Nokia Corporation
Half Year financial report
23 July 2026 at 08:00 EEST
Nokia Corporation Report for Q2 and Half Year 2026
Solid Q2 fueled by growing AI & Cloud demand
- Q2 net sales grew 9% y-o-y on a constant currency basis (+8% reported).
- Network Infrastructure net sales grew 12% y-o-y on a constant currency basis, led by Optical Networks growing 20% and IP Networks growing 16%. Net sales to AI & Cloud customers grew 105%.
- 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%. Reported gross margin rose 60bps to 44.6%.
- Q2 comparable operating margin increased 70bps y-o-y to 9.0%. Reported operating margin declined 430bps to (1.0)% 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% 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 Nokia Corporation Report for Q2 and Half Year 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.
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% | 160bps |
| 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% |
| Segment results | Network Infrastructure | Mobile Infrastructure | Portfolio Businesses | |||
| EUR million | Q2'26 | Q2'25 | Q2'26 | Q2'25 | Q2'26 | Q2'25 |
| Net sales | 2 037 | 1 825 | 2 680 | 2 531 | 94 | 89 |
| YoY change | 12% | 6% | 6% | |||
| Constant currency YoY change | 12% | 7% | 6% | |||
| Gross margin % | 42.7% | 40.3% | 49.3% | 50.0% | 28.7% | 16.9% |
| Operating profit/(loss) | 166 | 117 | 310 | 310 | 0 | (11) |
| Operating margin % | 8.1% | 6.4% | 11.6% | 12.2% | 0.0% | (12.4)% |
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 from 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 - 14% | This incorporates an assumption for combined IP and Optical Networks to grow 18-20% in 2026. |
| Comparable financial income and expenses | Positive EUR 150 to 250 million | |
| Comparable income tax rate | ~26-27% | Nokia's effective tax rate remains sensitive to geographic mix. |
| Cash outflows related to income taxes | EUR 500 million | |
| Capital expenditures | EUR 800 - 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 - 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 - 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 2-3 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 2 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.
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 July 2026, the Board resolved to distribute a dividend of EUR 0.04 per share. The dividend record date is 28 July 2026 and the dividend will be paid on 6 August 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 0.06 per share.
ADDITIONAL TOPICS
Businesses moved to discontinued operations
In Q2 2026, Nokia classified its Fixed Wireless Access CPE and Enterprise Campus Edge businesses as discontinued operations. Nokia reached an agreement to sell its Fixed Wireless Access CPE business to Inseego and Nokia also deems it highly probable it will reach an agreement to sell Enterprise Campus Edge business. Nokia is today publishing a separate release that provides a recast of Nokia's financial results for each quarter in 2025 and Q1 2026. If Nokia had not treated these businesses as discontinued operations in Q2 2026, net sales would have been EUR 66 million higher and comparable operating profit would have been EUR 13 million lower.
Nokia acquires further U.S. optical manufacturing capacity
Nokia continues to expand its long-term optical component manufacturing plans. Nokia remains on track with its new San Jose Fab to begin ramping production later in Q4 2026 and announced during Q2 2026 an investment to increase its advanced test and packaging capacity in Pennsylvania by 10x beginning in Q3 2026. These investments support the demand expected in 2027 and 2028.
As part of its long-term capacity planning, Nokia has entered into a definitive agreement to acquire NXP's Chandler Semiconductor Fabrication campus in Arizona. Subject to the receipt of certain regulatory approvals, Nokia will initially lease manufacturing capacity in a portion of the facility on the site starting in early 2027 and will convert the site to Indium Phosphide semiconductor production for optical components. Nokia will then acquire the full site, with the transaction expected to close in Q1 2029. The transaction further strengthens Nokia's in-house compound semiconductor manufacturing capabilities through the addition of a highly experienced team with deep industry expertise. It also adds U.S.-based Indium Phosphide semiconductor manufacturing capacity at a time when secure and scalable domestic supply is becoming increasingly important for the broader U.S. technology ecosystem and the AI supercycle build out.
