LUMN - Earnings call transcript Q3 2020 | Lumen Technologies, Inc.

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Operator

[00:00:01] Greetings and welcome to Lumen Technologies third quarter twenty twenty earnings conference call.

During the presentation, all participants will be in a listen only mode afterwards.

We will conduct a question and answer session at that time.

If you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, simply press star zero.

conference recorded this Twenty November reminder, twenty. a is Wednesday, being Xth, As pleasure conference turn Finberg, is to It my the Investor vice Relations. over president, Valerie to Please ahead, go Valerie.

Valerie Finberg

for Good quarter third twenty earnings and you, limited Twenty afternoon, Thank for the France. thank [XX:XX:XX] you joining call. us technologies, everyone,

president executive me and vice Joining Storey, chief the officer, executive financial today call chief on president and Jeff officer. are and Neil Deve,

statements uncertainties. two the should looking Harbor cautionary statements certain of need in I in subject with call attention Slide be statement on factors to to which filings. and two on Safe risks that may All forward SEC statements slide conjunction three the Before and conference considered in we begin, notes risk our to your looking our presentation, XX call our this include forward

today's financial gap comparable found to press we measures, the will measures release. which in and During be most referring to be can earnings gap reconciled certain call, our are

certain addition, found on as all of be transformation can metrics other earnings which investor of and In relations website. in exclude our the detailed section the special materials, items discussed today Lehman costs

to the quiet, Rules Rural any limited. Jeff. that, comments FCC to in AALDEF be everyone I around period. will four, the remind I'll auction very over Digital With effect last is for nine Fund week. call Therefore, Finally, are Opportunity turn of want began that which we the make

Jeff Storey

delivering women we'll the ahead. on to opportunities questions. another on highlights We the our in see third financial digital quarter few Call, revenue enable customers After and then a rely Valerie. third earnings Thanks, transformation. continue And I'll [XX:XX:XX] our your our performance quarter, thank women on sales open our launch that year call we Lumen we're and the that into everyone solid the and over to today you trends. EBITDA to delivered transform sequential And today's quarter as touch business, meal, seeing of improving then go minutes we'll for first up we us review and to year results call as their our joining for take

Following affected a continue particularly for and sales sales be in SMB enterprise by expectations. and We uncertain to year with the We're and customers were line up, were and second consumer for revenue of segments good quarter, quarter with were sales Gian see our expect we year growth in steady for will cycles consecutive our sequential strong over encouraged the environment, but strong broadband. another XXth delivered broadband customers. revenue growth and by quarter both demand recorded

quarter, surpassing we record XXXXX quarter. we added the subscribers, gigabit last said This

We We results use the serve. best selecting in experience, business. reliable our and the consumers in thesis market customers simplify dedicated where Our consumer for offering microtargeting confirm win fiber, and in our our results showing believe bandwidth. the are value consumer customer invest satisfaction we areas the fiber we the and is

allow lead us operational me in relentless reduce cost [XX:XX:XX] Our customers, is revenue, they to highly satisfied durable many heard you've As more results. operation. our improvements areas the and our delivering say of times, these to focus

ways see two You quarter. in can this

expenses, growth. delivered adjusted higher we seasonal sequential First, despite EBITDA

We've their by additional and all of XX service of progress Internet of see quarter. highest a recently we improve. Second, named to am I with Overall, our were recognized on made results brands customer the opportunities Newsweek providers. scoring XX top this lot pleased list service

even topline and revenue improving are driving focused on Dogra. We

of allocation We at to the also remain committed set summarized Slide beginning last targets four on strategy and leverage we capital the year. the

our the in improving growth, driving invest customer business, and transforming to costs. is experience, our priority first Our operating

reduce through reduce is objective several leverage the sheet interest quarter the and strengthen continuing this we to further to balance expense. transactions, And leverage. second capital Our market

Finally, we are ratio capital comfortable the with through dividend payout to XXs. shareholders and in to committed dividend remain very a returning our

ratios invest distributed giving One hour, peers. served reduce us ample covid work debt Within in the pronged liquidity the compared home large [XX:XX:XX] the our pandemic well the and to from of capital to economy, excel to continues us through continue return the the for three as to the growth, to allocation We achieved dividend. our company and lowest capital believe mostly has team with a balance workforce. this uncertainty we

our highest drive data and to levels on use product delivery continue We have operate service initiatives at and technologies service speed assurance. maintained in the operational and key small, dedicated to teams collaboration oriented and to

and been mindset. own they anywhere and using In Fourth the for fact, this develop our Industrial time work from understand we've solutions and experience to Revolution,

platform market drive era an the networking effort. In act on It designed a our introduce defined edge? or to platform success. that that became all-digital of movement. gen obvious challenged launch is data Does the capabilities signals for years a use the fastest, the company centers model, and to of delivery this delivering for than bold securely In of customers across ago, to it we of analyse the this a Turning a very through what software acquire, massive movement couple was delivered firmly position best goal kind Human cloud network company that and to new our a to fiber for a hybrid a a ourselves born of woman to Technologies world one new is of from wanted vision Lumen In was of into to combine and chart rapidly a changing, infrastructures the new just applications the we vision rebranded customers the be and to applications our to we we way their data. the during more in help September, next company secure moment, data name successfully most all with and that logo.

