LUMN - Earnings call 4 2023 | Lumen Technologies, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to Lumen Technologies Fourth Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded on Tuesday, February 6, 2024. I would now like to turn our conference over to Mike McCormack, Senior Vice President, Investor Relations. Please go ahead.

Michael McCormack

Thank you, Aaron. Good afternoon, everyone, and thank you for joining Lumen Technologies Fourth Quarter 2023 Earnings Call.

are Stansbury, President Chief Executive today Officer; Chief Financial call Chris and Vice the Kate and Johnson, Executive Officer. On President and

statements to with include on All our be begin, Slide safe the which fourth and on notes we I uncertainties. conference to forward-looking the subject presentation, your Before considered risk call to this may risks need quarter XXXX should harbor statements and in X Slide in attention statement cautionary that of forward-looking conjunction our statements X call factors our filings. certain SEC

be financial press most be the to will We which in found referring certain release. measures reconciled can measures, GAAP non-GAAP to earnings our comparable

our earnings which found certain Relations of the to be metrics section materials, Investor today on addition, over Lumen turn for it discussed I'll in website. With special Kate. that, the cost can In detailed exclude items as

Kathleen Johnson

solve XXXX cash progress guidance, that to we executing balance and by I'm needs. And we mission around customers our networking strategic both key improved new an strategic we're sheet. by EBITDA with commitments. Mike. afternoon, I'll on our excellence that us growth delivered everyone, with with that and igniting thanks I priorities. restore including for ago, our a Lumen's pleased to next-gen sheet, material significant and new XXXX progress start And joining for the shared that was in executive their innovations provide on reset to a delivering help the only excited on today. We we making transformation. A vision, newly but our flow redesigned company. this culture. turn team outlined and multiyear importantly, core not Lumen XXXX confidence big financial year aspire programs on year new on strengthening disruptive made the I'm Thanks, our results, to free business business and balance on priorities, with a Good update and report now delivers execution

access January, number that entered The an of new for maturities business and late on As of revolving significant our we facility transformation. All financing into beyond our indication to $X.XXX support strong with creditors and of in right. and to most extends operations. billion a XXXX of injects have business our our a us debt strategy, new agreement a us bondholders the they net approximately executing announced confidence our deal $X gives our broader the credit billion it to and markets we to clears into the allows our energy It's turnaround. that the in focus path of debt our

lot our So business industry how we're other growth is American work left we competitors. as do, have North of to progress going? to While the evidenced pivot by a compared performance seeing to

peer all distributed deliver hybrid networks industry. In complex digital and Gen legacy their environments wireline group that with whether ultra-low compute positive X economy, think of multilayered, away QX XX% straight due users, to our AI, speeds, emerging and was second alone performance put, for While segment or today's believe only like decline large QX the the we stands execution. our business our others quarter. for companies capacity data a blazing from Lumen how telco roughly year-over-year, the to breaking business saw Simply X.X% workloads businesses technology digital technologies and revenue turnaround both it's revenue widely We latency, year-over-year. edge fiber declines is to massive fast strategy services in about environment. in are in secure proximity multi-cloud Lumen's growing X% or or need

to digital importantly, these platform wireline harvest our fully go-to-market new capabilities is building business competitors deliver a customers. segments cash, them we're approach get their to And there. Lumen our for tailoring important While to

over commercial with procuring customer a start our little customers in into and progress. creating go-to-market base world-class customer excellence of execution segment, to all In execution, dig let's a go-to-market tailored I'll that deeper So the experience. XXXX, efforts digital driving sales each is we Business about segment. approach our surprisingly, with better to This which XX% This our sequentially to new focus us driving in and the logo America and provide are it's sales customers X,XXX execution. North is infrastructure. And communication tailored allowing where year, increased we and sales our meet path enterprise, they unique modern better by QX. added customers not

year-over-year products QX, to grew double performance. XX% year. quarter-over-quarter seller full sector productivity June, and and momentum, the XX% for bend segment the existing increased this for to market we simultaneously revenue strong that grew XX%. tenured productivity this will Year-over-year, segment our sales to digits segment we to the establishing With by QX be revenue in sold think by the we customers curve back public sector expect public powering our Grow XX% and we while last growth. Specifically, more sales first dedicated the increased go-to-market direct team suit. Since And force in we mid-market follow

service sophisticated scale market exited and Uber, can in who company's taking that digitally chose their we native both accelerate outperforming Lumen's growth Importantly, greater and growth share Large ensure In segment, they winning IP. SASE rates to agility. XXX-gig we're by business with recently companies Enterprise our Wave and XXXX with like

Okay.

