诺基亚公司 (NOK.US) 2025年第三季度业绩电话会
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会议摘要
Nokia's Q3 results highlight growth in AI, cloud, and network segments, with strategic initiatives in cost control, innovation, and market opportunities driving future profitability and market positioning.
会议速览
Financial Performance Review with Risk Disclosures and Currency AdjustmentsA presentation discusses financial predictions with risk factors, emphasizing currency-adjusted growth rates and portfolio-based analyses. It highlights the importance of reviewing the company’s annual report for comprehensive risk understanding, referencing both external and internal factors impacting outcomes. The agenda includes a review of key quarterly messages, financial performance analysis, and a Q&A session, with all relevant documents available on the company’s website.
Nokia's Q3 Performance: Growth in AI, Cloud, and Network ServicesNokia delivered strong Q3 performance with net sales growth across all business groups, driven by AI and cloud customer demand. Optical networks and IP networks saw significant order intake. The company is ahead of schedule in integrating the Infinera acquisition, contributing to sales and order growth. Nokia expects continued strong performance in Q4, with sequential net sales growth and a focus on achieving full-year operating profit outlook. The AI supercycle is accelerating demand for advanced connectivity, positioning Nokia as a leader in the market.
Q3 Financial Review Highlights Growth, Cost Savings, and Regional PerformanceThe dialogue covers Q3 sales and margin details, emphasizing growth across business groups, a €450 million cost-saving initiative, and regional performance. It highlights strong network infrastructure sales, improved cloud and network services margins, and steady Nokia technologies growth, concluding with cash flow and Capital Markets Day invitation.
Progress Update on IP Network Switching Business and 2028 TargetsThe dialogue focuses on an inquiry about the advancement of IP network switching operations and the achievement of previously set objectives for the year 2028, with a request for an update on progress and alignment with these targets.
Tracking Progress and Revenue Contribution in IP Networks and Data Center BusinessThe dialogue discusses the company's progress in IP networks and data center switching, highlighting new design wins and positive metrics. It emphasizes the company's position as a smaller player in the market and the ongoing journey towards growth. The focus shifts from a specific €100 million investment metric to overall business health and future revenue contributions, indicating optimism about upcoming quarters.
Biggest Growth Opportunities in Hyperscalers and Sovereign CloudsThe dialogue highlights the biggest growth opportunities for the company, emphasizing hyperscalers and neo clouds as the primary drivers of demand. The partnership with Enscale and focus on sovereign clouds, particularly in the EU, are also identified as significant growth segments.
Nokia's Opportunity in Scale Across Optics and AI-Driven Bandwidth DemandNokia sees potential in scale across optics for data center interconnects, leveraging its IP photonics and fab capabilities. AI's bandwidth demands create new opportunities, requiring innovation to meet performance and cost deltas across network segments. More details will be shared at Cmd.
Nokia's Investment in 6G and Cloud Native Core for Future Network ServicesNokia is currently investing in 6G pre-standard radio technology and cloud native core for network services. The company is focusing on AI and cloud native innovations in RAN, as well as collaborating with customers. These ongoing investments are part of Nokia's strategy to enhance spectral efficiency and radio capabilities for future opportunities in 6G and AI.
Strategies for Wireless Tech Stabilization and Digitalization-Driven Cost ControlThe dialogue discusses strategies for achieving wireless technology stabilization, emphasizing market and product advancements. It highlights a shift towards continuous improvement and digitalization for cost control, avoiding large restructuring programs. Benefits include operational leverage and efficiency through AI and process simplification, aiming for sustainable growth and market stability.
Analysis of Positive Q3 Financial Surprise and Uncertainties in Delivery TimingDiscussed factors behind positive Q3 financial surprise, including improved cross margins in cloud and network services, successful EDG standalone core implementations, portfolio cleanup, and cost efficiency measures. Highlighted uncertainties regarding delivery timing despite a strong order book, influencing the decision not to narrow the guidance range.
Exploring End-to-End Network Solutions and Best of Breed TechnologiesThe dialogue delves into the strategic importance of maintaining best-of-breed technologies in distinct network areas, such as fixed access, IP switching, and optical networking, while emphasizing the value of ecosystem compatibility and innovation. It highlights the benefits of leveraging synergies across markets without compromising on technological excellence, contrasting this approach with competitors who may offer less versatile product suites.
Nokia's Transition from Restructuring to Continuous Improvement and GrowthNokia aims to shift from large-scale restructuring to continuous improvement and growth, focusing on cost savings, digitalization, and customer focus to avoid future large-scale cost-cutting programs.
Infinera's Progress on Integration and Profit SynergiesThe dialogue discusses Infinera's positive operating profit contribution, integration progress, and conservative view on achieving 200 million in run rate operating profit synergies by 2027. The company is on track with cost synergies and ahead of expectations on revenue growth, with plans to be disciplined in capital allocation and potential investments for enhanced returns.
