Core Viewpoint - Lumen Technologies, Inc. has entered into a definitive agreement to sell its Mass Markets fiber-to-the-home business, including Quantum Fiber, to AT&T for $5.75 billion in cash, marking a significant step in Lumen's transformation into a digital enterprise networking company [1] Group 1: Transaction Details - The transaction is expected to close in the first half of 2026, pending regulatory approvals and customary closing conditions [2] - The sale includes approximately 95% of Quantum Fiber, covering around 4 million fiber-enabled locations and nearly 1 million subscribers as of March 31, 2025, projected to generate over $750 million in annualized revenues [3] Group 2: Financial Implications - Net proceeds from the deal, estimated at approximately $4.2 billion, will be used to retire about $4.8 billion in super priority debt, reducing annual interest expenses by $300 million and lowering the projected 2025 net debt to adjusted EBITDA ratio from 4.9 to 3.9 [4] - The deal will also decrease annual capital expenditures related to Mass Markets fiber by about $1 billion, allowing Lumen to reinvest in enterprise offerings and strengthen its balance sheet [4] Group 3: Future Strategy - Lumen plans to continue new fiber buildouts at a similar pace as in 2024 through the end of 2025 while retaining its existing copper network for consumer customers [5] - The company aims to expand its intercity fiber network to 47 million miles by 2028 and focus on growing the Lumen Digital Platform to provide enhanced networking solutions for business customers [6] - Management emphasized that the transaction enhances financial flexibility to innovate enterprise networking in a multi-cloud, AI-first environment, retaining core infrastructure assets for enterprise services [7] Group 4: Market Demand and Partnerships - Increasing demand for Lumen's Private Connectivity Fabric (PCF) solutions is noted, with $8.5 billion in PCF deals secured in 2024, driven by the urgent need for fiber capacity among large companies [8] - Lumen has established partnerships with major tech firms like Microsoft, Amazon, Google Cloud, and Meta Platforms to support AI innovation through enhanced network capabilities [8]

Lumen Technologies (LUMN) Q1 2025 Earnings Call May 01, 2025 05:00 PM ET Company Participants Jim Breen - Senior VP - IRKate Johnson - President and CEOChris Stansbury - EVP and CFONick Del Deo - Managing DirectorFrank Louthan - Managing Director Conference Call Participants Michael Rollins - AnalystBatya Levi - Managing Director - Communications, Media & Infrastructure AnalystJim Schneider - Senior Equity AnalystGregory Williams - AnalystJonathan Chaplin - Lead Analyst Operator Greetings, and welcome to th ...

Lumen Technologies (LUMN) Q1 2025 Earnings Call May 01, 2025 05:00 PM ET Speaker0 Greetings, and welcome to the Lumen Technologies First Quarter twenty twenty five Earnings Call. During the presentation, all lines will be in a listen only mode. Afterwards, we will conduct a question and answer session. As a reminder, this conference is being recorded Thursday, 05/01/2025. Your speakers for today are Kate Johnson, CEO and Chris Stansberry, CFO. I would now like to turn the conference over to Jim Brink, Senio ...

Core Insights - Lumen Technologies reported a net loss of $201 million for Q1 2025, a significant decline from a net income of $57 million in Q1 2024, reflecting ongoing challenges in the business environment [5][11][23] - Total revenue for Q1 2025 was $3.182 billion, down 3.3% from $3.290 billion in Q1 2024, indicating a continued revenue decline across various segments [11][23] - The company emphasized its focus on operational excellence and innovation, particularly through its Lumen Digital platform and partnerships, such as the one with Google for direct fiber access to Google Cloud [3][5] Financial Performance - Large Enterprise revenue decreased by 4% year-over-year to $737 million, while Mid-Market Enterprise revenue fell by 11% to $513 million [4][9] - Public Sector revenue increased by 15% to $483 million, showcasing growth in this segment [4][9] - Adjusted EBITDA for Q1 2025 was $929 million, down from $977 million in Q1 2024, with an adjusted EBITDA margin of 29.2% [5][6][9] Cash Flow and Liquidity - Net cash provided by operating activities was $1.095 billion, slightly down from $1.102 billion in Q1 2024 [12][26] - Free Cash Flow, excluding special items, was $354 million, a decrease from $518 million in Q1 2024 [12][44] - As of March 31, 2025, Lumen had cash and cash equivalents of $1.9 billion, reflecting a stable liquidity position [13][24] Strategic Initiatives - The company is focused on building a stronger balance sheet, highlighted by recent term loan refinancing [5] - Lumen is investing in its network capacity and utilization to support growth, particularly in AI and cloud services [3][5] - The adoption of Network as a Service (NaaS) ports and services is growing, indicating a shift towards a consumption-based model [5] 2025 Financial Outlook - Lumen reiterated its full-year 2025 financial outlook, projecting adjusted EBITDA between $3.2 billion and $3.4 billion and free cash flow between $700 million and $900 million [14][15]