 25 |
Costs associated with country exit | — | — | (49) |
Other⁽¹⁾ | — | — | 23 |
Comparable operating profit(1) | 2 024 | 2 584 | 2 409 |
(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and
administrative expenses and other operating income to financial income. The comparative amounts for 2024 and 2023 have been
recast accordingly. For more information, refer to Note 1.2. General accounting policies in the consolidated financial statements.
Comparable operating margin %
Definition
Comparable operating margin is defined as Comparable operating profit / Net sales.
Purpose
Comparable operating margin is used as a measure of Nokia’s operating profitability as a
percentage of net sales excluding intangible asset amortization and other purchase price fair value
adjustments, goodwill impairments, restructuring-related charges, transaction and related costs,
including integration costs and certain other items affecting comparability.
As with comparable operating profit, we believe that the comparable operating margin provides
meaningful supplemental information to both management and investors regarding Nokia’s
underlying business performance by excluding certain items of income and expenses that may not
be indicative of Nokia’s business operating results.
Composition of comparable operating margin:
EURm | 2025 | 2024 | 2023 |
Comparable operating profit(1) | 2 024 | 2 584 | 2 409 |
Net sales | 19 889 | 19 220 | 21 138 |
Comparable operating margin % | 10.2% | 13.4% | 11.4% |
(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and
administrative expenses and other operating income to financial income. The comparative amounts for 2024 and 2023 have been
recast accordingly. For more information, refer to Note 1.2. General accounting policies in the consolidated financial statements.
124 | Nokia Annual Report on Form 20-F 2025 |
l
Consolidated financial statements | 125 |
Consolidated income statement | 125 |
Consolidated statement of comprehensive income | 126 |
Consolidated statement of financial position | 127 |
Consolidated statement of cash flows | 128 |
Consolidated statement of changes in shareholders’ equity | 129 |
Notes to the consolidated financial statements | 130 |
Section 1: Basis of preparation | 130 |
1.1. Corporate information | 130 |
1.2. General accounting policies | 130 |
1.3. Use of estimates and critical accounting judgments | 131 |
1.4. New and amended standards and interpretations | 131 |
Section 2: Results for the year | 133 |
2.1. Net sales | 133 |
2.2. Segment information | 136 |
2.3. Operating expenses and other operating income | 139 |
2.4. Financial income and expenses | 139 |
2.5. Income taxes | 140 |
2.6. Discontinued operations | 143 |
2.7. Earnings per share | 144 |
Section 3: Compensation and benefits | 145 |
3.1. Summary of personnel expenses | 145 |
3.2. Remuneration of key management | 145 |
3.3. Share-based payments | 147 |
3.4. Pensions and other post-employment benefits | 149 |
Section 4: Operating assets and liabilities | 156 |
4.1. Goodwill and intangible assets | 156 |
4.2. Property, plant and equipment | 159 |
4.3. Leases | 160 |
4.4. Inventories | 161 |
4.5. Trade receivables and other customer- related balances | 161 |
4.6. Other receivables and liabilities | 163 |
4.7. Provisions | 164 |
Section 5: Capital and financial instruments | 165 |
5.1. Equity | 165 |
5.2. Financial assets and liabilities | 169 |
5.3. Derivative asset and liabilities | 173 |
5.4. Financial risk management | 176 |
Section 6: Other information | 183 |
6.1. Commitments, contingencies and legal proceedings | 183 |
6.2. Acquisitions | 184 |
6.3. Principal Group companies | 186 |
6.4. Related party transactions | 187 |
6.5. Subsequent events | 187 |
Reports of independent registered public accounting firm (PCAOB ID | 188 |
125 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements •Consolidated financial statements Notes to the consolidated financial statements Other information |
Consolidated financial
statements
Consolidated income statement
For the year ended 31 December
EURm | Note | 2025 | 2024 | 2023 |
Net sales | 2.1, 2.2 | |||
Cost of sales | 2.2, 2.3 | ( | ( | ( |
Gross profit | ||||
Research and development expenses | 2.2, 2.3 | ( | ( | ( |
Selling, general and administrative expenses(1) | 2.2, 2.3 | ( | ( | ( |
Other operating income(1) | 2.2, 2.3 | |||
Other operating expenses | 2.2, 2.3 | |||
Operating profit⁽¹⁾ | ||||
Share of results of associates and joint ventures | 2.2, 6.4 | ( | ||
Financial income(1) | 2.2, 2.4 | |||
Financial expenses | 2.2, 2.4 | ( | ( | ( |
Profit before tax | ||||
Income tax expense | 2.5 | ( | ( | ( |
Profit from continuing operations | ||||
Profit/(loss) from discontinued operations | 2.6 | ( | ||
Profit for the year | ||||
Attributable to: | ||||
Equity holders of the parent | ||||
Non-controlling interests | ||||
Earnings per share attributable to equity holders of the parent | 2.7 | EUR | EUR | EUR |
Basic | ||||
Profit from continuing operations | ||||
Profit for the year | ||||
Diluted | ||||
Profit from continuing operations | ||||
Profit for the year |
(1)In 2025, Nokia changed the presentation of gains and losses from venture fund investments from selling, general and administrative expenses and other operating income to
financial income. The comparative amounts for 2024 and 2023 have been recast accordingly. For more information, refer to Note 1.2. General accounting policies.
The notes are an integral part of these consolidated financial statements.
126 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements •Consolidated financial statements Notes to the consolidated financial statements Other information |
Consolidated statement of comprehensive income
For the year ended 31 December
EURm | Note | 2025 | 2024 | 2023 |
Profit for the year | ||||
Items that will not be reclassified to profit or loss | ||||
Remeasurements of defined benefit plans | ( | ( | ||
Income tax related to items that will not be reclassified to profit or loss | 2.5 | ( | ||
Total of items that will not be reclassified to profit or loss | ( | ( | ||
Items that may be reclassified to profit or loss | ||||
Translation differences | ||||
Exchange differences on translating foreign operations | ( | ( | ||
Transfer to income statement | ( | ( | ||
Net investment hedges | ||||
Net fair value gains/(losses) | ( | |||
Cash flow and other hedges | ||||
Net fair value gains/(losses) | ( | |||
Transfer to income statement | ( | ( | ( | |
Financial assets at fair value through other comprehensive income | ||||
Net fair value gains/(losses) | ( | |||
Transfer to income statement | ( | ( | ||
Other increase/(decrease), net | ( | |||
Income tax related to items that may be reclassified to profit or loss | 2.5 | ( | ( | |
Total of items that may be reclassified to profit or loss | ( | ( | ||
Other comprehensive (loss)/income, net of tax | ( | ( | ||
Total comprehensive (loss)/income for the year, net of tax | ( | ( | ||
Attributable to: | ||||
Equity holders of the parent | ||||
Continuing operations | ( | ( | ||
Discontinued operations | ( | |||
Total | ( | ( | ||
Non-controlling interests |
The notes are an integral part of these consolidated financial statements.
127 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements •Consolidated financial statements Notes to the consolidated financial statements Other information |
Consolidated statement of financial position
At 31 December
EURm | Note | 2025 | 2024 |
ASSETS | |||
Non-current assets | |||
Goodwill | 4.1 | ||
Other intangible assets | 4.1 | ||
Property, plant and equipment | 4.2 | ||
Right-of-use assets | 4.3 | ||
Investments in associated companies and joint ventures | 6.4 | ||
Non-current interest-bearing financial investments | 5.2, 5.4 | ||
Other non-current financial assets | 5.2, 5.4 | ||
Defined benefit pension assets | 3.4 | ||
Deferred tax assets | 2.5 | ||
Other non-current receivables | 4.6 | ||
Total non-current assets | |||
Current assets | |||
Inventories | 4.4 | ||
Trade receivables | 4.5, 5.2, 5.4 | ||
Contract assets | 4.5 | ||
Current income tax assets | 2.5 | ||
Other current receivables | 4.6 | ||
Current interest-bearing financial investments | 5.2, 5.4 | ||
Other current financial assets | 5.2, 5.3, 5.4 | ||
Cash and cash equivalents | 5.2, 5.4 | ||
Total current assets | |||
Total assets |
EURm | Note | 2025 | 2024 |
SHAREHOLDERS’ EQUITY AND LIABILITIES | |||
Equity | |||
Share capital | |||
Share premium | |||
Treasury shares | ( | ( | |
Translation differences | ( | ||
Fair value and other reserves | |||
Reserve for invested unrestricted equity | |||
Retained earnings | |||
Total shareholders’ equity | |||
Non-controlling interests | |||
Total equity | 5.1 | ||
Non-current liabilities | |||
Long-term interest-bearing liabilities | 5.2, 5.3, 5.4 | ||
Long-term lease liabilities | 5.4 | ||
Defined benefit pension and post-employment liabilities | 3.4 | ||
Deferred tax liabilities | 2.5 | ||
Contract liabilities | 4.5 | ||
Other non-current liabilities | 4.6 | ||
Provisions | 4.7 | ||
Total non-current liabilities | |||
Current liabilities | |||
Short-term interest-bearing liabilities | 5.2, 5.3, 5.4 | ||
Short-term lease liabilities | 5.4 | ||
Other financial liabilities | 5.2, 5.3, 5.4 | ||
Contract liabilities | 4.5 | ||
Current income tax liabilities | 2.5 | ||
Trade payables | 5.2, 5.4 | ||
Other current liabilities | 4.6 | ||
Provisions | 4.7 | ||
Total current liabilities | |||
Total liabilities | |||
Total shareholders’ equity and liabilities |
The notes are an integral part of these consolidated financial statements.
128 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements •Consolidated financial statements Notes to the consolidated financial statements Other information |
Consolidated statement of cash flows
For the year ended 31 December
EURm | Note | 2025 | 2024 | 2023 |
Cash flow from operating activities | ||||
Profit for the year | ||||
Adjustments, total(1) | ||||
Change in net working capital(2) | ( | ( | ( | |
Cash flows from operations | ||||
Interest received | ||||
Interest paid | 4.3, 5.2 | ( | ( | ( |
Income taxes paid, net | ( | ( | ( | |
Net cash flows from operating activities | ||||
Cash flow from investing activities | ||||
Purchase of property, plant and equipment and intangible assets | ( | ( | ( | |
Proceeds from sale of property, plant and equipment and intangible assets | ||||
Acquisition of businesses, net of cash acquired | 6.2 | ( | ( | ( |
Purchase of shares in associated companies | ( | |||
Proceeds from disposal of businesses, net of cash disposed | 2.6 | ( | ||
Proceeds from disposal of shares in associated companies | ||||
Purchase of interest-bearing financial investments | ( | ( | ( | |
Proceeds from interest-bearing financial investments | ||||
Purchase of other financial assets | ( | ( | ( | |
Proceeds from other financial assets | ||||
Other | ||||
Net cash flows (used in)/from investing activities | ( | ( | ||
Cash flow from financing activities | ||||
Proceeds from issuance of shares | 5.1 | |||
Acquisition of treasury shares | 5.1 | ( | ( | ( |
Purchase of equity instruments of subsidiaries | 5.2 | ( | ||
Proceeds from long-term borrowings | 5.4 | |||
Repayment of long-term borrowings | 5.4 | ( | ( | ( |
(Repayment of)/proceeds from short-term borrowings | 5.4 | ( | ( | |
Payment of principal portion of lease liabilities | 4.3, 5.4 | ( | ( | ( |
Dividends paid | 5.1 | ( | ( | ( |
Net cash flows used in financing activities | ( | ( | ( | |
Translation differences | ( | ( | ||
Net (decrease)/increase in cash and cash equivalents | ( | |||
Cash and cash equivalents at 1 January | ||||
Cash and cash equivalents at 31 December |
The consolidated statement of cash flows combines cash flows from both continuing and discontinued operations.
The notes are an integral part of these consolidated financial statements.
(1) Adjustments | |||
EURm | 2025 | 2024 | 2023 |
Depreciation and amortization | |||
Share-based payments | |||
Impairment charges | |||
Restructuring charges(1) | |||
Gain on sale of businesses and associated companies | ( | ( | ( |
Gain on sale of property, plant and equipment | ( | ( | ( |
Financial income and expenses(2) | ( | ( | |
Income tax expense | |||
Other adjustments, net(2) | ( | ||
Total |
(1)Restructuring charges in adjustments represent the non-cash portion recognized
in the consolidated income statement.
(2)In 2025, Nokia changed the presentation of gains and losses from venture fund
investments which resulted in reclassifications in adjustments. The comparative
amounts for 2024 and 2023 have been recast accordingly. For more information,
refer to Note 1.2. General accounting policies.
(2) Change in net working capital | |||
EURm | 2025 | 2024 | 2023 |
(Increase)/decrease in receivables | ( | ( | |
Decrease in inventories | |||
Decrease in non-interest-bearing liabilities | ( | ( | ( |
Total | ( | ( | ( |
129 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements •Consolidated financial statements Notes to the consolidated financial statements Other information |
Consolidated statement of changes in shareholders’ equity
EURm | Note | Share capital | Share premium | Treasury shares | Translation differences | Fair value and other reserves | Reserve for invested unrestricted equity | Retained earnings | Total shareholders’ equity | Non-controlling interests | Total equity |
1 January 2023 | ( | ||||||||||
Profit for the year | |||||||||||
Other comprehensive loss | 5.1 | ( | ( | ( | ( | ( | ( | ||||
Total comprehensive income for the year | — | — | — | ( | ( | — | ( | ( | |||
Share-based payments | |||||||||||
Settlement of share-based payments | ( | ( | ( | ||||||||
Acquisition of treasury shares | 5.1 | ( | ( | ( | |||||||
Cancellation of treasury shares | 5.1 | ( | |||||||||
Disposal of subsidiaries | ( | ( | |||||||||
Dividends | 5.1 | ( | ( | ( | ( | ||||||
Total transactions with owners | ( | ( | ( | ( | ( | ||||||
31 December 2023 | ( | ( | |||||||||
Profit for the year | |||||||||||
Other comprehensive income | 5.1 | ||||||||||
Total comprehensive loss for the year | — | — | — | — | |||||||
Share-based payments | |||||||||||
Settlement of share-based payments | ( | ( | ( | ||||||||
Acquisition of treasury shares | 5.1 | ( | ( | ( | ( | ||||||
Cancellation of treasury shares | 5.1 | ( | |||||||||
Adjustment to financial liability to acquire non-controlling interest | ( | ( | ( | ||||||||
Dividends | 5.1 | ( | ( | ( | ( | ||||||
Total transactions with owners | ( | ( | ( | ( | ( | ( | |||||
31 December 2024 | ( | ||||||||||
Profit for the year | |||||||||||
Other comprehensive (loss)/income | 5.1 | ( | ( | ( | ( | ( | |||||
Total comprehensive income for the year | — | — | — | ( | ( | — | ( | ( | |||
Share-based payments | |||||||||||
Settlement of share-based payments | ( | ( | ( | ||||||||
Acquisition of treasury shares(1) | 5.1 | ( | |||||||||
Cancellation of treasury shares | 5.1 | ( | |||||||||
Directed share issue | 5.1 | ||||||||||
Acquisitions through business combinations | 5.1 | ||||||||||
Dividends | 5.1 | ( | ( | ( | ( | ||||||
Total transactions with owners | ( | ( | |||||||||
31 December 2025 | ( | ( |
(1)In November 2024, Nokia launched a new share buyback program to offset the dilutive effect of the acquisition of Infinera. At 31 December 2024, Nokia recorded a liability and a reduction of reserve for invested unrestricted equity of EUR 821 million to reflect Nokia’s
commitment under the agreement with a third-party broker conducting the share repurchases on Nokia’s behalf. The liability and reduction of reserve for invested unrestricted equity were reversed in 2025 when the program was completed. For more information on Nokia’s
The notes are an integral part of these consolidated financial statements.
130 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Notes to the consolidated financial statements
Section 1 |
Basis of
preparation
This section describes the general
accounting policies applied in
preparation of these consolidated
financial statements, including the
basis of presentation and key
consolidation principles. This
section also summarizes the
accounting matters that involve
most judgment or estimation
uncertainty. The specific
accounting policies as well as
details of key accounting estimates
and judgments are provided in the
related notes.
Nokia Corporation, a public limited liability company
incorporated and domiciled in Helsinki, Finland, is the parent
company (Parent Company or Parent) for all its subsidiaries
(together Nokia or the Group). Nokia’s operational headquarters
are located in Espoo, Finland. The shares of Nokia Corporation
are listed on the Nasdaq Helsinki Stock Exchange and the New
York Stock Exchange.
Nokia is a global provider of critical network infrastructure across
fixed, mobile and transport networks, delivering the performance
and security its customers need to meet the demands of an AI-
enabled future. Nokia’s solution offerings combine hardware,
software and services, as well as licensing of intellectual
property, including patents, technologies and the Nokia brand.
These consolidated financial statements for the year ended 31
December 2025 were authorized for issuance and filing by the
Board of Directors on 5 March 2026.
compliance
The consolidated financial statements are prepared in accordance
with IFRS® Accounting Standards as issued by the International
Accounting Standards Board (IASB) and as adopted by the
European Union (EU). The consolidated financial statements also
conform to Finnish accounting and company legislation.
The consolidated financial statements are presented in millions
of euros (EURm), except when otherwise noted, and are prepared
under the historical cost convention, except when otherwise
disclosed in the accounting policies in the specific notes.
Presentation of the results of venture fund investments
In 2025, Nokia completed a strategic review of its venture fund
investment activities. As a result, Nokia no longer views broad-
based venture fund investments as having a strategic role and
has initiated a process to scale down these investments.
Consequently, the presentation of the results of venture fund
investments as operating activities is no longer considered
relevant, and therefore beginning from 2025, Nokia is
presenting the gains and losses from venture fund investments,
including the changes in fair value and the fund management
fees, as financial income. For the segment reporting purposes,
the results of venture fund investments had previously been
included in the operating results of Group Common and Other.
The comparative financial information for 2024 and 2023 has
been recast accordingly.
As a result of the recast, in 2024, selling, general and
administrative costs decreased by EUR 18 million, other
operating income decreased by EUR 47 million and financial
income increased by EUR 29 million. In 2023, selling, general
and administrative costs decreased by EUR 15 million, other
operating income increased by EUR 57 million and financial
income decreased by EUR 72 million.
Additionally, in 2024 and 2023, EUR 29 72
respectively, was reclassified to financial income and expenses
from gain/loss from other financial assets and other adjustments,
net within adjustments in the statement of cash flows.
Statutory reporting requirement in Germany
The fully consolidated German subsidiary, Nokia Solutions and
Networks GmbH & Co. KG, registered in the commercial register
of Munich under HRA 88537, has made use of the exemption
available under § 264b and § 291 of the German Commercial
Code (HGB).
The consolidated financial statements comprise the financial
statements of the Parent Company, and each company over
which it exercises control. Control over an entity exists when
Nokia is exposed, or has rights, to variable returns from its
involvement with the entity and has the ability to affect those
returns through its power over the entity. Presumption is that a
majority of voting rights results in control. To support this
presumption, Nokia considers all relevant facts and
circumstances when assessing if it has power over the entity
including voting rights and potential voting rights, rights to
appoint key management personnel and rights arising from
other contractual arrangements. Consolidation of a subsidiary
begins when control over it is obtained, and it ceases when the
control is lost.
All intercompany transactions are eliminated in the
consolidation process. Non-controlling interest represents the
proportion of net profit or loss, other comprehensive income
and net assets in subsidiaries that is not attributable to the
equity holders of the Parent.
131 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
An associate is an entity over which Nokia exercises significant
influence. A joint venture is a type of joint arrangement whereby
the parties that have joint control of the arrangement have
rights to the net assets of the arrangement.
Nokia’s investments in associates and joint ventures are
accounted for using the equity method. Under the equity
method, the investment in an associate or joint venture is
initially recognized at cost. The carrying amount of the
investment is adjusted to recognize changes in Nokia’s share of
net assets of the associate or joint venture since the acquisition
date. Nokia’s share of profits and losses of associates and joint
ventures is reflected in the consolidated income statement. Any
change in other comprehensive income of associates and joint
ventures is presented as part of Nokia’s other comprehensive
income.
Functional and presentation currency
The consolidated financial statements are presented in euro,
the functional and presentation currency of the Parent
Company. The financial statements of all Group companies are
measured using the functional currency, which is the currency
of the primary economic environment in which the entity
operates.
Transactions in foreign currencies are recorded at exchange
rates prevailing at the date of the transaction. For practical
reasons, a rate that approximates the actual rate at the date of
the transaction is often used. Monetary assets and liabilities
denominated in foreign currency are translated at the exchange
rates prevailing at the end of the reporting period.
Foreign exchange gains and losses arising from monetary
assets and liabilities as well as fair value changes of related
hedging instruments are recognized in financial income and
expenses. Foreign exchange gains and losses related to non-
monetary non-current financial investments are included in the
fair value measurement of these investments and recognized in
other financial income.
Foreign Group companies
On consolidation, the assets and liabilities of foreign operations
whose functional currency is other than euro are translated into
euro at the exchange rates prevailing at the end of the
reporting period.
The income and expenses of these foreign operations are
translated into euro at the average exchange rates for the
reporting period. The exchange differences arising from
translation for consolidation are recognized as translation
differences in other comprehensive income. On disposal of a
foreign operation, the cumulative amount of translation
differences relating to that foreign operation is reclassified to
profit or loss.
accounting judgments
The preparation of financial statements requires use of
management judgment in selecting and applying accounting
policies as well as making estimates and assumptions about the
future. These judgments, estimates and assumptions may have
a significant effect on the amounts recognized in the financial
statements.
The estimates and assumptions used in determining the
carrying amounts of assets and liabilities are based on historical
experience, expected outcomes and various other factors that
were available when these financial statements were prepared,
and they are believed to be reasonable under the
circumstances. The estimates and assumptions are reviewed
continually and revised if changes in circumstances occur, or as
a result of new information. As estimates and assumptions
inherently contain a varying degree of uncertainty, actual
outcomes may differ resulting in adjustments to the carrying
amounts of assets and liabilities in subsequent periods.
The accounting matters listed below are determined to involve
the most difficult, subjective or complex judgments, or are
considered as major sources of estimation uncertainty that may
have a significant risk of resulting in a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year. Please refer to the specific notes for further
information on the key accounting estimates and judgments.
Key accounting estimates and judgments | Note |
Judgment related to recognition of deferred tax assets | 2.5. Income taxes |
Judgment related to classification of Submarine Networks as a discontinued operation | 2.6. Discontinued operations |
Estimate of pension and other post-employment benefit obligations | 3.4. Pensions and other post-employment benefits |
Judgment related to the determination and fair value measurement of intangible assets in business combination | 6.2. Acquisitions |
interpretations
On 1 January 2025, Nokia adopted the following amendments
to the accounting standards issued by the IASB and endorsed by
the EU:
▪Amendments to IAS 21 The Effects of Changes in Foreign
Exchange Rates: Lack of Exchangeability
The amendments had no material impact on the measurement,
recognition or presentation of any items in Nokia’s consolidated
financial statements for 2025.
Nokia has not early adopted any new or amended standards or
interpretations that have been issued but are not yet effective.
The new and amended standards and interpretations issued by
the IASB that are effective in future periods are not expected to
have a material impact on the consolidated financial statements
of Nokia when adopted, except for IFRS 18 Presentation and
Disclosure in Financial Statements.
132 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
IFRS 18, which was published in April 2024 and will be effective
for annual periods beginning on or after 1 January 2027, will
replace IAS 1 Presentation of Financial Statements.
The objective of IFRS 18 is to enhance the comparability of
financial statements, particularly the income statement,
between companies, improve the transparency and
understandability of non-GAAP measures, and ensure useful
disaggregation of information in the financial statements. To
enable this, IFRS 18 introduces new requirements for
presentation within the income statement, including specified
totals and subtotals and classification of all income and
expenses into one of five categories: operating, investing,
financing, income taxes and discontinued operations, whereof
the first three are new.
Furthermore, the standard requires disclosure of newly defined
management-defined performance measures and aggregation
and disaggregation of financial information based on the
identified ‘roles’ of the primary financial statements and the
notes. In conjunction with the issue of IFRS 18, narrow-scope
amendments have been made to IAS 7 Statement of Cash Flows,
including changing the starting point for determining cash flows
from operations under the indirect method, from ‘profit or loss’
to ‘operating profit or loss’.
Even though IFRS 18 is not changing the recognition and
measurement requirements, the standard is expected to
significantly change how Nokia presents its consolidated
financial statements, particularly the income statement,
statement of cash flows, and notes to the financial statements.
Nokia is currently assessing the impact the adoption will have on
its consolidated financial statements. To date, the following
potential impacts have been identified:
▪Although the adoption of IFRS 18 will have no impact on its
net profit, Nokia expects that grouping items of income and
expenses in the income statement into the new categories
will impact how operating profit is determined. Foreign
exchange differences as well as interest income and
expenses currently aggregated in financial income and
expenses will need to be disaggregated, with some gains or
losses to be presented within the operating category.
Foreign exchange gains and losses as well as interest income
and expenses will be classified in the category where the
related income and expense from the underlying item is
classified.
▪The line items presented on the primary financial
statements might change as a result of the application of
the concept of “useful structured summary” and the
enhanced principles on aggregation and disaggregation.
Nokia does not expect there to be a significant change in the
information that is currently disclosed in the notes because
the requirement to disclose material information remains
unchanged; however, the way in which the information is
grouped might change as a result of the refined
aggregation/disaggregation principles.
▪New disclosures for management-defined performance
measures (MPMs) will be added. In brief, an MPM refers to a
subtotal of income and expenses an entity uses in its
financial communications outside financial statements which
has not been defined in IFRS Accounting Standards. To
improve transparency around these measures, IFRS 18
requires entities to disclose information about all of its
MPMs in a single note, including how the measure is
calculated, how it provides useful information and a
reconciliation to the most comparable subtotal specified by
IFRS Accounting Standards.
▪From the statement of cash flows perspective, the starting
point for calculating cash flows from operating activities will
change to operating profit. Additionally, there will be
changes to how interest received and interest paid are
presented. Interest paid will be presented as financing cash
flows and interest received as investing cash flows, which is
a change from current presentation as part of operating
cash flows.
Nokia will apply IFRS 18 from its mandatory effective date of
1 January 2027. As retrospective application is required, the
comparative information for 2025 and 2026 will be restated
accordingly.
133 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Section 2 |
Results for
the year
This section provides details of
items presented in the income
statement including disaggregation
of net sales by region and
customer type, results of Nokia’s
operating segments, and
information on operating expenses
and other operating income.
Additionally, this section contains
details of financial income and
expenses and income taxes, as well
as the results of discontinued
operations. The calculation of
earnings per share is presented at
the end of this section.
Nokia accounts for a contract with a customer when the
contract has been approved in writing, which is generally
when both parties are committed to perform their respective
obligations, the rights, including payment terms, regarding
the goods and services to be transferred can be identified,
the contract has commercial substance, and collection of the
consideration to which Nokia expects to be entitled is
probable. Management considers only legally enforceable
rights in evaluating the accounting for contracts with
customers. As such, frame agreements that do not create
legally enforceable rights and obligations are accounted for
upon issuance of subsequent legally binding purchase orders
under the frame agreements.
A contract modification or a purchase order is accounted for
as a separate contract if the scope of the contract increases
by additional distinct goods or services, and the price of the
contract increases by an amount that reflects the standalone
selling price of those additional goods or services. If the
additional goods or services are distinct but not sold at a
standalone selling price, the contract modification is
accounted for prospectively. If the additional goods or
services are not distinct, the modification is accounted for
through a cumulative catch-up adjustment.
