Lumen Technologies, Inc. (LUMN) TD Cowen 52nd Annual Technology, Media & Telecom Conference (Transcript)

Company and Industry Overview * Company: Lumen Technologies, Inc. (NYSE:LUMN) * Industry: Telecommunications, specifically telco wireless and cable space * Event: TD Cowen 52nd Annual Technology, Media & Telecom Conference * Date: May 30, 2024 Key Points Turnaround Strategy * Focus Areas: * Innovation for Growth: Enhancing network connectivity and offering additional services like security edge compute and seamless workload movement. * Innovation for Cost: Reducing costs through network unification and process simplification. * Legacy Declines: Addressing legacy product declines while managing cash flow for future investments. * Challenges: * Legacy product declines accelerating. * Industry-wide rewrite off-net activity driving short-term results at the expense of customer focus. Cost Reduction Efforts * Workforce Reduction: 7% reduction implemented, saving $90 million to $100 million in Q2. * Cost Savings Opportunities: * Simplifying processes and improving customer experience. * Integrating legacy systems to unlock cost potential. * EBITDA Growth: Expected to grow through the year due to cost savings and improved sales rates. AI-Driven Demand * Generational Opportunity: AI-driven demand expected to last 5-10 years. * Revenue Growth: Focus on selling connectivity solutions that enable on-demand data access and routing. * Internal AI Applications: Using AI tools like CoPilot for productivity improvements and code development. Consumer Business Strategy * Strategic Review: Exploring options for the consumer business, including potential divestiture. * Market Conditions: Current market conditions favoring joint ventures and fiber acquisition without taking on balance sheet risk. Business Segments * Large Enterprise: * Focus on driving execution and improving sales results. * Legacy declines and industry-wide bad behavior impacting growth. * Mid Markets: * Seeing notable improvement in sales and product portfolio. * Partner ecosystem expansion driving growth. * Public Sector: * Winning large contracts and seeing growth due to scaling of installations. Future Outlook * Investor Day: Expected to provide more visibility around free cash flow streams, cost paradigm, and consumer business direction. * Innovation Initiatives: Launching Lumen Defender, a security product, and focusing on big connectivity deals and security solutions.