Lumen Technologies Reports Solid Third Quarter 2026 Results; Strategic Growth and Operating Leverage Gain Momentum
Lumen Technologies, Inc. (LUMN) filed an SEC Form 8-K — Results of Operations and Financial Condition. NEWS RELEASE Lumen Technologies Reports Solid Third Quarter 2026 Results; Strategic Growth and Operating Leverage Gain Momentum Company delivers 10% year-over-year Strategic revenue growth, remains on track for adjusted EBITDA inflection, and advances its transformation DENVER, N
How this was made
The 30-second read
Why it matters
The earnings release provides new data on revenue mix, cash flow, and strategic initiatives, which may influence short‑term price action and sector sentiment.
Market read
The report offers fresh guidance on strategic revenue and cash flow, informing traders on potential price moves for LUMN and related telecom stocks.
What to watch
Cash flow from the FCC Connect America Fund and the $700M PCF pipeline may improve future profitability.
Lumen Technologies Reports Solid Third Quarter 2026 Results; Strategic Growth and Operating Leverage Gain Momentum
Strategic revenue grew 10% year over year and adjusted EBITDA margin excluding Special Items increased to 26.3%, but total revenue declined 12%, adjusted EBITDA excluding Special Items declined to $715 million, and Free Cash Flow excluding Special Items was $(76) million.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total RevenueGAAP | $2.71B | (3)% | (12)% |
| Cost of Services and ProductsGAAP | $1.43B | – | (16)% |
| Selling, General and Administrative ExpensesGAAP | $784M | – | (5)% |
| Depreciation and AmortizationGAAP | $670M | – | (1)% |
| Total Operating ExpensesGAAP | $2.88B | – | (10)% |
| Operating LossGAAP | −$167M | – | 44% |
| Interest ExpenseGAAP | −$189M | – | (41)% |
| Net Gain on Early Retirement of DebtGAAP | $1M | – | nm |
| Other Income, NetGAAP | $20M | – | 18% |
| Total Other Expense, NetGAAP | −$168M | – | (76)% |
| Income Tax BenefitGAAP | −$70M | – | (64)% |
| Net LossGAAP | −$265M | – | (57)% |
| Net Loss Excluding Special Itemsnon-GAAP | −$144M | – | – |
| Net Loss MarginGAAP | (9.8)% | – | – |
| Net Loss Margin Excluding Special Itemsnon-GAAP | (5.3)% | – | – |
| Adjusted EBITDAnon-GAAP | $521M | – | – |
| Adjusted EBITDA Excluding Special Itemsnon-GAAP | $715M | – | – |
| Adjusted EBITDA Marginnon-GAAP | 19.2% | – | – |
| Adjusted EBITDA Margin Excluding Special Itemsnon-GAAP | 26.3% | – | – |
| Diluted Loss Per ShareGAAP | $(0.26) | – | (58)% |
| Diluted Loss Per Share Excluding Special Itemsnon-GAAP | $(0.14) | – | – |
| Weighted Average Shares Outstanding - DilutedGAAP | 1.00B | – | – |
| Net Cash Provided by Operating ActivitiesGAAP | $518M | – | – |
| Capital ExpendituresGAAP | −$872M | – | – |
| Capital Expenditures Excluding Special Itemsnon-GAAP | −$796M | – | – |
| Free Cash Flownon-GAAP | −$354M | – | – |
| Free Cash Flow Excluding Special Itemsnon-GAAP | −$76M | – | – |
| Unlevered Cash Flownon-GAAP | −$132M | – | – |
| Unlevered Cash Flow Excluding Special Itemsnon-GAAP | $146M | – | – |
| Nine Months Total RevenueGAAP | $8.42B | – | (10)% |
| Nine Months Net LossGAAP | −$666M | – | (62)% |
| Nine Months Net Cash Provided by Operating ActivitiesGAAP | $2.81B | – | – |
| Nine Months Free Cash Flow Excluding Special Itemsnon-GAAP | $1.01B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Large EnterpriseNot separately provided. | $810M | 2% | 4% |
| Mid-Market EnterpriseNot separately provided. | $430M | (1)% | (7)% |
| Public SectorNot separately provided. | $429M | (12)% | (10)% |
| North America Enterprise ChannelsNot separately provided. | $1.67B | (3)% | (3)% |
| WholesaleNot separately provided. | $607M | (7)% | (7)% |
| North America Business RevenueNot separately provided. | $2.28B | (4)% | (4)% |
