Nokia used its Capital Markets Day in New York last week to reset its plan for the rest of the decade. The group set a long‑term goal to lift annual comparable operating profit to €2.7 to €3.2 billion (C$4.0 to C$4.7 billion) by 2028, tied to what it calls the AI supercycle.
It also outlined simpler reporting and a tighter focus on core platforms that carry growing traffic. The agenda centred on how networks will feed new compute loads and how to fund that shift without straining cash.
The targets and the operating model change were presented to investors and analysts at the event, alongside updated key performance indicators. Nokia said the new ambition replaces older margin goals and will steer capital in the next phase of its turnaround, as noted in its Capital Markets Day summary.
Two segments sharpen network focus
From Jan. 1, 2026, Nokia will report through two primary operating segments, Network Infrastructure and Mobile Infrastructure. Network Infrastructure brings together optical, IP and fixed networks, positioned for data centre growth and carrier upgrades.
Mobile Infrastructure will combine core and radio networks with technology standards, reflecting the value of licensing and 3GPP work. Nokia plans to publish recast 2024 and 2025 figures under this new frame in the first quarter of 2026 to ease comparisons. The move is meant to cut complexity and direct resources to platforms that win as traffic and computing scale.
Leaders tied the reboot to demand from AI and cloud builders. “As the trusted western provider of secure and advanced connectivity, our technology is powering the AI supercycle,” said Justin Hotard, Nokia’s president and chief executive.
He highlighted how fixed and mobile assets can be engineered as AI‑native networks. The pitch is straightforward, build higher‑capacity transport, modern radio, and smarter control to support new workloads. Customers want reliable capacity and simpler operations.
Financial targets track AI demand
Nokia linked its new structure to specific yardsticks. For Network Infrastructure, it targets a 13 to 17 percent operating margin by 2028. For Mobile Infrastructure, it aims for a 48 to 50 percent gross margin by the same year, with operating profit growth from a €1.5 billion (C$2.2 billion) base.
Group common operating expenses are planned to fall from about €350 million (C$520 million) to €150 million (C$220 million) by 2028. Free cash flow conversion is guided at 65 to 75 percent of comparable operating profit. These markers give procurement teams and lenders a clear sense of expected returns and cost discipline.
The company also created a Portfolio Businesses unit for activities seen as non‑core, while it reviews options during 2026. A defence incubation unit will consolidate go‑to‑market and R&D for secure connectivity, building off established work in the United States and allied markets. Both steps show where management sees upside and where it wants flexibility. Structure follows strategy here. Execution will decide how quickly margins expand.
Recent results set the base for that push. “We saw a strong finish to 2024 with 9% net sales growth year‑on‑year in Q4,” said Pekka Lundmark, then chief executive. Guidance issued in January set 2025 comparable operating profit at €1.9 to €2.4 billion (C$2.8 to C$3.6 billion), before the new long‑term plan. The 2028 target builds from a known profitability range. Investors will watch whether AI‑led orders in optical and IP convert into steady cash.
The message is a practical one. Nokia is orienting around transport and radio systems that can scale with compute demand, while keeping cash generation in view. If the two‑segment model speeds decisions and trims overhead, projects should see shorter lead times and clearer pricing. If not, targets may slip. The next checkpoint comes with recast financials in early 2026 and the first quarterly report under the new structure.