EU Pressure on Chinese Vendors and Opex Strategies for Network GrowthDiscussion revolves around EU regulations potentially accelerating the replacement of Chinese vendors, with a focus on enhancing market opportunities for Western providers. The conversation also delves into optimizing operating expenses for growth areas, emphasizing operational leverage, strategic investments in R&D and manufacturing capacity, and maintaining robust gross margins across CNS and mobile networks despite market volatility.
5G Core Network Upgrades and Software Deployment Strategies in Mobile NetworksThe dialogue discusses the strategic deployment of 5G standalone core networks and software upgrades in mobile networks, highlighting the shift towards cloud-based models and subscription pricing. It emphasizes the timing of software revenue recognition and the transition from legacy appliance models to more recurring revenue streams, reflecting the evolving business dynamics in the mobile network industry.
Nokia's Strategy Shift: AI, Data Centers, and Corporate Function SimplificationNokia is reorganizing corporate functions for efficiency, focusing on AI and data centers. The CTO role emphasizes technology, AI, and long-term investments in Nokia Bell Labs, aiming to simplify processes and enhance productivity through digitization.
European Market Demand and Investment in Networking EquipmentDiscussion on whether the revenue decline in networking equipment in Europe is structural or temporary, considering current investment levels and future market development.
European AI and Data Center Potential Amid US Investment DominanceStabilizing demand in telco's and potential regulatory improvements in Europe are viewed positively, especially regarding AI and data center businesses. Partnerships with companies like Enscale highlight growth opportunities, yet current investment and demand trends remain largely concentrated in the US.
Exploring Growth in Private Wireless: Focus on Vertical Markets and Customer ExpansionDiscussed the current state and future potential of private wireless business, highlighting growth in customer numbers and the importance of focusing on vertical markets such as railways and utilities for significant opportunities.
Strategies for Enhancing Mobile Network Margins and Navigating China's Market DynamicsThe discussion focuses on improving margins in mobile networks through customer engagement and innovation, addressing concerns about China's potential impact on network vendors, and highlighting the company's minimal exposure to China's market, emphasizing future growth opportunities in other regions.
Strategic Vision for Mobile Networks and IP Licensing in the Age of AI and CloudEmphasizes the importance of a full portfolio in mobile infrastructure and IP licensing, highlighting the shift towards cloud and AI technologies. The speaker outlines a strategy of innovation, collaboration, and best-of-breed technology to maintain a competitive edge in the evolving landscape of mobile connectivity and cloud services.
Nokia's IP Business: Navigating Post-Phone Era and Future Monetization StrategiesDiscussion centered around Nokia's intellectual property business, post-its phone division sale to Microsoft. Emphasized strong IP revenue, investment in EDGE monetization, and emerging revenue streams, highlighting business health and strategic alignment between standards and tech teams.
要点回答
Q：What factors could cause actual results to differ from the company's current expectations?
A：The company's financial performance predictions may differ from actual results due to both external and internal operating factors. Risks that could cause such differences are detailed in the risk factors section of the annual report on Form 10-K available on the company's Investor Relations website.
Q：What are the main topics covered in today's presentation?
A：The main topics covered in today's presentation are the key messages from the quarter, financial performance, and a question and answer session.
Q：How did the company's net sales grow in the third quarter?
A：In the third quarter, the company grew net sales by Ed across all business groups.
Q：How did the profitability and gross margins perform in the quarter?
A：Profitability in the quarter was as expected, with network infrastructure gross margin improving sequentially, impacted slightly by product mix. Cloud and network services had a strong gross margin, while mobile networks' gross margin was impacted by a lower mix of software revenue. The operating margin declined year on year due to a one-time benefit from a loss provision reversal in the prior year.
Q：What was the focus of the cloud and network services business in the third quarter?
A：The cloud and network services business focused on autonomous cloud native architectures, achieving strong network net sales and operating profit growth.
Q：What strategic partnerships and new design wins were announced in the third quarter?
A：In the third quarter, the company announced strategic partnerships with Cae and Super Micro for advanced networking technologies and Sr Linux network operating system adoption. New design wins for the switching platform were secured with hyperscalers.
Q：What changes were made to the company's investment strategy in the third quarter?
A：The company decided to scale down passive venture fund investments, with the venture fund investments now reported within financial income and expenses.
Q：What is the updated operating profit guidance after the recent changes?
A：The operating profit guidance was increased by €0.1 billion due to the removal of the negative impact of venture funds on operating profit in the first half, while maintaining operational guidance unchanged.
Q：What are the company's strategic priorities and financial performance highlights for the third quarter?
A：The company's strategic priorities include focusing on growth and operating leverage. Financial performance highlights include net sales growth across all business groups, gross margin decline, operating margin stability, and free cash flow generation.
