Solid Q2 Fueled by Growing AI & Cloud Demand
- Q2 net sales grew 9 percent y-o-y on a constant currency basis (+8 percent reported).
- Network Infrastructure net sales grew 12 percent y-o-y on a constant currency basis, led by Optical Networks growing 20 percent and IP Networks growing 16 percent. Net sales to AI & Cloud customers grew 105 percent.
- Mobile Infrastructure net sales grew with a stable year-on-year profit contribution driven by product mix.
- Q2 comparable gross margin expanded 70bps y-o-y to 46.0 percent. Reported gross margin rose 60bps to 44.6 percent.
- Q2 comparable operating margin increased 70bps y-o-y to 9.0 percent. Reported operating margin declined 430bps to (1.0) percent due to a faster pace of restructuring.
- Q2 comparable diluted EPS for the period of EUR 0.07; reported diluted EPS for the period of EUR 0.00.
- Nokia has reclassified two businesses previously in its Portfolio Businesses segment into discontinued operations.
Operationally, Nokia‘s full year outlook is unchanged. The presentation of these two businesses as discontinued operations has led to a EUR 0.1 billion technical revision to the full year comparable operating profit range. Nokia’s outlook is now for EUR 2.1 to 2.6 billion of comparable operating profit.
“Q2 demonstrates our strategy is delivering results. Since we set out our plan late last year, Team Nokia has focused on maximizing our opportunity in the AI supercycle. I am encouraged by the execution and progress we have made in a short period of time. We enter the second half with momentum and remain on track to deliver somewhat above the midpoint of our comparable operating profit guidance.
“In Q2, our AI & Cloud order intake was EUR 2.8 billion, while sales more than doubled year-on-year. The strength was broad-based, as we secured long-term orders in both Optical Networks and IP Networks. We expect around half of these orders to convert to revenue over the next twelve months. Demand remains strong, while supply continues to be the main industry constraint, prompting our customers to place longer-term orders.
“As AI evolves, trusted connectivity becomes even more critical and we are delivering market leading innovation that helps customers differentiate and capture value in this new era. Last week we launched the industry’s first commercial AI-RAN platform, which will help customers unlock more from their networks, including more than 100 percent spectral efficiency gains by 2028. These benefits will be tangible in 5G networks and the platform provides a software upgrade path to 6G. This innovation is one example of how we unlock value for our customers and generate returns for our shareholders.”
– Justin Hotard, President and CEO
This is a summary of the published “Nokia Corporation Report for Q2 and Half Year 2026.” Nokia only publishes a summary of its financial reports in stock exchange releases. The summary focuses on Nokia Group’s financial information as well as on Nokia’s outlook. The detailed, segment-level discussion will be available in the complete financial report hosted at www.nokia.com/financials. Investors should not solely rely on summaries of Nokia’s financial reports and should also review the complete reports with tables.
FINANCIAL RESULTS
| EUR million (except for EPS in EUR) | Q2’26 | Q2’25 | YoY change | Q1-Q2’26 | Q1-Q2’25 |
YoY change |
| Reported results | ||||||
| Net sales | 4 815 | 4 443 | 8% | 9 248 | 8 743 | 6% |
| Gross margin % | 44.6% | 44.0% | 60bps | 44.6% | 43.0% | 160bpm |
| Operating (loss)/profit | (50) | 147 | 33 | 151 | (78%) | |
| Operating margin % | (1.0)% | 3.3% | (430)bps | 0.4% | 1.7% | (130)bps |
| Profit from continuing operations | 27 | 99 | (73)% | 131 | 60 | 118% |
| Loss from discontinued operations | (22) | (3) | (39) | (23) | ||
| Profit for the period | 5 | 96 | (95)% | 92 | 36 | 156% |
| EPS for the period, diluted | 0.00 | 0.02 | (100)% | 0.02 | 0.01 | 100% |
| Net cash and interest-bearing financial investments | 2 776 | 2 879 | (4)% | 2 776 | 2 879 | (4)% |
| Comparable results | ||||||
| Net sales | 4 815 | 4 448 | 8% | 9 251 | 8 748 | 6% |
| Constant currency and portfolio YoY change | 9% | 7% | ||||
| Gross margin % | 46.0% | 45.3% | 70bps | 46.0% | 44.1% | 190bps |
| Operating profit | 434 | 367 | 18% | 735 | 576 | 28% |
| Operating margin % | 9.0% | 8.3% | 70bps | 7.9% | 6.6% | 130bps |
| Profit for the period | 414 | 252 | 64% | 726 | 426 | 70% |
| EPS for the period, diluted | 0.07 | 0.04 | 75% | 0.13 | 0.08 | 63% |
OUTLOOK
Full Year 2026
| Comparable operating profit(1),(2) | EUR 2.1 billion to EUR 2.6 billion (technical revision from EUR 2.0 billion to 2.5 billion) |
(1) Please refer to Alternative performance measures section in Nokia Corporation Report for Q2 and Half Year 2026 for a full explanation of how this term is defined.
