LUMN - Earnings call transcript Q2 2024 | Lumen Technologies, Inc.

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

Operator

Greetings, and welcome to Lumen Technologies Second Quarter 2024 Earnings Call. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to Jim Breen, Senior Vice President, Investor Relations. Jen, please go ahead.

Unknown Executive

Good afternoon, everyone, and thank you for joining Lumen Technologies Second Quarter 2024 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 be begin, the safe in which second and and notes we I uncertainties. conference to forward-looking the subject presentation, your Before considered our call to this may risks need quarter XXXX should harbor statements factors in X Slide filings. attention statement cautionary that of forward-looking conjunction our statements risk call SEC our certain

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

exclude our addition, on be items for found special in Lumen Investor which In today as section Relations website. can metrics our certain of costs our discussed detailed earnings materials,

the With over that, I'll turn to Kate. call

Kathleen Johnson

critical several XX to economy it months. the announcement for building Lumen's pivot X noisy everyone. our the we support to contrast, past out, decades. next key over cognizant Thanks, the bit to a XX the Thanks And growth the Good the days, about uncertainty to are economy because And to X for joining. today. all there about Jim. call last in the night AI is from call of made X the in health next about the timing with infrastructure of I'm of net lots been this have afternoon, of markets takeaways

is in satisfaction. our portfolio improvement growth First, progressing customer With across momentum and Lumen's well. enterprise operational continued turnaround sales further

Quantum our We well are also in extremely business. executing Fiber

$X shift this important positive [ companies some Lumen's ] the to more opportunities, for major ] as major $X see on a and partnerships nearly of company. trusted we in earth been for the has as AI Lumen [ providing momentum market over to Second, by visibility connectivity network date the in private billion in billion fabric with anointed technology most for

Third, securing our a forging partnerships, further growth. company these seeing given in ability we're improvement transform our to significant the our profile, pivot in liquidity to success overall and

the Let me detail part give first. some operational turnaround on

described to a cash, choose I've core best on to experiences calls, Lumen focusing customers the at network to that base. our sales, securing and giving from second in look progress customer a way on delighted delivering After quote the reason performance and mid-market sales services. progress As American sat for share up enterprise with year-over-year. dramatically fundamentals. quarter, measure customer prior X nearly to continue XX% across large to see I'm blockbuster sales is to we're areas: The QX, the strong we improved North

and Additionally, XX% channels and all new mid-market large up year-over-year. sales for total XX% contract nearly was increased net logo value

Lumen data wins fiber using for large delivery Net with points XX for points public for Scores we set enterprise, function another for to unparalleled their to between and from improvement sector. mid-market our notable who New customer saw sales activity process rising build whopping custom the leveraging in XX year-over-year XX statewide waves and centers in points first are wholesale, is these network. who transaction results, To State is Promoter Lumen education a service points complement its of XX Two Uber, ensure step Mexico

higher every time. growth should growth which customer again, revenue in over and year-over-year enterprise manifest Once of improvement, overall one significant showed improved channels our sales churn, lower

once way this think revenue again, less the peers. the progress and relentless best disconnect. saw X base trends. Finally, to migration, We securing progress we than focus levers: we're to making here is on market our our compare declines measure renewals, installs, to quarter our key ourselves usage with And industry

legacy customers in find bundles on modern to product our new technologies. developing path educating and from launching to and migration our motions, continue the We best

repositioning while Two of excited of you by for future breakthrough progress how services, we're repositioning to share we're we're network legacy ways with company that the Lumen. is market real the operational And AI. growing in turnaround the our core the the in

telecom customers order other to offering companies network enterprise effortlessly. the Marzetti Lumen a our and a cloudifying industry. We're as T delivering design, Versa, digital flagship of secure adoption Technologies, companies platform and by consume across with services. to we're DXC well and thrilled securely as driving many like First, progress enable price, digital quickly, as with network digitally service our

Okay.

connected. we're The Lumen's bring and rise with data AI to private is second dramatic like what's explosive build-outs, Lumen connectivity The To innovation big honored choosing growth technology backbone, choosing for company in AI X technology be is repositioning growth reasons. to their way build firms in and centers simply other are center happening. they're that for Microsoft powerhouses fabric. the summarize has and We're several data us

partnership fiber First, world-class from with our strategic route coverage network and unique solutions with our vast state-of-the-art Corning. fiber its

positions network trusted revenue the sale in quick, of future. digital consumption AI. type the and for we believe The billion for in active growth in second, will this be and cash customers, so with secure having is additional long-term $X long to makes building that in a meaningful predictable With Lumen short term accretive of we're the list platform the we're as [indiscernible] And the far effortless. discussions becoming position us our growth and and known

going sure how the like? I'm for AI like wondering are what's look everybody deals networking ahead, and big else on Planet market you, to is these be Looking Earth,

hypothesis to going think X you. are be our I'm So share with phases. to likely We early they distinct

