Nokia AI Sales More Than Double as Cash-Flow Outlook Tightens

Nokia’s October 22 results give U.S. investors a mixed picture of the AI infrastructure buildout: sharply rising demand for networking equipment, alongside a greater cash commitment to supply that growth.

The Finnish company, whose shares also trade in the United States under ticker NOK, reported third-quarter net sales of €5.154 billion, up 10% from a year earlier. Comparable operating profit rose 35% to €605 million, and comparable operating margin increased to 11.7% from 9.5%.

The results were released before Thursday’s U.S. cash-market open. They are company financial results, not a claim about where Nokia shares or the broader market will close on October 22.

AI and cloud customers drive network growth

Sales to AI and cloud customers increased 123% year over year, while order intake from those customers rose 118%. Nokia said it secured €1.5 billion in new orders in that business during the quarter.

Network Infrastructure sales grew 15% on a constant-currency basis, led by 43% growth in IP Networks and 18% in Optical Networks. These businesses provide connectivity needed to move data within and between increasingly large computing systems.

Chief executive Justin Hotard said Nokia expects its combined Optical and IP Networks businesses to grow 25%–30% in 2027. That is a forward-looking management expectation, not growth the company has already delivered. Nokia also said it remained on track to complete the Infinera integration by the end of 2026, one year ahead of plan, with €200 million in net synergies.

The cash-conversion assumption moves lower

Nokia kept its 2026 comparable operating-profit outlook at €2.1 billion–€2.6 billion. However, it lowered its free-cash-flow conversion assumption to 35%–55% of comparable operating profit, citing working-capital investments and accelerated restructuring.

The company plans to invest an additional €400 million in working capital this year to secure supply and support expected growth in 2027. It also increased its assumption for restructuring and associated charges to €1.1 billion, with related cash outflows expected at €800 million–€900 million.

That distinction is important for shareholders: maintaining a profit target does not mean maintaining the same near-term cash-generation profile. Inventory, payment timing and restructuring costs can change cash available to the business even when demand is improving.

Reported profit tells a different story

Reported operating profit fell 22% to €196 million, with a 3.8% margin, as restructuring and integration costs weighed on the result. The comparable measure excludes certain items, so it should not be presented as identical to reported profit.

The board approved a €0.03-per-share dividend, with an October 27 record date and a November 5 payment date. Nokia cautioned that payment timing outside Finland depends on intermediary-bank practices.

For U.S. investors, the immediate question is whether faster networking growth can compensate for the larger near-term cash requirement. The release supports an earnings-and-cash-flow assessment; it does not, on its own, verify any pre-market share-price move.

Main image: illustrative Ethernet network equipment photograph by Brett Sayles / Pexels, cropped to 16:9 under the Pexels License. The equipment is not identified as a Nokia product.

Sources

• Nokia: third-quarter 2026 interim report, October 22
• Brett Sayles / Pexels: original network-equipment photograph; Pexels License