Lumen Technologies (LUMN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 10.7–11% year-over-year to $3.268–$3.27 billion, driven by divestitures, legacy declines, and competitive pressures.

• Net loss improved to $49 million from a prior $8.7 billion loss, reflecting the absence of goodwill impairment charges.

• Adjusted EBITDA was $1.011 billion (30.9% margin), down 17.7–18% year-over-year; free cash flow was -$156 million.

• Over $5 billion in AI-driven Private Connectivity Fabric (PCF) partnerships announced, fueling transformation and growth.

• Announced a path to $1 billion in cost takeout by end of 2027 through network, product, and IT simplification.

Financial highlights

• Q2 2024 business segment revenue was $2.57–$2.58 billion, down 11.4% year-over-year; mass markets revenue was $691 million, down 8.2%.

• Fiber broadband revenue grew 14.6–15% year-over-year, with 40,000 net adds and ARPU of $62.

• Free cash flow for Q2 2024 was negative $156 million; cash and equivalents stood at $1.5 billion at quarter-end.

• Capital expenditures for Q2 2024 totaled $753 million.

• Interest expense increased 27% year-over-year to $373 million in Q2 2024.

Outlook and guidance

• 2024 Adjusted EBITDA expected at $3.9–$4.0 billion; CapEx $3.1–$3.3 billion; free cash flow $1.0–$1.2 billion.

• 2025 EBITDA expected below 2024 due to transformation investments, with rebound in 2026 and growth thereafter.

• Net cash interest for 2024 projected at $1.15–$1.25 billion.

• Free cash flow guidance raised due to a $700 million tax refund in Q1 2024.

• Public sector expected to be first to return to sustainable growth, followed by mid-market and large enterprise.