In This Article:
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Debt Reduction: Lowered debt by $1.6 billion in 2024, with redemption notices for an additional $200 million.
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Closed Sales: $8.5 billion in closed sales with major tech companies.
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EBITDA Guidance for 2025: Between $3.2 billion and $3.4 billion.
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Free Cash Flow Guidance for 2025: Between $700 million and $900 million.
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Revenue for Q4 2024: $3.32 billion, a decline of 5.3% year-over-year.
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Adjusted EBITDA for Q4 2024: $1.052 billion with a 31.6% margin.
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Free Cash Flow for Q4 2024: Negative $174 million.
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North American Enterprise Sales Growth: Over 15% year-over-year in 2024.
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Mass Markets Fiber Revenue Growth: 18.9% year-over-year.
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Capital Expenditures for Q4 2024: $915 million.
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Capital Expenditures Guidance for 2025: Between $4.1 billion and $4.3 billion.
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Net Cash Interest for 2025: Estimated between $1.2 billion and $1.3 billion.
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Cash Taxes for 2025: Estimated between $100 million and $200 million.
Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Lumen Technologies Inc (NYSE:LUMN) reduced its debt load by $1.6 billion in 2024 and sent redemption notices for an additional $200 million.
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The company secured $8.5 billion in closed sales with major tech companies like Microsoft, AWS, Google, and Meta, enhancing its position as a trusted network for AI.
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Lumen achieved over 15% year-over-year sales growth in North American enterprise channels, with significant growth in IP and ways.
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The company delivered more than 500,000 Quantum Fiber enablements, achieving over 90% year-over-year growth in fiber net adds while reducing expenses.
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Lumen's unified network architecture has enabled 85% of new Ethernet and IP data service sales in major metro markets, reducing delivery time and implementation costs significantly.
Negative Points
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Total reported revenue declined by 5.3% to $3.32 billion, impacted by divestitures, commercial agreements, and the sale of the CDN business.
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Adjusted EBITDA for the fourth quarter of 2024 was $1.052 billion, a decrease from the previous year, with a margin decline of 40 basis points.
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Free cash flow was negative $174 million, primarily due to the timing of cash from PCF deals.
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Mass Markets segment revenue declined by 6.3% to $670 million.
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The company faces challenges with legacy product declines, particularly in TDM-based voice and VPN, impacting nurture and harvest product revenues.
Q & A Highlights
Q: How is the 15% sales growth in North America translating into progress in verticals like large enterprise and mid-market? Also, how much of the growth in the "grow" product revenue is recurring versus one-time? A: The growth in product revenue was positively impacted by the State of California initiative, which started turning up revenue. The "grow" bucket now represents almost half of what we sell, indicating a focus on customer experience and growth products. While legacy declines were significant, the focus on grow products is driving improvements, and we have motions in place to manage disconnects and renewals as we move into 2025. - Christopher Stansbury, CFO