0000018926-26-000014
SEC filingRevenue declined 5% to $12.4B in 2025 due to legacy service erosion and strategic shift toward fiber and enterprise growth.
Lumen Technologies, Inc. describes itself as a leading digital networking services company that empowers enterprise businesses to fuel growth in a multi-cloud, AI-first marketplace by connecting people, data, and applications quickly, securely, and effortlessly. The company operates one of the world’s most interconnected communications networks, with approximately 163,000 fiber on-net buildings and over 340,000 route miles of fiber optic cable globally as of December 31, 2025. Lumen’s brands include Lumen (flagship enterprise and wholesale), CenturyLink (mass-market copper-based services), and Black Lotus Labs (cyberthreat research). Prior to its recent divestiture, Quantum Fiber was used for fiber-based broadband services to residential and small business customers.
As of December 31, 2025, Lumen reported two segments: Business and Mass Markets. The Business segment serves domestic and global enterprise and commercial customers through five sales channels: Large Enterprise, Mid-Market Enterprise, Public Sector, Wholesale, and International and Other. The Mass Markets segment served domestic residential and small business customers, but on February 2, 2026, Lumen completed the sale of its Mass Markets Fiber-to-the-Home business in 11 states to AT&T for gross cash proceeds of $5.75 billion. Following this divestiture, Lumen anticipates having one reporting segment going forward.
Business segment products are categorized into four groups: Grow (including Dark Fiber and Conduit, Edge Cloud Services, IP, VoIP, Managed Security Services, SD WAN, UC&C, Optical Services), Nurture (Ethernet, VPN Data Networks), Harvest (legacy Voice Services, Private Line), and Other (Equipment, Managed and Professional Service Solutions, other legacy services). Mass Markets products include Fiber Broadband, Other Broadband (copper-based), and Voice and Other (including federal support programs).
Lumen reaches customers through direct sales representatives, inbound call centers, telemarketing, third-party agents, system integrators, value-added resellers, and other telecommunications firms. The company also offers digital self-service ordering tools. Marketing support includes digital advertising, events, television advertising, and public relations. No single customer concentration is disclosed.
Lumen competes in a dynamic market against global communications providers, hyperscalers, cloud service providers, software networking companies, infrastructure companies, cable companies, wireless service providers, and niche players. Key competitive factors include network reliability, data transmission speed, pricing, integrated offerings, and customer service. In Mass Markets, competition comes from advanced wireless technologies (fixed wireless, low-earth-orbit satellites), cable enhancements, and new fiber builds by competitors or municipalities. Legacy voice services face competition from wireless, social networking, and videoconferencing platforms.
Lumen’s strategic goal is to be the trusted provider of network services. Key pillars include: delivering best-in-class physical infrastructure; optimizing connections between locations, data centers, and clouds; limiting security vulnerabilities; expanding product offerings and digital self-service; creating an adaptive integrated network; monetizing network assets through PCF solutions; expanding network capacity via an AI backbone initiative; managing non-core business for cash flow; and strengthening financial position through modernization and simplification initiatives.
As of December 31, 2025, Lumen employed approximately 24,000 people globally, with about 3,400 outside the U.S. Approximately 20% of the U.S. workforce is represented by unions (CWA or IBEW). The company invests in talent through skills-building programs, tuition reimbursement, mentoring, leadership development, and a robust learning ecosystem with around 160,000 courses. Lumen emphasizes a culture of teamwork, trust, and transparency, and offers comprehensive health and wellness programs.
Lumen Technologies reported operating revenue of $12.4 billion for 2025, a $706 million decrease (5%) from 2024. The decline was primarily driven by continued erosion in legacy services across both segments. Total operating expenses increased 4% to $13.2 billion, including a $628 million goodwill impairment and higher selling, general and administrative costs partly due to a $49 million fee for relinquishing RDOF funding. Depreciation and amortization fell 7% to $2.7 billion, benefiting from the discontinuation of depreciation on Mass Markets Fiber-to-the-Home assets held for sale. Interest expense decreased 6% to $1.3 billion due to lower average debt and a reduced average interest rate of 7.12%. A $740 million loss on early retirement of debt compared to a $348 million gain in 2024, swinging other expense to $1.9 billion from $690 million. Income tax benefit widened to $977 million, resulting in an effective tax rate of 36.0%, down from 76.1%.
Business Segment: Revenue fell 5% to $9.9 billion. Grow products (dark fiber, IP services) increased 5% to $4.6 billion, driven by a $112 million rise in dark fiber and conduit revenue and $74 million from IP services. Nurture declined 15% to $2.5 billion, led by a $344 million drop in traditional VPN and $116 million in Ethernet services. Harvest decreased 9% to $2.1 billion, largely from $162 million in legacy voice declines. Segment expenses fell 7% to $5.4 billion, mainly from lower network costs and headcount. Adjusted EBITDA decreased 2% to $4.5 billion, but margin improved to 46% from 45%.
Mass Markets Segment: Revenue fell 9% to $2.5 billion. Fiber Broadband grew 20% to $883 million, reflecting a $148 million increase from Quantum Fiber customer additions. Other Broadband declined 19% to $950 million due to copper broadband customer losses. Voice and Other dropped 20% to $674 million, including a $46 million reduction from RDOF forfeiture. Segment expenses decreased 11% to $1.1 billion, driven by lower employee costs and network expenses. Adjusted EBITDA fell 7% to $1.4 billion, but margin improved to 56% from 55%.
