Lumen Technologies Inc (NYSE:LUMN) Reports Mixed Q3 2025 Results with Earnings Beat and Revenue Decline

Lumen Technologies Inc (NYSE:LUMN) reported third-quarter financial results that presented a mixed picture for investors, with the company exceeding earnings expectations while experiencing a slight revenue decline. The telecommunications provider's performance demonstrates both the challenges of its ongoing transformation and the early successes of its strategic initiatives.

Earnings Performance Versus Expectations

The company's Q3 2025 results revealed a notable outperformance on bottom-line metrics despite top-line pressures. Lumen reported revenue of $3.087 billion, slightly below analyst estimates of $3.100 billion, representing a 4% decrease compared to the same quarter last year. However, the earnings story proved more encouraging.

Key financial metrics compared to expectations:

• Non-GAAP EPS of -$0.20, significantly better than the estimated -$0.27
• Revenue of $3.087 billion versus $3.100 billion estimated
• Free Cash Flow, excluding Special Items, of $1.661 billion compared to $1.198 billion in Q3 2024
• Adjusted EBITDA, excluding Special Items, of $787 million

The improved earnings performance reflects the company's progress on cost management and operational efficiency initiatives, even as revenue transformation continues.

Market Reaction and Price Action

Investors responded positively to the earnings beat, particularly the better-than-expected EPS performance. The stock showed strength in after-market trading with a gain of approximately 4.6%, indicating market approval of the company's ability to manage profitability amid revenue headwinds. This positive reaction extends the stock's recent momentum, which has seen gains of 0.6% over the past week, 0.5% over two weeks, and 0.8% over the past month.

The market's response suggests investors are focusing on the company's progress in controlling costs and generating cash flow rather than the ongoing revenue decline, which largely reflects the company's strategic shift away from legacy services.

Strategic Highlights and Transformation Progress

Lumen's quarterly performance included several significant operational achievements that underscore the company's transformation narrative. CEO Kate Johnson emphasized "disciplined execution and bold ambition" as driving factors behind the quarter's results.

Notable operational developments:

• Signed an additional $1 billion in Private Connectivity Fabric deals in October, bringing total PCF deal value to over $10 billion
• Successful Phase I ERP implementation
• Progress on consumer FTTH sale to AT&T, targeted to close early 2026
• $2.4 billion debt refinancing and further debt reduction, saving $135 million in annual interest expense year-to-date
• Scaling of Network-as-a-Service platform and launch of IoD offnet innovation

These developments highlight the company's strategic pivot toward next-generation connectivity solutions while managing its legacy business portfolio.

Financial Outlook and Analyst Expectations

The company maintained its full-year 2025 financial outlook, projecting Adjusted EBITDA between $3.2 and $3.4 billion and Free Cash Flow between $1.2 and $1.4 billion. This guidance appears conservative relative to analyst expectations for full-year 2025, which include estimated EPS of -$0.68 and sales of $12.6 billion.

For the upcoming fourth quarter, analysts project EPS of -$0.22 and revenue of $3.09 billion. The company's reiterated guidance and current performance trajectory suggest potential for outperformance in the final quarter of the year, particularly if the momentum in high-growth segments like Private Connectivity Fabric continues.

Segment Performance and Product Transition

The earnings report revealed ongoing shifts in the company's revenue mix, with growth products showing strength while legacy services continue to decline. The Business segment revenue declined 3% year-over-year to $2.456 billion, while Mass Markets revenue decreased 8% to $631 billion.

Within the Business segment, the "Grow" product category increased 8% year-over-year to $1.160 billion, indicating successful traction in the company's strategic growth initiatives. This was offset by declines in "Nurture" and "Harvest" categories, reflecting the planned transition away from legacy offerings.

For more detailed earnings analysis and future estimates, investors can review additional information here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or recommendation to buy or sell any securities. Investors should conduct their own research and consult with financial advisors before making investment decisions.