models in to and is companies, the and are by evidenced AI training serve data for the as first AI et explosive massively to model probably transform connectivity the AI and care I infrastructure. and health enterprises AI social leaders from inference who of cetera, technology economy, Internet responsible with Lumen a start. think are likely our huge tomorrow's simply We thought to growth with with They today's build-outs. way to next The partnering think building businesses, deals recognize tranche providers, were cloud their that their won't services, platforms, phase phase, center forward-thinking AI to closed as come they're financial expand who see retailers is demand first the

finally, the this included CapEx helping are to growth starts new and third in OpEx not our in strategic with the we in these who to upfront will guidance, view which and ramp necessary We're AI connectivity shape were services AI talking and breakout demand come these recent early our that for when on-demand Please digital And discussions rings announcements, in space. suspect fund in phase, very network and in XXXX exchanges. scale partners workloads. AI note

major continued creating me leads and engineering cost of from takeouts. X the network infrastructure simplified And product important Today, by strategic my and simplification billion wave projects that X into cost takeout piece see next them These XXXX. that standardized in areas: next provide news. deals for will announcing integrating innovation a funding portfolio end network these of in to network, fabric. strategic $X unified deeply we're the different and are now we infrastructure cost path to Additionally, rooted in of IT. from This X architectures, come efficiency standardization. We're network

improvements we a function change experiences. of employee can provides in breakthrough in step our company, that providing move drive simplification customer level inside the This the

just a more me bit the the color Let provide plan. little of on impact

enterprise ecosystem. massive our enabler XXXX. Once this the the we our services in us are massive simplification product will XXX, of network product of around reduce our unified network across we'll Lumen portfolio, enabling significantly new business, the technical codes that our ensure to is to IT. and majority to in the after count of of our thousands by from cost fabric end simplification target on a and enable This in go simplify target portfolio of Our unify savings product product net

it this example, systems management and going take is wouldn't a it To spending us connectivity our systems term. bottom to additional gained a out order compress of also few our to enduring in will and possible sales, without but like to these For a private well, which number target allows the reemphasize, to, line target the to the increase of drive areas X, for years long work to liquidity self-fund complete, to fabric billing yield we'd costs from work reduce be key our a material benefits. XX XX X yes

cash, to execute needed enterprise opportunities To and moving our we've the transformation our business team a of transformation, growth the phase efforts, the got assets. we've next And got summarize on leadership we've strategic savings world-class forward. breakthrough unlocking cost got

showing finally, mass segment steady results share that And market is improvement. delighted really I'm to our

deploy new locations fiber-enabled We year. track deliver capital, thousand enabling XXX,XXX to on QX, opportunistically continue in locations this to

over reached adds we're as of also quarter our indicated momentum July. happy fiber sales We strong X fiber in of by million first XQ from And XX,XXX. net announce 'XX to fiber subscribers our we've record level continued

our the reinforces really significant is product markets the And we're delivering also execute of a and to This to shows team knows consumer. mass well. how milestone who value the it

With that, turn the over I'll Chris. to call

Christopher Stansbury

Kate. Thanks,

yesterday, addressed I large debt in time, $XX we that completed we new I of as early to and suite the we to refinancing the new our enterprise generated successfully Before launched nearly a $X.X the hyperscaler we've by sector growth year. of Since billion AI billion to reflect our over maturities, company's moment of liquidity. $XX secured in we public as earnings announced the And And segment our largest our And to well as take in history, fueled offerings. over business. billion digital QX discuss $X access of over want back PCS our last of totaling solutions in a and quarter, billion our our customers. that sales growth extended

in we not as our X, would believe is The team over cost opportunity. X women first to the $X world-class and management None from execution and our in possible in path this starting vision. points terms inning done. a This and for recent to we're of digital are the without fiber efficiencies. We're this the developments transformation executing infrastructure enterprise AI in of discrete pleased on billion in unification in all network services. proof moving major women's reflect value pace who's our forward, of we're is and We early be on opportunity material with drive market resulting networks we growth business

the have private will our fabric sales positive clear. and are impact connectivity powerful these on Accordingly, financials

months few progress declines. sticky long-term a revenue past vast sales higher is we on new PCF which legacy just we've believe the these brings churn TAM, of First, offsetting beginning the driving [indiscernible] made

cash estimate growth. sales free will and Second, from sustainable reach cash flow positive now PCF close the cash that we any flow deficit free between received we when

have in our debt. Third, cash free reduce we ample to and transformation will flow invest

