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Lumen Posts Wider-Than-Expected Q1 Loss, Revenues Drop Y/Y
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Key Takeaways
LUMN posted a Q1 2026 adjusted loss of 47 cents per share as total revenues fell 9% to $2.899B.
LUMN's strategic revenues rose 9.4% to $1.246B, reaching 51% as legacy revenues dropped 13.5%.
LUMN to buy Alkira for $475M cash, aiming to expand east-west cloud connectivity; close set for Q3 2026.
Lumen Technologies, Inc. (LUMN - Free Report) reported a first-quarter 2026 adjusted loss (excluding special items) of 47 cents per share, significantly wider than the Zacks Consensus Estimate of a loss of 6 cents. The company reported adjusted loss per share of 13 cents in the prior-year quarter.
Quarterly total revenues were $2.899 billion, down 9% year over year, but topped the Zacks Consensus Estimate by 2.1%.
Strategic revenues remained a key bright spot, reaching 51% of total business revenues in the quarter, up from 49% in the fourth quarter. Strategic revenues were $1.246 billion, up 9.4% year over year, while legacy revenues declined 13.5% to $1.198 billion. The shift reflects continued traction in newer offerings.
Lumen Technologies, Inc. Price, Consensus and EPS Surprise
With about $13 billion in PCF deals, LUMN recognized revenues of $78 million associated with these deals. Management noted that about $32 million of that figure reflected a delivery milestone payment that is not expected to repeat in the second quarter. As AI demand surges, large companies across industries are urgently seeking fiber capacity, which is becoming highly valuable and potentially scarce.
LUMN highlighted ongoing adoption of its Network-as-a-Service (NaaS) offering, with customer adoption up 25% sequentially in the first quarter. Active ports rose 35% sequentially, while services sold across ports increased 32% from the prior quarter. Lumen now has 2,500 NaaS customers, with more than 30% repeat purchasers.
Another important highlight was the Alkira acquisition. Alkira is a “cloud-native, carrier-agnostic” networking platform, which will extend Lumen’s programmable networking footprint into faster-growing east-west connectivity, including cloud-to-cloud and data center-interconnect.
Management positioned Alkira as a control-plane software for cloud connectivity. Post the integration, Alkira will unify Lumen's on-net and off-net services, cloud on-ramps and Multi-Cloud Gateway into a single unified platform, compressing its digital platform roadmap meaningfully.
Financially, Lumen will pay $475 million for the acquisition in an all-cash deal and expects the deal to close in the third quarter of 2026.
Image Source: Zacks Investment Research
Following the results announcement, LUMN stock is down 2.1% in the pre-market session today. In the past year, shares of LUMN have jumped 122.7% compared with the Diversified Communications Services industry’s growth of 17.1%.
Looking at LUMN’s Quarterly Details
By segment, Business revenues fell 3.2% year over year to $2.444 billion, with North America business down 2.8% to $2.37 billion.
Revenues from Large Enterprises were up 1% to $778 million. Mid-Market Enterprise revenues declined 10% to $439 million. Public Sector revenues were up 5% to $506 million. Revenues of North America’s Enterprise Channels were down 1% to $1.723 billion. The metric for Wholesale decreased 8% to $648 million.
Revenues from Mass Markets were down 31% year over year to $455 million, reflecting the impact of divestitures.
LUMN’s Margin Performance
Total operating expenses were down 25% year over year to $2.297 billion.
Operating income was $602 million compared with operating income of $107 million in the year-ago quarter.
Adjusted EBITDA (excluding special items) slipped to $849 million from $929 million, reflecting expected revenue trends, higher healthcare costs and the completed sale of fiber-to-the-home assets. Adjusted EBITDA margin excluding special items was 29.3%, up 10 basis points year over year.
LUMN’s Cash Flow & Liquidity
In the first quarter, Lumen generated $1.323 billion of net cash from operations compared with $1.095 billion in the prior-year quarter.
Free cash flow (excluding cash special items) was $756 million compared with $354 million in the prior-year quarter. Capital expenditures excluding special items were $859 million.
As of March 31, 2026, the company had $1.625 billion in cash and cash equivalents with $12.925 billion of long-term debt compared with the respective figures of $1 billion and $17.353 billion as of Dec. 31, 2025. Lumen refinanced its revolver with a new $825 million facility.
LUMN’s 2026 Outlook
For 2026, adjusted EBITDA is predicted to be between $3.1 billion and $3.3 billion.
Capital expenditures are estimated to be between $3.2 billion and $3.4 billion.
