Nokia Q1 Sales Up 4% to €4.5B; AI and Cloud Orders Jump 49%
Nokia reported a 4% increase in Q1 net sales to €4.5 billion and expanded gross margin by 320 basis points to 45.5%. AI and cloud orders surged 49% with over €1 billion in new deals, while guidance for optical and IP networks was raised to 18–20% growth for 2026.
1. Q1 Financial Results
The company posted net sales of €4.5 billion, a 4% year-over-year increase, and expanded gross margin by 320 basis points to 45.5%, with operating margin rising 200 basis points to 6.2% and free cash flow of €629 million.
2. Segment Performance
AI and cloud sales surged 49% driven by over €1 billion in orders, optical networks grew 20%, IP networks rose 3%, while fixed networks declined 13% due to strategic portfolio shifts.
3. 2026 Growth Guidance
Nokia raised its full-year growth forecast for network infrastructure to 12–14% and for optical and IP networks to 18–20%, reflecting increased supply confidence and strong demand visibility.
4. Margin and Cash Flow Outlook
Management cautioned on product mix headwinds affecting gross margins and forecast seasonally lower cash flow in Q2 due to employee incentive timing, with mobile infrastructure margins expected to strengthen in Q4.