This strong. were up for Let's of program second and all renewals most is This turn in part we're QX, the about were disconnects, XX%. up helping And making challenging migrations The usage. good turnaround sequential our migrations year were in enterprise, X%, X%, to securing women's usage is the news results renewals, was progress executing up us end up the sure. large the installs, and shown is base. Installations for half. and XX% mid-markets by

the customer right to and action we're on satisfied part the and that right determine using focusing performance each analytics we'll in improving help this unique turnaround Now of said, and time. be here just not for our data AI at

sector state-of-the-art processes is systems experience. starting to stages, operations our work. Time IT and process to seeing and we're in improvement customer about assurance. of XX-point redesigning Net from large talk we're initial across example, seeing And based the foundation cash order our Scores in did building delivery piece implement and And Lumen and for to of the enterprise North to we public The reduce AI about pilot, were fantastic our volume CX for processing all improvement innovation, in third teams XX% our business a digital while by DIA, products. a signs customers, all job commercial XXXX, The Gen able growth. products our or already American Dedicated for Access service into time we're one on Internet of still highest for infusing in year-over-year Promoter innovating And new impact. excellence order

this fueling leadership, valuable announced world-class the for see as and we a Technology Dr. and, part us major highly brings we as of to recently engine. Dave joining the Satish Ward a And innovate, provider. Talented executive to is be and Dave long CTO that Satish take for and has of disrupt investors. artificial network. the served customers like to product last of value Lakshmanan comes will Lumen industry intelligence just our most visionaries value because well Product important Officer. from we PacketFabric, potential Network-as-a-Service announced an successful major way. fiber for As advantage services morning, for of In history several customers are our a Satish CEO joined And Lumen therefore, that report our having and launched Chief create XXXX, development that Officer. of AWS month, as cloud, as and I'm Lumen they and that our on Systems combination innovation Chief delighted with Lumen are experience Cisco digital Dave co-created new our joining

to are Our vision digital customers enabling empower across innovative environments you simplifying to secure digitally we'll on-prem, understand platform to this AI-powered it, services. This trajectory. help we network latter as the cloud platform for leverage the consume colo onboarding will half growth In better reporting enterprises Lumen our Lumen build new management digital applications calling is customers our and costs. to and save while seamlessly allow to of network to year, share also

Lumen capabilities a the Let platform. in me few highlight important digital

NaaS. or Network-as-a-Service is First

capability. solutions with continue availability connections. just We of NaaS private NaaS offering enrich announced last with the X we new And week, more to our

timely, As a recent transformative, customer it such solution just the NaaS but highlighted innovative untapped Element potential of not Materials was remarked, Lumen's solutions. network

needing simplified, the a our ExaSwitch for must-have interconnections the direct extremely soon to high-capacity and to Another the see fast Lumen it cloud ExaSwitch, scalable be direct excited and and breakthrough to as ExaSwitch highly Lumen It's any well is And new can they're eager Microsoft for performing market. originally corporation solution sees high-capacity provides, digital shared, optical capability platform as in intercloud ExaSwitch switching expand value platform metros in XXXX. connectivity. low-latency, peering. for that they

security. Lumen Finally,

to read the and incredibly have U.S. the disrupted United the the for proud in identifying helping team our may safe. hack Post, keep had infrastructure. major Justice announced DOJ effort States the the I'm Typhoon of Lotus threat critical Chinese a by used botnet You government-backed by for Volt Black that Labs this Department being Washington to of credited

Soon, some you'll valuable with see highly platform Lotus digital services. Lumen Labs Black the security powering

We're be digital $XX in company bullish getting available our capabilities clear, the will have on pivot initial net to the around that to in Lumen access to And platform just billion Lumen give new Now started. impact the on market. we're grow. helping

business investing Finally, deploy penetration. strategy evolve of where our and with markets, the capital the we wisely across continuing executing driving let's see to Markets. Mass portfolio fiber a of goal market cover opportunities our We're to greatest

Some share our similar fiber to more maintain and Markets, our than rate to commitment XXXX. by in about that intend we locations Mass XXX,XXX quick XXXX delivered notes robust grow network to in

last is a up, and the weren't company we that I and we the be we of now is satisfaction. One by pace our notably exciting is industry in the as priority. net we QX shown That's performance fourth December year-over-year this And this adds certification. Fiber to Quantum the people see to constant know to sure continue is delighted momentum customers why customer best all the we to alone, awards, innovation quarter-over-quarter Quantum company note, both talked XXXX strongly most X status, happy record Promoter high marketing through market. closed change won the that And just we we in hold gaining In as multi-gig with from WiFi to sales product and up maintain January. our how improving in were continue our Fiber important sales, culture X with engine transformation. first While year and made supporting different finally, plus XX%, about Net achieve our Score U.S. rebuilding quarter the culture