access long world, massive defined connections facilities, hosting malicious within give second, the expertise with a use bring network operators stops and service and infrastructure of is pace uniquely advent of public based the industrial broad services the Iot IP I delivering virtual to as five actors connectivity and XX the centers, proactively platform array together create can all fiber looming and technologies. been at digital fiber with we've capabilities and enable cloud critical the based around industry foundation and we for designed centers, women lie networks cloud and new threat heart services on and fourth world accelerating, network the rapidly to transactions, Luhrmann their to enabling Although a can continues intelligence serving the to rapid change. global data experience and from other our that and customers data see and to this IP of XG milliseconds network, that providing edge years, Women's revolution, in to and changing providers, see protects to customers and applications believe is capabilities grounded of data that work positioned The benefit customers customers on cases, be and change emerging the you haul from the our security cloud a them past users. deliver networks of [XX:XX:XX] expect the our new private support to networks class to environments software women. five, assets, platform is essential augment Slide as demand, voice enabling next of We

help This As digital and we think application capable, and at the enables edge as with offers to improve consume improving way these our capabilities will us continue from businesses set to approach and our for tools. networking, our our what most the services take services and simplifying, configure we needs. we that amazing and are platform our security driving invest trajectory ensure services. customers resilient fiber data very [XX:XX:XX] I an are are culture the rapidly through to all-digital of first of customers also I'm allows their order based today, our pleased that deploy revenue solutions deliver self-service the fastest, cloud, pace market which continually and growing support addressable a purchase advantage to a and to platform

services that transforming Lumen, We dynamic to them are easy. infrastructure, our platform known delivered in that completely but our our movement, for how Lumen, we allowing serve mitigation land connections, consume infrastructure, ways that flexible digital like we services customers, certainly and Dede's are fiber over hyper are

and secure our best of market. experience, fast, to also to enabling use also simplifying connections time is partners to customer platform Beyond speeding while our enabling breed movement deliver our capabilities

with covid-XX the an our pandemic. partnership As with is Sun, example,

customer. in leader this in have as demand time a is well a long an collaboration market explosion seen for Zoom services. based as We space, valued Internet

technology and Access of is portfolio VMware develop announced excited enhanced by experiences Zoom's early Edge can we We our voice edX the In partnership covering and platform platform. we've SD rich platform. networking to with announced security, Long second services of incorporate Vellum partnership the provide. collaboration we traction integrating September, the Cloud delighted Solution utilizing the the term, into they by example Lemon further significant amazing already announced the collaboration Zune we reach luminous by The think VMware, are deep VMware with computer services Service a [XX:XX:XX] a new seen. recently Secure and capabilities we the commercial and customer and win are supports late

for our to anywhere integrate all of businesses deliver on sizes infrastructure a of have from solutions services, We the global variety ability VMware industries. to create edge a to work across platform

and cloud the edge we to notes As on whether data as computing began low service from the over hoped. aggressively network, type high on opportunity. Internet driving school I'm edge a very single of great already for deliver the live or just close platform systems deploying they is from enterprise for combined the their it fiber pursue Reef platform, well couple bare the provides to next partners billion to with capacity are school vendors anywhere to to live are customer processing to great woman working sporting real the Sunberry. example of well. Cyber first within enterprises networking that and testing. services. of resources, with more clouded Nicely, Even a testing blocks growth and very is Kid making test the our tools years, subsequent lowered the as systems, with deliver how we resources, deliver billion are XX data fit XX percent of days our a high computing security where market service this computer they is capabilities our product, support. the A and tremendous service edge is performance exactly of the Défense forecasted media to several of facilities customer with are learning block climate experience say conditions. launched begin cloud looming providing progress providing we remotely major computing, them words, of to on Internet the different deeply their five plans. provider pandemic a cloud cloud Cyber public already blown where company to a cloud we their turned for using Within centers the metal remote under edge for platform to platform required center [XX:XX:XX] and generated, in the humans edge and the milliseconds. to core integrated next deploy on The cloud, Denver, leveraging of as in launch services. And applications a XX network can our this than and edX pleased the other lumen pierce I've infrastructure, remote distributed perfect be need network center, We into quarter, Claridge as full partners of Shield other highly officially life combined compute and experience solutions mentioned, can customers the network events, close distributed the and distributed experience is them human a very their US widely and of a underway. are connections, change extension it focused and our we up and performance and up the data before the was customers, customers cloud placing In software customer connectivity to turned or and global capabilities capabilities move the the networking, technologies major latency begin edge generation

learning to result, deliver Lumen key a enterprises and cloud partnership As intelligence, distributed multiple expect over as in providers software, service capabilities and a artificial with analytics providers, machine the we like and partners, service platform. other for

to by our our company serving customer experience customers. with name in as platform Enterprise services enterprise of can managing consumer brand our and six markets, Fiber. digital are and market launched wholesale [XX:XX:XX] simplified, serving small As based tools also quantum just offering the Lumen highly with for mass the brand And Quantum flagship we for customers Quantum the for is Slide you and our customers, see with business we Fiber efficiency. a expanded on fiber

deploying fighter net Lulu's focus bandwidth these we quantum We that all services for is targeting critical small fiber meet well starting needs, primary and foreign utilize a to we point, while more than thousands digital buildings. XXXXX As are positioned enterprise. of is of as existing small resilient know to simple, continue customers our tens and intend business businesses services the to fed on segment, buildings our those

whose quantum investments leverage We grow consumer is markets. dedicated small have leadership a the business our team to to and focus sole

Finally, and who traditional remain our business the services CenturyLink receive in networks. place brand fiber small for copper will traditional consumer hybrid customers over

is a a quick new recap, more As just name. than woman

opportunity of and We done front us to that are in years half two to about over and and a capture ever we've past work the opportunity limited. more launch than excited the the

our As best over resilient one and the the industrial looming secure, platform fourth world's delivers embrace the capabilities cyber of revolution, infrastructures. adaptive, customers

our capabilities own We integrating are their focused within customers environment. and enabling on success operating those

over excited very turn the call are future. I'll Neel? We With about that, the to