Nokia recognizes revenue from contracts with customers to
reflect the transfer of promised goods and services to
customers for amounts that reflect the consideration to
which Nokia expects to be entitled in exchange for those
goods and services. The consideration may include variable
amounts, such as volume discounts and sales-based or
usage-based royalties, which Nokia estimates based on the
most likely amount. Nokia includes variable consideration into
the transaction price only to the extent that it is highly
probable that a significant revenue reversal will not occur.
The transaction price also excludes amounts collected on
behalf of third parties.
If the timing of payments provides either the customer or
Nokia with a significant benefit of financing, the transaction
price is adjusted for the effect of financing and the related
interest revenue or interest expense is presented separately
from revenue. As a practical expedient, Nokia does not
account for financing components if, at contract inception,
the consideration is expected to be received within one year
before or after the goods or services have been transferred
to the customer.
Nokia enters into contracts with customers consisting of any
combination of hardware, services and intellectual property.
Hardware and software sold by Nokia includes warranty, which
can either be assurance-type for repair of defects and
replacement of hardware recognized as a centralized
warranty provision, or service-type for scope beyond the
repair of defects or for a time period beyond the standard
assurance-type warranty period and considered as a separate
performance obligation within the context of the contract.
The associated revenue recognized for such contracts
depends on the nature of the underlying goods and services
provided. The promised goods or services in the contract
might include sale of goods, license of intellectual property
and grant of options to purchase additional goods or services
that may provide the customer with a material right. Nokia
conducts an assessment at contract inception to determine
which promised goods and services in a customer contract
are distinct and accordingly identified as performance
obligations.
The standalone selling price of each performance obligation is
determined by considering factors such as the price of the
performance obligation if sold on a standalone basis and the
expected cost of the performance obligation plus a
reasonable margin when price references are not available.
The portion of the transaction price allocated to each
performance obligation is recognized when the revenue
recognition criteria for that performance obligation have
been met.
134 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Nokia allocates the transaction price to each distinct
performance obligation on the basis of their standalone
selling prices, relative to the overall transaction price. If a
standalone selling price is not observable, it is estimated. The
transaction price may include a discount or a variable amount
of consideration that is generally allocated proportionately to
all performance obligations in the contract unless Nokia has
observable evidence that the entire discount relates to only
one or more, but not all, performance obligations in a
contract. The amount of revenue recognized is the amount
allocated to the satisfied performance obligation based on
the relative standalone selling prices. A performance
obligation may be satisfied at a point in time or over time.
As described in Note 4.5. Trade receivables and other
customer-related balances, Nokia presents its customer
contracts in the statement of financial position as either a
contract asset or a contract liability, depending on the
relationship between Nokia’s performance and the
customer’s payment for each individual contract.
Sale of products
Nokia manufactures and sells a range of networking
equipment, covering the requirements of network operators.
Revenue for these products is recognized when control of the
products has transferred, the determination of which may
require judgment. Typically, for standard equipment sales,
control transfers upon delivery. For more complex solutions,
control generally transfers upon acceptance.
In some arrangements, mainly within the Submarine Networks
business which is presented as a discontinued operation and was
sold in 2024, Nokia’s performance does not create an asset with
an alternative use and Nokia recognizes revenue over time using
the output method, which faithfully depicts the manner in which
the asset is transferred to the customer as well as Nokia’s
enforceable rights to payment for the work completed to date,
including margin. The output measure selected by Nokia for each
contract may vary depending on the nature of the contract.
Sale of services
Nokia provides services related to the provision of networking
equipment, ranging from managing a customer’s network and
product maintenance services to network installation,
integration and optimization. Revenue for each separate service
performance obligation is recognized as or when the customer
obtains the benefits of Nokia’s performance. Service revenue is
recognized over time for managed and maintenance services, as
in these cases Nokia performs throughout a fixed contract term
and the customer simultaneously receives and consumes the
benefits as Nokia performs. In some cases, Nokia performs
services that are subject to customer acceptance where revenue
is recognized when the customer acceptance is obtained.
Sale of intellectual property licenses
Nokia provides its customers with licenses to intellectual
property (IP) owned by Nokia by granting software licenses and
rights to benefit from Nokia’s IP in their products. When a
software license is sold, revenue is recognized upon delivery or
acceptance of the software, as Nokia has determined that each
software release is distinct, and the license is granted for
software as it exists when the control transfers to the customer.
When Nokia grants customers a license to use IP owned by
Nokia, the associated license fee revenue is recognized in
accordance with the substance of the relevant agreements. In
the majority of contracts, Nokia retains obligations to
continue to develop and make available to the customer the
latest IP in the licensed assets during the contract term, and
therefore revenue is recognized on a straight-line basis over
the period during which Nokia is expected to perform.
Recognition of the revenue on a straight-line basis over the
term of the license is considered the most faithful depiction of
Nokia’s satisfaction of the performance obligation as the IP
being licensed towards the customer includes new inventions
patented by Nokia that are highly interdependent and
interrelated and created through the course of continuous
research and development (R&D) efforts that are relatively
stable throughout the year. In some contracts, Nokia has no
remaining obligations to perform after granting a license to the
initial IP, and licensing fees are non-refundable. In these cases,
revenue is recognized at the beginning of the license term.
135 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Revenue disaggregation
Management has determined that Nokia’s geographic areas are
considered as the primary determinants to depict how the
nature, amount, timing and uncertainty of revenue and cash
flows are affected by economic factors. Nokia’s primary
customer base consists of companies that operate on a
country-specific or a regional basis. Although Nokia’s
technology cycle is similar around the world, different countries
and regions are inherently in a different stage of that cycle,
often influenced by macroeconomic conditions specific to those
countries and regions. In addition to Net sales to external
customers by region, the chief operating decision-maker, as
described in Note 2.2. Segment information, also reviews
Segment net sales by aggregated regions and Net sales by
customer type disclosed in this note.
Each reportable segment, as described in Note 2.2. Segment
information, consists of customers that operate in all
geographic areas. No reportable segment has a specific revenue
concentration in any geographic area other than Nokia
Technologies, which is included within Europe.
Net sales to external customers by region are based on the
location of the customer, except for Nokia Technologies IPR and
licensing net sales which are allocated to Europe.
EURm | 2025 | 2024 | 2023 |
Americas | |||
Latin America | |||
North America | |||
APAC | |||
Greater China | |||
India | |||
Rest of APAC | |||
EMEA | |||
Europe | |||
Middle East & Africa | |||
Total |
Segment net sales by region
EURm | 2025 | 2024 | 2023 |
Network Infrastructure | |||
Americas | |||
APAC | |||
EMEA | |||
Cloud and Network Services(1) | |||
Americas | |||
APAC | |||
EMEA | |||
Mobile Networks(1) | |||
Americas | |||
APAC | |||
EMEA | |||
Nokia Technologies | |||
Group Common and Other(2) | ( | ||
Total |
(1)In 2025, Managed Services business was moved from Cloud and Network Services
segment into Mobile Networks segment. Comparative financial information for
2024 and 2023 has been recast accordingly. Refer to Note 2.2. Segment
information.
(2)Includes eliminations of inter-segment revenues.
Net sales by customer type
EURm | 2025 | 2024 | 2023 |
Telecom providers | |||
AI & Cloud and Mission Critical Enterprise & Defense | |||
Licensees | |||
Other(1) | ( | ||
Total |
(1)In 2025, includes eliminations of inter-segment revenues, unallocated items and
certain other items. In 2024 and 2023, includes net sales of Radio Frequency
Systems (RFS), which was managed as a separate entity, and certain other items,
such as eliminations of inter-segment revenues. RFS net sales also include
revenue from telecom providers and AI & Cloud and Mission Critical Enterprise &
Defense.
Order backlog
At 31 December 2025, the aggregate amount of the transaction
price allocated to partially or wholly unsatisfied performance
obligations arising from fixed contractual commitments
amounted to EUR 19.5 billion (EUR 20.0 billion in 2024).
obligations will be recognized as revenue as follows:
2025 | 2024 | |
Within 1 year | ||
2-3 years | ||
More than 3 years | ||
Total |
The estimated timing of the satisfaction of these performance
obligations is subject to change owing to factors beyond Nokia’s
control such as customer and network demand, market
conditions and, in some cases, restrictions imposed by the
weather or other factors impacting project logistics. Revenue
recognized in the reporting period from performance
obligations satisfied (or partially satisfied) in previous periods
(for example, due to changes in transaction price) was not
material.
136 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Nokia has four
financial reporting purposes: (1) Network Infrastructure,
(2) Cloud and Network Services, (3) Mobile Networks and
(4) Nokia Technologies. In addition, Nokia provides net
sales disclosure for the following business units within the
Network Infrastructure segment: (i) Optical Networks, (ii) IP
Networks and (iii) Fixed Networks.
The President and CEO is the chief operating decision-
maker monitoring the operating results of segments for
the purpose of assessing performance and making
decisions about resource allocation. Key financial
performance measures of the segments comprise
primarily net sales and segment operating profit. The
evaluation of segment performance and allocation of
resources is primarily based on segment operating profit
which the management believes is the most relevant
measure for this purpose. Segment operating profit
excludes intangible asset amortization and other purchase
price fair value adjustments, goodwill impairments,
restructuring-related charges and certain other items of
income and expenses that may not be indicative of the
business operating results.
Accounting policies of the segments are the same as
those for the Group except for the aforementioned items
of income and expenses that are not allocated to the
segments. Inter-segment revenues and transfers are
accounted for as if the revenues were to third parties, that
is, at current market prices.
Segment descriptions
Network Infrastructure
The Network Infrastructure segment serves AI & Cloud
customers, telecommunications providers and mission critical
enterprises globally. It comprises the following business units:
(i) Optical Networks, which provides optical transport networks
for metro, regional and long-haul application; (ii) IP Networks,
which provides IP routing and data center switching; (iii) Fixed
Networks, which features solutions in fiber broadband, optical
LAN, automation and AI, in-home Wi-Fi and related software
solutions and professional services.
On 28 February 2025, Nokia completed the acquisition of
Infinera, a San Jose based global supplier of innovative open
optical networking solutions and advanced optical
semiconductors. Nokia has reported the acquired business as
part of its Optical Networks business unit in its Network
Infrastructure segment as of the closing of the transaction.
Refer to Note 6.2. Acquisitions for more information on the
acquisition and its impact on Nokia’s financial position and
performance.
Cloud and Network Services
Cloud and Network Services segment provides open, fully
automated, and scalable software and solutions that accelerate
the journey of telecom providers and AI & Cloud and mission
critical enterprises to autonomous networks and new value
creation.
Cloud and Network Services segment invests in technologies
that are critical to our customers’ growth: 5G core, secure
autonomous networks, private wireless and industrial edge, and
network APIs. Delivered in a secure, Software-as-a-Service first
model, these solutions help customers capture the
opportunities of digitalization, AI & Cloud.
Mobile Networks
The Mobile Networks segment creates products and services
covering all mobile technology generations. Its portfolio
includes products for radio access networks (RAN) and
microwave radio (MWR) links for transport networks, and
solutions for network management, as well as network planning,
optimization, network deployment and technical support
services.
Nokia Technologies
Nokia Technologies segment conducts cellular, multimedia and
WiFi research and standardization, protects Nokia’s innovation
by securing patents and managing Nokia’s patent portfolio and
monetizes Nokia’s innovation through patent licensing. The
majority of net sales and related costs and expenses
attributable to licensing and patenting is recorded in Nokia
Technologies, while each segment separately records its own
research and development expenses.
Group Common and Other
Despite not being a reportable segment, Nokia also provides
segment-level information for Group Common and Other.
Group Common and Other includes certain corporate-level and
centrally managed expenses and revenues. Radio Frequency
Systems, which was managed as a separate entity, was included
in Group Common and Other until it was substantially divested
in 2024.
Changes in reporting structure in 2025
In 2025, Nokia made the following changes to its reporting
structure.
Managed Services business was moved from Cloud and Network
Services segment into Mobile Networks segment. The Managed
Services business provides outsourced network management of
multi-vendor RAN networks for operators. As the Cloud and
Network Services segment is increasingly transitioning towards
cloud-native software sales, “as-a-service” product offerings
and helping customers to monetize networks through API's,
Nokia believes that Managed Services is more aligned and fits
better with its Mobile Networks segment. Comparative financial
information has been recast accordingly.
Nokia changed the presentation of gains and losses from
venture fund investments, including the changes in fair value
and the fund management fees, from selling, general and
administrative expenses and other operating income to financial
income. The comparative financial information for the Nokia
Group, and Group Common and Other where the results of
venture fund investments had previously been included, has
been recast accordingly.
137 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Segment results | Network Infrastructure(1) | Cloud and Network Services | Mobile Networks | Nokia Technologies | Group Common and Other | Eliminations and unallocated items(2) | Nokia Group |
EURm | |||||||
2025 | |||||||
Net sales to external customers | ( | ||||||
Net sales to other segments | ( | ||||||
Cost of sales | ( | ( | ( | ( | ( | ( | |
Research and development expenses | ( | ( | ( | ( | ( | ( | ( |
Selling, general and administrative expenses | ( | ( | ( | ( | ( | ( | ( |
Other operating income and expenses | |||||||
Operating profit/(loss) | ( | ( | |||||
Share of results of associated companies and joint ventures | |||||||
Financial income and expenses | |||||||
Profit before tax | |||||||
Other segment items | |||||||
Depreciation and amortization | ( | ( | ( | ( | ( | ( | ( |
2024 | |||||||
Net sales to external customers | |||||||
Net sales to other segments | ( | ||||||
Cost of sales | ( | ( | ( | ( | ( | ( | ( |
Research and development expenses | ( | ( | ( | ( | ( | ( | ( |
Selling, general and administrative expenses | ( | ( | ( | ( | ( | ( | ( |
Other operating income and expenses | |||||||
Operating profit/(loss) | ( | ( | |||||
Share of results of associated companies and joint ventures | ( | ||||||
Financial income and expenses | |||||||
Profit before tax | |||||||
Other segment items | |||||||
Depreciation and amortization | ( | ( | ( | ( | ( | ( | ( |
2023 | |||||||
Net sales to external customers | |||||||
Net sales to other segments | ( | ( | |||||
Cost of sales | ( | ( | ( | ( | ( | ( | |
Research and development expenses | ( | ( | ( | ( | ( | ( | ( |
Selling, general and administrative expenses | ( | ( | ( | ( | ( | ( | ( |
Other operating income and expenses | |||||||
Operating profit/(loss) | ( | ( | |||||
Share of results of associated companies and joint ventures | ( | ( | ( | ||||
Financial income and expenses | ( | ||||||
Profit before tax | |||||||
Other segment items | |||||||
Depreciation and amortization | ( | ( | ( | ( | ( | ( | ( |
(1)In 2025, includes Optical Networks net sales of EUR 3 019 million (EUR 1 636 million in 2024 and EUR 1 942 million in 2023), IP Networks net sales of EUR 2 594 million (EUR 2 583 million in 2024 and EUR 2 606 million in 2023) and Fixed Networks net sales of EUR 2 373 million
(EUR 2 299 million in 2024 and EUR 2 369 million in 2023).
(2)For details of unallocated items, refer to the Reconciliation of total segment financial information to the Group financial information table in this note.
138 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Reconciliation of total segment financial information to the Group financial information
EURm | Net sales | Cost of sales | Research and development expenses | Selling, general and administrative expenses | Other operating income and expenses | Operating profit |
2025 | ||||||
Total segments(1) | ( | ( | ( | |||
Restructuring and associated charges | ( | ( | ( | ( | ( | |
Amortization and depreciation of acquired intangible assets and property, plant and equipment | ( | ( | ( | ( | ||
Release of acquisition-related fair value adjustments to deferred revenue and inventory | ( | ( | ( | |||
Provision for contractual claims | ( | ( | ||||
Other(2) | ( | ( | ( | ( | ||
Total reconciling items | ( | ( | ( | ( | ( | |
Total Group | ( | ( | ( | |||
2024 | ||||||
Total segments(1) | ( | ( | ( | |||
Restructuring and associated charges | ( | ( | ( | ( | ( | |
Amortization of acquired intangible assets | ( | ( | ( | |||
Divestment of associates | ||||||
Impairment and write-off of assets, net of reversals | ( | ( | ( | ( | ||
Disposal of businesses | ||||||
Other(2) | ( | ( | ( | ( | ||
Total reconciling items | ( | ( | ( | ( | ( | |
Total Group | ( | ( | ( | |||
2023 | ||||||
Total segments(1) | ( | ( | ( | |||
Restructuring and associated charges | ( | ( | ( | ( | ( | |
Amortization of acquired intangible assets | ( | ( | ( | |||
Other(2) | ( | ( | ( | |||
Total reconciling items | ( | ( | ( | ( | ( | |
Total Group | ( | ( | ( |
(1)Segments’ net sales and cost of sales include inter-segment net sales and cost of sales.
(2)Includes elimination of inter-segment net sales and cost of sales.
Information by geographies and customer
concentration
EURm | 2025 | 2024 | 2023 |
Finland | |||
United States | |||
India | |||
Great Britain | |||
Other | |||
Total |
Net sales to external customers by country are based on the
location of the customer, except for Nokia Technologies IPR and
licensing net sales which are allocated to Finland.
Major customers
In 2025, 2024 and 2023 no single customer represented more
than 10% of net sales.
EURm | 2025 | 2024 |
Finland | ||
United States | ||
France | ||
Other | ||
Total |
Non-current assets consists of goodwill, other intangible assets,
property, plant and equipment and right-of-use assets.
139 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
operating income
Nokia presents its income statement based on the
function of expenses as it considers this to provide more
relevant information about its financial performance.
Information about the nature of expenses is provided in
the notes. Certain items of income and expenses that
Nokia considers to be related to its operating activities but
not belonging to any specific functions, are presented as
other operating income and expenses.
expenses incurred are recognized as a reduction of the
related expenses except for certain non-recurring grants
that are recognized as other operating income.
Government grants received in the form of R&D tax credits
are recognized as a reduction of R&D expenses if the tax
credit relates to the R&D expenditures incurred by Nokia
and the tax credit is reimbursed in cash by the government
in cases where Nokia is not able to offset it against its
income tax payable. R&D tax credits that do not meet both
conditions are recognized as income tax benefit.
EURm | 2025 | 2024 | 2023 |
Personnel expenses | |||
Material and customer contract related expenses | |||
Depreciation and amortization | |||
IT services | |||
Impairment charges | |||
Other(1) | |||
Total |
(1)In 2025, Nokia changed the presentation of gains and losses from venture fund
investments from selling, general and administrative expenses and other
operating income to financial income. The comparative amounts for 2024 and
2023 have been recast accordingly.
Operating expenses include government grant income and R&D
tax credits of EUR 186 million (EUR 160 million in 2024 and
EUR 160 million in 2023) most of which have been recognized as
a deduction against research and development expenses.
EURm | 2025 | 2024 | 2023 |
Gain on sale of property, plant and equipment | |||
Gain on sale of associated companies | |||
Gain on sale of businesses | |||
Other | |||
Total |
(1)In 2025, Nokia changed the presentation of gains and losses from venture fund
investments from selling, general and administrative expenses and other
operating income to financial income. The comparative amounts for 2024 and
2023 have been recast accordingly.
Other operating expenses
EURm | 2025 | 2024 | 2023 |
Changes in provisions | ( | ||
Expected credit losses on trade receivables(1) | ( | ||
Foreign exchange gains on hedging forecasted sales and purchases | |||
Other | ( | ( | ( |
Total |
(1)In 2024, includes a decrease in loss allowance of EUR 111 million related to credit-
impaired trade receivables for which payments were received. Refer to Note 4.5.
EURm | 2025 | 2024 | 2023 |
Interest income on financial investments | |||
Interest income on financing components of other contracts | |||
Net interest income on defined benefit plans | |||
(Losses)/gains from venture funds⁽¹⁾ | ( | ( | |
Other financial income(2)(3) | ( | ( | |
Total |
(1)In 2025, Nokia changed the presentation of gains and losses from venture fund
investments from selling, general and administrative expenses and other
operating income to financial income. The comparative amounts for 2024 and
2023 have been recast accordingly.
(2)In 2025, includes an expense of EUR 49 million (expense of EUR 5 million in 2024
and expense of EUR 2 million in 2023) due to a change in the fair value of the
financial liability related to Nokia Shanghai Bell that was extinguished in 2025.
Refer to Note 5.2. Financial assets and liabilities.
(3)In 2025, includes EUR 3 million (EUR 79 million in 2024 and EUR 0 million in 2023)
fair value loss on equity investment in Vodafone Idea that was sold in April 2025.
Financial expenses
EURm | 2025 | 2024 | 2023 |
Interest expense on interest- bearing liabilities | ( | ( | ( |
Interest expense on financing components of other contracts(1) | ( | ( | ( |
Interest expense on lease liabilities | ( | ( | ( |
Net fair value losses on hedged items under fair value hedge accounting | ( | ( | ( |
Net fair value gains on hedging instruments under fair value hedge accounting | |||
Net foreign exchange gains/ (losses) | ( | ||
Other financial expenses(2) | ( | ( | ( |
Total | ( | ( | ( |
(1)In 2025, includes EUR 22 million (EUR 63 million in 2024 and EUR 106 million in
2023) related to the sale of receivables.
(2)In 2025, there was no change in loss allowance (decrease in loss allowance of EUR
credit-impaired customers financing-related loan receivables.
140 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Income tax expense comprises current tax and deferred tax.
Tax is recognized in the income statement except to the
extent that it relates to items recognized in other
comprehensive income, or directly in equity, in which case the
related tax is recognized in other comprehensive income or
equity, respectively.
Current taxes are calculated based on the results of the
Group companies in accordance with local tax laws and using
tax rates that are enacted or substantively enacted at the
reporting date. Corporate taxes withheld at the source of the
income on behalf of Group companies are accounted for as
income taxes when determined to represent a tax on net
income.
Deferred tax assets and liabilities are determined using the
balance sheet liability method for all temporary differences
arising between the tax bases of assets and liabilities and
their carrying amounts in the statement of financial position.
Deferred tax assets are recognized to the extent it is
probable that future taxable profit will be available against
which the unused tax losses, unused tax credits and
deductible temporary differences can be utilized in the
relevant jurisdictions. Deferred tax assets are assessed for
realizability at each reporting date. When facts and
circumstances indicate it is no longer probable that deferred
tax assets will be utilized, adjustments are made as
necessary.
Deferred tax liabilities are recognized for taxable temporary
differences, and for temporary differences that arise
between the fair value and the tax base of identifiable net
assets acquired in business combinations. Deferred tax
liabilities are not recognized if they arise from the initial
recognition of goodwill. Deferred tax liabilities are recognized
on taxable temporary differences associated with
investments in subsidiaries, associates and joint
arrangements, unless the timing of the reversal of the
temporary difference is controlled by Nokia, and it is probable
that the temporary difference will not reverse in the
foreseeable future.
Nokia applies the exception to recognizing and disclosing
information about deferred tax assets and liabilities related
to Pillar Two income taxes, as provided in the amendments to
IAS 12 issued in May 2023.
Deferred tax assets and deferred tax liabilities are measured
using the enacted or substantively enacted tax rates at the
reporting date that are expected to apply in the period when
the asset is realized or the liability is settled. Deferred tax
assets and liabilities are not discounted.
Deferred tax assets and deferred tax liabilities are offset for
presentation purposes when there is a legally enforceable
right to set off current tax assets against current tax
liabilities, and the deferred tax assets and deferred tax
liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different
taxable entities which intend either to settle current tax
liabilities and assets on a net basis, or realize the assets and
settle the liabilities simultaneously in each future period in
which significant amounts of deferred tax liabilities or
deferred tax assets are expected to be settled or recovered.
Nokia periodically evaluates positions taken in tax returns in
situations where applicable tax regulation is subject to
interpretation. The amounts of current and deferred tax
assets and liabilities are adjusted when it is considered
probable, i.e. more likely than not, that certain tax positions
may not be fully sustained upon review by tax authorities.
The amounts recorded are based on the most likely amount
or the expected value, depending on which method Nokia
expects to better predict the resolution of the uncertainty, at
each reporting date.
Nokia is subject to income taxes in the jurisdictions in
which it operates. Judgment is required in determining
current tax expense, uncertain tax positions, deferred tax
assets and deferred tax liabilities; and the extent to which
deferred tax assets can be recognized.
Estimates related to the recoverability of deferred tax
assets are based on forecast future taxable income and
tax planning strategies. Based on these estimates and
assumptions, at 31 December 2025, Nokia has
EUR 21 918 million (EUR 21 853 million in 2024) of unused
tax losses, unused tax credits and deductible temporary
differences for which no deferred tax assets are
recognized due to uncertainty of utilization. The majority
of the unrecognized deferred tax assets relate to France.
The utilization of deferred tax assets is dependent on
future taxable profit in excess of the profit arising from
the reversal of existing taxable temporary differences. The
recognition of deferred tax assets is based on the
assessment of whether it is probable that sufficient
taxable profit will be available in the future to utilize the
unused tax losses, unused tax credits and deductible
temporary differences before the unused tax losses and
unused tax credits expire. Recognition of deferred tax
assets involves judgment regarding the future financial
performance of the particular legal entity or tax group
that has recognized the deferred tax asset.
141 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Components of the income tax expense/benefit
EURm | 2025 | 2024 | 2023 |
Current tax expense | ( | ( | ( |
Deferred tax benefit/(expense) | ( | ||
Total | ( | ( | ( |
Income tax reconciliation
EURm | 2025 | 2024 | 2023 |
Income tax expense at statutory rate | ( | ( | ( |
Permanent differences | |||
Non-creditable withholding taxes | ( | ( | ( |
Income taxes for prior years | |||
Effect of different tax rates of subsidiaries operating in other jurisdictions | ( | ( | ( |
Effect of deferred tax assets not recognized(1) | ( | ( | ( |
Benefit arising from previously unrecognized deferred tax assets | |||
Net increase in uncertain tax positions | ( | ( | ( |
Change in income tax rates | ( | ( | |
Income taxes on undistributed earnings | ( | ( | |
Total | ( | ( | ( |
(1)In 2023, Nokia recognized a deferred tax expense and a decrease in deferred tax assets of EUR 0.4 billion due to an internal
transaction related to an operating model change that led to a remeasurement of deferred tax assets in Finland and the United
States.
Income tax liabilities and assets include a net liability of EUR 318 million (EUR 207 million in 2024)
relating to uncertain tax positions with inherently uncertain timing of cash outflows.
Prior period income tax returns for certain Group companies are under examination by local tax
authorities. Nokia has ongoing tax investigations in various jurisdictions, including Australia, Brazil,
China, France, India, Kenya, Mexico and United States. Nokia’s business and investments, especially
in emerging market countries, may be subject to uncertainties, including unfavorable or
unpredictable tax treatment. Management judgment and a degree of estimation are required in
determining the tax expense or benefit. Even though management does not expect that any
significant additional taxes in excess of those already provided for will arise as a result of these
examinations, the outcome or actual cost of settlement may vary materially from estimates.