Companies Telecom Best Report named Work World to as One & of XXXX News Technologies For. Lumen the

attract Lumen Our culture executing our workforce us a made as company. To great sum pretty through up, we putting strategy the and intense believe current supporting for as is one, this helping well new Lumen progress growth. our we're XXXX, We it for talent well. is right time

net strengthen new apprised So turn give step to to And and strategy we'll call commercial We'll wins our to being the plan the commitments struggles through XXXX. the that, on with our that our you new by all profit over progress steady while to our that our to of continue hold will balance and We'll every return innovative of pools. business Chris. delivering I'll sheet. and on to transparent co-create customers growth XXXX Lumen that access is way. And and capabilities excellence of delight our keeping about do drive

Christopher Stansbury

debt a support in provide beyond, access extend from of afternoon, new of finalized, She our $X.XXX Kate the XX% when billion a the group creditor creditors that. our earnings into provider. address transforms part through and transactions primarily money creditors indebtedness, TSA TSA amended are of everyone. also approximately maturing our structure more disrupting XXXX $X the a January The said XXXX. The has maturities billion our of broadened to to as will to new will provide opportunity spoke TSA debt amended for group and group and the on our no outstanding to in our address industry of billion how and with including than and the is agreement viewed very extend we $X our enterprise execute we to factor progress In broadened accomplishes as agreement a limiting an of an debt revolver. confidence support we speaks and of approximately success our in call, short, and announced change good in the about structure provides capital and the transformation. QX ample a broad efficient solutions a we leading way, longer This large maturities. On ripe of plan formation and Lumen in it runway creditors banks agreement Kate, reaching our to digital business capital for have turnaround. spoke women Thanks, on an amended

by complete subject We transactions expect closing remaining first limited quarter, the the to TSA the of conditions. contemplated to satisfaction in the

covering with take business. discuss Before align how to we prior like a our better comparability quarter moment fourth financial with to manage results, our some I'd changes enhance reporting and the to XXXX periods to

we're First, reporting business including channel, a international updating out our channel new other breaking sales by CDN. and

updated CDN of of CDN these the these discuss Keep historical reporting in our results, business rate. I'll the provide completed as quarter excluded of financial Secondly, updating as CDN quarter the impacts to with we better EMEA move and international of rates agreement contracts product are financial year-over-year now are associated fourth contracts other are of schedules Harvest sale our select 'XX, training fourth well our during 'XX, sequential substantially given channels. And commercial contributions than other the the the of have and and all summary quarter. the sale fourth reported growth category mind, substantially of to the finally, from our within sales the in our to impacts. from when business our we

million total Free to in EBITDA in adjusted billion billion. quarter agreements divestitures, impact was the cash $X.XXX revenue expectations quarter. was fourth Our CDN. X.X% reported in and cash $XX fourth decline was a both of year-over-year $X.XXX the of Approximately with declined EBITDA to commercial Adjusted flow. XX% XX.X% XXXX, the on margin. our the In fourth flow delivered we for quarter free due

results revenue Within X.X%. and the a detailed declined our which international business and excluding North segment, our America enterprise year-over-year for basis. on revenue review I'll is quarter other, Next, wholesale channels, our

our benefit This product quarter, we in public sector other had a group.

nature America reminder, quarter. our As fourth these our X.X%. competitors of to streams. Overall, significantly again fluctuate tends revenue a category other North given the declined outperformed quarter-to-quarter historical largest We the X business in

can vary the X.X% given trend we business continue the large digital service timing quarter. to year in product quarter. as over results Lumen expect to of legacy and infrastructure impacted revenue offerings. Large was declined the enterprise ago performance lower fourth any widen by enterprise and wireline revenue While other between of at our divergence in Large this providers the time revenue revenue also benefiting quarter, expand we

growth year-over-year Grow moderated. rate Our within

We expect overall in we variability trends as continued toward drive stabilization.

Mid-markets to lost one very on for and moving a Now is and mid-markets. area. Revenue declined to X% we had important in this considerable prior year-over-year. important focus investment where us share channel our

We and and to more are ordering leaning products make with provisioning channel this tools buying frictionless. into

strength as the declines a interested in in Nurture SASE by improved, leading As flexibility indicators both expect and higher improved of revenue, XX.X% the are revenue is given share provides. Public and mentioned Kate revenue, mentioned, ease and Grow other earlier. we taking Trends continued IP and seeing in offering be it products. This primarily year-over-year. grew extremely our provisioning NaaS will driven channel we're sector that moderating in

will the when Over asked to see public U.S. XX wins. big USDA, with benefits other to Postal XX have and past signed Department us Service, Defense start of the investors of months, sector the the the contracts we the

other to deals strength ramping services. diligently our revenue deploy demonstrate, As work these mission-critical to we results we and part due in those seeing are as