Lumen believe and sales with the in the and incremental our building network. blocks The business. view, scale is women's And the for value companies our the partnerships of to finally, of clear, one PCF And nationwide to infrastructure with resources are large provide fiber we continue believe value commercial execute a runway our We AI. and telecom, starting of are as significant a overall for a to the excellence, critical provide for creation solutions. our growth. represent all and strategic fabric the up sets see announced and innovating as connectivity base private We we opportunity goals we've of Lumen path we to core value-creation transform growing growth to on securing this few

showed As with year-over-year. business mid-market engines large this up segment, market within XX% both sales quarter enterprise segment our and our enterprise sales large along Kate solid mentioned, our with channels mid-market growth and our over mass in performance

million and net we of set all-time July. record, fiber Quantum subscriber total Fiber broadband mark Additionally, X XX,XXX additions passed in the again, an

the Outstanding by work team.

and feels impact by the business. consolidated improvements are making of legacy While encouraged declines, adjusted we the in still EBITDA revenue we're

$XXX CDN segment of billion, second total million. $X.XXX the for XX.X% to reported divestitures, due approximately EBITDA commercial X.X% commercial and Mass declined declined $X.XXX XX% of XX.X% Markets decline move the billion, results revenue million. to and of of the XX% discussion was XX.X% financial decline to basis, quarter. On free let's a Business agreements year-over-year of with of cash due sale was negative the to and Adjusted segment Now the was that $XXX agreements. to impact flow and a margin $X.XXX revenue was billion. impact divestitures declined the the to business. revenue

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

enterprise. to pivot Large growth second We business this The Overall, by expect to later revenue year. large American channel quarter. and first to declined the mid-market continue be sector to then Followed X.X% enterprise sustainable public in declined X.X%. the North

Our was continued revenue revenue. flat grow and nurture product approximately with harvest pressure year-over-year in

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

year-over-year strength improvement return other year-over-year, X% by offset our approximately grow in partially harvest. with harvest. Mid-market revenue product declines sector revenue growth in near-term by revenue Public X% and and declined offset by driven increased in

growth time We wins revenue, that sustainable continue continued with sector to the in to space. give sales bookings ramp to large this return confidence us to private will harvest quarter. wholesale this by take The to year-over-year see in line, first Wholesale which portion year-over-year. traction contract public year. and revenue of be approximately these XX.X% and products channel is the portfolio, comprised declined XX% voice which like revenue second TDM of saw the

This primarily selling are that services. by driven is telco partners legacy

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

cycle Moving X.X% segments was results year-over-year product in and to life our enterprise enterprise and declines our based particularly channel. business due The growth, decrease by our on harvest broadband, partially reference America offset reporting fiber IT. our dark nurture to North

quarter, as continue execute we to While -- on categories. vary expect our strength and results we in can sustained Harvest, Within turnarounds. these product headwinds in expect Nurture declining in grow we the markets, revenue core any

However, proactive newer uplift customers and our these and customers' technologies provide improve experience we value steps in for to continue to lifetime migrate Lumen. an customer actions take will to

enterprise TDM-based of Products to Within we channels, for migrate approximate total for XX.X% business America legacy and our total our when our cost XX% revenue decreased And American year-over-year. Additionally, Lumen's an an segment quarter. from services grow North quarter. customers business off-net enterprise margin now XX% year-over-year. onto increased network. we our will approximately represents pursue opportunities North XX% revenue. this margin segment Grow American approximate revenue X.X% this direct continue enterprise carried and of optimization represents carried Nurture direct Nurture for North Products XX% revenue help

XX.X% negatively our represented decreased North of year-over-year Harvest voice products enterprise declines Harvest in second by to TDM-based in revenue the quarter. impacted XX% line. be and and private America continues approximately revenue

Other For approximate our total an it direct carried this margin revenue XX.X% year-over-year. XX% product improved segment, business quarter.

variable tends product nature products. reminder, a these to due revenue As fluctuations of other experience the to

Now to moving on markets. mass

Our revenue broadband revenue. represents of grew approximately year-over-year fiber XX.X% broadband and XX% mass markets

our total target [ and XX broadband-enabled Fiber million to were this year. X.X adds of targeted bringing as location annual During build XXX,XXX XXX,XXX, the over our June quarter, pacing ] towards

[ We net ARPU date, also best and Quantum slightly, which XX,XXX Fiber customers, sequentially brings year-over-year. added up our this was total is and fiber to Fiber ]. to add quarter $XX, our XXX,XXX both reported

reached July. of milestone broadband significant subscribers in X a million we Importantly, fiber

approximately X% penetration approximately At the our second penetration quarter, legacy of XX%. and the of quantum our end broadband was stood at copper fiber

or wholesaling continue divestitures to future we joint our we include the As options will we business ahead, market-by-market as strategic look markets incremental cash. arrangements potential value. of ventures, of options generate Those a maximize assessment mass range its explore to

Now adjusted EBITDA. turning to

compared $X.XXX $X.XXX year EBITDA billion the second the of was adjusted quarter to billion ago XXXX, in quarter. For

impacted cost quarter in sales severance. Second our second was from positively adjusted were totaled actions to items items management. Special the related million. first overall quarter well bookings, majority margin our as as efficiency EBITDA impacting and strong EBITDA improvements $XXX The quarter special quarter

