LUMN · Lumen Technologies, Inc.

Lumen Technologies delivered Q1 2026 results in line with expectations, with total revenue of $2.899 billion reflecting a 9% YoY decline primarily driven by a 31% drop in Mass Markets revenue to $455 million following the Fiber-to-the-Home divestiture to AT&T, which generated $729 million in operating cash proceeds. Business revenue held steady at $2.444 billion, up 1% QoQ, as Strategic revenue reached $1.246 billion (51% of total, up from 49% prior quarter), surpassing Legacy revenue for the first time amid a 9% YoY increase in Strategic mix. CEO Kate Johnson highlighted progress in the transformation strategy, with Network-as-a-Service metrics showing +25% customer growth, +32% services sold, and +35% fabric ports QoQ. Adjusted EBITDA excluding Special Items was $849 million (29.3% margin, stable YoY), impacted by divestiture gains offset by modernization costs targeting $1 billion annualized savings by 2027 end. CFO Chris Stansbury noted leverage below 4.0x post-FTTH sale and revolver refinancing to $825 million, bolstering liquidity at $1.625 billion cash. The agreement to acquire Alkira unites Lumen's physical infrastructure with cloud-native NaaS control plane, targeting ~$70B TAM in programmable networking for AI, expected margin accretive at scale. Updated 2026 guidance raised Free Cash Flow to $1.9-$2.1 billion (incorporating divestiture proceeds used for debt paydown), while maintaining Adjusted EBITDA at $3.1-$3.3 billion, signaling confidence in strategic pivot despite Legacy pressures.