Lumen Technologies, Inc. (LUMN) Earnings
Lumen Technologies, Inc. is expected to report next earnings on October 29, 2026 (in NaN days), with a consensus EPS estimate of $-0.21. LUMN has beaten EPS estimates in 8 of its last 12 reported quarters (average surprise -24.1% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Aug 4, 2026 | $-0.13 | $-0.07 | +47.7% | $2.8B | +2.4% |
| May 5, 2026 | $-0.10 | $-0.47 | -389.1% | $2.9B | +2.4% |
| Feb 3, 2026 | $-0.21 | $0.23 | +209.5% | $3.0B | +3.2% |
| Oct 30, 2025 | $-0.31 | $-0.20 | +35.5% | $3.1B | +1.5% |
| Jul 31, 2025 | $-0.24 | $-0.03 | +87.5% | $3.1B | +1.5% |
| May 1, 2025 | $-0.29 | $-0.13 | +55.2% | $3.2B | +2.2% |
| Feb 4, 2025 | $-0.05 | $0.09 | +280.0% | $3.3B | +4.0% |
| Apr 30, 2024 | $-0.00 | $-0.04 | -1376.0% | $3.3B | -2.3% |
| Oct 31, 2023 | $0.06 | $-0.09 | -250.0% | $3.6B | +1.0% |
| Aug 1, 2023 | $0.09 | $0.10 | +11.1% | $3.7B | -0.2% |
| May 2, 2023 | $0.12 | $0.10 | -16.7% | $3.7B | +0.4% |
| Feb 7, 2023 | $0.12 | $0.43 | +258.3% | $3.8B | +0.6% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q2 FY2026 · August 4, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
### Acquisition and Integration of Alkira (now LumenConnect Alkira) - Post-acquisition, Lumen has trained nearly 4,000 employees on Alkira's value proposition, established a scalable sales motion, aligned incentives, and launched outbound marketing to grow the sales pipeline, with positive early customer feedback. - Full technical integration of LumenConnect and Alkira platforms, targeted for completion within 18 months, will deliver a unified digital experience for customers to discover, buy, provision, and manage all network services (both north-south and east-west traffic) on one platform. - Early integration work is already focused on making Lumen DIA ports digitally discoverable and service-ready, enabling remote provisioning, upselling of high-margin incremental services without on-site truck rolls, and supporting future consumption-based pricing. ### Strategic Portfolio Transformation - The company is actively pruning lower-margin legacy products to reallocate capital and talent to high-growth, high-margin digital platform services aligned with customer demand for AI and multi-cloud networking. The recent decision to phase out enterprise voice products is part of this strategy. - The mix shift from legacy to strategic/digital services is progressing faster than management expected; legacy revenue has declined slower than forecast, making the growing share of strategic revenue even more notable. - The company continues to monetize underutilized legacy infrastructure (such as conduit) via PCF deals to generate near-term cash, but will not pursue new PCF builds with returns at or below the company's cost of capital.
Guidance
- The company reaffirms its full-year 2024 adjusted EBITDA guidance, noting that the accelerated recognition of the $36 million State of California PCF milestone into Q2 (from the second half of 2024) does not change full-year targets. Seasonally, adjusted EBITDA is typically ~$100 million lower in Q3 than Q2 due to summer maintenance and higher energy costs, which is already factored into full-year guidance. - Management remains on track to deliver $700 million in modernization and simplification cost savings by the end of 2024, and $1 billion in annual savings by the end of 2025, which is a key driver of EBITDA inflection as revenue growth gradually improves. - Alkira was not included in the original Investor Day digital revenue growth targets, and management expects it to add upside to those targets; the company will quantify Alkira's growth acceleration impact when it releases 2027 guidance. - More detailed granularity on Alkira's monthly recurring revenue and contribution to total business revenue will be provided alongside 2025 guidance next year, as the company prioritizes driving customer adoption and upselling in the near term.