majority with other we'll to the to related confidence first represents each visibility sales complexity be we're the channel historical and our is revenue the high for The the to buy-side public quarter and fourth leverage carriers also generally industry's in approximately the to wholesale, longer within creating other Harvest changes detriment to instead results. Within of value arrangements. XX% which XX.X% pricing XX.X% rate sustainable install to to XX.X% we as In are Given return trade The also the contributed have of deploying these in sales solutions sector, the year-over-year decline. and drive while products, been cycles delivering volatility and between the sell-side declined customers. the negotiate has of declined unhealthy our comes of wholesale of to industry, and opinion, often bookings, balance industry majority on we others' to carriers with growth. Wholesale actions of behavior incremental revenue year-over-year. a from that our customers and of results our

fourth will other the cash. Our EMEA 'XX. declined for divestiture Harvest of CDN product International continue our continue will over likely to revenue contracts and an area year-over-year and we and sale the business in by driven is decline revenue quarter XX.X% of manage to select time of the

approximate to Moving IP within Grow services our Business core and carried particularly Within enterprise our revenue categories. dark we based infrastructure results in proactive categories and Lumen. expect revenue product channels, experience these take channels. technologies. to on provide by in X.X%, XX% uplift margin customers XX% represented newer direct headwinds colocation an life for which fiber. driven enterprise reporting. I'll our actions for These continue this North customers' value Nurture enterprise in strength our total Grow to reference our cloud we an to as of America customer steps all product our North lifetime across America approximately segment improve cycle quarter. business increased and strategic migrate represent and Products Harvest, and growth,

reflected carried declined declines continue within be products segment an decline. our continues VPN represents Pressure that XX% TDM-based our will take positive XX.X% services. X.X% be are North and Nurture As to Harvest in Nurture impacted legacy to year-over-year. other Ethernet initiatives our and indicators and margin revenue it the and Kate leading revenue time by some in we products quarter. mentioned, results. drove XX% our voice this to see of services approximate working Harvest declined year-over-year. negatively Business about America direct for total enterprise revenue

to in Now discuss I want detail. more minute to take a Harvest

very our as margin approach of customers some in Harvest other utilize that to profile the newer contracts result These customers Grow and non-regrettable and to are net cases, on much which our carry margin off-net to customer a have tactical technologies. different cases, portfolio, can will margin off-net. we well We as a mixture are We in this contains a dilutive. migrate to cases, seek churn. In some manage in re-rates

their within and customers Harvest existing needs be with quite profitable. of set services. Another are met can

and customers, enabling year-over-year. drives for represented approach optimize approximately to Harvest pricing these revenue us product return XX% XXX points fourth each basis data-driven than Our America our our the of less enterprise improvement strategies in of migration quarter, an our profile. North of

total carried XX% Other direct revenue our segment, XX.X%. approximate Business For an this it grew quarter. margin products

sector As in earlier, set. this I showed public product mentioned particular strength

Now Revenue Mass moving X.X% declined on year-over-year. to Markets.

fiber exposure year-over-year. other improve an with grew broadband broadband Markets X/X Mass Mass revenue. legacy XX.X% and revenue our Also voice to XXX-basis-point to note approximate Our continues revenue approximately represented that Markets of and services reduction

During enabled X.X fiber million December were as total our the quarter, bringing to approximately location broadband XXX,XXX, of XX. adds

to quarter. mentioned, quarter, of bill $XXX,XXX this our our penetration a increased and the basis and penetration at Fiber XXX,XXX. the sequentially pace Quantum our during stood the total ARPU brings same in approximately fourth was flat Fiber this fourth added approximately year. was And XX%, XX%. copper on approximately year-over-year broadband the Fiber the of legacy At we to end $XX XX,XXX Quantum Kate and As maintain intend we customers, quarter, to

XX%. of enablement cohort penetration XX, XX-month was penetration cohort while enablement frozen XXXX XX-month was at our frozen XXXX XX% our Our of our December

Turning to adjusted EBITDA.

was of commercial $X a the totaled billion select this $X.XXX CDN agreements $XX ago year-over-year net EBITDA The to a These year business, this divested million included of million. EMEA from XXXX, fourth $XX million items of related in million the the divestiture the items $XXX Special net and represent quarter headwind EBITDA billion a X% quarter of related headwind of quarter. from net impacting quarter of For post-closing of $X.XXX the decline. adjusted year contracts. benefit sale approximately to fourth compared adjusted

fourth the of company $XX Our $XXX generated margin Capital fourth free of fourth expenditures for flow And the quarter. XX.X%. the quarter XXXX XXXX cash million adjusted quarter were was EBITDA million. in

