Latest news with #KateJohnson
Yahoo
02-08-2025
- Business
- Yahoo
Lumen Technologies (LUMN) Extends Losing Streak on Wider Losses
We recently published . Lumen Technologies, Inc. (NYSE:LUMN) is one of the worst-performing stocks on Friday. Lumen Technologies saw its share prices decline for a third straight day on Friday, slashing 16.63 percent to close at $3.71 apiece after a disappointing earnings performance in the second quarter of the year. In its earnings release, Lumen Technologies, Inc. (NYSE:LUMN) said it widened its net loss by 1,767 percent to $915 million from the $49 million in the same period last year. Revenues decreased by 5 percent to $3.09 billion from $3.27 billion year-on-year. According to the company, the wider net loss was primarily due to the refinancing of certain debt instruments and credit facilities during the past two quarters, among others. cherezoff / In the first half, Lumen Technologies, Inc. (NYSE:LUMN) swung to a net loss of $1.1 billion from an $8 million net profit in the first six months of 2024, while revenues also declined by 4 percent to $6.27 billion from $6.56 billion. Kate Johnson, Lumen Technologies, Inc.'s (NYSE:LUMN) president and CEO, said that the firm is currently building a stronger and more modern company. 'With the sale of our consumer fiber business, successful debt refinancing, and continued modernization gains, we're laying our foundation for future revenue growth,' she noted. While we acknowledge the potential of LUMN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
02-08-2025
- Business
- Yahoo
Lumen Technologies (LUMN) Extends Losing Streak on Wider Losses
We recently published . Lumen Technologies, Inc. (NYSE:LUMN) is one of the worst-performing stocks on Friday. Lumen Technologies saw its share prices decline for a third straight day on Friday, slashing 16.63 percent to close at $3.71 apiece after a disappointing earnings performance in the second quarter of the year. In its earnings release, Lumen Technologies, Inc. (NYSE:LUMN) said it widened its net loss by 1,767 percent to $915 million from the $49 million in the same period last year. Revenues decreased by 5 percent to $3.09 billion from $3.27 billion year-on-year. According to the company, the wider net loss was primarily due to the refinancing of certain debt instruments and credit facilities during the past two quarters, among others. cherezoff / In the first half, Lumen Technologies, Inc. (NYSE:LUMN) swung to a net loss of $1.1 billion from an $8 million net profit in the first six months of 2024, while revenues also declined by 4 percent to $6.27 billion from $6.56 billion. Kate Johnson, Lumen Technologies, Inc.'s (NYSE:LUMN) president and CEO, said that the firm is currently building a stronger and more modern company. 'With the sale of our consumer fiber business, successful debt refinancing, and continued modernization gains, we're laying our foundation for future revenue growth,' she noted. While we acknowledge the potential of LUMN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . Sign in to access your portfolio
Yahoo
31-07-2025
- Business
- Yahoo
Lumen (NYSE:LUMN) Reports Sales Below Analyst Estimates In Q2 Earnings
Telecommunications infrastructure company Lumen Technologies (NYSE:LUMN) fell short of the market's revenue expectations in Q2 CY2025, with sales falling 5.4% year on year to $3.09 billion. Its non-GAAP loss of $0.03 per share was 88.7% above analysts' consensus estimates. Is now the time to buy Lumen? Find out in our full research report. Lumen (LUMN) Q2 CY2025 Highlights: Revenue: $3.09 billion vs analyst estimates of $3.11 billion (5.4% year-on-year decline, 0.7% miss) Adjusted EPS: -$0.03 vs analyst estimates of -$0.27 (88.7% beat) Adjusted EBITDA: $877 million vs analyst estimates of $833.8 million (28.4% margin, 5.2% beat) EBITDA guidance for the full year is $3.3 billion at the midpoint, below analyst estimates of $3.33 billion Operating Margin: -19.5%, down from 4.1% in the same quarter last year Free Cash Flow was -$321 million compared to -$156 million in the same quarter last year Market Capitalization: $4.58 billion 'Our second quarter results underscore the momentum of our transformation strategy and the discipline of our execution,' said Kate Johnson, President and CEO of Lumen Technologies. Company Overview With approximately 350,000 route miles of fiber optic cable spanning North America and the Asia Pacific, Lumen Technologies (NYSE:LUMN) operates a vast fiber optic network that provides communications, cloud connectivity, security, and IT solutions to businesses and consumers. Revenue Growth Examining a company's long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. With $12.82 billion in revenue over the past 12 months, Lumen is larger than most business services companies and benefits from economies of scale, enabling it to gain more leverage on its fixed costs than smaller competitors. This also gives it the flexibility to offer lower prices. However, its scale is a double-edged sword because finding new avenues for growth becomes difficult when you already have a substantial market presence. For Lumen to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets. As you can see below, Lumen struggled to generate demand over the last five years. Its sales dropped by 9.5% annually, a rough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Lumen's annualized revenue declines of 9.3% over the last two years align with its five-year trend, suggesting its demand has consistently shrunk. Lumen also breaks out the revenue for its most important segment, Large Enterprise. Over the last two years, Lumen's Large Enterprise revenue (services provided to businesses) averaged 9.7% year-on-year declines. This segment has lagged the company's overall sales. This quarter, Lumen missed Wall Street's estimates and reported a rather uninspiring 5.4% year-on-year revenue decline, generating $3.09 billion of revenue. Looking ahead, sell-side analysts expect revenue to decline by 5.4% over the next 12 months. Although this projection is better than its two-year trend, it's tough to feel optimistic about a company facing demand difficulties. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating Margin Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D. Lumen's high expenses have contributed to an average operating margin of negative 7.6% over the last five years. Unprofitable business services companies require extra attention because they could get caught swimming naked when the tide goes out. It's hard to trust that the business can endure a full cycle. Analyzing the trend in its profitability, Lumen's operating margin decreased by 7 percentage points over the last five years. Lumen's performance was poor no matter how you look at it - it shows that costs were rising and it couldn't pass them onto its customers. This quarter, Lumen generated a negative 19.5% operating margin. The company's consistent lack of profits raise a flag. Earnings Per Share Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Sadly for Lumen, its EPS declined by 16.4% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand. We can take a deeper look into Lumen's earnings to better understand the drivers of its performance. As we mentioned earlier, Lumen's operating margin declined by 7 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don't tell us as much about a company's fundamentals. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For Lumen, its two-year annual EPS declines of 50.3% show it's continued to underperform. These results were bad no matter how you slice the data. In Q2, Lumen reported adjusted EPS at negative $0.03, up from negative $0.13 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Lumen to perform poorly. Analysts forecast its full-year EPS of negative $0.20 will tumble to negative $1.22. Key Takeaways from Lumen's Q2 Results Revenue missed, and full-year EBITDA guidance came in below expectations. This was a weaker quarter, and shares traded down 4.8% to $4.26 immediately following the results. Big picture, is Lumen a buy here and now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free.
