Nokia Q2 2026 Earnings Report

Nokia EPS Results

• Actual EPS: $0.08
• Consensus EPS: $0.07
• Beat/Miss: Beat by +$0.01
• One Year Ago EPS: $0.04

Nokia Revenue Results

• Actual Revenue: $5.50 billion
• Expected Revenue: $5.57 billion
• Beat/Miss: Missed by -$72.38 million
• YoY Revenue Growth: +8.40%

Nokia Announcement Details

• Quarter: Q2 2026
• Date: 7/23/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, July 23, 2026
• Conference Call Time: 8:00AM ET

Nokia (NYSE:NOK), headquartered in Espoo, Finland, is a global telecommunications and technology company with roots dating back to 1865. Over its long history the company moved from forestry and cable operations into electronics and telecommunications, becoming widely known in the 1990s and 2000s for its mobile phones. In recent years Nokia refocused its business toward network infrastructure, software and technology licensing, and research and development, following the divestiture of its handset manufacturing business and the acquisition of Alcatel‑Lucent in 2016, which brought Bell Labs into its portfolio.

Today Nokia’s core activities center on designing, building and supporting communications networks and related software. Its product and service portfolio includes mobile radio access networks (RAN) and core network equipment for 4G and 5G, IP routing and optical transport systems, cloud‑native software for network automation and operations, and professional services for network deployment, optimization and managed services. Nokia Technologies manages patents and licensing programs, while Nokia Bell Labs provides advanced research and innovation that underpins its technology road map. The company serves telecommunications operators, cloud and hyperscale providers, enterprises and public sector customers.

Nokia operates globally across Europe, the Americas, Asia-Pacific, the Middle East and Africa, supplying equipment and services to customers in diverse markets. The company is led by President and Chief Executive Officer Pekka Lundmark, who assumed the role in 2020. Nokia-branded consumer devices are produced by partners under license rather than by Nokia itself, reflecting the company’s strategic focus on network infrastructure, software and intellectual property rather than handset manufacturing.

Nokia Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 results improved meaningfully, with net sales up 9%, gross margin rising to 46%, and operating margin increasing to 9%. Management said Nokia remains on track to finish somewhat above the midpoint of its full-year operating profit guidance.
• Positive Sentiment: AI & Cloud was the standout growth engine, as sales more than doubled year over year to EUR 446 million and order intake reached EUR 2.8 billion. Management said demand is being driven by data center interconnect and scale-out fabrics, though they cautioned that orders can be lumpy.
• Positive Sentiment: Network Infrastructure performed strongly, with sales up 12% and Optical Networks up 20%, helped by AI-related demand and Infinera integration benefits. Gross margin in the segment improved to 42.7%, and IP Networks also showed solid growth.
• Neutral Sentiment: Nokia is pushing major AI-RAN and optical capacity investments, including the launch of its first commercial AI-RAN platform and expansions of indium phosphide manufacturing in the U.S. The company expects AI-RAN pilots by the end of 2026 and commercialization in 2027, while new fab capacity is intended to ease supply constraints.
• Neutral Sentiment: Cash flow and restructuring remain near-term drags, with free cash flow negative EUR 732 million in Q2 and full-year free cash flow conversion now expected toward the low end of the 55%-75% range. Nokia also said restructuring charges in 2026 will be about EUR 800 million, even as it works toward EUR 1.2 billion in cumulative cost savings from its broader restructuring program.

Presentation

[David Mulholland, Head of Investor Relations at Nokia]

Good morning, ladies and gentlemen. Welcome to Nokia's second quarter 2026 results call. I am David Mulholland, Head of Nokia Investor Relations, and today with me is Justin Hotard, our President and CEO, along with Marco Wirén, 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 factor 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.

[David Mulholland, Head of Investor Relations at Nokia]

Please note that our Q2 report and a presentation that accompanies this call are published on our website. The report includes both reported and comparable financial results and reconciliation between the two. In terms of the agenda for today, Justin will go through the strategic highlights of the quarter, and Marco will go through our financial performance. We will then move to Q&A. With that, let me hand over to Justin.

[Justin Hotard, President and CEO at Nokia]

Thanks, David, and hello, everyone. Our second quarter showed continued progress against the strategy we set out at our Capital Markets Day. Our team is focused on maximizing our opportunity in the AI super cycle, and that focus is translating into early results. I am pleased with the progress that Team Nokia has made in the first half of 2026. In Q2, net sales grew 9%. We expanded our gross margin by 70 basis points to 46%, and our operating margin by 70 basis points to 9%. Network Infrastructure delivered strong growth, led by Optical and IP Networks, with sales from AI & Cloud customers more than doubling year-on-year. Mobile Infrastructure sales also grew, and the business delivered stable profitability, largely driven by product mix. Marco will take you through the details of our financial performance in his update in a moment.

[Justin Hotard, President and CEO at Nokia]

I want to take a step back and look at how our first half performance demonstrates progress against the strategy we set out in last November. As a reminder, these are the five priorities we have shared at our Capital Markets Day, and I am pleased by the progress we have already made across each of these areas. Let me touch on a few highlights from Q2. AI & Cloud was the strongest growth driver in the quarter. Net sales more than doubled year-on-year to EUR 446 million and order intake grew to EUR 2.8 billion. While we are very pleased with the order growth, it is important to put that number into a bit of context. Q2 benefited from several significant long-term orders as our customers looked to secure supply in a constrained environment.

[Justin Hotard, President and CEO at Nokia]

To provide some reference, approximately half the order volume received in Q2 is expected to convert to revenue in the next 12 months. As I've said before, order patterns in this market can be lumpy, and we should not expect this level of intake every quarter. As importantly, the strength was broad-based across Optical Networks and IP Networks and included some of the design wins we mentioned last quarter. This was driven by growing demand for data center interconnect and scale-out fabrics from our customer base. The demand primarily shows up in our AI & Cloud segment, but we're also seeing emerging signs of growth in telecom customers as they invest to support the increased data traffic driven by the AI super cycle. During this quarter, we also secured our first multi-rail ILA design win with a major customer.

