Nokia Q2 profit beats expectations as AI data-centre demand doubles cloud sales to €446 million

Nokia Q2 profit beat on AI demand

STOCKHOLM, July 23 (Reuters) - Nokia (NOKIA.HE), opens new tab reported a bigger than expected rise in its quarterly comparable operating profit on Thursday, as the Finnish telecom gear maker got a boost from artificial intelligence and cloud customers. Comparable operating profit jumped 18% to 434 million euros ($496.11 million) in the second quarter of 2026. That was above the average estimate of 382 million euros from ⁠analysts polled by LSEG. Nokia has been shifting focus to selling fibre optic cables to big tech companies building AI data centres. The company, however, was not immune to the sudden increase in memory chip prices due to AI companies cornering the market and impacting telecom equipment makers. "Demand remains strong, while supply continues to be the main industry constraint, prompting ⁠our customers to place longer-term orders," CEO Justin Hotard said in a statement. Comparable net sales reached 4.82 billion euros in the quarter, above market estimates. The Espoo, Finland-based group said net ⁠sales from AI and cloud customers doubled in the quarter to 446 million, as it booked 2.8 billion euros in new orders. Rival ⁠Swedish telecoms equipment maker Ericsson (ERICb.ST), opens new tab warned last week that it was under pressure from rising memory chip costs driven ⁠by surging AI demand, fanning investor worries that margins would be hit and sending its shares tumbling. ($1 = 0.8748 euros) Reporting by Supantha Mukherjee in Stockholm, editing by Terje Solsvik Our Standards: The Thomson Reuters Trust Principles., opens new tab

Nokia Q2 profit climbs 18% as AI data-centre demand doubles cloud sales

Comparable operating profit of €434mn beat analyst forecasts, but reported net profit fell to €5mn as restructuring charges bit. Nokia reported comparable operating profit of €434mn for the second quarter of 2026, up 18% on the same period last year and comfortably ahead of the €382mn that analysts polled by LSEG had forecast. Net sales rose 8% to €4.82bn, or 9% at constant currency, lifted by the companies racing to build AI data centres. The beat extended a run that began earlier in the year, when comparable operating profit jumped 54% in the first quarter. For the first half, net sales reached €9.25bn, up 6% as reported and 7% at constant currency, while the group operating margin widened to 9.0% in the second quarter, an improvement of 70 basis points. The Finnish network-equipment maker's Network Infrastructure division carried the quarter, with sales up 12% to €2.04bn. Optical Networks grew 20% and IP Networks 16%, both supplying the optical networking and routing that hyperscalers are buying to wire their AI clusters together and to link data centres across long distances. Sales to AI and cloud customers more than doubled year on year, reaching €446mn, and the unit booked €2.8bn of fresh orders during the quarter. Much of that came from selling fibre-optic gear to the large technology firms building AI data centres, a market Nokia has pushed into hard over the past year. "Demand remains strong, while supply continues to be the main industry constraint, prompting our customers to place longer-term orders," chief executive Justin Hotard said. New orders ran well ahead of what Nokia actually shipped, a sign of a lengthening backlog. The €2.8bn of AI and cloud orders booked in the quarter comfortably exceeded the €446mn those customers bought over the same three months, as buyers moved to lock in scarce supply ahead of delivery. Mobile Infrastructure, still the larger unit by revenue, grew 6% to €2.68bn, a steadier showing than the surging data-centre business. The mobile networks market has stabilised after several lean years of slowing 5G spend, though it is nowhere near the double-digit growth Nokia is now booking from cloud customers, and it remains the part of the business most exposed to the memory chips whose prices are climbing. The comparable figures flattered a messier bottom line. On a reported basis, Nokia swung to an operating loss of €50mn and posted net profit of just €5mn, down from €96mn a year earlier, after restructuring and other one-off charges weighed on the accounts. Nokia expects about €800mn of restructuring charges across 2026, including €350mn tied to integrating its operations in China, €200mn for European restructuring, and €250mn under an earlier cost-cutting programme. It held the quarterly dividend at €0.04 a share, payable on August 6. The company raised its full-year outlook for comparable operating profit to between €2.1bn and €2.6bn, up from €2.0bn to €2.5bn, though €0.1bn of the increase is a technical adjustment linked to reclassifying discontinued operations. Hotard said the group was on track to finish "somewhat above the midpoint" of that range. The raised guidance still leaves most of the year to play for. Nokia earned roughly €715mn of comparable operating profit across the first half, which means the top of its €2.6bn target depends on the second half delivering close to €1.9bn, a back-loaded shape that leaves little room for slippage. The results arrive against a backdrop of rising memory chip prices, which AI demand has pushed to record levels and which are squeezing makers of telecoms and networking equipment. Rival Ericsson has flagged similar cost pressure, though Nokia's second-quarter numbers suggest it is absorbing the hit for now. Hotard, who joined from Intel and took over as chief executive in 2025, has steered Nokia towards the data-centre buildout rather than the slower telecoms-equipment cycle that defined the company for much of the past decade. The next test comes with third-quarter results, when investors will watch whether that €2.8bn order book converts into the second-half momentum he is promising.

