Lumen Technologies continued its multi-year turnaround in 2025, delivering stable adjusted EBITDA and a narrowing operating loss despite a fourth consecutive year of top-line decline. Full-year revenue fell by approximately 4% year-over-year as legacy voice and copper services contracted, but core enterprise and wholesale revenues partially offset the decline. Management highlighted a 5% increase in adjusted EBITDA in the second half of the year compared with the first half, driven by disciplined cost controls and ongoing network simplification initiatives.

Lumen’s push into artificial intelligence infrastructure accelerated through 2025, with deferred revenue from AI-focused contracts rising by more than 120% year-over-year. The company secured multi-year deals with two Fortune 100 technology firms for edge compute and high-bandwidth connectivity, representing over $200 million of total contract value. Deferred revenue as a percentage of total billings climbed to roughly 18%, underscoring the strategic shift toward recurring, software-like economics on top of its fiber backbone.

In the fourth quarter of 2025, Lumen completed the sale of its residential fiber-to-home business, reducing total debt by approximately $1.5 billion and extending average debt maturity by 18 months. The transaction also trimmed annual interest expense by an estimated $75 million. Pro forma leverage on a net debt-to-EBITDA basis is now targeting a sub-4.0x ratio by mid-2026. Credit rating agencies have signaled a potential upgrade trajectory if free cash flow conversion remains above 80% of EBITDA and leverage continues to decline.