- Lumen plans to eliminate copper-based telecom services in four states by the end of next year
- It's still struggling with declining revenues and profits as it steers the ship away from legacy telecom to enterprise connectivity
- Yesterday's mid-term elections might affect the pace of data center builds, but Lumen doesn't think it will have an effect on its business
Lumen Technologies today reported total revenues were down, but revenues from the company’s strategic business lines is increasing. And the company is accelerating the decommissioning of its copper networks in four states and expects to “mine” that copper for more than $1 billion.
Lumen reported total revenues of $2.72 billion for Q3 2026, a decrease both sequentially and year over year. In Q2 Lumen reported $2.81 billion in revenue, and for the year-ago quarter, it reported $3.09 billion in total revenue.
In addition, Lumen reported a net loss of $265 million for Q3 2026, compared to a net loss of $201 million in Q2 and a net loss of $621 million for the third quarter 2025.
Fierce spoke with Lumen’s CFO Chris Stansbury prior to today’s earnings call, and he highlighted the fact that revenue in Lumen’s newer “strategic” business lines — with a focus on enterprise connectivity — grew 53% sequentially and 10% year over year to $1.28 billion. The company’s strategic lines represent 55% of Lumen’s business revenue.
In terms of the quarter’s declines in revenue and profit Stansbury said, “What it comes down to is the decline of the legacy business, which is declining in double digits. What is more important in our minds is the growth of the strategic to the point where that's now 55% of the portfolio. So, each quarter we get closer to that point where we do return to growth.”
He said Wall Street analysts put a big focus on adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), which was $715 million for the third quarter 2026. It’s guiding for 2026 adjusted EBITDA of $3.1–$3.3 billion. “I think the important part about our profitability story is adjusted EBITDA will inflect to growth this year,” Stansbury said. “We are recommitting to that in our guidance, and I've been here for four and a half years, and that's the first time that's been said.”
Decommissioning and mining copper
Lumen plans to eliminate copper-based telecom services in four states by the end of next year. The four states are Florida, Iowa, Utah and Nevada. “We're now at the point where the cost of maintaining those services exceeds the value of the revenue,” said Stansbury.
Another benefit of retiring the legacy networks is that Lumen expects from $1 billion to $1.5 billion from the mineable copper over the next five years. The four states where Lumen plans to retire copper represent 25% of its existing copper network. On today’s earnings call Lumen CEO Kate Johnson said, “Copper is worth more to us mined than operated.”
Analysts have always liked Lumen’s legacy residential copper business because of its high margins. But Stansbury said, “The myth that legacy margins are better than our strategic portfolio is incorrect. Our strategic portfolio direct margins are approximately 80%, whereas on legacy it's 65%. And so, every dollar we shift to our strategic portfolio is more margin rich and less capital intensive.”
Effect on Lumen from mid-term elections
Last night saw a big Blue Wave sweep the U.S., with Democrats taking back control of both the House and Senate. Already, there’s speculation that Democrats will slow down the AI boom and take a more measured approach because voters don’t like the pace of data center builds.
But many companies in the telecom space have been going gangbusters because of the AI boom. And they might fear that data center builds will stop or perhaps get built in different places than expected.
Prior to today’s earnings call (and prior to the election), the analysts at TD Cowen wrote, “For better or for worse Lumen has become an AI trade, and investor enthusiasm in the AI trade continues to soften amidst supply chain pressures, political pressures, capital returns and an already-levered capital markets toward AI,”
Stansbury said he doesn’t expect any change in the pace of data center builds to affect Lumen. “We can literally move data from anywhere to anywhere on the planet. We don't have to connect to cloud through neutral third-party carriers. We can give you direct access, and you can literally, through one pane of glass, manage the entirety of your network.”
Johnson said, “If there's a slowdown in data center builds, it forces enterprises to have to make more out of the assets that they already have, which means moving the workloads where there's available GPUs, and that's what we do. We're the platform that enables exactly that.”
MORE STORIES ABOUT LUMEN:
Lumen's message to Wall Street: 'Legacy is out, enterprise networking is in'
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