[Justin Hotard, President and CEO at Nokia]

This was one of the new optical networking products we launched at OFC this past March. Last week, we launched the industry's first commercial AI-RAN platform, marking a fundamental shift from a hardware-defined radio network to software-defined platforms. This fundamentally changes the economics of radio networks. Our AI-RAN platform gives our telco customers a path to improve network performance through software and AI innovation, rather than relying on hardware upgrades as they have traditionally. The platform would deliver more than 100% spectral efficiency gains by 2028, doubling the capacity operators can get from their existing spectrum. The performance benefits are tangible in 5G networks, and our AI-RAN platform provides a software upgrade path to 6G to ensure continuity without additional hardware investment. The platform is also open, programmable and O-RAN compliant.

[Justin Hotard, President and CEO at Nokia]

This gives operators greater flexibility as they evolve their networks. They can choose the hardware path that works best for them, adding AI acceleration into their existing Nokia AirScale infrastructure, deploying new AI-RAN hardware, or moving to cloud-native AI-RAN. Ultimately, this is about delivering more performance, better returns, and faster delivery of new service for our customers. We're on track to enter pilot deployments at the end of this year and expect to be commercially available in 2027, as we've said previously. Co-innovation is a powerful differentiator for Nokia. When we combine our technology leadership with the expertise and scale of our customers and partners, we accelerate innovation, bring solutions to market faster, and solve increasingly complex challenges together. We're already demonstrating early results from this approach, and I will highlight four examples from Q2.

[Justin Hotard, President and CEO at Nokia]

First, we expanded our partnership with Google Cloud, bringing Gemini-powered AI agents into our autonomous networks portfolio. Second, with Vodafone Albania, we demonstrated AI-powered network slicing using agents to dynamically optimize network resources. Third, we expanded our relationship with Indosat Ooredoo Hutchison in Indonesia, supporting network modernization and the rollout of 5G, while providing a seamless upgrade path to AI-RAN. Fourth, we entered trials with a U.S. hyperscaler for a new out-of-band management solution that goes inside the data center, leveraging the passive optical technology that we deliver in our Fixed Networks business. We're also making progress to focus Nokia where we can differentiate and create long-term value. This means we are investing where we see long-term demand, and we believe Nokia can be a unique winner, and at the same time, reducing exposure to areas where we are less differentiated.

[Justin Hotard, President and CEO at Nokia]

In November, we shared that our Fixed Wireless Access customer premise equipment portfolio is not core to the future of our strategy. The sale we announced this past quarter to Inseego is an example of our disciplined approach to capital allocation and allows us to concentrate resources on higher priority opportunities. The sale is on track to close by the end of the year. Talking about higher priority opportunities, one area of focused investment is scaling the capacity needed to support our optical growth ambitions, particularly around indium phosphide semiconductor manufacturing. In San Jose, our new indium phosphide fab is now processing test wafers as we move closer to product qualification. It remains on track for volume production by the end of the year.

[Justin Hotard, President and CEO at Nokia]

In June, we announced a new commitment we are making to scale our Pennsylvania facility, increasing our advanced test and packaging capacity for optical systems in that facility by 10 times. Today, we announced the acquisition of a manufacturing site from NXP in Arizona, where we plan to increase our indium phosphide fab capacity. This gives us additional capacity to support our own demand and greater optionality, recognizing the supply constraints in the market today. Altogether, these investments continue to strengthen and secure U.S.-based optical manufacturing capacity for the long term. While Marco will update you on our restructuring progress, I wanted to touch on one key area where we are making progress in driving incremental productivity. We believe that to be a relevant technology provider in the AI super cycle, we need to be a leading adopter of AI internally.

[Justin Hotard, President and CEO at Nokia]

Last year, we established a team to deploy AI testbeds across multiple functions within Nokia. One area where we're seeing early traction is software development, where we now have nearly 100% adoption across our developer base. This is already yielding significant productivity returns, supporting our efficiency targets and accelerating roadmap deliverables. We will continue to scale this initiative across every function of the organization as our testbeds yield tangible results. We see this as essential, not only to unlock sustainable returns, but also to be a better partner in support of our customers as we help them unlock the full potential of the AI super cycle. In closing, I want to recognize and thank Team Nokia for a strong first half of the year. We are focused on our key priorities and have begun to fundamentally change how we work.

[Justin Hotard, President and CEO at Nokia]

I'm pleased to see our efforts are already reflected in our results. We're entering the second half with good momentum and remain on track to deliver somewhat above the midpoint of our operating profit guidance. Now, I will turn the call over to Marco to dive into our financial performance.

[Marco Wirén, CFO at Nokia]

Thank you, Justin, and hello from my side as well. Before looking at the quarterly performance, let me start with reporting changes we announced this morning. As we have agreed to sell our Fixed Wireless Access business to Inseego, we now consider the sale of Enterprise Campus Edge highly probable. As a result, both businesses are classified as discontinued operations. We have published recast historical numbers for 2025 and Q1 2026 to support comparability. In Q2 2026, this reporting change reduced comparable net sales by EUR 66 million and increased the comparable operating profit by EUR 13 million. It also led to minor adjustments in cost allocations between Network Infrastructure and Mobile Infrastructure, with an impact of approximately EUR 1 million-EUR 2 million per quarter. Turning to performance. Net sales grew 9% in the quarter, supported mainly by Network Infrastructure.

[Marco Wirén, CFO at Nokia]

Gross profit was EUR 2.2 billion, and gross margin increased 70 basis points to 46%. The margin expansion was driven by Network Infrastructure and particularly Optical Networks, where we continue to benefit from both strong demand and the integration of Infinera. Operating profit was EUR 434 million, and operating margin increased 70 basis points to 9%. The quarter benefited from some software revenue recognition coming in in Q2 instead of Q3. We also incurred higher stock-based compensation expense, which represented 150 basis points headwind to our operating margin in Q2 year-on-year. This was driven by Nokia's share price increase, an increase in the program, and the issuance happening earlier in this year. Financial income and expenses benefited from a positive venture fund revaluation during the quarter, which supported both net profit and EPS, earnings per share. Free cash flow was negative EUR 732 million.

[Marco Wirén, CFO at Nokia]

As you know, Q2 is typically the weakest quarter for cash generation as employee cash incentives are paid in Q2. We also saw some increase in working capital during the quarter. We ended Q2 with a net cash position of EUR 2.8 billion, maintaining a strong balance sheet and significant financial flexibility. Let me now turn to Network Infrastructure. Net sales grew 12% in the quarter, reflecting continued strength across the business. Optical Networks grew 20%, and growth was supported by continued demand from AI & Cloud customers. We also saw healthy demand from telecom customers investing in transport infrastructure. IP Networks grew 16%. The strong order momentum that began in the second half of 2025 is now translating into revenue growth. Fixed Networks declined 2%. The areas where we are prioritizing investment performed well.

