Lumen Technologies (LUMN) Q4 2025 earnings summary

Executive summary

• Completed the $5.75 billion sale of the fiber-to-the-home business to AT&T, reducing total debt by over $4.8 billion and net leverage below 4x, and pivoted to an enterprise-focused technology infrastructure company.

• Achieved nearly $13 billion in PCF deals signed to date, with strong adoption in NaaS and PCF, and network innovation supporting AI and cloud services.

• Reduced annual interest expense by nearly 45% and capital expenditures by over $1 billion, enhancing investment flexibility.

• Exceeded $400 million in run-rate cost savings in 2025, targeting $1 billion by 2027.

• Added key executives and expanded partnerships to drive technology and commercial scale.

Financial highlights

• Q4 2025 total revenue was $3.041 billion, down 8.7% year-over-year; adjusted EBITDA was $767 million (25.2% margin), down from $1.052 billion a year ago.

• Free cash flow for Q4 2025 was negative $765 million, impacted by a delayed $400 million tax refund; full-year free cash flow was $1.041 billion.

• Full-year 2025 revenue was $12.402 billion, down 5%; full-year adjusted EBITDA was $3.36 billion.

• Diluted EPS for Q4 2025 was $0.00 (reported), $0.23 (excluding special items); full-year diluted loss per share was $(1.75) reported, $(0.13) excluding special items.

• Achieved $41 million in PCF revenue in Q4 and $116 million for the full year.

Outlook and guidance

• 2026 adjusted EBITDA guidance is $3.1–$3.3 billion; free cash flow projected at $1.2–$1.4 billion.

• 2026 capital expenditures expected at $3.2–$3.4 billion, with $1 billion tied to PCF deals.

• Net cash interest expense expected at $650–$750 million, a reduction of over $550 million from 2025.

• Anticipates a $400 million tax refund in the first half of 2026, subject to government shutdown risks.

• Business revenue growth targeted for 2028, with total revenue growth in 2029.