Lumen's Strategic Revenue Rises 10% To $1.28 Billion, But Total Sales Fall 12% And Cash Flow Turns Negative
Lumen's third-quarter net loss narrowed to $265 million from $621 million, and the company kept its full-year outlook unchanged.
Lumen Technologies, which sells network services to businesses, said its Strategic business revenue rose 10% to $1.28 billion in the third quarter, while total revenue fell 12% to $2.715 billion after the sale of its consumer fiber unit. Free cash flow excluding special items turned negative at $(76) million, against $1.7 billion a year earlier, the company said Wednesday in an 8-K.
Strategic grows, Legacy shrinks
Total revenue was $2.715 billion, down from $3.087 billion a year earlier. Mass Markets revenue fell 42% to $369 million from $631 million; the company sold its home fiber business in 11 states to AT&T for $5.75 billion in gross cash proceeds on February 2, 2026.
Within business revenue of $2.346 billion, Strategic revenue made up 55%, up from 53% in the second quarter. Legacy business revenue fell 17% to $1.07 billion. Strategic sales rose 30% from a year earlier, the company said.
CEO Kate Johnson said "AI-driven demand for connectivity is fueling momentum in our Strategic revenue base." That is management's characterization of the demand behind the growth.
Cash flow drops sharply
Operating cash flow was $518 million, versus $2.5 billion a year earlier. Reported free cash flow was $(354) million, against $1.47 billion; excluding special items of $278 million in cash costs, it was $(76) million.
The net loss narrowed to $265 million, or $0.26 a share, from $621 million, or $0.62. Adjusted EBITDA excluding special items was $715 million, down from $787 million. Lumen reported $27 million of revenue from deferred federal support payments in the quarter.
Long-term debt stood at $13.164 billion on September 30, down from $17.353 billion at the end of 2025. The company said the sale proceeds were primarily used to pay down debt in the first quarter. Cash on hand was $978 million.
Outlook held, PCF deals grow
Lumen reiterated its 2026 outlook: adjusted EBITDA excluding special items of $3.1 billion to $3.3 billion and free cash flow excluding special items of $1.9 billion to $2.1 billion. The free cash flow figure includes $729 million of proceeds from the divestiture counted as operating cash flow.
The company signed $700 million of additional Private Connectivity Fabric deals this year, bringing cumulative signed agreements to over $13.5 billion. In the third quarter those deals brought $117 million of cash, $66 million of revenue and $269 million of capital spending, according to the earnings presentation.
President and CFO Chris Stansbury said the company remains on track for adjusted EBITDA to turn up this year and for business revenue growth to return in 2028.
Management hosts its earnings call at 5:00 p.m. ET Wednesday.
Sources
- 8-K Filing — Lumen Technologies, Inc. (LUMN) — SEC EDGAR
- Exhibit lumnq320268-kexhibit991.htm — Lumen Technologies, Inc. 8-K exhibit — SEC EDGAR
- Exhibit lumen3q26quarterlypresen.htm — Lumen Technologies, Inc. 8-K exhibit — SEC EDGAR
- Lumen Technologies Reports Solid Third Quarter 2026 Results; Strategic Growth and Operating Leverage Gain Momentum — businesswire.com
