Nokia cut FY25 guidance earlier this week and reported a miss in Q2 25 with weak Q3 25 guidance. While disappointing we believe this also helps lower the bar ahead of the CMD. What did we learn that we did not know last week? 1. Phasing heavily skewed to Q4 25. Nokia Q2 25 EBITDA of EUR0.3bn and Q3 25 guidance pointing to EUR0.3bn suggests that Q4 25 needs to be strong (EUR0.9-1.2bn). The order book at this point does not cover this Q4 25 (as is normal given turns nature of NI) 2. Several items should help later in year. Q4 25 should benefit from more hyperscaler revs in optical, supply constraints easing, Infinera synergies and perhaps India mobile recovery. 3. Margin mix effects. MN margin was strong thanks to low India mix and high software. NI margin was low due to high CPE mix. Q3 25 is likely to be the other way around. 4. Upside risk from US telco capex announcements. The BBB appears to be driving increased fibre capex amongst some US telcos and this should help drive higher NI revs for Nokia. Nokia also suggested that European telcos'' fibre spend could pick up again as the sector''s health improves. Has our investment thesis changed? No We have long been sceptical about the outlook for Nokia''s mobile business which we see as subscale, and with a big revenue miss this view remains intact. NI has more optionality with the pivot into AI but there remains high execution risk both near term (can Nokia generate enough Q4 25 EBIT to hit mid point of guide?) and longer term (how effective and costly will the AI pivot in optical be?). We expect an update on both at the November CMD. Changes to estimates Nokia cut guidance earlier this week to reflect FX and (minor) tariff effects. We cut FY26 EPS 8% and trim our ord/ADR TP by 2%/4%. We continue to prefer Nokia over Ericsson.