Deferred tax assets and liabilities
2025 | 2024 | ||||||
Deferred | Deferred | Net | Deferred | Deferred | Net | ||
EURm | tax assets | tax liabilities | balance | tax assets | tax liabilities | balance | |
Tax losses carried forward and unused tax credits | |||||||
Undistributed earnings | ( | ( | |||||
Intangible assets and property, plant and equipment | ( | ( | |||||
Right-of-use assets | ( | ( | |||||
Defined benefit pension assets | ( | ( | |||||
Other non-current assets | ( | ( | |||||
Inventories | ( | ( | |||||
Other current assets | ( | ( | |||||
Lease liabilities | |||||||
Defined benefit pension and other post-employment liabilities | |||||||
Other non-current liabilities | ( | ||||||
Provisions | ( | ( | |||||
Other current liabilities | ( | ( | |||||
Other temporary differences | ( | ( | |||||
Total before netting | ( | ( | |||||
Netting of deferred tax assets and liabilities | ( | — | ( | — | |||
Total after netting | ( | ( | |||||
Nokia has undistributed earnings of EUR 433 million (EUR 377 million in 2024) for which a deferred
tax liability has not been recognized as these earnings will not be distributed in the foreseeable
future.
The Finnish Government announced changes to the corporate income tax regime that could see the
corporate income tax rate reduce from 20% to 18% starting from 1 January 2027. On the date of
issuing the financial statements, the legislation has not yet been enacted or substantively enacted.
If the legislative change is enacted as proposed, the change in the corporate income tax rate would
decrease Nokia's net deferred tax assets approximately by EUR 300 million resulting in
corresponding impact on income tax expense. The estimated impact of the proposed change is
based on temporary differences recognized at 31 December 2025.
Nokia continues to monitor the legislative process and will reflect the impact of the tax rate change
in the period in which it becomes substantively enacted.
142 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
EURm | 2025 | 2024 | 2023 |
1 January | |||
Recognized in income statement, continuing operations | ( | ||
Recognized in income statement, discontinued operations | ( | ||
Recognized in other comprehensive income | ( | ( | |
Acquisitions through business combinations(1) | |||
Disposals | ( | ||
Other | ( | ||
Translation differences | ( | ( | ( |
31 December |
(1)In 2025, acquisitions through business combinations relates to the acquisition of Infinera. For more information, refer to Note 6.2.
Acquisitions.
In addition, at 31 December 2025, Nokia has unrecognized deferred tax assets of which the
majority relate to France. These deferred tax assets have not been recognized due to uncertainty
regarding their utilization. A significant portion of the French unrecognized deferred tax assets are
indefinite in nature and available against future French tax liabilities, subject to a limitation of 50%
of annual taxable profits.
deferred tax asset was recognized due to uncertainty of utilization:
EURm | 2025 | 2024 |
Temporary differences | ||
Tax losses carried forward | ||
Tax credits | ||
Total |
Expiry of tax losses carried forward and unused tax credits:
2025 | 2024 | ||||||
EURm | Recognized | Unrecognized | Total | Recognized | Unrecognized | Total | |
Tax losses carried forward | |||||||
Within 10 years | |||||||
Thereafter | |||||||
No expiry | |||||||
Total | |||||||
Tax credits | |||||||
Within 10 years | |||||||
Thereafter | |||||||
No expiry | |||||||
Total | |||||||
Nokia continually evaluates the probability of utilizing its deferred tax assets and considers both
positive and negative evidence in its assessment. As the majority of the recognized deferred tax
assets relates to Finland, Nokia has considered the following factors in the assessment:
▪The recent years’ cumulative accounting and taxable profit in Finland;
▪Expectations regarding future financial performance in Finland; and
▪The relevant attributes underlying the deferred tax assets are generally not subject to expiry.
Nokia has established the pattern of material taxable and accounting profits in Finland and
continued to recognize deferred tax assets related to Finland. In its assessment, Nokia has not
applied any cut-off period, other than expiry under the relevant tax legislation. A significant portion
of the tax attributes for which the deferred tax assets relate to are indefinite in nature and
available fully against future Finnish tax liabilities. Due to the non-expiry of these assets, the
sensitivity of future profit projections affects mainly the period over which the deferred tax assets
are expected to be utilized. Nokia will continue to monitor the above factors related to Finland,
including in particular its actual profit record, in upcoming periods.
Income tax related to items of other comprehensive income
2025 | 2024 | 2023 | |||||||||
EURm | Gross | Tax | Net | Gross | Tax | Net | Gross | Tax | Net | ||
Remeasurements of defined benefit plans | ( | ( | ( | ( | ( | ||||||
Translation differences | ( | ( | ( | ( | ( | ||||||
Net investment hedges | ( | ( | ( | ( | |||||||
Cash flow and other hedges | ( | ( | ( | ||||||||
Financial assets at fair value through other comprehensive income | ( | ( | |||||||||
Other increase/(decrease), net | ( | ( | ( | ||||||||
Total | ( | ( | ( | ( | ( | ( | |||||
OECD Pillar Two model rules
Nokia is within the scope of the OECD Pillar Two model rules, which introduced a global minimum
tax rate of 15% per jurisdiction. Pillar Two legislation has been enacted in Finland, the jurisdiction in
which Nokia is incorporated, and is effective from 1 January 2024.
Nokia has performed an analysis of the impact of the Pillar Two legislation and based on this
analysis, in 2025, the impact on income tax expense is immaterial. The main elements of this
analysis were the following:
▪Current understanding of the interpretation of the rules.
▪Applicability of the safe harbors provided for in the Pillar Two legislation.
▪Analysis and calculations of potential income tax expense in respect of jurisdictions not meeting
safe harbor tests.
143 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Non-current assets or disposal groups are classified as held for sale if their carrying amounts
will be recovered principally through a sale transaction rather than through continuing use. Non-
current assets or disposal groups classified as held for sale are measured at the lower of their
carrying amount and fair value less costs to sell. Non-current assets classified as held for sale,
or included in a disposal group classified as held for sale, are not depreciated or amortized.
Discontinued operation is reported when a component of Nokia, comprising operations and
cash flows that can be clearly distinguished both operationally and for financial reporting
purposes from the rest of Nokia, has been disposed of or is classified as held for sale, and that
component represents a major line of business or geographical area of operations or is part of
a single coordinated plan to dispose of a separate major line of business or geographical area
of operations. Profit or loss from discontinued operations is reported separately from income
and expenses from continuing operations in the consolidated income statement, with prior
periods presented on a comparative basis. Intra-group revenues and expenses between
continuing and discontinued operations are eliminated.
In June 2024, Nokia entered into an agreement to sell its wholly owned subsidiary Alcatel
Submarine Networks (ASN) to the French State. As a result, Nokia classified the assets and liabilities
of ASN as held for sale and recorded an impairment loss of EUR 514 million on the measurement of
ASN's net assets to fair value less costs to sell. Concurrently, the Submarine Networks business,
which was previously reported as part of Network Infrastructure operating segment, was classified
as a discontinued operation.
The sale was completed on 31 December 2024. Upon completion, Nokia recorded a gain of EUR 29
million related to the sale and received a cash consideration of EUR 98 million from the sale. In
2025, Nokia recorded an additional gain on sale of EUR 22 million related to purchase price
adjustments and ASN meeting certain financial targets, and received an additional cash
consideration from the sale amounting to EUR 40 million.
Nokia retained a 20 % shareholding in ASN with board representation to ensure a smooth transition
until targeted exit, at which point it is planned for the French State to acquire Nokia’s remaining
interest. Nokia accounts for its remaining interest in ASN as an investment in an associated company.
Nokia classified its non-core standalone Submarine Networks business, a global provider of
submarine communication networks, as held-for-sale and a discontinued operation following
the announcement of its sale on 27 June 2024. For financial reporting purposes the
Submarine Networks business had been a separate cash-generating unit within the Network
Infrastructure reportable segment. Judgment was applied in determining that the Submarine
Networks business is a component of Nokia that represents a separate major line of business
EURm | 2025 | 2024 | 2023 |
Net sales | |||
Expenses | ( | ( | |
Operating profit | |||
Financial income and expenses | ( | ||
Impairment loss recognized on the remeasurement to fair value less costs to sell | ( | ||
Gain on sale | |||
Profit/(loss) from discontinued operations before tax | ( | ||
Income tax expense | ( | ( | |
Profit/(loss) from discontinued operations(1) | ( |
(1)Profit/loss from discontinued operations is attributable to the equity holders of the parent in its entirety.
EURm | 2025 | 2024 | 2023 |
Net cash flows from/(used in) operating activities | ( | ||
Net cash flows from/(used in) investing activities(1) | ( | ( | |
Net cash flows used in financing activities | ( | ( | |
Net cash flows from/(used in) discontinued operations | ( | ( |
(1)Cash proceeds from the disposal of the Submarine Networks business, net of cash disposed of, are included in net cash flows
from/used in investing activities of discontinued operations.
144 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Reconciliation of gain on sale of Submarine Networks business
EURm | 31 December 2024 |
Cash proceeds | |
Deferred cash consideration | |
Total consideration | |
Carrying amount of net assets on disposal | ( |
Cumulative other comprehensive income | |
Transaction costs | ( |
Fair value of retained interest in associate | |
Gain on sale before tax | |
Income tax | |
Gain on sale after tax |
Carrying amount of assets and liabilities on disposal
EURm | 31 December 2024 |
ASSETS | |
Property, plant and equipment | |
Deferred tax assets | |
Inventories | |
Trade receivables | |
Contract assets | |
Other current financial and firm commitment assets | |
Other assets | |
Cash and cash equivalents | |
Total assets | |
LIABILITIES | |
Lease liabilities | |
Provisions | |
Other financial and firm commitment liabilities | |
Trade payables | |
Contract liabilities | |
Accrued expenses related to customer projects | |
Other liabilities | |
Total liabilities | |
Net assets on disposal |
Basic earnings per share is calculated by dividing the profit or loss attributable to equity
holders of the parent by the weighted average number of shares outstanding during the year.
Diluted earnings per share is calculated by adjusting the profit or loss attributable to equity
holders of the parent, and the weighted average number of shares outstanding, for the
effects of all dilutive potential ordinary shares. Potential ordinary shares are excluded from
the calculation of diluted earnings per share when they are determined to be antidilutive.
EURm | 2025 | 2024 | 2023 |
Profit or loss attributable to equity holders of the parent | |||
Continuing operations | |||
Discontinued operations | ( | ||
Profit for the year | |||
Number of shares (000s) | |||
Weighted average number of shares outstanding | |||
Effect of potentially dilutive shares | |||
Performance shares | |||
Restricted shares and other(1) | |||
Total effect of potentially dilutive shares | |||
Adjusted weighted average number of shares | |||
(1)Includes the matching shares related to the employee share purchase plan. | |||
Earnings per share, EUR | |||
Basic earnings per share | |||
Continuing operations | |||
Discontinued operations | ( | ||
Profit for the year | |||
Diluted earnings per share | |||
Continuing operations | |||
Discontinued operations | ( | ||
Profit for the year | |||
145 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Section 3 |
Compensation
and benefits
This section provides information
on Nokia’s employee benefits
including remuneration of the
management and Board of
Directors. Employee benefits
comprise salaries and wages,
short-term cash incentives and
share-based payments, as well as
post-employment benefits in
accordance with the local
conditions and practices in the
countries in which Nokia operates.
Information about the
remuneration of the President and
CEO and Board of Directors is
provided in compliance with Finnish
Accounting Standards.
EURm | 2025 | 2024 | 2023 |
Salaries and wages(1) | |||
Pensions and other post- employment benefits | |||
Defined contribution plans | |||
Defined benefit plans(2) | |||
Share-based payments | |||
Social security costs | |||
Total |
(1)Includes termination benefits.
(2)Excludes amounts presented in financial income, refer to Note 3.4. Pensions and
other post-employment benefits.
Average number of employees
Number of employees | 2025 | 2024 | 2023 |
Continued Operations | |||
Discontinued Operations | |||
Total |
Remuneration of the Group Leadership Team
Group Leadership Team.
EURm | 2025 | 2024 | 2023 |
Short-term benefits | |||
Post-employment benefits(1) | |||
Share-based payments | |||
Termination benefits(2) | |||
Total |
(1)The members of the Group Leadership Team participate in the local retirement
programs applicable to employees in the country where they reside.
(2)Includes both termination payments and payments made under exceptional
contractual arrangements for lapsed equity awards.
Remuneration of the President and CEO
2025 | 2024 | 2023 | ||
EUR | Justin Hotard, from 1 April | Pekka Lundmark, until 31 March | Pekka Lundmark | Pekka Lundmark |
Base salary | ||||
Cash incentive payments | ||||
Share-based payment expenses(1) | ||||
Pension expenses | ||||
Other benefits(2) | ||||
Total | ||||
(1)Represents the expense for all outstanding equity grants recorded during the year.
(2)Other benefits consist of on-boarding and exit agreement benefits, and certain
fringe benefits.
Termination terms of President and CEO’s service agreement
The President and CEO, Justin Hotard, may terminate the
service agreement with 12 months’ notice, receiving salary and
benefits during the notice period or a lump sum equivalent, plus
any incentives vesting during the notice. As a general rule,
unvested equity awards are forfeited unless the Board decides
otherwise. If termination occurs due to Nokia’s material breach
of the agreement, the notice period may be reduced to two
months, and the CEO is entitled to severance equal to 12
months’ compensation including the notice period. In addition,
all his equity incentives vest, subject to any applicable
performance criteria, prorated until the expiry of the
agreement.
Nokia may terminate for cause without notice, with no
additional pay and forfeiture of unvested equity awards. For
termination without cause, the CEO receives 12 months’
compensation (incl. benefits and short-term incentives), with
unvested equity awards forfeited after the termination of the
agreement unless the Board decides otherwise. If termination
occurs within three months before or six months after a change
of control, the notice period may be reduced to three months
and the CEO receives 12 months’ remuneration and all his
equity incentives vest subject to performance and time
proration until the expiry of the agreement.
146 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Remuneration of the Board of Directors
2025 | 2024 | 2023 | |||||||||
Annual fee(1) EUR | Meeting fees(2) EUR | Shares received(3) number | Annual fee(1) EUR | Meeting fees(2) EUR | Shares received(3) number | Annual fee(1) EUR | Meeting fees(2) EUR | Shares received(3) number | |||
Sari Baldauf, Chair (4)(5) | |||||||||||
Timo Ihamuotila, Vice Chair(5) | |||||||||||
Søren Skou | |||||||||||
Timo Ahopelto(4)(6) | |||||||||||
Bruce Brown | |||||||||||
Elizabeth Crain(4)(5) | |||||||||||
Thomas Dannenfeldt(4)(7) | |||||||||||
Pernille Erenbjerg(7) | |||||||||||
Lisa Hook(5)(7) | |||||||||||
Jeanette Horan | |||||||||||
Edward Kozel | |||||||||||
Mike McNamara (6)(7) | |||||||||||
Thomas Saueressig(6) | |||||||||||
Carla Smits-Nusteling | |||||||||||
Kai Öistämö(5)(6) | |||||||||||
Total | |||||||||||
(1)Annual fees consist of Board member fees and Committee chair and member fees.
(2)Meeting fees include all meeting fees paid during the reported year.
(3)Approximately 40 % of each Board member’s annual compensation is paid in Nokia shares purchased from the market, and the remaining approximately 60 % is paid in cash.
(4)Annual fees in 2025 include EUR 30 000 for Thomas Dannenfeldt as Chair and EUR 15 000
(5)Annual fees in 2025 include EUR 20 000 10 000
(6)Annual fees in 2025 include EUR 20 000 10 000
(7)Annual fees in 2025 include EUR 30 000 for Thomas Dannenfeldt as Chair and EUR 15 000
147 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Nokia offers three types of global share-based
compensation plans for employees: performance shares,
restricted shares and the employee share purchase plan.
All plans are equity-settled.
Employee services received and the corresponding
increase in equity are measured by reference to the fair
value of the equity instruments at the grant date,
excluding the impact of any non-market vesting
conditions. Plans that apply tranched vesting are
accounted for under the graded vesting model. Share-
based compensation plans are generally conditional on
continued employment as well as the fulfillment of any
performance conditions specified in the award terms. Until
the Nokia shares are delivered, the participants do not
have any shareholder rights, such as voting or dividend
rights, associated with the shares. The share grants are
generally forfeited if the employment relationship with
Nokia terminates prior to vesting. Share-based
compensation is recognized as an expense over the
relevant service periods.
Share-based payment expense
In 2025, the share-based payment expense recognized in the
income statement for continuing operations for all share-based
compensation plans amounted to EUR 337 million (EUR 239
million in 2024 and EUR 201 million in 2023).
Performance shares
In 2025, Nokia had outstanding performance shares from
grants made in 2022, 2023, 2024 and 2025. Grants made for
performance shares are targeted on a limited basis to senior
level employees and executives.
Plan | Performance shares outstanding at target | Confirmed payout (% of target) | Performance period | Settlement year |
2022 | 2022-2024 | 2025/2026 | ||
2023 | 2023–2025 | 2026/2027 | ||
2024 | 2024–2026 | 2027/2028 | ||
2025 | 2025–2027 | 2028/2029 |
The 2022 Performance share grants have a three-year vesting
period where Nokia’s actual total shareholder return (ATSR) is
compared to the target total shareholder return to determine
the number of Nokia shares that will be delivered at settlement.
The 2022 Performance share grants do not include a minimum
payout guarantee.
The 2023 Performance share grants apply the ATSR
performance metric to two-thirds of the grant. For the
remaining one-third of the granted shares, the metrics are
either a service condition alone or a relative total shareholder
return (RTSR). RTSR grants measure Nokia’s share performance
against its peer group companies where minimum payout for
this metric requires Nokia to be at least in the 25th percentile
when compared with the peer group.
The 2024 and 2025 Performance share grants apply the
performance metrics to two-thirds of the grant. For the
remaining one-third of the granted shares, the metrics are
either a service condition or performance metrics. The
performance metrics of the 2024 and 2025 Performance share
grants are 50 40
non-recurring events, and 10
Restricted shares
In 2025, there were outstanding restricted shares from grants
made in 2022, 2023, 2024 and 2025. Nokia grants restricted
shares to selected employees as the primary method of equity
compensation. Restricted shares are Nokia shares that will be
delivered to eligible participants at a future point in time,
subject to the fulfillment of predetermined service conditions.
Restricted shares will either vest on the third anniversary of the
award or follow a tranche vesting schedule whereby each plan
vests in one or more tranches determined at the award date.
The restricted share grants are generally forfeited if the
employment relationship with Nokia terminates prior to vesting
of the applicable tranche or tranches.
Employee share purchase plan
Nokia offers a voluntary Employee Share Purchase Plan (ESPP)
to its employees. Participating employees make contributions
from their net salary to purchase Nokia shares on a monthly
basis during a 12-month savings period. Nokia delivers one
matching share for every two purchased shares the employee
holds at the end of the plan cycle. In 2025, 5 578 417 matching
shares were issued as a settlement to the participants of the
ESPP 2024 (7 455 343 matching shares issued under the 2023
Plan in 2024, and 6 726 190 matching shares issued under the
2022 Plan in 2023).
148 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Performance shares | Restricted shares | ||||
Number of shares outstanding at target | Weighted average grant date fair value (EUR) | Number of shares outstanding | Weighted average grant date fair value (EUR) | ||
1 January 2023 | |||||
Granted | |||||
Forfeited | ( | ( | |||
Vested(1) | ( | ( | |||
31 December 2023 | |||||
Granted | |||||
Forfeited | ( | ( | |||
Vested(1) | ( | ( | |||
31 December 2024 | |||||
Granted(2) | |||||
Forfeited | ( | ( | |||
Vested(1) | ( | ( | |||
31 December 2025 | |||||
(1)Vested performance shares at target are to be multiplied by the confirmed payout (% of target) to calculate the total number of Nokia shares settled.
(2)Number of granted restricted shares includes 39.4 million replacement share awards granted as part of the acquisition of Infinera. For more information on the replacement
awards as part of the purchase consideration, refer to Note 6.2. Acquisitions.
Estimation of grant date fair values
Plan | Grant date fair value |
ATSR | Estimated considering the dividend-adjusted Nokia share price at the end of the performance period of the plan and the target payout levels set for the plan. |
RTSR | Estimated considering a combination of the dividend-adjusted Nokia share price compared with benchmark companies’ share prices at the end of the performance period of the plan and the target payout levels set for the plan. |
Restricted Shares | Estimated using the grant date market price of the Nokia share less the present value of dividends expected to be paid during the vesting period. |
149 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Nokia has various post-employment plans in accordance with the local conditions and
practices in the countries in which it operates. Nokia’s defined benefit plans comprise pension
schemes as well as other benefit plans providing post-employment healthcare and life
insurance coverage to certain employee groups. Defined benefit plans expose Nokia to
various risks such as investment risk, interest rate risk, life expectancy risk, and regulatory/
compliance risk. The characteristics and extent of these risks vary depending on the legal,
fiscal and economic requirements in each country as well as the impact of global events. The
plans are generally funded through payments to insurance companies or contributions to
trustee-administered funds as determined by periodic actuarial calculations.
The costs of defined benefit plans are assessed using the projected unit credit method. The
defined benefit obligation is measured as the present value of the estimated future cash
outflows using interest rates on high-quality corporate bonds or government bonds with
maturities most closely matching expected payouts of benefits. The plan assets are measured
at fair value at the reporting date. Qualifying insurance contracts included within pension plan
assets are measured at fair value based upon the actuarial valuation of the underlying insured
liability. The liability or asset recognized in the statement of financial position is the present
value of the defined benefit obligation at the reporting date less the fair value of plan assets
adjusted for effects of any asset ceiling.
Actuarial valuations for defined benefit plans are performed annually or when a material plan
amendment, curtailment or settlement occurs. Service cost related to employees’ service in
the current period and past service cost resulting from plan amendments and curtailments, as
well as gains and losses on settlements, are presented in cost of sales, research and
development expenses or selling, general and administrative expenses. Net interest and
pension plan administration costs that are not considered in determining the return on plan
assets are presented in financial income and expenses. Remeasurements, comprising actuarial
gains and losses, the effect of the asset ceiling and the return on plan assets, excluding
amounts recognized in net interest, are recognized in other comprehensive income.
Remeasurements are not reclassified to profit or loss in subsequent periods.
In a defined contribution plan, Nokia’s legal or constructive obligation is limited to the amount
that it agrees to contribute to the plan. Nokia’s contributions to defined contribution plans,
multi-employer and insured plans are recognized in the income statement in the period to
which the contributions relate. If a pension plan is funded through an insurance contract
where Nokia does not retain any legal or constructive obligations, the plan is treated as a
defined contribution plan. All arrangements that do not fulfill these conditions are considered
defined benefit plans.
Defined benefit plans
Nokia’s most significant defined benefit plans are in the United States, Germany, and the United
Kingdom. Together, they account for 91 % of Nokia’s total defined benefit obligation (92 % in 2024)
and 89 % of Nokia’s total fair value of plan assets (91 % in 2024).
EURm | Defined benefit obligation | Fair value of plan assets | Effects of asset ceiling | Net defined benefit balance |
2025 | ||||
United States, Pension | ( | |||
United States, OPEB | ( | ( | ||
Germany | ( | ( | ||
United Kingdom | ( | |||
Other | ( | ( | ||
Total | ( | ( | ||
2024 | ||||
United States, Pension | ( | |||
United States, OPEB | ( | ( | ||
Germany | ( | ( | ||
United Kingdom | ( | |||
Other | ( | ( | ||
Total | ( | ( |
Funded status of defined benefit obligation:
EURm | 2025 | 2024 |
Wholly funded | ||
Partly funded | ||
Unfunded | ||
Total |
150 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
United States
Nokia has significant defined benefit pension plans and a significant post-employment welfare
benefit plan (OPEB) providing post-employment healthcare benefits and life insurance coverage in
the United States.
Defined Benefit Pension Plans
The defined benefit pension plans include both traditional service-based programs and cash-
balance plans. Salaried, non-union-represented employees are covered by a cash-balance program.
All other legacy programs, including legacy service-based programs, were frozen by 31 December
2009. For former employees who, when actively employed, were represented by a union, Nokia
maintained two defined benefit pension plans, both of which are traditional service-based
programs. On 31 December 2021, these two plans were merged. On 31 December 2025, the
remaining service-based plan for former union-represented employees was merged into the
service-based plan for non-union-represented employees.
Other Post-Employment Benefit Plan
The other post-employment benefit plan provides welfare benefits for certain retired former
employees. Pursuant to an agreement with the Communications Workers of America (CWA) and the
International Brotherhood of Electrical Workers (IBEW) unions, Nokia provides post-employment
healthcare benefits and life insurance coverage for employees formerly represented by these two
unions. That agreement was renewed in 2020, and the contract expires on 31 December 2027.
On 1 October 2024, Nokia transferred investment management operations for US Pension, OPEB
and 401(k) assets to Mercer Investments LLC in an Outsourced Investment Management (OCIO)
transaction.
Germany
Nokia maintains two primary plans in Germany which cover the majority of active employees: the
cash-balance plan Beitragsorientierter Altersversorgungs Plan (BAP) for the Group’s Nokia
employees and a similar cash-balance program (AVK Basis-/Matchingkonto) for the Group’s former
Alcatel-Lucent employees. Individual benefits are generally dependent on eligible compensation
levels, ranking within the Group and years of service. These plans are partially funded defined
benefit pension plans, the benefits being subject to a minimum return guaranteed by the Group.
The funding vehicle for the BAP is the NSN Pension Trust e.V. The trust is legally separate from the
Group and manages the plan assets in accordance with the respective trust agreements.
All other plans have been frozen or closed in prior years and replaced by the cash-balance plans.
Benefits are paid in annual installments, as monthly retirement pension, or as a lump sum on
retirement in an amount equal to accrued pensions and guaranteed interest.
United Kingdom
Nokia maintains one primary plan in the UK, “Nokia Retirement Plan for former NSN & ALU
employees”, which is the result of the 2019 merger of the legacy Nokia plan where the plan was
merged and members’ benefits were transferred to the legacy Alcatel-Lucent plan. The combined
plan consists of both money purchase sections with Guaranteed Minimum Pension (GMP) underpin
and final salary sections. All final salary sections are closed to future benefit accrual: the legacy
Nokia plan closed on 30 April 2012 and the legacy Alcatel-Lucent plan on 30 April 2018. Individual
benefits for final salary sections are dependent on eligible compensation levels and years of
service. For the money purchase sections with GMP underpin, individual benefits are dependent on
the greater of the value of GMP at retirement date and the pension value resulting from the
individual’s invested funds. Nokia engages the services of an external trustee service provider to
manage all investments for the combined pension plan. During 2024, Nokia completed a risk
transfer buy-out in the amount of EUR 178 million, with insurer Aviva, for certain beneficiaries
whose liability was covered by an existing insurance agreement.
In June 2025, the UK Government announced it would legislate a remedy for affected defined
benefit pension schemes, with regard to the implications of the ruling by the High Court in June
2023, and the dismissal of appeal by the Court of Appeal in July 2024, in the case of Virgin Media
Limited v NTL Pension Trustees II Ltd. Nokia’s UK Pension Trustee awaits further developments that
may impact this position from pending cases in UK courts that are expected in 2026. As of 31
December 2025, management has not identified any benefit uncertainties for which the potential
impact would need to be considered.
151 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Defined benefit obligation | 2025 | 2024 | |||||||
EURm | United States pension | United States OPEB | Other pension | Total | United States pension | United States OPEB | Other pension | Total | |
1 January | ( | ( | ( | ( | ( | ( | ( | ( | |
Current service cost | ( | ( | ( | ( | ( | ( | |||
Interest expense | ( | ( | ( | ( | ( | ( | ( | ( | |
Past service cost | ( | ( | ( | ( | ( | ||||
Settlements(1) | |||||||||
Total | ( | ( | ( | ( | ( | ( | ( | ( | |
Remeasurements: | |||||||||
(Loss)/gain from change in demographic assumptions | ( | ( | |||||||
(Loss)/gain from change in financial assumptions | ( | ( | ( | ||||||
Experience gain/(loss) | ( | ( | ( | ||||||
Total | ( | ( | ( | ||||||
Translation differences | ( | ( | ( | ( | |||||
Contributions from plan participants | ( | ( | ( | ( | ( | ( | |||
Benefits paid | |||||||||
Acquisitions through business combinations | ( | ( | |||||||
Other | ( | ( | ( | ||||||
Total | |||||||||
31 December | ( | ( | ( | ( | ( | ( | ( | ( | |
Weighted average duration of the defined benefit obligation (in years) | |||||||||
(1)In 2024, the settlement relates to the transfer of a liability in the amount of EUR 178 million to insurer Aviva as part of a buy-out transaction in the UK.
