Nokia reported a 2 percent increase in revenue to €4.497 billion in Q1 2026, compared to €4.39 billion in Q1 2025, supported by strong demand from AI and cloud infrastructure investments.
Nokia’s Network Infrastructure business emerged as the key growth driver, with revenue rising 12 percent to €1.829 billion from €1.639 billion. Within this segment, Optical Networks revenue surged to €821 million from €525 million, reflecting robust demand from AI and cloud customers, particularly in the Americas. The company reported strong order intake and is expanding manufacturing capacity to capture long-term growth opportunities in optical networking.
IP Networks revenue stood at €626 million, slightly down from €646 million, but recorded 3 percent growth on a constant currency basis. Growth was driven by AI and cloud demand, partially offset by reduced spending from telecom operators, while order intake improved across all customer segments.
Fixed Networks revenue declined to €383 million from €468 million, mainly due to lower sales of consumer premise fiber products as Nokia shifts focus toward higher-margin offerings. However, sales of operator-focused fiber optical line terminals remained stable.
Mobile Infrastructure revenue decreased 3 percent to €2.495 billion from €2.573 billion. Within this segment, Core Software revenue was €530 million, compared to €535 million last year, while Radio Networks revenue declined to €1.580 billion from €1.669 billion. Growth in EMEA and Latin America was offset by a decline in North America following a prior contract loss in December 2023.
Technology Standards revenue increased to €385 million from €369 million, supported by new deals in consumer electronics and multimedia, which contributed catch-up revenue during the quarter.
Regional performance showed growth in the Americas, where revenue reached €1.537 billion from €1.482 billion, and in EMEA, which rose to €1.997 billion from €1.844 billion. However, APAC revenue declined to €963 million from €1.064 billion.
By customer segment, revenue from Telecommunication Providers fell to €3.267 billion from €3.421 billion. In contrast, AI and Cloud revenue nearly doubled to €350 million from €180 million, highlighting accelerating enterprise demand. Mission Critical Enterprise and Defense revenue increased to €498 million from €418 million, while Technology Licensees contributed €385 million, up from €369 million.
Justin Hotard, President and CEO, said the company is increasing its growth assumptions for Optical and IP Networks and investing to capture rising demand from AI and cloud customers.
AI focus
AI and cloud emerged as a key growth engine for Nokia in Q1 2026, significantly boosting both revenue and future demand. AI and Cloud sales grew 49 percent year-on-year and contributed around 8 percent of total revenue, highlighting rapid enterprise adoption of AI-driven infrastructure.
The company recorded strong momentum in orders, securing approximately €1 billion in AI and Cloud-related deals during the quarter, indicating robust pipeline growth.
AI-led demand is also accelerating Nokia’s broader market opportunity. According to the outlook shown on page 6 of the report, the AI and Cloud segment is expected to grow at a 27 percent CAGR between 2025 and 2028, significantly higher than previous estimates of 16 percent.
This surge is driving increased investments in Network Infrastructure, particularly in optical and IP networks, which are critical for AI data centers. Nokia has also introduced new optical networking solutions optimized for AI workloads, delivering up to 70 percent reduction in total cost of ownership, as highlighted on page 7.
Additionally, Nokia is advancing AI integration in telecom networks through AI-RAN initiatives, with 10 customers already committed and trials expected later in 2026.
BABURAJAN KIZHAKEDATH