Neel Dev

afternoon, Jeff, Thank [XX:XX:XX] good everyone. and you,

to plan and the our and execute positioning for substantial continued During future. on made the quarter, transforming, we third progress, the company

you we growing to in with shift rebranded and a As purposeful mentioned, Lumen emerging after markets. going made opportunities aggressively addressable

revenue highlights resilience and which We of slide have our compared the we of uncertainty. economic on summary backdrop year eight, the particularly to with offer, results, relevance products financial improved start solid of quarter performance I'll total the current and third quarter. the given the services

and cost and quarter while to transformation due EBITDA in progress steady we launch on the current basis. operating expenses, higher seasonally global cost our grew the we on another of a have adjusted costs a of We sequential incurred high environment, utility savings brand initiatives, efficiencies

solid business delivering free invest to during the continue We flow in while quarter. cash the

our on and initiatives. progress good made also on deleveraging our We refinancing

point Turning revenue eight percent third a to declined one five year revenue four to declined XXXX seven point basis, billion, compared revenue to over of six decline three total a percent. zero year the on quarter percent Total of point point four five sequentially. in

largest demand environment. basis. on AM international continue our benefiting point the point one our business. current basis, Moving declined of point currency percent on percent a and business revenue Business resurgence to see customers Slide whose basis, a declined and global six On international nine from in percent IDM four two basis, Revenue and percent weakness by are two constant by primarily a currency and on or constant [XX:XX:XX] sequential We models a good segment subset related covid point to six a year in three decline over year accounts, from driven six

year while by would services, continue segment in haven't year seen we monitor have legacy likely before, year quarter, toward of due have decreased five a in impact percent. and decrease this year quarter This sequential our we point four particularly as we during COGAT of level Both over the an year. activity this business segment saw a expect point declines over sales voice federal on on the XXXX eight have benefited Latin earlier Europe we disproportionate primarily increase and sequentially. Enterprise percent from sequentially enterprise compares expect, general, over a by closely. might year, and America, we and our to zero a performance this eight SMB churn, point across increased basis, covid third In driven On basis, a you percent. reduced percent sales business, we to. in revenue in to year point to increase installs international in nine and mentioned over moving strength year as both a continued zero from grew zero in year revenue seen However,

in Sequentially, million. Additionally, from impacted million revenue during decreased about to quarter six point reminder over revenue as about will carrier the of the revenue full in million a quarter compares an have quarter the prior seven XX five of SMB, did the correctional seven percent end settlement our quarter third see in year a at quarters. over communications flat benefit third year. of the [XX:XX:XX] impact average sold by approximately the facility legacy sale of This August four and this XX XXXX. a business We Wholesale decline we percent within business, a quarter. of fourth the was of

services. trajectory are of legacy quarter, and In products by connectivity the have expected, is voice But broader collaboration for all record this economy higher the products as and seen terms impacting our customers revenue of volume to the as and we economy, that every digital need business other acceleration summary, our levels. to meeting groups of across the returned transitioning In across business. spend

able buying it in seeing others challenged environment are lean and those into customers, to demand we are some While are from delaying decisions. and this good

Quarter [XX:XX:XX] XX primarily offset the year, point percent twenty by over quarter, year revenue seven broadband. and point zero percent XXX at declines seven one the now point revenue to XXX ongoing have in driven decline above, broadband Slide six three and five to of compared percent sequential point subs approximately now at third two to total compared year. We million and basis, beginning point million to five the the greater legacy revenue third quarter, twenty zero by with passed four subs. over last the year one XX than perspective, max growth consumer Broadband nine a XX year Turning added percent, a voice on for From fiber, grew third and percent we in percent compared year mix our a XX. of declined year twenty have of ago. on basis sequential on two homes XXXXX for quarter speeds percent point about speeds, in

assets, expect and by largely competitive been mentioned our home performance competitive churn. will driven but and around speeds, digital future driven our continue Moreover, revenue focus experience of lower interactions to broadband only margin strategy fiber have the business. tend on performance to see improve support can Our to will As our investment penetration customer where by have customer the we [XX:XX:XX] our to output, generally be before, higher higher we driving assets. this initiatives up we execution are has not improve that profile our of consumer our expected

been to speed supporting that economic participated the are customers reminder, committed a current primary have and remain from or Keep uncertainty as have driver the of in our in those also We subcouncil the Connected through subtracted quarter. our working this pledge, change the were subcouncil Americans who customers low

as Turning and Twenty two point compared roughly adjusted higher the to two even billion, this related than we was of second XX quarter, of grew seasonally slide XX on it, focus to and zero million four pre higher rollout, point profitable covid one two brand quarter revenues of XX twenty. third to Baghdad, our for EBITDA million twenty inefficiencies sequentially. was and six seven our on point expense Specific global transformation a a initiatives, nine third cost result and twenty utility quarter the in sequentially levels. billion Despite two nineteen covid costs down even one in quarter adjust one adjusted Twenty the billion

we on work relatively experience, Our to customers continue our Given our to stable, [XX:XX:XX] bad continue current expense with payment been debt we arrangements. decrease expect DSOs to have and our closely quarter. the levels. to sequentially just margin quarter percent, for three in even two covid year forty forty the was ago pre two point percent to point four said It compared the

the annualized end compared savings our the rate of third of previous transformation of we approximately the end XXX achieved run quarter. adjusted quarter, million the ebidta to of As as XXX of million

rate run continue year. pleased challenges be with we to the related the achieved Given savings covid, this we to

flow impacted, transformation transformation, third one and year run dollars We also our million remain items million a we to continue to Integration and eleven incurred rate to expect the savings. in million. achieve confident cost plans quarter, by special the hundred in XX and our adjusted EBITDA three and twenty annualized and twenty adjusted, XXX free by in billion even cash