Moving outlook. to our financial

to expect For the the billion. range full adjusted year we of $X.X XXXX, to EBITDA be $X.X billion in

significant X% initiatives EBITDA XXXX includes organic the expected XXX-basis-point Our hold. to take organic from an our decline outlook guidance decline, roughly X% improvement transformation and in as included a our

outlook capital to Moving other metrics. and our spending

full expect of we expenditures range the capital total For the XXXX, $X.X $X.X billion. year billion in to

million of expect generate in refund quarter year million We for received million to of tax includes during $XXX an the first year. free flow to the cash the this and $XXX of this range XXXX, full approximate $XXX

cash And of free we've million expect interest be cash new or by contributions initial analysis, based flow to to XXXX our in pension required an versus do We XXXX. $XXX to agreement. incremental planned XXXX. our TSA any have in higher impacted related We not discretionary on million interest expense included $XXX fund

with special divestitures. terms cash expect other transition net for the In of continue for impact items dedicated to for services services support XXXX, income to our flows. will in material be costs these to The third-party no we reimbursement

in the of addition, we TSA to related meaningful agreement. and quarter our execution of recognize to first In charges expect negotiation the XXXX,

move to housekeeping Q&A, Before just couple a items. of we

bonus expenses. has to the the payments timing typically prepaid related please that higher expenses of remember other First, first and seasonally quarter

around are on business. With business I is in the and detail, forward. further happy the financial as Mike. we now to would that, discuss TSA be while oriented to we Additionally, announcement turn to our over recent results we to it questions Accordingly, the move prefer our focus

Michael McCormack

ready Aaron, for questions. we're

Operator

And today line Flannery Instructions] comes the Stanley. [Operator question for of Morgan our with from Simon first

Simon Flannery

with you if through quarter. just could help wondering revenues was updated us the the trajectory of I

first after acceleration I some half past, talked a second about think the noise. in half you've

that your remarks. prepared didn't to talk really You during

think other in How OpEx there that been some through the updates the then taking? color should and does quarters savings the recently thanks about on some of great. we the OpEx. from How XXXX? for would be And severance any flow that So actions QX of you've

Christopher Stansbury

revenue other would and the to we implementation mid-markets but sales the And harder the a through we as the to expect in year. side, Obviously, to the well, of year one continue more be revenue can as accelerate choppy, to course a well. that's Kate's conversion to channels to we improve public wholesale see continue predict. the Yes, little move over to point, we from as so the Simon, improvement expect sector on

As it that be took to the action will relates this and quarter-to-quarter. expect fairly It's we OpEx realized of I year full related most are savings to even a will be last the would that year, year impact.

Simon Flannery

Great. And just not to extent sales on the next I CPE know, other that that mean quarter? public sector, was don't or I things including, recur number, what QX may

Christopher Stansbury

commentary So deals associated we our recognition bulk I last and the we did revenue with the from in the quarter, to say announced over big that of the say our product revenue relates impacted public really sector it. confidence the installs other would that XX to fourth that's those months. around XX

Operator

Our with next from Levi the line comes UBS. Batya of question

Batya Levi

Great.

the with were mentioned we tax had conversations how that other of seasonal were expenses we concerned first trends, of shaping are you And just quantify follow-up lastly, the bonus another maybe XQ. how about larger Can think upcoming think maturities is more on sales should the those credits quarter? you funnel or recent about the depreciation hold. range on enterprises you taxes, Can if for some And of some about should up? extended? provide color conversations maybe on the enterprise earlier, kind you and the On clients and a

Kathleen Johnson

have our and Chris. clarity focus X give to the that It one and great on without of The handle question. this the I'll customers It customer and TSA ability efforts maturities shifts is the with -- debt to other 'XX. amended pieces basically to the transformation conversations. provides having has been our updated for conversations Batya,

And so relishing we've really that. been

and people that that our productivity pipeline do place sales driving with with and world-class to for positive a AI has terms sales and customers that. like lot and put we've are with conversations in platforms things Our growing, of in excellence the and of supporting

a in think we're I Chris? spot. So good

Christopher Stansbury

with we on expenses that from gave our charges the it. net taxes, guidance, to amount the tax impact a and is best on transaction, can the with feel standpoint look special onetime income ETR Obviously, And Yes. cash sensitive. associated debt at way we an really be the

So to cash where the tax chose that's we amount. guide

in momentum it that be we're there, to the with that's the $XXX on but we'll relates if to everything was really enacted, legislation. and us annual We Again, $XXX As around the to range benefit million pleased would that. an million to basis, expect wait see. out have could

Operator

question of next Barden America. from Bank comes Our of David with line the

David Barden

I guess two, if I could.

return and that -- of is you the quarter million onetime quarter, free the attributed to fourth guidance to of The first growth, kind TSA of be to fourth does today, presenting just what have successful in would could to kind third from the given quarter number how But impact cash it's that second would back this be was question that Chris, maybe the when -- it around some put the we not guardrails of first of appear outlook up a conclusion flow Most growth would growth iceberg to you're up should how another it's sorry $XX here be go which $XX going to there? And quarter, all to assume public of tip to third say the turnaround, Where you that was the million. begins? items. sector.