Q：How is the company planning to achieve operational leverage?
A：The company plans to achieve operational leverage through continuous productivity improvement, simplification, digital instrumentation, and organizational efficiency, rather than large restructuring programs.
Q：What are the business group performance highlights for the third quarter?
A：Business group performance highlights include 11% growth in network infrastructure with strong optical network performance, IP networks starting to see traction with AI and cloud, and cloud and network services experiencing strong growth in core platforms with gross margin improvements.
Q：What was the impact of the lower software contribution in the third quarter on the company's operating margin?
A：The lower software contribution in the third quarter led to a year-over-year decline of 370 basis points in operating margin, despite a decrease in operating expenses.
Q：How is Nokia Technologies performing and what is the forecast for the full year?
A：Nokia Technologies net sales grew by 14% in the quarter with an expected 1.1 billion operating profit for the full year.
Q：What is the company's free cash flow and net cash position?
A：The company's free cash flow was positive at €409 million, and the net cash position was €3 billion.
Q：What are the recent design wins and the progress towards the €100 million incremental investment target in IP networks?
A：The company has been pleased with recent design wins and overall book-to-bill in IP networks. However, they acknowledge that as a small player in the space, they are just beginning their journey despite positive announcements and metrics. The €100 million incremental investment target is considered a small portion of their overall capital, and they do not plan to focus on that metric going forward.
Q：What are the biggest growth opportunities for Nokia in the short to medium term, particularly in different customer segments?
A：The biggest growth opportunities are in hyperscalers and new cloud operators, driven by demand from partnerships like the one with Enscale and an optimistic outlook on sovereign clouds. The company is positive about work being done in the EU and other regions. Clearly, the demand today is largely coming from hyperscalers and some larger new clouds.
Q：What relevance does the 'scale across' concept have for Nokia in the context of optics and data center interconnect?
A：'Scale across' has been around for a while in data centers and is not a new technology, but as bandwidth demands increase, particularly driven by AI, there's a new demand for innovation in this space. Nokia believes their assets, especially in indium phosphide and the ability to innovate in packaging, position them well for this opportunity. As bandwidth demands continue, both scale across and scale out create tremendous opportunities for Nokia.
Q：What is Nokia's strategy regarding investments in Edge Data Centers and what are the key milestones?
A：Nokia's strategy includes technology standardization work which has already started and ongoing investment. They are investing in 6G pre-standard radio technology and have more work to do in this area. They are also focusing on a cloud-native core, and share capture and revenue growth have been good indicators of their performance. The company plans to continue investing in AI and MN and work closely with customers. They will provide more insights into their approach at the Capital Markets Day.
Q：How does Nokia plan to achieve operational leverage and what role does digitalization play in this strategy?
A：Operational leverage is a key focus for Nokia, aiming to continuously improve and operate efficiently. The company emphasizes the importance of simplification to ensure they can capitalize on various AI installations and streamline processes for greater efficiency. Digitalization is crucial in this approach, with a commitment to ongoing process simplification and efficiency improvements.
Q：What factors drove the positive surprise in the third quarter?
A：The positive surprise in the third quarter was driven by strong order books and successful standalone core implementations that gained market share, portfolio cleanup in the CNS business, and cost out initiatives in core business that improved margin levels.
Q：What are the reasons for the improved cross margin development in different businesses?
A：Improved cross margin development was attributed to good traction on standalone core implementations that gained market share, portfolio cleanup in the CNS business, and cost out efforts in the core business that made operations more efficient.
Q：How does the company's 6% exposure to AI and cloud in Q3 compare to the 5% hyperscaler exposure mentioned in Q2?
A：The 6% exposure to AI and cloud in Q3 and the 5% hyperscaler exposure mentioned in Q2 are comparable metrics representing the company's business mix in those respective quarters.
Q：Is the end-to-end promise from previous CEOs being realized within the company's NBU?
A：The end-to-end promise from previous CEOs is not being realized as a singular entity; rather, the company is focusing on being a best-of-breed technology provider, emphasizing innovation and leveraging the ecosystem rather than attempting to manage all aspects end-to-end.
Q：What is the impact of the recent reduction in forecasted restructuring cash outflows and increase in gross cost savings?
A：The recent reduction in forecasted restructuring cash outflows and increase in gross cost savings signify a shift from large-scale restructuring programs to a more focused approach on continuous improvement and customer satisfaction. The company aims to integrate cost-saving measures into regular operations and utilize digitalization opportunities to enhance efficiency.
Q：Are the forecasted 200 million in run-rate operating profit synergies for 2027 considered conservative?
A：The forecasted 200 million in run-rate operating profit synergies for 2027 is not considered conservative as the company is on track with cost synergies and ahead of expectations on revenue.
Q：What is the company's approach to capital allocation and investment opportunities?