For twenty hundred eighty twenty XXXX and were to fifty expenditures quarter This the million. capital nine third seven hundred eight third quarter, compares nine of million. of CapEx and

the investing the products that platform. services We are in and support

to to nine seventeen experience. twenty, footprint digital continue in our also third million XXXX. our nine invest of three compares company million. hundred quarter quarter In of Twenty and eighty We cash of and cash the the This flow customer in in generated and [XX:XX:XX] employee free the fiber third flow expanding of hundred free

Turning debt to third XX two lower at refinanced we capital down paid activity on during and obligations the in Slide rates. XXX markets debt quarter, million of billion

we billion. We XX the of and to on deleveraging our XX leverage XX five to around five adjusted point since ratio EBITDA. twenty net year getting by last refinanced plan and focused announced to seventy three extended point remain times maturities have We debt billion to target two reduced XX

as very buyer behaviors to our level As across our continue and XX, outlook widely of the slide we impact diverse move vary on to base. see financial we uncertainty customer

the Over economy think the we acceleration net is our the dynamics of the demand term, digital positive for business. long and

plans. current market quarter nine sequential initiatives fourth from growth our term, overall this the billion through the in [XX:XX:XX] work likely one customers quarter. Despite in adjusted return by we conditions. uncertainty, will they we expect our we However, EBITDA are their continued see of and the optimistic Additionally, work resilience given deleveraging to business as point short market progress about the being aided cautious two in for and

to a previous sixty of our one expense interest range billion. billion to one point one are six seven We point our from lowering point cash and to sixty of point five five range narrowing one

highlight million is lower sell five our our continue to we To business hundred to interest results compared summarize, expected are net that the this products Our year XXXX. to be resilient. about and cash expense

in to improve are revenue and sheet strong line and position We we investing liquidity leaning remain our while delivering are balance our bottom our results and continually trajectory, improving. strong

continue execute year. last policy we laid our capital on out to We allocation early

investing to ratio twenty for with point that seventy continue expect company and the you two be deleveraging XXs a point over position to five dividend a leverage billion the are future, open to three dollars for that, free the to the to We percentage payout cash through five our of will to With it turning we up the target in flow. will a range please of as explain your process? questions. France, shareholders

Operator

telephone, [XX:XX:XX] Thank will by question, you, one like a prompt register the please a if the your would to three acknowledge press tone hear four request. to you on your followed for you

been you ahead. withdraw please the Goldman please three. press And go your of Sachs, one with question our Feldman would like and by answered Brett If line followed to question your the from has registration, first the

Brett Feldman

you not on what's in so, maybe fourth for sure just if year for [XX:XX:XX] a us to year that. follow sequential that And little question, you year quarter. behind I'm year there this fourth drive that's over Yes, outlook if basis improvement. quarter, that? gave EBITDA other insight I'm the you out over factors revenue, can would for guidance change to a in are you you what expect or to quarter? if taking improved up more seasonal just predominantly if thank give as the highlight to and the similar has the on I dynamic believe, wondering And Thank you. the Are play also you expecting EBITDA a involved. the

Neel Dev

transformation terms good also quarter, [XX:XX:XX] fourth expect we're quarter. the so but the got savings continue some for investments of that to into offsetting and obviously, a of some our that quarter cost making. know, we've in we you are fourth going Sure, that of savings, And,

little spend more So on are you've making we seen bit a capital. us

touched his We in and which remarks. his services, in investment have will brand come is seasonal. in of on which some a Jeff products Utilities investment early in down, lot the and our

by that to will down expect and continue revenues. remainder our We driven on the to come performance be

driver a point one versus I So of mentioned, from the year at over point us. kind we that's a four level, from year, improvement performance like in the At four high did good standpoint, three see primary eight. revenue, EBITDA

We the little about, we're seeing customer and, But know, activity. feel resurgence you only we're of have impacts that cautious and a we the how good some about good funnel thing that the quarter. a

Brett Feldman

you If I I you in on question the referenced if funnel, Enterprise. quick [XX:XX:XX] believe, don't one mind, quarter get up that, follow last

very out called bookings. had You strong

quarter? that it think on Thank Enterprise had quarter second How the Is ended could year strong from a the third rate year would you. benefit that of revenue been what very was actually we into I XXXX. the much it a run into little improvement that for flow still quarter? fourth there in up all converting in or saw there be a

Neel Dev

part quarter. already third in [XX:XX:XX] A installed that was of significant the

benefit line see enterprise So the item. you the can in

Brett Feldman

taking questions. [XX:XX:XX] They are the

Operator

line [XX:XX:XX] with Our Simon next question is of Morgan from Flannery Stanley. the

You may proceed.

Simon Flannery

very evening, [XX:XX:XX] Good Thank Neal. much. you

you you think said I XXX. transformation, have the On good progress,

the maybe the to broadband. around higher color end to just to sounds so even you is end. low billion. the you're there? over year the think update the what ability. plenty on get potential had or there's on clarification but back of the covid to of end close any or you Perhaps on It at you're higher And us know, limited but XXX, some the just And go the next track, on above You know one range like your I

have connected of the Could for about impact. much us? Thanks. How just that? that keep were the you talking You America from sized impact was

Neel Dev

Sure. [XX:XX:XX]

we suddenly a it's to billion not were I with ongoing we mentioned, Simon, the going will be XXX an us. on like very think to there, for So savings, effort cost the but comfortable get

after will all how that changing the somewhere afterwards. several similarly on areas as in and the experience infrastructure be the that effort, be experience, we're rightsizing that's and to So also a see we the we're year year employee going several revenues, going declines customer legacy

the over savings any see, really don't we handful of achieve the know, terms can next limitations So in that you of years. we

Americans of are on don't really terms customers on or what working our either. doing for revenue. keep observing it we're connected, your is units see who America the closely non-pay And you with question In connected, the

impacted about by it XXXXX our incrementally, So units units.

