Nokia (NOKIA) investor relations material

Executive summary

• Net sales grew 9% year-over-year in Q2 2026 on a constant currency basis, driven by strong AI & Cloud momentum, with sales to this segment up 105% year-over-year and order intake reaching EUR 2.8 billion.

• Comparable gross margin expanded by 70 basis points to 46.0%, and comparable operating margin increased by 70 basis points to 9.0% year-over-year.

• Strategic focus remains on capitalizing on the AI super cycle, scaling optical manufacturing, and divesting non-core assets, with co-innovation initiatives involving Google Cloud and Vodafone Albania.

• Two businesses were reclassified as discontinued operations, impacting reported results and leading to a technical revision of full-year profit guidance.

• Reported operating margin declined to -1.0% due to accelerated restructuring charges of EUR 390 million in the quarter.

Financial highlights

• Q2 2026 net sales reached EUR 4,815 million (+9% year-over-year constant currency); comparable operating profit was EUR 434 million (+18% year-over-year); reported operating loss was EUR 50 million.

• Free cash flow was negative EUR 732 million, mainly due to working capital outflows, employee incentive payments, and restructuring.

• Net cash position at quarter-end was EUR 2.8 billion, down from EUR 3.8 billion at Q1 end.

• Financial income benefited from a positive venture fund revaluation, supporting net profit and EPS.

• Q2 comparable diluted EPS was EUR 0.07, up 75% year-over-year; reported diluted EPS was EUR 0.00.

Outlook and guidance

• Full-year 2026 comparable operating profit guidance revised to EUR 2.1–2.6 billion due to discontinued operations reclassification.

• Q3 net sales projected to increase sequentially by 3%-7%, with operating profit similar to Q2 due to software revenue phasing; Q4 anticipated to show meaningful improvement in operating profit.

• Free cash flow conversion expected at the low end of the 55%-75% range due to restructuring and working capital investments.

• Network Infrastructure net sales expected to grow 12–14% for the full year.

• Dividend of EUR 0.04 per share declared, with a remaining authorization of up to EUR 0.06 per share.