Lumen Technologies, Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 4 August 2026: press release. Guidance figures: 1 lowered, 9 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue fell on lower Mass Markets: Total revenue was $2.805 billion, down 9% from a year earlier and 3% from the first quarter; Mass Markets accounted for most of the year-over-year decline. Source
• Adjusted EBITDA excluding Special Items fell: Adjusted EBITDA excluding Special Items was $802 million, against $877 million a year earlier; reported Adjusted EBITDA was $598 million, against $725 million. Source
• Free cash flow excluding Special Items rose: Free cash flow excluding Special Items was $327 million, against $(209) million a year earlier, after $258 million of cash paid for Special Items. Source
• Mass Markets revenue fell 40 percent: Mass Markets revenue was $361 million, down 40% from a year earlier and 21% from the first quarter; total revenue was $2.805 billion. Source
• Network-as-a-Service adoption grew: More than 3,000 NaaS customers; new customer adoption up 22%, active ports up 34% and active services up 29%, quarter over quarter. Source
• Alkira acquisition closed: The company closed the Alkira acquisition, which it said extends its digital capabilities for enterprises connecting clouds, sites, partners and AI workloads. Source
• Cost savings target exiting 2027: The modernization program covers network, product portfolio, IT systems and workforce, with a target of $1 billion in annualized cost savings on a run-rate basis exiting 2027. Source

“By embedding digital intelligence directly into the physical network layer, we’re delivering higher-impact business outcomes instead of competing on price alone.”

Lumen CEO Kate Johnson

Guidance

What changed from last quarter

• New: The Alkira acquisition, announced as an agreement in May, closed in the second quarter. Source
• Guidance kept: Full-year 2026 financial guidance was reiterated this quarter. Source
• Guidance lowered: Stock-based compensation expense guidance is $60 million to $80 million, down from the $100 million to $120 million range in the May reconciliation. Source
• New: The Adjusted EBITDA definition now also adds back goodwill impairment; the May definition did not list it. Source

Results and growth drivers

• Revenue fell on lower Mass Markets: Total revenue was $2.805 billion, down 9% from a year earlier and 3% from the first quarter; Mass Markets accounted for most of the year-over-year decline. Source
• Net loss narrowed from prior year: Net loss was $(201) million, compared with $(915) million a year earlier, when the period included a $628 million goodwill impairment. Diluted loss per share was $(0.20), against $(0.92). Source
• Adjusted EBITDA excluding Special Items fell: Adjusted EBITDA excluding Special Items was $802 million, against $877 million a year earlier; reported Adjusted EBITDA was $598 million, against $725 million. Source
• Free cash flow excluding Special Items rose: Free cash flow excluding Special Items was $327 million, against $(209) million a year earlier, after $258 million of cash paid for Special Items. Source

Segments and regions

• Enterprise segments moved in different directions: Large Enterprise rose 4% year over year to $794 million; Mid-Market Enterprise fell 8% to $435 million; Public Sector rose 1% to $490 million. Source
• Wholesale revenue declined: Wholesale revenue fell 5% year over year to $653 million; North America Business Revenue was $2.372 billion, down 2%. Source
• Mass Markets revenue fell 40 percent: Mass Markets revenue was $361 million, down 40% from a year earlier and 21% from the first quarter; total revenue was $2.805 billion. Source
• Business revenue flat quarter over quarter: Business revenue was $2.444 billion, flat from the first quarter and down 2% year over year. Source

“Our second quarter results reflect continued execution against our financial objectives and ongoing momentum in the business.”

Lumen President and CFO Chris Stansbury

Products and customers

• Strategic revenue rose 14 percent: Strategic revenue was $1.289 billion, up 14% year over year and 3% from the first quarter. Legacy revenue fell 15% year over year to $1.155 billion. Source
• Strategic share of business revenue rose: Management said the strategic share of total business revenue rose as customers increasingly adopt digital networking solutions. Source
• Network-as-a-Service adoption grew: More than 3,000 NaaS customers; new customer adoption up 22%, active ports up 34% and active services up 29%, quarter over quarter. Source

Costs and margins

• Cost of services fell 13 percent: Cost of services and products was $1.415 billion, down 13% year over year, excluding depreciation and amortization. Source
• Selling and admin costs edged up: Selling, general and administrative expense was $779 million, up 3% from $755 million a year earlier; the six-month figure rose 10%. Source
• Adjusted EBITDA margin edged up: Adjusted EBITDA margin excluding Special Items was 28.6%, against 28.4%; the reported margin was 21.3%, against 23.4%. Source
• Modernization costs rose to $116 million: Modernization and simplification costs were $116 million, against $41 million a year earlier, and are recorded within Special Items. Source

Cash, capital and balance sheet

• Operating cash flow rose: Net cash provided by operating activities was $971 million, up from $570 million a year earlier. Source
• Cash balance rose over the quarter: Cash and cash equivalents were $1.876 billion at June 30, 2026, up from $1.625 billion at March 31, 2026 and $1.003 billion at December 31, 2025. Source
• Long-term debt rose from March: Long-term debt was $13.150 billion at June 30, 2026, up from $12.925 billion at March 31, 2026 and down from $17.353 billion at December 31, 2025. Source
• Debt payments in first half: Payments of long-term debt in the six months ended June 30, 2026 were $6.253 billion, against $4.284 billion a year earlier. Source

Strategy and digital platform

• Alkira acquisition closed: The company closed the Alkira acquisition, which it said extends its digital capabilities for enterprises connecting clouds, sites, partners and AI workloads. Source
• Modernization and simplification continues: Management said it is continuing modernization and simplification and reducing internal systems complexity, after rationalizing its product portfolio to redeploy resources toward higher-growth digital work. Source
• Cost savings target exiting 2027: The modernization program covers network, product portfolio, IT systems and workforce, with a target of $1 billion in annualized cost savings on a run-rate basis exiting 2027. Source

Coming up, as management said on 4 August 2026

• Form 10-Q filing to follow: The company said its Form 10-Q for the quarter ended June 30, 2026 is to be filed with the SEC. Source

Figures management reported

Risks management discussed

• Operational: Multi-year modernization work across network, products, IT and workforce carries ongoing costs, which are excluded from Special Items-adjusted results. Source
• Financial: The company voluntarily relinquished its RDOF awards, so it will no longer receive that federal funding; the remittance payment was made in the first quarter. Source

Earlier plans management reported on

• On track: Management said the company is on track toward full-year guidance and the long-term framework set out at Investor Day. Source
• On track: Management said the company delivered financial results in line with expectations during the quarter. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.