[Marco Wirén, CFO at Nokia]

Optical Line Terminal sales grew 18%, while ONT sales declined 16% as we continue to focus on higher-value parts of the portfolio. Gross margin increased 240 basis points to 42.7%. This improvement was driven by three factors. First, we benefited from higher scale as revenue increased. Second, we continued to realize synergies from the Infinera acquisition. Third, we saw more favorable mix within Fixed Networks. The gross margin improvement was partially offset by growth investments we are making across Optical Networks and IP Networks as we position ourselves to capture the long-term opportunity in AI infrastructure. Finally, operating margin increased 170 basis points to 8.1%. Turning to Mobile Infrastructure, net sales grew 7% in the quarter. Core software grew 1%, radio networks 7%, and technology standards increased 15%. Technology standards benefited from signing a few new agreements during the quarter and included some catch-up revenue recognition.

[Marco Wirén, CFO at Nokia]

Looking at the full year, we continue to expect technology standards to deliver a similar level of sales and profitability as in 2025. Gross margin was 49.3%, which was somewhat better than we expected entering the quarter. The main driver was a higher contribution from software sales as some revenue were expected in Q3 ended up benefiting Q2 gross margin. Looking ahead, because of the earlier software revenue phasing, we currently expect Mobile Infrastructure gross margin in Q3 to be closer to 44%-46%, reflecting a lower software contribution. Before improving again in Q4, in line with normal seasonality. Operating profit was stable year-on-year. Looking at sales by customer segment, AI & Cloud was again the fastest-growing segment, with net sales increasing 105% year-on-year. Growth was broad-based across both Optical Networks and IP Networks. Telecom sales increased 4%, while technology licensing grew 15%.

[Marco Wirén, CFO at Nokia]

We remain optimistic about the long-term AI & Cloud opportunity and continue to see strong customer demand. At the same time, our expectations for the telecom market remain largely unchanged. Turning to restructuring and integration costs. First, we are on track to complete our 2023-2026 restructuring program this year and achieve EUR 1.2 billion in gross cost savings. The second area is the integration of our Chinese operations into Nokia's global operating model after taking full ownership at the end of 2025. As we discussed previously, we continue to adjust our operating structure to reflect market conditions and improve competitiveness. As a reminder, this program was expected to achieve EUR 200 million in cost synergies with one-time charges of between EUR 350 million and EUR 400 million over a two- to three-year period.

[Marco Wirén, CFO at Nokia]

We now expect to recognize approximately EUR 350 million of the planned one-time charges by the end of 2026 as we accelerate the integration to complete it within two years. The third area is a set of new efficiency progress, mainly impacting Europe. These programs are expected to lead to restructuring charges of EUR 200 million in 2026. These actions are focused on simplifying the organization, improving productivity, and ensuring resources are aligned with our strategic priorities. Overall, we expect restructuring charges of approximately EUR 800 million in 2026. Let's go to cash. With respect to cash flow, the quarter followed the normal seasonality we typically see in quarter two. The largest impact was the payment of annual employee incentives related to 2025 performance. We also saw some working capital buildup during the quarter, reflecting the continued growth of the business.

[Marco Wirén, CFO at Nokia]

Despite these seasonal factors, our overall cash generation profile remains unchanged. Considering some of the increased restructuring costs, and as we make some investments in working capital to prepare for growth, we now expect to track towards the low end of our free cash flow conversion assumption of 55%-75%. Finally, turning to our outlook, there is no operational change to our comparable operating profit guidance. The only adjustment is the technical change resulting from the move of Fixed Wireless Access and Enterprise Campus Edge into discontinued operations. We continue to track somewhat above the midpoint of our operating profit range. Looking at quarter three specifically, we currently assume a sequential increase in net sales of between 3% and 7%.

[Marco Wirén, CFO at Nokia]

For operating profit, we currently expect a result broadly similar to quarter 2 due to the phasing of software sales in Mobile Infrastructure between quarter 2 and quarter 3, followed by a meaningful improvement in quarter 4. This is a combination of the normal seasonality we see in our telco business and the contribution from year-on-year growth in AI & Cloud sales. Aside from the discontinued operations adjustment, our outlook assumptions remain largely unchanged. The demand environment remains supportive, and we allocate capital where we see the strongest opportunities for long-term growth while maintaining discipline on profitability and cash generation.

[David Mulholland, Head of Investor Relations at Nokia]

Thank you, Justin and Marco. As usual, for the Q&A session, as a courtesy to others in the queue, could you please limit yourself to one question and a brief follow-up? Operator, could you please give the instructions?

[Operator]

Ladies and gentlemen, we will now begin the Q&A session. If you have a question and are using the Zoom app, we ask that you please use the raise hand function at the bottom of your Zoom screen or by clicking on the three dots on the black bar at the bottom of your Zoom screen. Alternatively, if you have joined via Zoom browser, please click the reactions button at the bottom of your Zoom page and then select raised hand. If you have dialed in by phone today and wish to ask a question, please use star nine on your keypad to raise your hand and then star six to unmute. Once your name has been announced, you may ask your question. If you want to withdraw your question, please lower your hand by using the raise hand function or star nine if you have dialed in.

[Operator]

I will now hand the call back to David Mulholland, Head of Investor Relations for the Q&A. Thank you.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Dani. We'll take our first question today from Terence Tsui from Morgan Stanley. Terence, please go ahead.

[Terence Tsui, Analyst at Morgan Stanley]

Yep. Thank you very much. I hope you can hear me okay. I had a question around capacity and particularly around the four new DSPs planned by the end of 2027. This is actually a big ramp-up compared to the previous run rate. Can you give us some milestones to look out for and reassurance that this can be achieved? Thank you.

[Justin Hotard, President and CEO at Nokia]

Sure, Terence. I think first of all, we talked about these going into customer trial in 2027 and then becoming commercially available towards the end of 2027. I think the thing I would just emphasize and remind you of on this is that Nokia and Infinera previously were each building two DSPs individually, so collectively a total of four DSPs. One of the decisions we made, and I've talked about this a bit as we saw the growth opportunity emerging in optical, was to maintain the DSP team as is versus reducing them. The reason we did that was we felt quite strongly in spending time with our customers that we could actually deliver more differentiated products to them with four unique DSPs versus the traditional two that we had been delivering in each company independently.

