- Lumen completed the sale of its mass markets business to AT&T, reducing its debt and improving financial flexibility
- The company announced $2.5 billion in new Private Connectivity Fabric (PCF) deals in Q4 2025
- Lumen is now focused on enabling enterprise customers’ AI strategies and digital transformation initiatives
Lumen Technologies yesterday reported its Q4 and year-end 2025 earnings, just after closing the sale of its mass markets business to AT&T.
CEO Kate Johnson said during an earnings call the close of the AT&T transaction marks a defining moment for Lumen, which emerges as a simpler, more focused company serving enterprise customers and helping them in the AI era.
The sale to AT&T also takes a huge burden of debt off the company. With the $4.8 billion in net proceeds and cash on hand, the company paid off its super priority bonds and second lien debt. Its total debt now stands at less than $13 billion, which reduces its interest expense by roughly $500 million, down 45% from 2025 levels.
Lumen CFO Chris Stansbury said the company is now “fully funded” and “we are not required to borrow money to fund our future anymore.” He added that Lumen has excess cash over the next five years to fund its growth, pay down additional debt and possibly buy back shares.
The company has been focused on its Private Connectivity Fabric (PCF) business, and Johnson said, “We had a banner performance in PCF sales in the fourth quarter. You may recall that just over 18 months ago, we announced our first $5.5 billion in PCF deals with a goal of reaching $12 billion over time. As of today, we are now at nearly $13 billion with more deals in the pipeline.”
Johnson laid out a couple of strategic imperatives, including fiber backbone work and its focus on cloud.
In terms of the backbone, Lumen reached its 2025 goal of implementing 17 million intercity fiber miles. And notably, it inked $2.5 billion in new PCF deals in Q4, which will raise Lumen’s total network expansion to 58 million fiber miles in 2031. The company is laying 400-gig across 36 routes for data centers across key markets. “To support this work, we've expanded our partnership with Corning, ensuring we have priority access to the newest state-of-the-art fiber technology,” said Johnson.
For cloud, Johnson talked about Lumen’s network-as-a-service (NaaS), which she said, “finally puts networking on par with compute and storage in the world of cloud.”
Lumen reported that its number of active NaaS customers grew by 29% quarter-over-quarter. The number of NaaS fabric ports deployed grew 31%, and the number of services sold grew 26% in that same period.
“It’s a new day for this company. Lumen is separating itself from the traditional telecom pack," Johnson stated. "It's not a story about share take or price protection in a declining legacy market. This is about taking a once commoditized asset, innovating new architectures and capabilities and commercializing it through a modern business model so that enterprises can focus on using AI.”
A little reality check
Johnson was so upbeat on the earnings call yesterday, that it seemed like she was taking a victory lap. And she deserves one. She joined the company as CEO in September 2022, when Lumen was in pretty bad shape.
At the time, there were news articles noting that struggling companies have a habit of hiring female CEOs to take the reins just when the sky is about to fall in. This is apparently an ongoing trend.
Johnson is at least making some headway turning things around. At its lowest point in August, 2023, Lumen’s stock traded at $1.86 per share. Today, it’s trading at around $6.65. That’s a nice improvement but hardly close to its height in 2007.
One analyst asked why — if everything is looking so much rosier now — aren’t long-term forecasts even better than projected?
Johnson said, “Any sort of change to critical infrastructure takes a long time. We’re being, I think, pretty conservative in the way that we think about not just our ability to deliver everything, but the market's ability to absorb that change. We see the catalyst of AI and Cloud 2.0 driving a clear and pressing need for that change. But we're being cautiously optimistic.”
During yesterday’s call, the company also announced two new executives. Jim Fowler became Lumen’s new chief technology and product officer, succeeding Dave Ward. And Jeff Sharritts became Lumen’s new chief revenue officer. He was previously with Cisco.