Nokia Q3 sales up 9% as AI & Cloud revenue more than doubles

Growth led by IP and optical networks

Nokia reported Q3 net sales of EUR 5 154 million, up 10% on a reported basis and 9% at constant currency and portfolio. Network Infrastructure was the main driver. Its net sales rose 15% in constant currency, with IP Networks growing 43% and Optical Networks 18%, according to the company.

Group order intake from AI & Cloud customers grew 118%. In his comments, CEO Justin Hotard said AI & Cloud net sales "more than doubled year-over-year" and that Nokia secured EUR 1.5 billion in new orders. He also said the company expects its combined Optical and IP Networks businesses to grow between 25% and 30% in 2027.

Mobile Infrastructure net sales grew 5%, which Nokia said was partly due to revenue moving forward from Q4 into Q3. The segment benefited from product mix, commercial discipline and the cost reduction program. Network Infrastructure posted an operating margin of 10.0%, compared with 7.7% a year earlier, while Mobile Infrastructure reached 14.5%, up from 12.9%.

Margins: comparable up, reported down

On a comparable basis, operating profit rose 35% to EUR 605 million, and the operating margin increased 220 basis points to 11.7%. Comparable gross margin was largely stable at 44.6%. Comparable diluted EPS from continuing operations was EUR 0.09, against EUR 0.06 a year earlier.

Reported figures were weaker. Operating profit fell 22% to EUR 196 million, and the operating margin declined 160 basis points to 3.8%. Nokia attributed this to accelerated restructuring and integration costs. Reported gross margin fell 220 basis points to 42.2%, and reported diluted EPS from continuing operations was EUR 0.03. Profit from continuing operations nearly doubled to EUR 176 million from EUR 90 million.

Net cash and interest-bearing financial investments stood at EUR 2 584 million, down 14% from EUR 3 001 million a year earlier.

Outlook assumptions change beneath an unchanged target

While the headline outlook did not move, Nokia updated several supporting assumptions. It now expects Network Infrastructure net sales growth of 12 to 14% in 2026, and says combined Optical and IP Networks should grow somewhat above its prior 18 to 20% assumption. For Q4, it assumes a 20% to 24% quarter-on-quarter rise in net sales and full-year operating profit above the mid-point of its range.

• Comparable financial income and expenses: positive EUR 300 to 400 million, helped by strong income from venture fund investments.
• Capital expenditures: EUR 750 to 850 million, reduced partly because some cash payments for manufacturing investments move to 2027. Nokia says its optical manufacturing expansion plans remain on track.
• Free cash flow conversion from comparable operating profit: 35% to 55%, lowered because Nokia plans to invest an additional EUR 400 million in working capital this year to secure supply and support 2027 growth.
• Restructuring and associated charges: EUR 1 100 million, with related cash outflows of EUR 800 to 900 million, as Nokia enlarges some programs to simplify operations and raise operating leverage.

Infinera, AI-RAN and shareholder payout

Hotard said Nokia is on track to complete the Infinera integration by the end of 2026, one year ahead of plan, with EUR 200 million of net synergies. He cited the partnership with Google supporting its EUR 13 billion investment in Finland as an example of optical and IP networks providing connectivity for AI infrastructure. Together with T-Mobile and NVIDIA, Nokia also completed what it calls the world's first AI-RAN call in a live operator network.

The Board resolved to distribute a dividend of EUR 0.03 per share. The record date is 27 October 2026 and payment is due on 5 November 2026. The remaining distribution authorization after this payment is a maximum of EUR 0.03 per share.

For investors, the report shows strong demand tied to AI infrastructure, but also higher restructuring costs and a lower cash conversion forecast as Nokia builds working capital ahead of 2027. Nokia notes that the published text is a summary and that investors should consult the complete report.