152 | Nokia Annual Report on Form 20-F 2025 |
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Fair value of plan assets | 2025 | 2024 | |||||||
EURm | United States pension | United States OPEB | Other pension | Total | United States pension | United States OPEB | Other pension | Total | |
1 January | |||||||||
Interest income | |||||||||
Administrative expenses and interest on asset ceiling | ( | ( | ( | ( | ( | ( | |||
Settlements(1) | ( | ( | |||||||
Total | ( | ||||||||
Remeasurements: | |||||||||
Return on plan assets, excluding amounts included in interest income | ( | ( | ( | ||||||
Total | ( | ( | ( | ||||||
Translation differences | ( | ( | ( | ( | |||||
Contributions: | |||||||||
Employers | |||||||||
Plan participants | |||||||||
Benefits paid | ( | ( | ( | ( | ( | ( | ( | ( | |
Acquisitions through business combinations | |||||||||
Section 420 transfer(2) | ( | ( | |||||||
Other | |||||||||
Total | ( | ( | ( | ( | ( | ( | ( | ( | |
31 December | |||||||||
(1)In 2024, the settlement primarily relates to transfer of assets in the amount of EUR 178 million to insurer Aviva as part of a buy-out transaction in the UK.
(2)Refer to the Future cash flows section below for description of Section 420 transfers.
The impact of the asset ceiling limitation | 2025 | 2024 | |||||||
EURm | United States pension | United States OPEB | Other pension | Total | United States pension | United States OPEB | Other pension | Total | |
1 January | ( | ( | ( | ( | |||||
Interest expense | ( | ( | ( | ( | |||||
Remeasurements: | |||||||||
Change in asset ceiling, excluding amounts included in interest expense | ( | ( | |||||||
Translation differences | ( | ( | ( | ( | |||||
31 December | ( | ( | ( | ( | |||||
Net balances | 2025 | 2024 | |||||||
EURm | United States pension | United States OPEB | Other pension | Total | United States pension | United States OPEB | Other pension | Total | |
31 December | ( | ( | |||||||
Consisting of: | |||||||||
Net pension assets | |||||||||
Net pension liabilities | ( | ( | ( | ( | ( | ( | ( | ( | |
153 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Recognized in the income statement(1)
EURm | 2025 | 2024 | 2023 |
Current service cost(2) | |||
Past service cost(2) | |||
Net interest(3) | ( | ( | ( |
Settlements(2) | ( | ||
Total | ( | ( | ( |
(1)In 2024 and 2023, amounts comprise both continuing and discontinued operations.
(2)Amounts related to continuing operations are presented in operating expenses within the income statement.
(3)Amounts related to continuing operations are presented in financial income within the income statement.
Recognized in other comprehensive income
EURm | 2025 | 2024 | 2023 |
Return on plan assets, excluding amounts included in interest income | ( | ( | |
(Loss)/gain from change in demographic assumptions | ( | ||
(Loss)/gain from change in financial assumptions | ( | ( | |
Experience gain/(loss) | ( | ||
Change in asset ceiling, excluding amounts included in interest expense | ( | ||
Total | ( | ( |
Actuarial assumptions and sensitivity analysis
Actuarial assumptions
Discount rate | Mortality table | |||
2025 | 2024 | 2025 | ||
United States(1) | Pri-2012 w/MP-2020 Mortality projection scale | |||
Germany | Heubeck 2018G | |||
United Kingdom(2) | CMI 2023 | |||
Total weighted average for all countries | ||||
(1)Mortality tables remain unchanged in the US. 2024 and 2025 mortality assumption includes an adjustment based upon actual
experience.
(2)Mortality tables for United Kingdom have been adjusted with 1.5 % long-term rate of improvement.
Assumptions regarding future mortality are set based on actuarial advice in accordance with
published statistics and experience in each country.
obligation and sensitivity of the defined benefit obligation to changes in these assumptions:
2025 | 2024 | Change in assumption | Increase in assumption(1) EURm | Decrease in assumption(1) EURm | |
Discount rate for determining present values | ( | ||||
Pension growth rate | ( | ||||
Inflation rate | ( | ||||
Life expectancy | ( |
(1)Positive movement indicates a reduction in the defined benefit obligation; a negative movement indicates an increase in the
defined benefit obligation.
Sensitivity analysis
When calculating the sensitivity of the defined benefit obligation to significant actuarial
assumptions, the present value of the defined benefit obligation is calculated using the projected
unit credit method. The sensitivity analyses are based on a change in an assumption while holding
all other assumptions constant and may not be representative of the actual impact of changes. If
more than one assumption is changed simultaneously, the combined impact of changes would not
necessarily be the same as the sum of the individual changes. If the assumptions change to a
different level compared with that presented, the effect on the defined benefit obligation may not
be linear. Increases and decreases in the principal assumptions, which are used in determining the
defined benefit obligation, do not have a symmetrical effect on the defined benefit obligation
primarily due to the compound interest effect created when determining the net present value of
the future benefit.
Key source of estimation uncertainty
The determination of pension and other post-employment benefit obligations and expenses
for defined benefit plans is dependent on a number of estimates and assumptions, including
the discount rate, future mortality rate, annual rate of increase in future compensation levels,
and healthcare costs trend rates and usage of services in the United States where the
majority of Nokia’s post-employment healthcare plans are maintained. Changes in
assumptions and actuarial estimates may materially affect the benefit obligation, future
expense and future cash flow.
154 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Investment strategies
The overall pension investment objective of Nokia is to preserve or enhance the defined benefit
pension plans’ funded status through the implementation of an investment strategy that
maximizes return within the context of minimizing funded status risk. In formulating the asset
allocation for the plans, multiple factors are considered, including, but not limited to, the long-term
risk and return expectations for a variety of asset classes as well as current and multi-year
projections of the defined benefit pension plans’ demographics, benefit payments, contributions
and funded status. Local trustee boards are responsible for conducting Asset-Liability Management
(ALM) studies, when appropriate; overseeing the investment of plan assets; and monitoring and
managing associated risks under company oversight and in accordance with local law. The results
of the ALM framework are implemented on a plan level.
Nokia’s pension investment managers may use derivative financial instruments including futures
contracts, forward contracts, options and interest rate swaps to manage market risk. The
performance and risk profile of investments is regularly monitored on a standalone basis as well as
in the broader portfolio context. One risk is a decline in the plan’s funded status as a result of the
adverse performance of plan assets and/or defined benefit obligations. The application of the ALM
study focuses on minimizing such risks.
United States plan assets
The majority of Nokia’s United States pension plan assets are held in a master pension trust. The
OPEB plan assets are held in two separate trusts. The Pension & Benefits Investment Committee
formally approves the target asset allocation following the proposal by Nokia’s OCIO provider. The
overall United States pension plan asset portfolio, at 31 December 2025, reflects a balance of
investments split of approximately 63 % insurance contracts, 32 % short-term investments and 5 %
other assets.
In November 2025, the Group entered into a buy-in transaction with a third party insurer to de-risk
EUR 8.9 billion of pension exposure in the US defined benefit pension scheme. The transaction was
fully funded from existing assets with no additional employer contributions required. Nokia retains
the pension liability, however this transaction transfers certain investment and longevity risks to
the insurer, enhancing the stability of the funding status and protection of Nokia US pension plan
member benefits further securing the plan’s ability to meet its future liabilities to plan participants.
The recognition of the insurance policy as a qualifying plan asset resulted in a gain of approximately
EUR 236 million recognized in other comprehensive income.
Disaggregation of plan assets
2025 | 2024 | ||||||||
EURm | Quoted | Unquoted | Total | % of total assets | Quoted | Unquoted | Total | % of total assets | |
Equity securities | |||||||||
Fixed income securities | |||||||||
Insurance contracts(1) | |||||||||
Real estate | |||||||||
Short-term investments | |||||||||
Private equity and other | |||||||||
Total | |||||||||
(1)In 2025, insurance contracts include a EUR 8.7 billion qualifying insurance contract related to the US buy-in transaction.
Most short-term investments including cash, equities and fixed-income securities have quoted
market prices in active markets. Equity securities represent investments in equity funds and direct
investments, which have quoted market prices in an active market. Fixed income securities
represent direct investments in government and corporate bonds, as well as investments in bond
funds, which have quoted market prices in an active market. Insurance contracts are customary
pension insurance contracts structured under domestic law in the respective countries. Real estate
investments are investments in commercial properties or real estate funds, which invest in a
diverse range of real estate properties. Private equity and other investments include investments in
private equity limited partnerships and absolute return investments in hedge funds.
Short-term investments are liquid assets or cash, which are being held for a short period of time,
with the primary purpose of controlling the tactical asset allocation. Private equity net asset values
(NAVs) are determined by the asset managers based on inputs such as operating results,
discounted future cash flows and market-based comparable data. Assets invested in alternative
asset classes such as private equity, real estate and absolute return are measured using latest
available valuations provided by the asset managers, reviewed by Nokia and adjusted for
subsequent cash flows.
155 | Nokia Annual Report on Form 20-F 2025 |
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Future cash flows
Contributions
Group contributions to the pension and other post-employment benefit plans are made to facilitate
future benefit payments to plan participants. The funding policy is to meet minimum funding
requirements as set forth in the employee benefit and tax laws, as well as any such additional
amounts as Nokia may determine appropriate. Contributions are made to benefit plans for the sole
benefit of plan participants. Employer contributions expected to be paid in 2026 total EUR 54
million.
United States
Funding methods
Funding requirements for the United States qualified defined benefit pension plan is determined by
the applicable statutes, namely the Employee Retirement Income Security Act of 1974 (ERISA), the
Internal Revenue Code of 1986, and regulations issued by the Internal Revenue Service (IRS). In
determining funding requirements, ERISA allows assets to be either fair value or an average value
over a period of time; and liabilities to be based on spot interest rates or average interest rates
over a period of time. For the non-represented and formerly represented defined benefit pension
plan, Nokia does not foresee any future funding requirement for regulatory funding purposes,
given the plan asset allocation and the level of assets compared to liabilities.
Post-employment healthcare benefits for both non-represented and formerly union represented
retirees are capped for those who retired after 28 February 1990. The benefit obligation
associated with this group of retirees is 96 % of the total United States retiree healthcare
obligation at 31 December 2025. The US government’s Medicare program is the primary payer for
those aged 65 and older.
Section 420 transfers
Section 420 of the U.S. Internal Revenue Code (Section 420) allows for the transfer of pension
assets in excess of specified thresholds above the plan’s funding obligation (excess pension assets)
to a retiree health benefits account, a retiree life insurance account, or both, maintained within the
pension plan and to use the assets in such accounts to pay for, or to reimburse the employer for
the cost of providing applicable health or life insurance benefits, each as defined in Section 420, for
retired employees, and with respect to health benefits, their spouses and dependents. Employers
making such transfers are required to continue to provide healthcare benefits or life insurance
coverage, as the case may be, for a certain period of time (cost maintenance period) at levels
prescribed by regulations. Pursuant to Section 420, Nokia has transferred EUR 35 million during
2025 (EUR 38 million in 2024). Section 420 is currently set to expire on 31 December 2032.
Benefit payments
and other post-employment benefit plans until 2035. Actual benefit payments may differ from
expected benefit payments.
US Pension | US OPEB | Other countries | Total | |||||||
EURm | Management | Occupational | Supplemental plans | Formerly union represented | Non-union represented | |||||
2026 | ||||||||||
2027 | ||||||||||
2028 | ||||||||||
2029 | ||||||||||
2030 | ||||||||||
2031–2035 | ||||||||||
Benefits are paid from plan assets where there is sufficient funding available to the plan to cover
the benefit obligation. Any payments in excess of the plan assets are paid directly by Nokia. Direct
benefit payments expected to be paid in 2026 total EUR 103 million.
156 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Section 4 |
Operating
assets and
liabilities
This section provides detailed
information on Nokia’s assets and
liabilities related to its operating
activities, such as tangible and
intangible fixed assets, leases,
inventories, trade receivables and
other customer related balances,
and provisions.
Intangible assets acquired separately are measured on initial
recognition at cost. Internally generated intangibles, except
for development costs that may be capitalized, are expensed
as incurred. Development costs are capitalized only if Nokia
has the technical feasibility to complete the asset; has an
ability and intention to use or sell the asset; can demonstrate
that the asset will generate future economic benefits; has
resources available to complete the asset; and has the ability
to measure reliably the expenditure during development.
The useful life of Nokia’s intangible assets, other than
goodwill, is finite. Following initial recognition, finite intangible
assets are carried at cost less accumulated amortization and
accumulated impairment losses. Intangible assets are
amortized over their useful lives, generally three years to
considered to best reflect the pattern in which the asset’s
future economic benefits are expected to be consumed.
Depending on the nature of the intangible asset, the
amortization charges for continuing operations are included
in cost of sales, research and development expenses or
selling, general and administrative expenses.
Goodwill is allocated to the groups of cash-generating units
that are expected to benefit from the synergies of the
related business combination and that reflect the lowest level
at which goodwill is monitored for internal management
purposes. A cash-generating unit, as determined for the
purposes of Nokia’s goodwill impairment testing, is the
smallest group of assets generating cash inflows that are
largely independent of the cash inflows from other assets or
groups of assets. The carrying values of the groups of cash-
generating units include their share of relevant corporate
assets allocated to them on a reasonable and consistent
basis. When the composition of one or more groups of cash-
generating units to which goodwill has been allocated is
changed, the goodwill is reallocated based on the relative
value of the affected groups of cash-generating units.
annually. In addition, Nokia assesses the recoverability of the
carrying value of goodwill and intangible assets if events
or changes in circumstances indicate that the carrying value
may be impaired. Factors that Nokia considers when it
reviews indications of impairment include, but are not limited
to, underperformance of the asset relative to its historical or
projected future results, significant changes in the manner of
using the asset or the strategy for the overall business, and
significant negative industry or economic trends.
Nokia conducts its impairment testing by determining the
recoverable amount for an asset, a cash-generating unit or
groups of cash-generating units. The recoverable amount of
an asset, a cash-generating unit or groups of cash-generating
units is the higher of its fair value less costs of disposal and
its value-in-use. The recoverable amount is compared to the
asset’s, cash-generating unit’s or groups of cash-generating
units’ carrying value. If the recoverable amount for the asset,
cash-generating unit or groups of cash-generating units is
less than its carrying value, the asset is considered impaired
and is written down to its recoverable amount. Impairment
losses are presented in cost of sales, research and
development expenses or selling, general and administrative
expenses, except for impairment losses on goodwill, which
are presented in other operating expenses.
157 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
EURm | Goodwill | Intangible assets | Total |
2025 | |||
Acquisition cost at 1 January | |||
Additions | |||
Acquisitions through business combinations(1) | |||
Disposals and retirements | ( | ( | |
Translation differences | ( | ( | ( |
Acquisition cost at 31 December | |||
Accumulated amortization and impairment charges at 1 January | ( | ( | ( |
Amortization | ( | ( | |
Impairment | ( | ( | |
Disposals and retirements | |||
Translation differences | |||
Accumulated amortization and impairment charges at 31 December | ( | ( | ( |
Net book value at 1 January | |||
Net book value at 31 December | |||
2024 | |||
Acquisition cost at 1 January | |||
Additions | |||
Acquisitions through business combinations | |||
Assets held for sale | ( | ( | ( |
Disposals and retirements | ( | ( | ( |
Translation differences | |||
Acquisition cost at 31 December | |||
Accumulated amortization and impairment charges at 1 January | ( | ( | ( |
Amortization | ( | ( | |
Assets held for sale | |||
Disposals and retirements | |||
Translation differences | ( | ( | ( |
Accumulated amortization and impairment charges at 31 December | ( | ( | ( |
Net book value at 1 January | |||
Net book value at 31 December |
(1)In 2025, acquisitions through business combinations relates to the acquisition of Infinera. For more information, refer to Note 6.2. Acquisitions.
asset
EURm | 2025 | 2024 |
Customer relationships | ||
Patents and licenses | ||
Technologies and IPR&D | ||
Tradenames and other | ||
Intangible assets under construction | ||
Total |
period
Years | 31 December 2025 |
Customer relationships | |
Patents and licenses | |
Technologies and IPR&D | |
Tradenames and other |
158 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Goodwill
Nokia has allocated goodwill to its operating segments corresponding to groups of cash-generating
units (CGUs) that are expected to benefit from goodwill. Refer to Note 2.2. Segment information.
Allocation of goodwill
EURm | 2025 | 2024 |
Network Infrastructure | ||
Cloud and Network Services(1) | ||
Mobile Networks(1) |
(1)In 2025, includes EUR 79
transfer of Managed Services
Recoverable amounts
The recoverable amounts of the groups of CGUs in 2025 were based on value-in-use that was
determined using a discounted cash flow calculation. The cash flow projections approved by
management were based on financial plans covering a forecast period of five years that reflects
management’s expectations of recovery from the market-driven mid-term decrease in sales and
market cyclicality, especially in the Mobile Networks segment and accelerated growth in Network
Infrastructure segment, followed by a five-year period that then converge to the steady state cash
flow projection modelled in the terminal year. The terminal growth rate assumptions do not exceed
long-term average growth rates for the industries and economies in which the groups of CGUs
operate.
The discount rates reflect current assessments of the time value of money and relevant market risk
premiums considering risks and uncertainties for which the future cash flow estimates have not been
adjusted. Discounted cash flow projections are based on post-tax cash flows and post-tax discount
rates, which do not materially differ from the pre-tax basis discounted cash flow projections.
CGUs:
Terminal growth rate | Post-tax discount rate | ||||
Key assumption % | 2025 | 2024 | 2025 | 2024 | |
Network Infrastructure | |||||
Cloud and Network Services | |||||
Mobile Networks | |||||
Other key variables in future cash flow projections include assumptions on estimated sales growth,
gross margin and operating margin. Sales growth and gross margin assumptions reflect
management expectations of addressable market growth, market share and competitive position,
as well as Nokia’s strategy and long-term business outlook. Gross margin and operating margin
assumptions include the impact of the ongoing efficiency, investment discipline and cost savings
initiatives, which are expected to reduce cost base and increase operational leverage throughout
the operating segments.
The results of the impairment testing indicate adequate headroom for each group of CGUs in 2025.
159 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment
losses. Depreciation is recorded on a straight-line basis
over the expected useful lives of the assets as follows:
Buildings and constructions | |
Buildings and constructions | |
Light buildings and constructions | |
Machinery and equipment | |
Production machinery and measuring and test equipment | |
Other machinery and equipment |
Maintenance, repairs and renewals are generally expensed
in the period in which they are incurred. However, major
renovations are capitalized and included in the carrying
amount of the asset when it is probable that future
economic benefits in excess of the originally assessed
standard of performance of the existing asset will flow to
Nokia. Major renovations are depreciated over the
remaining useful life of the related asset. Leasehold
improvements are depreciated over the shorter of the
lease term and the useful life. Gains and losses on the
disposal of property, plant and equipment are included in
other operating income or expenses.
EURm | Land, buildings and constructions | Machinery, equipment and other | Assets under construction | Total |
2025 | ||||
Acquisition cost at 1 January | ||||
Additions | ||||
Acquisitions through business combinations | ||||
Reclassifications | ( | |||
Disposals and retirements | ( | ( | ( | ( |
Translation differences | ( | ( | ( | ( |
Acquisition cost at 31 December | ||||
Accumulated depreciation at 1 January | ( | ( | ( | |
Depreciation | ( | ( | ( | |
Disposals and retirements | ||||
Translation differences | ||||
Accumulated depreciation at 31 December | ( | ( | ( | |
Net book value at 1 January | ||||
Net book value at 31 December | ||||
2024 | ||||
Acquisition cost at 1 January | ||||
Additions | ||||
Reclassifications | ( | |||
Disposals and retirements | ( | ( | ( | ( |
Assets held for sale | ( | ( | ( | ( |
Translation differences | ||||
Acquisition cost at 31 December | ||||
Accumulated depreciation at 1 January | ( | ( | ( | |
Depreciation | ( | ( | ( | |
Impairment | ( | ( | ||
Disposals and retirements | ||||
Assets held for sale | ||||
Translation differences | ( | ( | ( | |
Accumulated depreciation at 31 December | ( | ( | ( | |
Net book value at 1 January | ||||
Net book value at 31 December |
160 | Nokia Annual Report on Form 20-F 2025 |
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In the majority of its lease agreements, Nokia is acting as a
lessee. Nokia’s leased assets relate mostly to commercial
and industrial properties such as R&D, production and
office facilities. Nokia also leases vehicles provided as
employee benefits and service vehicles. There are only
minor lease contracts, mainly concerning subleases of
vacant leasehold or freehold facilities, where Nokia is
acting as a lessor.
As a lessee, Nokia recognizes a right-of-use asset and a
lease liability at the commencement date of the lease.
Right-of-use assets are measured at cost less
accumulated depreciation and impairment losses, and
adjusted for any remeasurements of the lease liabilities.
basis over the lease term as follows:
Buildings | |
Other |
Lease liabilities are initially measured at the present value
of the lease payments made over the lease term. Nokia
uses its incremental borrowing rate to calculate the
present value as the interest rate implicit in the lease is
not readily determinable. Subsequently, lease liabilities are
measured on an amortized cost basis using the effective
interest method. In addition, lease liabilities are
remeasured if there is a lease modification, a change in
the lease term or a change in the future lease payments.
The interest component of the lease payments is
recognized as interest expense in financial expenses.
Nokia applies practical expedients whereby the payments
for short-term leases and leases of low-value assets are
recognized as an operating expense on a straight-line
basis over the lease term. In addition, Nokia does not
separate certain non-lease components from lease
components but instead accounts for each lease
component and associated non-lease component as a
single lease component.
EURm | Buildings | Other | Total |
2025 | |||
Acquisition cost at 1 January | |||
Additions(1) | |||
Acquisitions through business combinations | |||
Retirements | ( | ( | ( |
Translation differences | ( | ( | ( |
Acquisition cost at 31 December | |||
Accumulated depreciation at 1 January | ( | ( | ( |
Depreciation | ( | ( | ( |
Retirements | |||
Translation differences | |||
Accumulated depreciation at 31 December | ( | ( | ( |
Net book value at 1 January | |||
Net book value at 31 December | |||
2024 | |||
Acquisition cost at 1 January | |||
Additions(1) | |||
Assets held for sale | ( | ( | ( |
Retirements | ( | ( | ( |
Translation differences | |||
Acquisition cost at 31 December | |||
Accumulated depreciation at 1 January | ( | ( | ( |
Depreciation | ( | ( | ( |
Impairment | ( | ( | |
Assets held for sale | |||
Retirements | |||
Translation differences | ( | ( | ( |
Accumulated depreciation at 31 December | ( | ( | ( |
Net book value at 1 January | |||
Net book value at 31 December |
(1)Additions comprise new lease contracts as well as modifications and
remeasurements of existing lease contracts.
EURm | 2025 | 2024 | 2023 |
Depreciation of right-of-use assets(1) | ( | ( | ( |
Interest expense on lease liabilities(1) | ( | ( | ( |
Impairment charges, net of reversals | ( | ||
Total | ( | ( | ( |
(1)In 2024 and 2023, amounts comprise both continuing and discontinued
operations.
Amounts recognized in the income statement presented above
exclude expenses relating to short-term leases and leases of
low-value assets and income from subleasing right-of-use
assets as these are immaterial.
flows
EURm | 2025 | 2024 | 2023 |
Payment of principal portion of lease liabilities(1) | ( | ( | ( |
Interest paid on lease liabilities(1) | ( | ( | ( |
Total | ( | ( | ( |
(1)In 2024 and 2023, amounts comprise both continuing and discontinued
operations.
Amounts reported in the statement of cash flows exclude
payments for short-term leases and leases of low-value assets.
The maturity analysis of lease liabilities is presented in Note 5.4.
Financial risk management. Commitments related to future
lease contracts are presented in Note 6.1. Commitments,
contingencies and legal proceedings.
161 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Inventories are measured at the lower of cost and net
realizable value. Cost is determined using standard cost,
which approximates actual cost on a first-in first-out (FIFO)
basis. In addition to the cost of materials and direct labor,
an appropriate proportion of production overheads is
allocated to the cost of inventory. Net realizable value is the
estimated selling price in the ordinary course of business
less the estimated costs necessary to make the sale.
Contract work in progress comprises costs incurred to
date for customer contracts where the contractual
performance obligations are not yet satisfied. Contract
work in progress will be recognized as cost of sales when
the corresponding revenue is recognized.
EURm | 2025 | 2024 |
Raw materials and semi-finished goods | ||
Finished goods | ||
Contract work in progress | ||
Total |
Inventories recognized as an expense during the year in respect
of continuing operations was EUR 5 728 million in 2025
(EUR 5 050 million in 2024 and EUR 7 115 million in 2023).
During the year write-downs of inventories to net realizable
value totaled EUR 142 million (EUR 259 million in 2024 and
EUR 287 million in 2023) and reversals of previous inventory
write-downs totaled EUR 41 million (EUR 54 million in 2024 and
EUR 88 million in 2023). The write-downs and reversals of
previous write-downs have been included in cost of sales.
Previous write-downs have been reversed primarily as a result
of changes in estimated customer demand.
The amount of inventories expected to be recovered after more
than 12 months was EUR 561 million at 31 December 2025 (EUR
4.5. Trade receivables and other customer-related balances |
Nokia presents its customer contracts in the statement of
financial position as either a contract asset or a contract
liability, depending on the relationship between Nokia’s
performance and the customer’s payment for each individual
contract. On a net basis, a contract asset position represents
where Nokia has performed by transferring goods or services
to a customer before the customer has provided the
associated consideration or before payment is due.
Conversely, a contract liability position represents where a
customer has paid consideration or payment is due, but
Nokia has not yet transferred goods or services to the
customer. Contract assets presented in the statement of
financial position are current in nature while contract
liabilities can be either current or non-current.
Invoices are generally issued as control transfers and/or as
services are rendered. Invoiced receivables represent an
unconditional right to receive the consideration and only the
passage of time is required before the consideration is
received. Invoiced receivables are presented separately from
contract assets as trade receivables in the statement of
financial position. Trade receivables may be converted to
customer loan receivables in certain cases where extended
payment terms are requested. From time to time Nokia may
also extend loans to other third parties and these loans are
accounted for similarly as customer loan receivables. Nokia
sells trade receivables and customer loan receivables to
various financial institutions primarily without recourse in the
normal course of business, in order to manage credit risk and
working capital cycle.
The business model for managing trade receivables and
customer loan receivables is holding receivables to collect
contractual cash flows and selling receivables. Trade
receivables and customer loan receivables are initially
recognized and subsequently remeasured at fair value using
the discounted cash flow method.
The changes in fair value are recognized in the fair value
reserve through other comprehensive income. Interest
calculated using the effective interest method as well as
foreign exchange gains and losses are recognized in financial
income and expenses.