$XXX negative were adjusted cash the expenditures $XXX million, our items, Capital XX.X%, EBITDA quarter was XXXX, For second flow, margin of excluding special was free and million.

rapid we're our in network As are we've customers to leaning demand previously support facing. our stated, investments into the growth

I'd our Now have. like additional the and PCF of XXXX impact our to around color and the update financial some sales on flexibility before I we liquidity an provide outlook, near-term provide

ahead speed systems network additional in on Kate mentioned, we're and includes that more investing in which spending transformation, our customer lead full to better experience. ultimately a unification will efficient As and moving operations

to our the our from pull 'XX, Given some accelerating 'XX and intend improving line 'XX liquidity we cost profile, goals. into expenses takeout time forward of

recent significant PCF see directionally, and associated legacy thereafter. a XXXX transformation with growing we and XXXX costs and rebound below investments conjunction in levels XXXX declines, EBITDA in in revenue the with With continued sales with

call our detailed more quarter on XXXX We guidance February. will fourth provide XXXX in

CapEx Now with CapEx of a the billion moving of to our billion to fiscal $X We to range billion cash PCF gain our spending to funded our additional $X.X the on to flows some and billion EBITDA billion. OpEx associated $X as in Cash be billion. cash margins. in in $X.X interest growth, the range ultimately in $X.XX cost billion. outlook. flow. includes fully $X.XX This now of incremental 'XX to PCF year incremental on This the OpEx sale $X.X cash upfront by structure of estimate the investment an financial $X.X incremental free billion and of to as will improve range well range and and sales be guidance flow

with And I'll back closing it for turn that, Kate to remarks.

Ana Goshko

Thanks, Chris.

for Before call digital will history. At for will to Instead, pause see and fiber data we I data, earth find we to person Lumen, try shifting growth needs technology data legacy that growth and AI most is telco us the every for more represents likely in where become our What on centers AI the so decades. from in questions, acknowledge operations can and be capitalize centers to the network commodity significant organization we aren't platform Every much needs network once something wanted trusted of digitizing to open we're valuable. shifts streamlining up building to we to help explosive an one was are. need a AI markets. markets the to overbuilt data connected. be impacted. on

is This moment. Lumen's

that for we're business are the to ready playing in. This are questions. is we We win. Operator,

Operator

Rollins from question the Citi. with Your line [Operator Instructions] of Michael comes first

Michael Rollins

you on could $X vendors. respect process? vendors additional billion First, to or if Are competitiveness multiple of these the some single the Curious give color with customers using of that the solution for sales,

Lumen this specifically, conduit, out then versus the are already of new that assets for what assets something can women is leveraging but And you you helping ecosystem. just that So building from that's maybe the are existing mix there existing fiber, not is infrastructure. share you're

you of within [ margin you And that to fiber segment? consume new differently inventories ] mix time over mix look those investment continue sell PSC as this might as such some or

Kathleen Johnson

first second I'll so let take the part. the Mike, first Chris the part, handle

landscape a competitive look what I'm here's observation. So my does but first the like? bit obviously, Look, biased, part, little

They're we It's them our got crown fiber by thought care building with service deals and there that's better unique coverage, time quality it's get of Our themselves. that's for across that giving us jewel state-of-the-art because won looking far. taking higher diverse great that it customers. network was. for is routes it's always at and so the the got observation we with we've routes, positioning some and it great can of the a time. long sometimes And Most understanding we've faster the been

Christopher Stansbury

on And But to evasive really Yes. just be not question, a and you. is the with the going then complicated. really it's good economics, reality it's I'm

deal, a It fiber, deal they conduit, combination And end of deal. conduit. it's will does different how inevitably, up really where need. of existing new they go fiber, with to, deal to to existing terms in vary every from new is a capacity deal So and much to want you

And secret that customers connectivity keep because is secret fabric it want for called private it as competitive a on reason. these they that, a have disclose are a to us. our a because Now private never -- for competitive it's we'll it

on I deal we gives good but a released, average. flavor vary video think, will deal, it the that So to

Operator

question next comes Sebastiano the of Your Petti. line from

Sebastiano Petti

maybe will uplift in here? the us is Chris, flow in to question fabric driven stay you quick Or Just get probably commencement the custom is help private seeing customer that something of to gain I also the on you should -- CapEx spent sheet you're just is XXXX that the help deposits guided the us -- AI? free fund Can to build-out the just you're today? that think free the in that, think a that the about, from reflective by fiber to something that the had And cash Just expect help cash to this in sale? flow pacing? on can of that balance you increase said -- does fully -- Is guidance. think, as the trying probably on we think that you've or about addition

Christopher Stansbury

one I'll credit asked early. because the the questions you great give you on call of

[ gas cash cash this guidance the ] So both received. is upfront driven some by year flow the for of

We the obviously, it, to all deals, related we the that is PCF of did. also asset and sale it haven't received for

the cash flow. both things to those of So free contributed

received it to we're and because we here, relates guidance we from not cash careful As yet. XXXX I be again, to But haven't yet. where really go want giving the really all

build. received from as by some following are the to the will have projects. That take And the our next massive we're we time. financing more the some They again, because evidenced and year. be But year year will these point start CapEx this not spend deals, construction year, year is next on these This guidance.