Nokia says AI, cloud boosted sales in second quarter

Helsinki (AFP) - Finnish telecommunications equipment maker Nokia said that demand for its AI and cloud services drove sales higher in the second quarter, but restructuring charges ate into earnings. The second quarter "demonstrates our strategy is delivering results," chief executive Justin Hotard said in a statement. "Since we set out our plan late last year, Team Nokia has focused on maximising our opportunity in the AI supercycle. I am encouraged by the execution and progress we have made in a short period of time. We enter the second half with momentum," he said. Nokia booked profit of 5.0 million euros ($5.7 million) for the period from April to June, down from 96 million euros a year earlier. Second-quarter sales, on the other hand, rose by eight percent to 4.8 billion euros. The group attributed the sharp drop in earnings to restructuring charges which are projected to amount to 800 million euros for the full year. Underlying or operating profit -- which strip out one-off factors -- rose by 18 percent to 434 million euros. "In the second quarter, our AI and cloud order intake was 2.8 billion euros while sales more than doubled year-on-year," said CEO Hotard. "The strength was broad-based We expect around half of these orders to convert to revenue over the next 12 months," he continued.

Nokia says AI, cloud boosted sales in second quarter

Finnish telecommunications equipment maker Nokia said that demand for its AI and cloud services drove sales higher in the second quarter, but restructuring charges ate into earnings. "In the second quarter, our AI and cloud order intake was 2.8 billion euros while sales more than doubled year-on-year," said CEO Hotard. Finnish telecommunications equipment maker Nokia said that demand for its AI and cloud services drove sales higher in the second quarter, but restructuring charges ate into earnings. The second quarter "demonstrates our strategy is delivering results," chief executive Justin Hotard said in a statement. "Since we set out our plan late last year, Team Nokia has focused on maximising our opportunity in the AI supercycle. I am encouraged by the execution and progress we have made in a short period of time. We enter the second half with momentum," he said. Nokia booked profit of 5.0 million euros ($5.7 million) for the period from April to June, down from 96 million euros a year earlier. Second-quarter sales, on the other hand, rose by eight percent to 4.8 billion euros. The group attributed the sharp drop in earnings to restructuring charges which are projected to amount to 800 million euros for the full year. Underlying or operating profit which strip out one-off factors rose by 18 percent to 434 million euros. "In the second quarter, our AI and cloud order intake was 2.8 billion euros while sales more than doubled year-on-year," said CEO Hotard. "The strength was broad-based We expect around half of these orders to convert to revenue over the next 12 months," he continued.

Global Market: Nokia Q2 profit beats estimates on strong AI, cloud demand; raises full-year outlook