Discounts without performance obligations presented on the
statement of financial position in other current liabilities
relate to discounts given to customers which will be
executable upon satisfying specific criteria. As these
discounts become executable, they are netted against
related trade receivables or customer loan receivables.
Expected Credit Losses
Loss allowance for expected credit losses (ECL) is recognized
on financial assets measured at amortized cost and financial
assets measured at fair value through other comprehensive
income, as well as on financial guarantee contracts and loan
commitments. Nokia continuously assesses its financial
instruments on a forward-looking basis and accounts for the
changes in ECL on a quarterly basis using the following method:
▪ECL = PD x LGD x EAD
▪Probability of Default (PD) is based on the credit rating
profile of the counterparties as well as specific local
circumstances as applicable, unless there are specific
events that would indicate that the credit rating would
not be an appropriate basis for estimating credit risk at
the reporting date.
▪For Loss Given Default (LGD), the recovery rate is based
on the type of receivable, specific local circumstances as
applicable and related collateral arrangements, if any.
▪Exposure at Default (EAD) is normally the nominal value of
the receivable.
162 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Nokia applies a simplified approach to recognize a loss
allowance based on lifetime ECL on trade receivables and
contract assets without significant financing components.
Based on quantitative and qualitative analysis, Nokia has
determined that the credit risk exposure arising from its
trade receivables is low risk. Quantitative analysis focuses
on historical loss rates, historic and projected sales and
the corresponding trade receivables, and overdue trade
receivables including indicators of any deterioration in the
recovery expectation. Qualitative analysis focuses on all
relevant conditions, including customer and country credit
rating, to improve the accuracy of estimating lifetime ECL.
For customer loan receivables, the ECL is calculated
separately for each significant counterparty using the
method described above, including the impact of any
collateral arrangements or other credit enhancements to
LGD. The estimate is based on 12-month ECL unless there
has been a significant increase in credit risk for the specific
counterparty since the initial recognition, in which case
lifetime ECL is estimated. Breaches of contract, credit
rating downgrades and other credit measures are typical
indicators that Nokia takes into consideration when
assessing whether the credit risk on a financial instrument
has increased significantly since initial recognition. Nokia
considers additional indicators to determine if a financial
asset is credit-impaired including whether the
counterparty is in significant financial difficulties and
whether it is becoming probable that the customer will
enter bankruptcy or financial reorganization. Typically
customer loan credit risk is higher than credit risk of trade
receivables and contract assets on average.
The change in the amount of ECL for trade receivables and
contract assets is recognized in other operating expenses
and for customer loan receivables in financial expenses.
For customer loan receivables, the loss allowance is
recorded as an adjustment in other comprehensive
income instead of adjusting the carrying amount that has
already been recorded at fair value. If trade receivables
and customer loan receivables are sold, the impact of ECL
is reversed and the difference between the carrying
amount derecognized and the consideration received is
recognized in financial expenses.
Customer-related balances
Nokia aims to ensure the highest possible quality in trade receivables and contract assets, as well as customer loan receivables. The
Credit Risk Management Standard Operating Procedure (CRMSOP), approved by Nokia’s Chief Financial Officer, lays out the framework
for the management of business-related credit risks. The CRMSOP sets out that credit decisions are based on credit evaluation in each
business, including credit rating and limits for larger exposures, according to defined principles. Group level limit approvals are
required for material credit exposures. Credit risks are monitored in each business and, where appropriate, mitigated on a case-by-
case basis with the use of letters of credit, collaterals, sponsor guarantees, credit insurance and sale of selected receivables.
Past due | |||||
EURm | Current | 1-30 days | 31-180 days | > 180 days | Total |
2025 | |||||
Trade receivables(1) | |||||
Contract assets | |||||
Customer financing-related loan receivables | |||||
Total gross receivables | |||||
Expected credit loss allowance | ( | ( | ( | ( | ( |
Total net receivables | |||||
2024 | |||||
Trade receivables(1) | |||||
Contract assets | |||||
Customer financing-related loan receivables | |||||
Total gross receivables | |||||
Expected credit loss allowance | ( | ( | ( | ( | ( |
Total net receivables | |||||
(1)Nokia’s payment terms are 80 days (89 days in 2024) on average.
The reversal of ECL credited to the income statement was EUR 50 million (EUR 137 million 2024 and EUR 16 million in 2023).
At 31 December 2025, the total ECL related to credit-impaired assets amounted to EUR 30 million (EUR 62 million in 2024 and EUR 396
million in 2023). In 2024, the reduction of ECL related to credit-impaired assets of EUR 334 million includes releases of EUR 233 million
related to assets that were written off during the year and EUR 111 million related to assets for which payments were received.
163 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Credit risk exposure by customer and country
Credit exposure is measured as the total of trade receivables, contract assets and loans
outstanding from customers and committed credits. Trade receivables do not include any major
concentrations of credit risk by customer.
as well as loans and loan commitments to customers:
Customer | 2025 | 2024 |
Customer 1 | ||
Customer 2 | ||
Customer 3 | ||
Total | ||
Country | 2025 | 2024 |
United States | ||
Country 2 | ||
Country 3 | ||
Total |
Contract assets and contract liabilities
Contract asset balances decrease upon reclassification to trade receivables when Nokia’s right to
payment becomes unconditional. Contract liability balances decrease when Nokia satisfies the
related performance obligations and revenue is recognized. There were no material cumulative
adjustments to revenue recognized arising from changes in transaction prices, changes in
measures of progress or changes in estimated variable consideration.
During the year, Nokia recognized EUR 1.0 billion (EUR 1.5 billion in 2024 of which EUR 0.1 billion
related to discontinued operations sold in 2024) of revenue that was included in the current
contract liability balance at the beginning of the period.
EURm | 2025 | 2024 |
R&D tax credits | ||
Indirect tax receivables | ||
Other | ||
Total |
Other current receivables
EURm | 2025 | 2024 |
VAT and other indirect tax receivables | ||
Prepayments related to contract manufacturing | ||
IT-related prepaid expenses | ||
R&D tax credits and grant receivables | ||
Divestment-related receivables | ||
Other | ||
Total |
EURm | 2025 | 2024 |
Salaries, wages and social charges | ||
Other | ||
Total |
Other current liabilities
EURm | 2025 | 2024 |
Salaries, wages and social charges | ||
Accrued expenses related to customer projects | ||
Discounts without performance obligations | ||
VAT and other indirect tax payables | ||
Other(1) | ||
Total |
(1)Includes accrued logistics, R&D and IT expenses.
164 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Provision is recognized when Nokia has a present legal or
constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to
settle the obligation and a reliable estimate of the amount
can be made. Management judgment may be required in
determining whether it is probable that an outflow of
economic benefits will be required to settle the obligation.
The amount recognized as a provision is based on the best
estimate of unavoidable costs required to settle the
obligation at the end of the reporting period.
When estimating the amount of unavoidable costs,
management may be required to consider a range of
possible outcomes and their associated probabilities, risks
and uncertainties surrounding the events and
circumstances, as well as making assumptions about the
timing of payment. Changes in estimates of timing or
amounts of costs required to settle the obligation may
become necessary as time passes and/or more accurate
information becomes available. Nokia assesses the
adequacy of its existing provisions and adjusts the
amounts as necessary based on actual experience and
changes in facts and circumstances at each reporting date.
EURm | Restructuring | Litigation and environmental(1) | Warranty | Material liability | Other | Total |
1 January 2025 | ||||||
Business combinations | ||||||
Charged to income statement | ||||||
Additions(2) | ||||||
Reversals | ( | ( | ( | ( | ( | ( |
Total charged/(credited) to income statement | ( | ( | ||||
Utilized during year(3) | ( | ( | ( | ( | ( | ( |
Translation differences and other | ( | ( | ( | ( | ( | ( |
31 December 2025 | ||||||
Non-current | ||||||
Current |
(1)Environmental provision was EUR 130 million at 31 December 2025 (EUR 152 million at 31 December 2024).
(2)Additions to warranty provision are primarily due to a contract settlement related to a customer specific project that started in 2019.
Restructuring provision
Nokia provides for the estimated cost to restructure when a detailed formal plan of restructuring has been completed, approved by
management, and announced. Restructuring costs consist primarily of personnel restructuring charges. The other main components are
costs associated with exiting real estate locations, and costs of terminating certain other contracts directly linked to the restructuring.
At 31 December 2025, the restructuring provision consists primarily of amounts related to the announcements made by Nokia on 16
March 2021 and 19 October 2023. The majority of the restructuring cash outflows is expected to occur over the next two years .
Litigation and environmental provisions
Nokia provides for the estimated future settlements related to legal proceedings based on the probable outcome of the claims. Nokia
also provides for environmental remediation when Nokia becomes obliged, legally or constructively, to rectify environmental damage
relating to soil, groundwater, surface water or sediment contamination. Cash outflows related to the litigation and environmental
liabilities are inherently uncertain and generally occur over several periods. For a presentation of legal matters potentially affecting
Nokia, refer to Note 6.1. Commitments, contingencies and legal proceedings.
Warranty provision
Nokia provides for the estimated liability to repair or replace products under standard warranty at the time revenue is recognized. The
provision estimate is based on historical experience of the level of repairs and replacements. Cash outflows related to the warranty
provision are generally expected to occur in the next 18 months.
Material liability provision
Nokia recognizes the estimated liability for non-cancellable purchase commitments for inventory in excess of forecasted requirements
at each reporting date. Cash outflows related to the material liability provision are expected to occur over the next 12 months.
Other provisions
Nokia provides for various legal and constructive obligations such as project losses, indirect tax provisions, divestment-related
provisions, certain employee-related provisions other than restructuring provisions and asset retirement obligations. Cash outflows
related to other provisions are generally expected to occur over the next two years .
165 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Section 5 |
Capital and
financial
instruments
This section provides information
on shareholders’ equity,
shareholders’ remuneration and
Nokia’s capital management
objectives. Furthermore, this
section comprises the policies and
disclosures related to Nokia’s
financial assets and liabilities and
hedge accounting, as well as
information on Nokia’s financial
risks and financial risk
management principles
and objectives.
Shares and share capital
Share capital
Nokia Corporation has one class of shares. Each share entitles
the holder to one vote at general meetings. The shares have no
par value nor is there a minimum or maximum share capital or
number of shares under the Articles of Association of Nokia
Corporation. The share capital amounted to
EUR 245 896 461.96
consisted of 5 742 239 696 (5 605 850 345 in 2024) issued and
fully paid shares.
In 2025, Nokia Corporation issued 166 389 351 new shares at
the subscription price of USD 6.01 per share, corresponding to
EUR 5.16 per share, in a directed share issue to NVIDIA
Corporation. The total proceeds of USD 1 000 million (EUR 850
million, net of the share issuance costs) were recognized in the
reserve for invested unrestricted equity. Nokia will use the
proceeds from the issuance to accelerate its strategic plans to
advance trusted connectivity for the AI supercycle and other
general corporate purposes.
In addition, Nokia Corporation issued in a directed share issue
consideration and canceled 150 000 000 (157 646 220 in 2024
related to the share buyback program announced in January
2024) shares it had repurchased under the share buyback
program announced in November 2024.
Share premium
Share premium reserve includes the Parent Company’s share
premium account and the equity impact of employee services
related to equity-settled share-based compensation plans.
Treasury shares
At 31 December 2025, the number of Nokia shares held by the
Group companies was 159 705 525 (232 700 997 in 2024)
representing 2.8 % (4.2 % in 2024) of the share capital and total
voting rights.
In 2025, Nokia repurchased 130 813 954 shares under its share
buyback program announced in November 2024 (176 832 266
shares in 2024 under the share buyback programs announced in
January and November 2024). The shares repurchased under
the November 2024 program were canceled in April 2025.
On 28 February 2025, Nokia completed the acquisition of
Infinera. The aggregated consideration transferred included
Note 6.2. Acquisitions for more information.
Additionally in 2025, Nokia Corporation transferred without
consideration 46 374 440 (24 380 761 in 2024) shares held by
the Company to employees, including certain members of the
Group Leadership Team, as settlement of the Group’s equity-
based incentive plans and the employee share purchase plan.
Number of shares outstanding at the beginning and at the end
of the period
Number of shares 000s | 2025 | 2024 | 2023 |
1 January | |||
Settlement of share-based payments | |||
Shares issued as consideration for business combinations | |||
Directed share issue | |||
Acquisition of treasury shares | ( | ( | ( |
31 December |
Nature and purpose of other equity reserves
Translation differences
Translation differences consist of foreign exchange differences
arising from translation of foreign operations into euro, the
presentation currency of the consolidated financial statements,
as well as gains and losses related to hedging of net
investments in foreign operations.
Fair value and other reserves
Pension remeasurements
Pension remeasurements reserve includes actuarial gains and
losses as well as return on plan assets and changes in the effect
of the asset ceiling, excluding amounts recognized in net
interest, related to Nokia’s defined benefit plans.
Hedging reserve
Hedging reserve includes the change in fair value that reflects
the change in spot exchange rates for certain foreign exchange
forward contracts and foreign exchange options, as well as the
part of cross-currency swaps that is designated as a cash flow
hedge to the extent that the hedges are effective.
166 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Cost of hedging reserve
Cost of hedging reserve includes the forward element of foreign
exchange forward contracts and the time value of foreign
exchange options related to cash flow hedging of forecast
foreign currency sale and purchase transactions. Additionally,
cost of hedging reserve includes the difference between the
change in fair value of the forward element of foreign exchange
forward contracts and the time value of option contracts and
the amortization of the forward element of foreign exchange
forward contracts and time value of option contracts related to
net investment hedging. Cost of hedging reserve also includes
changes in fair value from foreign currency basis spread related
to fair value hedging of foreign currency denominated bonds.
Fair value reserve
Fair value reserve includes the changes in fair value of financial
instruments that are managed in a portfolio with a business
model of holding financial instruments to collect contractual
cash flows including principal and interest, as well as selling
financial instruments. The fair value changes recorded in fair
value reserve for these instruments are reduced by amounts of
loss allowances.
Reserve for invested unrestricted equity
The reserve for invested unrestricted equity includes that part
of the subscription price of issued shares that according to the
share issue decision is not to be recorded to the share capital as
well as other equity inputs that are not recorded to some other
reserve. The amount received for treasury shares is recorded to
the reserve for invested unrestricted equity, unless it is
provided in the share issue decision that it is to be recorded in
full or in part to the share capital. The Nokia shares repurchased
under the 2022, January 2024 and November 2024 share
buyback programs were funded using funds in the reserve for
invested unrestricted equity.
Fair value and other reserves | |||||
EURm | Translation differences(1) | Pension remeasurements | Hedging reserve | Cost of hedging reserve | Fair value reserve |
1 January 2023 | ( | ( | |||
Foreign exchange translation differences | ( | ||||
Net investment hedging gains | |||||
Remeasurements of defined benefit plans | ( | ||||
Net fair value gains/(losses) | — | — | ( | ( | |
Transfer to income statement | — | ( | |||
Movement attributable to non-controlling interests | |||||
31 December 2023 | ( | ( | ( | ||
Foreign exchange translation differences | |||||
Net investment hedging losses | ( | ( | |||
Remeasurements of defined benefit plans | |||||
Net fair value gains/(losses) | — | — | ( | ||
Transfer to income statement | ( | — | ( | ( | |
Movement attributable to non-controlling interests | ( | ||||
31 December 2024 | ( | ||||
Foreign exchange translation differences | ( | ||||
Net investment hedging gains | |||||
Remeasurements of defined benefit plans | ( | ||||
Net fair value gains/(losses) | — | — | ( | ||
Transfer to income statement | ( | — | ( | ( | |
Other increase | |||||
Movement attributable to non-controlling interests | |||||
31 December 2025 | ( | ( | ( | ||
(1)At 31 December 2025, translation differences include a EUR 244 million gain related to net investment hedging (EUR 154 million gain in 2024 and EUR 186 million gain in 2023).
167 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Capital management
For capital management purposes Nokia defines capital as total
equity and interest-bearing liabilities less cash and cash
equivalents, current interest-bearing financial investments and
non-current interest-bearing financial investments.
The main objectives of Nokia’s capital management are to
maintain a solid overall financial position and to ensure
sufficient financial flexibility to execute Nokia’s long-term
business strategy and to provide returns to shareholders. From
a cash perspective, Nokia aims to maintain the balance of its
cash and cash equivalents and interest-bearing financial
investments less interest-bearing liabilities at 10 -15 % of annual
net sales over time. To support these objectives, Nokia aims to
maintain investment grade credit ratings. At 31 December
2025, Nokia’s long-term credit ratings are BBB- (stable) by
Fitch, Ba1 (positive) by Moody’s, and BBB- (stable) by S&P
Global.
With regards to shareholder remuneration, Nokia targets
recurring, stable and over time growing ordinary dividend
payments, taking into account the previous year’s earnings as
well as the Company’s financial position and business outlook.
Nokia may also use share repurchases as a tool to manage its
capital structure through the reduction of capital and distribute
excess cash to the shareholders.
Distribution of funds
Nokia distributes funds to its shareholders in two ways: a) as
dividends from retained earnings and/or as assets from the
reserve for invested unrestricted equity, and b) by repurchasing
shares using funds in the unrestricted equity. The amount of
any distribution is limited to the Parent Company's distributable
funds and subject to its solvency, and may not exceed the
amount proposed by the Board of Directors.
Dividend and/or assets from the reserve for unrestricted
invested equity
For the financial year 2025
Nokia’s Board of Directors proposes to the Annual General
Meeting 2026 that no dividend is distributed by a resolution of
the AGM for the financial year ended on 31 December 2025.
Instead, the Board proposes to be authorized to decide, in its
discretion, on the distribution of an aggregate maximum of EUR
assets from the reserve for invested unrestricted equity. The
authorization would be used to distribute dividend and/or
assets from the reserve for invested unrestricted equity in four
installments during the period of validity of the authorization
unless the Board decides otherwise for a justified reason.
Distributions of dividend and/or assets from the reserve for
invested unrestricted equity are recognized as a reduction of
equity and a liability when the Board has decided on the
distribution. On the date of issuing the financial statements for
2025, the total number of Nokia shares is 5 742 239 696 , based
on which the total amount of distribution would be EUR 804
million. The total number of shares includes the shares held by
the Parent Company which are not entitled to a distribution.
For the financial year 2024
The AGM in 2025 resolved to authorize the Board of Directors
to decide on the distribution of an aggregate maximum
of EUR 0.14 per share as dividend from the retained earnings
and/or as assets from the reserve of invested unrestricted
equity for the financial year 2024. The authorization was used
to distribute a dividend in four installments. During 2025, three
installments of dividend were distributed amounting to EUR
installment of EUR 0.03 per share and EUR 168 million in total
was paid in February 2026. The total amount of dividend paid
for the financial year 2024 was EUR 761 million.
For the financial year 2023
For the financial year 2023, a total dividend of EUR 709 million,
corresponding to EUR 0.13 per share, was paid.
Share buyback programs
November 2024 program
In November 2024, Nokia launched a share buyback program to
offset the dilutive effect of the acquisition of Infinera
completed on 28 February 2025. The repurchases commenced
on 25 November 2024 and ended on 2 April 2025. Nokia
repurchased in total 150 000 000 shares under the program of
which 130 813 954 shares were purchased in 2025. The
aggregate purchase price of all shares acquired under the
program was EUR 703 million, and the average price per share
was EUR 4.69 .
The repurchases were funded using funds in the reserve for
invested unrestricted equity in accordance with the
authorization given to the Board of Directors by the AGM, and
hence the repurchases reduced Nokia's total unrestricted
equity. The repurchased shares were canceled in April 2025.
January 2024 program
In January 2024, Nokia’s Board of Directors initiated a share
buyback program targeting to return up to EUR 600 million of
cash to shareholders in tranches over a period of two years .
The purchases under the first phase of the program
commenced on 20 March 2024. In July 2024, Nokia announced
it had decided to accelerate the repurchases in a way that the
whole share buyback program would be completed by the end
of 2024. During the program, which ended on 21 November
2024, Nokia repurchased 157 646 220 shares. The aggregate
purchase price of all shares acquired was EUR 600 million, and
the average price per share was EUR 3.81 .
The repurchases were funded using funds in the reserve for
invested unrestricted equity, and hence the repurchases
reduced Nokia’s total unrestricted equity. The repurchased
shares were canceled in December 2024.
168 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
The 2022 program
In February 2022, Nokia’s Board of Directors initiated a share
buyback program targeting to return up to EUR 600 million of
cash to shareholders in tranches over a period of two years .
In the first phase of the program, which was launched on
11 February 2022 and which ended on 11 November 2022,
Nokia repurchased 63 963 583 shares. The aggregate purchase
price of all shares acquired in the first phase was EUR 300
million, and the average price per share was EUR 4.69 . The
repurchased shares were canceled in December 2022.
In the second phase of the program, which was launched on
2 January 2023 and which ended on 10 November 2023, Nokia
repurchased 78 301 011 shares. The aggregate purchase price
of all shares acquired under the second phase of the program
was EUR 300 million, and the average price per share was EUR
The repurchases were funded using funds in the reserve for
invested unrestricted equity, and hence the repurchases
reduced Nokia’s total unrestricted equity.
Authorizations given to the Board of Directors
The following authorizations related to the issue and
repurchase of shares were given to the Board of Directors at
the AGM held on 29 April 2025.
Authorization to issue shares and special rights entitling to
shares
The shareholders authorized the Board to issue a maximum of
number of Nokia’s shares, through issuance of shares or special
rights entitling to shares in one or more issues during the
effective period of the authorization. The Board is authorized to
issue either new shares or shares held by Nokia. Shares and
special rights entitling to shares may be issued in deviation
from the shareholders’ pre-emptive rights within the limits set
by law. The authorization may be used to develop Nokia’s
capital structure, diversify the shareholder base, finance or
carry out acquisitions or other arrangements, settle Nokia’s
equity-based incentive plans or for other purposes resolved by
the Board of Directors.
The authorization is effective until 28 October 2026, and it
terminated the previous authorizations to issue shares and
special rights entitling to shares.
Authorization to repurchase shares
The shareholders authorized the Board to repurchase a
maximum of 530 million shares, corresponding to less than
unrestricted equity, which means that the repurchases will
reduce Nokia’s distributable funds. The price paid for the shares
under the authorization shall be based on the market price of
Nokia shares on the securities markets on the date of the
repurchase or a price otherwise formed in a competitive
process. Shares may be repurchased to be cancelled, held to be
reissued, transferred further or for other purposes resolved by
the Board of Directors. The Company may enter into derivative,
share lending or other arrangements customary in capital
market practice. The shares may be repurchased otherwise than
in proportion to the shares held by the shareholders. The Board
shall resolve on all other matters related to the repurchase of
Nokia shares.
The authorization is effective until 28 October 2026, and it
terminated the previous authorization to repurchase shares to
the extent that the Board has not previously resolved to
repurchase shares based on such authorization.
169 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Fair value
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. Financial
assets and liabilities measured at fair value are categorized
based on the availability of observable inputs used to
measure their fair value. Three hierarchical levels are based
on an increasing amount of judgment associated with the
inputs used to derive fair valuation for these assets and
liabilities, Level 1 being market values for exchange traded
products, Level 2 being primarily based on publicly available
market information and Level 3 requiring most management
judgment.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in
their economic best interest, by using quoted market rates,
discounted cash flow analyses and other appropriate
valuation models. Nokia uses valuation techniques that are
appropriate in the circumstances and for which sufficient
data is available to measure fair value, maximizing the use of
relevant observable inputs and minimizing the use of
unobservable inputs. At the end of each reporting period, all
financial assets and liabilities, that are either measured at fair
value on a recurring basis or for which fair values are
disclosed in the financial statements, are categorized within
the fair value hierarchy based on the lowest level input that is
significant to the fair value measurement as a whole.
Classification and measurement
Financial assets
Nokia classifies its financial assets that are debt instruments
in the following three categories: financial assets measured at
amortized cost, financial assets measured at fair value
through other comprehensive income, and financial assets
measured at fair value through profit and loss. The selection
of the appropriate category is made based on both Nokia’s
business model for managing the financial asset and on the
contractual cash flow characteristics of the asset. Equity
instruments and derivative financial assets are measured at
fair value through profit and loss.
Nokia’s business model for managing financial assets is defined
on a portfolio level. The business model must be observable on a
practical level by the way the business is managed. The cash
flows of financial assets measured at amortized cost are solely
payments of principal and interest. These assets are held within
a business model that has an objective to hold assets to collect
contractual cash flows. Financial assets measured at fair value
through other comprehensive income have cash flows that are
solely payments of principal and interest, and these assets are
held within a business model that has an objective that is
achieved both by holding financial assets to collect contractual
cash flows and selling financial assets. For these categories, a
loss allowance is calculated on a quarterly basis based on a
review of collectability (probability of default) and available
collateral (loss given default) for the asset, recorded as an
adjustment to the carrying amount of the asset and recognized
in other financial expenses in the income statement.
Financial assets measured at fair value through profit and loss
are assets that do not fall in either of the categories in the
paragraph above. Additionally, the accounting for financial assets
depends on whether the financial asset is part of a hedging
relationship (refer to Note 5.3. Derivative assets and liabilities).
All purchases and sales of financial assets are recorded on the
trade date, i.e. when Nokia commits to purchase or sell the
asset. All financial assets are initially measured at fair value and
subsequently remeasured according to their classification.
Subsequently, instruments classified as fair value through profit
or loss and instruments classified as fair value through other
comprehensive income are remeasured at fair value, while
instruments classified as amortized cost are remeasured using
the effective interest rate method. For instruments classified as
fair value through profit or loss, the fair value adjustments and
foreign exchange gains and losses are recognized in the income
statement either in other operating income and expenses or
financial income and expenses as determined by the purpose of
the instruments. For instruments classified as fair value through
other comprehensive income, changes in fair value are
recognized in the fair value reserve through other
comprehensive income (refer to Note 5.1. Equity).
For instruments classified as amortized cost, interest
calculated using the effective interest method, as well as
foreign exchange gains and losses, are recognized in financial
income and expenses in the income statement.
A financial asset is derecognized when substantially all the
risks and rewards related to the financial asset have been
transferred to a third party that assumes control of the
asset. On derecognition of a financial asset, the difference
between the carrying amount and the consideration received
is recognized in the income statement either in other
operating income and expenses or financial income and
expenses as determined by the purpose of the instrument.
The FIFO method is used to determine the cost basis of
financial assets at amortized cost that are disposed of.
Financial liabilities
Nokia classifies its financial liabilities as financial liabilities
measured at amortized cost except for derivative liabilities
and the conditional obligation related to Nokia Shanghai Bell,
which are classified as financial liabilities at fair value through
profit and loss.
All financial liabilities are initially recognized at fair value and,
in the case of borrowings and payables, net of transaction
costs. Financial liabilities are subsequently remeasured
according to their classification.
For financial liabilities measured at amortized cost, interest
calculated using the effective interest method, as well as
foreign exchange gains and losses, are recognized in financial
income and expenses in the income statement.
Financial liabilities are derecognized when the related
obligation is discharged, canceled or expired. Additionally, a
substantial modification of the terms of an existing financial
liability is accounted for as a derecognition of the original
financial liability and the recognition of a new financial liability.
On derecognition of a financial liability, the difference
between the carrying amount extinguished and the
consideration paid is recognized in financial income or
expenses in the income statement.
