Lumen Technologies (NYSE: LUMN): 206.25% in 1 Year | GrowthTech AI Review

From May 30, 2024, to May 30, 2025, Lumen rose from $1.28 to $3.92—a gain of 206.25%— in our AI-powered portfolio

Lumen Technologies, Inc. (NYSE: LUMN), formerly known as CenturyLink, is a legacy telecommunications firm that has evolved into a fiber infrastructure and digital services company aiming to become the backbone for cloud, AI, and enterprise connectivity. Headquartered in Denver, Colorado, Lumen operates one of the world’s largest and most deeply interconnected internet networks, spanning more than 400,000 route miles of fiber. Its customer base includes Fortune 500 companies, mid-sized enterprises, government agencies, and wholesale clients across North America and select international markets. Through its core offerings—fiber-based connectivity, cloud networking, and edge computing—Lumen plays a foundational role in powering the digital economy.

Strategic Shift: From Legacy Telecom to Digital Infrastructure Leader

Lumen’s transformation journey centers around three pillars: driving operational excellence, building the physical and digital backbone for artificial intelligence, and “cloudifying” telecom by pushing services toward consumption-based models. These strategic initiatives are essential as the company pivots away from its declining copper-based services and legacy revenue segments, aiming to stabilize its financial foundation and reposition itself as a high-value, future-facing infrastructure provider.

In recent quarters, Lumen has shown signs of tactical execution, especially in areas that align with broader market tailwinds such as AI adoption and cloud migration. For example, its recently announced partnership with Google provides direct fiber access to Google Cloud through Lumen’s metro-fiber network, a move that reinforces its ambition to be the infrastructure layer behind next-generation technologies.

CEO Kate Johnson, who took the helm in late 2022, has been the face of this transformation. Her leadership has focused on reorienting the business toward digital-first solutions while simultaneously tackling legacy debt and cost inefficiencies. Under her guidance, the company has prioritized balance sheet optimization, network modernization, and digital platform scalability.

Q1 2025: Financial Overview and Business Trends

Lumen's first quarter of 2025 was mixed, with signs of operational progress tempered by ongoing financial pressures. Total revenue for the quarter came in at $3.182 billion, down 3% year-over-year from $3.290 billion. While this decline is consistent with the company's long-standing revenue contraction due to legacy service attrition, it masks nuanced developments in individual business segments.

Enterprise demand remains a focal point. Large Enterprise revenue fell 4% to $737 million, and Mid-Market Enterprise was down 11% to $513 million. The Public Sector, however, grew 15% year-over-year to $483 million, a bright spot that signals government interest in secure, high-capacity fiber networks. Wholesale revenues also dipped 4% to $705 million, continuing the broader pressure on Lumen’s traditional connectivity business.

On a product classification basis, the “Grow” category—services aligned with Lumen’s strategic transformation like fiber, edge computing, and cloud enablement—rose 7% year-over-year to $1.136 billion. This growth is significant as it reflects the emerging health of Lumen’s future-facing portfolio. In contrast, the “Nurture” and “Harvest” categories, which include less strategic or declining services, saw respective declines of 14% and 8%. This bifurcation between growth and legacy products underscores the urgency and complexity of the transition.

The company reported a net loss of $201 million for Q1 2025, reversing a $57 million profit from the same quarter last year. Adjusted EBITDA (excluding special items) fell 5% to $929 million, though the margin remained stable at 29.2%. This suggests management has been successful in containing costs even as top-line pressures persist. Lumen’s adjusted EBITDA remains an important metric as it excludes one-off restructuring charges and special items tied to legacy asset write-downs.

Cash flow generation was modest but stable. Free Cash Flow, excluding special items, totaled $354 million, down from $518 million in Q1 2024. However, this comparison is skewed by a $700 million tax refund Lumen received in Q1 2024, making the year-over-year decline appear steeper than it is. The company also reported $1.095 billion in net cash provided by operating activities—a solid figure that reflects resilient core operations.

Capital expenditures for the quarter were $791 million, up 11% from Q1 2024, as Lumen continues to reinvest heavily in network upgrades. While elevated capex weighs on short-term cash flow, it is necessary to execute the company's digital pivot.

Debt Management and Liquidity

A major highlight this quarter was the refinancing of $2.4 billion in term loan debt by Level 3 Financing, Lumen’s affiliate. This refinancing extends maturities and lowers interest rates, improving financial flexibility in a higher-for-longer rate environment. As of March 31, 2025, the company held $1.9 billion in cash and equivalents, providing a near-term liquidity buffer.

Net cash interest is projected at $1.2 to $1.3 billion for 2025, a reflection of Lumen’s still-heavy debt load. The company is walking a tightrope between investing for growth and servicing legacy liabilities. However, it remains committed to deleveraging as a long-term strategic priority.

2025 Guidance: Management Reaffirms Confidence

Lumen reiterated its full-year 2025 financial guidance, targeting adjusted EBITDA between $3.2 billion and $3.4 billion, and free cash flow of $700 million to $900 million. This suggests management believes that margin discipline, network monetization, and capital prioritization can stabilize the business in the face of persistent revenue headwinds.

The company expects capital expenditures to reach $4.1 billion to $4.3 billion in 2025, highlighting its continued emphasis on network expansion and digital platform development. These investments are essential to transforming Lumen’s sprawling legacy infrastructure into a modern, fiber-first architecture that can support 5G, AI, and cloud-native services.

