second quarter 2026
Filed Aug 4, 2026Lumen Technologies Reports Solid Second Quarter 2026 Results; Digital Transformation Accelerates
Strategic revenue grew 14% year over year and free cash flow excluding Special Items improved to $327 million, but total revenue declined 9%, Mass Markets revenue declined 40%, and Adjusted EBITDA excluding Special Items declined to $802 million from $877 million.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total RevenueGAAP | $2.805 billion | (3)% | (9)% |
| Cost of Services and ProductsGAAP | $1,415 million | – | – |
| Selling, General and Administrative ExpensesGAAP | $779 million | – | – |
| Net Loss on Sale of BusinessGAAP | $31 million | – | – |
| Stock-based Compensation ExpenseGAAP | $18 million | – | – |
| Net LossGAAP | $(201) million | – | – |
| Net Loss, Excluding Special Itemsnon-GAAP | $(73) million | – | – |
| Adjusted EBITDAnon-GAAP | $598 million | – | – |
| Adjusted EBITDA, Excluding Special Itemsnon-GAAP | $802 million | – | – |
| Net Loss MarginGAAP | (7.2) % | – | – |
| Net Loss Margin, Excluding Special Itemsnon-GAAP | (2.6) % | – | – |
| Adjusted EBITDA Marginnon-GAAP | 21.3 % | – | – |
| Adjusted EBITDA Margin, Excluding Special Itemsnon-GAAP | 28.6 % | – | – |
| Net Cash Provided by Operating ActivitiesGAAP | $971 million | – | – |
| Capital ExpendituresGAAP | $902 million | – | – |
| Capital Expenditures, Excluding Special Itemsnon-GAAP | $780 million | – | – |
| Unlevered Cash Flownon-GAAP | $157 million | – | – |
| Unlevered Cash Flow, Excluding Special Itemsnon-GAAP | $415 million | – | – |
| Free Cash Flownon-GAAP | $69 million | – | – |
| Free Cash Flow, Excluding Special Itemsnon-GAAP | $327 million | – | – |
| Net Loss per Common Share - DilutedGAAP | $(0.20) | – | – |
| Net Loss per Common Share - Diluted, Excluding Special Itemsnon-GAAP | $(0.07) | – | – |
| Weighted Average Shares Outstanding (in millions) - DilutedGAAP | 1,004.1 | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Large EnterpriseRevenue by sales channel. | $794 million | 2% | 4% |
| Mid-Market EnterpriseRevenue by sales channel. | $435 million | (1)% | (8)% |
| Public SectorRevenue by sales channel. | $490 million | (3)% | 1% |
| North America Enterprise ChannelsRevenue by sales channel. | $1,719 million | —% | —% |
| WholesaleRevenue by sales channel. | $653 million | 1% | (5)% |
| North America Business RevenueRevenue by sales channel. | $2,372 million | —% | (2)% |
| International and OtherRevenue by sales channel. | $72 million | (1)% | (10)% |
| Business RevenueRevenue by sales channel and product category. | $2,444 million | —% | (2)% |
| Mass Markets RevenueRevenue by sales channel. | $361 million | (21)% | (40)% |
| StrategicBusiness revenue by product category. Strategic revenue increased to approximately 53% of total business revenue, up from 51% in the first quarter. | $1,289 million | 3% | 14% |
| LegacyBusiness revenue by product category. | $1,155 million | (4)% | (15)% |
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 was $1,289 million, up 14% year over year and 3% quarter over quarter.
- Strategic revenue increased to approximately 53% of total business revenue, up from 51% in the first quarter.
- The company reported more than 3,000 NaaS customers, with quarter-over-quarter new customer adoption up 22%, active ports up 34%, and active services up 29%.
- Lumen closed the acquisition of Alkira, extending its digital capabilities for enterprise connectivity across clouds, sites, partners, and AI workloads.
- The company said it redeployed resources toward higher-growth, higher-margin digital opportunities through product-portfolio rationalization and simplification initiatives.
Concerns
- Total Revenue was $2.805 billion, down 9% year over year and 3% quarter over quarter.
- Mass Markets Revenue was $361 million, down 40% year over year and 21% quarter over quarter.
- Legacy revenue was $1,155 million, down 15% year over year and 4% quarter over quarter.