Business Wire
31-07-2025
- Business
- Business Wire
Lumen Technologies reports second quarter 2025 results
DENVER--(BUSINESS WIRE)--Lumen Technologies, Inc. (NYSE: LUMN) reported results for the second quarter ended June 30, 2025. Outperformance on Key Metrics: Strong revenue and Adjusted EBITDA despite approximately $46 million in one-time revenue givebacks associated with the FCC's Rural Digital Opportunity Fund. AT&T Consumer Fiber Transaction: Announced an agreement to sell Lumen's consumer fiber business to AT&T for $5.75 billion, sharpening the company's enterprise focus and unlocking the financial flexibility to invest in our strengths. Strengthened Financial Position: Successfully completed a $2 billion bond offering, extending maturities to 2033 and reducing annual interest expense by approximately $50 million. Momentum in Modernization and Simplification: Increased the 2025 exit run-rate cost-reduction target from $250 million to $350 million, positioning the company at the high end of full-year Adjusted EBITDA guidance and creating room for reinvestment in growth. 'Our second quarter results underscore the momentum of our transformation strategy and the discipline of our execution,' said Kate Johnson, President and CEO of Lumen Technologies. 'We are delivering on our financial milestones and building a stronger, more modern company. With the sale of our consumer fiber business, successful debt refinancing, and continued modernization gains, we're laying our foundation for future revenue growth — we are playing to win.' Second Quarter 2025 Highlights Announced we entered into a definitive agreement to sell our Mass Markets fiber-to-the-home business, including approximately 95% of Quantum Fiber, in 11 states to AT&T for a pre-tax total of $5.75 billion in cash Reported Net Loss of $(915) million for the second quarter 2025, which included a non-cash goodwill impairment charge of $628 million, compared to reported Net Loss of $(49) million for the second quarter 2024 Reported diluted loss per share of $(0.92) for the second quarter 2025, compared to diluted loss per share of $(0.05) for the second quarter 2024. Excluding Special Items 1, diluted loss per share was $(0.03) for the second quarter 2025, compared to $(0.13) diluted loss per share for the second quarter 2024 Generated Adjusted EBITDA 1 of $877 million for the second quarter 2025, compared to $1.011 billion for the second quarter 2024, excluding the effects of Special Items of $152 million and $136 million, respectively Reported Net Cash Provided by Operating Activities of $570 million for the second quarter 2025 compared to Reported Net Cash Provided by Operating Activities for the second quarter 2024 of $511 million Generated Free Cash Flow 1 of $(209) million for the second quarter 2025, excluding cash paid for Special Items of $112 million, compared to Free Cash Flow of $(156) million for the second quarter 2024, excluding cash paid for Special Items of $86 million Financial Results Metric, as reported Second Quarter ($ in millions, except per share data) 2025 2024 Large Enterprise $ 732 749 Mid-Market Enterprise 500 562 Public Sector 486 449 North America Enterprise Channels 1,718 1,760 Wholesale 690 726 North America Business Revenue 2,408 2,486 International and Other 82 92 Business Segment Revenue 2,490 2,578 Mass Markets Segment Revenue 602 690 Total Revenue $ 3,092 3,268 Cost of Services and Products 1,624 1,653 Selling, General and Administrative Expenses 755 742 Gain on Sale of Business — (5 ) Stock-based Compensation Expense (Credit) 12 (3 ) Net Loss (915 ) (49 ) Net Loss, Excluding Special Items (1)(2) (29 ) (124 ) Adjusted EBITDA (1) 725 875 Adjusted EBITDA, Excluding Special Items (1)(3) 877 1,011 Net Loss Margin (29.6 )% (1.5 )% Net Loss Margin, Excluding Special Items (1)(2) (0.9 )% (3.8 )% Adjusted EBITDA Margin (1) 23.4 % 26.8 % Adjusted EBITDA Margin, Excluding Special Items (1)(3) 28.4 % 30.9 % Net Cash Provided by Operating Activities 570 511 Capital Expenditures 891 753 Unlevered Cash Flow (1) 54 (24 ) Unlevered Cash Flow, Excluding Cash Special Items (1)(4) 166 62 Free Cash Flow (1) (321 ) (242 ) Free Cash Flow, Excluding Cash Special Items (1)(4) (209 ) (156 ) Net Loss per Common Share - Diluted $ (0.92 ) (0.05 ) Net Loss per Common Share - Diluted, Excluding Special Items (1)(2) $ (0.03 ) (0.13 ) Weighted Average Shares Outstanding (in millions) - Diluted 994.5 987.2 (1) See the attached schedules for definitions of non-GAAP metrics and reconciliations to GAAP figures. (2) Excludes Special Items (net of the income tax effect thereof) which (i) positively impacted this metric by $886 million, for the second quarter of 2025 and (ii) negatively impacted this metric by $(75) million for the second quarter of 2024. (3) Excludes Special Items in the amounts of (i) $152 million for the second quarter of 2025 and (ii) $136 million for the second quarter of 2024. (4) Excludes cash paid for Special Items in the net amounts of (i) $112 million for the second quarter of 2025 and (ii) $86 million for the second quarter of 2024. Expand Revenue Second Quarter First Quarter QoQ Percent Second Quarter YoY Percent ($ in millions) 2025 2025 Change 2024 Change Revenue By Sales Channel Large Enterprise $ 732 737 (1 )% 749 (2 )% Mid-Market Enterprise 500 513 (3 )% 562 (11 )% Public Sector 486 483 1 % 449 8 % North America Enterprise Channels 1,718 1,733 (1 )% 1,760 (2 )% Wholesale 690 705 (2 )% 726 (5 )% North America Business Revenue 2,408 2,438 (1 )% 2,486 (3 )% International and Other 82 86 (5 )% 92 (11 )% Business Segment Revenue 2,490 2,524 (1 )% 2,578 (3 )% Mass Markets Segment Revenue 602 658 (9 )% 690 (13 )% Total Revenue $ 3,092 3,182 (3 )% 3,268 (5 )% Business Segment Revenue by Product Category Grow $ 1,127 1,136 (1 )% 1,063 6 % Nurture 634 666 (5 )% 750 (15 )% Harvest 554 534 4 % 568 (2 )% Subtotal 2,315 2,336 (1 )% 2,381 (3 )% Other 175 188 (7 )% 197 (11 )% Business Segment Revenue $ 2,490 2,524 (1 )% 2,578 (3 )% Expand Revenue Total Revenue was $3.092 billion for the second quarter 2025, compared to $3.268 billion for the second quarter 2024. Cash Flow Negative Free Cash Flow, excluding Special Items, was $(209) million in the second quarter 2025, compared to $(156) million in the second quarter 2024. Liquidity As of June 30, 