A：The company is taking a disciplined approach to capital allocation, being selective with investments, and focusing on areas that can accelerate enhanced returns. This includes maintaining a watchful eye on capital deployment in areas like research and development and expanding factory capacity where there are growth opportunities.
Q：How does the company view potential EU pressure on member countries to swap out Chinese vendors?
A：The company welcomes the potential for increased market opportunities in the EU if regulations allow for reduced reliance on Chinese vendors and views it as important for sovereignty. The company is optimistic about growth opportunities in this scenario.
Q：What factors contributed to the improved gross margins in CNS and what is the sustainability of these improvements?
A：The factors contributing to the improved gross margins in CNS include portfolio cleaning up, focusing on cost out on different products, and gaining market support with the launch of the Lyte m-one core. These improvements are considered sustainable following a multi-year journey and positive market reactions in the past months.
Q：Why is there a discrepancy in software upgrades between the standalone 5G core and the CNS on the 5G core, and what does this imply for future upgrades?
A：The discrepancy in software upgrades reflects the market's need for advanced features offered by new generations of technology. Initially, the 4G core performed well with early 5G installations, but as opportunities for network slicing and offering specific services arose, the 5G standalone core became necessary. Future upgrades will likely follow this trend, with a need for continuous innovation to meet new market demands.
Q：What is the impact of software upgrades on MN margins and how is the revenue recognized?
A：Software upgrades impact MN margins due to the timing of revenue recognition, which is based on when the upgrades are deployed and utilized by customers. The MN baseband software, which is the majority of the software revenue, is still largely in a legacy appliance model, as opposed to the cloud model. This shift towards a cloud model with subscription-based pricing and ratable deployment is changing the business model.
Q：What changes in focus are expected for the Nokia Bell Labs organization following the departure of the head of CTIO?
A：Following the departure of the head of CTIO, the Nokia Bell Labs organization is expected to focus more on AI and data centers rather than just mobile networks and radio access networks. This change is part of a broader strategy to enhance functional excellence and align accountability with corporate functions, emphasizing areas such as technology, AI, security, and cloud.
Q：What is the general view on the demand trends in Europe, particularly with respect to mobile networks?
A：The view on the demand trends in Europe is that carrier demand is stabilizing, which is seen as positive. While there is potential for upside in Europe due to regulatory developments, the reality is that most investments currently are happening in the US. The company is excited about AI and data center opportunities in Europe but acknowledges that the majority of investment is outside of Europe.
Q：How is the private wireless business performing and what is the projected growth timeline?
A：The private wireless business has seen a nice increase in the number of customers, but it is still in the early phase of development. Growth rates are positive, but it will take some time before it becomes a meaningful part of the business.
Q：What is the strategy for improving profitability in mobile networks and how does the Chinese government's push affect your business?
A：The strategy for improving profitability includes a continued tight focus and engagement with customers, particularly those interested in co-innovation. The company aims to differentiate itself through innovation and technology leadership. With respect to the Chinese government's push, it is not yet reflected in the order intake, but the company is monitoring the situation closely.
Q：What is the company's strategy concerning the Chinese market?
A：The company's strategy concerning the Chinese market is to focus on markets where there is significant opportunity and customers where they can collaborate and innovate. The Chinese market is not considered a core market for the company.
Q：What is the speaker's perspective on the importance of having a full portfolio in the mobile business?
A：The speaker believes that having a full portfolio, which includes core networks, radio networks, and IP licensing, is crucial for innovation and maintaining a foothold in the mobile business. They state that companies without this full portfolio have struggled to innovate or sustain their position.
Q：How does the company plan to stay competitive in the connectivity market?
A：The company plans to stay competitive in the connectivity market by continuing to innovate and capturing technology shifts, such as in cloud and AI, and by focusing on areas like autonomous vehicles, robotics, and virtual reality that require mobile connectivity.
Q：What are the new directions for the company's cloud and network services?
A：The new directions for the company's cloud and network services include setting up an autonomous cloud-native core stack and emphasizing best-of-breed technology and strong partnerships for future mobile networks.
Q：Is there a risk of a decline in the IPR business due to the sale of the phone business to Microsoft?
A：There is no risk of a decline in the IPR business. The speaker is confident that Nokia can continue monetizing its SPCs and non-SPCs at the current level or better, given that every player of scale in mobile infrastructure has a strong IP business and Nokia has made changes to align its standards team with its tech business, which ensures stable revenue. They also mention investing in 5G monetization and identifying emerging revenue streams.
Q：What are the expectations for the future performance of the technology licensing business?
A：The technology licensing business is expected to perform well in the future. The speaker mentions good stable revenue, investments in 5G monetization, and the identification of other emerging revenue streams. The business is described as very healthy, and the team is praised for doing an excellent job in pushing on operating leverage.