RISK FACTORS
Nokia and its businesses are exposed to a number of risks and uncertainties which include but are not limited to:
- Competitive intensity, which is expected to continue at a high level as some competitors seek to take share;
- Changes in customer network investments related to their ability to monetize the network or opportunities related to AI and data center growth;
- Our ability to ensure competitiveness of our product roadmaps and costs through additional R&D investments;
- Our ability to procure or manufacture certain components (e.g. semiconductors), the costs thereof and our ability to align our inventory levels and supplier commitments with customer demand
- Disturbance in the global supply chain;
- Impact of inflation, increased global macro-uncertainty, major currency fluctuations, changes in tariffs and higher interest rates;
- Potential economic impact and disruption of global pandemics;
- War or other geopolitical conflicts, disruptions and potential costs thereof;
- Other macroeconomic, industry and competitive developments;
- Timing and value of new, renewed and existing patent licensing agreements with licensees;
- Results in technology licensing; costs to protect and enforce our intellectual property rights; on-going litigation with respect to licensing and regulatory landscape for patent licensing;
- The outcomes of on-going and potential disputes and litigation;
- Our ability to execute, complete, successfully integrate and realize the expected benefits from transactions;
- Timing of completions and acceptances of certain projects;
- Our product and regional mix;
- Uncertainty in forecasting income tax expenses and cash outflows, over the long-term, as they are also subject to possible changes due to business mix, the timing of patent licensing cash flow and changes in tax legislation, including potential tax reforms in various countries and OECD initiatives;
- Our ability to utilize our Finnish deferred tax assets and their recognition on our balance sheet;
- Our ability to meet our sustainability and other ESG targets, including our targets relating to greenhouse gas emissions;
as well the risk factors specified under Forward-looking statements of this release, and our 2025 annual report on Form 20-F published on 5 March 2026 under Operating and financial review and prospects-Risk factors.
FORWARD-LOOKING STATEMENTS
Certain statements herein that are not historical facts are forward-looking statements. These forward-looking statements reflect Nokia's current expectations and views of future developments and include statements regarding: A) expectations, plans, benefits or outlook related to our strategies, projects, programs, product launches, growth management, licenses, sustainability and other ESG targets, operational key performance indicators and decisions on market exits; B) expectations, plans or benefits related to future performance of our businesses (including the expected impact, timing and duration of potential global pandemics, geopolitical conflicts and the general or regional macroeconomic conditions on our businesses, our supply chain, the timing of market changes or turning points in demand and our customers’ businesses) and any future dividends and other distributions of profit; C) expectations and targets regarding financial performance and results of operations, including market share, prices, net sales, income, margins, cash flows, cost savings, the timing of receivables, operating expenses, provisions, impairments, tariffs, taxes, currency exchange rates, hedging, investment funds, inflation, product cost reductions, competitiveness, value creation, revenue generation in any specific region, and licensing income and payments; D) our ability to execute, expectations, plans or benefits related to transactions, investments and changes in organizational structure and operating model; E) impact on revenue with respect to litigation/renewal discussions; and F) any statements preceded by or including "anticipate", “continue”, “believe”, “envisage”, “expect”, “aim”, “will”, “target”, “may”, “would”, “could“, "see", “plan”, “ensure” or similar expressions. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which could cause our actual results to differ materially from such statements. These statements are based on management’s best assumptions and beliefs in light of the information currently available to them. These forward-looking statements are only predictions based upon our current expectations and views of future events and developments and are subject to risks and uncertainties that are difficult to predict because they relate to events and depend on circumstances that will occur in the future. Factors, including risks and uncertainties that could cause these differences, include those risks and uncertainties identified in the Risk Factors above.
ANALYST WEBCAST
- Please note that Nokia's webcast time has changed and will begin on 23 July 2026 at 3.00 p.m. Finnish time (EEST). The webcast will last approximately 60 minutes.
- The webcast will be a presentation followed by a Q&A session. Presentation slides will be available for download at www.nokia.com/financials.
- A link to the webcast will be available at www.nokia.com/financials.
- Media representatives can listen in via the link, or alternatively call +44 20 3428 1399. Conference ID is 050-573-800.
FINANCIAL CALENDAR
• Nokia plans to publish its third quarter and January-September 2026 results on 22 October 2026.
About Nokia
Nokia is a global leader in connectivity for the AI era. With expertise across fixed, mobile, and transport networks, we’re advancing connectivity to secure a brighter world.
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Nokia
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Maria Vaismaa, Vice President, Corporate Communications
Nokia
Investor Relations
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Email: investor.relations@nokia.com
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