2025, Lumen had cash and cash equivalents of $1.568 billion. Goodwill Impairment Under GAAP, the company is required to perform impairment tests related to its goodwill asset. Based on this analysis, the company recorded a non-cash goodwill impairment charge of $628 million in the second quarter of 2025. As will be explained further in the company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025 to be filed shortly after the time of this release, this goodwill impairment was driven by the difference between the post-divestiture fair value of the company's Mass Markets reporting unit and the carrying value in its Mass Markets reporting unit as of the impairment testing date. 2025 Financial Outlook The Company updated its full-year 2025 financial outlook, which is detailed below: Metric (1)(2) Current Outlook Previous Outlook Adjusted EBITDA (3) $3.2 to $3.4 billion $3.2 to $3.4 billion Free Cash Flow (4) $1.2 to $1.4 billion $700 to $900 million Net Cash Interest (5) $1.2 to $1.3 billion $1.2 to $1.3 billion Capital Expenditures (6) $4.1 to $4.3 billion $4.1 to $4.3 billion Cash Income Taxes (Refunded) Paid (7) ($400) to ($300) million $100 to $200 million (1) For definitions of non-GAAP metrics and reconciliations to GAAP figures, see the attached schedules and our Investor Relations website. (2) Outlook measures in this chart and the accompanying schedules (i) exclude the effects of Special Items, goodwill impairment, future changes in our operating or capital allocation plans, unforeseen changes in regulation, laws or litigation, and other unforeseen events or circumstances impacting our financial performance and (ii) speak only as of Jul. 31, 2025. See 'Forward-Looking Statements.' (3) Expect to come in near the high end of range driven primarily by better progress on our modernization and simplification initiatives and improved performance from legacy services. (4) Primarily driven by $400 million tax refund, lower capital expenditures, better Adjusted EBITDA performance, and lower interest expense. (5) Expect to come in near low end of the range, driven primarily from recent debt refinancings. (6) Expect to be at the low end of the range primarily due to project timing. (7) Expect to receive $400 million refund from recent tax legislation. Expand Investor Call Lumen's management team will host a conference call at 5:00 p.m. ET today, July 31, 2025. The conference call will be streamed live over the Lumen website at Additional information regarding second quarter 2025 results, including the presentation materials, will be available on the Investor Relations website prior to the call. A webcast replay of the call will also be available on our website for one year. About Lumen Technologies: Lumen is unleashing the world's digital potential. We ignite business growth by connecting people, data, and applications – quickly, securely, and effortlessly. As the trusted network for AI, Lumen uses the scale of our network to help companies realize AI's full potential. From metro connectivity to long-haul data transport to our edge cloud, security, managed service, and digital platform capabilities, we meet our customers' needs today and as they build for tomorrow. For news and insights visit LinkedIn: /lumentechnologies, X: @lumentechco, Facebook: /lumentechnologies, Instagram: @lumentechnologies and YouTube: /lumentechnologies. Lumen and Lumen Technologies are registered trademarks of Lumen Technologies LLC in the United States. Lumen Technologies LLC is a wholly-owned affiliate of Lumen Technologies, Inc. Forward-Looking Statements Except for historical and factual information, the matters set forth in this release and other of our oral or written statements identified by words such as 'estimates,' 'expects,' 'anticipates,' 'believes,' 'plans,' 'intends,' 'will,' and similar expressions with respect to the future are forward-looking statements as defined by the federal securities laws, and are subject to the 'safe harbor' protections thereunder. The forward-looking statements included in this press release including without limitation statements regarding our future financial results of operations, cash flows, or financial condition, our transformation strategy, our completed, pending, or proposed transactions, including with respect to the anticipated sale of our consumer fiber business, our modernization efforts and our competitive position, and the assumptions on which they are based are not guarantees of future results and are based on current expectations only, are inherently speculative, and are subject to a number of risks and uncertainties, many of which are beyond our control. Actual events and results may differ materially from those anticipated, estimated, projected or implied by us in those statements if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect. Factors that could cause our actual results to differ materially from those anticipated, estimated, projected or implied by us in those forward-looking statements include but are not limited to: the effects of intense competition from a wide variety of competitive providers, including decreased demand for our more mature service offerings and increased pricing pressures; the effects of new, emerging or competing technologies, including those that could make our products less desirable or obsolete; our ability to successfully and timely attain our key operating imperatives, including simplifying and consolidating our network, simplifying, and automating our service support systems, attaining our Quantum Fiber buildout schedule, replacing aging or obsolete plant and equipment, strengthening our relationships with customers, and attaining projected cost savings; our ability to successfully and timely monetize our network related assets through leases, commercial service arrangements or similar transactions (including as part of our Private Connectivity Fabric SM solutions), including the possibility that the benefits of or demand for these transactions may be less than anticipated, that the costs thereof may be more than anticipated, or that we may be unable to satisfy any conditions of any such transactions in a timely manner, or at all; our ability to safeguard our network, and to avoid the adverse impact of cyber-attacks, security breaches, service