Nokia Q4 Results Promise Continued Data Centre Growth

Leading telco Nokia has reported stronger than expected fourth-quarter adjusted operating profit and sales.
Over the past year, the company has experienced a sharp increase in demand for telecoms infrastructure from mobile operators in North America and India. It has reported that its quarterly net sales rose 10% to €5.98 billion (US$6.2bn), which beat estimations from analysts.
The company has attributed part of this dramatic growth to its work in the data centre industry, where the company continued to expand its presence in the market in Q4.
“Looking further ahead into 2025, we expect the improved trends we have seen in Network Infrastructure in the second half of this year, to sustain and drive strong growth,” shares Pekka Lundmark, President and CEO of Nokia.
“Cloud and Network Services is also expected to grow with strong 5G Core momentum and growth in our Enterprise Campus Edge business. End markets in Mobile Networks are improving and we currently assume largely stable net sales. Nokia Technologies is expected to deliver approximately €1.1 billion (US$1.14bn) of operating profit.”
‘Stepping up’ on investments
In order to capitalise on the continued AI boom, Nokia has been engaging with significant data centre partnerships over the past year.
Significantly, the telco has signed important deals with Microsoft and Nscale for its data centre switching products. For Nscale in 2024, Nokia started to build a new IP network for the company’s new sustainable data centre crucially to support AI workloads.
The data centre by Nscale stands to enable cutting-edge AI services, including Graphics Processing Unit as a Service (GPUaaS).
- Net sales grew 9% in constant currency in Q4
- Delivered an excellent comparable operating margin of 19.1% in Q4
- Continued to win new deals across the business and took positive steps across growth areas of defense, data centres and private wireless
More broadly, Nokia is helping cloud builders worldwide to build modern data centre networks that are highly reliable, secure and easy to operate – which is essential to meet the growing demands of AI workloads worldwide.
In 2024, the telco was also selected by CoreWeave to support its hyperscale AI cloud. CoreWeave will also be deploying Nokia IP and optical platforms in data centres across the US and Europe, which is part of a large-scale wide area network build-out to support high-performance AI infrastructure.
Additionally, Nokia partnered with leading technology companies like Kyndryl in Q4 to deliver automation and security solutions for enterprise data centres.
Looking ahead, Nokia is optimistic about how these partnerships can support the data centre market.
“We are now stepping up our investments to broaden our addressable market in data centre IP networking,” Pekka explains. “We will invest up to an additional €100 million (US$104.23m) in annual operating expenses with a view to driving incremental net sales of €1 billion by 2028.
“In the short-term this will moderate the pace of operating margin expansion in Network Infrastructure, but we anticipate a strong return on investment considering the momentum we already have today in the market.”
Infinera acquisition to grow optical networking solutions
A transformative aspect of Nokia’s data centre journey is when the company announced it would be acquiring Infinera, a global supplier of innovative open optical networking solutions and advanced optical semiconductors.
Optical networking refers to how communications service providers (CSPs) and hyperscalers cope with sharp increases in traffic. Nokia remains eager to increase its scale in Optical Networks and accelerate its product roadmap.
The telco is acquiring Infinera in a transaction valuing the company at an enterprise value of US$2.3bn.
Looking ahead to 2026, Nokia is seeking further opportunities to increase its margins in the future. The company estimates that it will deliver comparable operating profit of €1.9-2.4 billion (US$1.98-2.98bn) in 2025.
Pekka adds: “Given the market volatility in 2024, our results demonstrate the responsiveness and capacity of the Nokia team to execute in all market conditions.
“I thank the whole Nokia team for their commitment, hard work and drive which made these results possible.”
Explore the latest edition of Data Centre Magazine and be part of the conversation at our global conference series, Tech & AI LIVE and Data Centre LIVE.
Discover all our upcoming events and secure your tickets today.
Data Centre Magazine is a BizClik brand