(2) Outlook is based on a EUR:USD rate of 1.14 for the remainder of 2026.
Operationally, Nokia’s outlook is unchanged for full year 2026. However, a change in the presentation of two businesses (Fixed Wireless Access CPE and Enterprise Campus Edge) which are now treated as discontinued operations revises the comparable operating profit outlook by EUR 0.1 billion. As a result Nokia’s comparable operating profit guidance range is now EUR 2.1 to 2.6 billion (was EUR 2.0 to 2.5 billion).
The outlook and the underlying outlook assumptions are forward-looking statements subject to a number of risks and uncertainties as described or referred to in the Risk Factors section later in this release.
Along with Nokia’s official outlook target provided above, Nokia provides the below assumptions that support the group level financial outlook for 2026.
| Full year 2026 | Comment | |
| H2 seasonality | Net sales: Nokia assumes a 3% to 7% q-o-q increase in net sales in Q3. Comparable operating profit: Nokia assumes comparable operating profit will be largely flat Q2 into Q3 due to the phasing of software revenue recognition. Nokia then expects a meaningful increase in Q4. |
|
| Network Infrastructure net sales growth(1) | 12 to 14% | This incorporates an assumption for combined IP and Optical Networks to grow 18 to 20% in 2026. |
| Comparable financial income and expenses | Positive EUR 150 to 250 million | |
| Comparable income tax rate | ~26 to 27% | Nokia’s effective tax rate remains sensitive to geographic mix. |
| Cash outflows related to income taxes | EUR 500 million | |
| Capital expenditures | EUR 800 to 900 million (update) | Reduced assumption primarily due to changes in real estate plans. Nokia continues to invest in expanding Optical manufacturing capacity. |
| Free cash flow conversion from comparable operating profit | 55% to 75% | FCF conversion will be influenced by customer payment timing, evolution of regional demand and capex timing. |
| Restructuring and associated charges related to cost savings programs |
EUR 800 million (update) |
Nokia has provided an update on its restructuring actions below. |
| Restructuring and associated cash outflows |
EUR 700 to 800 million (update) |
Restructuring and related outflows relating to all Nokia restructuring programs (previous assumption based only on 2023-2026 program). |
1 Net sales growth assumption is on a constant currency and portfolio basis.
RESTRUCTURING UPDATE
Acceleration of restructuring actions
Consistent with Nokia’s objective of increasing agility and reallocating resource toward growth opportunities, the company has accelerated certain restructuring actions. In total, this means that Nokia now expects related charges of EUR 800 million in 2026.
2023 to 2026 restructuring program: In Oct 2023, Nokia initiated a program to achieve between EUR 800 million and 1 200 million in gross cost savings by the end of 2026. Nokia is currently tracking to achieve the high-end of that range and continues to expect EUR 250 million of restructuring charges in 2026 related to the conclusion of the program.
Simplifying Nokia’s operating structure in China: In January, Nokia announced that having taken full ownership of its joint venture in China it would integrate the operations into its global operating model. At the time this was expected to take two to three years with integration charges of between EUR 350 and 400 million and the expectation to deliver EUR 200 million in cost savings. Nokia now expects to recognize EUR 350 million of the planned integration charges by the end of 2026 as we target to complete the integration within two years.
Additional restructuring actions primarily in Europe: As a further step in simplifying Nokia’s operating model and allocating resources towards growth opportunities, the company has already initiated additional restructuring programs primarily in Europe. These programs are expected to lead to restructuring charges of EUR 200 million in 2026.