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Dec 31, 2025
Lumen Q4 2025 Earnings Report
Lumen Technologies reported solid fourth quarter and full year 2025 results, completed the AT&T transaction, strengthening its balance sheet and advancing its enterprise focus.
Key Takeaways
Lumen Technologies delivered revenue, Adjusted EBITDA, and free cash flow in line with expectations for Q4 2025, while sharpening its focus on high-value enterprise growth. The company completed the $5.75 billion AT&T transaction, significantly reducing total debt and annual interest expense, and increasing flexibility for growth initiatives. Operational execution exceeded cost reduction targets, and the company saw strong momentum in PCF sales and NaaS customer growth.
Completed the $5.75 billion AT&T transaction, reducing total debt by over $4.8 billion and net leverage to below 4x, and cutting annual interest expense by nearly 45%.
Achieved Adjusted EBITDA at the high end of guidance, despite a one-time giveback from the FCC's Rural Digital Opportunity Fund, with free cash flow remaining solid.
Exceeded cost reduction targets, ending the year with over $400 million in run-rate savings, and is on track for $700 million by end of 2026 and $1 billion by end of 2027.
North America Enterprise revenue grew 52% in Q4, surpassing nurture and harvest segments, with PCF sales reaching nearly $13 billion and NaaS customers growing 29%.
Revenue by Segment
Forward Guidance
Lumen Technologies issued its full-year 2026 financial outlook, projecting Adjusted EBITDA between $3.1 billion and $3.3 billion, and Free Cash Flow between $1.2 billion and $1.4 billion. This outlook reflects expectations of a $400 million tax refund in the first half of 2026.
Positive Outlook
- Anticipated Adjusted EBITDA of $3.1 billion to $3.3 billion for the full year 2026.
- Projected Free Cash Flow of $1.2 billion to $1.4 billion for the full year 2026.
- Expected Net Cash Interest between $650 million and $750 million.
- Forecasted Capital Expenditures of $3.2 billion to $3.4 billion.
- Anticipated a $400 million tax refund from recent tax legislation in the first half of 2026.
Challenges Ahead
- Net loss is projected between $(1,320) million and $(545) million.
- Income tax expense is projected between $200 million and $45 million.
- Total other expense, net is projected between $1,300 million and $1,100 million.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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