Nokia Updates Financials Amid Fixed Wireless Access and Enterprise Campus Divestitures, Classifies as Discontinued Operations

Strategic Portfolio Restructuring and Discontinued Operations Designation

Nokia’s reclassification of Fixed Wireless Access CPE and Enterprise Campus Edge as discontinued operations marks a key milestone in its strategic repositioning announced earlier in 2026. Following an extensive strategy review, Nokia established two main operating segments to concentrate on its core connectivity and infrastructure strengths. Initially assigned to a Portfolio Businesses segment from January 1, 2026, these units were evaluated for value-creation opportunities.

In Q2 2026, Nokia formally designated these businesses as discontinued operations after concrete disposal developments. The company confirmed an agreement to sell Fixed Wireless Access CPE and assessed a high probability for Enterprise Campus Edge divestiture, justifying the accounting treatment. This reclassification also led to minor financial adjustments in Network Infrastructure and Mobile Infrastructure segments due to transaction scopes and reallocation of centralized costs within the revised structure.

Recast Comparable Financial Performance for Nokia Group in 2025 and H1 2026

Recast comparable financials reveal Nokia’s continuing operations performance excluding discontinued activities. For full-year 2025, Nokia Group reported net sales of EUR 19,480 million, gross profit of EUR 8,889 million, and operating profit of EUR 2,092 million. These correspond to a gross margin of 45.6% and operating margin of 10.7%, highlighting profitability in core network and mobile infrastructure businesses. Research and development expenses totaled EUR 4,541 million, while selling, general, and administrative costs were EUR 2,402 million, reflecting ongoing investments alongside efficiency initiatives.

During the first half of 2026, comparable net sales reached EUR 9,251 million with gross profit of EUR 4,253 million and operating profit of EUR 735 million. Gross margin stood at 46.0%, slightly above 2025 levels, with an operating margin of 7.9%. Research and development spending was EUR 2,334 million, and selling, general, and administrative expenses were EUR 1,177 million, indicating sustained investment amid market transition and strategic realignment.

Network Infrastructure Segment Results and Market Standing

The Network Infrastructure segment, delivering connectivity solutions to telecom service providers and enterprises, showed solid results. In 2025, it generated EUR 7,646 million in net sales and EUR 3,278 million in gross profit, yielding a 42.9% gross margin. Operating profit was EUR 760 million, equating to a 9.9% operating margin, reflecting competitive pricing and operational leverage from platform investments.

In H1 2026, Network Infrastructure posted EUR 3,866 million in net sales, EUR 1,662 million gross profit, and EUR 287 million operating profit, with gross and operating margins of 43.0% and 7.4%, respectively. Q1 2026 recorded a 6.6% operating margin on EUR 1,829 million sales, improving to 8.2% in Q2 on EUR 2,037 million sales. This segment covers Nokia’s fixed network infrastructure including optical transport, IP routing, and fixed wireless access technologies supporting service providers’ transition to software-defined and virtualized networks.

Mobile Infrastructure Division and 5G Deployment Momentum

Nokia’s Mobile Infrastructure segment, providing 5G, 4G, and multi-standard radio access network technologies and services, delivered robust comparable results. For 2025, it reported EUR 11,445 million in net sales, EUR 5,525 million gross profit, and EUR 1,531 million operating profit, translating to a 48.3% gross margin and 13.4% operating margin. Research and development expenses were EUR 2,890 million, underscoring intense innovation in radio access technologies.

In H1 2026, Mobile Infrastructure achieved EUR 5,183 million net sales, EUR 2,533 million gross profit, and EUR 532 million operating profit, with gross and operating margins of 48.9% and 10.3%. Q1 2026 operating margin was 8.9% on EUR 2,503 million sales, rising to 11.6% in Q2 on EUR 2,680 million sales. This performance reflects ongoing 5G upgrades, growing service revenues, and the segment’s strategic role in connectivity infrastructure for the AI era.

Portfolio Businesses Segment and Divestment Progress

Established January 1, 2026, the Portfolio Businesses segment includes Fixed Wireless Access CPE and Enterprise Campus Edge units now classified as discontinued operations, plus other non-core units. For 2025, this segment reported EUR 379 million in net sales, EUR 90 million gross profit, and an operating loss of EUR 17 million, reflecting R&D expenses of EUR 65 million and administrative costs of EUR 42 million amid transitional dynamics.

In H1 2026, Portfolio Businesses posted EUR 194 million net sales, EUR 60 million gross profit, and EUR 2 million operating profit, with gross and operating margins of 31.0% and 1.3%. Q1 2026 net sales were EUR 100 million with a 2.9% operating margin, while Q2 net sales totaled EUR 94 million with breakeven operating results. These figures illustrate the segment’s reduced scale and transitional status as Nokia advances divestment processes.