Christopher Stansbury

Yes.

around have the here right, we forward, growth last first. David, and helped build into installs from those contracts we year, last some as But over quarters, the their So in as big we said the certainly I'll you're have continue there answer themselves Again, us. benefits repeated look to that see were should of the onetime sector part couple public pace.

as we revenue cash public costs. it as the free does guidance, to increasing be relates of do here. And sector we to So all expect forward TSA the include go it flow from

tax give line free sight in closing is successful certainly $XXX in be included hit is We'll part of doing gets may of the that So cash that that more impact million But flow closure to finalized. around commentary refund and QX. in guidance as think that means we've got that QX, that. I confusion it and contemplated, the

David Barden

offsetting the perfect. are Those That's helpful. Right. forces,

Operator

from next Michael is of with Rollins the Citi. Our question line

Michael Rollins

questions. of couple A

first give of at And $XX.X and time, we Can current range? XXXX. then months range us it billion guidance at of the is a from the also update lower some some developments of back to can how is, to the the $X.X should to one slides few all billion. to look The an got you if $X.X to influences billion the range back, for was go the after that versus think Analyst you billion remind $X.X just this revenue the originally I billion EBITDA on Day you $XX.X us billion $X.X

Christopher Stansbury

Yes.

So things. a few

Investor and QX our versus the and that but size turnaround certainly, concern. in the were debt that calls, and least, concerned. in the And pretty customers our particularly refinance ability Day? particular to I that, QX sale just tower to was execute the EMEA Lumen the last of overhang changed and on the the debt what's clear, time were and sales, of think, debt discussions not of business. Obviously, 'XX We the the So CDN impact that

for momentum positive that. with behind negotiations And So the there. we adjusted see us, we

want to that. the point, that's revenue, guiding forward, revenue I and to be we're try we too a some at turnaround. go choppy channel piece see totals say would going just is relates we be that to conscious as early. really about it's it point this at we this do, to that and to is As predict will because hard easier revenue not predict transparent It's little But to when give expect confidence channel level what would to of a by with to

stick and have that. control to levers So around we pull EBITDA obviously we've more to to chosen more where

Michael Rollins

talked the services? strategic the about strategic and past, fresher show that where the churn opportunities into second, the additional developments? the revenue. share Are customers to Can able to to And some some to convert of of then you've more in numbers legacy able proactively migrate revenue details quickly benefit just there you being or you're financial some maybe

Kathleen Johnson

step. that at the we using to fashion So productivity customers of out a couple AI one, things. is do of number to a in reach programmatic There's, first the outbound -- scale to drive the calling

made progress factory the there, we've lot of two, taking a together. migration approach. platform a so putting And Number

legacy migrate best solution likelihood in and the each much we doing meeting of and the them that they as customers and that of and them can them in approaching have in where are on, to fashion that terms understanding then platform behavior what signals automated for churn that they possible. drive to So are cohorts as an

All 'XX. of we in chassis the that is built that

to starting migrations, making and and in we with don't in numbers had the but we're doing progress outs progress of significant -- report on, cetera. in some pretty QX, we et reach terms Now

it. get a we teams a monitor and those stability we and to as will. can growth So we'll productivity certainly of in to that continue place And share, of we way

Operator

Luebchow from Fargo. with line Next question Wells of Eric is the

Eric Luebchow

And focus really touch then in touch additional more in Maybe know turn Appreciate you in see just on Great. XXXX do that we you or new look as sales interest revenue is you segment? you big of could mean a a terms start secondly, been that's that generation. maybe it. bit. I story new asset a the divestitures when think, of your could on the mid-market salespeople I and out. company line little of logo to when

I evaluate? sense potentially pretty Mass making open business, that segment. the or Markets that been the Enterprise think being something you would Is about consumer from separate you've actively

Kathleen Johnson

them marketing, method first -- with scrum need our up agile, of the And circling the better say these marketing, account-based rapid All stood teams of IT were offerings that's or it's say an So starting all we segments. segment for we around then functions to we are need? customer team success, context that is in across kind we context segment this cetera. operations, with What's silos finance, thing and building to And an mid-market, stand-ups market squads, everybody can from piece after. the IT the set what -- team using need sales, et price customer indirect product how both 'XX. What's where perspective. do challenges we with net treat that to the we with for turnarounds look in or to segment customer back learning on this direct capabilities that go in tone the agile working that actually we our billing, how daily the the weekly cetera. the the because work experiencing stand-ups want say, do methodology, and and most happened happening, continue of leverage all the we more to then they et cover got because and win? about How does are sales and that other to swarm our that's What the segments remarkable we from to do it's functionality whether new feet is, set the markets, team marketplace working street the marketing reporting on no fashion of like? the a has we basically meeting other for it in And that how ecosystem mojo

and sandbaggers there's they're better So in excited get my call to, And bit chops, that's teams in thing competition. and a improvement et two I little in healthy revenue, because improvement by cetera. is, think and one. Thing productivity. bit our so We're going camaraderie coming to internally, we're our and mid-market they're basically, say their sales they always excited of the they're than I starting a about

we need the that we'd indirect sort all next where ecosystem we of for that guns and what side, the coverage. sure so on sales productivity total think is can do we see us we what I that's a that you'll is making to know partner-friendly have target platform because like drive

