Lumen Technologies (LUMN) Q4 2023 earnings summary

Executive summary

• 2023 priorities included strengthening the balance sheet, securing and improving the core business, pursuing next-generation networking growth, and targeting a return to growth in 2025; management said EBITDA and free cash flow guidance was achieved.

• Quantum Fiber enabled 516K locations in 2023, while Q4 fiber broadband revenue grew 11.5% YoY.

Financial highlights

• Q4 revenue was $3.517B, down 7.4% YoY; divestitures, post-closing commercial agreements, and sold CDN contracts accounted for ~39% of the decline.

• FY 2023 revenue was $14.557B, down 17% YoY.

• Q4 adjusted EBITDA excluding Special Items was $1.099B, down 21.1% YoY; FY adjusted EBITDA was $4.628B versus $6.858B in 2022.

• Q4 net loss was $1.995B, including a $1.9B non-cash goodwill impairment; FY net loss was $10.298B, including $10.693B in goodwill impairments.

• Q4 operating cash flow was $784M and free cash flow excluding cash Special Items was $50M; FY figures were $2.160B and negative $878M, respectively.

Outlook and guidance

• 2024 adjusted EBITDA outlook is $4.1B–$4.3B, with an expected organic decline of 2%–5% and ~600 bps improvement versus the 2023 outlook.

• 2024 free cash flow outlook is $100M–$300M, assuming no discretionary pension contributions; net cash interest is $1.25B–$1.35B and capital expenditures are $2.7B–$2.9B.

• 2024 cash income taxes/(refund) outlook is negative $200M to negative $300M and includes a ~$700M tax refund received in Q1 2024; outlook excludes Special Items and unforeseen events.