| International and OtherNot separately provided. | $70M | (3)% | (11)% |
| Business RevenueStrategic revenue grew 10% year over year to $1.28 billion. | $2.35B | (4)% | (4)% |
| Mass Markets RevenueNot separately provided. | $369M | 2% | (42)% |
| StrategicStrategic revenue represented 55% of business revenue, up from 53% in the second quarter. | $1.28B | (1)% | 10% |
| LegacyNot separately provided. | $1.07B | (8)% | (17)% |
Full-year 2026 outlook
- NoteAdjusted EBITDA excluding Special Items: $3.1 to $3.3 billion
- NoteFree Cash Flow excluding Special Items: $1.9 to $2.1 billion
- NoteNet Cash Interest: $650 to $750 million
- NoteCapital Expenditures excluding Special Items: $3.2 to $3.4 billion
- NoteCash Income Taxes (Refunded): ($350) to ($450) million
- NoteIncome tax expense: $45 to $200 million
- NoteTotal other expense, net: $1.1 to $1.3 billion
- NoteDepreciation and amortization expense: $2.6 to $2.8 billion
- NoteStock-based compensation expense: $60 to $80 million
What drove it
- Strategic revenue grew 10% year over year to $1.28 billion.
- Strategic sales rose 30% year over year and Strategic waves sales increased 22% sequentially.
- More than 4,000 customers were on Lumen’s NaaS platform; active customers increased 24% sequentially and active ports increased 38%.
- 20% of NaaS Internet on Demand ports are carrying multiple services at nearly 100% direct margin.
- Lumen signed $700 million in additional PCF deals year to date, bringing cumulative signed agreements to over $13.5 billion.
- Third-quarter 2026 revenue included $27 million related to CAF Phase II support payments.
Concerns
- Total Revenue declined (12)% year over year and (3)% sequentially.
- Business Revenue declined (4)% year over year, while Legacy revenue declined (17)% year over year.
- Mass Markets Revenue declined (42)% year over year.
- Adjusted EBITDA excluding Special Items declined to $715 million from $787 million.
- Free Cash Flow excluding Special Items was $(76) million, compared to $1,661 million.
- The company reported long-term debt of $13,164 million and stockholders' deficit of $(1,722) million as of September 30, 2026.
What to watch
- Delivery of full-year 2026 Adjusted EBITDA excluding Special Items guidance of $3.1 to $3.3 billion.
- Delivery of full-year 2026 Free Cash Flow excluding Special Items guidance of $1.9 to $2.1 billion.
- Conversion of Strategic sales, PCF agreements and NaaS platform adoption into revenue and cash flows.
- Progress toward adjusted EBITDA inflection in 2026 and the stated goal to return to business revenue growth in 2028.
- Execution of copper decommissioning in Florida, Iowa, Nevada and Utah and modernization designed to deliver $1 billion in annualized cost savings on a run-rate basis exiting 2027.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $978 million.
- Long-term debt as of September 30, 2026: $13,164 million.
- Current maturities of long-term debt as of September 30, 2026: $29 million.
- Nine-month capital expenditures: $(2,717) million, compared to $(2,723) million.
- Nine-month net cash used in financing activities: $(4,639) million, compared to $(995) million.
- Free Cash Flow guidance for 2026 includes $729 million of proceeds from the Mass Markets Fiber-to-the-Home divestiture classified as cash flow from operations.
Analysis
Lumen reported third-quarter Total Revenue of $2,715 million, down (12)% from $3,087 million and down (3)% from $2,805 million in the second quarter. The reported mix continues to shift toward Strategic offerings: Strategic revenue was $1,279 million, up 10% year over year, and represented 55% of business revenue compared with 53% in the second quarter. That growth was offset by a $(17)% year-over-year decline in Legacy revenue, a (42)% decline in Mass Markets Revenue, and a (4)% decline in Business Revenue.