170 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
2025 | 2024 | ||||||||||||||||||||
Carrying amounts | Fair value(1) | Carrying amounts | Fair value(1) | ||||||||||||||||||
Fair value through profit or loss | Fair value through other comprehensive income(2) | Fair value through profit or loss | Fair value through other comprehensive income(2) | ||||||||||||||||||
EURm | Amortized cost | Level 1 | Level 2 | Level 3 | Level 2 | Total | Total | Amortized cost | Level 1 | Level 2 | Level 3 | Level 2 | Total | Total | |||||||
Non-current interest-bearing financial investments | |||||||||||||||||||||
Venture funds and similar equity investments | |||||||||||||||||||||
Other non-current financial assets | |||||||||||||||||||||
Other current financial assets | |||||||||||||||||||||
Derivative assets(3) | |||||||||||||||||||||
Trade receivables(4) | |||||||||||||||||||||
Current interest-bearing financial investments | |||||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||||
Total financial assets | |||||||||||||||||||||
Long-term interest-bearing liabilities | |||||||||||||||||||||
Other long-term financial liabilities | |||||||||||||||||||||
Short-term interest-bearing liabilities | |||||||||||||||||||||
Other short-term financial liabilities(5) | |||||||||||||||||||||
Derivative liabilities(3) | |||||||||||||||||||||
Discounts without performance obligations(4) | |||||||||||||||||||||
Trade payables | |||||||||||||||||||||
Total financial liabilities | |||||||||||||||||||||
(1)The following fair value measurement methods are used for items not carried at fair value: The fair values of long-term interest-bearing liabilities, including current portion, are primarily based on publicly available market information (level 2). The fair values of other assets
and liabilities, including loan receivables and loans payable, are primarily based on discounted cash flow analysis (level 2). The fair value is estimated to equal the carrying amount for short-term financial assets and financial liabilities due to limited credit risk and short time to
maturity.
(2)No financial instruments measured at fair value through other comprehensive income are categorized in fair value hierarchy level 1 or level 3.
(3)For further information on derivative assets and liabilities, refer to Note 5.3. Derivative assets and liabilities.
(4)For further information on trade receivables and discounts without performance obligation, refer to Note 4.5. Trade receivables and other customer-related balances.
(5)In 2024, other financial liabilities included a liability related to Nokia's share buyback program reflecting Nokia’s commitment under the agreement with a third-party broker conducting the share repurchases on Nokia’s behalf.
171 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Financial assets
Interest-bearing financial investments
Nokia invests a portion of the corporate cash needed to cover
the projected cash outflows of its ongoing business operations
in highly liquid, interest-bearing investments. Interest-bearing
financial investments may include investments measured at
amortized cost and investments measured at fair value through
profit and loss.
Non-current interest-bearing financial investments are
investments in highly liquid corporate bonds that are long-term
in nature based on their initial maturity and are measured at
amortized cost using the effective interest method.
Current interest-bearing financial investments in bank deposits,
as well as fixed income and money market securities with an
initial maturity or put feature longer than three months, that
have characteristics of solely payments of principal and interest
and are not part of structured investments, are managed in a
portfolio with a business model of holding investments to
collect principal and interest and are measured at amortized
cost using the effective interest method. These investments are
executed with the main purpose of collecting contractual cash
flows and principal repayments. However, investments are sold
from time to time for liquidity management and market risk
mitigation purposes.
Current interest-bearing financial investments may also include
money market funds that do not qualify as cash equivalents,
investments acquired for trading purposes, investment
structures consisting of securities traded in combination with
derivatives with complementing and typically offsetting risk
factors and other investments that have cash flows not being
solely payments of principal and interest. These investments
are executed for capital appreciation and other investment
returns and can be sold at any time. These investments are
classified as fair value through profit or loss, with fair value
adjustments, foreign exchange gains and losses and realized
gains and losses recognized in financial income and expenses in
the income statement. The fair values of these investments are
based on publicly available market information.
Corporate cash investments in bank deposits used as collateral
for derivative transactions are measured at amortized cost
using the effective interest method.
Other financial assets
Other non-current financial assets include unlisted private
equity and unlisted venture fund investments, including
investments managed by NGP Capital which specializes in
growth-stage investing. These investments do not fulfill the
criteria of being solely payments of principal and interest and
they are classified as investments at fair value through profit
and loss. The fair value of these level 3 investments is
determined using one or more valuation techniques where the
use of the market approach generally consists of using
comparable market transactions, while the use of the income
approach generally consists of calculating the net present value
of expected future cash flows.
For unlisted funds, the selection of appropriate valuation
techniques by the fund managing partner may depend on the
availability and reliability of relevant inputs. In some cases, one
valuation technique may provide the best indication of fair value
while in other circumstances multiple valuation techniques may
be appropriate.
Inputs generally considered include the original transaction
price, recent transactions in the same or similar instruments,
completed or pending third-party transactions in the underlying
investment or comparable issuers, subsequent rounds of
financing, recapitalizations or other transactions undertaken by
the issuer, offerings in the equity or debt capital markets, and
changes in financial ratios or cash flows, adjusted as
appropriate for liquidity, credit, market and/or other risk
factors. The fair value may be adjusted to reflect illiquidity and/
or non-transferability, with the amount of such discount
estimated by the managing partner in the absence of market
information.
Level 3 investments are remeasured at each reporting date
taking into consideration any changes in estimates, projections
and assumptions, as well as any changes in economic and other
relevant conditions. These investments include approximately
50 separate venture funds investing in hundreds of individual
companies in various sectors and geographies, focusing on AI,
data infrastructure, digital health, software and enterprise
sectors.
Hence, specific estimates and assumptions used in the absence
of observable inputs do impact the fair value of individual
investments, but no individual input has a significant impact on
the aggregated fair value of level 3 investments.
Fair value adjustments, foreign exchange gains and losses, and
realized gains and losses from the disposal of these
investments are recognized in financial income.
From time to time Nokia may have investments in listed equity
shares classified as level 1 investments. These are exchange
traded products with quoted prices readily and regularly
available from an exchange representing actual and regularly
occurring market transactions on an arm’s length basis.
Other non-current financial assets also include restricted assets
and other receivables, customer financing-related loan
receivables (refer to Note 4.5. Trade receivables and other
customer-related balances) and certain other financial assets of
a long-term nature.
Restricted assets and other receivables include restricted bank
deposits primarily related to employee benefits as well as other
loan receivables measured at amortized cost using the effective
interest method.
The cash flows of certain other financial assets of a long-term
nature do not fulfill the criteria of being solely payments of
principal and interest. These investments are measured at fair
value using quoted market rates, discounted cash flow models
or other appropriate valuation methods as of the reporting date.
Fair value adjustments, foreign exchange gains and losses, and
realized gains and losses from the disposal of these investments
are mainly recognized in financial income and expenses.
Other current financial assets include the current part of other
non-current financial assets as well as short-term loan
receivables measured at amortized cost using the effective
interest method.
Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand as
well as highly liquid, fixed income and money market
investments that are readily convertible to known amounts of
cash with maturities at acquisition of three months or less, as
well as bank deposits with maturities or contractual call periods
at acquisition of three months or less. Due to the high credit
quality and short-term nature of these investments, there is an
insignificant risk of change in value. Investments in money
market funds that have a risk profile consistent with the
aforementioned criteria are also classified as cash equivalents.
172 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Investments that have cash flows that are solely payments of
principal and interest are measured at amortized cost using the
effective interest method whereas all other investments are
classified as fair value through profit and loss, with fair value
adjustments and foreign exchange gains and losses recognized
in financial income and expenses. The fair values of these
investments are based on publicly available market information.
Financial liabilities
Interest-bearing liabilities
Interest-bearing liabilities are measured at amortized cost using
the effective interest method. Long-term and short-term
interest-bearing liabilities include issued bonds and other
borrowings. Short-term interest-bearing liabilities also include
the current portion of long-term interest-bearing liabilities and
collaterals for derivative transactions.
Other financial liabilities
In 2024, other financial liabilities included a liability related to
Nokia's share buyback program.
In 2024, other financial liabilities also included a liability related
to a contractual arrangement Nokia entered into with China
Huaxin Post & Telecommunication Economy Development
Center (China Huaxin), the non-controlling shareholder in Nokia
Shanghai Bell (NSB), in 2017. The arrangement provided China
Huaxin with the right to fully transfer its ownership interest in
NSB to Nokia and Nokia with the right to purchase China
Huaxin’s ownership interest in NSB. To reflect this, Nokia
derecognized the non-controlling interest in NSB and
recognized a level 3 financial liability.
This financial liability was measured based on the expected cash
settlement with any changes recorded in financial income and
expenses. The measurement of the financial liability involved
estimation of the acquisition price and the distribution of
excess cash balances. Unobservable valuation inputs included
certain financial performance metrics of NSB. No individual
input had a significant impact on the total fair value.
Trade payables
Trade payables are carried at invoiced amount in the statement
of financial position. Trade payables include balances payable to
suppliers under reverse factoring arrangements with financial
institutions. The related payments are classified as cash flows
from operating activities (refer to Note 5.4. Financial risk
management).
Interest-bearing loans and other borrowings
All borrowings presented in the table below are senior unsecured and have no financial covenants.
Carrying amount EURm(1) | ||||||
Issuer/borrower | Instrument | Currency | Nominal (million) | Final maturity | 2025 | 2024 |
Nokia Corporation | EIB R&D Loan | EUR | 2/2025 | |||
Nokia Corporation | NIB R&D Loan | EUR | 5/2025 | |||
Nokia Corporation | EUR | 5/2025 | ||||
Nokia Corporation | EUR | 3/2026 | ||||
Nokia Corporation | USD | 6/2027 | ||||
Nokia of America Corporation | USD | 1/2028 | ||||
Nokia Corporation | EUR | 5/2028 | ||||
Nokia of America Corporation | USD | 3/2029 | ||||
Nokia Corporation | EUR | 8/2031 | ||||
Nokia Corporation | NIB R&D Loan(3) | EUR | 10/2032 | |||
Nokia Corporation | USD | 5/2039 | ||||
Various Group companies | Other borrowings(4) | |||||
Total | ||||||
(1)Carrying amount includes EUR 15 46 million in 2024) related to fair value hedge accounting relationships, including EUR 120
gains (EUR 137 million in 2024) related to discontinued fair value hedge accounting relationships that are amortized over the life of the respective senior notes.
(2)The bond has a one-time redemption premium at maturity of EUR 4 million in case Nokia does not meet its commitment to reduce its greenhouse gas (GHG) emissions (in tCO2e)
across its value chain (Scope 1, 2, and 3) by 50
Performance Target in Nokia’s Sustainable Finance Framework that enables the issuance of sustainability-linked financing instruments.
(3)The loan from Nordic Investment Bank (NIB) is repayable in two installments in 2031 and 2032.
(4)At 31 December 2025, other borrowings contained the M&A loan of EUR 399 million, which was drawn to acquire China Huaxin's ownership interest in Nokia Shanghai Bell (NSB).
The loan has been fully repaid during January 2026.
2025 | 2024 | ||||
EURm | Financial assets | Financial liabilities | Financial assets | Financial liabilities | |
1 January | ( | ( | |||
Net (losses)/gains in income statement | ( | ( | ( | ||
Additions(1) | ( | ||||
Deductions(1) | ( | ( | |||
Transfers out of level 3 | ( | ||||
Other movements | ( | ( | |||
31 December | ( | ( | |||
(1)For level 3 financial assets, additions mainly include capital contributions to venture funds and deductions mainly include distributions from venture funds.
A net loss of EUR 70 million (net gain of EUR 17 million in 2024) related to level 3 financial instruments held at 31 December 2025 was
included in the profit and loss during 2025. In 2025, deductions in level 3 financial liabilities primarily relate to the purchase of China
Huaxin’s non-controlling ownership interest in NSB. Nokia had exercised its call option, outlined in NSB’s shareholders' agreement, in
2024, to initiate the process to become the sole shareholder in NSB. The purchase was completed in December 2025 with the cash
settlement amounting to EUR 501 million (the financial liability representing the estimated cash settlement was EUR 487 million in
2024).
173 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Fair value
All derivatives are recognized initially at fair value on the date
a derivative contract is entered into and subsequently
remeasured at fair value. The method of recognizing the
resulting gain or loss varies according to whether the
derivatives are designated and qualify under hedge accounting.
Foreign exchange forward contracts are valued at market-
forward exchange rates. Changes in fair value are measured
by comparing these rates with the original contract-forward
rate. Currency options are valued at each reporting date by
using the Garman & Kohlhagen option valuation model.
Interest rate swaps and cross-currency swaps are valued
using the discounted cash flow method.
Nokia applies hedge accounting on certain foreign exchange
forward contracts, options or option strategies, and interest
rate derivatives. Qualifying options and option strategies
have zero net premium, or a net premium paid. For option
structures, the critical terms of the purchased and written
options are the same and the notional amount of the written
option component is not greater than that of the purchased
option.
In the fair valuation of foreign exchange forward contracts,
Nokia separates the forward element and considers it to be
the cost of hedging for foreign exchange forward contracts.
In the fair valuation of foreign exchange option contracts,
Nokia separates the time value and considers it to be the cost
of hedging for foreign exchange option contracts. In the fair
valuation of cross-currency swaps, Nokia separates the
foreign currency basis spread and considers it to be the cost
of hedging for cross-currency swaps.
Hedge effectiveness is assessed at inception and
subsequently on a quarterly basis during the hedge
relationship to ensure that an economic relationship exists.
As Nokia only enters in hedge relationships where the critical
terms match, the assessment of effectiveness is done on a
qualitative basis with no significant ineffectiveness expected.
Presentation in the statement of cash flows
The cash flows of a hedge are classified as cash flows from
operating activities in cases where the underlying hedged items
relate to Nokia’s operating activities. When a derivative contract
is accounted for as a hedge of an identifiable position relating to
financing or investing activities, the cash flows of the contract
are classified in the same way as the cash flows of the position
being hedged. Cash flows of derivatives used in hedging the
foreign exchange risk of Nokia’s cash position are presented in
cash flows from investing activities.
Cash flow hedges: hedging of forecast foreign currency
denominated sales and purchases
Nokia applies cash flow hedge accounting primarily to foreign
exchange exposure that arises from highly probable forecast
operative business transactions. The risk management strategy
is to hedge material net exposures (identified standard net sales
exposure minus identified standard costs exposure) by using
foreign exchange forwards and foreign exchange options in a
layered hedging style that follows defined hedging level ranges
and hedge maturities in quarterly time buckets. The hedged item
must be highly probable and present an exposure to variations in
cash flows that could ultimately affect profit or loss.
For qualifying foreign exchange forwards and foreign exchange
options, the change in fair value that reflects the change in spot
exchange rates on a discounted basis is recognized in hedging
reserve through other comprehensive income (refer to Note 5.1.
Equity). The changes in the forward element of the foreign
exchange forwards and the time value of the options that relate
to hedged items are deferred in the cost of hedging reserve
through other comprehensive income (refer to Note 5.1. Equity)
and are subsequently accounted for in the same way as the spot
element or intrinsic value.
In each quarter, Nokia evaluates whether the forecast sales and
purchases are still expected to occur. If a portion of the hedged
cash flow is no longer expected to occur, the hedge accounting
criteria are no longer met and all related deferred gains or losses
are derecognized from fair value and other reserves and
recognized in other operating income and expenses in the
income statement.
If the hedged cash flow ceases to be highly probable, but is
still expected to occur, accumulated gains and losses remain
in fair value and other reserves until the hedged cash flow
affects profit or loss.
Nokia’s risk management objective is to hedge forecast cash
flows until the related revenue has been recognized. Each
hedge relationship is discontinued during the quarter when
the hedge matures, which is also the quarter that it had been
designated to hedge. At this point, the accumulated gain or
loss of cash flow hedges is reclassified to other operating
income and expenses in the income statement. In cases
where the forecast amount of revenue is not recognized
during a quarter, the full accumulated gain or loss of cash
flow hedges designated for said quarter is still reclassified
and the portion related to forecast revenue that was not
recognized is disclosed as hedge ineffectiveness.
As cash flow hedges primarily mature in the same quarter as
the hedged item, there is no significant ineffectiveness
resulting from the time value of money. Nokia will validate the
magnitude of the impact of discounting related to the
amount of gain or loss recognized in fair value and other
reserves on a quarterly basis.
Cash flow and fair value hedges: hedging of foreign
exchange risk of future interest cash flows
Nokia also applies cash flow hedging to future interest cash
flows in foreign currency related to issued bonds. These
future interest cash flows are hedged with cross-currency
swaps that have been bifurcated and designated partly as fair
value hedges (see Fair value hedges: hedging of interest rate
exposure below) to hedge both the foreign exchange and
interest rate benchmark risk component of the issued bond,
and partly as cash flow hedges to hedge the foreign exchange
risk related to the remaining portion of interest cash flows on
the issued bond. The accumulated gain or loss for the part of
these cross-currency swaps designated as cash flow hedges
is initially recorded in hedging reserve through other
comprehensive income and reclassified to profit or loss at
the time when the related interest cash flows are settled.
174 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Fair value hedges: hedging of interest rate exposure
Nokia applies fair value hedge accounting to reduce exposure
to fair value fluctuations of interest-bearing liabilities due to
changes in interest rates and foreign exchange rates. Nokia
uses interest rate swaps and cross-currency swaps aligned
with the hedged items to hedge interest rate risk and
associated foreign exchange risk.
Nokia has entered into long-term borrowings mainly at fixed
rates and has swapped most of them into floating rates in
line with a defined target interest profile. Nokia aims to
mitigate the adverse impacts from interest rate fluctuations
by continuously managing net interest exposure resulting
from financial assets and liabilities by setting appropriate risk
management benchmarks and risk limits. The hedged item is
identified as a proportion of the outstanding loans up to the
notional amount of the swaps as appropriate to achieve the
risk management objective. Nokia enters into interest rate
swaps that have similar critical terms to the hedged item,
such as reference rate, reset dates, payment dates,
maturities and notional amount and hence Nokia expects that
there will be no significant ineffectiveness. Nokia has not
entered into interest rate swaps where it would be paying
fixed rates.
Nokia’s borrowings are carried at amortized cost. Changes in
the fair value of derivatives designated and qualifying as fair
value hedges, together with any changes in the fair value of
hedged liabilities attributable to the hedged risk, are recorded
in financial income and expenses in the income statement.
Nokia separates the foreign currency basis spread from cross-
currency swaps and excludes it from the hedged risk as cost
of hedging that is initially recognized and subsequently
measured at fair value and recorded in the cost of hedging
reserve through other comprehensive income. If a hedge
relationship no longer meets the criteria for hedge
accounting, hedge accounting ceases, the cost of hedging
recorded in the cost of hedging reserve is immediately
expensed and any fair value adjustments made to the carrying
amount of the hedged item while the hedge was effective are
recognized in financial income and expenses in the income
statement based on the effective interest method.
Hedges of net investments in foreign operations
Nokia applies hedge accounting for its foreign currency hedging
of selected net investments. The hedged item can be an amount
equal to or less than the carrying amount of the net assets of
the foreign operation in the statement of financial position. The
risk management strategy is to protect the euro counter value
of the portion of this exposure expected to materialize as non-
euro cash repatriation in the foreseeable future.
For qualifying foreign exchange forwards, foreign exchange
options and option strategies, the change in fair value that
reflects the change in spot exchange rates is recognized in
translation differences in shareholders’ equity (refer to Note 5.1.
Equity). The changes in the forward element of foreign exchange
forwards as well as the changes in the time value of options
(collectively known as the “cost of hedging”) is recognized in the
cost of hedging reserve through other comprehensive income.
The cost of hedging at the date of designation of the foreign
exchange forward or option contract as a hedging instrument is
amortized to financial income and expenses in the income
statement over the duration of the contract. Hence, in each
reporting period, the change in fair value of the forward element
of the foreign exchange forward contract or the time value of the
option contract is recorded in the cost of hedging reserve through
other comprehensive income, while the amortization amount is
reclassified from the cost of hedging reserve to profit or loss.
The cumulative amount or proportionate share of changes in
the fair value of qualifying hedges deferred in translation
differences is recognized as gain or loss on disposal of all or part
of a foreign subsidiary.
Derivatives not designated in hedge accounting
relationships carried at fair value through profit and loss
For derivatives not designated under hedge accounting, but
hedging identifiable forecast exposures such as anticipated
foreign currency denominated sales and purchases, the gains
and losses are recognized in other operating income and
expenses in the income statement. The gains and losses on
all other derivatives not designated under hedge accounting
are recognized in financial income and expenses.
Embedded derivatives included in contracts are identified and
monitored by Nokia. For host contracts that are not financial
assets containing embedded derivatives that are not closely
related, the embedded derivatives are separated and
measured at fair value at each reporting date with changes in
fair value recognized in financial income and expenses in the
income statement. For host contracts that are financial
assets containing embedded derivatives, the whole contract
is measured at fair value at each reporting date with changes
in fair value recognized in financial income and expenses in
the income statement.
175 | Nokia Annual Report on Form 20-F 2025 |
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2025 | 2024 | ||||||||||
Assets | Liabilities | Assets | Liabilities | ||||||||
EURm | Fair value(1) | Notional(2) | Fair value(1) | Notional(2) | Fair value(1) | Notional(2) | Fair value(1) | Notional(2) | |||
Cash flow hedges | |||||||||||
Foreign exchange forward contracts | ( | ( | |||||||||
Currency options bought | |||||||||||
Cash flow and fair value hedges(3) | |||||||||||
Cross-currency swaps | ( | ( | |||||||||
Fair value hedges | |||||||||||
Interest rate swaps | ( | ( | |||||||||
Hedges on net investment in foreign subsidiaries | |||||||||||
Foreign exchange forward contracts | ( | ( | |||||||||
Derivatives not designated in hedge accounting relationships carried at fair value through profit and loss | |||||||||||
Foreign exchange forward contracts | ( | ( | |||||||||
Currency options bought | |||||||||||
Embedded derivatives(4) | ( | ||||||||||
Total | ( | ( | |||||||||
(1)Included in other current financial assets and other financial liabilities in the statement of financial position.
(2)Includes the gross amount of all notional values for contracts that have not yet been settled or canceled. The amount of notional value outstanding is not necessarily a measure or indication of market risk as the exposure of certain contracts may be offset by that of other
contracts.
(3)Cross-currency swaps have been designated partly as fair value hedges and partly as cash flow hedges.
(4)Embedded derivatives are related to customer contracts.
and cash flow hedge accounting, and interest rate swaps as hedges under fair value hedge accounting at 31 December:
Notional (million in currency) | Fair value EURm | |||||||
Entity | Instrument | Currency | Maturity | 2025 | 2024 | 2025 | 2024 | |
Nokia Corporation | Interest rate swaps | EUR | 5/2025 | |||||
Nokia Corporation | Interest rate swaps | EUR | 3/2026 | ( | ||||
Nokia Corporation | Cross-currency swaps | USD | 6/2027 | ( | ||||
Nokia Corporation | Interest rate swaps | EUR | 5/2028 | ( | ( | |||
Nokia Corporation | Interest rate swaps | EUR | 8/2031 | |||||
Nokia Corporation | Cross-currency swaps | USD | 5/2039 | ( | ( | |||
Total | ( | ( | ||||||
176 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
General risk management principles
Nokia has a systematic and structured approach to risk
management. Key risks and opportunities are primarily
identified against business targets either in business operations
or as an integral part of strategy and financial planning. Risk
management covers strategic, operational, financial, compliance
and reputational risks. Key risks and opportunities are analyzed,
managed and monitored as part of business performance
management. The principles documented in the Nokia
Enterprise Risk Management Policy, which is approved by the
Audit Committee of the Board, require risk management and its
elements to be integrated into key processes. One of the core
principles is that the business or function head is also the risk
owner, although all employees are responsible for identifying,
analyzing and managing risks, as appropriate, given their roles
and duties. Nokia’s overall risk management concept is based on
managing the key risks that would prevent Nokia from meeting
its objectives, rather than focusing on eliminating risks. In
addition to the principles defined in the Nokia Enterprise Risk
Management Policy, other key policies and operating
procedures reflect the implementation of specific aspects of
risk management, including financial risk management.
Financial risks
The objective for treasury activities is to guarantee sufficient
funding at all times and to identify, evaluate and manage
financial risks. Treasury activities support this aim by mitigating
the adverse effects on the profitability of the underlying
business caused by fluctuations in the financial markets, and by
managing the capital structure by balancing the levels of liquid
assets and financial borrowings. Treasury activities are
governed by the Nokia Treasury Policy approved by the
President and CEO, which provides principles for overall
financial risk management and determines the allocation of
responsibilities for financial risk management activities.
Operating procedures approved by the Chief Financial Officer
(CFO) cover specific areas such as foreign exchange risk,
interest rate risk, credit risk and liquidity risk, as well as the use
of derivative financial instruments in managing these risks.
Nokia is risk averse in its treasury activities.
Financial risks are divided into market risk covering foreign
exchange risk and interest rate risk, financial credit risk, and
liquidity risk.
Market risk
Foreign exchange risk
Nokia operates globally and is exposed to transaction and
translation foreign exchange risks. The objective of foreign
exchange risk management is to mitigate adverse impacts from
foreign exchange fluctuations on Nokia’s profitability and cash
flows. Treasury applies a global portfolio approach to manage
foreign exchange risks within approved guidelines and limits.
Transaction risk arises from foreign currency denominated
assets and liabilities together with foreign currency denominated
future cash flows. Transaction exposures are managed in the
context of various functional currencies of Group companies.
Material transactional foreign exchange exposures are hedged,
unless hedging would be uneconomical due to market liquidity
and/or hedging cost. Exposures are defined using transaction
nominal values. Exposures are mainly hedged with derivative
financial instruments, such as foreign exchange forward
contracts and foreign exchange options with most of the
hedging instruments having a duration of less than a year.
A layered hedging approach is typically used for hedging of
highly probable forecast foreign currency denominated cash
flows with quarterly hedged items defined based on set hedge
ratio ranges for each successive quarter. Hedged items defined
for successive quarters are hedged with foreign exchange
forward contracts and foreign exchange options with a hedge
ratio of 1 :1. Hedging level ranges are adjusted on a monthly
basis including hedging instrument designation and
documentation as appropriate. In cases where hedges exceed
the hedge ratio range for any specific quarter, the hedge
portfolio for that specific quarter is adjusted accordingly.
As Nokia has entities where the functional currency is other than
the euro, the shareholders’ equity is exposed to fluctuations in
foreign exchange rates. Changes in shareholders’ equity caused
by movements in foreign exchange rates are shown as currency
translation differences in the consolidated financial statements.
The risk management strategy is to protect the euro counter
value of the portion of this exposure expected to materialize as
foreign currency repatriation cash flows in the foreseeable
future. Exposures are mainly hedged with derivative financial
instruments, such as foreign exchange forward contracts and
foreign exchange options with most of the hedging instruments
having a duration of less than a year. Hedged items are defined
based on conservative expectations of repatriation cash flows
based on a range of considerations. Net investment exposures
are reviewed, hedged items designated, and hedging levels
adjusted at minimum on a quarterly basis with a hedge ratio of
significant events impacting expected repatriation cash flows.
The foreign exchange risk arising from foreign currency
denominated interest-bearing liabilities is primarily hedged
using cross-currency swaps that are also used to manage
Nokia’s interest rate profile (refer to the interest rate risk
section below).
177 | Nokia Annual Report on Form 20-F 2025 |
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2025 | 2024 | ||||||||
EURm | USD(1) | CNY | INR | JPY | USD(1) | CNY | INR | GBP | |
Foreign exchange exposure designated as hedged item for cash flow hedging, net(2) | ( | ( | ( | ( | |||||
Foreign exchange exposure designated as hedged item for net investment hedging(3) | |||||||||
Foreign exchange exposure from interest-bearing liabilities(4) | ( | ( | |||||||
Foreign exchange exposure from items on the statement of financial position, excluding interest-bearing liabilities, net | ( | ( | ( | ( | ( | ||||
Other foreign exchange derivatives, carried at fair value through profit and loss, net(5) | ( | ( | |||||||
(1)Includes foreign exchange exposures from US dollar pegged currencies.