Nokia reported stronger second-quarter earnings, surpassing analyst expectations significantly. Robust demand from artificial intelligence and cloud customers fueled this positive financial performance. The company's sales to AI and cloud clients doubled, securing substantial new orders. Despite rising chip costs, Nokia raised its 2026 profit guidance. This outlook reflects sustained momentum from infrastructure investments. Nokia reported stronger-than-expected second-quarter earnings as robust demand from artificial intelligence and cloud customers helped offset broader challenges in the telecom equipment market, according to Reuters. It posted a comparable operating profit of 434 million euros ($496.1 million) for the quarter ended June, an 18% year-on-year increase, comfortably surpassing analysts' average estimate of 382 million euros, according to an LSEG poll cited by Reuters. US MarketsPowered By As on 23 Jul 2026, 01:30 AM IST S&P 500 Top Gainers Super Micro Computer30.56(19.84%) Westinghouse Air Brake290.00(10.04%) Dell Technologies441.80(9.32%) EQT54.01(8.45%) Gainers" S&P 500 Top Losers GE Vernova985.03(-8.69%) Coterra Energy32.56(-8.62%) ServiceNow95.46(-6.47%) PTC113.11(-6.34%) Losers" AI Data Centre Push Drives Growth Nokia has been expanding beyond its traditional telecom infrastructure business by supplying fibre-optic networking equipment to major technology companies building AI data centres. The strategy has become a key growth driver as hyperscale cloud providers continue to invest heavily in AI infrastructure. According to Reuters, the company's sales to AI and cloud customers doubled during the quarter to 446 million euros, while it secured 2.8 billion euros in new orders from the segment, highlighting sustained demand for high-capacity networking solutions. Revenue Tops Market Expectations Comparable net sales rose to 4.82 billion euros during the quarter, exceeding market expectations. The strong revenue performance reflected continued investments by cloud providers and enterprise customers despite a mixed spending environment in the broader telecom sector. Nokia's growing presence in AI-related infrastructure has helped diversify its revenue base and reduce its dependence on traditional telecom operators. Chip Costs Remain an Industry Challenge Despite the strong performance, Nokia continued to face higher component costs as AI-driven demand for memory chips tightened global supply. According to Reuters, the sharp rise in memory chip prices has affected telecom equipment manufacturers across the industry, although Nokia indicated that customer demand remains resilient and supply constraints have encouraged longer-term purchasing commitments. The company has been strengthening its AI infrastructure capabilities under Chief Executive Justin Hotard, who joined Nokia from Intel's Data Center & AI Group last year. Hotard has prioritised expanding Nokia's data centre business, including a billion-dollar partnership with chipmaker Nvidia. Guidance Raised for 2026 Reflecting confidence in sustained demand, Nokia raised its full-year comparable operating profit guidance to a range of 2.1 billion euros to 2.6 billion euros, up from its previous forecast of 2.0 billion euros to 2.5 billion euros, Reuters reported. The upgraded outlook contrasts with concerns across the sector after Swedish rival Ericsson recently warned that soaring memory chip costs linked to AI demand could pressure profit margins. Those comments had heightened investor concerns about the industry's cost outlook. Nokia's improved forecast suggests the company expects continued momentum from AI and cloud infrastructure investments to support earnings growth through the remainder of 2026.

Nokia Q2 net sales rise 9% on AI and cloud demand By Investing.com

ESPOO, Finland - Nokia Corporation (HEL:NOKIA) reported second quarter net sales of €4.82 billion on Wednesday, representing a 9% increase year-over-year on a constant currency basis, according to a press release statement. The company's Network Infrastructure segment drove growth with net sales increasing 12% year-over-year on a constant currency basis. Optical Networks grew 20% while IP Networks expanded 16%. Net sales to AI and cloud customers more than doubled, rising 105% compared to the prior year period. Mobile Infrastructure net sales increased with stable year-over-year profit contribution driven by product mix, the company stated. Nokia's comparable gross margin expanded 70 basis points year-over-year to 46.0% in the second quarter. Comparable operating margin increased 70 basis points to 9.0%. Reported operating margin declined 430 basis points to negative 1.0% due to accelerated restructuring activities. The company reported comparable diluted earnings per share of €0.07 for the quarter, compared to €0.04 in the prior year period. Reported diluted earnings per share was €0.00. Nokia reclassified two businesses previously in its Portfolio Businesses segment into discontinued operations, resulting in a technical revision to its full year comparable operating profit outlook. The company now expects comparable operating profit of €2.1 billion to €2.6 billion for 2026, revised from €2.0 billion to €2.5 billion. Nokia stated its operational outlook remains unchanged. AI and cloud order intake reached €2.8 billion in the second quarter. The company expects approximately half of these orders to convert to revenue over the next twelve months. Nokia announced accelerated restructuring actions, with total expected charges of €800 million in 2026. This includes €250 million related to its 2023-2026 program, €350 million for integrating its China operations, and €200 million for additional programs primarily in Europe. The board resolved to distribute a dividend of €0.04 per share with a record date of July 28 and payment date of August 6. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.