Lumen(US:LUMN)2024-09-05 16:23Financial Data and Key Metrics Changes - The EBITDA for Lumen's NaaS market business is approximately $1 billion, with a significant portion generated from fiber, while the company is heavily investing in marketing and infrastructure, which consumes cash [4][10] - The company has a revenue of $13 billion and an EBITDA of $4 billion, with annual CapEx of $3 billion and a $9 billion maturity tower due in 2029 [58][60] Business Line Data and Key Metrics Changes - The NaaS market business is the smallest segment but is currently in the spotlight due to industry activity, with a focus on separating consumer and enterprise segments [3][5] - Lumen has approximately 10 million homes in its NaaS footprint, with 4 million enabled on the fiber side and 1 million customers on fiber, indicating strong penetration rates [7][8] Market Data and Key Metrics Changes - The competitive landscape is evolving, with Verizon's acquisition of Frontier for $20 billion setting a new metric for fiber and copper multiples, which Lumen is considering in its strategic planning [3][9] - The company is focusing on enterprise networking, which is seen as the future of business, while the consumer segment is viewed as less favorable for investment [5][61] Company Strategy and Development Direction - Lumen is prioritizing investments in the enterprise space, indicating a strategic shift away from consumer markets, which are perceived as less profitable [5][17] - The company is leveraging existing conduit capacity and focusing on digital networking solutions to meet the growing demand for AI and data services [40][41] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the legacy business but emphasizes the importance of monetizing existing assets to fund future growth in enterprise networking [59][60] - The company expects a pivot point in EBITDA by 2026, with a V-shaped recovery anticipated following a low point in 2025 [65][66] Other Important Information - Lumen has announced a $5 billion contract, which includes over 10 contracts, with significant cash flow expected from construction-related revenues [30][35] - The company is also exploring additional opportunities worth $7 billion, with a focus on hyperscalers and cloud providers as primary customers [56][57] Q&A Session All Questions and Answers Question: What is the current status of Lumen's NaaS market business? - The NaaS market business is generating about $1 billion in EBITDA, with a focus on fiber and significant investments in marketing and infrastructure [4][10] Question: How many homes are left in Lumen's NaaS footprint? - Lumen has approximately 10 million homes in its footprint, with 4 million enabled on the fiber side [7] Question: What is the company's strategy regarding consumer and enterprise markets? - Lumen is focusing on enterprise investments and does not plan to consolidate in the consumer space, which is seen as less favorable [5][17] Question: What are the expectations for EBITDA and revenue growth? - Management expects a pivot point in EBITDA by 2026, with a V-shaped recovery anticipated after a low point in 2025 [65][66] Question: Can you elaborate on the $5 billion contract? - The $5 billion contract includes over 10 contracts, with significant cash flow expected from construction-related revenues [30][35]