It has been about a month since the last earnings report for Lumen (LUMN Quick QuoteLUMN - Free Report) . Shares have added about 12% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Lumen due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Lumen Technologies, Inc. before we dive into how investors and analysts have reacted as of late.

Lumen Posts Narrower-Than-Expected Q2 Loss

Lumen reported a second-quarter 2026 adjusted loss (excluding special items) of 7 cents per share, narrower than the Zacks Consensus Estimate of a loss of 15 cents. The company reported adjusted loss per share of 3 cents in the prior-year quarter.

Quarterly total revenues were $2.805 billion, down 9.3% year over year, but topped the Zacks Consensus Estimate by 2%. 

Strategic revenues remained a key bright spot, reaching 53% of total business revenues in the quarter, up from 51% in the first quarter. The metric was $1.289 billion, up 14.1% year over year, while legacy revenues declined 15.1% to $1.155 billion. The shift reflects continued traction in newer digital offerings. Within strategic, digital revenues came in at $39 million.

Strong adoption of NaaS, growing demand for AI-driven networking solutions and the completed Alkira acquisition (July) remained key highlights.

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. 

With about $13 billion in PCF deals, Lumen recognized revenues of $91 million associated with these deals. Management noted that about $36 million of that figure reflected a California delivery milestone payment that was expected in the back half of the year. As AI demand surges, large companies across industries are urgently seeking fiber capacity, which is becoming highly valuable and potentially scarce. 

Total NaaS customer adoption was up 22% sequentially in the second quarter. Active ports rose 34% sequentially, while services sold across ports increased 29% from the prior quarter. Lumen now has 3,000 NaaS customers.

Quarterly Details

Business revenues fell 2% year over year to $2.444 billion, with North America business down 2% to $2.37 billion.

Revenues from Large Enterprises were up 4% to $794 million. Mid-Market Enterprise revenues declined 8% to $435 million. Public Sector revenues were up 1% to $490 million. Revenues of North America’s Enterprise Channels were marginally down to $1.719 billion. The metric for Wholesale decreased 5% to $653 million. 

Revenues from Mass Markets were down 40% year over year to $361 million, reflecting the impact of divestitures.

Management noted continued strength in higher-bandwidth networking products. Within North American enterprise channels, strategic 100 and 400-gig wave services posted nearly 11% year-over-year growth, while strategic wave sales increased almost 35%, supported by strong demand from AI infrastructure and cloud customers.

Margin Performance

Total operating expenses were down 22% year over year to $2.893 billion. Operating loss was $88 million in contrast with a loss of $603 million in the year-ago quarter. 

Adjusted EBITDA (excluding special items) slipped to $802 million from $877 million, reflecting expected revenue trends and the completion of the sale of fiber-to-the-home assets. Adjusted EBITDA margin excluding special items improved modestly to 28.6% from 28.4% a year earlier.

Cash Flow & Liquidity

In the second quarter, Lumen generated $971 million of net cash from operations compared with $570 million in the prior-year quarter.

Free cash flow (excluding cash special items) was $327 million, compared with an outflow of $209 million in the prior-year quarter. Capital expenditures excluding special items were $780 million.

As of June 30, 2026, the company had $1.876 billion in cash and cash equivalents with $13.15 billion of long-term debt compared with the respective figures of $1.625 billion and $12.925 billion as of March 31, 2026.

2026 Outlook

Lumen reiterated its full-year 2026 outlook, projecting adjusted EBITDA excluding special items between $3.1 billion and $3.3 billion. Capital expenditures (excluding special items)  are estimated to be between $3.2 billion and $3.4 billion.  Free cash flow is 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.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in estimates review.

VGM Scores

At this time, Lumen has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision has been net zero. Notably, Lumen has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Lumen belongs to the Zacks Diversified Communication Services industry. Another stock from the same industry, Liberty Global Ltd (LBTYA Quick QuoteLBTYA - Free Report) , has gained 1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Liberty Global Ltd reported revenues of $1.17 billion in the last reported quarter, representing a year-over-year change of -7.7%. EPS of -$1.07 for the same period compares with -$8.09 a year ago.

Liberty Global Ltd is expected to post break-even earnings per share for the current quarter, representing a year-over-year change of 0%. Over the last 30 days, the Zacks Consensus Estimate has changed 0%.

Liberty Global Ltd has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.