Lumen Charts a New Course with AI and Network Expansion

Lumen concludes restructuring, pivots to AI infrastructure with $13B in contracts. Plans massive fiber expansion and targets mid-30% EBITDA margins by 2030.

Lumen Technologies has formally concluded its internal stabilization phase. During a recent investor presentation outlining its 2026 strategy, CEO Kate Johnson detailed a corporate realignment, shifting the network operator's core focus squarely toward AI infrastructure and advanced connectivity services. Following several years of restructuring, the company is now targeting a return to sustainable revenue growth.

AI Demand Fuels Strategic Pivot

The centerpiece of Lumen's renewed growth strategy is capitalizing on the soaring demand for artificial intelligence infrastructure. The company has already secured contracts for its Private Connectivity Fabrics (PCF) totaling nearly $13 billion. A key partnership is with AI research firm Anthropic, for which Lumen is expanding its North American fiber network.

To meet this anticipated demand, management has outlined aggressive capacity expansion plans. The intercity fiber network, which currently spans 17 million miles in 2025, is projected to grow to 47 million miles by 2028 and reach 58 million miles by 2031.

A Strengthened Financial Foundation

This strategic shift is built upon a significantly strengthened balance sheet. The sale of its consumer fiber optic business to AT&T for approximately $5.75 billion enabled Lumen to reduce its net debt to under $13 billion. According to company leadership, this move will result in annual interest savings of around $500 million and free up an additional $1 billion per year for investment.

The company has set ambitious medium-term targets, aiming to increase its adjusted EBITDA margin from 27.1% in 2025 to a level in the mid-30% range by the end of the decade. While the stock faces near-term consolidation pressure—shares declined 2.72% to €6.16 in the latest session—credit rating agencies have already acknowledged the company's progress with upgrades to its creditworthiness.

Operational Gains in Enterprise Solutions

Positive signs of the transformation are emerging in the core enterprise business. The customer base for its Network-as-a-Service (NaaS) offerings has doubled since Q3 2025, now exceeding 2,000 clients. New software solutions, such as the "Multi-Cloud Gateway," are designed to simplify data exchange in hybrid cloud environments and are attracting new customer segments, including recent client Seattle Sounders FC.

The start of fiscal year 2026 will be particularly noteworthy for investors, as Lumen introduces a new revenue reporting structure beginning in the first quarter. This change is intended to provide greater transparency into the operational progress of the realignment. The corporate segment is projected to return to consistent revenue growth by 2028.