Lumen reported Q3 2025 financial results, beating adjusted earnings expectations with a loss of $0.20 per share versus consensus of $0.27 loss.
Revenue for the quarter was $3.087 billion, slightly below the $3.10 billion consensus estimate. Compared to Q3 2024 revenue of $3.221 billion, revenue declined 4.2%.
Operating cash flow reached $2.511 billion, up from $2.5 billion in Q3 2024, and free cash flow was $1.661 billion, up from $1.198 billion in the prior year.
Adjusted EBITDA for the quarter was $787 million, down from $899 million a year earlier but above the $800 million target set by management. The decline was driven by higher cost inflation and investments in network expansion.
Lumen completed a $2.4 billion debt refinancing that will reduce annual interest expense by $135 million, strengthening the balance sheet.
The company signed an additional $1 billion in new Private Connectivity Fabric (PCF) deals, bringing total PCF commitments to over $10 billion. PCF contracts are high‑margin and part of the shift to digital network services.
The "Grow" product segment grew 8% year‑over‑year to $1.160 billion, offsetting declines in legacy revenue. The Business segment revenue fell 3.2% to $2.456 billion, while Mass Markets revenue decreased 7.7% to $631 million.
Management reiterated its 2025 guidance, targeting adjusted EBITDA of $3.2 billion to $3.4 billion and free cash flow of $1.2 billion to $1.4 billion. The company emphasized cost reduction, PCF expansion, and simplification of network architecture.
Lumen is also progressing its consumer fiber sale to AT&T, expected to close in early 2026, which will reduce capital expenditures and lower leverage to below four times. Phase I of the new ERP system has been completed, supporting ongoing cost‑control initiatives.
The results demonstrate progress in Lumen’s transformation strategy, with strong PCF demand and a debt‑refinancing that improves financial flexibility, while margin compression reflects investment in future growth.
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