10-Q · May 5, 2026
Lumen Technologies posted Q1 2026 results with total revenue of $2.899 billion, exceeding estimates by 1.8%, while EPS fell short at -$0.47 compared to an expected -$0.11. The company has revised its full-year Free Cash…
Earnings analysis · 10-Q
LUMN earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Lumen reported second-quarter revenue of $2.805 billion, down $287 million, or 9%, year over year, while GAAP diluted EPS improved to a loss of $0.20 from a loss of $0.92. Strategic revenue grew 14% to $1.289 billion…
Read full summary
Lumen reported second-quarter revenue of $2.805 billion, down $287 million, or 9%, year over year, while GAAP diluted EPS improved to a loss of $0.20 from a loss of $0.92. Strategic revenue grew 14% to $1.289 billion and gross margin expanded to 49.6%, but Legacy revenue declined 15% and Mass Markets revenue fell 40% following the fiber divestiture. Liquidity improved through divestiture proceeds and debt paydowns, though the company still carried $13.4 billion of total indebtedness and expects a large $3.2 billion-$3.4 billion next-12-month capital program.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.2
What stood out
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Strategic products continued double-digit growth
Strategic revenue grew 14% year over year to $1.289 billion, led by a $109 million increase in dark-fiber-and-conduit revenue and a $17 million increase in IP services.
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Gross margin expanded 210 basis points YoY
Gross margin improved to 49.6%, calculated from $2.805 billion of revenue less $1.415 billion of cost of services and products, versus 47.5% a year earlier ($3.092 billion less $1.624 billion).
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Operating loss materially narrowed
Operating loss narrowed sharply to $88 million from $603 million a year earlier; operating margin improved to negative 3.1% from negative 19.5%.
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Debt actions reduced interest burden
Interest expense declined 41% to $201 million from $338 million, driven by a $5 billion reduction in average long-term debt and a lower average interest rate of 6.92% versus 7.31%.
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Operating cash flow strengthened
Six-month operating cash flow increased $629 million year over year to $2.294 billion. Management attributed the increase partly to divestiture-related contractual credits/commercial agreements and advance PCF cash payments.
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Near-term liquidity remains substantial
Liquidity at June 30 included $1.9 billion of cash and cash equivalents and $660 million of net revolving-credit availability; management believes these sources are sufficient for at least the next 12 months.
What to watch
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Revenue base continues to contract
Consolidated revenue fell 9% year over year to $2.805 billion, as $205 million of Legacy revenue erosion and a $241 million aggregate decline in Fiber and Other Broadband more than offset the $159 million Strategic revenue increase.
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Divestiture reduces recurring cash generation
Mass Markets revenue declined 40% to $361 million, including a 92% decline in Fiber Broadband revenue to $17 million following the February 2026 Fiber-to-the-Home divestiture. Management says the sale will reduce recurring revenue and operating cash flow.
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New Alkira integration and execution risk
A new risk-factor update warns that Lumen may not fully or timely integrate Alkira or realize anticipated benefits. The acquisition closed July 1, 2026 for $487 million in cash and is expected to reduce available liquidity by the cash consideration paid.
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Leverage and floating-rate exposure remain high
Total consolidated indebtedness remained $13.4 billion at June 30, including $2.4 billion of unhedged floating-rate debt; a 100-basis-point increase in SOFR would raise annual loss before income taxes by $24 million.
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Sequential operating result reversed
Operating performance weakened sequentially: the second-quarter operating loss was $88 million, versus derived first-quarter operating income of $602 million (six-month operating income of $514 million less the second-quarter loss). The first-quarter result benefited from a net $596 million gain on sale of business, based on the six-month $565 million gain and the second-quarter $31 million loss.
Management's outlook
The 10-Q provides no quantitative revenue or EPS outlook. Management projects next-12-month capital expenditures of $3.2 billion to $3.4 billion, primarily for network modernization and fiber expansion, and expects the Mass Markets Fiber-to-the-Home divestiture to reduce Mass Markets fiber-related capex by approximately $1.0 billion annually.
Earlier filings 4
10-K · February 20, 2026
Lumen is refocusing as an enterprise-focused digital network services provider, prioritizing monetization of its Private Connectivity Fabric (PCF) and an AI backbone while managing legacy mass‑market assets for cash…
10-Q · October 30, 2025
Lumen reported Q3 2025 revenue of $3,087 million and an operating loss of $116 million, with diluted loss per share of $0.62. The quarter shows improved liquidity and strong operating cash generation (nine months net…
10-Q · July 31, 2025
Lumen reported Q2 revenue of $3,092 million and an operating loss of $603 million driven primarily by a $628 million goodwill impairment recognized in the quarter. The company generated $1,665 million of cash from…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.