Quick Verdict: Nokia delivered Q1 2026 comparable net sales of €4.50 billion, up 4% in constant currency, with comparable EPS of €0.05 and reported EPS of €0.02. Comparable operating profit jumped 54% to €281 million, beating a roughly €250 million consensus, and shares surged about 7%, touching a 16‑year high after the beat.
About Nokia Corporation
Nokia Corporation (tickers: NOK on NYSE, NOKIA on Helsinki) is a Finnish technology company that provides network infrastructure, mobile and fixed connectivity, and related software and services worldwide. Founded in 1865 and headquartered in Espoo, Finland, Nokia has transformed from its legacy handset roots into a leading supplier of telecom and cloud networking gear for operators, enterprises and hyperscale data‑center customers. As of April 2026, Nokia’s equity is valued at roughly ₹5.16 trillion in market capitalization, placing it among the larger global communications‑equipment players by value. The stock trades at an elevated trailing P/E ratio of around 66–70x, reflecting renewed AI‑driven growth expectations, while forward dividend distributions of up to €0.14 per share for the 2025 financial year imply a modest yield in the mid‑1% range. Nokia employed about 78,000 people in 2025, with a globally diversified workforce that it is now streamlining under a multi‑year cost‑reduction and portfolio‑sharpening program.
Top Financial Highlights
- Total revenue (net sales): Q1 2026 reported net sales were €4,497 million, up 2% year over year, while comparable net sales were €4,500 million, up 3% (4% in constant currency and portfolio terms).
- Net income and EPS: Reported profit for the period improved to €87 million from a €60 million loss in Q1 2025, with reported diluted EPS of €0.02 versus –€0.01 a year earlier. Comparable profit for the period rose to €295 million (EPS €0.05) from €153 million (EPS €0.03), a 93% profit and 67% EPS increase.
- Gross margin: Reported gross margin expanded to 44.2% from 41.5%, while comparable gross margin climbed 320 bps to 45.5%, reflecting better mix, cost control and growing AI & Cloud exposure.
- Operating profit and margin: Reported operating profit swung to €62 million from a €21 million loss, with the reported operating margin improving to 1.4% from –0.5%. On a comparable basis, operating profit grew to €281 million from €183 million, lifting the comparable operating margin to 6.2% from 4.2% (up 200 bps).
- Operating cash flow and free cash flow: Q1 free cash flow reached €0.6 billion, supported by favorable working‑capital seasonality, and Nokia ended the quarter with €3.8 billion of net cash and interest‑bearing financial investments.
- Cash and liquidity: Net cash of €3.788 billion was up 27% vs. €2.988 billion a year earlier, underpinning continued investment in R&D and AI‑driven optical and IP networking.
- Segment revenue – Network Infrastructure: Network Infrastructure net sales were €1.829 billion, up 6% in constant currency and 12% on the segment table, driven by Optical Networks net sales of €821 million (+20%) and IP Networks net sales of €626 million (+3%). Fixed Networks net sales declined 13% to €383 million as Nokia shifts toward higher‑margin products.
- Segment revenue – Mobile Infrastructure: Mobile Infrastructure net sales came in around €2.495 billion, with comparable constant‑currency growth of 3%, including Core Software net sales of €530 million (+5%), Radio Networks net sales flat at €1.58 billion, and Technology Standards net sales of €385 million (+10%).
- Margins by segment: Network Infrastructure delivered a 43.4% gross margin and 6.7% operating margin, while Mobile Infrastructure posted a stronger 48.5% gross margin and 8.9% operating margin in Q1, the latter up 380 bps year on year.
- AI & Cloud momentum: Net sales from AI & Cloud customers surged 49% and now account for 8% of group sales, with €1.0 billion of AI & Cloud orders booked in the quarter.
- Dividend and capital returns: Under the AGM authorization of up to €0.14 per share on 2025 earnings, the Board approved a €0.04 per‑share dividend to be paid on 7 May 2026, leaving €0.10 per share authorization outstanding.
- Guidance and outlook: Nokia reaffirmed its full‑year 2026 comparable operating profit target of €2.0–2.5 billion, now tracking “somewhat above the mid‑point,” and raised Network Infrastructure net sales growth guidance to 12–14% (constant currency), with Optical + IP Networks targeted to grow 18–20%. Management expects Q2 2026 net sales to rise 5–9% quarter‑on‑quarter, with Q2 accounting for 12–16% of full‑year comparable operating profit.