So do the to other you one? handle want

Christopher Stansbury

growth. the right more a pace where and about space at hard ground that's we're now subscriber been to to things. entire necessary, continuing asset really drive consolidator. on I fiber say few a One, in Yes. business obviously the invest valuable is we'll specifically the That that, and that's And asset. enormously public and an will and evaluate pushing we the I consolidation Mass What that is Markets portfolio. that's getting really continue at we why mean not and sales, very the said, about be we've to we're know would saying

few -- So sector. active some in people and I I happens positions next last think what days, you've as noise the are, seen taking with in industry around more think, that the

to we'll evaluate building as asset, down, execution So we're that and our and of we out on heads the continue focus going go. to keep value

Operator

of Next with question Deo is from Del Nick line the MoffettNathanson.

Nicholas Del Deo

got I've X ones Chris. guidance-related for

CapEx. on one first The

looks year in $X.X it billion. about this ex-EMEA. billion midpoint $X your is So for like It CapEx was

Your to the Fiber versus in 'XX. Home passings are same about the 'XX

down little reduction, like the about everything what's assuming seems a else behind ticking just is talk correct. it that wondering that observation CapEx So could some. was is bit if you I for

Christopher Stansbury

focus really on It's continued our by efficiency. driven

signal And pulling CapEx, to both will we OpEx as we a not anywhere. But it's push back so so. continue on it -- continue well as as and us of view do to don't

Markets just in improve are well effort enormous aggressively to broader systems simplification the of and Mass as will continue that as that's as There's Enterprise go particular as investing amount well in we Lumen of financial We both aggressively around experience. invest we'll year and an operations as taking customer the this place, forward. dramatically

Nicholas Del Deo

Okay.

year, for it? year last So and you or -- similar bang a CapEx that more than buck bang get you'd this of your explains a kind your for say of

Christopher Stansbury

That's right.

Nicholas Del Deo

Okay.

be in tax think kind a to this like then number. to for $XXX off? or debt code. change Or taxes. of million about guess million in And paid, point the pretty range, Okay. throwing the it the few is on transactions $XXX barring regard Is which second reasonable excluding years? any the next big a things starting I It other refund cash are going to taxes looks cash

Christopher Stansbury

what I estimate guidance want to not obviously Yes. We're right now. don't 'XX there. is doing to try

we earlier, bit give guidance, will interest important. just other the net you I -- of with though, said hitting guidance charges think I the cash we on in year. year the income it's all I here, the the tax sensitivity and little because special As gave because gave this We this a

'XX is, think cash the do pull a it at is, forward execution the modeling interest your will we different impact have under the key basically just the thing there than materially 'XX. not don't interest expense. And is we I of in in TSA, the TSA to have for full be while year

to So the roughly when it, we be variable 'XX. at is 'XX look same going and that

I that you give think I'll much -- on that 'XX.

Nicholas Del Deo

Are tax there are I'll it guess differently. items baked maybe guidance? I kind that onetime in of into phrase mind But that should we Okay. bear that

Christopher Stansbury

Yes. materially, no. No, not

Operator

Our next question the of Williams Cowen. is from Greg from TD line

Gregory Williams

that particular driving can runway and can looking is you're million range mentioned year these I in fiber there's of from that second you you markets, guide that just you this that in TSA the you've and the if typically to now the any levers just that Chris, know leverage then And pull. what's range. on at debt puts And EBITDA takes clean wondering realize year? the question some got if I'm maybe ABS $XXX I homes? you consider the some

Christopher Stansbury

and Yes. We'll more make the it capital for continue to look to ways efficient structure at forward.

That done. was So but done. we're not big we're not a one,

repeat And first question? the sorry, part of the

Gregory Williams

range, pull? levers Just there's takes and if puts the EBITDA to consider to any and

Christopher Stansbury

that things, at we same services Obviously, have. The we we just legacy $XXX some digital aggressively of of -- plus or get are And we're shift doing primary to just as right? We time, go. the multiple Lumen. we spoke felt levers Kate objective we're million to workings to we really comment internal was a service way is growing the a from I inventory, -- Yes. the the offerings. I kind experience. minus number making the revenue made that No. mean mean, of to earlier GLs, billing systems, the frankly, multiple the I of poor fixing But there. customer progress on

experience, that also So us customer that gives drive better addition efficiency get a to as effect. things more in and those opportunity obviously has EBITDA to fixed, the

as play well double of revenue the So obviously, the the EBITDA, get in. as efficiency benefit, those we