Management's outlook focuses on the post-divestiture enterprise and fiber growth strategy. The Mass Markets Fiber-to-the-Home sale closed February 2, 2026, generating $5.75 billion in pretax proceeds used to repay debt. This transaction reduces recurring revenue but is expected to cut fiber-related capital expenditures by approximately $1 billion annually. Short-term liquidity includes $1.0 billion cash and $722 million in revolver availability as of December 31, 2025. For the next 12 months, projected capital expenditures are $3.2 to $3.4 billion, primarily for network modernization and fiber expansion. Debt service obligations are modest ($88 million in the next 12 months), and a $400 million federal income tax refund is anticipated in the first half of 2026. The company expects to continue refinancing maturing debt subject to market conditions, with credit ratings currently at B/Caa1 levels. Strategic priorities include monetizing network assets through PCF solutions, managing legacy revenue decline, and investing in high-capacity connectivity to capture AI and multi-cloud demand.
As of December 31, 2025, Lumen held $1.003 billion in cash and cash equivalents, a decrease from $1.889 billion at end of 2024. Total debt was $17.441 billion (including $88 million current maturities), down from $17.906 billion. Stockholders' equity stood at a deficit of $(1.117) billion, reflecting accumulated losses. The company's total assets were $34.342 billion, with property, plant and equipment net of $19.575 billion representing the largest asset. Goodwill was reduced to zero after a $628 million impairment and reclassification of $1.336 billion to held for sale.
Lumen has significant lease obligations totaling $1.917 billion in future operating lease payments and $255 million in finance lease payments. The company also has $7.411 billion in deferred revenue, including $1.005 billion current. In January 2026, Lumen paid $95 million related to relinquishment of RDOF awards. Purchase commitments beyond leases are not disclosed in the Notes provided.
Capital expenditures were $4.367 billion in 2025, representing 35.2% of total revenue. The company paid minimal dividends of $1 million. Debt activity was substantial: $8.158 billion of new debt issued and $8.818 billion repaid, resulting in a net reduction of $0.465 billion. The company recorded a $740 million net loss on early retirement of debt due to refinancings and repurchases. No stock buybacks were disclosed.
Segment data (Note 16) is not included in the provided Notes excerpt. However, revenue by product category for Business and Mass Markets is disclosed. Business segment revenue was $9.895 billion (79.8% of total), with Grow products at $4.595 billion. Mass Markets revenue was $2.507 billion, including Fiber Broadband of $883 million. Geographic mix is not detailed beyond international and other (Business) revenue of $325 million in 2025.
The company highlights that integrating and modernizing legacy systems is critical to achieving operational goals and cost savings. Failure to execute on time or within budget could disrupt service delivery, delay repairs, and destabilize the network, leading to customer loss and financial harm. This is a multi-year challenge.
Lumen's pivot to PCF (Private Connectivity Fabric) solutions faces construction delays, cost overruns from weather/supply chain, and shifting data center connectivity demand. If anticipated benefits do not materialize, financial results could be adversely impacted.
The company assumes AI will drive robust demand; if demand is weaker or misaligned, resources may be misallocated. Additionally, internal use of AI introduces governance, operational, and regulatory risks.
Lumen operates in an intensely competitive industry with commoditized pricing. Competitors have advantages in resources, technology, and regulatory posture. Failure to innovate and deliver advanced solutions timely could erode market share.
The company faces intense competition for skilled personnel, exacerbated by a low stock price reducing equity compensation value. Remote work models may impair collaboration and innovation.
Prolonged declines in legacy services and broader pricing pressures challenge revenue growth. High debt and low stock price create uncertainty with customers, vendors, and employees.
As a critical infrastructure provider, Lumen is a frequent target of sophisticated cyber-attacks. Past incidents were not material, but future attacks could cause operational disruption, data loss, regulatory penalties, and reputational harm. Network outages from aging infrastructure or human error pose similar risks.
Key suppliers, vendors, and hyperscaler customers pose risks if agreements are not renewed or if customers develop alternative networks. Reliance on landowners for rights-of-way and on licensors for essential technologies adds vulnerability.
Extreme weather events may disrupt operations and increase costs. Climate change may heighten exposure. ESG programs face legal and reputational risks from evolving stakeholder expectations.
Lumen is subject to numerous federal, state, and international laws. FCC buildout programs (e.g., RDOF) expose the company to significant financial risk if noncompliant. Data privacy laws (e.g., EU GDPR, U.S. state laws) create a complex compliance environment.
As a network provider, Lumen may face claims (defamation, copyright) from content transmitted over its network. While current law limits liability, proposed changes could increase exposure.
Media reports about lead-sheathed cables have triggered lawsuits and regulatory inquiries. Even if unfounded, reputational harm may be significant.
Significant debt (with complex structure and covenants) requires large cash flow for interest and principal, limiting flexibility. Covenant breaches could accelerate debt and trigger cross-defaults.
Market conditions may limit access to additional financing. Failure to refinance could force asset sales or restructuring, harming operations.
Substantial NOLs may be limited by Section 382 ownership changes; inability to utilize them reduces tax benefits.
Underfunded pension plans and rising healthcare costs could reduce profitability and increase funding requirements.
These transactions may yield lower-than-expected benefits due to transition service disputes, stranded assets, operational distractions, and reduced cash flows. Talent retention and customer dissatisfaction are additional concerns.
Macroeconomic conditions (inflation, trade policies), shareholder activism, and anti-takeover provisions also pose risks, though they are more standard boilerplate.