Profitability showed operating leverage on the adjusted measure despite lower revenue. Adjusted EBITDA excluding Special Items was $715 million, compared with $787 million, while its margin increased to 26.3% from 25.5%. Reported adjusted EBITDA was $521 million, compared with $571 million. The GAAP operating loss was $(167) million versus $(116) million, while the GAAP net loss improved to $(265) million from $(621) million, aided by lower total other expense, net of $(168) million compared with $(697) million.
Cash generation was weak in the quarter. Net cash provided by operating activities was $518 million versus $2,511 million, capital expenditures were $(872) million versus $(1,041) million, and Free Cash Flow excluding Special Items was $(76) million versus $1,661 million. The company reported $978 million of cash and cash equivalents and $13,164 million of long-term debt as of September 30, 2026. Nine-month net cash used in financing activities was $(4,639) million, and the company states that cash proceeds from the Mass Markets Fiber-to-the-Home divestiture were primarily used to pay down debt in the first quarter of 2026.
Operating indicators point to continued adoption of the digital platform. Lumen reported more than 4,000 NaaS customers, a 24% sequential increase in active customers, and a 38% increase in active ports. Strategic sales rose 30% year over year, Strategic waves sales increased 22% sequentially, and cumulative signed PCF agreements exceeded $13.5 billion after $700 million in additional year-to-date deals. The reported quarter also included $27 million of CAF Phase II support-payment revenue.
The company reiterated its full-year 2026 outlook, including Adjusted EBITDA excluding Special Items of $3.1 to $3.3 billion and Free Cash Flow excluding Special Items of $1.9 to $2.1 billion. The Free Cash Flow guidance includes $729 million of proceeds from the Mass Markets Fiber-to-the-Home divestiture classified as cash flow from operations. The key reported tension is whether Strategic growth, modernization and simplification, and digital-platform adoption can overcome continuing declines in Legacy, Mass Markets and aggregate Business Revenue while supporting the reiterated cash-flow and EBITDA targets.
Management, verbatim
We’re delivering what we promised and building a stronger, more valuable Lumen.
Kate Johnson, CEO of Lumen
AI-driven demand for connectivity is fueling momentum in our Strategic revenue base. Customers are choosing our platform to simplify their networks and get more from every connection.
Kate Johnson, CEO of Lumen
The third-quarter results reinforce that Lumen is being built on Strategic revenue growth, not on preserving the past. We remain on track to deliver adjusted EBITDA inflection this year and return to business revenue growth in 2028.
Chris Stansbury, president and CFO of Lumen
Not in the filing
stated, not guessed- Prior-period outlook was not provided; therefore, no comparison of reported results with prior guidance is available.
- Gross margin was not reported.
- Gross margin guidance was not reported.
- Revenue guidance was not reported.
- Operating expense guidance was not reported.
- Tax rate guidance was not reported.
- Share repurchases were not reported.
- Dividends were not reported.
- Third-quarter operating income was not reported because the company reported operating loss.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Lumen Technologies filed a Form 8‑K reporting its third‑quarter 2026 financial results, emphasizing strategic revenue growth and network transformation initiatives.
Ticker impact
Lumen Technologies disclosed Q3 2026 results, reporting $2.72B revenue, 10% YoY strategic revenue growth and a net loss of $265M.
likely pressure as investors weigh strategic growth against the net loss and weaker EBITDA.
The earnings release provides fresh financial metrics; strategic revenue up 10% is positive, but the company posted a larger net loss and declining adjusted EBITDA, which may weigh on the stock.
Market effects
Highlights continued demand for Network-as-a-Service, signaling potential upside for telecom infrastructure peers.
U.S. telecom sector may see modest re‑rating as investors assess strategic revenue trends.
Limited; primarily impacts U.S. communication services equities.
Counterpoint
The strategic revenue growth could signal a turnaround, offering a buying opportunity despite the current loss.
Key entities
- companyLumen Technologies
U.S. telecom and network services provider reporting Q3 2026 results.
