Good morning. Lumen Technologies has been transforming from a traditional telecom operator into a key player in AI networking, with clients including Anthropic and the New York Yankees.<\/p>\n
\u201cThe transformation that we\u2019re driving is really starting to take hold,\u201d President and CFO Chris Stansbury told me, pointing to Gartner recently naming Lumen the company \u201cto beat\u201d in enterprise wide area network (WAN) and connectivity services for AI.\u00a0Telecom carriers used to sell connectivity and deploy physical networks, then ceded the software layer\u2014firewalls, load balancers and software-defined WAN\u2014to big tech. Lumen\u2019s acquisition of Alkira, a cloud networking platform for multi-cloud environments, reverses that.\u00a0<\/p>\n
\u201cIt doesn\u2019t matter who owns the fiber, and it doesn\u2019t matter which cloud your data is in,\u201d Stansbury said. Lumen can move data across networks and clouds it doesn\u2019t own, positioning itself as neutral infrastructure for the AI-driven economy, he said.<\/p>\n
The financial logic matters as much as the technology. Stansbury and Kate Johnson, CEO of Lumen (No. 354<\/a> on the Fortune 500) have\u00a0worked together for about four years, first stabilizing the company and its balance sheet.\u00a0Stansbury inherited $10 billion of debt maturing in 2027 across three competing borrowing entities. Lumen cut its dividend, restructured with creditors, refinanced debt and sold<\/a> non-strategic assets, reducing total debt below $13 billion under a single entity, he said.<\/p>\n That allowed Lumen to acquire Alkira and \u201cget aggressive on network-as-a-service (NaaS) in terms of customers\u2019 ability to access the network,\u201d he said.\u00a0NaaS is growing 20\u201330% quarter over quarter, versus about 1% annually for the legacy \u201cnorth-south\u201d networking market, he said.\u00a0<\/p>\n He added that capital intensity is falling even as Lumen builds toward 47 million fiber miles by 2028 and 58 million by 2031, backed by nearly $13 billion in private connectivity fabric deals, including an Anthropic contract announced<\/a> earlier this year that will expand the AI startup\u2019s fiber-optic network across North America.<\/p>\n Last month, Lumen announced<\/a> a partnership with the Yankees, who need consistent connectivity across two venues: Yankee Stadium and their spring training facility in Tampa. NaaS gives them a uniform network experience at both sites while letting the team add services themselves\u2014by \u201cpointing and clicking\u201d\u2014rather than waiting on custom engineering, Stansbury said. The innovation is elasticity: traditional networking forced customers to provision for peak demand year-round, but spring training doesn\u2019t need regular-season bandwidth, so the Yankees can scale up or down on demand, he said, putting \u201cnetwork design and consumption in the hands of the user.\u201d<\/p>\n Lumen reported second-quarter revenue of $2.805 billion, beating estimates by about $50 million. Total business revenue slipped slightly year over year to $2.44 billion, but strategic revenue rose 14% to $1.289 billion, now 53% of total business revenue.\u00a0On Tuesday\u2019s earnings call, Johnson said Lumen is combining physical infrastructure, a programmable network and a connected ecosystem \u201cin a way no other traditional telecom company is.\u201d<\/p>\n Morningstar\u2019s Michael Hodel wrote that revenue trends appear to be improving, though competition for AI-related fiber deals is intensifying. The firm maintained its $7.50 fair value estimate and no-moat rating.<\/p>\n On the AI boom, Stansbury said nobody knows who will win the large language model race, but \u201cthe constraint is the network.\u201d That bet\u2014that Lumen becomes indispensable regardless of which AI players prevail\u2014is central to its strategy.<\/p>\n Sheryl\u00a0Estrada Leaderboard<\/p>\n Jeremy Hofmann, CFO of Zillow Group, Inc.<\/a> (Nasdaq: Z and ZG), was appointed to the additional role of chief operating officer. In this expanded role, Hofmann will oversee both Zillow’s financial strategy and day-to-day operational execution. The board expanded Hofmann’s role because of his proven track record as CFO and his understanding of operational dependencies across the business during his nine years at the company, according to the announcement. Jun Choo, who has held the role of chief operating officer since November 2024, is stepping down to focus on his health and will serve in an advisory capacity through the end of 2026.<\/p>\n Matt Newcomb, CFO of financial technology company Chime<\/a>, is stepping down, effective Aug. 7. Mark Troughton, Chime’s president, will take on the role of interim CFO. Troughton is a seasoned public company executive and chartered accountant. The company has initiated an executive search for a permanent CFO. Newcomb has had a\u00a0decade-long tenure and led Chime’s June 2025 IPO. He will remain with the company as an advisor during the search and leadership transition period.<\/p>\n Big Deal<\/p>\n A new report from Safeguard Global<\/a>, “The Global Hiring Confidence Series: Untangling the CFO Paradox Between Confidence and Restraint,” surveyed 400 CFOs in the U.S. and the U.K. It found that 97% of CFOs are interested in global hiring, and 96% believe their company is prepared to hire workers globally.<\/p>\n Seventy-nine percent of CFOs identified cost savings as the most important metric when hiring globally. However, every CFO surveyed admitted their organization had suffered financial losses due to noncompliance when expanding globally. More than three-quarters (78%) of CFOs reported losing up to $1 million and 22% reported losing over $1 million in noncompliance-related losses when expanding globally.\u00a0<\/p>\n These challenges have contributed to an overall reluctance among CFOs to actively pursue global expansion. More than a third (37%) of CFOs said their organization is prioritizing domestic hiring over international hiring, planning to decrease cross-border hiring, or both. Just 22% of CFOs said their organization has plans to hire globally in the next six months.<\/p>\n Going deeper<\/p>\n “Career growth is actually a higher priority for Gen Z than work-life balance, survey says\u2014with 93% of interns wanting to become executives” is a Fortune article<\/a> by Preston Fore.<\/p>\n Fore writes: “No generation has entered the workforce more squarely in AI\u2019s crossfire than Gen Z. As companies across industries have\u00a0pulled back on entry-level hiring, leaders have made it clear they\u2019re now more than ever looking for highly-skilled and ambitious young workers. And many aspiring professionals appear to have begun taking that message to heart.” Read more here<\/a>.<\/p>\n Overheard<\/p>\n “The two things that keep me up at night are, are we doing everything we can to mitigate the risks? And are we doing everything we can to maximize the opportunity? Those two, in my mind, go hand in hand.”<\/p>\n
Sheryl.Estrada@fortune.com<\/a><\/p>\n