[Justin Hotard, President and CEO at Nokia]

That laid out and supported the roadmap that we launched at OFC in March. I touched on that a bit in last quarter's call. The view here is that we think this gives us better market coverage aligned to where the market is evolving, specifically given the amount of investment we're seeing across the different layers of optical fabric, from the scale across fabric to what we see in data center interconnect, to metro network, to long-haul transport. Across all of that We think we have a much better portfolio in 2027 to address each of the unique evolving solutions than we would have had if we'd only kept two versions.

[David Mulholland, Head of Investor Relations at Nokia]

Did you have a follow-up, Terence?

[Terence Tsui, Analyst at Morgan Stanley]

A real quick follow-up on the comments around the order book potentially being lumpy. Do you still expect an upward trajectory over the long term from these levels, albeit with some bumps along the way?

[Justin Hotard, President and CEO at Nokia]

Yeah, look, I think two things about this quarter's order book. Obviously, if you do the book-to-bill on this, it's a significant jump up. I think for me, that's a data point around a little bit of lumpiness. The other is the elongation of the orders, which we've been talking about expecting and we're seeing here. I think we have to look at it in both those dimensions. The way I think about orders is I think about orders in a period of time, right? Because it's easy to give you a headline number and then say, well, the next question is that over a quarter period, a four-quarter period, an eight-quarter, 12-quarter, et cetera?

[Justin Hotard, President and CEO at Nokia]

For me, that's really where we're focused, is not necessarily on are we getting big order pops consistently, but rather are we seeing the order momentum grow as we look at it over a time period. Right now, what we're seeing is continued growth and continued demand in the market. As I said in my comments, it's still largely driven by AI & Cloud, particularly around scale-out and data center interconnect. Then we're starting to see some emerging growth. We saw some of it in sales this year in our telco customer base, and we believe that's also tied to AI demand.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Terence.

[Terence Tsui, Analyst at Morgan Stanley]

Thank you.

[David Mulholland, Head of Investor Relations at Nokia]

We'll take our next question from Simon Leopold from Raymond James. Simon, please go ahead. Simon, have you unmuted yourself?

[Simon Leopold, Analyst at Raymond James]

There we go. Can you hear me now, David?

[David Mulholland, Head of Investor Relations at Nokia]

Yes, go ahead, Simon.

[Simon Leopold, Analyst at Raymond James]

Okay, great. I didn't expect that button to pop up, sorry. I wanted to see if you could rank order and characterize supply chain risks. I'm thinking about issues like memory, printed circuit boards, and even indium phosphide wafers. Maybe a particular focus on that latter one, the wafers, given the factory expansion, whether or not you can get the materials. Then I've got a quick follow-up after. Thank you.

[Justin Hotard, President and CEO at Nokia]

Sure. Look, if I think about the supply chain risks or the time that we're spending in this, first of all, as you rightly point out, it's broad-based, right? I think we talk a lot about memory, and memory is significant just given the amount of demand that is in the market. I think this has been talked about quite a bit across multiple companies and multiple parts of this ecosystem. There's clearly constraints there. Then obviously the significant change in pricing driven by that shortage, which again, has been talked about very broadly across the tech ecosystem. That's probably the one that we see as most significant. Now, we talked about this last quarter.

[Justin Hotard, President and CEO at Nokia]

I think I don't need to repeat what I said last quarter, but maybe briefly, our focus is on securing supply, simplifying our designs, looking at where we can reduce scope wherever possible on our designs. Of course then, passing that on to customers. I think if you look at what we said last quarter, there were some companies with us last quarter. It seems like more companies have joined us in some of the more recent earnings calls now making that same comment. The key thing for me here is also really talking to our customers. Not the AI & Cloud customers, they understand this well, but really making sure our telco, our mission-critical customers understand that we have elongated lead times, which means better visibility, better planning, and something that we need to team with them on. Particularly important in that regard.

[Justin Hotard, President and CEO at Nokia]

As you touch on, there's a broad base across the board. On the indium phosphide question you asked, Simon, the comment I'll make is this new fab is looking at coming online probably earliest in 2029. If you think about our capacity, we've got a significant jump up with San Jose coming, call it 2027 as it ramps volume manufacturing later this year. 2027 it ramps, then we kind of line up for a 2029 ramp and an incremental capacity. As you know, that's kind of the timelines that you have to take with these investments. I think as we're looking at it, we're looking out at different solutions to get indium phosphide capacity at that time. That's obviously an industry issue, though.

[Justin Hotard, President and CEO at Nokia]

It's something that all of us in the industry need to enable. It's something that I think collectively we need to solve even across the ecosystem.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Simon. Did you have a follow-up?

[Simon Leopold, Analyst at Raymond James]

Yeah. I wanted to see if maybe you could offer us your view on the scale across market and your ambitions, Nokia's ambitions for this particular application considering optical and IP routing. Thank you.

[Justin Hotard, President and CEO at Nokia]

Yep. Yeah, absolutely. I think first of all, Simon, I am going to be a little technical, but scale across technically was talking about data centers within a given campus area that were strung together as an AI factory. One of the things I talked about on the last call was the demand we are seeing in data center interconnect. My point in saying that is some of what we are seeing is just increased data center interconnect. Now you can call it scale across. Some folks may want to label it one way or another. To me, they are very different. They are complementary and very important applications, because one is back-end connectivity, which is providing connectivity to expand the back end for scale-out, which is the scale-out fabric. The other is data center interconnect, providing higher bandwidth between data centers over a long haul on the front end.

[Justin Hotard, President and CEO at Nokia]

Both of those have a routing element. Obviously, the data center interconnect has a very significant demand growth in routing. If you look at our opportunity and why we are talking about growth in both IP and Optical, it is because we are seeing growth in both of those elements. They are complementary, they are reinforcing. Now, the other thing I will say is, it is not limited to that. We are seeing some traction in some of the back-end switching. It is on a limited basis, obviously, without getting into all the market dynamics there. All of this is encouraging in terms of our focus in this area and the traction we are starting to make.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Simon. We will take our next question.

[Simon Leopold, Analyst at Raymond James]

Thank you.

[David Mulholland, Head of Investor Relations at Nokia]

From Sami Sarkamies, from Danske Bank. Sami, please go ahead.