(2)Includes foreign exchange exposures from forecast cash flows related to sales and purchases. In some currencies, especially the US dollar, Nokia has substantial foreign exchange exposures in both estimated cash inflows and outflows. These underlying exposures have been
hedged.
(3)Includes net investment exposures in foreign operations. These underlying exposures have been hedged.
(4)Includes interest-bearing liabilities that have been hedged with cross-currency swaps and foreign exchange forwards. Refer to Note 5.3. Derivative assets and liabilities.
(5)Items on the statement of financial position are hedged by a portion of foreign exchange derivatives not designated in a hedge relationship and carried at fair value through profit and loss. Embedded derivatives are included in this line item.
Effects of hedge accounting on the financial position and performance
Nokia is using several types of hedge accounting programs to manage its foreign exchange and interest rate risk exposures; refer to Note 5.3. Derivative assets and liabilities. The effect of these programs
on Nokia’s financial position and performance at 31 December:
EURm | Cash flow hedges(1) | Net investment hedges(1) | Fair value and cash flow hedges(1) |
2025 | |||
Carrying amount of hedging instruments | ( | ( | |
Notional amount of hedging instruments | ( | ( | |
Notional amount of hedged items | ( | ||
Change in intrinsic value of hedging instruments since 1 January | |||
Change in value of hedged items used to determine hedge effectiveness | ( | ( | ( |
2024 | |||
Carrying amount of hedging instruments | ( | ( | ( |
Notional amount of hedging instruments | ( | ( | |
Notional amount of hedged items | ( | ||
Change in intrinsic value of hedging instruments since 1 January | ( | ( | |
Change in value of hedged items used to determine hedge effectiveness | ( |
(1)No significant ineffectiveness has been recorded during the periods presented and economic relationships have been fully effective.
178 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
The methodology for assessing foreign exchange risk
exposures: Value-at-Risk
Nokia uses the Value-at-Risk (VaR) methodology to assess
exposures to foreign exchange risks. The VaR-based
methodology provides estimates of potential fair value losses in
market risk-sensitive instruments as a result of adverse
changes in specified market factors, at a specified confidence
level over a defined holding period. Nokia calculates the foreign
exchange VaR using the Monte Carlo method, which simulates
random values for exchange rates in which Nokia has exposures
and takes the non-linear price function of certain derivative
instruments into account. The VaR is determined using
volatilities and correlations of rates and prices estimated from a
sample of historical market data, at a 95 % confidence level,
using a one-month holding period. To put more weight on
recent market conditions, an exponentially weighted moving
average is performed on the data with an appropriate decay
factor. This model implies that, within a one-month period, the
potential loss will not exceed the VaR estimate in 95 % of
possible outcomes.
In the remaining 5 % of possible outcomes, the potential loss
will be at minimum equal to the VaR figure and, on average,
substantially higher. The VaR methodology relies on a number
of assumptions, which include the following: risks are measured
under average market conditions, changes in market risk
factors follow normal distributions, future movements in
market risk factors are in line with estimated parameters and
the assessed exposures do not change during the holding
period. Thus, it is possible that, for any given month, the
potential losses at a 95 % confidence level are different and
could be substantially higher than the estimated VaR.
The VaR calculation includes foreign currency denominated
monetary financial instruments, such as current financial
investments, loans and trade receivables, cash, and loans and
trade payables; foreign exchange derivatives carried at fair
value through profit and loss that are not in a hedge
relationship and are mostly used to hedge the statement of
financial position foreign exchange exposure, as well as
embedded derivatives; and foreign exchange derivatives
designated as forecast cash flow hedges, fair value hedges and
net investment hedges as well as the exposures designated, as
hedged items for these hedge relationships.
impact to financial statements is presented in the profit, other comprehensive income (OCI) and cumulative translation adjustment
(CTA) columns in the table below.
2025 | 2024 | ||||||||
Simulated impact on financial statements | Simulated impact on financial statements | ||||||||
EURm | Total VaR | Profit | OCI | CTA | Total VaR | Profit | OCI | CTA | |
31 December | |||||||||
Average for the year | |||||||||
Range for the year | |||||||||
December:
Maturity breakdown of notional amounts (EURm)(1) | ||||||
Currency | Fair value (EURm) | Weighted average hedged rate | Total | Within 3 months | Between 3 and 12 months | |
2025 | ||||||
Cash flow hedge accounting | GBP | ( | ( | ( | ||
JPY | ( | ( | ( | |||
USD | ( | ( | ( | |||
Net investment hedge accounting | CNY | ( | ( | ( | ||
2024 | ||||||
Cash flow hedge accounting | GBP | ( | ( | ( | ( | |
USD | ( | ( | ( | ( | ||
Net investment hedge accounting | CNY | ( | ( | ( | ||
INR | ( | ( | ( | |||
(1) Negative notional amounts indicate that hedges sell currency, and positive notional amounts indicate that hedges buy currency.
179 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Interest rate risk
Nokia is exposed to interest rate risk either through market
value fluctuations of items on the statement of financial
position (price risk) or through changes in interest income or
expenses (refinancing or reinvestment risk). Interest rate risk
mainly arises through interest-bearing liabilities and assets.
Estimated future changes in cash flows and the structure of the
statement of financial position also expose Nokia to interest
rate risk.
The objective of interest rate risk management is to mitigate
adverse impacts arising from interest rate fluctuations on the
income statement, cash flow and financial assets and liabilities
while taking into consideration Nokia’s target capital structure
and the resulting net interest rate exposure. Nokia has entered
into long-term borrowings mainly at fixed rates and swapped
most of them into floating rates, in line with a defined target
interest profile. Nokia has not entered into interest rate swaps
where it would be paying fixed rates. Nokia aims to mitigate the
adverse impacts from interest rate fluctuations by continuously
managing net interest rate exposure arising from financial
assets and liabilities, by setting appropriate risk management
benchmarks and risk limits.
Treasury monitors and manages interest rate exposure centrally.
Nokia uses selective sensitivity analyses to assess and measure
interest rate exposure arising from interest-bearing assets,
interest-bearing liabilities and related derivatives. Sensitivity
analysis determines an estimate of potential fair value changes
in market risk-sensitive instruments by varying interest rates in
currencies in which Nokia has material amounts of financial
assets and liabilities while keeping all other variables constant.
analysis.
Interest rate profile of items under interest rate risk management at 31 December:
2025 | 2024 | ||||
EURm | Fixed rate | Floating rate(1) | Fixed rate | Floating rate(1) | |
Non-current interest-bearing financial investments | |||||
Current interest-bearing financial investments | |||||
Cash and cash equivalents | |||||
Interest-bearing liabilities | ( | ( | ( | ( | |
Financial assets and liabilities before derivatives | ( | ( | |||
Interest rate derivatives | ( | ( | |||
Financial assets and liabilities after derivatives | ( | ||||
(1)All cash equivalents and derivative transaction-related collaterals with initial maturity of three months or less are considered floating rate for the purposes of interest rate risk
management.
below with simulated impact to the financial statements presented in the profit and other comprehensive income (OCI) columns.
2025 | 2024 | ||||||
Impact on | Impact on | Impact on | Impact on | Impact on | Impact on | ||
EURm | fair value | profit | OCI | fair value | profit | OCI | |
Interest rates - increase by | |||||||
Interest rates - decrease by | ( | ( | ( | ( | ( | ||
180 | Nokia Annual Report on Form 20-F 2025 |
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Credit risk
Credit risk refers to the risk that a counterparty will default on
its contractual obligations resulting in financial loss to Nokia.
Credit risk arises from credit exposures to customers, including
outstanding receivables, financial guarantees and committed
transactions, as well as financial institutions, including bank and
cash, fixed income and money market investments, and
derivative financial instruments. Credit risk is managed
separately for business-related and financial credit exposures.
Financial instruments contain an element of risk resulting from
changes in the market price due to counterparties becoming
less creditworthy or risk of loss due to counterparties being
unable to meet their obligations. Financial credit risk is
measured and monitored centrally by Treasury. Financial credit
risk is managed actively by limiting counterparties to a
sufficient number of major banks and financial institutions, and
by monitoring the creditworthiness and the size of exposures
continuously. Additionally, Nokia enters into netting
arrangements with all major counterparties, which give the right
to offset in the event that the counterparty would not be able to
fulfill its obligations. Nokia enters into collateral agreements
with most counterparties, which require counterparties to post
collateral against derivative receivables.
Investment decisions are based on strict creditworthiness and
maturity criteria as defined in the Treasury-related policies and
procedures. As a result of this investment policy approach and
active management of outstanding investment exposures,
Nokia has not been subject to any material credit losses in its
financial investments in the years presented. Due to the high
credit quality of Nokia’s financial investments, the expected
credit loss for these investments is deemed insignificant based
on 12 months’ expected credit losses at 31 December 2025. For
information on expected credit losses for customer-related
balances, refer to Note 4.5. Trade receivables and other
customer-related balances.
Nokia has restricted bank deposits primarily related to employee
benefits of EUR 61 million (EUR 114 million in 2024) that are
presented in other non-current financial assets. Nokia has
assessed the counterparty credit risk for these financial assets
and concluded that expected credit losses are not significant.
grades ranked in line with S&P Global Ratings categories at 31 December:
Cash equivalents and interest-bearing financial investments | ||||||||
EURm | Rating(1) | Cash | Due within 3 months | Due between 3 and 12 months | Due between 1 and 3 years | Due between 3 and 5 years | Due beyond 5 years | Total(2)(3) |
2025 | AAA | |||||||
AA+ – AA- | ||||||||
A+ – A- | ||||||||
BBB+ – BBB- | ||||||||
Other | ||||||||
Total | ||||||||
2024 | AAA | |||||||
AA+ – AA- | ||||||||
A+ – A- | ||||||||
BBB+ – BBB- | ||||||||
Other | ||||||||
Total | ||||||||
(1)Bank Parent Company ratings are used here for bank groups. Actual bank subsidiary ratings may differ from the Bank Parent Company rating.
(2)Non-current and current interest-bearing financial investments and cash equivalents include bank deposits, structured deposits, investments in money market funds and
investments in fixed income instruments.
(3)Instruments that include a call feature have been presented at their final maturities. Instruments that are contractually due beyond three months include EUR 495 million (EUR 306
million in 2024) of instruments that have a call period of less than three months.
similar arrangements at 31 December. To reconcile the items presented to the statement of financial position, items that are not
subject to offsetting would need to be included, refer to Note 5.3. Derivative assets and liabilities.
Related amounts not set off in the statement of financial position | ||||
EURm | Net amounts of financial assets/ (liabilities) presented in the statement of financial position | Financial instruments assets/(liabilities) | Cash collateral (received)/pledged | Net amount |
2025 | ||||
Derivative assets | ( | ( | ||
Derivative liabilities | ( | ( | ||
Total | ( | ( | ||
2024 | ||||
Derivative assets | ( | ( | ||
Derivative liabilities | ( | ( | ||
Total | ( | ( | ||
The financial instruments subject to enforceable master netting agreements and similar arrangements are not offset in the statement
of financial position as there is no intention to settle net or realize the asset and settle the liability simultaneously.
181 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Liquidity risk
Liquidity risk is defined as financial distress or extraordinarily
high financing costs arising from a shortage of liquid funds in a
situation where outstanding debt needs to be refinanced or
where business conditions unexpectedly deteriorate and require
financing. Transactional liquidity risk is defined as the risk of
executing a financial transaction below fair market value or not
being able to execute the transaction at all within a specific
period of time. The objective of liquidity risk management is to
maintain sufficient liquidity, and to ensure that it is readily
available without endangering its value in order to avoid
uncertainty related to financial distress at all times.
Nokia aims to secure sufficient liquidity at all times through
efficient cash management and by investing primarily in highly
liquid money market investments. Depending on its overall
liquidity position, Nokia may pre-finance or refinance upcoming
debt maturities before contractual maturity dates. The
transactional liquidity risk is minimized by entering into
transactions where proper two-way quotes can be obtained
from the market. Nokia aims to ensure flexibility in funding by
maintaining committed and uncommitted credit lines.
Nokia's trade payables include balances payable to suppliers
under reverse factoring arrangements with financial
institutions. These balances are classified as trade payables
since the payments are made to the banks on very similar terms
as to suppliers. Possible extensions to payment terms beyond
the due dates agreed with suppliers are insignificant and there
are no special guarantees securing the payments to be made.
These arrangements do not result in a significant liquidity risk
given the limited amount of liabilities subject to supplier finance
arrangements and Nokia's access to other sources of finance.
Carrying amount of liabilities (EURm) | 2025 | 2024 |
Presented within trade payables | ||
Of which suppliers have received payment | ||
Range of payment due dates after invoice date (days) | 2025 | 2024 |
Liabilities that are part of the arrangements | ||
Comparable trade payables that are not part of an arrangement |
Utilized (million) | |||||
Committed/uncommitted | Financing arrangement | Currency | Nominal (million) | 2025 | 2024 |
Committed | Revolving Credit Facility(1) | EUR | |||
Committed | EIB R&D Loan Facility(2) | EUR | |||
Uncommitted | Finnish Commercial Paper Programme | EUR | |||
Uncommitted | Euro-Commercial Paper Programme | EUR | |||
Uncommitted | Euro Medium Term Note Programme(3) | EUR | |||
Total | |||||
(1)At 31 December 2025, Nokia had committed Revolving Credit Facilities (RCF) with nominal values of EUR 1 500 million maturing in June 2030 (with two one-year extension options)
and EUR 500 million maturing in March 2027 (with a one-year extension options). On 3 March 2026, Nokia voluntarily canceled the EUR 500 million RCF with the effective date of 6
March 2026.
(2)The availability period of the loan facility ends in December 2027.
(3)All euro-denominated bonds have been issued under the Euro Medium Term Note Programme.
Certain changes in financial liabilities do not have a direct impact on Nokia’s liquidity position. A disaggregation of cash and non-cash
changes in lease liabilities, interest-bearing liabilities and associated derivatives arising from financing activities has been presented in
the table below.
EURm | Long-term interest-bearing liabilities | Short-term interest-bearing liabilities | Derivatives held to hedge long-term borrowings(1) | Lease liabilities(2) | Total |
1 January 2025 | |||||
Cash flows | ( | ( | ( | ||
Non-cash changes: | |||||
Acquisitions through business combinations | |||||
Changes in foreign exchange rates | ( | ( | ( | ( | |
Changes in fair value | ( | ||||
Reclassification between long-term and short-term | ( | ||||
Additions(3) | |||||
Other | ( | ( | |||
31 December 2025 | |||||
1 January 2024 | |||||
Cash flows | ( | ( | ( | ( | |
Non-cash changes: | |||||
Changes in foreign exchange rates | ( | ||||
Changes in fair value | ( | ( | ( | ||
Reclassification between long-term and short-term | ( | ||||
Liabilities associated with assets held for sale | ( | ( | |||
Additions(3) | |||||
Other | ( | ( | |||
31 December 2024 |
(1)Includes derivatives designated in fair value and cash flow hedge accounting relationships as well as derivatives not designated in hedge accounting relationship but hedging
identifiable long-term borrowing exposures.
(2)Includes non-current and current lease liabilities. In 2024, cash flows exclude Submarine Networks’ cash flows after it was classified as held for sale and a discontinued operation.
(3)Includes new lease contracts, modifications and remeasurements of existing lease contracts as well as impacts from early terminations of lease contracts.
182 | Nokia Annual Report on Form 20-F 2025 |
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commitments given and obtained. The line-by-line analysis does not directly reconcile with the statement of financial position.
2025 | 2024 | ||||||||||||
Due | Due | ||||||||||||
EURm | within 3 months | between 3 and 12 months | between 1 and 3 years | between 3 and 5 years | beyond 5 years | Total | within 3 months | between 3 and 12 months | between 1 and 3 years | between 3 and 5 years | beyond 5 years | Total | |
Non-current financial assets | |||||||||||||
Non-current interest-bearing financial investments | |||||||||||||
Other non-current financial assets(1) | |||||||||||||
Current financial assets | |||||||||||||
Other current financial assets excluding derivatives(1) | |||||||||||||
Current interest-bearing financial investments(2) | |||||||||||||
Cash and cash equivalents(2) | |||||||||||||
Cash flows related to derivative financial assets net settled: | |||||||||||||
Derivative contracts – receipts | ( | ( | ( | ( | |||||||||
Cash flows related to derivative financial assets gross settled: | |||||||||||||
Derivative contracts – receipts | |||||||||||||
Derivative contracts – payments | ( | ( | ( | ( | ( | ( | ( | ( | ( | ||||
Trade receivables | |||||||||||||
Non-current financial and lease liabilities | |||||||||||||
Long-term interest-bearing liabilities | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | |
Long-term lease liabilities | ( | ( | ( | ( | ( | ( | ( | ( | |||||
Other non-current financial liabilities | ( | ( | ( | ( | ( | ( | ( | ( | |||||
Current financial and lease liabilities | |||||||||||||
Short-term interest-bearing liabilities | ( | ( | ( | ( | ( | ( | |||||||
Short-term lease liabilities | ( | ( | ( | ( | ( | ( | |||||||
Other financial liabilities excluding derivatives(3) | ( | ( | ( | ( | ( | ( | |||||||
Cash flows related to derivative financial liabilities net settled: | |||||||||||||
Derivative contracts – payments | ( | ( | ( | ( | ( | ( | |||||||
Cash flows related to derivative financial liabilities gross settled: | |||||||||||||
Derivative contracts – receipts | |||||||||||||
Derivative contracts – payments | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | |
Discounts without performance obligations | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | |||
Trade payables | ( | ( | ( | ( | ( | ( | ( | ( | ( | ( | |||
Commitments given and obtained | |||||||||||||
Loan commitments given undrawn(4) | ( | ( | ( | ( | ( | ( | |||||||
Loan commitments obtained undrawn(5) | ( | ( | ( | ||||||||||
Investment commitments given undrawn(6) | ( | ( | ( | ( | |||||||||
(1)Other non-current financial assets and other current financial assets excluding derivatives mainly include financial receivables from customers and suppliers.
(2)Instruments that include a call feature have been presented at their final maturities. Instruments that are contractually due beyond three months include EUR 495 million (EUR 306 million in 2024) of instruments that have a call period of less than three months.
(3)In 2024, Other financial liabilities excluding derivatives included a conditional obligation to China Huaxin presented in the earliest period as the exercise period was open.
(4)Loan commitments given undrawn have been included in the earliest period in which they could be drawn or called.
(5)Loan commitments obtained undrawn have been included based on the period in which they expire. These amounts include related commitment fees.
(6)The timing of draw downs for these commitments are dependent on investment decisions of various venture funds and these are typically spread over a time period of several years. For further information on venture fund commitments, refer to Note 6.1. Commitments,
contingencies and legal proceedings.
183 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Section 6 |
Other
information
This section contains information
on Nokia’s off-balance sheet
commitments and contingencies,
business combinations, Group
structure and related party
transactions, as well as events
after the reporting period.
legal proceedings
Contractual obligations
EURm | Within 1 year | 1-5 years | More than 5 years |
2025 | |||
Purchase obligations | |||
Lease commitments(1) | |||
2024 | |||
Purchase obligations | |||
Lease commitments(1) |
(1)Relates to lease contracts that had not yet commenced as at the reporting date.
At 31 December 2025, Nokia has potential undiscounted future
lease payments of EUR 906 million (EUR 812 million in 2024)
relating to extension options not expected to be exercised and
EUR 97 million (EUR 58 million in 2024) relating to termination
options expected to be exercised that are not included in the
lease liability.
Guarantees and financing commitments
The contingent liabilities in the table below represent the
maximum principal amount of guarantees and financing
commitments, and do not reflect management’s expected
outcomes.
EURm | 2025 | 2024 |
Guarantees on behalf of Group companies | ||
Guarantees issued by financial institutions | ||
Commercial guarantees(1) | ||
Non-commercial guarantees | ||
Corporate guarantees(2) | ||
Commercial guarantees(1) | ||
Non-commercial guarantees | ||
Financing commitments | ||
Customer finance commitments(3) | ||
Investment commitments(4) |
(1)Commercial guarantees are guarantees that are issued in the normal course of
business to Nokia’s customers for the performance of Nokia’s obligations under
supply agreements; these include tender bonds, performance bonds and warranty
bonds.
(2)Corporate guarantees are guarantees with a primary obligation that are issued to
Nokia’s customers and other third parties.
(3)Customer finance commitments are available under customer loan facilities.
Availability of the facility depends on the borrower’s continuing compliance with
the agreed financial and operational covenants, and other administrative terms of
the facility. The loan facilities are primarily available to fund purchases of network
infrastructure equipment and services. Refer to Note 4.5. Trade receivables and
other customer-related balances.
(4)As a limited partner in NGP Capital and certain other funds making technology-
related investments, Nokia is committed to capital contributions and entitled to
cash distributions according to the respective partnership agreements and
underlying fund activities.
184 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Legal matters
Nokia discloses ongoing legal matters that relate to possible obligations whose existence will
be confirmed by the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of Nokia. These matters are assessed continually to determine
whether an outflow of resources embodying economic benefits has become probable so as to
Nokia is and will likely continue to be subject to various legal proceedings that arise from time to
time, including proceedings related to intellectual property, antitrust, commercial disputes, product
liability, environmental issues, tax, health and safety, employment and wrongful discharge, sales
and marketing practices, international trade, securities, privacy matters and compliance. While
management does not expect any of the legal proceedings it is currently aware of to have a
material adverse effect on Nokia’s financial position, litigation is inherently unpredictable, and
Nokia may in the future receive judgments or enter into settlements that could have a material
adverse effect on its results or cash flows.
Litigation and proceedings
Mass labor litigation in Brazil
Nokia is defending against a number of labor claims in various Brazilian labor courts. Plaintiffs are
former employees whose contracts were terminated after Nokia exited from certain managed services
contracts. The claims mainly relate to payments made under, or in connection with, the terminated
labor contracts. Nokia has closed the majority of the court cases through settlement or judgment.
Asbestos litigation in the United States
Nokia is defending approximately 250 asbestos-related matters, at various stages of litigation. The
claims are based on premises liability, products liability, and contractor liability. The claims also
involve plaintiffs allegedly diagnosed with various diseases, including but not limited to asbestosis,
lung cancer, and mesothelioma.
Intellectual property rights litigation
Litigations concluded during the year
In 2023, Nokia commenced patent infringement proceedings against Amazon in several countries in
relation to patents covering video-related technologies implemented in Amazon’s services and
devices. In March 2025, Nokia announced it had signed a patent agreement with Amazon. The
agreement resolves all pending patent litigation between the parties.
Business combinations are accounted for using the acquisition method. At the acquisition
date the consideration transferred, comprising the sum of assets transferred, liabilities
assumed and equity interests issued, is generally measured at fair value. The consideration
transferred is allocated to the separately identifiable assets acquired and liabilities assumed,
including assets and liabilities that were not recognized on the statement of financial position
of the acquiree, such as certain intangible assets or contingent liabilities. The total amount of
consideration transferred and non-controlling interests in the acquiree, if any, exceeding the
net of all identifiable assets acquired and liabilities assumed is recognized as goodwill. The
acquisition-related costs are recognized as expenses in the periods incurred, except for the
costs related to issuing debt or equity securities. The results of businesses acquired are
consolidated in the results of Nokia from the acquisition date.
Acquisition of Infinera
On 28 February 2025, Nokia completed the acquisition of Infinera Corporation (Infinera), pursuant
to the definitive agreement announced on 27 June 2024. Infinera, the San Jose based global
supplier of innovative open optical networking solutions and advanced optical semiconductors,
became part of the Nokia Group effective as of the closing, with Nokia holding 100 % of its equity
and voting rights. The acquisition is expected to significantly improve Nokia’s scale and profitability
in optical networks, and accelerate Nokia’s growth strategy in data centers and strengthen its
presence both in North America and with hyperscalers. Nokia is reporting the acquired business as
part of its Network Infrastructure segment.
Purchase consideration
The purchase consideration transferred to the Infinera shareholders comprised cash and
Nokia shares issued was determined with reference to the closing price of Nokia ADSs in the New
York Stock Exchange on 28 February 2025. The total purchase consideration also included the fair
value of the portion of Infinera’s performance and restricted shares attributable to pre-
combination services that were replaced with Nokia’s share-based payment awards, and the fair
value of Infinera's convertible senior notes as described below.
185 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
The acquisition resulted in a conversion event and a “make whole fundamental change” for
Infinera’s convertible senior notes in accordance with relevant indentures. The fair value of
convertible notes included in the purchase consideration was determined with regards to the
pricing mechanism of the “make whole fundamental change” in accordance with the bond terms.
The pricing formula included a component which was dependent on the performance of Nokia ADSs
convertible notes included as part of the purchase consideration was determined based on the
closing price of Nokia ADSs in the New York Stock Exchange at the date of acquisition. Conversion
elections expired on 19 March 2025 with all bondholders surrendering their notes. The surrendered
notes were settled in cash in May 2025. Nokia recognized EUR 23 million loss in the financial
expenses in the consolidated income statement for the change in the fair value of convertible
notes between the acquisition date and the subsequent settlement date.
EURm | 28 February 2025 |
Cash | |
Infinera's convertible notes | |
Nokia shares issued | |
Portion of the replacement equity awards attributable to pre-combination service | |
Total purchase consideration |
EURm | 28 February 2025 |
ASSETS | |
Intangible assets | |
Property, plant and equipment | |
Deferred tax assets | |
Inventories | |
Trade receivables(1) | |
Other assets | |
Cash and cash equivalents | |
Assets acquired | |
LIABILITIES | |
Deferred tax liabilities | |
Trade payables | |
Contract liabilities | |
Other liabilities | |
Liabilities assumed | |
Net identifiable assets acquired | |
Goodwill | |
Net assets acquired |
(1)The gross amount of trade receivables does not materially differ from their fair value, and it is expected that the full contractual
amounts can be collected.
Goodwill arising from the acquisition of Infinera amounts to EUR 833 million and is primarily
attributable to the acquired workforce, as well as anticipated synergies and economies of scale.
Goodwill is allocated in its entirety to the Network Infrastructure segment and is expected not to be
deductible for income tax purposes.
Fair value (EURm) | Useful life (years) | |
Customer relationships | ||
Technologies | ||
Tradenames and other | ||
Total |
The determination and fair value measurement of intangible assets recognized separately
from goodwill are dependent on management estimations and assumptions, including value
drivers and synergies of the acquisition, and revenue growth, profitability and cash flow
projections, useful lives and other characteristics of the intangible assets, as well as discount
rates, as of the acquisition date. Assumptions and estimations have material impact on the
carrying value of the intangible assets at initial recognition, and on the subsequent
Acquisition-related costs amounted to EUR 41 million of which EUR 21 million is recorded in 2025.
Acquisition-related costs are presented in selling, general and administrative expenses in the
consolidated income statement, and in operating cash flows in the consolidated statement of
cash flows.
From 28 February to 31 December 2025 the acquired business contributed net sales of EUR 1 258
million and an operating loss of EUR 215 million to the consolidated income statement. Nokia
Group net sales and operating profit in 2025 would have been EUR 20 092 million and EUR 846
million, respectively, had the acquisition been completed on 1 January 2025. The information
regarding the combined entity’s net sales and operating profit as of the beginning of 2025 is
unaudited and for illustrative purposes only, and is calculated by using the subsidiary’s results for
January-February 2025 adjusted for the impacts of accounting policy alignment and release of
purchase price allocation adjustments.
