The following is a summary of the Lumen Technologies, Inc. (LUMN) Q1 2024 Earnings Call Transcript:
Financial Performance:
Lumen Technologies reported Q1 2024 revenue of $3.29 billion, representing a decline of 12% YoY, due to debt restructuring.
Business segment revenue declined 12.7% to $2.591 billion, and the mass market segment saw a 9.2% downturn to $699 million.
Adjusted EBITDA reached $977 million with a 29.7% margin, indicating a stronger balance sheet after addressing over $15 billion of debt in TSA agreement.
Significantly reduced early Q2 cost base owing to focus on automation, AI, and prioritizing high-impact growth projects. This led to a free cash flow generation of $518 million in Q1.
Business Progress:
Q1 saw sequential and YoY revenue growth within the North American enterprise growth product portfolio and earned a $73 million contract to transform the U.S. Government Accountability Office's network for improved connectivity.
Lumen's NaaS and Quantum Fiber product reported substantial progress in driving customer adoption, with the latest earning the highest fiber net adds ever for a quarter and high customer approval.
Lumen Defender, leveraging patented AI-powered threat detection, will be made broadly available on NaaS and DIA connections by H2 2024.
Reorganizing their structure for additional cost savings, the company is considering potential joint ventures, new and additional sources of cash for deleveraging, and wholesaling arrangements for improved EBITDA contributions.
As part of transformation into a digital entity, significant productivity gains have been noted after AI adoption, and the company is emphasizing new skill imports, reskilling, and upscaling.
The company has brought to market 30 net new innovations since October and plans to further expand growth opportunities into waves, dark fiber, and custom private networks, as well as its partner ecosystem.
More details: Lumen Technologies IR
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