Lumen Technologies (LUMN) Goldman Sachs Communacopia + Technology Conference 2026 summary

Strategic priorities and transformation

• Focus on digitizing the networking experience, with over half of revenue now from growth areas and a 14% increase last quarter.

• Emphasis on Network-as-a-Service (NaaS) and direct cloud access, enabling flexible, on-demand data movement for enterprises.

• Legacy revenue streams are managed for cash generation while investments pivot to digital and strategic growth.

• Alkira acquisition enhances orchestration across fiber networks, supporting enterprise needs.

• Key operational milestones include accelerating digital growth and managing legacy assets for efficiency.

Product and revenue drivers

• Strategic revenue is driven by connectivity solutions, including fiber waves, IP, and security, with strong growth in on-demand Wavelengths.

• PCF (Private Connectivity Fabric) leverages existing fiber routes, monetizing dormant assets at high margins and supporting deleveraging.

• Digital revenue targets $800–$900 million by 2030, with NaaS adoption growing rapidly and enabling high-margin, scalable digital services.

• NaaS is gaining traction, especially in financial services, enabling cross-selling and integration of API-driven partner services.

• AI cloud on-ramps and Multi-Cloud Gateway are expanding, with a goal of 90% on-ramp coverage by 2026.

Financial outlook and cost management

• EBITDA guidance for 2026 is $3.1–$3.3 billion, with business revenue expected to decline 3–4% excluding PCF timing.

• CapEx for 2024 is guided at $3 billion, with $1 billion allocated to PCF, which is not capital intensive.

• PCF contracts deliver 90% of cash in the first three years, supporting conduit rental and CapEx.

• Legacy portfolio is shifting from revenue-driven to cost and asset efficiency, including copper mining as systems are retired.

• Targeting $700 million in run-rate cost savings in 2024 and $1 billion by 2027, driven by network simplification and IT integration.