Half Year 2026 Nokia Oyj Earnings Call Transcript
Key Points
- Nokia Oyj (NOK) reported a 9% growth in net sales for Q2 2026, driven by strong performance in Network Infrastructure.
- The company's gross margin expanded by 70 basis points to 46%, and the operating margin also increased by 70 basis points to 9%.
- AI and Cloud segment sales more than doubled year-on-year, with order intake growing to EUR2.8 billion.
- Nokia Oyj (NOK) launched the industry's first commercial AI-RAN platform, promising significant spectral efficiency gains and a software upgrade path to 6G.
- The company is making strategic investments in optical growth, including expanding its indium phosphide semiconductor manufacturing capacity in the US.
- Free cash flow was negative EUR732 million in Q2, attributed to seasonal factors such as employee incentive payments and increased working capital.
- The company faces supply chain constraints, particularly in memory and indium phosphide wafers, impacting its ability to meet demand.
- Nokia Oyj (NOK) anticipates restructuring charges of approximately EUR800 million in 2026, which could affect profitability.
- The order book for AI and Cloud is described as 'lumpy,' indicating potential volatility in future revenue recognition.
- Despite strong growth in AI and Cloud, the margins in these segments have not yet become materially accretive to the company's overall profitability.
Good morning, ladies and gentlemen. Welcome to Nokia's second quarter 2026 results call. I'm David Mulholland, Head of Nokia Investor Relations. And today with me is Justin Hotard, our President and CEO; along with Marco Wiren, our CFO.
Before we get started, a quick disclaimer. During this call, we will be making forward-looking statements regarding our future business and financial performance, and these statements are predictions that involve risks and uncertainties. Actual results could, therefore, differ materially from the results we currently expect. Factors that could cause such differences can be both external as well as internal operating factors. We have identified such risks in the Risk Factors section of our annual report on Form 20-F, which is available on our Investor Relations website.
Within today's presentation, references to growth rates will be on a constant currency basis, and other financial items will be based on our comparable reporting. Please note that our Q2 report and a presentation that accompanies
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