Nokia Q1 2026: Strong AI and Optical growth
Nokia has started 2026 with a solid first quarter, showing steady growth and better profitability. The company is clearly benefiting from rising demand in AI, cloud services, and high-capacity networks.
In the first three months of the year, Nokia generated €4.5 billion in revenue, slightly more than last year. More importantly, the company improved its profitability, meaning it is earning more from its business than before.
A big part of this growth comes from AI and cloud customers, where sales jumped by 49%. This segment now makes up about 8% of Nokia’s total business, and the company also secured around €1 billion in new orders from these customers during the quarter.
The strongest performance came from Nokia’s Network Infrastructure division. Within it, Optical Networks grew by 20%, driven by demand from data centers and AI workloads. IP Networks also grew, while Fixed Networks declined as Nokia continues shifting toward more profitable products.
On the mobile side, Nokia delivered a stable performance. Mobile Infrastructure grew by 3%, with improvements in software and licensing, while radio networks remained flat. Still, this business achieved a healthy profit level.
Nokia is now placing even more focus on the AI market, which it expects to grow much faster than previously thought. The company sees strong demand across the industry, with increasing investments and longer delivery times due to high demand.
To support this, Nokia continues to invest in new technology. Recently, it introduced new optical solutions designed to handle AI workloads more efficiently and reduce costs for customers. These products are expected to reach the market starting in 2027.
The company is also moving forward with AI-RAN technology, with real-world trials expected later in 2026. Nokia already has 10 partners working with it on this.
Financially, Nokia remains in a strong position. It generated €0.6 billion in free cash flow and ended the quarter with €3.8 billion in net cash. The company also confirmed a €0.04 dividend per share, to be paid in May.
Looking ahead, Nokia did not change its full-year outlook and still expects €2.0 to €2.5 billion in operating profit for 2026. However, it is slightly more optimistic about growth in its network business, especially in Optical and IP Networks.
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% |
| Segment results | Network
Infrastructure |
Mobile
Infrastructure |
Portfolio
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)% |
Overall, Nokia’s Q1 results show a company that is steadily shifting toward future technologies, with AI and high-speed networks becoming key drivers of its growth.