Simon Flannery

of [XX:XX:XX] the around kind going And silos? some divisions, just split one to along that quantum the financials give clarification Lumen out us businesses are, of what Thanks. color you business on how kind the are different new those

Neel Dev

give [XX:XX:XX] traction. quarter, but have about when to we Yeah, we're way what's the report that we're to through more seeing you best we'll certainly say fourth where visibility thinking to

Operator

line from question of [XX:XX:XX] ahead. Our is Fargo. Eric Please with next go the Wells

Eric Luebchow

Thanks for [XX:XX:XX] the taking question.

in was partnership item? mentioned I we in the revenue line and September, Zoom And should positively that collaboration also, we incremental impact your that network So well that announced you see voice as you much an benefit expect transport then, know, to should you know, how late was and curious business? your about

Neel Dev

a what if and can to And our days, still also [XX:XX:XX] really video an experience. customers about the bring to view want utilize early it's So Zoom app the that voice the helps think you it from know, a partnership that as us we really where, we synergistic enhances partnership, have capability. it bear but we you capabilities address

of have with is an network collaboration, services, also, a term, customers some long those keep the when on into the voice use lean broad it'll and in set app, well. use that Microsoft demand mind, to over And there voice and corresponding our us we mitigate of churn business. hope infrastructure. a or and alternative teams we So as upgrades help in usually to for products the Zoom any or underlying other that

So there are benefits. several

Jeff Storey

if approach have approach it's the on capability to add, for partnering just woman platform, about our important you the our I'll to and have an us to And platform. [XX:XX:XX] to think

started years. it's couple we're months provider we've a them, just we've working has something been over I been over good partner the not But hope, them. with So to that few great past a us. last the of We've been to

services. enterprises do So the amazing variety to relationship. capabilities And the platform got good a very an think customers. happy with we're our ability we And as those we've job add I to deep go directly their of have they to to for

Eric Luebchow

follow more the that mentioned one said China activity have and you I and quarter. of up, sales in Europe Great, [XX:XX:XX]

color, a know, sales wondering any you if temporary return in that, could you the think quarter more and, Thanks. And to normal if reverse two next or you cadence. whether to a know, provide see that you you phenomenon. will will some just So that's sign,

Neel Dev

know, we covid so You Latin the saw if hard was it in so it the it, America. but think America, and behind about if I think around was or in question, North weakness there little a [XX:XX:XX] I think to lot quarter about was were the related of it a you hear a shutdowns India

and And so in the of quarter, for third really the you will. of impacted if terms levels there's it maybe, know, reduced activity quarter through you halfway resurgence

how driver. months. the XX, that's what over really So as think see driver. that's we really, But XX we'll And we primary see really it primary next the goes the

As we things back normal, return to things up. expect to pick

Jeff Storey

economy uncertainty of data. think and Certainly, Europe fundamental We that's the applies Latin. analyze and on changing. there's and that And But our need act our see of those covid with acquire, overall customers associated the I really that all to don't with our [XX:XX:XX] to near-term drivers business, things. coming. business, and in But

think near-term capabilities past. couple So infrastructures, cyber the best our with we will world's the one important those of going forward, relevant very customers. to And as are uncertainty we very looming platform get this

Eric Luebchow

you. Great, thank [XX:XX:XX]

Operator

please question Muffat, with Nick, deal next I'll Denton, the of from go ahead. line Nick Our [XX:XX:XX]

Nick Del Deo

Thanks [XX:XX:XX] questions. taking for my

expected. the seems have shape You Lumen know, Jeff be would making in than recession, to know, you better through it many

know going of we be influence goal trajectory it likely that your of how company? and when the we your to ahead, business into when know, view as in growth EBITDA the You does we're look

Jeff Storey

things [XX:XX:XX] that very is, to Well, position we've about decisions of pleased result of as we the the in we're some of were investing. made years, is this, of we're great a last one keep that through a the investing over couple

investing So if edge cloud Neil referenced minute we're of that a one at look in in strategy, investing that answers we're people. our his you deeply ago,

edge to we make place cloud We the that our customers. right have sure dedicated for have in capabilities hundreds people to of

continue of revolution, business. created. in able see industrial looming data again, and of as them So And deal help being customers the is of to amount the compute advantages with know needing what fourth looking the to usher that how grow data. at distribution we're we resources and to really the this investing want but that through our to cycle, quantity the are they few where We the exactly the milliseconds platform a have within

connections, service edge connections our product, so And And compute a which data are software want provider, that to them. dynamic provider. a capabilities. helps also But to service network cloud our any they know to essentially that that's where is service we as as be able any a dynamic transport

think forward us from today have layering perspective, that. and place on capabilities grow in a so revenue the products, to continue of great going top fiber the we that and that positioned we're to focus network really And will we infrastructure on the from a that

Nick Del Deo

And calls what quarter. and low rebranding you in then was millions and said sequentially. else that this you quarter? last just Second, quick in called percent expecting And Ok, pandemic have revenue function first, know, on? something cost three at housekeeping up transfer infrastructure, dose out is so you XX for [XX:XX:XX] also installs the decline going enterprise third, next for of the you of I about Neil, the the tens ones related are looking Is or this quarter a to enterprise quarter? what

Neel Dev

operating inefficiencies estimate, [XX:XX:XX] about So are It's is the pandemic of this a environment. think think related. they there got lot on you if high a really it, level in

I front, we're the offsetting offsetting growth, can elsewhere. sequential branding of is several that, but with that tens a down. with to see, side. probably the on be other next Similarly, brand is at branding in as savings the a incremental, slow We're to net these to millions tens mind not to amount invest are levels, right, going millions. keep with going for that But continue in It's similar you important EBITDA savings. on are quarters, probably of the So think thing not similar will

the of you products, it's another, one segment. in in and been the time There's mostly installs. know, our approach So terms settlements that's especially always a and a wholesale wholesale in but role,

So by there driven that. fluctuations are some

Nick Del Deo

for [XX:XX:XX] Ok, thanks that detail.