Beat or Miss?
| Metric | Reported Q1 2026 | Difference / Analysis |
| Comparable net sales | €4.50 billion | Roughly in line with market expectations, described as matching consensus in Reuters coverage. |
| Comparable operating profit | €281 million | Beat vs. ~€250 million consensus from Infront, a 54% YoY jump and ~12% upside to estimates. |
| Comparable operating margin | 6.20% | Up 200 bps YoY, ahead of a mid‑single‑digit margin profile implied in prior guidance. |
| Comparable diluted EPS | € 0.05 | Broadly in line with pre‑earnings forecasts that centered around €0.04–0.05 (≈**$0.06** per ADR share). |
| Free cash flow | €0.6 billion | Strong seasonal cash generation supports FCF conversion targets of 55–75% for 2026. |
| Net cash | €3.8 billion | Up 27% YoY, providing ample flexibility for AI‑optical investments and shareholder returns. |
Overall, Nokia beat profit expectations, delivered margins above consensus, and posted revenue that was broadly in line with forecasts, with external commentary emphasizing a “bigger than expected rise” in comparable operating profit.
What Leadership Is Saying
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.
Q1 was a solid start to 2026, with net sales of €4.5bn, gross margin of 45.5%, operating margin of 6.2%, free cash flow of €0.6bn and net cash of €3.8bn.
In his remarks, President and CEO Justin Hotard highlighted accelerating demand from AI & Cloud customers, noting that their net sales grew 49% and now represent 8% of group revenues, with €1 billion of orders booked in the quarter. This underpins Nokia’s view of an “AI supercycle,” prompting higher growth assumptions for optical and IP networks and increased investment to capture that opportunity.
The second quote comes from CFO Marco Wirén’s Q1 results presentation, where he framed the quarter as a “solid start” underpinned by improved gross and operating margins, strong free cash flow and a reinforced net cash position. His focus is on maintaining disciplined cost control and capital allocation while supporting elevated growth capex in Network Infrastructure and Optical Networks.
Historical Performance
Nokia’s Q1 2026 performance shows a modest top‑line recovery but a much sharper improvement in profitability versus the prior‑year quarter. Gross margin and operating margin expanded meaningfully as product mix shifted toward higher‑value optical and IP networking, while Mobile Infrastructure margins benefited from last year’s one‑time charge and ongoing cost actions.
Year‑over‑year comparison – Nokia Group
| Category | Q1 2026 | Q1 2025 | Change (%) |
| Net sales (reported) | €4,497 million | €4,390 million | +2% reported growth |
| Net sales (comparable) | €4,500 million | €4,390 million | +3% (4% in constant currency) |
| Profit for the period (reported) | €87 million | –€60 million | Swing from loss to profit |
| Profit for the period (comparable) | €295 million | €153 million | 93% |
| Total operating expenses (comp., R&D + SG&A) | €1,758 million (1,154 + 604) | €1,697 million (1,115 + 582) | ≈**+4%** increase |
Despite low‑single‑digit revenue growth, Nokia nearly doubled comparable profit by expanding gross margin, tightly managing operating costs and benefiting from a more favorable segment mix. The modest rise in comparable R&D and SG&A (around 4%) reflects incremental investment in AI‑native optical/IP solutions and Mobile Infrastructure integration, funded by efficiency gains elsewhere.
Historical Performance – Competitor YoY
Swedish rival Ericsson offers a useful benchmark for the broader network‑equipment cycle, reporting Q1 2026 results that featured organic growth but weaker reported figures due to currency and restructuring. While Nokia’s focus is on AI‑driven optical and IP networks, both companies face similar macro, FX and operator‑capex dynamics.
Year‑over‑year comparison – Ericsson
| Category | Q1 2026 | Q1 2025 | Change (%) |
| Net sales | SEK 49.3 billion | SEK 55.0 billion | –10% reported (but +6% organic) |
| Net income | SEK 0.9 billion | SEK 4.2 billion | –79% |
| Adjusted EBITA | SEK 5.6 billion (11.3% margin) | SEK 6.9 billion (12.6% margin) | –20%, margin –130 bps |
Ericsson’s Q1 2026 report highlights 6% organic sales growth across all segments but a 10% reported revenue decline driven by a SEK 7.8 billion negative currency impact and divestments. Net income dropped sharply due to SEK 3.8 billion in restructuring charges and FX, whereas adjusted gross margin and EBITA margin remained resilient at 48.1% and 11.3%, respectively.
By contrast, Nokia delivered positive reported revenue growth and margin expansion, with no comparable one‑off restructuring drag at the P&L level in Q1 2026, highlighting relatively cleaner optics on profitability.
How the Market Reacted?
The market’s reaction to Nokia’s Q1 2026 print was decisively positive: shares in Helsinki rose nearly 7% in early trading, reaching their highest level in 16 years following the release. Investors rewarded the company for beating expectations on comparable operating profit, reaffirming its €2.0–2.5 billion 2026 profit outlook, and raising growth targets for AI & Cloud‑linked Network Infrastructure, particularly Optical and IP. External coverage tied the stock surge to strong AI data‑center demand, upgraded segment‑growth assumptions, and evidence that the AI‑optical “supercycle” is translating into tangible orders and margin expansion. While some pre‑earnings commentary warned that high valuation and prior rallies could cap upside, the profit beat and guidance tone were strong enough to push the stock to a new multi‑year high rather than trigger profit‑taking.