outages, system failures, or similar events impacting our network or the availability and quality of our services; the effects of ongoing changes in the regulation of the communications industry, including the outcome of legislative, regulatory, or judicial proceedings relating to content liability standards, intercarrier compensation, universal service, service standards and obligations, broadband deployment, data protection, network security, privacy, and net neutrality; our ability to generate cash flows sufficient to fund our financial commitments and objectives, including our capital expenditures, operating costs, debt obligations, taxes, and pension contributions and other benefits payments; our ability to effectively retain and hire key personnel and to successfully negotiate collective bargaining agreements on reasonable terms without work stoppages; our ability to successfully adjust to changes in customer demand for our products and services, including increased demand for high-speed data transmission services, low-latency connectivity, and scalable infrastructure driven by the growth of artificial intelligence applications and workloads, and the risk that we may misjudge the timing, scale, or nature of such demand, leading to potential misalignment of our investments or strategic priorities; our ability to enhance our growth products and manage the decline of our legacy products, including by maintaining the quality and profitability of our existing offerings, introducing profitable new offerings on a timely and cost-effective basis, and transitioning customers from our legacy products to our newer offerings; our ability to successfully and timely implement our corporate strategies, including our transformation, modernization and simplification, buildout and deleveraging strategies; our ability to successfully consummate and timely realize the anticipated benefits from the pending sale of our Mass Markets fiber-to-the-home business in 11 states to AT&T our ability to successfully and timely realize the anticipated benefits from our 2022 and 2023 divestitures, our 2024 debt modification and extinguishment transactions, and our 2025 debt refinancing transactions, in each case as described in our prior reports filed with the U.S. Securities and Exchange Commission (the "SEC"); changes in our operating plans, corporate strategies, or capital allocation plans, whether based upon changes in our cash flows, cash requirements, financial performance, financial position, market or regulatory conditions, or otherwise; the impact of any future material acquisitions or divestitures that we may transact, including our pending divestiture of our Mass Markets fiber-to-the-home business in 11 states; the negative impact of increases in the costs of our pension, healthcare, post-employment, or other benefits, including those caused by changes in capital markets, interest rates, mortality rates, demographics, or regulations; the impact of events that harm our reputation or brands, including the potential negative impact of customer or shareholder complaints, government investigations, security breaches, or service outages impacting us or our industry; adverse changes in our access to credit markets on acceptable terms, whether caused by changes in our financial position, lower credit ratings, unstable markets, debt covenant restrictions, or otherwise; our ability to meet the terms and conditions of our debt obligations and covenants, including our ability to make transfers of cash in compliance therewith; our ability to maintain favorable relations with our security holders, key business partners, suppliers, vendors, landlords, or lenders; our ability to timely obtain necessary hardware, software, equipment, services, governmental permits, and other items on favorable terms; the potential adverse effects arising out of allegations regarding the release of hazardous materials into the environment from network assets owned or operated by us or our predecessors, including any resulting governmental actions, removal costs, litigation, compliance costs, or penalties; our ability to collect our receivables from, or continue to do business with, financially-troubled customers; our ability to continue to use intellectual property necessary to conduct our operations; any adverse developments in legal or regulatory proceedings involving us; changes in tax, trade, tariff, pension, healthcare, or other laws or regulations, in governmental support programs, or in general government funding levels, including those arising from governmental programs promoting broadband development; our ability to use our net operating loss carryforwards in the amounts projected and to fully realize any anticipated benefits from recently-enacted federal tax legislation; the effects of changes in accounting policies, practices, or assumptions, including changes that could potentially require additional future impairment charges; the effects of adverse weather, terrorism, epidemics, pandemics, war, rioting, vandalism, societal unrest, political discord, or other natural or man-made disasters or disturbances; the potential adverse effects if our internal controls over financial reporting have weaknesses or deficiencies, or otherwise fail to operate as intended; the effects of changes in interest rates or inflation; the effects of more general factors such as changes in exchange rates, in operating costs, in public policy, in the views of financial analysts, or in general market, labor, economic, public health, or geopolitical conditions; and other risks referenced in our filings with the SEC. Additional factors or risks that we currently deem immaterial, that are not presently known to us, or that arise in the future could also cause our actual results to differ materially from our expected results. Given these uncertainties, investors are cautioned not to unduly rely upon our forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise. Furthermore, any information about our intentions contained in any of our forward-looking statements reflects our intentions as of the date of such forward-looking statement, and is based upon, among other things, our assessment of regulatory, technological, industry, competitive, economic, and market conditions as of such date. We may