Analyst(s): Futurum Research
Publication Date: October 26, 2026
Nokia’s Q3 FY 2026 results show AI and cloud demand translating into broader optical and routing deployments. Manufacturing capacity, product economics, and live AI radio network deployments now shape its ability to turn customer commitments into sustained growth.
What Is Covered in This Article:
- Nokia’s Q3 FY 2026 financial results
- Hyperscaler wins broaden network infrastructure demand
- Manufacturing capacity shapes AI order conversion
- Live deployments advance AI radio networks
- Guidance and Final Thoughts
The News: Nokia (NYSE: NOK) reported Q3 FY 2026 comparable revenue of €5.15 billion, up 10% year-over-year (YoY), versus Wall Street consensus of €5.05 billion. Revenue increased 9% YoY on a constant currency (cc) basis. Network Infrastructure revenue reached €2.16 billion, up 15% YoY cc, including Optical Networks revenue of €933 million, up 18% YoY cc, Internet Protocol (IP) Networks revenue of €839 million, up 43% YoY cc, and Fixed Networks revenue of €386 million, down 22% YoY cc. Mobile Infrastructure revenue totaled €2.90 billion, up 5% YoY cc. Portfolio Businesses’ revenue was €96 million, down 2% YoY cc. Comparable operating profit reached €605 million, up 35% YoY, with operating margin increasing 220 basis points YoY to 11.7%. Comparable profit from continuing operations totaled €498 million, up 49% YoY, while comparable diluted earnings per share from continuing operations increased 50% YoY to €0.09.
“Together with T-Mobile and NVIDIA, we completed the world’s first AI-RAN call in a live operator network in line with the commitment we announced last year,” said Justin Hotard, president and CEO of Nokia. “As we move towards commercial deployment, the features and spectral efficiency delivered by our platform are uniquely differentiated in the market.”
Nokia Q3 FY 2026: AI Network Demand Tests Supply Capacity
Analyst Take: Nokia’s quarter shows AI infrastructure spending expanding its commercial reach beyond traditional telecom investment cycles. Earlier hyperscaler design wins are moving into deployments, while telecom customers are investing in connectivity that supports distributed AI workloads. Mobile Infrastructure’s delivery pull-forward and Core Software project delays also show why the quarter shouldn’t be read as a uniform demand recovery. For enterprise technology vendors and operators, supply commitments and network architecture decisions increasingly need to advance together.
Hyperscaler Wins Broaden Nokia’s Connectivity Role
Nokia secured €1.5 billion in gross AI and cloud orders, up 118% YoY, extending demand across optical transport and IP networking. Shipment volumes for 800-gigabit coherent pluggables more than doubled sequentially, and the product now has design wins with 29 customers, providing evidence of adoption beyond isolated deployments. Two additional hyperscaler IP design wins, including a next-generation data center gateway, broaden Nokia’s participation in customer architectures as earlier wins convert into revenue. Its multi-rail optical technology has secured three design wins, with initial volumes reaching the first customer, adding a route into line systems where Nokia historically had less share. Work with Zayo on connecting distributed inference across data centers also shows how the opportunity extends to network providers serving multiple AI infrastructure customers. Nokia’s competitive opportunity, therefore, spans both direct hyperscaler deployments and the transport networks connecting distributed compute.
Supply Capacity Determines the Pace of Order Conversion
Demand exceeds available supply in both Optical Networks and IP Networks, making manufacturing execution a direct constraint on customer deployments. Nokia has completed 90% of process development for its new San Jose optical fabrication facility, although that milestone does not yet establish production yields or volume readiness. Network Infrastructure’s gross margin fell 150 basis points YoY to 41.2% as product mix and new IP product ramps increased costs, showing that faster AI-related sales do not immediately improve unit economics. The largely completed Infinera integration brings the optical portfolio and production effort under a more unified operation, while Nokia’s retreat from lower-margin customer premises equipment narrows its resource commitments. Nokia is also asking telecom customers for 12 to 18 months of planning visibility as component constraints and rising costs complicate procurement. Buyers should assess delivery capacity and qualification schedules alongside product performance, because a design win alone does not secure deployment timing.
Live AI Radio Trials Shift Attention to Operator Economics
Nokia’s artificial intelligence radio access network (AI-RAN) program has progressed into live operator environments, giving customers a more practical basis for evaluating software-defined radio infrastructure. T-Mobile completed a live voice call on its production network, while Elisa ran voice, mobile data, and AI workloads simultaneously on the same platform in its commercial network. Nokia has demonstrated spectral efficiency gains above 20% in live environments and now has 19 customers engaged in its AI-RAN program. Running anyRAN software on NVIDIA’s accelerated computing platform creates a path for adding radio capabilities through software, shifting part of the purchasing decision toward continuing performance improvements. However, Radio Networks’ quarter benefited from deliveries moving forward from Q4 FY 2026, while Core Software faced server-related project delays, separating current revenue timing from AI-RAN adoption. Operator adoption will depend on whether capacity gains and software flexibility justify deployment costs across commercial networks.
Guidance and Final Thoughts
Nokia maintained FY 2026 comparable operating profit guidance of €2.1 billion to €2.6 billion but now expects to finish above the midpoint, signaling greater confidence than a quarter earlier. For Q4 FY 2026, it assumes revenue will increase 20% to 24% sequentially, with Mobile Infrastructure’s earlier deliveries moderating normal seasonality. FY 2026 Network Infrastructure revenue growth remains at 12% to 14% on a cc and portfolio basis, while combined Optical Networks and IP Networks growth should exceed the prior 18% to 20% assumption and reach 25% to 30% in FY 2027. Nokia reduced its FY 2026 free cash flow conversion assumption to 35% to 55%, reflecting an additional €400 million working capital investment and accelerated restructuring, with associated charges now expected to reach €1.1 billion. Capital expenditure is expected to total €750 million to €850 million, partly reflecting cash payments shifting into FY 2027, while the Infinera integration targets €200 million in net savings by the end of FY 2026, one year ahead of schedule. Delivering the growth outlook will require Nokia to convert optical capacity investments into qualified shipments while improving new-product economics, making production execution the central test of its AI infrastructure strategy.
See the full press release on Nokia’s Q3 FY 2026 financial results on the Nokia website.
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Other Insights From Futurum:
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Can Mobile Core Early Access Support Nokia’s Software Growth?
Nokia’s AI-RAN Platform Puts a Number on the Software-Defined RAN Bet
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