So the received. we you hanging advance that of out months the tax thing go get is XX only is construction. paid on cash pay we in The as of kind

So deals. even IRS revenue likes basis cash get for paid on to these though the amortized, is a the

cash get color was through. we move that more something would that deal good. free that and I we'll So say next with, But as will year, on we that be level, flow high

Operator

Your next UBS. line from question comes Levi of Batya from the

Batya Levi

for X related in EBITDA getting the underlying the expenses any is networks? the incremental ready the at through you any think And next be $X savings over that guidance mentioned there that? some trend? that for -- change the then terms the over change billion for pacing next And Looking cost you go is cost years? to OpEx the the Or years year, to X incremental I forward. purely of can achieve these just is there pulled of will you the of expect savings

Christopher Stansbury

Yes.

are go driver things need Lumen's construction the obviously TCF on EBITDA. we in a investments support exists. But competencies, way. scaled the deals. deals. just this It's get vast It's to needs one that up of the a running of relates and of of the the get substantially So quantum the core that the size inside the group a here to more OpEx -- of to that main as lot there's make to year, factory And it of larger but majority group that to

And the driver. so that's key

key we're balance we in this consolidated, more were a simplified to And drive There our get when a 'XX it Kate it's just would -- really make As will year. takeout, to be billion to away say year give we relates networks going and investment want year. year, next there's X the what are to I from and expecting in some opportunity term going driver comments are fact $X to our that experience. customer enterprise . We're today next haven't full guidance my much for to to the we again, investments one of X. disclose not to where around can. I those near guidance and IT to I taking savings dimensionalize mentioned, cost go XXXX that we'll as stay really that have place 'XX to as if next from as start we the But trying pull on where here, 'XX until to systems, from

much seamless exist experience as more is to drives forward. needs customer that legacy go just a we today that up be that because a And that cleaned it

Operator

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

David Barden

be, much think forward to you it's guess what about share hypothesis and so you question it. right helpful I think, want for would or a not put a Chris, to want I people wrong it is I is -- tell I to super

cash deal, out So door years, this of also majority to X but of in, the to that of next is the and years. next is cash in X we've the coming cash in billion X $X the going majority X got the the the

a billion let's of So the of any getting numbers. if billion contract. $X it of under benefit inflow the required And cash contract call is timing CapEx construction and it kind the to piece, it's round relative is to that's kind $X related a we're the just majority

piece your probably EBITDA, the X revenue which $X would period. maybe $X a maybe, period, will And a revenue or the high after be $XX billion until affected, but over in video, in flow that tax-affected dollar is as very that again, is a year, your million year tax in timing IRRU $XXX billion. means That done, build ROE it million million video, of you X, about actual the just XX-year you've shared sale be doesn't as a in is mentioned margin, XX-year $XX taxes cash let's call related, start over

So a of what's $X now, into right from assessment? flow billion wrong deal that announcement years cash X turns $XX what's million and about

Christopher Stansbury

The where -- most say it I David, is I'd think, wrong. Yes, of here's we go.

about which less And roughly that's pretax Not the in it's video, the So margin. of CapEx, again, billion. margin, contribution is EBITDA just EBITDA ballpark the multiple in talked cash deals the that existing a our to $X we added up the one. effectively

cash that, come give largely these point, that the will the you do end. free on you cash does to front deals. that And flow So math associated pretax your with flow, at the

ongoing run for to the and be for they for there's networks power gives tax and front-end operating Now payments space want the would flow maintenance us us them years. if loaded. over But nice the that also cash

in set on talked from we're that fund liquidity key deals we've that So that thing in billion the cash us. so generated not the calls. net It's for one long fully here gap that older, these about those behind after-tax And deals of the it's is $X done.

this right this So now. isn't trend And will as discussions of and one we done. The there's billion continue. said, $X underway another demand

difference. key the that's So

cash laid come. more there's to So in more you've out and deal the than there's

Kathleen Johnson

it's represents additionally, different. is contract The multiple and X not very $X customers, And each deal. billion

that's stress. think I to important

David Barden

if could. that, just follow Chris, I want on up I to

majority just and So the so X press X out it's going to see next of next or also if -- X years, in cash as X in, the you years. is the to the coming the make in in release,

$X kind X. is the that this billion that's not So then release. then net following there's Is you of there's over years. that how press minority this XX said been -- so what what's -- that in a And the of income. Is of you've got -- realized tail the

