Nokia (NOKIA) Q1 2026 earnings summary

Executive summary

• Q1 2026 net sales grew 4% year-over-year to EUR 4.5 billion, with Network Infrastructure up 6% and Optical Networks up 20%; AI & Cloud net sales surged 49% and accounted for 8% of total sales, with EUR 1 billion in new orders.

• Gross margin expanded by 320bps to 45.5%, and operating margin rose 200bps to 6.2%, aided by Infinera acquisition synergies and absence of prior year one-time charges.

• Free cash flow reached EUR 629 million, with net cash position at EUR 3.8 billion at quarter end.

• Book-to-bill ratio remained above one at group and Network Infrastructure levels.

• New Optical Networks solutions launched, delivering up to 70% TCO savings and progress on AI-RAN with 10 publicly committed customers.

Financial highlights

• Comparable operating profit reached EUR 281 million (+54% YoY), with a 200bps increase in operating margin year-over-year.

• Network Infrastructure sales grew 6%, with Optical Networks up 20% to EUR 821 million, IP Networks up 3% to EUR 626 million, and Fixed Networks down 13% to EUR 383 million.

• Mobile Networks net sales grew 3%, with Core Software up 5%, Radio Networks flat, and Technology Standards up 10%; gross margin increased by 430bps to 48.5%.

• Free cash flow was EUR 629 million; net cash increased by EUR 410 million during Q1 2026.

• Dividends paid: EUR 0.2 billion in Q1.

Outlook and guidance

• Upgraded 2026 growth target for Network Infrastructure to 12%-14%, and for Optical and IP Networks combined to 18%-20%.

• Full-year 2026 comparable operating profit guidance unchanged at EUR 2.0–2.5 billion, tracking above midpoint.

• Q2 net sales expected to increase 5%-9% sequentially; Q2 operating profit to account for 12%-16% of full year.

• Free cash flow conversion from comparable operating profit expected at 55–75% for FY2026.

• Dividend of EUR 0.04 per share declared, with up to EUR 0.14 per share authorized for FY2025.