Lumen Technologies, Inc.

Second-quarter total business revenue declined 1.8% year over year to $2.44 billion. Adjusted EBITDA, excluding special items, was $802 million versus approximately $877 million in the prior-year quarter, and free cash flow, excluding special items, was $327 million. Capex, excluding special items, was approximately $780 million, including about $300 million of capex associated with PCF deals, and PCF cash received was approximately $476 million. Strategic revenue grew 14% year over year, strategic waves revenue in North American enterprise grew nearly 11% year over year, and strategic waves sales were up nearly 35% year over year. For the full year, management reiterated the guidance framework already given, said they remain committed to it, and noted the seasonal EBITDA pattern implies third-quarter adjusted EBITDA is typically about $100 million below Q2; they also said the State of California work was accelerated into Q2 and is now largely complete. They said modernization and simplification savings are on track to exit this year at $700 million and to exit next year at $1 billion. Alkira’s near-term revenue contribution was described as immaterial, with more detail expected when 2027 guidance is provided.

Kate Johnson framed the quarter as evidence that Lumen is becoming a different company, focused on “enterprise networking for AI” rather than legacy telecom. She emphasized the combination of physical infrastructure, a programmable network, and the connected ecosystem, and said the market is responding, citing Gartner recognition and customer examples with Alkira. Her tone was confident and optimistic, stressing that NaaS adoption is outpacing the market, strategic revenue is growing, and new digital services can lift margins over time.

Chris Stansbury focused on disciplined simplification, portfolio pruning, and capital allocation toward digital, platform-based services. He said revenue, adjusted EBITDA, and free cash flow were all in line with expectations, with total business revenue at $2.44 billion, adjusted EBITDA at $802 million, capex at about $780 million, and free cash flow at $327 million. He reiterated that modernization and simplification savings are on track for $700 million exiting this year and $1 billion exiting next year, and said Alkira’s revenue and cost impact are immaterial today but are expected to be upside to the digital growth trajectory.

Analysts pressed on how quickly customers are moving from legacy to strategic products, what Alkira adds economically, and whether Q2’s revenue trend implies a weaker back half. Management said the mix shift is faster than expected, but it is not a one-for-one conversion because many NaaS customers are new to Lumen or are adding services rather than replacing old ones; they also pointed to stronger 100G/400G demand and neocloud activity. On Alkira, management said it is too early to quantify MRR or full financial contribution, but they see higher upsell potential, more share of wallet, and a route to selling to CIO/CTO buyers rather than only procurement.