change our intentions, strategies or plans (including our capital allocation plans) at any time and without notice, based upon any changes in such factors or otherwise. Reconciliation to GAAP This release includes certain historical and forward-looking non-GAAP financial measures, including but not limited to Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Unlevered Cash Flow and adjustments to GAAP and non-GAAP measures to exclude the effect of Special Items. In addition to providing key metrics for management to evaluate the Company's performance, we believe these above-described measurements assist investors in their understanding of period-to-period operating performance and in identifying historical and prospective trends. Reconciliations of non-GAAP financial measures to the most comparable GAAP measures are included in the attached financial schedules. Non-GAAP measures are not presented to be replacements or alternatives to the GAAP measures, and investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP. Lumen may present or calculate its non-GAAP measures differently from other companies. Lumen Technologies, Inc. CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2025 AND DECEMBER 31, 2024 (UNAUDITED) ($ in millions) December 31, 2024 ASSETS CURRENT ASSETS Cash and cash equivalents $ 1,568 1,889 Accounts receivable, less allowance of $53 and $59 1,266 1,231 Assets held for sale 3,692 24 Other 1,211 1,250 Total current assets 7,737 4,394 Property, plant and equipment, net of accumulated depreciation of $23,158 and $23,121 18,665 20,421 GOODWILL AND OTHER ASSETS Goodwill — 1,964 Other intangible assets, net 4,525 4,806 Other, net 2,049 1,911 Total goodwill and other assets 6,574 8,681 TOTAL ASSETS $ 32,976 33,496 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 331 412 Accounts payable 831 749 Accrued expenses and other liabilities Salaries and benefits 588 716 Income and other taxes 285 272 Current operating lease liabilities 275 253 Interest 151 197 Other 179 179 Liabilities held for sale 110 — Current portion of deferred revenue 882 861 Total current liabilities 3,632 3,639 LONG-TERM DEBT 17,565 17,494 DEFERRED CREDITS AND OTHER LIABILITIES Deferred income taxes, net 2,496 2,890 Benefit plan obligations, net 2,152 2,205 Deferred revenue 4,450 3,733 Other 3,276 3,071 Total deferred credits and other liabilities 12,374 11,899 STOCKHOLDERS' (DEFICIT) EQUITY Common stock 19,162 19,149 Accumulated other comprehensive loss (679 ) (723 ) Accumulated deficit (19,078 ) (17,962 ) Total stockholders' (deficit) equity (595 ) 464 TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY $ 32,976 33,496 Expand Lumen Technologies, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2025 AND 2024 (UNAUDITED) ($ in millions) Six months ended June 30, 2025 2024 OPERATING ACTIVITIES Net (loss) income $ (1,116 ) 8 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 1,401 1,491 Net loss on sale of business — 17 Goodwill impairment 628 — Deferred income taxes (409 ) 2 Provision for uncollectible accounts 31 39 Net loss (gain) on early retirement and modification of debt 271 (278 ) Debt modification costs and related fees — (75 ) Gain on sale of investment — (205 ) Stock-based compensation 22 11 Changes in current assets and liabilities, net (50 ) 341 Retirement benefits (1 ) (16 ) Changes in deferred revenue 718 143 Changes in other noncurrent assets and liabilities, net 69 158 Other, net 101 (23 ) Net cash provided by operating activities 1,665 1,613 INVESTING ACTIVITIES Capital expenditures (1,682 ) (1,466 ) Proceeds from sale of property, plant and equipment, and other assets 31 264 Other, net 9 8 Net cash used in investing activities (1,642 ) (1,194 ) FINANCING ACTIVITIES Net proceeds from issuance of long-term debt 4,261 1,325 Payments of long-term debt (4,284 ) (1,997 ) Net payments of revolving line of credit — (200 ) Debt issuance and extinguishment costs and related fees (308 ) (282 ) Other, net (13 ) (6 ) Net cash used in financing activities (344 ) (1,160 ) Net decrease in cash, cash equivalents and restricted cash (321 ) (741 ) Cash, cash equivalents and restricted cash at beginning of period 1,900 2,248 Cash, cash equivalents and restricted cash at end of period $ 1,579 1,507 Cash, cash equivalents and restricted cash: Cash and cash equivalents $ 1,568 1,495 Restricted cash 11 12 Total $ 1,579 1,507 Expand Lumen Technologies, Inc. OPERATING METRICS (UNAUDITED) Operating Metrics 2Q25 1Q25 2Q24 Mass Markets broadband subscribers (in thousands) Fiber broadband subscribers 1,150 1,116 992 Other broadband subscribers (1) 1,308 1,392 1,666 Mass Markets total broadband subscribers (2) 2,458 2,508 2,658 Mass Markets broadband enabled units (3) (in millions) Fiber broadband enabled units 4.4 4.3 3.9 Other broadband enabled units 17.6 17.7 18.0 Mass Markets total broadband enabled units 22.0 22.0 21.9 (1) Other broadband subscribers are customers that primarily subscribe to lower speed copper-based broadband services marketed under the CenturyLink brand. (2) Mass Markets broadband subscribers are customers that purchase broadband connection service through their existing telephone lines, stand-alone telephone lines, or fiber-optic cables. Our methodology for counting our Mass Markets broadband subscribers includes only those lines that we use to provide services to external customers and excludes lines used solely by us and our affiliates. It also excludes unbundled loops and includes stand-alone Mass Markets broadband subscribers. We count lines when we install the service. Other companies may use different methodologies. (3) Represents the total number of units capable of receiving our broadband services at period end. Other companies may use different methodologies to count their broadband enabled units. Expand Description of Non-GAAP Metrics Pursuant to Regulation G and Item 10(e) of Regulation S-K, the Company is hereby providing definitions of non-GAAP financial metrics and reconciliations to the most directly comparable GAAP measures. The following describes and reconciles those financial measures as reported under accounting principles generally accepted in the United States (GAAP) with those financial measures as adjusted by the items detailed below and presented in the accompanying news release. These