Christopher Stansbury

that not fully it over not the can and call. I'm after years. in fully I'm liquidity the I'm the X. guess and fund The and now we have number net following modeled your -- of I following net peers That's gap is addressed. not next the significant do you

then time fund the that right, start But of this debt yes, with and coming. to -- longer It the there's more you're first $X frame. that's us total again, cash So and that billion transformation. much attack down and allows bundle pay renew over And the a us structure. debt to leads in to deals allows

David Barden

my follow-up. that liquidity so amount that to the the to I X talking the is deficit deals, in smaller the Great so that CapEx majority X you these disbursements, and if -- And us CapEx add to related necessary win you're to of comes breakeven, gets just next the say press of the so years, release the the -- deal when that than so equal and the about. a there's the last roughly cash in

Christopher Stansbury

That's right.

we leaves impact of that We contribution, kind cash have OpEx from deals. this that the gap David, us way, to first cash. on of that and over an it, the few CapEx to another let's the the billion, cash. it funds the modeled amount years, next the fully support said So support less tax with the liquidity of pay after-tax $X

Operator

Schneider question with Sachs. comes the from next of Goldman Your Jim line

Unknown Analyst

$X it within about I customers? large you the billion on any The hyperscale some could few Is that is including $X diversity billion then wondering And a sense give us now? color was deals. much us -- within on closed give kind customers pursuing of could maybe the of that customers, tail color kind if if corporates? a longer of you the same of you're additional of

Kathleen Johnson

they're first seeing It's a building the they're saying, it's $X right? building going. platforms. simply and is they're talked Where tranche of So huge models, is technology them everybody data growth the that first state serve the cow, I training them. about. holy billion social the cloud don't and AI company. It's It's They're networks current where hyperscalers, companies. that flows Is

centers because connect out by the they that as So the can "Hey, there? is here can well. they're continue about, to bring so highways me that serve us that And driving building you Internet back to way, main me there customers to requirements their data can get needs you compute. And data the my from I to

the that's first So one.

The enterprises we're early Which piece. -- really that are second the using models. at phase is AI tranche the just is that of and

business. using we're frankly, them. to AI And our of transform one models We're

necessarily part. needs. all way. retail advanced for more network end-to-end and different bandwidth But little some in increasing a an It's of And services it custom great in have take top guys private health most to efficiency, it's a these of care, and they're not performance doing that it, on services the per intelligent gain way se. and the fiber leading partnerships bit dramatically enterprises of cost out, insight, financial drive and services. try We those are with And are the

Unknown Analyst

maybe I you network relative network, were itself. that, on is, year, million the had commentary your to you build-out same then made fiber in and Day inner referenced you doubling And which earlier that just planning last announcements. you I city think, on the the route X Analyst miles believe

that pre-funding change had already Or plan? -- pulling build-out revenue So deals, associated the the and is to these time? you build profile is simply or is the contemplated in forward accelerating that complexion with them and there the any of with

Kathleen Johnson

happening. out struggled figure your question. where -- continually So I the just is what's from I'll I'm you to give baseline

We metro long-haul existing routes. pulling the as areas that's networks. and new are more fiber routes connectivity in as on with inside And well increasing both the

of you combination all significant it's is deal And a a them each it. and And together metro what when in different see a bit [indiscernible]. overlay in is increase of a doubling so all you

Christopher Stansbury

next already would that, we that add scale over in X to that the fiber the put terabytes. XXX we're to years, the and gig I the that XXX will just today supports X.X fiber waves. ground that and And adding

And So investing needs of I to meet of ground anyone at not enormous the I'm has in customers. fiber going don't that's the that least think else expandability. at the aware rate who's

Operator

comes Jonathan with line Chaplin next question Street. of New the Your from

Jonathan Chaplin

piece on point? markets, did think the sort on should the pretty you're of comes I we if you mass really to that over presumably And back wonder unlike in the is enterprise the but at growth mass follow sort sort How segment, the net business quarter. quarters. X revenue just well dramatic question. of on then embarrassed transactions adds up the of of could markets recurring been help about First, you to contextualize in -- transformative about business acceleration transactions or in David's this given last doing? be is, the how this massive a that these course for large important the driving all It's this these asking growth of event this

also penetration. It wondering if is what's can -- context decision that's well conscious looks time? like for assume driving little to And there's I'm wondering some of peers. of the a over you give ARPU close the sort just I'm us drive if ARPU to strategy around plan I you to that? below a sort sort bit. of And speak gap a if

Christopher Stansbury

lot Yes. I'll to There's a in I'll remember. there. try

X- it again, David space to we that deals, power. PCF say In scale, once between the as did anywhere not to also provide us ask out, and to will Customers some video all. the the X-year you it's and get pointed that run As cases, and window. in relates networks will

services as of can going you on contract a you powering the roughly revenue XX% powers be pull you're long think and the you're put rats, signals. if average, will Francisco the York, in again, the And San to New And about year we those need total huts provided. from that So to are value. equipment that signal that earned cash said where way, can that

