Lumen beats quarterly revenue estimates on data center demand

:Fibre-optic cable provider Lumen Technologies reported fourth-quarter revenue above Wall Street estimates on Tuesday, driven by rising demand for data centers amid the AI boom, sending its shares up 7.5 per cent after the bell.

As the need for cloud computing and AI heightens, Lumen has benefited from increased investments in data centers to support AI applications, which require significant computing power.

The telecommunications company has signed deals worth more than $8 billion with cloud and tech companies such as Alphabet's Google, Microsoft, Amazon Web Services and Meta Platforms for its networking solutions.

In a bid to phase out its traditional mass markets business and reduce its considerable debt, Lumen initiated a process to sell its consumer fiber operations, Reuters had reported in December, citing sources.

The Monroe, Louisiana-based company also forecast its full-year 2025 free cash flow to range from $700 million to $900 million, compared to analysts' estimates of $126.6 million, according to data compiled by LSEG.

Lumen Technologies reported revenue of $3.33 billion for the fourth quarter ended Dec. 31, above estimates of $3.20 billion.