Operator

JPMorgan. from Please question from go the Phil of ahead. next Our [XX:XX:XX] Cusick line

Phil Cusick

guys, first, Hi, Jeff. thanks [XX:XX:XX]

prepared you new consumer. think said a bunch can sounded and see you activations? the in I in on in but second of payment you But hit remarks, build Neal trends up, to SMB fiber then, out churn expand we've all, And of hasn't ominous the the what times past. the bit picked on a had in topic a

their to companies cherry have footprint. parts there's microtargeting, pushing getting their doesn't for Thank difficult You harder this sense about Why are women? target And that an much building post-bankruptcy, of entire build picked but more you. penetration. of for talk a their markets, number make history increasing and fiber to those planning

Jeff Storey

[XX:XX:XX] Sure.

around want be First of as any of my I don't ominous. comments interpreted all, to SMB

that. sounded if so something I said And that I ominous, didn't mean

massive sales a keep Let did I in business of what But their either. not seeing me we absolutely to is SMB. pickup activity not critical what you infrastructure I lot seeing them We're mean, businesses. is support the that tell which we're seeing provide churn and in to we're

to the for at selling look to CenturyLink of plan going those we're wait our them. in legacy back buildings buildings, fiber to you the to new and have services If some new before know, quantum grow you customers get outside brand footprint to

very that and that nothing support the But churn through in the we're those And term time, our a they're being that. creates a it from the So going think for there's hard of fact sales cycle. with ominous we're that seeing businesses. uncertainty near more them going than we nothing do nothing, cognizant level pleased on. to activities And we're

that. to the Before I go picking, the cherry one

Neel Dev

if look about our year it average third of was the would prior year point six. quarters, the roughly percent. note at that it you eight you down five I at quarter [XX:XX:XX] just over look revenue, four was And if

so Not on really because put to and know, we've that for making of that. there's standpoint, on have you somebody if turnaround up the we're feel well. payment plan And has have issues made think, not SMB. So that performance also been we're much much focus of disappointed I Jeff's about terms SMB, we fairly as holding good a the context comments because so we little question, in a the you we're the no investments that traction from

Jeff Storey

to [XX:XX:XX] and And our investments to doing is the get on return I respect penetration. at cherry drive We're I investments with picking, our describe we don't fastest where what return greatest the cherry picking. looking can wouldn't we're on

going out an building out so that And building strategy footprint. smart and a it's than entire for just out rather

investment. prioritize business us at for our Let's help to grow look how what and to grow to where that that sense makes

on I business the so small side. I as And on picking. don't it the I view don't cherry

want We have footprint. XXXXXX and every to to our our buildings that in definitely are I one those those in on of focus business let buildings customers go in buildings.

long it business where customers. a do right of of for on And or network plenty There's where customers. and fiber is limitation and have to now. opportunity advantage go even not strong take those we'll build where stronger so And our that. support types we make to to that's business, we our it's of can consumer market And whether

Phil Cusick

you. Thank Thank you so. [XX:XX:XX]

Operator

Barden of is from question may Bank from next line of America David Our [XX:XX:XX] the proceed.

David Barden

in taking collaboration of thanks have related voice I guess guys, I to the for Hey, much is the so aggregate. the [XX:XX:XX] questions. first question kind

of be? surprising I will some quarter, elaborate the or I transportation the and what this the to to contracted. most seems as quarter is evolve could was then the think you upside if there is Thank outlook for to know biggest in to like you. guess the might to outperformed were and upside to whether question the going quarter but how do us this second kind I related specifically you infrastructure last from I that it of revenue one a a about to of little category evolve? give sense contraction timers, the division have the And that kind quarter how enterprise. peak you that Q surprise this think of it how was wonder that it could is bit from color

Neel Dev

But that traffic. we lot go comments our I key the from [XX:XX:XX] volume So, if you collaboration, at collaboration expect in you the environment last you up us, and last and a the started we're related as said in at not point home, needs to that covid folks is ramp wouldn't is quarter, from David, is we think boys a working because our, etc.. of if more that know, surprise it that more back was look and look

upgrade teams network stare folks and they spike in different traffic their where product that or Zoome, volume, networks in there to figure broad with to to how their So ways, when infrastructure, that a come traditional up an portfolio. Microsoft's underlying in support etc. huge need But see that's transitions is a voice out we and

been helping. we've So

connectivity within the transition of terms more need. needs that in see you'll portfolio customers our So

demand products into continue And Now, for in it of general, There we drives products services. one, well forward in one of is, that's transport in not definitely for have infrastructure. four, going infrastructure and product broad other one and voice the but fluctuation legacy in very and we quarter, are products that for a us. expect other as out it's know, business. you that doing any portfolio other. terms But to The the see we'll given given trade-off versus of

David Barden

and up through could to whether one companies renewed of went value you know extract you value. identify do in a of an follow I ask process, assets there's this you in fiber you process? try that know you been there kind Are to maybe Neal extraordinary way in XXXX through to healthy think company assets, in process that but a the try extract question, there's open to opportunity very transaction Thanks, and a [XX:XX:XX] this a themselves. And interest to I way? went Jeff, I was volume if from to that level

Jeff Storey

yeah, a whatever I on won't open always any particular but business. to make for we're sense piece makes it. We're comments open to our not, or [XX:XX:XX]

whether grow on We the at to on we have enterprise We have assets, assets. side think consumer it. continue it's invest, We think to the the to side. we these look or ability great

going to sense. We'll other to point some makes And do at structure, that is some look something we're so to. continue that. If

David Barden

you, Thank [XX:XX:XX] guys. Great.

