Nokia posts strong Q4 2022 results

The little green spy boat seen from the old Nokia House in the Keilalahti bay, Espoo, Finland. Photo by Jari Ijäs on December 8, 2010, with a Nokia C7.

Nokia released this morning their financial results for the fourth quarter of 2022, which spans the months of October, November and December. The results are better than what the market expected, with Nokia forecasting further growth in 2023.

In Q4 2022, Nokia’s net sales grew 16% from 6.4 billion euro in Q4 2021 to 7.4 billion euro. The profit for the period also increased, from 731 million euro to 929 million euro. For the full year of 2022, Nokia reported revenue of 24.911 billion euro (12% growth) and profit of 2.481 billion euro (18% growth).

Nokia’s growth is based on a good demand of 5G gear in India and also in diversification in its offerings, as Nokia attracted more enterprise customers wanting private 5G networks for plants, mines and other facilities. Nokia Technologies saw a significant increase in revenue in the last quarter because a “long-term licensee exercised an option leading to higher revenue recognition“, as is stated in the report. What the report says even more about that licensee is that the license was a 10-year license that started in April 2014, strongly indicating that Microsoft could be the customer in question. This revenue from this licensee was recognized each year for the duration of the license. The licensee decided to exercise the option in the contract that after 10 years grants them perpetual license on those patents, which the company did so all revenue that would paid in the next 2 years was recognized in the last quarter. On the bad side, there would be a decline without this as 2 licensors decided not to renew their license and are in litigation. The smartphone market declining also impacted negatively Nokia Technology patents revenues.

The market reacted positively to Nokia’s Q4 report with the stock price going up 4%. For 2023, Nokia expects net sales to be between 24.9 and 26.5 billion euro and a comparable operating margin between 11.5 to 14.0%.

You can check the full report here (PDF).