Lumen Technologies, Inc.

Greetings and welcome to Lumen Technologies' first quarter 2026 earnings call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press the star followed by the one on your telephone. If at any time during the conference you need to reach an operator, please press star zero. As a reminder, this conference is being recorded Tuesday, May 5th, 2026. Your speakers for today are Kate Johnson, CEO, and Chris Stansbury, President and CFO. I would now like to turn the conference over to Jim Breen, Senior Vice President of Investor Relations. Jim, please go ahead.

Good afternoon, everyone, and thank you for joining Lumen Technologies Q1 2026 earnings call. Before we begin, I'd like to remind everyone that today's presentation will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, These statements reflect our current expectations, assumptions, and projections about future events and financial performance. Actual results may differ materially from those expressed or implied in these forward-looking statements due to a number of risks and uncertainties. A detailed discussion of these factors can be found in our most recent filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K, our quarter report on Form 10-Q for this quarter, and any subsequent filings. We undertake no obligation to update or revise any forward-looking statements made today, whether as a result of new information, future events, or otherwise. Today's presentation may also include non-GAAP financial measures. Reconciliations are provided in our posted materials. I'll pass it on to Kate.

Thanks, Jim. And thanks, everybody, for joining the call and also for your feedback following the Lumen Investor Day. In addition to hearing your perspective about our strategy and new business model, we're tweaking the format of our earnings call by shortening our prepared remarks and leaving more time for your strategy oriented questions. So let's get to it. Lumen delivered a solid performance during the first quarter with revenue and EBITDA in line with expectations. I'll let Chris handle the detail in a few minutes after I provide an update on our strategy and execution. Enterprises are facing a huge challenge. They're trying to build an AI driven future on infrastructure that simply wasn't designed to support it. And it's no longer about point to point connectivity. It's about whether you can move massive amounts of data securely, predictably, and in real time across highly distributed environments. And just as importantly, it's about whether you can control and orchestrate that movement dynamically. Lumen is solving that problem. We're bringing together three core assets, a world-class physical infrastructure, a programmable network, and a connected ecosystem of clouds, applications, and partners. Now, individually, each of these assets matter, but together, they solve the complexity problem by forming a comprehensive platform designed for AI and rooted in simplicity. The whole industry now recognizes the need for better networking. better performance, and better economics. It's not just Lumen talking about disruption anymore, but we believe it is Lumen who stands alone in our readiness to deliver game-changing capabilities to meet the needs of enterprise customers in an AI-driven world. And it starts with the physical layer. Lumen already has one of the largest fiber networks in the world. We're making significant investments in long-haul capacity, metro expansion, data center interconnect, and cloud adjacency. And we're on track to deliver all of the commitments we shared in detail at Investor Day. This physical foundation is table stakes to support the proliferation of data workloads, but alone, it's insufficient to capture the full value of opportunity that we seek. That's where the programmable network comes in. A single pane of glass where enterprises can control and orchestrate connectivity across their entire technology footprint of clouds, data centers, applications, and partner networks. Lumen's made strong progress in capturing the north-south part of this market with Lumen Connect and NAS, giving customers API-driven, on-demand access to our network. And today, We announced our intent to acquire the software company Alcura. Alcura is expected to extend and enhance our programmable network into the fastest growing segment of the enterprise networking market, the east-west part, establishing the control plane for cloud connectivity. After close, our combined capabilities will enable us to provide comprehensive coverage of north-south and east-west connectivity, whether on-net or off-net, with game-changing innovation, including direct cloud on-ramps and multi-cloud gateway, and all of this in a single programmable system. We'll also be able to provide digital marketplace access to a myriad of ecosystem partners, simplifying network purchase and deployment experiences. Together, LumenConnect and Alcura will significantly accelerate time to value for customers operating in a complex multi-cloud and AI driven architecture world. Strategically, this acquisition will substantially complete our digital architecture. And post-close, it's all about integration and continuing our first and third party service innovation to deliver new value for customers and growth for Lumen. As you know, we've also had some exciting recent announcements AWS and Lumen partnered to launch AWS interconnect last mile, a service allowing enterprises to establish fast, secure, private direct connections from on-prem to the AWS cloud. And Google just announced the availability of private connectivity discovery through Google cloud marketplace with an upcoming preview of API provision, prem to cloud connectivity offering all powered by Lumen. These two new offerings are another example of how we're innovating to help enterprise customers deliver on their AI ambitions, while simultaneously giving Lumen an opportunity to capture some of the over $2 billion in annual revenue currently served by carrier-neutral facility CrossConnex. And it's Lumen Multicloud Gateway that makes these direct on-ramp offerings possible, enabling customers to connect any cloud and any data center in any combination over our private network rather than the public internet. It's how we bridge north, south, and east-west connectivity domains securely and consistently. Now, after closing the acquisition, Multicloud Gateway and Alkira together will turn direct cloud on-ramps into more than just access points into clouds and data centers. They will become programmable entry points into a broader digital fabric. And speaking of that digital fabric, Let's spend a minute on our Q1 adoption metrics. We're continuing to see strong adoption of our NAS services with strength in off-net and large enterprise adoption this quarter. In the first quarter specifically, customer adoption grew 25% quarter over quarter, active ports grew 35% quarter over quarter, and active services grew 32% quarter over quarter. What's more, in Q1 we had two landmark wins. a leading global financial services firm committed to a more than 600-site branch upgrade with Lumen NAS. Their goal is to drive deposit growth with faster new branch activation and deliver AI advisory and fraud detection services across all of those sites. And a large global logistics firm is deploying Lumen NAS at 300 sites to ensure faster activation of acquired service centers, directly accelerating freight capacity and revenue. Both customer wins tell the same story. Programmable networks are essential in delivering AI-powered business transformation. Back in February at Investor Day, we shared a multi-year roadmap for how we plan to drive digital service innovation, adoption, and revenue growth. And since then, we've made meaningful progress in execution, and we have some encouraging buying pattern data that we'd like to share. Starting with basic NAS, We now have nearly 2,500 NAS customers with more than 30% of them being repeat purchasers. What's more, over 20% of first-time NAS adopters in Q1 were customers who are brand new to Lumen. They weren't doing any business with us before they bought our NAS ports and services. Now, the remaining NAS first-time adopters this quarter were existing Lumen customers. But what's interesting is that more than 60% of them were expanding their footprint with Lumen NAS, not migrating from the old services. These trends are encouraging as they suggest market share gain. Now we'll continue to track them as we grow the business. In the second scenario, upselling services, approximately 25% of all NAS customers are attaching more than one service per port, primarily DDoS and Lumen Defender, another positive indicator of growth. And in the third buying scenario, Multicloud Gateway, it's already in market, enabling innovation with tech titans like AWS and Google, as I shared. And after we close the Alkira transaction, it will be the bridge between east-west and north-south traffic, giving our customers the feeling of one network, any cloud, total control globally. And the fourth and fifth buying scenarios, direct connections into SaaS providers and dynamic east-west cloud interconnects, that will be our focus post-Alcura transaction close, as we believe there's material growth potential there. Now let me finish up by sharing what we think this acquisition means to Lumen, our customers, and our shareholders. Alcura is a bullseye in terms of strategic alignment and value creation. For Lumen, we expect it to dramatically accelerate our roadmap execution from years to months. It will reduce execution risk. It will give us an injection of talent. And it will give us a partner platform that's expected to be marketplace ready on day one. Our customers will get the value they deserve, ample bandwidth, control, simplicity, and accelerated time to value. and our investors will get what they deserve, better economics across the board from Lumen. Lumen has firmly entered a growth phase, and our future is very bright. Chris, over to you.