186 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Company name | Domicile | Parent holding % | Group ownership interest % |
Nokia Solutions and Networks Oy | Finland | ||
Nokia of America Corporation | United States | — | |
Nokia Solutions and Networks B.V. | Netherlands | — | |
Nokia Technologies Oy | Finland | ||
Nokia Participations | France | — | |
Nokia Networks France | France | — | |
Nokia Solutions and Networks India Private Limited | India | — | |
Nokia Solutions and Networks Japan G.K. | Japan | — | |
Nokia Solutions and Networks Branch Operations Oy | Finland | — | |
Infinera Corporation | United States | — | |
Nokia Arabia Limited | Saudi Arabia | — | |
Nokia Shanghai Bell Co., Ltd.(1) | China | — | |
Nokia Solutions and Networks do Brasil Telecomunicações Ltda. | Brazil | — | |
Nokia Solutions and Networks Taiwan Co., Ltd. | Taiwan | — | |
Nokia Spain, S.A. | Spain | — | |
Nokia UK Limited | United Kingdom | — | |
Nokia Canada Inc. | Canada | — | |
Nokia Solutions and Networks Italia S.p.A. | Italy | — | |
Nokia Solutions and Networks Australia Pty Ltd | Australia | — | |
(1)In December 2025, Nokia completed the purchase of China Huaxin’s approximately | |||
187 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements •Notes to the consolidated financial statements Other information |
Nokia has related party transactions with its subsidiaries, associated companies, joint ventures and
pension funds as well as the management and the Board of Directors. Transactions and balances
between Group companies are eliminated on consolidation. For more information on principles of
consolidation and principal Group companies, refer to Note 1.2. General accounting policies, and
Note 6.3. Principal Group companies, respectively.
EURm | 2025 | 2024 | 2023 |
Sales | |||
Purchases | ( | ( | ( |
Trade and other receivables | |||
Trade and other payables | ( | ( | ( |
Investments in associated companies and joint ventures are individually immaterial. The aggregate
carrying amount for the investments in associated companies and joint ventures was EUR 180
million in 2025 (EUR 124 million in 2024).
In 2024, Nokia completed the sale of Alcatel Submarine Networks (ASN) to the French State. Nokia
retained a 20 % shareholding with board representation to ensure a smooth transition until
targeted exit, at which point it is planned for the French State to acquire Nokia’s remaining interest.
The retained interest is accounted for as an investment in an associate. Refer to Note 2.6.
Discontinued operations for more information on disposal of the Submarine Networks business.
Nokia holds a 51 % ownership interest in TD Tech Holding Limited (“TD Tech HK”), a Hong Kong
based joint venture holding company which Nokia has accounted for as an investment in associated
companies and joint ventures. In 2024, TD Tech HK completed the divestment of the entire
business of the joint venture through the sale of its operating subsidiaries to a consortium
consisting of Huawei Technologies, Chengdu High-tech Investment Group and other buyers.
Following the divestment, Nokia is in the process of exiting from its shareholding in the parent
company TD Tech HK. Nokia considered the transactions as a sale of associated companies and
joint ventures, recorded a gain of EUR 191 million related to the sale and received a cash
consideration of EUR 248 million from the sale in 2024.
In 2016, Nokia entered into a strategic agreement with HMD Global Oy (HMD) granting HMD an
exclusive global license to create Nokia branded mobile phones and tablets for 10 years. Under the
agreement, Nokia receives royalty payments from HMD for sales of Nokia branded mobile phones
and tablets, covering both brand and patent licensing. In August 2023, Nokia and HMD amended
the licensing agreement so that HMD’s exclusive license to create Nokia branded devices would
expire by March 2026. In October 2025, Nokia and HMD agreed to extend the license period for the
Nokia-branded feature phones until March 2029 for limited countries. Nokia has held an ownership
interest in HMD since 2020 which it has accounted for as an investment in associate. In 2023, Nokia
recorded an impairment loss of EUR 28 million related to its investment in HMD in the share of
result of associates and joint ventures.
Transactions with pension funds
Nokia has borrowings of EUR 34 million (EUR 35 million in 2024) from Nokia’s German pension fund,
a separate legal entity. The indefinite loan bears 6 % annual interest and can be terminated by
either party with a 90 -day notice. The loan is included in short-term interest-bearing liabilities in
the statement of financial position. For more information on Nokia’s post-employment benefit
plans, refer to Note 3.4. Pensions and other post-employment benefits.
Transactions with the Group Leadership Team and the Board of Directors
2025, 2024 or 2023. For information on remuneration of Nokia’s key management personnel, refer
to Note 3.2. Remuneration of key management.
Non-adjusting events after the reporting period
Nokia to operate with two primary operating segments
Nokia announced on 19 November 2025, together with its new strategy, that it will reorganize its
business into two primary operating segments to better align to customer needs and accelerate
innovation as the AI supercycle increases demand for advanced connectivity. This reorganization
took effect as of 1 January 2026.
The reorganization recognizes Network Infrastructure as a growth segment, positioned to
capitalize on the rapid, global AI and data center build-out while continuing to innovate for its
telecommunications customer base. The segment consists of three business units Optical
Networks, IP Networks and Fixed Networks and is led by David Heard.
The new Mobile Infrastructure segment brings together Nokia’s Core Networks portfolio, Radio
Networks portfolio and Technology Standards (formerly Nokia Technologies). It is positioned for
core and radio network technology and services leadership to lead the industry to AI-native
networks and 6G. The new segment brings together a portfolio whose value creation is founded on
mobile communication technologies based on 3GPP standards with a strong cash flow position
underpinned by IP licensing. It is led by Justin Hotard on an interim basis and consists of three
business units Core Software, Radio Networks and Technology Standards.
In addition, as part of its strategy work, Nokia identified several units which are not seen as core to
the future of the company’s strategy. These units were moved into a dedicated operating segment
called Portfolio Businesses while the company assesses the best value creating opportunity for
them. The units moved were:
▪Fixed Wireless Access CPE (previously in Fixed Networks in Network Infrastructure)
▪Site Implementation and Outside Plant (previously in Fixed Networks in Network Infrastructure)
▪Enterprise Campus Edge (previously in Cloud and Network Services)
▪Microwave Radio (previously in Mobile Networks)
188 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements Notes to the consolidated financial statements Other information |
Report of
independent
registered
public
accounting firm
To the shareholders and the Board of Directors of Nokia
Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated statements of
financial position of Nokia Corporation and subsidiaries (the
"Company") as of December 31, 2025 and 2024, and the
related consolidated income statements, consolidated
statements of comprehensive income, consolidated statements
of changes in shareholders’ equity and consolidated statements
of cash flows for each of the three years in the period ended
December 31, 2025, and the related notes (collectively referred
to as the "financial statements"). In our opinion, the financial
statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2025 and 2024,
and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2025, in
conformity with IFRS Accounting Standards as issued by the
International Accounting Standards Board (IASB) and as adopted
by the European Union.
We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting
as of December 31, 2025, based on criteria established in
Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 5, 2026, expressed an
unqualified opinion on the Company's internal control over
financial reporting.
Basis for Opinion
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of
the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether
due to error or fraud. Our audits included performing
procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management,
as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable
basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising
from the current-period audit of the financial statements that
was communicated or required to be communicated to the audit
committee and that (1) relates to accounts or disclosures that
are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any
way our opinion on the financial statements, taken as a whole,
and we are not, by communicating the critical audit matter
below, providing a separate opinion on the critical audit matter
or on the accounts or disclosures to which it relates.
Revenue recognition – Accounting for
significant and complex contracts — Refer to
Note 2.1 to the financial statements
Critical Audit Matter Description
The Company enters into multi-year framework agreements
with customers, which together with purchase orders for
hardware, software and services, represent revenue contracts.
Certain revenue contracts are particularly significant in value
and contain highly complex terms and conditions which impact
revenue recognition. Accounting complexities for such revenue
contracts include the assessment of contractual settlements,
contract combinations and subsequent contract modifications,
and other factors occurring during the period that materially
impact revenue recognition.
Given the level of complexity in performing such accounting
assessments for these significant and complex revenue
contracts, our audit procedures to evaluate the reasonableness
of these accounting judgements require a high degree of
auditor judgement.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the determination of the
appropriateness of the revenue recognition for these significant
and complex revenue contracts included the following, amongst
others:
▪We tested the effectiveness of controls over the
determination of accounting treatment for significant and
complex revenue contracts;
▪We utilised data analytics to identify revenue contracts that
were significant in value and contained complexities;
▪We analysed the significant and complex revenue contracts
entered into or modified during the current period, to identify
all terms and conditions relevant to revenue recognition; and
▪We assessed whether management’s accounting conclusions
in relation to the areas of complexity identified in significant
and complex revenue contracts were in accordance with IFRS
15 Revenue from Contracts with Customers.
/s/ Deloitte Oy
March 5, 2026
We have served as the Company’s auditor since 2020.
189 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Consolidated financial statements Notes to the consolidated financial statements Other information |
Report of
independent
registered
public
accounting firm
To the shareholders and the Board of Directors of Nokia
Corporation
Opinion on Internal Control over Financial
Reporting
We have audited the internal control over financial reporting of
Nokia Corporation and subsidiaries (the “Company”) as of
December 31, 2025, based on criteria established in Internal
Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway
Commission (COSO). In our opinion, the Company maintained, in
all material respects, effective internal control over financial
reporting as of December 31, 2025, based on criteria
established in Internal Control — Integrated Framework (2013)
issued by COSO.
We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States)
(PCAOB), the financial statements as of and for the year ended
December 31, 2025, of the Company and our report dated
March 5, 2026, expressed an unqualified opinion on those
financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining
effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over
financial reporting, included in the accompanying Management’s
annual report on internal control over financial reporting. Our
responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We
are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audit in accordance with the standards of the
PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an
understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal
control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our
opinion.
Definition and Limitations of Internal Control
over Financial Reporting
A company’s internal control over financial reporting is a
process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made
only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.
/s/ Deloitte Oy
Helsinki, Finland
March 5, 2026
190 | Nokia Annual Report on Form 20-F 2025 |
Exhibits | 191 |
Glossary | 192 |
Investor information | 195 |
Signatures | 196 |
191 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information •Exhibits Glossary Investor information Signatures |
Exhibits
1 | Articles of Association of Nokia Corporation (English Translation of the Finnish original) (incorporated by reference to Exhibit 1 of our Annual Report on Form 20-F filed with the Securities and Exchange Commission on 13 March 2025 (File No. 001-13202)). |
8 | Refer to Note 6.3. Principal Group companies, in our consolidated financial statements for more information on our significant subsidiaries. |
11.1 | Code of Ethics (incorporated by reference to Exhibit 11.1 of our Annual Report on Form 20-F filed with the Securities and Exchange Commission on 13 March 2025 (File No. 001-13202)) |
11.2 | Insider Trading Policy (incorporated by reference to Exhibit 11.2 of our Annual Report on Form 20-F filed with the Securities and Exchange Commission on 13 March 2025 (File No. 001-13202)). |
12.1 | Certification of Justin Hotard, President and Chief Executive Officer of Nokia Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
12.2 | Certification of Marco Wirén, Group Chief Financial Officer of Nokia Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
13 | Certification, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
15.1 | Consent of Deloitte Oy. |
97.1 | Executive Officer Clawback Policy (incorporated by reference to Exhibit 97.1 of our Annual Report on Form 20-F filed with the Securities and Exchange Commission on 29 February 2024 (File No. 001-13202)). |
101 | Interactive Data Files (Inline XBRL – Related Documents). |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
192 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information Exhibits •Glossary Investor information Signatures |
Glossary
2G (Second Generation Mobile Communications): Also known as
GSM (Global System for Mobile Communications): A digital
system for mobile communications that is based on a widely-
accepted standard and typically operates in the 900 MHz,
1800 MHz and 1900 MHz frequency bands.
3G (Third Generation Mobile Communications): The third
generation of mobile communications standards designed for
carrying both voice and data generally using WCDMA or close
variants. See also WCDMA.
3GPP (The Third Generation Partnership Project): A consortium
comprising several standards organizations which develop
protocols for mobile telecommunications. The initial goal was to
develop a global technical specification for a 3G mobile phone
system. Since then, the operations have been extended and
today the main focus is on 5G networks.
4G (Fourth Generation Mobile Communications): The fourth
generation of mobile communications standards based on LTE,
offering IP data connections only and providing true broadband
internet access for mobile devices. See also LTE.
5G (Fifth Generation Mobile Communications): The next major
phase of mobile telecommunications standards. 5G is a
complete redesign of network architecture with the flexibility
and agility to support upcoming service opportunities. It
delivers higher speeds, higher capacity, extremely low latency
and greater reliability.
6G (Sixth Generation Mobile Communications): The cellular
industry introduces a new generation about every ten years. The
next generation of technology is expected to be introduced by
2030 and is generally referred to as 6G.
Access network: A telecommunications network between a local
exchange and the subscriber station.
AI & Cloud: One of Nokia's customer segments.
AI-RAN: AI-RAN is the fusion of innovation in AI and radio access
networks (RAN) to the mutual benefit of both.
AirScale Radio Access: A 5G-ready complete radio access
generation that helps operators address the increasing
demands of today and tomorrow. The solution comprises: Nokia
AirScale Base Station with multiband radio frequency elements
and system modules; Nokia AirScale Active Antennas; Cloud RAN
with Nokia AirScale Cloud Base Station Server and the cloud-
based AirScale RNC (Radio Network Controller) for 3G; Nokia
AirScale Wi-Fi; common software; and services which use
intelligent analytics and extreme automation to maximize the
performance of hybrid networks.
Alcatel-Lucent: Alcatel-Lucent Group, that has been part of the
Nokia Group since 2016.
Annual revenue run-rate: A financial projection that takes
Nokia's current revenue and extrapolates it over a full year,
assuming current performance remains constant.
Artificial Intelligence (AI): Autonomous and adaptive intelligence
of machines, where machines have the ability to perform tasks
in complex environments without constant guidance by a user
and have the ability to improve performance by learning from
experience.
Bandwidth: The width of a communication channel, which
affects transmission speeds over that channel.
Base station: A network element in a mobile network
responsible for radio transmission and reception to or from the
mobile station.
Broadband: The delivery of higher bandwidth by using
transmission channels capable of supporting data rates greater
than the primary rate of 9.6 Kbps.
Churn: A measure of the number of customers or subscribers
who leave their service provider, e.g., a mobile operator, during
a given time period.
Cloud: Cloud computing is a model for enabling ubiquitous,
convenient, on-demand network access to a shared pool of
configurable computing resources (e.g., networks, servers,
storage, applications and services) that can be rapidly
provisioned and released with minimal management effort.
Cloud and Network Services: Our Cloud and Network Services
business group enables telecommunication providers and
enterprises to deploy and monetize 5G, cloud-native software
and as-a-Service delivery models.
Cloud RAN: Cloud RAN refers to all or some of the baseband
functions being run on a commercial off-the-shelf (COTS)
computing platform rather than purpose-built hardware.
Convergence: The coming together of two or more disparate
disciplines or technologies. Convergence types are, for example,
IP convergence, fixed-mobile convergence and device
convergence.
Core network: A combination of exchanges and the basic
transmission equipment that together form the basis for
network services.
Digital: A signaling technique in which a signal is encoded into
digits for transmission.
Discontinued operations: Submarine Networks business, which
was previously reported as part of Network Infrastructure
operating segment, was sold in 2024 and is presented as a
discontinued operation.
Ecosystem: An industry term to describe the increasingly large
communities of mutually beneficial partnerships that
participants such as hardware manufacturers, software
providers, developers, publishers, entertainment providers,
advertisers and ecommerce specialists form in order to bring
their offerings to market. At the heart of the major ecosystems
in the mobile devices and related services industry is the
operating system and the development platform upon which
services are built.
ETSI (European Telecommunications Standards Institute):
Standards produced by the ETSI contain technical specifications
laying down the characteristics required for a
telecommunications product.
Fixed Wireless Access (FWA): Uses wireless networks to connect
fixed locations such as homes and businesses with broadband
services.
GSM (Global System for Mobile Communications): A digital
system for mobile communications that is based on a widely
accepted standard and typically operates in the 900 MHz,
1800 MHz and 1900 MHz frequency bands. See also 2G.
Hexa-X: European Commission’s flagship 6G initiative for
research into the next generation of wireless networks. The
initiative began in January 2021 with Nokia as project lead,
working closely with a strong consortium of European partners.
193 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information Exhibits •Glossary Investor information Signatures |
Hyperscalers: One of Nokia’s customer segments. Hyperscaler
refers to companies like Alphabet (Google), Amazon (Amazon
Web Services), Microsoft and Meta Platforms (Facebook) that
provide cloud solutions at a global scale leveraging massive
connected data centers.
Infinera: Infinera Corporation, a global supplier of innovative
open optical networking solutions and advanced optical
semiconductors. In 2024, Nokia announced its plans to acquire
the company and the acquisition of Infinera was closed in
February 2025.
Internet of Things (IoT): All things such as cars, the clothes we
wear, household appliances and machines in factories
connected to the internet and able to automatically learn and
organize themselves.
IP (Internet Protocol): A network layer protocol that offers a
connectionless internet work service and forms part of the
(Transmission Control Protocol) TCP/IP protocol.
IP (Intellectual Property): Intellectual property results from original
creative thought, covering items such as patents, copyright
material and trademarks, as well as business models and plans.
IPR (Intellectual Property Rights): Legal rights protecting the
economic exploitation of intellectual property, a generic term
used to describe products of human intellect, for example
patents, that have an economic value.
IPR licensing: Generally, an agreement or an arrangement where
a company allows another company to use its intellectual
property (such as patents, trademarks or copyrights) under
certain terms.
LTE (Long-Term Evolution): 3GPP radio technology evolution
architecture and a standard for wireless communication of high-
speed data. Also referred to as 4G.
Massive MIMO (Multiple Input Multiple Output) radios:
Advanced technology, which extends the MIMO concept by
using a large array of transmit and receive antennas. Nokia
provides an extensive portfolio of Massive MIMO radios to
deliver high-performance 5G with optimized capacity, coverage
and energy efficiency.
Mission critical enterprise & Defense: One of Nokia's customer
segments.
Mission critical networks/communications: One of the key
elements of 5G. Mission critical communications meets the
needs of emergency responders such as emergency operations
centers, fire departments, emergency vehicles, police, and
search and rescue services, replacing traditional radio with new
communications capabilities available to smartphone users.
Mobile broadband: Refers to high-speed wireless internet
connections and services designed to be used from multiple
locations.
Mobile Infrastructure: One of Nokia's primary operating
segments effective 1 January 2026. The Mobile Infrastructure
segment brings together Nokia’s Core Software portfolio, Radio
Networks portfolio and Technology Standards.
Mobile Networks: Our Mobile Networks business group offers
products and services for radio access networks covering
technologies from 2G to 5G, and microwave radio links for
transport networks.
Network Infrastructure: Our Network Infrastructure business
group provides fiber, copper, fixed wireless access
technologies, IP routing, data center, subsea and terrestrial
optical networks – along with related services – to customers
including communications service providers, webscales
(including hyperscalers), digital industries and governments.
NVIDIA: NVIDIA Corporation, a world leader in AI and accelerated
computing.
Nokia Bell Labs: Our research arm engaged in discovering and
developing the technological shifts needed for the next phase
of human existence as well as exploring and solving complex
problems to radically redefine networks.
Nokia Technologies: Our Nokia Technologies business group is
responsible for managing Nokia’s patent portfolio and
monetizing Nokia’s intellectual property, including patents,
technologies and the Nokia brand.
Operating System (OS): Software that controls the basic
operation of a computer or a mobile device, such as managing
the processor and memory. The term is also often used to refer
more generally to the software within a device, for example, the
user interface.
Platform: Software platform is a term used to refer to an
operating system or programming environment, or a
combination of the two.
PON (Passive Optical Network): A fiber access architecture in
which unpowered fiber optic splitters are used to enable a single
optical fiber to serve multiple endpoints without having to
provide individual fibers between the hub and customer.
Portfolio Business: One of Nokia's segments effective 1
January 2026. The Portfolio Business segment include Fixed
Wireless Access CPE, Site Implementation and Outside Plant
Services, Enterprise Campus Edge, and Microwave Radio.
Private wireless network: Private wireless is a standalone
network focused on industrial operational assets and users. A
private wireless network provides broadband connectivity,
similar to a public wireless network, but is owned and controlled
by the organization that built or purchased it.
RAN (radio access networks): A mobile telecommunications
system consisting of radio base stations and transmission
equipment.
SEP (Standard-Essential Patent): Generally, patents needed to
produce products which work on a standard which companies
declare as essential and agree to license on Fair, Reasonable
and Non-Discriminatory (FRAND) terms. Can also be referred to
as essential patent.
Standalone (SA): Network architecture that allows independent
operation of a 5G service without interaction with an existing 4G
core and 4G radio network.
Submarine Networks: In 2024, Nokia sold its wholly owned
subsidiary, Alcatel Submarine Networks (ASN), a global
submarine communication networks leader, to the French State.
The business unit was previously reported as part of Nokia’s
Network Infrastructure business groups segment and is now
presented as a discontinued operation.
Technology licensing: Generally, refers to an agreement or
arrangement where under certain terms a company provides
another company with its technology and possibly know-how,
whether protected by intellectual property or not, for use in
products or services offered by the other company.
194 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information Exhibits •Glossary Investor information Signatures |
Telco cloud: Applying cloud computing, SDN and NFV principles
in telecommunications environment, for example separating
application software from underlying hardware with automated,
programmable interfaces while still retaining
telecommunications requirements such as high availability and
low latency.
Telecommunication providers: One of Nokia's customer
segments
Transmission: The action of conveying signals from one point
to one or more other points.
Virtual Reality (VR): The simulation of a three-dimensional
image or environment that can be interacted with in a seemingly
real or physical way by a person using special electronic
equipment, such as a helmet with a screen inside or gloves
fitted with sensors.
WCDMA (Wideband Code Division Multiple Access): A third-
generation mobile wireless technology that offers high data
speeds to mobile and portable wireless devices. Also referred to
as 3G.
Webscale companies: Companies which are investing in cloud
technology and network infrastructure on an increasing scale to
fulfill their needs for massive, mission critical networks.
XGS-PON (10Gbps Symmetrical Passive Optical Network): A
high-speed optical network technology that enables both
upstream and downstream gigabit and multigigabit services. Its
adoption is accelerating, helping operators improve
competitiveness, revenue, and network efficiency, while
meeting the growing demand for bandwidth from video, online
gaming, and emerging applications like virtual reality.
195 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information Exhibits Glossary •Investor information Signatures |
Investor
information
Information on the internet
www.nokia.com
Available on the internet: financial reports, information on members of the Group Leadership Team,
other investor-related materials and information on events, and press releases as well as
environmental and social information, Code of Conduct, Corporate Governance Statement and
Remuneration Statement.
SEC maintains an internet site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC (http://www.sec.gov).
Investor Relations contacts
investor.relations@nokia.com
Annual General Meeting
Date:9 April 2026
Place:Helsinki, Finland
Dividend
The Board proposes to the Annual General Meeting 2026 to be authorized to decide, in its
discretion, on the distribution of an aggregate maximum of EUR 0.14 per share as dividend from
the retained earnings and/or as assets from the reserve for invested unrestricted equity.
Financial reporting
Our interim reports in 2026 are planned to be published on 23 April 2026, 23 July 2026 and
22 October 2026. The full-year 2026 results are planned to be published in January 2027.
Information published in 2025
All our global press releases and statements published in 2025 are available on the internet at
www.nokia.com/newsroom.
Stock exchanges
The Nokia Corporation share is quoted on the following stock exchanges:
Symbol | Trading currency | |
Nasdaq Helsinki (since 1915) | NOKIA | EUR |
New York Stock Exchange (since 1994) | NOK | USD |
In 2025, Nokia also maintained a listing on Euronext Paris Stock Exchange (since 2015) but decided
to apply for delisting in November 2025. The final day of trading of Nokia’s shares on Euronext
Paris was 30 December 2025.
Documents on display
The documents referred to in this Annual Report on Form 20-F can be read at the Securities and
Exchange Commission’s internet site at http://www.sec.gov.
Contact information
Nokia Head Office
Karakaari 7
FI-02610 Espoo
Finland
Tel. +358 (0) 10 44 88 000
Fax +358 (0) 10 44 81 002
196 | Nokia Annual Report on Form 20-F 2025 |
Contents Business overview Corporate governance Operating and financial review and prospects General facts on Nokia Financial statements Other information Exhibits Glossary Investor information •Signatures |
Signatures
The registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and that it has duly caused
and authorized the undersigned to sign this Annual Report on
Form 20-F on its behalf.
Nokia Corporation
By:/S/ STEPHAN PROSI
Name:Stephan Prosi
Title:Vice President, Corporate Controlling and Accounting
By:/S/ JOHANNA MANDELIN
Name:Johanna Mandelin
Title:Vice President, Corporate Legal
5 March 2026
 |
Copyright © 2026 Nokia Corporation. All rights reserved. Nokia is a registered trademark of Nokia Corporation. |
www.nokia.com |
FAQ
How did Nokia (NOK) perform financially in 2025?
Nokia reported 2025 net sales of EUR 19 889 million, growing about 3% year-on-year. Comparable operating profit was approximately EUR 2 billion, and free cash flow reached EUR 1.5 billion, providing funds to strengthen the balance sheet, invest in growth initiatives, and support dividend payments.
What are Nokia’s key AI & Cloud achievements mentioned in the 2025 20-F?
Nokia generated EUR 2.4 billion of orders from AI & Cloud customers in 2025 and sees a EUR 17 billion serviceable market, up 28% year-on-year. Nine of the world’s top 10 hyperscalers use its optical networks, and AI & Cloud orders were about three times higher year-to-date including Infinera.
What major strategic deals did Nokia complete in 2025?
Nokia closed the EUR 2.5 billion acquisition of Infinera in February 2025, boosting Optical Networks scale and North American presence. It also agreed a strategic partnership in which NVIDIA will invest USD 1 billion in Nokia to co-develop AI-native mobile networks and AI networking infrastructure, including AI-RAN products.
How is Nokia changing its business structure after 2025?
Effective 1 January 2026, Nokia is simplifying from four business groups to two primary operating segments: Network Infrastructure and Mobile Infrastructure. Network Infrastructure includes Optical, IP and Fixed Networks, while Mobile Infrastructure unites core and radio portfolios plus technology standards, aiming for faster execution and clearer accountability.
What dividend and shareholder return plans does Nokia outline in the filing?
The Board proposes authorization to distribute up to EUR 0.14 per share from retained earnings and/or invested equity reserves. Since 2023, Nokia has paid EUR 2.1 billion in dividends and repurchased EUR 1.6 billion of shares, reflecting a balanced capital allocation approach combining investment with cash returns.
What financial targets does Nokia set for 2026 in its 20-F?
For 2026, Nokia targets EUR 2.0–2.5 billion of comparable operating profit. Management expects strong demand in Network Infrastructure driven by AI & Cloud, while focusing Mobile Infrastructure on improving gross margin, segment operating profit, and cash flow within a largely stable market environment for mobile networks.
How large is Nokia’s patent and licensing business according to the 20-F?
Nokia Technologies delivered EUR 1.5 billion of net sales in 2025, mainly from patent licensing. The company holds over 26 000 patent families, including more than 8 000 declared essential to 5G, and has secured annual contracted recurring licensing revenue of over EUR 800 million through 2030 across multiple device categories.
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