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Jun 30, 2023
Lumen Q2 2023 Earnings Report
Lumen's financial performance was marked by a net loss, impacted by a significant goodwill impairment charge, while the company focused on growth initiatives, particularly in its Business Grow product revenue and Quantum Fiber deployments.
Key Takeaways
Lumen Technologies reported a mixed second quarter, with increased Business Grow product revenue but a significant net loss due to a non-cash goodwill impairment charge. The company progressed on its growth strategy, expanding fiber deployments, but faced challenges in overall revenue and cash flow.
Business Grow product revenue increased to $1.138 billion, showing improvement from both the previous quarter and the prior year when considering divested businesses.
Approximately 130,000 fiber locations were deployed during the quarter, accelerating Quantum Fiber-enabled location pacing.
A non-cash goodwill impairment charge of $8.793 billion led to a reported net loss of $(8.736) billion.
Negative free cash flow of $(896) million was reported, compared to positive $668 million in the prior year, impacted by cash tax payments related to divestitures.
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.comMass Markets Segment Revenue
CapyFin.com Forward Guidance
Lumen updated its full-year 2023 financial outlook, maintaining its Adjusted EBITDA and Free Cash Flow guidance while anticipating specific figures for net cash interest, GAAP interest expense, capital expenditures, depreciation and amortization, stock-based compensation expense, cash income taxes, and the full-year effective income tax rate.
Positive Outlook
- Adjusted EBITDA is projected to be in the range of $4.6 to $4.8 billion.
- Net Cash Interest is expected to be between $1.1 to $1.2 billion.
- Depreciation and Amortization is estimated to be $2.9 to $3.1 billion.
- The full-year effective income tax rate is projected to be approximately 26%.
- GAAP Interest Expense is expected to be $1.200 billion.
Challenges Ahead
- Free Cash Flow is projected to be in the range of $0 to $200 million.
- Capital Expenditures are expected to be $2.9 to $3.1 billion.
- Stock-based Compensation Expense is anticipated to be approximately $65 million.
- Cash Income Taxes are projected to be approximately $300 to $400 million.
- The outlook excludes the effects of Special Items, goodwill impairments, and unforeseen events.
Revenue & Expenses
Visualization of income flow from segment revenue to net income