Effect of Discontinued Operations on Reported vs Comparable Results

The discontinued operations reclassification caused notable differences between Nokia’s reported and recast comparable results, especially in H1 2026. Reported operating profit was EUR 33 million, significantly lower than the comparable EUR 735 million, highlighting the impact of discontinued operations and non-recurring items. Reported gross margin was 44.6% versus 46.0% comparable, reflecting the lower-margin profile of the discontinued businesses.

Quarterly comparisons show Q1 2026 reported operating profit of EUR 83 million against EUR 301 million comparable, and Q2 reported operating loss of EUR 50 million versus EUR 434 million comparable. These variances emphasize the importance of reviewing both metrics to understand ongoing operational performance. Minor adjustments also affected Network Infrastructure and Mobile Infrastructure financials due to transaction scopes and cost reallocations during this transition.

Gross Margin Trends and Profitability Improvements Across Segments

Nokia’s gross margin trends indicate enhanced operational leverage and pricing stability in core segments throughout 2025 and into 2026. Network Infrastructure’s gross margins ranged from 40.3% in Q2 2025 to 45.8% in Q4 2025 on a recast basis, reflecting seasonal demand and efficiency gains. Mobile Infrastructure delivered strong gross margins between 44.2% and 50.8% in 2025, maintaining 48.9% in H1 2026, underscoring the value of Nokia’s 5G radio access portfolio and pricing power.

For the Nokia Group overall on a comparable basis, gross margins improved from 42.8% in Q1 2025 to 48.5% in Q4 2025, stabilizing at 46.0% in H1 2026. This progression aligns with 5G adoption maturity and Nokia’s cost management efforts. Excluding lower-margin Portfolio Businesses further enhances gross margins for continuing operations, providing investors with clearer insight into core profitability.

Research and Development Investment and Innovation Focus

Nokia’s R&D spending underscores its commitment to technological leadership in connectivity infrastructure critical to the AI era. In 2025, R&D totaled EUR 4,541 million (23.3% of net sales), highlighting the capital-intensive nature of telecom infrastructure development. Mobile Infrastructure accounted for EUR 2,890 million (25.3% of segment sales), reflecting rapid innovation in 5G and radio access technologies. Network Infrastructure invested EUR 1,520 million (19.9% of segment sales) to advance optical transport, routing, and fixed wireless access.

In H1 2026, comparable R&D spending was EUR 2,334 million (25.2% of net sales). Mobile Infrastructure invested EUR 1,443 million (27.8% of segment sales), accelerating development in 5G advanced tech, open RAN architectures, and AI-enabled network capabilities. Network Infrastructure’s R&D totaled EUR 825 million (21.3% of segment sales), positioning Nokia to maintain competitive advantage amid evolving telecom markets and digital transformation initiatives.

Strategic Reasons for Divestment and Future Operating Model

Nokia’s divestment of Fixed Wireless Access CPE and Enterprise Campus Edge reflects a strategic focus on telecom infrastructure domains with stronger competitive advantages and profitability. The Fixed Wireless Access CPE business, producing customer premises equipment for wireless broadband, operates in a commoditized segment dominated by large consumer electronics and regional suppliers competing on cost and scale. Selling this unit allows Nokia to reallocate capital and management focus toward higher-value infrastructure services such as 5G radio access networks, optical transport, and software platforms where it holds unique technological strengths and customer relationships.

The Enterprise Campus Edge business, offering localized edge computing for enterprise networks, faces competition from hyperscale cloud providers and edge specialists. Nokia’s view that divestment is highly probable aligns with its preference to focus on service provider-centric infrastructure, where long-term contracts, integrated systems, and technology roadmaps create sustainable competitive moats. The revamped operating model centered on Network Infrastructure and Mobile Infrastructure segments positions Nokia to leverage trends in network virtualization, open RAN, and AI-driven automation favoring vendors with deep telecom expertise and established partnerships.

Investor Insights and Forward-Looking Reporting Framework

Investors should note that Nokia’s recast comparable financials offer a clearer economic view of continuing operations than reported results, which include discontinued operations and related adjustments. This presentation enables assessment of profitability and margin trends in Network Infrastructure and Mobile Infrastructure without distortions from Portfolio Businesses or transition costs. Monitoring progress on Fixed Wireless Access CPE divestment and Enterprise Campus Edge sale will clarify Nokia’s capital allocation, dividend capacity, and reinvestment plans.

Attention to timing and terms of these divestitures is critical, as transaction proceeds and gain or loss recognition will impact Nokia’s financial position and strategic priorities. Additionally, improvements in reported operating margins and cash flow in subsequent quarters due to discontinued operations reclassification would validate the strategic rationale behind these divestments and the focus on core connectivity infrastructure.