[Sami Sarkamies, Analyst at Danske Bank]

Hi. My question would be on your supply capability in optical networks. Are you fully constrained, or have you been able to build any inventory during the first half of the year?

[Justin Hotard, President and CEO at Nokia]

Yeah, I would say, Sami, it's a good question. There are always pockets. Think of legacy products and those areas where we have some supply. In general, I would think of us as being constrained, right? We talk about lead times elongating, it's because we're seeing constraints, and particularly on the leading-edge products. By the way, I don't think we're unique in that. If you look at our ecosystem, again, I think you see the constraints and you see that across the component suppliers, some of our peers, et cetera. Obviously we're working aggressively on that and maximizing the supply. As I've said as well, if you look at our forecast, what we've included in our forecast is the demand that we have line of sight to shipping.

[Justin Hotard, President and CEO at Nokia]

We recognize even that has some risk because that assumes continuity of supply, no disruptions, everything goes perfectly. When we're thinking about this, we're thinking about it from a constraint perspective, aligned to what we have line of sight to in supply. Absolutely, if there was more supply, I think we'd probably generate more revenue.

[David Mulholland, Head of Investor Relations at Nokia]

Did you have a follow-up, Sami?

[Sami Sarkamies, Analyst at Danske Bank]

Yeah. Regarding radio networks, just curious, do you think you are currently gaining share? You had a 5% organic growth, in the first half of the year. I think that's a bit more than your main European rival is having, or it's just timing?

[Justin Hotard, President and CEO at Nokia]

Yeah. My view on this, Sami, is it's timing. Actually, Marco talked about the timing around the software revenue recognition we had in Q2, which is tied to our radio software platforms. I would call this timing. I also think looking at market share on a quarterly basis in this industry is super challenging to get any kind of good signal. I think you have to look at it certainly on an annual basis.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Sami.

[Sami Sarkamies, Analyst at Danske Bank]

Thanks.

[David Mulholland, Head of Investor Relations at Nokia]

Let's take our next question from Alex Duval from Goldman Sachs. Alex, please go ahead.

[Alex Duval, Analyst at Goldman Sachs]

Yes, thank you very much. You talked about further progress in AI-RAN. I wondered if you could talk a bit about the timeline for this benefiting Nokia in terms of revenue and competitive position and what your discussions with Telco are suggesting in that area. Secondly, back to the AI side, I wondered if you could give an update on switching and the progress you make there. Could you help us understand the latest thoughts on switching design-ins and when we should expect orders and revenue momentum given the progress you're delivering?

[Justin Hotard, President and CEO at Nokia]

Let me answer the second one first. In terms of the switching design-wins, we talked about this a little bit last quarter. We said we expected orders this year. We saw a lot of those orders come in in Q2. Obviously, as you know, in the design-win process, you start small, you get traction, and then you build on top of that as you validate and execute for performance. We're continuing to drive that across a number of customers. Obviously, we're pleased with the progress we had in Q2. Then can you just repeat your first question?

[Alex Duval, Analyst at Goldman Sachs]

Yeah, absolutely, Justin. It was just, you had mentioned further progress on AI-RAN. I'm just curious how you think about the customer feedback and the timelines for that impacting your revenues.

[Justin Hotard, President and CEO at Nokia]

Yeah. I think basically, Alex, everything is consistent with what we've said. Pilots at the end of 2026, commercially available in 2027. Obviously, we'd anticipate more significant volume going into 2028. That continues to be our expectation in terms of AI-RAN.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Alex.

[Alex Duval, Analyst at Goldman Sachs]

Many thanks.

[David Mulholland, Head of Investor Relations at Nokia]

We'll take our next question from Ulrich Rathe from Bernstein. Ulrich, please go ahead. I think we've lost Ulrich. I don't know.

[Ulrich Rathe, Analyst at Bernstein]

Thank you.

[David Mulholland, Head of Investor Relations at Nokia]

Are you there, Ulrich?

[Ulrich Rathe, Analyst at Bernstein]

Sorry. It takes some time. Take some time for the button to appear here. Apologies. I wanted to come back to the very strong AI & Cloud order intake. You put it into perspective already with regards to the elongation of the order book, as you call it. I was wondering, in supply-constrained markets, we often do see double ordering, which does create a false signal for suppliers such as Nokia. How do you see this risk? Are there any specific reasons why this would be an unlikely factor for Nokia?

[Justin Hotard, President and CEO at Nokia]

Look, I think first of all, if you think about the level of sophistication in the customers that are placing these orders, I think you have to step back and ask what the incentive is for double ordering. I've absolutely seen this, much like you, in supply-constrained markets that I've worked in in the past, and it's particularly prevalent in markets where you're focused on enterprise customers, or you've got channels because customers tend to diversify and look for allocation. In this environment, the thing that I would flag is, for one of these customers to come in and say, "I'm going to double order with you," when ultimately that goes back to supply of leading-edge silicon manufacturing capacity on optical components, that they can actively inspect and we transparently share the progress. The question for them would be, what does it do in terms of incentives?

[Justin Hotard, President and CEO at Nokia]

The other thing I would say is, obviously, as we're making commitments on a longer-term basis, we're expecting those commitments from customers as well.

[Ulrich Rathe, Analyst at Bernstein]

That's helpful. If I may follow up with one clarification. What would you call a normal length of an order book? Is it essentially 100% of the orders within the next 12 months? Because you highlighted.

[Justin Hotard, President and CEO at Nokia]

Yeah

[Ulrich Rathe, Analyst at Bernstein]

sort of the difference, with half of the revenues. Is 12 months for 100% the "normal" here or not?

[Justin Hotard, President and CEO at Nokia]

Yeah, Ulrich, that's a good question. I think typically we have seen orders within 12 months in our customer base. Again, there's two factors to this. Obviously, one is the growing demand, is the fact that AI & Cloud is a new segment for us, right? I would say we've had less exposure to this, obviously, substantially less exposure to this in the past. The second thing is obviously the supply constraints. I think both of those are factors. If you think about our traditional business, heavily concentrated with telco customers and then obviously some in mission-critical, those orders, we may win a contract award, but we would see orders typically within 12 months, and that's really the shift.

