Lumen Technologies (LUMN) saw its stock price surge 5.11% in Friday's pre-market trading session following the release of better-than-expected first-quarter 2025 earnings and an optimistic outlook driven by artificial intelligence (AI) initiatives.
The telecommunications company reported a quarterly adjusted loss of $0.13 per share, significantly better than the analyst consensus estimate of a $0.27 loss. Revenue fell 3.3% year-over-year to $3.18 billion but still managed to surpass Wall Street expectations of $3.12 billion.
Lumen's North American business segment showed promising signs of growth, with its "Grow" revenue category increasing by 7.9% compared to the same period last year. The company's fiber broadband division was particularly strong, posting a 22.9% year-over-year revenue increase.
During the earnings call, CEO Kate Johnson highlighted the company's progress in building what she called "the backbone for the AI economy" and efforts to "cloudify telecom." Johnson emphasized the growing demand for Lumen's private connectivity fabric (PCF) and digital platform services, driven by enterprises' need for high-capacity, low-latency networks to support AI applications.
"Fiber networking is critical infrastructure for us to build an AI economy in the United States and for us to be competitive on the innovation platform on a global level," Johnson stated during the call. She also noted that while there could be uncertainty in the broader market, these long-term strategic investments are necessary for customers to compete in an AI-driven future.
The company reaffirmed its full-year 2025 EBITDA guidance range of $3.2 billion to $3.4 billion, instilling confidence in investors about Lumen's financial trajectory. Management expressed optimism about returning to EBITDA growth in 2026, citing anticipated improvements in sales performance, lower absolute declines in legacy products, and cost-saving initiatives.
As Lumen continues to transform its business model and capitalize on the growing demand for AI-related networking services, investors appear encouraged by the company's direction and improved financial performance.
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