I that's, So think, a guideline. good broad

it really super enablement enablement kept yes, pleased chugging As And mass machine executing they and the the team. execution now. killing I penetration. marketing an both it. along, on in more growth on the could driving flawlessly of -- proud is relates There's focus right intense focus the penetration. and They're to that They're just markets, be not but we're

over On or to the I under part mean ARPU, trying price. yes. of not we're that's strategy,

and we in do to raised to opportunity the do so, with where ARPU combination we'll everything fact, cetera. working et continue pleased the that. But prices we have In is penetration, we're see way

come. So more to

Operator

Del Your next MoffettNathanson. line the Nick question comes with Deo from of

Nicholas Del Deo

Chris, deals First, these the associated cash comments apply with billion signed to you've made mostly to seem $X contribution the around deals. in the margins

you cash As deals, to those the the more they same for by of have leveraging deals, you billion negotiation, about ballpark? future expect these favorable some in fiber have would like economics the in in think of or put $X should we kind ground earlier the being be

Christopher Stansbury

average, on say, it's I Again, we gave would I the pretty is say. hard guidance think good. to Yes.

can to may we customers us and be your and that of we've some would don't of want, full have now decisions obviously that know try scale you along the we've of I yet we to incremental for mean we may way that capacity on -- I made to the the less today. do things point. discrete future, require that where what a So tell then help investments benefit we slightly the But that don't routes have had to make do additional all

it's to now. deals right the I is guidance again, general about -- just answer But of we it's quantum around guidance I it. given tell that and the good think complexity the So think to you gave hard the would how

Nicholas Del Deo

Okay.

too commitments deals trying whatnot? in . far ahead not signed to get and of of capital So terms

Christopher Stansbury

our mean, look, more kind will to I for view of we as responsibility. that we have in years, network I and as baseline continue invest Right.

relates that. we not will be gamble. it big in measured a As to CapEx very is do This how we expansions,

the pulling a -- there's got we lots If may more. in pull we see route will of demand it's route a capacity, we to already we've where future, fiber, We if where know won't. be we going and we're

it mile frankly, the is to analytics, it's those that in can So services by that core think And That's the as impressive it's what actually model this do Lumen. and to the offer route they that come route doing customers really quite it's reasons capability. digital we of these is we by a addition one really mile out. team I customers

Nicholas Del Deo

Okay.

your prepared was alluded you whether bit I you're about you it in Okay. on that how quickly to remarks, risk, but expand revenue generated. you might thinking have otherwise Chris, And revenue or could then hoping cannibalization current a

if not waves So I'm selling on you're selling for them someone that guessing you're fiber, route dark example, forward? going

Christopher Stansbury

And fiber about it the mixed infrastructure, with of kind network, to to in. way. it way, fiber IP. of is -- wave about a these dark happen large It's deals think dark this things connectivity think bundle deals from first to private of So some fabric very be everything your other your

As mix evolve. that continue time expect to goes on, I to would

And that so more. the we again, it what where whether as to they we've depends get pull -- some customer to the already wants, on what want in need of ground to fiber got whether or

Kathleen Johnson

strategy to being about to assets services are to place think evolution of prioritize think our I'd than our penetration . be quite I as telecom, we for And tech got world term. going to proclivity of that, shareholders. also and add going accretive like portfolio. person look to to cannibalization to long I our deliver there's this the we very overbuilt. rather of that's a these as I from worry moving forward, how coming at into And that's the return And demand

Christopher Stansbury

This not Yes. is be to very clear.

about This And cannibalization is this at why our going. where about ability talked of we we the all. returns legacy We new isn't drive This upside in and shareholders. see that for haven't even is see cannibalization. net to we're

Operator

line question from next Greg with TD of Cowen. Your comes the Williams

Gregory Williams

that all Maybe Christa. size good more job start just phase did fiber, we'll market X and to the are of first you a trying dark with these total AI deals of addressable and all articulating phases. as those We're

week Is it are And you scope? really, our we of billion XX are $X with [ ] the to trying ]? of like helps get $X just and billion feeding data creating? think [ centers I roughly guys XX market reports. [ ]? you are some of to I'm a sense centers this it that, it us Is how in it deals? how they data talking the asking And new way So be addressable many many earlier would new really about better

Kathleen Johnson

can we're I you this really. The that where upon dozens, and point to, these. we need do cooling do mean by and technology when that out [indiscernible]. the at drive model requests the we can tracking is is closure as speaking is is economies think you like? operationally as of group their where by of can of in piece drive the one that that deliver we're a tracking how also there's scale of those them piece so is not that thing between power. synergies look the data in across space possible look center energy and how it fast route, the And we're we are can can ways we group we What which What green what needs companies it footprint as the a well. because deliver build centers can equation at we I Data the power to

pretty it's complex. so And

Operator

with question James. Raymond next Your of line Louthan comes Frank the from

Frank Louthan

this you $X revenue? deal within group, give can you give us percentage of you bookings? the how what's an do Maybe little And can billion color And average annual deals? it year, PCF us of up this the $X a bookings an relates more to here, the billion -- largest including as as in is a of idea then sort much it what