[Justin Hotard, President and CEO at Nokia]

That's why when I talk about our telco customer base, one of the conversations we're having with those customers is getting more visibility going forward, because they're also used to giving us fairly short-term, within 12 months, visibility, and we need to be planning even further. This is something that with all of our sales teams having this conversation to make sure that we're getting better visibility, not because it implies a commitment, but because the risks, given the supply constraints in the industry are, we don't want to miss any of their deliveries while we continue to support them, given their importance to us, as well as customers.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Ulrich. We'll take our next question.

[Ulrich Rathe, Analyst at Bernstein]

Thanks very much.

[David Mulholland, Head of Investor Relations at Nokia]

from Jakob Bluestone from BNP Paribas. Jakob, please go ahead.

[Jakob Bluestone, Analyst at BNP Paribas]

Great. Thanks for taking the question. You are obviously ramping up in terms of AI & Cloud revenues. I guess we are not yet seeing it in terms of margins. I guess my question is just, I appreciate that obviously, as these businesses scale, margins will go up, and particularly on the IP side, you are just sort of starting to scale now. I would just be interested, how long do you think it actually takes before these revenues become materially accretive?

[Justin Hotard, President and CEO at Nokia]

Yeah, I think two things, Jakob. One is gross margin, the other is operating leverage, right?

[Jakob Bluestone, Analyst at BNP Paribas]

Yeah.

[Justin Hotard, President and CEO at Nokia]

As we talked about in Capital Markets Day, we are doing a lot of work at the front end of the three-year period to really set the company up to become more efficient, more nimble, more scalable, and get the operating leverage as we drive growth in the business. That is a key focus, and we talked about that. By nature, that would be a little bit back end loaded. Like I said, I am very pleased with the progress we are making, and obviously, with the demand accelerating higher than what we said at Capital Markets Day, we have got optimism on progress there that will continue to improve. On the other side, on the gross margin side, this is an area where I think we are dealing with just a lot of complexity in the mix. This is a little bit of supply chain.

[Justin Hotard, President and CEO at Nokia]

This is also us, we talked about the focus we are making in FN on exiting low-margin business. Some of those things are just playing through in the business, and you are not quite seeing a drop to the bottom line yet. Obviously, we are very clear on what we are anticipating, and based on the assumptions we shared at Capital Markets Day and the progress that we are making ahead of those in terms of revenue growth.

[Jakob Bluestone, Analyst at BNP Paribas]

Very clear. If I could just ask a quick follow-up. You mentioned you've got several customers coming in on the IP side, I think you said. I'd just be interested in understanding just sort of the level of concentration of that customer mix. Would you say you're well represented across the different hyperscaler customers, or would you say it's still a relatively narrow segment?

[Justin Hotard, President and CEO at Nokia]

Yeah. I think we've talked about this a little bit before. It's fairly concentrated today. That's the way you build the business, right? I think we've got very good partnerships and relationships across many of the AI & Cloud players, the hyperscalers. The focus right now is obviously on making sure where we do have demand that we're delivering it and we're continuing to innovate for those customers, and then, over time, obviously expanding that footprint.

[Jakob Bluestone, Analyst at BNP Paribas]

Very helpful. Thank you.

[David Mulholland, Head of Investor Relations at Nokia]

We'll take our next question from Oliver Wong from Bank of America. Oliver, please go ahead.

[Oliver Wong, Analyst at Bank of America]

Hey guys, thanks for taking my question. My first question is, in terms of the EUR 2.8 billion AI orders in the quarter, I understand that a significant portion pertains to some of your significant design wins and data center switches from last quarter. I think what will be helpful is if you could maybe try to quantify or guide us a little bit on how much of the total AI orders this quarter that comprised, just so that we can have a better sense of underlying optical-related demand in the quarter. Thanks.

[Justin Hotard, President and CEO at Nokia]

Yeah. I think I would say it was driven by Optical and IP weighted towards Optical, and that's probably not a surprise given the momentum we're seeing right now in that market.

[David Mulholland, Head of Investor Relations at Nokia]

Also design.

[Oliver Wong, Analyst at Bank of America]

Got it. A quick follow-up. In terms of within Optical, you mentioned you discussed briefly about scale-out versus regular DCI. I was just wondering what the composition of demand is right now between the two.

[Justin Hotard, President and CEO at Nokia]

Yeah. I don't think we're breaking that out right now. I just would highlight that I think there's a significant amount of demand in DCI as well as scale-out, I think the two kind of get either pushed together or maybe the DCI piece gets underappreciated. That's certainly where for us, we're seeing traction on both.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Oliver.

[Oliver Wong, Analyst at Bank of America]

Got it.

[David Mulholland, Head of Investor Relations at Nokia]

We'll take our next question.

[Oliver Wong, Analyst at Bank of America]

Thanks so much

[David Mulholland, Head of Investor Relations at Nokia]

From Richard Kramer from Arete. Richard, please go ahead.

[Richard Kramer, Analyst at Arete]

Thanks. Hey, Justin. My first question for you is, on the AI-RAN transition, your customer installed base runs on Nokia proprietary silicon. Do you see the industry long-term shifting away from that proprietary silicon-based set of solutions? What are the implications for what is a EUR 3 billion run rate of mobile R&D and Mobile Infrastructure margins for that transition? Thanks.

[Justin Hotard, President and CEO at Nokia]

Yeah. Hey, Richard. A couple of things on this. First of all, I've talked about this pretty openly. I think we're at a point where the industry has to transition. I think we look at what we see on AI-RAN and the spectral efficiency. By the way, we'll have spectral efficiency on our existing hardware. We'll have some improvements in software, but they'll be an order of magnitude below what we're talking about on AI-RAN. The second thing here is that when you look at leading-edge silicon, you do the math on the cost of leading-edge silicon, and then, by the way, the supply constraints on leading-edge silicon, in my mind, this is a very clear industry shift that has to happen on the baseband, and that is a shift to general-purpose silicon. Of course, we're partnered with NVIDIA in launching the AI-RAN solution.

[Justin Hotard, President and CEO at Nokia]

I don't think we're alone in this move. Fundamentally, as we think about the R&D in this space, this is the other thing I've touched on. When you look at this industry, there's two fundamental challenges, and certainly from 4G and 5G. One of them is that the cost of capital, the return on invested capital at an operator level and aggregate hasn't delivered in terms of the investment. Certainly looking at 5G, but also 4G. If you look at it from a supplier perspective, a technology provider like us, it also hasn't been acceptable on our side. And so I think we also have to look at how we shift investment and generate a better return on invested capital.