Free cash flow is now anticipated to be between $1.9 billion and $2.1 billion, compared with free cash flow (excluding cash special items) of $1.041 billion reported in 2025. Lumen raised its 2026 free cash flow guidance as $729 million of cash proceeds from the Mass Markets fiber-to-the-home divestiture is being classified as cash flow from operations.
AT&T (T - Free Report) reported solid first-quarter fiscal 2026 results, with earnings and revenues beating the Zacks Consensus Estimate. Earnings were 57 cents per share, up 11.8% from the year-ago quarter and ahead of the consensus mark of 55 cents by 3.6%.
AT&T’s revenues rose 2.9% year over year to $31.51 billion, topping the consensus estimate of $31.19 billion by 1%. Momentum in advanced connectivity, supported by robust customer net additions, buoyed the quarterly results. Adjusted operating income increased to $6.89 billion from $6.35 billion for respective adjusted operating income margins of 21.9% and 20.7%. Adjusted EBITDA improved to $11.79 billion from $11.53 billion. Free cash flow came in at $2.5 billion, which was at the high end of the guided range of $2-$2.5 billion. Shares for T are down 7.8% in the past year.
Rogers Communications Inc (RCI - Free Report) reported first-quarter 2026 adjusted earnings of 74 cents per share, beating the Zacks Consensus Estimate by 1.37% and up 7.2% year over year. RCI’s revenues of $4 billion beat the consensus mark by 1.39% and increased 15.3% year over year.
In domestic currency (Canadian dollar), adjusted earnings increased 2% year over year to C$1.01 per share. Total revenues increased 10.2% year over year to C$5.48 billion, primarily driven by growth in the Media businesses. Total service revenues increased 10.5% year over year to $4.91 billion in the quarter. Shares for RCI are up 43.6% in the past year.
Verizon Communications (VZ - Free Report) reported adjusted earnings of $1.28 per share for the first quarter of 2026, which jumped 7.6% year over year and beat the Zacks Consensus Estimate of $1.22 by 4.9%.
Verizon’s total operating revenues rose 2.9% from the year-ago quarter to $34.44 billion but missed the consensus mark of $35.03 billion by 1.7%. The quarter featured 341,000 broadband net additions, led by fixed wireless access growth. Shares for VZ are up 7.8% in the past year.
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Lumen Posts Wider-Than-Expected Q1 Loss, Revenues Drop Y/Y
Key Takeaways
Lumen Technologies, Inc. (LUMN - Free Report) reported a first-quarter 2026 adjusted loss (excluding special items) of 47 cents per share, significantly wider than the Zacks Consensus Estimate of a loss of 6 cents. The company reported adjusted loss per share of 13 cents in the prior-year quarter.
Quarterly total revenues were $2.899 billion, down 9% year over year, but topped the Zacks Consensus Estimate by 2.1%.
Strategic revenues remained a key bright spot, reaching 51% of total business revenues in the quarter, up from 49% in the fourth quarter. Strategic revenues were $1.246 billion, up 9.4% year over year, while legacy revenues declined 13.5% to $1.198 billion. The shift reflects continued traction in newer offerings.
Lumen Technologies, Inc. Price, Consensus and EPS Surprise
Lumen Technologies, Inc. price-consensus-eps-surprise-chart | Lumen Technologies, Inc. Quote
With about $13 billion in PCF deals, LUMN recognized revenues of $78 million associated with these deals. Management noted that about $32 million of that figure reflected a delivery milestone payment that is not expected to repeat in the second quarter. As AI demand surges, large companies across industries are urgently seeking fiber capacity, which is becoming highly valuable and potentially scarce.
LUMN highlighted ongoing adoption of its Network-as-a-Service (NaaS) offering, with customer adoption up 25% sequentially in the first quarter. Active ports rose 35% sequentially, while services sold across ports increased 32% from the prior quarter. Lumen now has 2,500 NaaS customers, with more than 30% repeat purchasers.
LUMN’s Alkira Deal Targets East-West Cloud Connectivity
Another important highlight was the Alkira acquisition. Alkira is a “cloud-native, carrier-agnostic” networking platform, which will extend Lumen’s programmable networking footprint into faster-growing east-west connectivity, including cloud-to-cloud and data center-interconnect.
Management positioned Alkira as a control-plane software for cloud connectivity. Post the integration, Alkira will unify Lumen's on-net and off-net services, cloud on-ramps and Multi-Cloud Gateway into a single unified platform, compressing its digital platform roadmap meaningfully.
