Lumen further cements its AI networking presence with nearly $13B in PCF deals
Key Highlights
- Lumen announced nearly $13 billion in PCF deals, with additional pipelines, fueling its network expansion to 58 million fiber miles by 2031.
- The company is investing in 400G wavelength services, metro expansions, and partnerships with Corning to support AI backbone infrastructure.
- NaaS growth remains strong, with a 29% increase in active customers and new off-net opportunities via Project Berkeley, expanding market reach.
- Despite Q4 revenue declines across segments, North American Enterprise revenue grew 52%, highlighting improving business mix.
- Asset sale to AT&T reduces Capex by over $1 billion, enabling Lumen to focus on building a digital network services company.
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Lumen is seeing the fruits of its enterprise focus taking shape, a trend that continued into the fourth quarter, with strong growth from its Private Connectivity Fabric (PCF) platform.
After announcing $5.5 billion in initial PCF deals to reach $12 billion, sales continued to accelerate throughout the fourth quarter and throughout 2025.
Speaking to investors during its fourth-quarter 2025 earnings call, Kate Johnson, CEO of Lumen, said these deals show that its enterprise focus is paying off.
“As of today, we are now at nearly $13 billion with more deals in the pipeline,” Johnson said. “And we had another strong quarter of growth in our NaaS business, rising ports per customer show that enterprises are starting to standardize on the Lumen fabric as their programmable network control plane for Cloud 2.0.”
She added that the “roughly $2.5 billion of new PCF deals that we inked in Q4 will raise our total network expansion to a whopping 58 million fiber miles in 2031.”
As part of this network expansion plan, Lumen is investing significantly in 3 major network upgrades: building 400G rapid route wavelength service routes across 36 routes with others in development, enabling 400G services for data centers across key markets, and a metro expansion plan to connect the most desired routes, data centers and cities. The service provider also met its 2025 goal of deploying 17 million miles of intercity fiber.
“To support this work, we've expanded our partnership with Corning, ensuring we have priority access to the newest state-of-the-art fiber technology, delivering the AI backbone for today's and tomorrow's most important customers,” Johnson said.
What will further Lumen’s momentum in the data center and cloud services market is the completion of its asset sale to AT&T.
Johnson said that wrapping the AT&T deal paves the way to become “a simpler, stronger, enterprise-focused technology infrastructure company.”
“This divestiture reduces our annual Capex by over $1 billion, driving a significant reduction in capital intensity as we stop fiber-to-the-home builds and focus our capital on building a digital network services company,” she said.
NaaS growth continues
In addition to PCF, Network as a Service (NaaS) was a key driver of Lumen's growth in the fourth quarter, with the number of active NaaS customers growing by 29% quarter-over-quarter.
The number of NaaS Fabric Ports deployed grew 31%, and the number of services sold grew 26% in that same period.
While Lumen continues to expand its fiber network reach to deliver on-net and cloud services, it is keen to pursue off-net NaaS opportunities with service provider partners.
In October, the service provider announced its NaaS internet-on-demand product, which will expand its NaaS platform to more than 10 million new business locations, removing geographic barriers to connectivity.
Earlier, in September, it unveiled “Project Berkeley,” a network interface device that expands the company’s NaaS services, like on-demand internet, Ethernet, and IP VPN, to off-net sites using any access type. Those access types can be 5G, fiber, copper, fixed wireless access, satellite and other media.
“While it's still early, we believe off-net growth significantly expands our addressable market for NaaS services,” Johnson said. “Great brands across industries are adopting this new capability with more than 900 off-net ports sold so far. The investments we're making in building a programmable network are driving significant growth in high-value digital revenues, which we believe will ultimately drive higher returns for Lumen investors.”
Johnson added that the company will “share more on its off-net plans and Project Berkeley at Investor Day.”
Quarterly struggles and opportunities
While Lumen has positioned itself to focus more on enterprise and data center opportunities, it struggled in the fourth quarter.
Lumen’s business segment revenue declined 8.8% to $2.425 billion, which includes over 350 basis points of anticipated downward impact from one-time dark fiber and elevated public sector harvest revenue growth in the fourth quarter of 2024.
Due to one-time revenue items in the fourth quarter of 2024, Lumen’s total business revenue growth was roughly flat year over year in the quarter.
Within the segment, it saw declines across all three of its main business lines—large enterprise, mid-market enterprise, and public sector—during the quarter.
Large and Mid-Market Enterprise revenues were $758 and $472 million, down from $764 million and $531 million, respectively. Meanwhile, the Public Sector was $457, down from $556 million.
Total North American business, including wholesale, declined 8.6%. Wholesale revenue declined approximately 7.8% year-over-year, in line with our expectations. International and other revenue declined 16.3%, or $15 million, driven primarily by declines in managed services, VPN, and voice.
Christopher Stansbury, CFO of Lumen, said, “We saw expected and typical declines in nurture and harvest” categories of declining business service lines.
However, North American Enterprise's revenue growth category rose 52% in Q4, surpassing the nurture and harvest segments and highlighting its improving business mix.
One of the bright spots for Lumen’s business was its Private Connectivity Fabric (PCF).
Stansbury said that for the fourth quarter and full year 2025, “we recognized revenue of approximately $41 million and $116 million, respectively, from the nearly $13 billion in PCF deals it has announced to date.”
“These prefunded deals have both strategic and financial impacts for women, allowing us to expand our capacity and build alongside the largest technology companies while also providing capital to fully fund our business plan,” he said.
Lumen reported revenues for the quarter were $3.04 billion and $12.4 billion for the full year 2025.
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Sean Buckley
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