- Adjusted EBITDA excluding Special Items was $802 million, compared to $877 million in the second quarter 2025.
- Adjusted EBITDA Margin was 21.3 %, compared to 23.4 % in the second quarter 2025.
- The company reported a Net Loss of $(201) million and diluted loss per share of $(0.20).
What to watch
- Execution toward the reiterated full-year 2026 Adjusted EBITDA excluding Special Items outlook of $3.1 to $3.3 billion.
- Execution toward Free Cash Flow excluding Special Items outlook of $1.9 to $2.1 billion.
- Strategic revenue growth and the mix of Strategic revenue within total business revenue.
- The pace of Legacy and Mass Markets revenue declines.
- NaaS customer adoption, active ports, and active services.
- Capital expenditures excluding Special Items relative to the $3.2 to $3.4 billion full-year 2026 outlook.
Balance sheet and cash flow
- Net Cash Provided by Operating Activities was $971 million in the second quarter 2026, compared to $570 million in the second quarter 2025.
- Free Cash Flow, excluding Special Items, was $327 million in the second quarter 2026, compared to $(209) million in the second quarter 2025.
- As of Jun. 30, 2026, Lumen had cash and cash equivalents of $1.876 billion.
Analysis
Lumen reported $2.805 billion of total revenue for the second quarter 2026, compared with $3.092 billion in the second quarter 2025 and $2.899 billion in the first quarter 2026. The revenue result reflects sharply lower Mass Markets Revenue, which was $361 million and declined 40% year over year and 21% quarter over quarter. Business Revenue was $2,444 million, down 2% year over year and unchanged quarter over quarter.
The business mix continued to move toward the company’s Strategic category. Strategic revenue was $1,289 million, up 14% year over year and 3% quarter over quarter, while Legacy revenue was $1,155 million, down 15% year over year and 4% quarter over quarter. Strategic revenue reached approximately 53% of total business revenue, compared with 51% in the first quarter. Large Enterprise revenue increased 4% year over year, Public Sector increased 1%, while Mid-Market Enterprise, Wholesale, and International and Other each declined year over year.
Profitability remained pressured on a year-over-year basis despite improvement in reported losses. Net Loss was $(201) million compared with $(915) million, and Net Loss Margin was (7.2) % compared with (29.6) %. Adjusted EBITDA excluding Special Items was $802 million compared with $877 million, although its margin was 28.6 % compared with 28.4 %. The company also incurred $31 million of Net Loss on Sale of Business and reported $18 million of Stock-based Compensation Expense.
Cash generation improved materially. Net Cash Provided by Operating Activities was $971 million compared with $570 million, and Free Cash Flow excluding Special Items was $327 million compared with $(209) million. Capital Expenditures excluding Special Items were $780 million compared with $824 million. Lumen ended the period with $1.876 billion of cash and cash equivalents.
Management 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 guide also calls for Capital Expenditures excluding Special Items of $3.2 to $3.4 billion. The operational focus is on digital networking, with more than 3,000 NaaS customers and reported quarter-over-quarter increases in new customer adoption, active ports, and active services, alongside the completed Alkira acquisition.
Management, verbatim
Lumen is putting innovation back where it belongs - inside the network itself. By embedding digital intelligence directly into the physical network layer, we’re delivering higher-impact business outcomes instead of competing on price alone. That’s a fundamentally different value proposition in enterprise networking, and a new chapter for Lumen customers and investors.
Kate Johnson, CEO
Our second quarter results reflect continued execution against our financial objectives and ongoing momentum in the business. Strategic revenue increased to 53% of total business revenue, up from 51% in the first quarter, as customers increasingly adopt our digital networking solutions.
Chris Stansbury, President and CFO
Not in the filing
stated, not guessed- GAAP gross profit
- GAAP gross margin
- GAAP operating income or loss
- GAAP operating margin
- Debt
- Share repurchases
- Dividends
- Prior-quarter Net Loss
- Prior-quarter Adjusted EBITDA
- Prior-quarter operating cash flow
- Prior-quarter free cash flow
- Revenue guidance
- Gross margin guidance
- Operating expenses guidance
- Tax rate guidance
- Previous-release outlook for comparison with reported results
AlphaAI analysis generated 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 cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.