Financially, Lumen will pay $475 million for the acquisition in an all-cash deal and expects the deal to close in the third quarter of 2026.
Image Source: Zacks Investment Research
Following the results announcement, LUMN stock is down 2.1% in the pre-market session today. In the past year, shares of LUMN have jumped 122.7% compared with the Diversified Communications Services industry’s growth of 17.1%.
Looking at LUMN’s Quarterly Details
By segment, Business revenues fell 3.2% year over year to $2.444 billion, with North America business down 2.8% to $2.37 billion.
Revenues from Large Enterprises were up 1% to $778 million. Mid-Market Enterprise revenues declined 10% to $439 million. Public Sector revenues were up 5% to $506 million. Revenues of North America’s Enterprise Channels were down 1% to $1.723 billion. The metric for Wholesale decreased 8% to $648 million.
Revenues from Mass Markets were down 31% year over year to $455 million, reflecting the impact of divestitures.
LUMN’s Margin Performance
Total operating expenses were down 25% year over year to $2.297 billion.
Operating income was $602 million compared with operating income of $107 million in the year-ago quarter.
Adjusted EBITDA (excluding special items) slipped to $849 million from $929 million, reflecting expected revenue trends, higher healthcare costs and the completed sale of fiber-to-the-home assets. Adjusted EBITDA margin excluding special items was 29.3%, up 10 basis points year over year.
LUMN’s Cash Flow & Liquidity
In the first quarter, Lumen generated $1.323 billion of net cash from operations compared with $1.095 billion in the prior-year quarter.
Free cash flow (excluding cash special items) was $756 million compared with $354 million in the prior-year quarter. Capital expenditures excluding special items were $859 million.
As of March 31, 2026, the company had $1.625 billion in cash and cash equivalents with $12.925 billion of long-term debt compared with the respective figures of $1 billion and $17.353 billion as of Dec. 31, 2025. Lumen refinanced its revolver with a new $825 million facility.
LUMN’s 2026 Outlook
For 2026, adjusted EBITDA is predicted to be between $3.1 billion and $3.3 billion.
Capital expenditures are estimated to be between $3.2 billion and $3.4 billion.
Free cash flow is now anticipated to be between $1.9 billion and $2.1 billion, compared with free cash flow (excluding cash special items) of $1.041 billion reported in 2025. Lumen raised its 2026 free cash flow guidance as $729 million of cash proceeds from the Mass Markets fiber-to-the-home divestiture is being classified as cash flow from operations.
LUMN’s Zacks Rank
Lumen currently sports a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Recent Performance of Some of the Peers
AT&T (T - Free Report) reported solid first-quarter fiscal 2026 results, with earnings and revenues beating the Zacks Consensus Estimate. Earnings were 57 cents per share, up 11.8% from the year-ago quarter and ahead of the consensus mark of 55 cents by 3.6%.
AT&T’s revenues rose 2.9% year over year to $31.51 billion, topping the consensus estimate of $31.19 billion by 1%. Momentum in advanced connectivity, supported by robust customer net additions, buoyed the quarterly results. Adjusted operating income increased to $6.89 billion from $6.35 billion for respective adjusted operating income margins of 21.9% and 20.7%. Adjusted EBITDA improved to $11.79 billion from $11.53 billion. Free cash flow came in at $2.5 billion, which was at the high end of the guided range of $2-$2.5 billion. Shares for T are down 7.8% in the past year.
Rogers Communications Inc (RCI - Free Report) reported first-quarter 2026 adjusted earnings of 74 cents per share, beating the Zacks Consensus Estimate by 1.37% and up 7.2% year over year. RCI’s revenues of $4 billion beat the consensus mark by 1.39% and increased 15.3% year over year.
In domestic currency (Canadian dollar), adjusted earnings increased 2% year over year to C$1.01 per share. Total revenues increased 10.2% year over year to C$5.48 billion, primarily driven by growth in the Media businesses. Total service revenues increased 10.5% year over year to $4.91 billion in the quarter. Shares for RCI are up 43.6% in the past year.
Verizon Communications (VZ - Free Report) reported adjusted earnings of $1.28 per share for the first quarter of 2026, which jumped 7.6% year over year and beat the Zacks Consensus Estimate of $1.22 by 4.9%.
Verizon’s total operating revenues rose 2.9% from the year-ago quarter to $34.44 billion but missed the consensus mark of $35.03 billion by 1.7%. The quarter featured 341,000 broadband net additions, led by fixed wireless access growth. Shares for VZ are up 7.8% in the past year.