The Bigger Picture: Strategic Optionality and Valuation Considerations

Lumen is not without risks. The company faces declining revenues, a highly leveraged capital structure, and intense competition from cable operators, hyperscalers, and newer fiber entrants. However, it also holds valuable assets: a deep, high-capacity fiber network; long-standing enterprise relationships; and growing capabilities in AI and cloud enablement.

The Google Cloud partnership, rising adoption of its Network-as-a-Service (NaaS) offerings, and a gradual migration toward consumption-based revenue models suggest that Lumen has credible growth levers. Execution remains key. If management can accelerate “Grow” revenue while cutting exposure to lower-margin services, the company could begin to reverse its narrative from secular decline to digital rebirth.

From a valuation perspective, Lumen trades at a distressed multiple, reflecting investor skepticism about its turnaround. But for long-term investors with a tolerance for risk, the company presents a call option on fiber infrastructure modernization and enterprise digital transformation.

AI Stock Pick: $LUMN

Lumen’s stock performance over the past year further reinforces the credibility of its digital pivot. From May 30, 2024, to May 30, 2025, Lumen rose from $1.28 to $3.92—a gain of 206.25%—earning it the number 5 spot in our AI-powered portfolio. Our machine learning models identified Lumen as a high-upside opportunity based on multi-factor signals including enterprise fiber growth, capex alignment with AI infrastructure, and debt refinancing momentum.

AI Stock Pick: Lumen Technologies, Inc. (NYSE: LUMN)

Forecast Period: May 30th, 2024 to May 30th, 2025

Time Horizon: 365 Days (12-Months)

Yield: 206.25%

Ranking: 5

Get Todays Top Stocks & Crypto To Buy Today

This selection highlights the power of artificial intelligence in modern portfolio management, where algorithms ingest vast streams of market data—ranging from price momentum and sentiment trends to macroeconomic indicators and earnings dynamics—and continually retrain themselves to recognize evolving patterns. By analyzing non-linear relationships and reacting to new data in real time, machine learning enables more adaptive and forward-looking investment decisions than traditional methods. Lumen’s inclusion and outsized performance demonstrate the edge that algorithmic forecasting can provide in identifying undervalued opportunities ahead of the broader market.

Conclusion

Lumen Technologies is currently navigating a crucial and transformative inflection point in its corporate journey. This phase is marked by significant changes and challenges, as the company seeks to redefine its identity and operational focus in a rapidly evolving technological landscape. Although the path forward is fraught with obstacles, including fierce competition and the need to adapt to new market demands, Lumen's strategic initiatives, which encompass a comprehensive review of its cost structure and the pursuit of expanding partnerships, lay a solid foundation that fosters cautious optimism among stakeholders and industry analysts alike. The company's strategic initiatives are designed to streamline operations and enhance efficiency, which is vital for improving profitability in a sector characterized by thin margins and high capital expenditures. By focusing on reducing operational costs and optimizing resource allocation, Lumen aims to bolster its financial health, allowing for reinvestment in key areas that will drive future growth. This includes upgrading its existing infrastructure and innovating new services that align with the shifting needs of its customer base.

Furthermore, Lumen's emphasis on expanding partnerships is critical in an era where collaboration often leads to enhanced service offerings and market reach. By forging alliances with technology leaders and industry innovators, Lumen can leverage complementary strengths and technologies, enabling it to deliver more comprehensive solutions to its clients. These partnerships not only enhance Lumen's competitive edge but also position the company as a pivotal player in the broader ecosystem of digital transformation. However, the success of these initiatives hinges significantly on management's capability to accelerate the company’s transition from a traditional legacy telecom provider into a modern digital infrastructure enabler. This transformation is not merely a shift in branding but requires a fundamental rethinking of the services offered and how they are delivered. Lumen must invest in cutting-edge technologies that support the burgeoning demands of artificial intelligence, cloud computing, and enterprise networking, which are becoming increasingly integral to business operations across various sectors. As the digital landscape continues to evolve, the backbone that supports AI, cloud, and enterprise networking is taking shape, and Lumen's strategic positioning within this framework is crucial.

The company’s extensive fiber footprint presents a unique opportunity to capitalize on the growing demand for high-speed connectivity and data services. Effectively monetizing this infrastructure will be essential for Lumen to not only sustain its operations but also to thrive in a competitive marketplace. Ultimately, the question remains whether Lumen can successfully execute its turnaround strategy and deliver a second act that captures the attention of investors and industry observers. The ability to adapt and innovate in response to market dynamics will be a determining factor in whether this turnaround story unfolds positively. If Lumen can navigate these complexities and establish itself as a leader in digital infrastructure, it may very well set the stage for a resurgence that revitalizes its brand and enhances its market position in the years to come.

Enhanced Market Intelligence

Finding market opportunities is made easier by using our AI system. It doesn't tell you what to do. It tells you where to look. Our skilled team of analysts carefully verifies the AI outputs and enhances this market research with a human touch, providing our subscribers with enhanced market intelligence. If you would like the AI advantage working for you, then you should subscribe today!

Life is better when you can be bullish.

Subscribe Now For Enhanced Market Intelligence

Sources: 1. Lumen Investor Relations, "Lumen Technologies reports first quarter 2025 results" (2025)