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Mar 31, 2023
Lumen Q1 2023 Earnings Report
Lumen's first quarter results declined year-over-year due to divestitures and the end of the CAF Phase II program, but showed positive leading indicators with strong growth products revenue performance and Quantum Fiber build progress.
Key Takeaways
Lumen Technologies reported first quarter 2023 results, with a focus on its turnaround strategy. The company saw positive leading indicators in growth products revenue and Quantum Fiber build progress. Net income was $511 million, and diluted earnings per share were $0.52. The company updated its full-year 2023 financial outlook, maintaining Adjusted EBITDA guidance of $4.6 to $4.8 billion and Free Cash Flow guidance of $0 to $200 million.
Business product Grow revenue increased to $1.128 billion, up from $1.091 billion in Q4 2022.
Quantum Fiber deployment reached approximately 120,000 fiber locations.
Principal debt balance reduced by $620 million through exchange offers for Lumen senior notes.
Generated negative Free Cash Flow of $(75) million.
Lumen
Lumen
Lumen Revenue by Segment
Revenue by Segment
Large Enterprise Revenue
CapyFin.comMid-Market Enterprise Revenue
CapyFin.comPublic Sector Revenue
CapyFin.comWholesale Revenue
CapyFin.comBusiness Segment Revenue
CapyFin.comMass Markets Segment Revenue
CapyFin.com Forward Guidance
Lumen updated its full-year 2023 financial outlook, maintaining Adjusted EBITDA guidance of $4.6 to $4.8 billion and Free Cash Flow guidance of $0 to $200 million.
Positive Outlook
- Adjusted EBITDA: $4.6 to $4.8 billion
- Free Cash Flow: $0 to $200 million
- Net Cash Interest: $1.1 to $1.2 billion
- GAAP Interest Expense: $1.200 billion
- Depreciation and Amortization: $2.9 to $3.1 billion
Challenges Ahead
- Capital Expenditures: $2.9 to $3.1 billion
- Stock-based Compensation Expense: ~$125 million
- Cash Income Taxes: ~$300 to $400 million
- Full Year Effective Income Tax Rate: ~26%
- Excludes approximately $1 billion impact of taxes related to our divestitures completed on August 1, 2022 and October 3, 2022.
Revenue & Expenses
Visualization of income flow from segment revenue to net income