Lumen Technologies 2025 Q2 Earnings Misses Targets as Net Loss Widens 1767.3%

Lumen Technologies (LUMN) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. Lumen Technologies' Q2 2025 results came in below expectations, with net loss widening significantly compared to the previous year. The company adjusted its guidance, increasing exit run-rate cost-reduction targets, aiming to align with full-year Adjusted EBITDA guidance. Despite revenue challenges, Lumen remains committed to strategic initiatives, including the sale of its consumer fiber business to AT&T and successful debt refinancing, which are expected to bolster its enterprise focus and financial flexibility for future growth.

Revenue
In the second quarter of 2025, Lumen Technologies experienced a revenue decline of 5.4% compared to the same period last year, totaling $3.09 billion. Within the business segment, revenue from the 'Grow' category reached $1.13 billion, while the 'Nurture' segment contributed $634 million. The 'Harvest' segment saw revenues of $554 million, and 'Other' accounted for $175 million. Mass Markets added $602 million to the overall revenue. These figures highlight the challenges the company faces in maintaining growth across its segments.

Earnings/Net Income
Lumen Technologies reported a deepening loss of $0.92 per share in Q2 2025, a substantial increase from the $0.05 per share loss during the same period in 2024. The net loss expanded to $915 million this quarter, marking a dramatic rise of 1767.3% from the $49 million loss recorded in Q2 2024. The EPS reflects worsening financial performance compared to analyst expectations.

Price Action
The stock price of Lumen Technologies edged down 0.45% during the latest trading day, edged up 0.91% over the most recent full trading week, and increased 1.60% month-to-date.

Post-Earnings Price Action Review
The investment strategy of purchasing Lumen Technologies shares following a quarter of revenue increase and holding for 30 days proved significantly unprofitable. This approach resulted in a compound annual growth rate (CAGR) of -13.76% and an excess return of -137.61%, starkly underperforming the benchmark return of 85.57%. The strategy was characterized by a high maximum drawdown of 0.00% and a Sharpe ratio of -0.17, indicating elevated risk and loss. These figures highlight the volatility and potential downside of relying on revenue growth as a sole driver for investment decisions in Lumen Technologies.

CEO Commentary
“Our second quarter results underscore the momentum of our transformation strategy and the discipline of our execution,” said Kate Johnson, President and CEO of Lumen Technologies. The company demonstrated strong revenue and Adjusted EBITDA performance despite one-time revenue givebacks related to the FCC's Rural Digital Opportunity Fund. The sale of the consumer fiber business to AT&T for $5.75 billion enhances Lumen’s enterprise focus and creates financial flexibility for investment. Johnson emphasized the company’s commitment to achieving financial milestones and building a stronger, modernized organization, positioning Lumen for future revenue growth.

Guidance
Lumen Technologies increased its 2025 exit run-rate cost-reduction target from $250 million to $350 million, aiming to align with the high end of full-year Adjusted EBITDA guidance. The company is focused on leveraging recent strategic moves, including the consumer fiber business sale and successful debt refinancing, to lay a robust foundation for future revenue growth.

Additional News
In recent developments, Lumen Technologies has announced a significant transaction involving the sale of its consumer fiber business to AT&T for $5.75 billion. This strategic move is expected to enhance Lumen’s focus on enterprise services while providing financial flexibility for future investments. Additionally, the company successfully completed a $2 billion bond offering, extending maturities to 2033 and reducing annual interest expenses by approximately $50 million. These actions are part of Lumen's broader strategy to streamline operations and strengthen its financial position. Furthermore, there have been no notable changes in C-level leadership or dividend/buyback announcements within the three-week span leading up to the earnings release.