[Justin Hotard, President and CEO at Nokia]

Getting out a purpose-built silicon on the baseband is a step in that direction, and that's why we've said that's the long-term direction. I think it's incredibly compelling when you can also say to a customer, "By the way, look at the better efficiency you can get on your hardware," which means you're going to get a better return on that hardware investment. The last thing we're saying is, "By the way, when we deliver the hardware, that's not the best performance you're going to get. We'll continue to provide performance enhancements." As an industry, we've always added features, but the fact that we're now adding performance capabilities in our software stack, we think is a huge advantage. And the final point I'll make is, as we've talked about in the software stack, this is a single software stack.

[Justin Hotard, President and CEO at Nokia]

We've got capabilities to optimize it for different hardware, including our legacy stack and of course, the NVIDIA GPUs that are now coming into our portfolio on the AI-RAN platform, but it's a single software stack. We're getting a tremendous amount of leverage out of that stack. This is right on that path.

[Richard Kramer, Analyst at Arete]

Okay, thanks. And then a quick follow-up from Marco, if I may. Your comments about being above the midpoint of your full-year profit guidance, but having flattish profits in the third quarter suggests you're going to more than double profits in Q4. Can you talk through the drivers of that, be it software revenue recognition, licensing, product deliveries, cost reductions, especially given the cash outflows for restructuring CapEx, working capital, et cetera, that we're seeing now and can expect in the second half? Thanks.

[Marco Wirén, CFO at Nokia]

Thank you. I would say that if you look, the normal seasonality that the industry has, specifically on a telecom customer base side, is usually very Q4 delivery heavy, and that's why we've seen in the past years as well that that part of the industry usually generates the biggest profits and sales as well in quarter four. Now in addition to that, we see also increase in AI & Cloud customer base that is also impacting the seasonality of our operations and also profit generation. Restructuring. The program that we announced in end of 2023, that we will end in end of this year, and we expect that we'll get those EUR 1.2 billion accumulated gross cost savings, just like we said as well.

[Marco Wirén, CFO at Nokia]

In addition that, we expect to actually accelerate the synergy program that I mentioned earlier, what comes to the China company that we took over 100%. Also we had some additional voluntary-based cost saving or restructuring also in Europe, and those we will take this year as well. Altogether, if you look our cash position, we have very strong position. Now we had EUR 2.8 billion net cash end of quarter two. We had some inventory and working capital increase in quarter two to secure also deliveries going forward. Of course, accounts receivables follow normal sales pattern as well. We believe also by the end of the year, we have very good financial position and cash position. I don't see any issues there.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Richard. We'll take our next question from Sandeep Deshpande from JPMorgan. Sandeep, go ahead.

[Sandeep Deshpande, Analyst at JPMorgan]

Hi. Thanks for letting me on. I want to understand from your order intake in AI & Cloud in the quarter-

[Justin Hotard, President and CEO at Nokia]

Sandeep, we can barely hear. We're really struggling to hear you, Sandeep.

[Sandeep Deshpande, Analyst at JPMorgan]

Can you hear me? Can you hear me better now?

[Justin Hotard, President and CEO at Nokia]

That's a little better.

[Sandeep Deshpande, Analyst at JPMorgan]

Yeah. You had a nice, strong intake in AI & Cloud in the quarter. Last quarter you had said that the EUR 1 billion of orders were an ongoing order intake, even though you will have lumpiness in your orders. How much of this EUR 2.8 billion is an ongoing order intake, would you characterize? Secondly, regarding AI & Cloud, how should we be looking at a run rate on revenue in this business between optical and IP routing?

[Justin Hotard, President and CEO at Nokia]

Sure. On the first one, I think we've broken it out for you that what we saw on next 12 months and forward, and I'm not going to break it out any further in terms of, or try to estimate that for you. That should give you a good view on what's in the coming four quarters and what's beyond that. Then in terms of the mix, I think I touched on this. Optical is growing a little bit faster this quarter than IP, but of course it's starting from a healthier, just a stronger position. IP, as we said, we're just starting to ramp in design wins and deliver those. We talked about that last quarter.

[Justin Hotard, President and CEO at Nokia]

I'm pleased with the momentum, and I think, if you look at it from the other side, which is 100% year-over-year growth, I think we're set up for a very good continued growth forecast from the AI & Cloud segment.

[Sandeep Deshpande, Analyst at JPMorgan]

Thank you.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Sandeep. Did you have a follow-up?

[Sandeep Deshpande, Analyst at JPMorgan]

No, I'm fine. Thank you.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Sandeep. We'll take our next question from Sébastien Sztabowicz from Kepler Cheuvreux. Sébastien, please go ahead.

[Sébastien Sztabowicz, Analyst at Kepler Cheuvreux]

Hello, everyone. Thanks for taking my question. On AI-RAN coming back, have you seen a specific commercial traction over the past few months? Have you been added any new customers trialing your solution? You are targeting twice more spectral efficiency by 2028. What about the total cost of ownership of this solution? Next to the baseband, do you plan to partner with NVIDIA on GPU for radios, or it will be mostly focused on the baseband? Thank you.

[Justin Hotard, President and CEO at Nokia]

Okay. Three questions. Let me hit them. First of all, I'll start actually with the last one. The announcement that we made last week was around AI-RAN for baseband, and the NVIDIA GPU solution going into our AirScale platform, a future standalone platform, and also having a Cloud RAN common off-the-shelf server solution. That's the current announcement. In terms of the spectral efficiency and TCO, as you probably know, TCO ends up being a very customer-specific discussion. At the macro level, a hardware deployment with 100% spectral efficiency improvement, I think the math there speaks for itself in terms of the value creation potential for the operator.

[Justin Hotard, President and CEO at Nokia]

The other key thing is that this is a software model, so the benefit for the operator is not just TCO, but it's also a CapEx to OpEx transition in terms of ongoing benefit without having to have hardware upgrades. I think there's a tremendous amount of value when you look at it from a life cycle standpoint. Then in terms of the pilot deployments, we've announced 10 public customers on track for later this year. There's many conversations going on about this. We expect to start the pilots later this year. Obviously, expect that will continue into 2027. Obviously, as we make progress and we'll continue to share the progress publicly as we can on the progress we're making, the capabilities we're delivering. It's more than just spectral efficiency, it's also a platform that's extensible, and we talked about this a little bit.

