Lumen Technologies (LUMN) Raymond James 47th Annual Institutional Investors Conference summary

Strategic transformation and business focus

• Transitioned to an enterprise-focused networking company, completing a major transformation and divesting the consumer fiber-to-the-home business.

• Signed nearly $13 billion in Private Connectivity Fabric deals with hyperscalers for AI training, highlighting unique network capabilities.

• Emphasizes programmability and on-demand digital network services to support distributed data and AI workloads.

• Focused on enabling anywhere-to-anywhere data movement, positioning as the supply chain for data.

• Shifted sales approach from large upfront contracts to dynamic, unit-based, on-demand consumption, mirroring hyperscaler models.

Financial outlook and operational efficiency

• Achieved healthier leverage at 3.8x, targeting 3–3.5x, with EBITDA inflection in 2024 and business segment revenue growth expected by 2028.

• Margin expansion and reduced capital intensity projected over the next five years, with free cash flow conversion supporting fully funded aspirations.

• Cost savings initiatives exceeded targets, aiming for $700 million in 2024 and $1 billion by 2027.

• Balance sheet strengthened by reducing debt from $19 billion to under $12 billion, smoothing maturities, and lowering interest expense by $500 million annually.

• Upgrades in debt ratings and lower cost of capital achieved through six refinancing transactions.

Product innovation and digital growth

• Network-as-a-Service and Lumen Fabric Ports enable digital delivery of services, reducing churn and increasing margins.

• Digital revenue targeted to grow from $117 million in 2023 to $500–$600 million by 2028, with a focus on customer, port, and service adoption metrics.

• Adoption metrics (customers, ports, services per port) are key indicators for exponential growth (J-curve moment).

• Partnerships with technology and construction firms ensure scalability and timely delivery of network builds.

• Material supply secured through a strong relationship with Corning, enabling higher fiber counts and network expansion.