Lumen beats revenue estimates on strong digital networking demand

By Juby Babu and ‌Nithyashree R B

Aug 4 (Reuters) - ​Lumen ​Technologies beat Wall Street estimates for second-quarter revenue and reaffirmed its full-year outlook on Tuesday, as the company continued ‌its shift toward higher-margin digital networking services.

Lumen's results come as ⁠it leans on its Alkira acquisition to expand its multi-cloud and AI networking capabilities, ‌betting on rising enterprise demand ‌for cloud-to-cloud connectivity as customers build out AI workloads.

Here are some details:

• CFO Chris Stansbury told Reuters that the near-term focus is ​on "quantifying what we believe the Alkira revenue can be" over the balance of the year, adding that Lumen's goal is to include ⁠revenue guidance alongside with its 2027 outlook.

• Lumen reported second-quarter revenue of $2.81 billion, above analysts' average ​estimate of $2.77 billion, according to data compiled by LSEG.

• Strategic revenue, which includes higher-margin digital networking products, rose 14% ​year over year and increased to ‌53% of business revenue in the second quarter, up from 51% in the first quarter.

• Adjusted EBITDA excluding special ⁠items fell to $802 million in the second quarter, from $877 million a year earlier.

• Stansbury told Reuters the company expects EBITDA growth to turn positive this ⁠year for the first time.

• Adjusted loss per share was 7 cents in the ​second quarter, versus analysts' average estimate for a 14-cent loss.

• Lumen reiterated its full-year outlook, projecting adjusted EBITDA excluding special items of $3.1 billion to $3.3 billion and free ‌cash flow excluding special items of $1.9 billion to $2.1 billion.

• Lumen, which provides digital fiber connectivity, data center interconnect ‌and digital networking services to enterprise and AI customers, said adoption of ⁠its Network-as-a-Service platform is accelerating, ‌with more than 3,000 ​NaaS customers.

(Reporting by Juby Babu in Mexico City and Nithyashree R B in Bengaluru; Editing by Shreya Biswas and ‌Tasim Zahid)

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