Christopher Stansbury

to customers give again, not one, And then really is. of that And So disclose if you game the to it's stuff starts get a that, fair biggest because it's information yes, for guessing as just to to starting the around to sensitive close which customer. it us. in that's terms I customer frankly,

going So give we're to that. not

the question? bookings, -- to I once are how Is that that to to -- today? get make you asking selling understand what relate how to much the that As relates we're want it we scale, does sure I

Frank Louthan

bump what inclusive What of versus, is upside say, bookings necessarily something getting misusing income incremental hitting a I'm done maybe revenue -- which deal? like 'XX, you've in Not seems that but an sales the from statement. idea the of for bookings I'm seems terms in sounds it -- this billion 'XX -- the like PCF number. from just here, it the Well, in is $X from here,

Christopher Stansbury

run And think I think dark about and because all say largely sell the I those don't think the forward. don't ex that to in Yes. back But but We my as we incremental. would that was that I'd head, deals, and continue from grow of a these dark standpoint, check fiber. other bucket, dark that grow comes know yes, in rate right, frank state is I right? deal. the we go the in I the that top going -- as we've to deals again, have would that I This this the done fiber modeling fiber of off fall big shift quite like obviously But we'll California we're seeing had segment. mentioned, a we frankly, past, right do surprise, a so which, and always now,

about around forgot it's investment to center that in the been of center, to support the right? to the and communication required And data fact stay data the get the AI. got get in, It's out. everybody originate in much data There's research and so got doesn't amount

now seeing realized I'd finally So largely what being we're really and say incremental. that is that's

Frank Louthan

the in flow cash the and asset and the Okay. split Did -- can upfront free And increase between clarify you thing. sale the one quick you cash?

Christopher Stansbury

The was, sale asset I $XXX million. tax, think, after

Operator

line Your next question Wells Eric Fargo. from with comes the Luebchow of

Eric Luebchow

think revenues, it certainly we trajectory had. there of back getting year. to really over growth, XXXX they'll about are about talked like well? down but back as through deals the talk growth by long of should PCF very growth next the back to revenue be you moving revenue visibility sounds bookings these in you EBITDA kind of contract a get They'll enough if If parts know help don't I duration. you there? could amortized you've to since So to XXXX And step a given after getting How the

Christopher Stansbury

Yes.

I don't guidance here. too again, So want close to to get

-- think we're still X because we kind we I billion to ability broken, having guess made, I really going we've the that by the that that's so But very from networks 'XX timing a takeout lag -- As will revenue of what of we to And at and recently situation. obviously fix right? that to that about comment And turnaround set is I X to significant this, 'XX. drive want we cost our EBITDA go this revenue, now. of lag on in the as again, directionally clear, said, the discussions said around I right the excludes be $X right? year. be clear least holds To most

deliver what of in first required batch is. it just deals, to timing because and what's predict don't We very the this that two, they're to count hard comes until like on them;

Eric Luebchow

These data follow-up. Yes. fiber the deals, Understood. are then out that your that And pipeline, you've intercity markets. just ones you fiber locations moving to center where heard capacity power announced and lot of new in -- investments over the We've constraints next then data you'll center tied one the ones them double your more a further deals given of about lot handful in to a years. the rural

locations, So given long-haul of can data center your between deals fiber further on you we've fiber about talk splits at pipeline all seen? this deals mile, it based versus like are types what seems in support in out to middle being metro these done

Christopher Stansbury

fiber say this, when in it's ability And that XX network, the What we conduit, because why It's of years our in technology, the reasons this I say of it's vision so to monetize was network, by the some ago. is it's attractive. way, the I'll and advances have cases, And built now fiber it. right? one

of So those it's both. It's things. both

of and to I to And inner both deliver against will customers to things. invest the be X to as that want it in things speaking, continue want to want so get to those. waves, get, They metro say and get we are city there Wave broadly the would they they access. of strength wanting And customers, quickly. the both like where want

don't that else make happens. is we anyone to know in money the sure investing if of that And space who I the are kind

Operator

to I ahead. Johnson, back CEO, Since there now Please Kate questions, over no remarks. go will more for are conference turn the closing

Kathleen Johnson

you bright. a pivoted joining the Thanks today. the Thanks our We very charts night. as upcoming conferences updating and so much. progress great future at we're it's for course is growth, look for significant exciting meeting Have AI To our and transforming to forward time very, wrap, you an company. making on Lumen the our in for

Operator

gentlemen, that today's Thank joining. for concludes and you call. all Ladies

You may now disconnect.

Lumen (LUMN) 6 Aug 242024 Q2 Earnings call transcript