Lumen Technologies Adds Former PacketFabric, Cisco Leader As Turnaround Progresses

“We're just not satisfied. And we'll be focusing on improving performance in this part of our turnaround using data and analytics and AI to help determine the right action for each unique customer at the right time,” Lumen CEO Kate Johnson tells investors during the company’s Q4 2023 earnings call.

Lumen Technologies, formerly CenturyLink, has made extensive leadership changes over the last two years as the telecom-turned technology provider continues to evolve its business and focus on strategic services, including network as a service (NaaS).

President and CEO Kate Johnson (pictured above) last year referred to 2023 as the company’s “reset year” which included a new set of priorities and a focus on next-generation networking and services to help turn the company’s core business around by 2025. Johnson said that Lumen has made “material progress” on its strategic priorities during Lumen’s Q4 2023 earnings call on Tuesday evening.

Monroe, La.-based Lumen on Tuesday afternoon named networking tech mainstay Dave Ward as its new chief technology officer. Ward will lead the development and integration of Lumen’s global network and accompanying “disruptive” technologies, Lumen said.

A tech leader with extensive networking experience, Ward joins Lumen from PacketFabric where he led the NaaS specialist as chair and CEO for the last three years. Prior to his time with PacketFabric, he was CTO of engineering and chief architect during his eight-year tenure at Cisco Systems. Ward also served as a fellow at both Cisco and Juniper Networks.

Ward will report to Johnson starting next week and is replacing Andrew Dugan, the company’s CTO since 2018, ahead of his pending retirement, a spokesperson for the company told CRN.

Lumen at the end of 2022 started making sweeping changes to its leadership team. The company in November 2022 brought on tech veteran Kate Johnson as its CEO. In 2023, Lumen brought on Sham Chotai as executive vice president of product and technology, Jay Barrows as executive vice president of enterprise sales and public sector, and Kye Prigg as its new executive vice president of the service provider’s North American enterprise operations, a business that accounts for more than three-quarters of Lumen’s overall revenue.

Lumen also added Microsoft’s former COO of U.S. business applications and industry Ashley Haynes-Gaspar to its marketing organization as executive vice president and customer experience officer, wholesale and international, in 2023. Haynes-Gaspar in January was promoted to chief revenue officer, a new role for the company.

The company at the end of 2022 announced the proposed sale of its EMEA business to Colt Technology Services for $1.8 billion in a deal that closed in November 2023. Lumen in October 2023 finalized the $7.5 billion sale of its incumbent local exchange carrier (ILEC) business, which included its consumer, small business, wholesale and mostly copper-served enterprise customers and assets in 20 states to Brightspeed, a two-year old company that was launched by former Verizon executives.

The Financial Results

Lumen’s Large Enterprise segment dipped 3.6 percent to $1.06 billion during Q4 compared with revenues of $1.22 billion a year ago. The midmarket enterprise segment declined 5.9 percent to $491 million in the fourth quarter compared to $522 million in Q4 2022. Enterprise Channels fell 5.5 percent to $2.05 billion from $2.17 billion a year prior.

Chris Stansbury, Lumen’s CFO, called the midmarket segment “very important” to the company.

“We're leaning into this channel with products and buying tools to make ordering and provisioning more frictionless … We're seeing improved leading indicators and are taking share in both IP and SASE products. This is the channel that we expect will be extremely interested in our NaaS offering given the flexibility and ease of provisioning it provides,” Stansbury said.

Overall, Lumen’s total Business segment revenue slipped 7.2 percent, totaling $2.78 billion in the fourth quarter compared to $3.01 billion a year ago. The Mass Markets segment fell 8.3 percent to $729 million from $795 million in Q4 2022. Wholesale revenue slumped 11.2 percent during the quarter to $741 million from $835 million in the year-ago quarter.

Stansbury said 39 percent of Lumen’s Business revenue decline came as a result of its recent divestures.

Business segment revenue for the full year totaled $11.54 billion, Large Enterprise pulled in $4.62 billion, Midmarket reported $2.01 billion, and Enterprise Channels totaled $8.41 billion in 2023.

For the fourth quarter of 2023 that ended December 31, Lumen reported total revenue of $3.52 billion, beating Wall Street’s expectations, but representing a decline of 7.3 percent compared to $3.80 billion in the year-ago period. The company reported non-GAAP earnings per share of 8 cents, an 81.3 percent decline compared with 43 cents per share in the final quarter of 2022.

Revenue for 2023 totaled $14.56 billion, down 16.7 percent from $17.48 in 2022.

“In 2023, we made great progress getting lumen for growth … Our plan is to hold steady on that strategy through 2024 and we’ll will continue to strengthen our balance sheet and drive commercial excellence to return the business to growth by 2025,” Johnson said.