10-Q · August 4, 2026
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…
Earnings analysis · 10-Q
LUMN earnings analysis
Filed November 4, 2026 · Our reading of the company's report
The latest report
Lumen's third-quarter results were mixed: strategic revenue rose 10% to $1.279 billion and operating expenses declined 10%, but total revenue fell 12% to $2.715 billion and the company reported a $167 million operating…
Read full summary
Lumen's third-quarter results were mixed: strategic revenue rose 10% to $1.279 billion and operating expenses declined 10%, but total revenue fell 12% to $2.715 billion and the company reported a $167 million operating loss. Nine-month operating cash flow declined $1.364 billion to $2.812 billion, although the Fiber-to-the-Home divestiture provided $5.0 billion of investing cash inflows and supported debt reduction. Management maintained its outlook, expects $3.2 billion to $3.4 billion of capital spending over the next 12 months, and continues to emphasize AI, network modernization, and strategic connectivity growth while legacy revenues contract.
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.
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
- $-0.26
- Operating margin
- -6.2%
What stood out
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Strategic revenue continued to grow
Strategic revenue increased 10% year over year to $1.279 billion, including a $59 million increase in dark fiber and conduit revenue and a $12 million increase in IP services revenue.
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Operating cost reductions continued
Operating expenses declined 10% year over year to $2.882 billion from $3.203 billion. Cost of services fell $268 million, while depreciation and amortization declined 1% to $670 million.
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Debt reduction lowered interest expense
Interest expense declined 41% year over year to $189 million, driven by a $5 billion reduction in average outstanding long-term debt during the quarter comparison.
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Liquidity remains available
The company reported $978 million of cash and cash equivalents, $677 million of revolver availability, and $13.3 billion of total consolidated indebtedness as of September 30, 2026.
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Divestiture strengthened near-term liquidity
Nine-month operating cash flow was $2.812 billion, and the Mass Markets Fiber-to-the-Home divestiture generated $5.0 billion of investing cash inflows during the period.
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Connectivity demand supports strategy
Management expects continued demand for high-capacity, low-latency connectivity supported by enterprise digital transformation and government broadband programs, while investing in its AI backbone and network capacity.
What to watch
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Legacy and Mass Markets contraction
Total revenue declined 12% year over year to $2.715 billion, with Legacy revenue down 17% to $1.067 billion and Mass Markets revenue down 42% to $369 million.
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Operating loss remained significant
Operating loss widened to $167 million from $116 million in the prior-year quarter, equivalent to an operating margin of approximately negative 6.2%. GAAP diluted loss per share was $0.26.
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Cash generation weakened
Nine-month operating cash flow fell $1.364 billion year over year to $2.812 billion, partly due to lower PCF advance payments and reduced cash allocated from the divestiture-related contractual credits.
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High capex and leverage burden
The company projects $3.2 billion to $3.4 billion of capital expenditures over the next 12 months against $13.3 billion of consolidated indebtedness, increasing dependence on operating cash flow and financing access.
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AI and floating-rate exposure
New risk-factor disclosures state that AI-enabled offerings and internal AI use could cause data disclosure, cybersecurity, regulatory, intellectual-property, or service-performance problems; the company also cites an unhedged floating-rate debt exposure of $2.4 billion, where a 100-basis-point SOFR increase would raise annual pretax loss by $24 million.
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Macroeconomic and supply-chain risk
Management identifies supply constraints, inflation, tariffs, and geopolitical disruption as potential sources of higher costs, reduced revenue, and delayed network expansion; it specifically notes that prolonged Middle East instability could disrupt shipping and increase network-infrastructure risks.
Management's outlook
The MD&A provides no quantitative EPS or revenue guidance. It projects next-12-month capital expenditures of $3.2 billion to $3.4 billion, primarily for network modernization and fiber expansion, and states that liquidity should be sufficient for at least the next 12 months. Full-year 2026 outlook was maintained according to the accompanying earnings update.
Earlier filings 4
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…
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…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.