[Justin Hotard, President and CEO at Nokia]

It's a bit technical, you can actually put your own applications and services in at the radio layer, this allows some new capabilities, which we think are going to be pretty attractive to a number of operators, things like sensing and other applications.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Sébastien. We'll take our next question from Rob Sanders from Deutsche Bank. Rob, please go ahead.

[Rob Sanders, Analyst at Deutsche Bank]

Hi. Thanks for taking my question. First question would just be about the indium phosphide fab ramp. Do you have line of sight to hitting best-in-class six-inch yields next year? Clearly, Coherent is already doing pretty well. Lumentum seems a bit behind. Where do you stand on that? The second question would just be around AI-RAN. If you look at the top three U.S. operators, how many do you think internally have already gone past the go, no-go decision on whether to deploy AI-RAN? Thank you.

[Justin Hotard, President and CEO at Nokia]

Okay. Got it, Rob. Thanks. I think, obviously, we have one operator today in the U.S. I'm going to start with the AI-RAN, then I'll come back to indium phosphide. On AI-RAN, we have one operator in the U.S. that's got our RAN deployed at scale. That's T-Mobile. They announced that they're going to be our lead partner on the pilot. Obviously, we're working closely with them. I would assume that that would lead us to conclude that they're probably not past the go, no, go, no deployment path. On the others, I think it's a discussion that obviously we'll leave for them to assess. My view here is that the GPU performance is compelling, and it's particularly compelling in a business case where spectral efficiency matters, which is going to be more dense operations. They've got roadmaps and strategies.

[Justin Hotard, President and CEO at Nokia]

Probably better to ask them than ask me. On the indium phosphide ramp, what I would say is we've got yield targets that we've focused on, both yield and volume targets we've focused on through 2027 on the fab. My view is while you rightly said, while the ecosystem is maturing, and it's not just the two you mentioned, but also the Chinese manufacturers in this space. I also believe this is a place where we're going to go through a significant amount of maturity and learning as we scale and scale yield, and that's what I'm focused on with the team versus a specific target or competitor reach. I think this is more about us learning and scaling and making sure we can deliver on our volume plans and obviously our cost point.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Rob.

[Rob Sanders, Analyst at Deutsche Bank]

Thanks a lot.

[David Mulholland, Head of Investor Relations at Nokia]

We'll take our next question from Artem Beletski from SEB. Artem, please go ahead.

[Artem Beletski, Analyst at SEB]

Yes, good afternoon, and thank you for taking my question. Relating to NI, could you maybe comment what type of order intake development you actually see outside of AI & Cloud, namely telcos and mission-critical? How we should think about the revenue growth trajectory on this front, looking at this year and also next year?

[Marco Wirén, CFO at Nokia]

Yeah, thank you, Artem. Just like we mentioned earlier as well, that we had a good order intake development and sales development in also non-AI & Cloud customer base. Telcos were investing more, and this is also driving because of their need to invest in their network to secure that they can deliver the demand that is coming from AI & Cloud and AI in general development. Most likely, this will happen more broadly going forward as well because we believe that AI demand will continue, the underlying demand will continue for a longer period of time. Without very good secure networks, it is very difficult to provide those improvements that AI is actually providing. I don't know if you have something you want to add.

[Justin Hotard, President and CEO at Nokia]

Yeah. No. The only thing I would say, Artem, is if you looked at NI specifically, the only headwind which we talked about last quarter is obviously on the customer premise equipment side of Fixed Networks, where we're getting much more disciplined on margin. That creates a bit of a headwind when you look at NI as a whole. Underneath that is the momentum that Marco talked about in IP and Optical and also obviously a healthy growth in Optical Line Terminals as well, which is the network side of the Fixed Networks business.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Artem. We'll squeeze one last question in from Felix Henriksson from Nordea. Felix, please go ahead.

[Felix Henriksson, Analyst at Nordea]

Hi

[David Mulholland, Head of Investor Relations at Nokia]

Go ahead, Felix.

[Felix Henriksson, Analyst at Nordea]

Can you hear me now?

[David Mulholland, Head of Investor Relations at Nokia]

Yes, go ahead.

[Felix Henriksson, Analyst at Nordea]

Okay, perfect. Yeah, thanks for squeezing me in. In the report, you say that the IP Networks product mix had an adverse impact on the NI gross margin. Was this something specific to the quarter, or does this sort of imply that the margin profile in data center switching products at this scale is sort of dilutive to your NI gross margins? Thank you.

[Justin Hotard, President and CEO at Nokia]

Yeah. I think this is largely tied to what we said at the CMD. We'd see some gross margin headwinds as we ramp products in this space, and this is what we're seeing. What I'm focused on is the business is fundamentally accretive to gross profit and ultimately to our operating margins. Then, as we talked about earlier in answering one of the questions, making sure we're streamlining the company and driving efficiency so that we unlock operating leverage. That's our focus. I mean, obviously, we've got to show that, when I think about where Marco and I are focused, we're very focused on that side right now. I think you'll see the margin as we mature in this space continue to improve.

[David Mulholland, Head of Investor Relations at Nokia]

Thanks, Felix. Ladies and gentlemen, that concludes today's call. I would like to remind you that during the call today, we have made a number of forward-looking statements that involve risks and uncertainties. Actual results may therefore differ materially from the results currently expected. Factors that could cause such differences could 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. Thank you for joining us today.

[Operator]

This concludes today's call. Thank you everyone for joining. You may now disconnect.

Participants

Executives

• David Mulholland, Head of Investor Relations
• Justin Hotard, President and CEO
• Marco Wirén, CFO

Analysts

• Terence Tsui, Analyst at Morgan Stanley
• Simon Leopold, Analyst at Raymond James
• Sami Sarkamies, Analyst at Danske Bank
• Alex Duval, Analyst at Goldman Sachs
• Ulrich Rathe, Analyst at Bernstein
• Jakob Bluestone, Analyst at BNP Paribas
• Oliver Wong, Analyst at Bank of America
• Richard Kramer, Analyst at Arete
• Sandeep Deshpande, Analyst at JPMorgan
• Sébastien Sztabowicz, Analyst at Kepler Cheuvreux
• Rob Sanders, Analyst at Deutsche Bank
• Artem Beletski, Analyst at SEB
• Felix Henriksson, Analyst at Nordea