calculations are not prepared in accordance with GAAP and should not be viewed as alternatives to GAAP. In keeping with its historical financial reporting practices, the Company believes that the supplemental presentation of these calculations provides meaningful non-GAAP financial measures to help investors understand and compare business trends among different reporting periods on a consistent basis. We use the term Special Items as a non-GAAP measure to describe items that impacted a period's statement of operations for which investors may want to give special consideration due to their magnitude, nature or both. We do not call these items non-recurring because, while some are infrequent, others may recur in future periods. The largest components of our Special Items reflected in this release are one-time or unusual charges, including charges for goodwill impairment and gains or losses associated with the early retirement of debt or sale of investments. The other main components of our Special Items include Modernization and Simplification costs, Transaction and Separation costs, and Income from Transition and Separation Services. Modernization and Simplification costs are associated with a multi-year transformation initiative to streamline our network infrastructure, product portfolio, and IT systems, and to modernize our workforce to deliver $1 billion in annualized cost savings on a run-rate basis exiting 2027. Transaction and Separation costs are primarily associated with providing certain transition services in connection with our divestitures and costs related to certain debt transactions which were unusual and infrequent. Income from Transition and Separations Services includes charges we have billed for certain services provided to the purchasers in connection with our recent divestitures. Other primarily includes the recognition of previously deferred gain on our sale of select CDN contracts and the recognition of losses on disposal of certain operating assets. Adjusted EBITDA ($) is defined as net income (loss) from the Statements of Operations before income tax (expense) benefit, total other income (expense), depreciation and amortization, stock-based compensation expense and impairments. Adjusted EBITDA Margin (%) is defined as Adjusted EBITDA divided by total revenue. Management believes that Adjusted EBITDA and Adjusted EBITDA Margin are relevant and useful metrics to provide to investors, as they are an important part of our internal reporting and are key measures used by management to evaluate profitability and operating performance of Lumen and to make resource allocation decisions. Management believes such measures are especially important in a capital-intensive industry such as telecommunications. Management also uses Adjusted EBITDA and Adjusted EBITDA Margin (and similarly uses these terms excluding Special Items) to compare our performance to that of our competitors and to eliminate certain non-cash and non-operating items in order to consistently measure from period to period our ability to fund capital expenditures, fund growth, service debt and determine bonuses. Adjusted EBITDA excludes non-cash stock compensation expense and impairments because of the non-cash nature of these items. Adjusted EBITDA also excludes interest income, interest expense and income taxes. Adjusted EBITDA also excludes depreciation and amortization expense because these non-cash expenses primarily reflect the impact of historical capital investments, as opposed to the cash impacts of capital expenditures made in recent periods, which may be evaluated through cash flow measures. Adjusted EBITDA further excludes the gain (or loss) on extinguishment and modification of debt and other income (expense), net, because none of these items are related to the primary business operations of Lumen. There are material limitations to using Adjusted EBITDA as a financial measure, including the difficulty associated with comparing companies that use similar performance measures whose calculations may differ from our calculations. Additionally, by excluding the above-listed items, Adjusted EBITDA may exclude items that investors believe are important components of our performance. Adjusted EBITDA and Adjusted EBITDA Margin (either with or without Special Items) should not be considered a substitute for other measures of financial performance reported in accordance with GAAP. Unlevered Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures, plus cash interest paid and less interest income, all as disclosed in the Statements of Cash Flows. Management believes that Unlevered Cash Flow is a relevant metric to provide to investors, because it reflects the operational performance of Lumen and, measured over time, enables management and investors to monitor the underlying business' growth pattern and ability to generate cash. Unlevered Cash Flow (either with or without Special Items) excludes cash used or received for acquisitions, divestitures and debt service and the impact of exchange rate changes on cash and cash equivalents balances. There are material limitations to using Unlevered Cash Flow to measure our cash performance as it excludes certain material items that investors may believe are important components of our cash flows. Comparisons of our Unlevered Cash Flow to that of some of our competitors may be of limited usefulness. Additionally, this financial measure is subject to variability quarter over quarter as a result of the timing of payments related to accounts receivable, accounts payable, payroll and capital expenditures. Unlevered Cash Flow should not be used as a substitute for net change in cash, cash equivalents and restricted cash in the Consolidated Statements of Cash Flows. Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures as disclosed in the Statements of Cash Flows. Management believes that Free Cash Flow is a relevant metric to provide to investors, as it is an indicator of our ability to generate cash to service our debt. Free Cash Flow excludes cash used or received for acquisitions, divestitures, principal repayments and the impact of exchange rate changes on cash and cash equivalents balances. There are material limitations to using Free Cash Flow to measure our performance as it excludes certain material items that investors may believe are important components of our cash flows. Comparisons of our Free Cash Flow to that of some of our competitors may be of limited usefulness since until recently we did not pay a significant amount of income taxes due to net operating loss carryforwards, and therefore generated higher cash flow than a comparable business that does pay income taxes. Additionally, this financial measure is subject to variability quarter over quarter as a result of the timing of payments related to interest expense, accounts receivable, accounts payable, payroll and capital expenditures. Free Cash Flow (either with or without Special Items) should not be used as a substitute for net change in cash, cash equivalents and restricted cash on the Consolidated Statements of Cash Flows. Lumen Technologies, Inc. Non-GAAP Special Items (UNAUDITED) ($ in millions) Actual QTD Actual YTD Special Items Impacting Adjusted EBITDA 2Q25 2Q24 2Q25 2Q24 Severance $ 3 103 6 107 Consumer and other litigation 2 1 2 (1 ) Net (gain) loss on sale of business — (5 ) — 17 Transaction and separation costs (1) 92 23 108 191 Modernization and simplification (2) 41 — 91 — Other (3) 14 14 44 (8 ) Total Special Items impacting Adjusted EBITDA $ 152 136 251 306 Actual QTD Actual YTD Special Items Impacting Net (Loss) Income 2Q25 2Q24 2Q25 2Q24 Severance $ 3 103 6 107 Consumer and other litigation 2 1 2 (1 ) Net (gain) loss on sale of business — (5 ) — 17 Transaction and separation costs (1) 92 23 108 191 Modernization and simplification (2) 41 — 91 — Other (3) 14 14 44 (8 ) Goodwill impairment 628 — 628 — Net loss (gain) on early retirement of debt (4) 236 (3 ) 271 (278 ) Income from transition and separation services (5) (39 ) (35 ) (76 ) (70 ) Gain on sale of investment — (205 ) — (205 ) Total Special Items impacting Net (Loss) Income 977 (107 ) 1,074 (247 ) Income tax effect of Special Items (6) (91 ) 32 (116 ) 74 Total Special Items impacting Net Income (Loss), net of tax $ 886 (75 ) 958 (173 ) Actual QTD Actual YTD Special Items Impacting Cash Flows 2Q25 2Q24 2Q25 2Q24 Severance $ 4 83 14 101 Consumer and other litigation 1 1 3 (1 ) Transaction and separation costs (1) 10 29 26 167 Modernization and simplification (2) 124 — 200 — Income from transition and separation services (5) (27 ) (27 ) (81 ) (52 ) Total Special Items impacting Cash Flows $ 112 86 162 215 (1) Transaction and separation costs associated with (i) the Q2 2025 expense of $49 million for fees related to the relinquishment of our funding received under the FCC's Rural Digital Opportunity Fund, (ii) our recently announced plan to sell our Mass Markets fiber-to-the-home business, (iii) our 2022 and 2023 divestitures, (iv) our March 22, 2024 debt transaction support agreement and our September 24, 2024 exchange offer and (v) our evaluation of other potential transactions. (2) Includes costs incurred related to network infrastructure, product portfolio, IT systems, and workforce modernization designed to deliver $1 billion annualized in cost savings on a run-rate basis exiting 2027. (3) Includes primarily (i) the recognition of Q1 2024 previously deferred gain on sale of select CDN contracts in October 2023, based on the transfer of remaining customer contracts as of March 31, 2024 and (ii) the recognition of a loss on disposal of certain operating assets in Q2 2024 and Q1 2025. (4) Reflects primarily net loss (gain) as a result of (i) refinancing of certain debt instruments and credit facilities in Q2 and Q1 2025, (ii) repurchase of $75 million aggregate principal in Q2 2024 and (iii) the debt transaction support agreement and resulting debt extinguishment in Q1 2024. (5) Income from transition and separation services includes charges we billed for transition services and IT professional services provided to the purchasers in connection with our 2022 and 2023 divestitures. (6) Tax effect calculated using the annualized effective statutory tax rate, excluding any non-recurring discrete items, which was 26.0% for Q2 and Q1 2025 and 30.0% for Q1 and Q2 2024. Expand Lumen Technologies, Inc. Non-GAAP Cash Flow Reconciliation ($ in millions) Actual QTD Actual YTD 2Q25 2Q24 2Q25 2Q24 Net cash provided by operating activities (1) $ 570 511 1,665 1,613 Capital expenditures (891 ) (753 ) (1,682 ) (1,466 ) Free Cash Flow (1) (321 ) (242 ) (17 ) 147 Cash interest paid 396 232 676 571 Interest income (21 ) (14 ) (42 ) (72 ) Unlevered Cash Flow (1) $ 54 (24 ) 617 646 Free Cash Flow (1) $ (321 ) (242 ) (17 ) 147 Add back: Severance (2) 4 83 14 101 Add back (remove): Consumer and other litigation (2) 1 1 3 (1 ) Add back: Transaction and separation costs (2) 10 29 26 167 Add back: Modernization and Simplification (2) 124 — 200 — Remove: Income from transition and separation services (2) (27 ) (27 ) (81 ) (52 ) Free Cash Flow excluding cash Special Items (1) $ (209 ) (156 ) 145 362 Unlevered Cash Flow (1) $ 54 (24 ) 617 646 Add back: Severance (2) 4 83 14 101 Add back (remove): Consumer and other litigation (2) 1 1 3 (1 ) Add back: Transaction and separation costs (2) 10 29 26 167 Add back: Modernization and Simplification 124 — 200 — Remove: Income from transition and separation services (2) (27 ) (27 ) (81 ) (52 ) Unlevered Cash Flow excluding cash Special Items (1) $ 166 62 779 861 (1) Includes the impact of $700 million in cash tax refund received in Q1 2024. Expand Lumen Technologies, Inc. Adjusted EBITDA Non-GAAP Reconciliation (UNAUDITED) ($ in millions) Actual QTD Actual YTD 2Q25 2Q24 2Q25 2Q24 Net (loss) income $ (915 ) (49 ) (1,116 ) 8 Income tax (benefit) expense (234 ) 8 (278 ) 53 Total other expense, net 546 176 898 119 Depreciation and amortization expense 688 743 1,401 1,491 Stock-based compensation expense (credit) 12 (3 ) 22 11 Goodwill impairment 628 — 628 — Adjusted EBITDA $ 725 875 1,555 1,682 Add back: Severance (1) 3 103 6 107 Remove: Consumer and other litigation (1) 2 1 2 (1 ) Add back: Net (gain) loss on sale of business (1) — (5 ) — 17 Add back: Transaction and separation costs (1) 92 23 108 191 Add back: Modernization and simplification (1) 41 — 91 — Add back: Other (1) 14 14 44 (8 ) Adjusted EBITDA excluding Special Items $ 877 1,011 1,806 1,988 Net loss excluding Special Items (1) $ (29 ) (124 ) (158 ) (165 ) Total revenue $ 3,092 3,268 6,274 6,558 Net (loss) income Margin (29.6 )% (1.5 )% (17.8 )% 0.1 % Net loss Margin, excluding Special Items (0.9 )% (3.8 )% (2.5 )% (2.5 )% Adjusted EBITDA Margin 23.4 % 26.8 % 24.8 % 25.6 % Adjusted EBITDA Margin excluding Special Items 28.4 % 30.9 % 28.8 % 30.3 % (1) Refer to Non-GAAP Special Items table for details of the Special Items included above. Expand Outlook To enhance the information in our outlook with respect to non-GAAP metrics, we are providing a range for certain GAAP measures that are components of the reconciliation of the non-GAAP metrics. The provision of these ranges is in no way meant to indicate that Lumen is explicitly or implicitly providing an outlook on those GAAP components of the reconciliation. In order to reconcile each non-GAAP financial metric to GAAP, Lumen has to use ranges for the GAAP components that arithmetically add up to the non-GAAP financial metric. While Lumen believes that it has used reasonable assumptions in connection with developing the outlook for its non-GAAP financial metrics, it fully expects that the ranges used for the GAAP components will vary from actual results. We will consider our outlook of non-GAAP financial metrics to be accurate if the specific non-GAAP metric is met or exceeded, even if the GAAP components of the reconciliation are different from those provided in an earlier reconciliation.
Fast Company
21-07-2025
- Business
- Fast Company
Revolutionizing telecom for the AI era
Artificial intelligence is reshaping the landscape of work and business at a staggering rate. New tools and trends seem to emerge at a near daily rate: generative AI, advanced large language models, agentic AI, and more. One thing underpins each of these breakthroughs: a powerful, intelligent fiber network. But traditional legacy systems are not equipped for the demands of AI or the promise of enterprise workloads AI will help to build. Telecom needs a transformation, and it's one that will redefine the future of technology innovation. 'The networks of yesterday simply do not serve the AI needs of tomorrow,' said Kate Johnson, CEO of Lumen Technologies, during a 'fireside chat' presented by Lumen at Fast Company's annual Most Innovative Companies Summit. Johnson discussed what business leaders need to know about next-generation fiber infrastructure, why it's enabling the AI-powered future of business, and how to begin shifting their cultures now. Here are three takeaways from the discussion. (Some comments have been edited for length and clarity; scroll to the bottom to watch the entire presentation.) 1. Modernizing networks is essential to prepare for the AI-driven economy. The future of connectivity matters far beyond the telecom industry—in fact, it will affect how all of us live and work. 'Infrastructure is super boring until it becomes critical,' Johnson said. 'And it is critical. It's a matter of national security; it's a matter of innovation; it's a matter of economic development.' She recommends that organizations and leaders of all kinds follow this space closely, as it will have a major impact on how their businesses adopt AI and operate in the future. Planning is a long game, she added, and she recognizes this is inherently challenging. 'Critical infrastructure is not something that you can build overnight. It takes time and it takes planning,' Johnson added. 'People say, 'Well, I don't really know what we're going to look like in a year or five or 10, so how the heck do I build critical infrastructure to support something I haven't defined yet?' That's what we're all grappling with.' At this stage, she said, leaders can focus on transforming how their functions work. That means evolving their cultures, the way they lead, and even their own personal mindsets. 2. For innovation to flourish, company culture needs to support experimentation and change. The speed of AI's adoption rate is staggering, and it may eclipse the internet and cell phone as the fastest-diffusing technology in history, Johnson noted. And that's why businesses cannot afford to wait on the sidelines. When cloud computing emerged several years ago, many companies were nervous to put their data in the cloud, Johnson said. They weren't comfortable doing so until others tested it first. But that wait-and-see approach, she warned, will not work with AI. 'You do not have time to take a seat and watch,' she said. 'Because the pace of innovation is measured in minutes and hours—not days, weeks, and months.' As Johnson put it, many team members may be reticent to jump in and experiment because, traditionally, corporate America has focused on 'mastery.' They've been trained to think that if they're presenting an idea to their boss, they must know all the answers to questions they might face. But that mindset doesn't work today given how quickly AI tools are evolving. 'You have to promote a mindset about getting it right, not being right—and that is a fundamental shift for every human being, because they don't want to make a mistake,' Johnson said. 'AI right now is about trial and error, so you have to say, 'It's expected that we're going make mistakes.' Nobody knows how this story will play out, so you have to create an environment and the culture that enables change.' 3. Leaders must immerse themselves in AI if they expect their teams to experiment with it. To promote that culture of experimentation and change, however, leaders cannot simply dictate to others. They must inspire that transformation by living it themselves. Johnson recommended they take two specific actions: First, experiment with several AI tools and use them frequently—the occasional query to ChatGPT will not suffice. 'If you're a leader and you're not using AI every single day, more than 10 times a day, then don't expect your team to use it,' Johnson said. Second, leaders should look 'very deeply' within themselves to identify old patterns of thinking that won't serve them in this evolving landscape and recognize what and how they must change going forward. 'It's almost always going to be oriented around your mindset—being comfortable with this profound uncertainty regarding the future, not only of the environment around us, but also what your company looks like within it,' Johnson said. 'It's time to get off the bench and get into the game.' Watch the full panel:
