Nokia Q3 2026: AI orders fuel a 40% earnings beat

Nokia posted adjusted earnings of $0.10 per share in the third quarter of 2026, beating expectations and making this one of the cleaner quarters the company has reported in recent memory.

The engine behind both beats was the AI and Cloud customer segment, where net sales rose 123% on a constant currency basis and orders from those customers kept IP Networks and Optical Networks expanding.

Comparable operating profit rose 35% even as restructuring charges weighed on reported figures, and CEO Justin Hotard framed the quarter in terms of execution: 'In AI and Cloud, net sales more than doubled year-over-year and we secured EUR 1.5 billion in new orders. Our strong order backlog also positions us for future growth.' The Infinera integration, which Nokia expects to complete by end of 2026, a year ahead of schedule, is projected to deliver net synergies.

Nokia left its full-year comparable operating profit guidance unchanged at EUR 2.1 billion to EUR 2.6 billion and said it expects to finish above the midpoint of that range. Management guided for a sequential increase in fourth quarter net sales and expects the combined Optical and IP Networks businesses to grow in 2027. The AI infrastructure tailwind is not treated internally as a one-quarter story.

Free cash flow came in at negative $111.2 million, weighed down in part by an additional working capital investment Nokia is making to secure supply and support 2027 growth, and operating cash flow fell sharply year-over-year. Those are deliberate choices in the context of building capacity for a demand cycle management believes is durable, and they are numbers worth monitoring as the year closes out.