Lumen reported a non-GAAP Q4 EPS of $0.23, outperforming consensus by $0.50 and marking a significant turnaround from the $0.09 per share posted in the year-ago quarter. While revenue declined 8.7% year-over-year to $3.04 billion, the result aligned with analyst expectations and underscored the effectiveness of aggressive cost-control measures implemented during the period. Adjusted EBITDA of $800 million reflected disciplined expense management and the early benefits of network modernization efforts.

In February, Lumen closed the $5.75 billion sale of its mass-market fiber assets to AT&T, generating $4.8 billion in net debt reduction and cutting annual interest expense by roughly 45%. This transaction has materially improved financial flexibility, enabling the company to reallocate capital toward higher-return digital infrastructure investments. Pro forma net debt-to-EBITDA now stands at approximately 3.2x, down from 4.0x at the end of Q3, positioning Lumen to accelerate its transformation without compromising credit metrics.

Demand for Lumen’s AI-optimized fiber solutions propelled $13 billion in Private Connectivity Fabric deal commitments during Q4, a 30% increase versus Q3. Adoption of Network as a Service (NaaS) offerings rose by 25% year-over-year, contributing to a shift in the revenue mix toward higher-margin enterprise and digital infrastructure products, which now account for 48% of total service revenues. Management forecasts annual free cash flow exceeding $3.5 billion in 2026, driven by continued uptake of these strategic offerings and further operational efficiencies.