Operator

We have of with Frank Raymond Louthan another from line question James. the

Frank Louthan

timing for on some mentioned revenues be sector recognition the difference should then sort there that of a something go that Is the opportunity to Slide you and the And of you for Can of is? characterize multibillion-dollar you that? those what that Is sort the business. in about Lumen? the that think X to some of cash we wanted How opportunities revenue we Just as flow, aware public there. of? have different should potential

Kathleen Johnson

do the... I'll and flow cash the get you don't Why

Christopher Stansbury

Yes.

we're the with got and of install through really, agencies, complex working processes, deals, interval longest So anything They're public big they've takes to Frank, the and sale sector, on to kind time. we that's sell. that Obviously, their of government go

an I a to have mentioned, XX-month XX- starts revenue. to can you recognized in lag, So as until that get

it of relates around cash the the obviously, increase in pace as will that, goes As flows terms because, increase. of... But time on the to it installs

Frank Louthan

difference is not talking about, recognition difference? cash you're book-to-bill what It's a

Christopher Stansbury

question. of so massive to -- your contracts, yes. just first part the it But Kate turn And for Exactly. I'll they're back

Kathleen Johnson

customer and around Sure. X, it's digital just On here, X with things. portfolio outlined the important have Page for we platform, the wrapped totally digital everybody's experience edification a Lumen

service and get needs of integration services, digital The left first And network economics really the be the into core a and it. There they of they about digital because are The that X thought, So shaping path they kind can't I'm we're totally customer NaaS that's across interesting have center cloud. of network of more and just is are understating the that's under cloud don't way, really fast services integration, to other the the of fiber speed going bottom is process exactly digital It thing have any excited switching commercialized. in that connectivity, all here we the edge to can't this and the get becoming with any matters. core actually look the and right? I service, secure, bit think and the these for it, opportunities quick, getting high-capacity in cloudifying digital. about around a our said, to relevant Lumen services, And you total as anytime, then these we that we represent have huge so We're are everything, totally germane, $XX now and data right network that more that's digital can of a generated to a started, is relevant network, it into telco. because to is everywhere. have available ones and are here we economy. billion. any total port, of of anywhere. ExaSwitch none right, without It's I cloud, the the Think have just talk And have market couple proximity we get effortless. we'll last little I But digital muscle think that expectation that especially of capabilities order to companies is be security, users as some that at is demanding because our network. closer them. emerging to Customers top

which excited is So a net for pools, big now, going And future. the really kind very it opportunity we're growth right about we're just of curve. new calling profit help to our

Operator

Perfect.

We from Jonathan for New have is Chaplin one with the of today final here that Street. line question

Jonathan Chaplin

Actually, two very quick ones.

aggregate an just sort that And the you're me part It and focused in against industry away run just you that's separate Markets for wondering a the backdrop areas, of So just a out, that from? business, guys, looking is sense in I'm be a through sort in Chris, it of strikes that in EBITDA make that some would taking on segment be to struggling you're business then the maybe improving you're you lot us consolidation that's problem. move tough. of a you'd really And consolidation to given give fragmented you're at big sense opportunity and you whether if that more streams could or the point seem a there's Mass core conceptual the give you trends share it there transaction in exposure you're segments for a which consolidator may whether and of seems as a business to to revenue the and question generating like that today?

Kathleen Johnson

Yes.

cetera. of one think the of services you take think by can we et I'll these that multi-cloud, sure. and in And the business about complex huge network segment the and smarter as Gen integrated question. cloud, second of opportunity digital should how the providing seeing environments, I hybrid It's smarter are So interesting advantage into for an part us getting really take really, AI,

positions grow customers where we a and obsessing needs will integrate with as goes talked property focus start focused single those about horizontally vertically how got our And got that's If there one at after team, of as uniquely to that as us them. sense, as protected only and their fast opportunities We're is patents go of which to We head intellectual by we we've advantage are we'll responsibility. as is. strategically as network, because not we've look or make of they right a the I've value about, sort delivering every already on, talked time possible. fiduciary our take on this. That's of world-class about, have I've maniacally a to lot

Christopher Stansbury

the our don't to on guide we filings. And in that. It EBITDA, is Okay.

that's Mass I as split and I in you of the want is, Enterprise. I really So potential point terms to the But between businesses, where of to think Markets it what would splits relates emphasize to a We're assets. as investing value that's great. how forward. assets we're our in see that's make not sale good we first them focus, we to foremost, and looking maximizing to fire any go because the path And to

continue dedicated great So definitely the customer experience people of Fiber on going got focused radar are on we've the and that screen, on path. group very but it we're that who really to the Quantum brings, build-out a and

Michael McCormack

call. that, with going the to Aaron, end we're

Operator

please will that your disconnect for conclude We'll We you call gentlemen, a today. next you and everyone. time. you the participation great Ladies thank for ask and this Have day, your line. see conference

Lumen (LUMN) 6 Feb 242023 Q4 Earnings call transcript