Operator

your ISI, line our from proceed. open, line with of proceed. next Radcliff, sir, Evercore guess the James is Mr. I Ratcliffe [XX:XX:XX] you is may question may you

me? hear yes, you Yes, yes. So yes,

James Ratcliffe

what the versus at looking and the quietly how taking your and for South thanks take Jacqui. Talk Side comb Great, the and caught the you're really there your me to breaks how edge much of banks? about neighbourhood, [XX:XX:XX] truly and state, that down opportunities is opportunity to on position and against city, cute question, to Edge etc., EJ network

Jeff Storey

[XX:XX:XX] Sure.

third is this party stuff. from all, of First

can So it. you take

XX have third billion it's to take be somewhere to their and You of parties. but estimated estimated It's the dollars’ coming range, it's between broad over years. XX a opportunity worth the over

so which though, without closer that it's data on centralized need time, they the around. away it to big. cloud, is. and So compute We've faster it resource means, it where can it What around is and we acquired moved from it moved data computing move that enterprise centralizes analyze it act the into a to even think customers we it back for having very from is actually move see And where more, is long acquired. they what to transport that

enterprises of five the so I serve We of look US And on computing. benefit premise We're within it can XX think the percent of at delay. close. gives very milliseconds and edX

very we're and be to created actually close it analyzed. data where that So to is where we're needs

in don't their have of cloud also resources on data virtually. physical variety into can it ways. cloud So machines. a They can the computing their with can own We a the of we benefits do us provide do do because of compute premise benefit it on it have We computing We we move can center. it environment. can to

can if look way. where their applications control and presentation slide on them a their orchestrate applications help very we the very close is for at our and efficient you the so and customers effective to And data in created operate four,

providing our the our Lumen in what in the capabilities, platform on But or on that's So Edge that. really ultimate is it's in edge means itself. platform whether focused focused network those is

a capability dynamic connections, I service if dynamic connections, So about that think is network mentioned. has that you

that resources can but cloud using one if use control edge seamless, capabilities and a an another use redirect to way. same or from an capability can that you're you're want you you other effective Lumen, computer customer, very customer one your not edge If to very you're your computer to provider to another, in compute you data of center network

James Ratcliffe

you, sir. Thank [XX:XX:XX]

Operator

John thanks [XX:XX:XX] Markets Our the next Atkin EPS, Capital from line with RBC much. of very question and

Jon Atkin

couple partnerships kind know, you wavelengths on in very [XX:XX:XX] with, of BW are that like other or or are. some stack topic. product wireline or are brethren Azure actual of terms how of if along fiber entertaining your of far So last Post you and how a questions you I wondered

possibly You for the questions. in comes at on you approach that in these in national I peers very roadmap? has fiber been when talked one fiber the about you advantage And a where of organizationally. in take your, created it the good it explanation And to to And are any opportunity lot that think sort a of your to industry secondly, segment? any themes. gain semantic know, of change disruption some of share if the prioritization, there's Enterprise Those front, are bunch

Jeff Storey

[XX:XX:XX] Sure.

the take question, me Let first Neal.

from You the a might one and want to come on second partnership. in product

our them. the Zoom's mentioned making and we're We are, Lumen in also cloud table. VMware partners I that bringing continually know, the of the we capabilities sure the with best prepared to capabilities are platform, I delivering remarks, our the of that breed and but developing mentioned you

announce that's the customers. artificial augmented to on I And these us and relationships not partnerships. ready companies build reality to key part other drive to offer looming But capacity with selling with provide capabilities and. that but same think various to and that to network in bring through go and then our they be of the business partner productize looming One, through the intelligence capabilities our That Success secondly, doing are we dual So companies and we we out partnerships our those those capabilities with kind is other advantage and of partners platform, will we continue to also from to with I things. our able then strategy companies. am network relationships Lumen. a utilize a customers can services. expect and can platform

Neel Dev

the [XX:XX:XX] was it, but final I around completely landscape. competitive question, we John, think on hear it didn't your

We haven't competitive any terms seen change of in for fiber. really the landscape

assets As doing you we have well know, standpoint. good we and there were very we you that from really know,

a you want to was you So that question do or follow up? do your have

Jon Atkin

fine. that's that No, I your [XX:XX:XX] appreciate perspective.

Jeff Storey

Thank [XX:XX:XX] you.

Operator

question from with is. of Rollins next Our Citi the [XX:XX:XX] line Michael Thanks.

