Nokia Corporation
Interim report
23 April 2026 at 08:00 EEST
Nokia Corporation Interim Report for Q1 2026
Solid start to the year with strong growth in Optical Networks
-- Q1 comparable net sales grew 4% y-o-y on a constant currency and
portfolio basis (+2% reported).
-- Network Infrastructure net sales grew 6% y-o-y on a constant currency and
portfolio basis with a strong contribution from Optical Networks which
grew 20%. Net sales from AI & Cloud customers grew 49%.
-- Mobile Infrastructure net sales grew 3% y-o-y on a constant currency
basis. Core Software grew 5% while Radio Networks was flat and Technology
Standards grew 10% with several new deals signed in the quarter.
-- Q1 comparable gross margin expanded 320bps y-o-y to 45.5%. Reported gross
margin increased 270bps to 44.2%.
-- Q1 comparable operating margin increased 200bps y-o-y to 6.2%. Reported
operating margin expanded 190bps to 1.4%.
-- Q1 comparable diluted EPS of EUR 0.05; reported diluted EPS for the
period of EUR 0.02.
-- Q1 free cash flow of EUR 0.6 billion, net cash balance of EUR 3.8
billion.
-- Nokia's full year outlook is unchanged. Nokia targets EUR 2.0 to 2.5
billion of comparable operating profit.
"We are increasing our growth assumption for Optical and IP Networks and we are investing to capture accelerating demand from AI & Cloud customers."
Justin Hotard, President and CEO
This is a summary of the Nokia Corporation Interim Report for Q1 2026 published today. 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.
JUSTIN HOTARD, PRESIDENT AND CEO, ON Q1 2026 RESULTS
In the following quote, net sales comments and growth rates are referring to comparable net sales and are on a constant currency and portfolio basis. References to margins are related to Nokia's comparable results.
We delivered a solid start to the year, with net sales growing 4%, gross margin expanding 320bps and operating margin expanding 200bps in the first quarter. Demand continued to be strong, particularly in AI & Cloud, where net sales grew 49% and now account for 8% of group sales. We also booked EUR 1 billion of orders from AI & Cloud customers in the quarter.
Network Infrastructure net sales grew 6%, with Optical Networks growing 20%, supported by strong order intake and a book-to-bill well above one. We won a number of important AI & Cloud design wins and orders for both pluggables and line systems in the quarter. IP Networks net sales grew 3% and we expect growth to improve in Q2 and for the full year. In Fixed Networks, net sales declined 13%, reflecting our strategic shift to higher-margin products. Our core fiber OLT business was largely flat, with a growing pipeline in our major markets.
At our Capital Markets Day in November, we outlined our view of the AI supercycle and the market opportunity for Nokia. Since then, demand has accelerated significantly. We now expect the addressable market in AI & Cloud to grow at a 27% CAGR (2025--2028), compared to the 16% we estimated in November. Across the supply chain, demand is accelerating and lead times are extending, reflecting the scale of investment underway.
At the OFC optical conference in March, we announced a new suite of innovations in Optical Networks designed to deliver the scale and performance required for AI workloads. We announced four new Digital Signal Processors (DSPs) that power 13 new solutions. These solutions unlock new applications and reduce total cost of ownership by up to 70% for our customers. Products will begin sampling in mid-2027, with volume production starting in the second half. Our new indium phosphide manufacturing facility online in San Jose, California is on track to begin ramping production later this year.
We are seeing good traction in IP Networks, with pipeline growth driven by new design wins and deeper penetration into AI & Cloud use cases inside the data center.
Mobile Infrastructure delivered a solid Q1, with an operating margin of 8.9%. Net sales grew 3%, with strength in Core Software, a steady performance in Radio Networks, and growth in Technology Standards supported by new deals in consumer electronics and multimedia. Margin expansion reflected a one-time charge in the prior year. The integration of this new segment is on track, with teams focused on delivering against our KPIs, expanding gross margin and growing operating profit over time.
We are making progress on AI-RAN and are on track to launch customer trials later this year. With the addition of Orange, we now have 10 customers publicly committed to working with us.
For the full year, we now expect Network Infrastructure net sales to grow between 12% and 14% in 2026. We expect Optical Networks and IP Networks combined to grow between 18% and 20%. We are also increasing our investment in Optical Networks to maximize our opportunity in this accelerating market. As a result we are currently tracking somewhat above the mid-point of our full year financial outlook of EUR 2.0 to 2.5 billion in comparable operating profit.
FINANCIAL RESULTS
EUR million (except for EPS in EUR) Q1'26 Q1'25 YoY change
---------------------------------------- ------- ------- ----------
Reported results
---------------------------------------- ------- ------- ----------
Net sales 4 497 4 390 2%
Gross margin % 44.2% 41.5% 270bps
Research and development expenses (1 239) (1 145) 8%
Selling, general and administrative
expenses (664) (723) (8)%
Operating profit/(loss) 62 (21)
Operating margin % 1.4% (0.5)% 190bps
Profit/(loss) for the period 87 (60)
EPS for the period, diluted 0.02 (0.01)
Net cash and interest-bearing financial
investments 3 788 2 988 27%
---------------------------------------- ------- ------- ----------
Comparable results
---------------------------------------- ------- ------- ----------
Net sales 4 500 4 390 3%
Constant currency and portfolio YoY
change 4%
Gross margin % 45.5% 42.3% 320bps
Research and development expenses (1 154) (1 115) 3%
Selling, general and administrative
expenses (604) (582) 4%
Operating profit 281 183 54%
Operating margin % 6.2% 4.2% 200bps
Profit for the period 295 153 93%
EPS for the period, diluted 0.05 0.03 67%
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Network Mobile Portfolio
Segment results Infrastructure Infrastructure Businesses
---------------------- ----------------- ----------------- ----------------
EUR million Q1'26 Q1'25 Q1'26 Q1'25 Q1'26 Q1'25
---------------------- -------- ------- -------- ------- ------- -------
Net sales 1 829 1 639 2 495 2 573 173 176
YoY change 12% (3)% (2)%
Constant currency
and portfolio YoY
change 6% 3% 4%
Gross margin % 43.4% 41.9% 48.5% 44.2% 26.0% 22.2%
Operating
profit/(loss) 123 115 222 132 (20) (32)
Operating margin % 6.7% 7.0% 8.9% 5.1% (11.6)% (18.2)%
---------------------- -------- ------- -------- ------- ------- -------
SHAREHOLDER DISTRIBUTION
Dividend
Under the authorization by the Annual General Meeting held on 9 April 2026, the Board of Directors may resolve on the distribution of an aggregate maximum of EUR 0.14 per share to be paid in respect of financial year 2025. The authorization will be used to distribute dividend and/or assets from the reserve for invested unrestricted equity in four installments during the authorization period unless the Board decides otherwise for a justified reason.
On 23 April 2026, the Board resolved to distribute a dividend of EUR 0.04 per share. The dividend record date is 28 April 2026 and the dividend will be paid on 7 May 2026. The actual dividend payment date outside Finland will be determined by the practices of the intermediary banks transferring the dividend payments.
Following this announced distribution, the Board's remaining distribution authorization is a maximum of EUR 0.10 per share.
OUTLOOK
Full Year 2026
----------------------------------
Comparable operating EUR 2.0 billion to EUR 2.5 billion
profit(1),(2)
-------------------- ----------------------------------
(1) Please refer to Alternative performance measures section in Nokia Corporation Interim Report for Q1 2026 for a full explanation of how this term is defined.
(2) Outlook is based on a EUR:USD rate of 1.15 for the remainder of 2026.
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.
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