Segment performance
Total business revenue for Q2 was $2.44 billion, a 1.8% year-over-year decline. North America total business revenue declined 1.6% YoY, while North American enterprise revenue (excluding wholesale) declined only 0.2% YoY. Strategic revenue grew 14% YoY (23% cumulative growth over two years) and accounted for 53% of total business revenue, up from 51% in Q1 and 45% in Q2 2023. Digital revenue, a subset of strategic revenue, was $39 million in Q2, in line with company expectations. Strategic Waves revenue (100G and 400G) grew nearly 11% YoY in North American enterprise channels, with strategic Waves sales up 35% YoY. Adjusted EBITDA (excluding special items) was $802 million, down from $877 million YoY, primarily due to the prior-quarter fiber-to-the-home sale and expected legacy revenue declines. Capital expenditures (excluding special items) were $780 million, including ~$300 million in CapEx for PCF deals. Free cash flow (excluding special items) was $327 million in Q2. PCF revenue was approximately $91 million in the quarter, associated with $13 billion in announced PCF deals. Alkira's near-term revenue contribution is currently immaterial following its early-July acquisition.
Risks & headwinds
- The slow quarter-over-quarter ramp of digital revenue (up only $2 million from Q1) reflects the early stage of scaling the business, with growth dependent on getting existing customers to add additional incremental services after initial adoption, creating near-term uncertainty around the speed of digital revenue acceleration. - Phasing out legacy enterprise voice products creates a small risk of unwanted churn for other Lumen services that existing voice customers purchase; management is mitigating this by prioritizing support for large customers with multiple Lumen services, partnering with third-party providers to meet ongoing customer voice needs, and providing planned migration paths aligned with customer timelines and regulatory requirements. - The mix shift from lower-margin legacy to higher-margin strategic services is still in progress, so overall company EBITDA is still declining year-over-year as legacy revenue shrinks, with margin expansion not expected to take full effect until strategic services represent a much larger share of total revenue.
Analyst Q&A
Q: Is the legacy-to-strategic revenue transition happening faster than expected, how can Alkira accelerate this shift, and what does the accelerated California PCF milestone mean for full-year revenue declines? /
A: Management confirmed the transition is progressing faster than planned, with over 20% of new NAS customers being brand new to Lumen (not just legacy migrations), and ~60% of existing Lumen customers adding NAS circuits rather than just migrating from legacy. Alkira expands addressable market by enabling higher-value strategic conversations with CIOs/CTOs around AI-ready network upgrades, rather than just price-focused talks with procurement. The full-year guidance remains on track, as the early California PCF revenue was pulled forward from the second half and does not change full-year targets.
Q: Are you taking share in the 100/400G Waves business, and what is the incremental monthly recurring revenue from an Alkira customer? /
A: Management confirmed Lumen is taking share in the Waves market, driven by its RapidRoutes capability that turns up circuits in days versus months, which is particularly attractive to neocloud customers upgrading capacity for AI. It is too early to share specific MRR figures just one month post-acquisition, as the current focus is on driving adoption and upselling existing customers; the company already sees early positive traction with upsized deals during Alkira customer renewals, and will share clearer MRR metrics in next year's guidance.
Q: What is your strategy for new PCF deal pricing, and will you continue to pursue these deals? /
A: Management noted that all completed PCF deals to date monetize decades-old, already paid-for, underutilized conduit, delivering strong returns. The company will not pursue new greenfield PCF builds that deliver returns at or below Lumen's cost of capital, as new conduit/trench construction has unfavorable economics. Lumen will continue to pursue deals to monetize existing underutilized assets where returns are attractive, and is comfortable letting other providers build new fiber at sub-optimal returns, while Lumen provisions higher-margin digital services on top of that third-party infrastructure.
Q: What is the timeline for phasing out enterprise voice, and what steps are you taking to avoid unwanted churn on other services? /
A: Management confirmed enterprise voice contributes only low single-digit percentage of total revenue, so its phase-out is immaterial to overall results. The company announced end-of-sale, not immediate end-of-life, and will support customers while prioritizing large customers with multiple Lumen services. It is partnering with third-party voice providers to meet ongoing customer needs, meets all regulatory obligations, and will maximize cash flow from the legacy base while winding it down to free up capital for digital growth.