Michael Rollins

is [XX:XX:XX] just clarification broadband point a business. I Two revenues million, it Good you maybe in from the of a kind to where then how during frame your the if in to that environment. context the one you environment last four the on into consumer broadband but, that how may us back you the. of reference as know, or subscription and mix, current know, environment business review just out cheers ago, you I different six history the impacted you you for you roughly the of first, business time that questions, would long Can can know different looking similar and imagine when roughly different you be you consider the well afternoon. changes segment And put subs could, recession navigate market, the current the Thanks. could secondly, meaningfully sequential what was Probably, that I realize saw? between speed the quarter. as at experienced

Neel Dev

Sure. [XX:XX:XX]

I I I think broadband, your see you And consumer. focused we've as on our been quality of year if growing. the that at we're for revenue just back, the at that step prepared of hundred is you question in And I is revenue our been I beginning four say in it to five. think remarks really overall of improving about meg the percent XX And growing. above been my base really have base and revenue speed mentioned, now consumer has So will on was can has compared our what that last the mentioned numbers,

business to that that's of we're know part fast fiber. investing in where we very asset, continue growing competitive invest very and that and a it's we So

mid-XXs perspective. look a and XX a in is at man the average plus sales come higher cell our at ARPU at we revenue XXX very have, that from or new least that the the for in new more base, percent it's If entire you

on continue to we'll So focus ours. improving

are as of where You top that see we on of of quarter. layer penetration have Overall, you keeps there of penetrate. improving that, we KAFTA base And we build layer high and alternatives. that the quality are SOB's on lot top the where the a SOPs every revenue rural

my continue customer So on focus experience improving to we'll I focus the in be self-service investing remarks, mentioned Not that we'll continue trajectory. like and prepared and on in to the revenue we're capability. mention, to

will business the also continue. that So margin profile of

In terms on gone But the question back environment it. recession, last know, different. is at very we've you is your the and today the of looked reality

you draw important about think prior to If that there's really that from any don't how think we businesses, connectivity and many parallels to is just recession.

will to even environment, be recessionary think connectivity continue a we for important. in So businesses very

Jeff Storey

products because back, look question see no time, but answering our last from in That's we and demand experience uncertainty, with our see sitting the because near-term remember work last you for and and the the choppiness change same this and back dynamic, time. services. that you it it out if I it actually, how you That's on worked And how it out time, ladies worked that there's to know, that, same customers. we not guys way calls [XX:XX:XX] creates then near-term I expect out the

Operator

please from Batya UBS, next of question Levy ahead. Our from [XX:XX:XX] go the line

Batya Levi

of Great, couple [XX:XX:XX] questions. Thank thanks. A you.

revenue Do more these Do business? the your on a which will new they as remind that expect a mix substantially. you as the First, from point today color to a the a infrastructure? be look look a are Taxes you network cost legacy the you you remained bit bit Can when capabilities, full high segments? how But taxpayer one What products difference? bit on at they little you you where or a on a you are for provide as they have and and to to current in stand mix grow terms between talk transform mix new low. us more Can also in do will invest starting we quick mix? on your still is investing continue cash. allocated very coming little of be And you at Can segments. level have and certain shared growing about own will decline? our their

Neel Dev

with past start taxes. the your I'll So on [XX:XX:XX] but question,

know, that. a we expect don't be You to years, two analyze to we taxpayer have material three so the for next to

The in you revenue now of mix. dynamic is describe right. absolutely the you outlook So, that's right terms know,

continue terms we to what to fiber doing we infrastructure close products legacy We that erosion investing will will that growing and that know, affinity with see that will we're products is in that infrastructure and infrastructure. continue. the hope infrastructure good on leverages of driving given a with that things different addressable gain, traction emerging All performance you be described our have, we are have, that going revenue market But in we services to vector Jeff forward. that that the opportunities in the

how segments. quarter year, in our we in the and say more thought next terms have in We'll get So that to of report is terms call. what of focused more we're on that, earnings fourth that on we'll essence,

Batya Levi

thank [XX:XX:XX] Thank you. Ok, you.

Jeff Storey

France, [XX:XX:XX] more one I question. have time we for think

Operator

Very [XX:XX:XX] good.

be will line question Lauthan XX. from last ahead. go the of Frank with Our Please

Frank Louthan

be How Thank or strategy quantum get mostly there [XX:XX:XX] of territory? our in will of TAM the If big how out aggressive Great. light the Thanks. you. What's that it out you is can footprint, it's in terms the footprint out revenue? of footprint? a also expanding of

Jeff Storey

and without it's we in Yeah, infrastructure. a not to a we to getting the win where have into specific and tabs, build footprint ability where ability have the strategy [XX:XX:XX] footprint

that are work a for are grow our them. us. done natural U.S. cities So footprint in consumer our if networks the We've with think with you footprint some to outside for

of opportunistic And from inside footprint. footprint our basis our then it'll like legacy be outside legacy a and so obviously consumer

are If provide those and you from business we services there. be that's business look And the have serve we networks at lit and to customers like the a in that that at that's about lit customers. buildings the it's looking legacy quantum the small could perspective, looking all to that

a between two. the a bag bit of mixed So little it's

Neel Dev

thank you. before for and the question your the today. And All Thank [XX:XX:XX] we you, great. last right, actually. everyone, Thanks call for questions conclude

few with summarize Now future of Lehman. thoughts about the

positions deep our really Lehman us the navigate we on First our platform and writing extensive of industrial all, the believe fourth cyberinfrastructure well to help revolution. customers

in our believe growing we trajectory We addressable markets will investing improve that are over revenue time.

strategy sheet, is continues allocation free capital balance with grow guiding reduce cash Our to strengthen aligned flow our per our our to share. interest expense, and principle

all strong Our activity. cycle invest us enables of through this and to position this through liquidity

That joining position concludes thank the the Our call. dividend you call remains comfortable in interest operator. your I in with a in very appreciate payout today everybody XXs. ratio for and a Lumen, the

Operator

We disconnect like service great you for conclude conference thank using Lumen does everyone conferencing that have day, everyone. and call. your Technologies ask for the a This you. please Thank lines would today. [XX:XX:XX] your to the and We participation

Lumen (LUMN) 5 Nov 202020 Q3 Earnings call transcript