Morning, everyone, thank you for joining Lumen's 2026 Investor Day. Before we begin, I'm gonna read the safe harbor because I can't memorize it. 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 as detailed in our most recent SEC 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 include non-GAAP financial measures. You'll find reconciliation to those on our website, and the presentation is available on the IR website as well. Thanks for coming. Really happy to have everyone here, given the weather, and enjoy the short video before we begin. Everyone wants to talk about AI. You just want it to work. Here's the simple truth: If your network can't move massive workloads quickly, securely, and effortlessly across multiple clouds, none of the AI in the world matters. That's why we built the Lumen network the way we did. A high-capacity backbone, real-time control, and multi-cloud routing without the headache. We're not here to add more noise to the AI conversation. We're here to simplify the complex infrastructure that makes AI work, and that starts with reach. A network connected to nearly every major U.S. data center, expanding fast and built for AI, because performance, reliability, and control aren't hype, they're your job. AI is a network story. Start with a network built for what's next. Lumen, the trusted network for AI. Let's go! Let's give a warm welcome to Lumen's Chief Executive Officer, Kate Johnson. Oh, yeah. Good morning. Good morning, everybody, thank you so much for coming today. You know, getting through the snow, the hail, the sleet, the rain to hear our story. Thanks for taking the time to be with us. It's been a while, right, since we've done a deep dive, more than 2 and a half years, so much has changed. We're so excited to share that progress with you, it really starts with a commitment that I made to our people and to the market, that we would rebuild Lumen from the people up, we've refreshed our people and our culture in such a profound way. First and foremost, we took people who were in the company already, we empowered them to show us the way, that's been an important part of where we started. We imported industry leadership from telecom and from networking at all levels of the company, across all functions. Wherever required, we retrained and upskilled. We're still committed to doing that, particularly as we build AI skills across the company. We rebooted our culture. I don't say that lightly. It's actually a very significant part of the reason why we've made so much progress. We were in survival mode. We were playing not to lose, focused on trying to slow the decline, right? Harvesting cash to pay a dividend. Now we're playing to win. We're making intentional bets. That takes a completely different mindset. When you're playing to win, you have to constantly learn, so that you can take feedback from the market to pivot. It takes a certain amount of agility. You have to have courage to speak truth to power, to point to the problems, you have to have the mindset of, "We can fix it. We can overcome." That's how we built the Lumen 8. It's the 8 behaviors that define our culture; I think the important thing to know about them is this. These weren't random behaviors that we selected. They're actually 8 behaviors that are associated as common denominators with companies that have driven successful transformation. Big reason why we're here today. Second, we rebooted our strategy fundamentally to become the trusted network for AI. We simplified the product portfolio, really getting rid of adjacencies that didn't make sense. We declared our major. We're gonna focus on serving the enterprise in the world of Cloud 2.0 and AI. We've driven a massive expansion of our physical network and continue to do so, and probably most importantly, and a significant focus of our story today, we built a digital platform that's representing a very exciting and fast-growing organic platform, organic growth platform for the company. The future looks bright. Finally, we established financial freedom two ways. Number 1, we inked $13 billion of Private Connectivity Fabric deals with the biggest technology companies in the world. Secondly, we sold our consumer fiber to the home business to AT&T. Huge injection of cash. We very wisely used that cash to absolutely reboot our capital structure, and all of this put together has driven incredible feedback from the financial markets. Our debt is trading at greater than 95% of par for the first time in a couple years, up from a very low number before that. We've received upgrades from all of the agencies we just announced on Monday. That's pretty encouraging. Our equity price. Equity investors have enjoyed a 400% return in the past two years alone. The average stock price given, assigned to us by the community here that we're talking to today, has risen from slightly above $1 to slightly above $7, which is also very encouraging. We've seen a substantial increase in growth-focused investors. We have had a lot of volatility. I think there are two parts to that story. The first is, we are now a part of the AI trade, and there's a lot of thought, you know, on one day it's positive, the next day it might be negative, about what's going on in the AI economy. We're now a part of that story, and we see volatility as a result of it. Secondly, we need to make sure that the world understands our story. It's a very powerful one, and I think it will tend to moderate the volatility over time once that story becomes well known. Finally, our trading multiple, up 25 points compared to the backdrop of other competitors in the industry. This is pretty solid performance. Today marks the line. The dark days are over. We've stabilized the company, we've driven a turnaround to both credit and equity investors, and the future is very bright. We're gonna focus on how we grow. We're gonna give you great insight into exactly that path today, and we're ve ry excited about it. The lineup for today is, I think, a very solid one, and what we're talking about, I think it's gonna be a lot of new content. I'm gonna focus on the strategy and the business model, and I think that'll shed a lot of light on our path to pivoting the company to growth. Jim Fowler, our new Chief Technology and Product Officer, is gonna talk about building the stack to address this complicated market called Cloud 2.0 and the world of AI. Ryan Asdourian, our Chief Marketing Officer, is gonna take us through the Lumen difference and what we look like compared to the rest of the market. Chris Stansbury, our CFO, is gonna bat cleanup and take us through the financials and our guidance. We're gonna open it up. The entire Lumen leadership team will be on stage, 45 minutes of Q&A, and then I know you've heard that there's no such thing as a free lunch, but today you're gonna get exactly that. Okay? All right. 2 and a half years ago, or 2 and a half years ago plus, I started my presentation with this slide, and it's changed a little bit and refreshed, but it still provides the North Star for our transformation. Our focus, what we wake up to do every single day, is to ignite business growth by connecting people, data, and applications quickly, securely, and effortlessly. Now, we've been connecting for decades, right? The difference here is the quick, secure, and effortless customer experience is defining in the telecom industry and much needed. We've established five core customer solution areas. This is that simplification I talked about, getting rid of the stuff that doesn't make any sense, and really focusing on our assets and the value that we can deliver to customers, and that has proven actually very fruitful in terms of our focus, both slowing decline as well as accelerating growth. A couple of years ago, I really focused on profitable growth. That is what we're going to do. We've already talked about driving growth in revenue in our business segment by 2028. Still a primary goal. We've added some things. We want to deliver the best experiences for employees, customers, and partners. That requires digital. That requires a fundamental reset of our IT backbone from quote to cash, which is underway. This is new. I think this is new for telecom, it's new for Lumen, and it's probably the most important thing on this page. We want to build products and services that customers love. We want to innovate to deliver true value to them. I think the growth of our NaaS business, which we just announced on Tuesday, 2,000 customers or a doubling since the last time we quoted that, you know, a number for you, I think it's proof that we're onto something very special here. The whole thing sits on top of that culture. These are the 8 behaviors: team transparency, growth mindset, courage, et cetera. These things, again, not random, but they're based on a very important thesis, that our path to greatness lies by giving agency to the people who do the work at our company. It's an incredibly virtuous cycle. The more we empower, the more they deliver, as you can see in our results so far. Who are we gonna be in 3-5 years? This is an incredibly important line we're drawing in the sand. This is where we're headed. We want to be a digital network services company that delivers ubiquitous and universal connectivity to enterprises, right? You know, we're all about high bandwidth, low latency, secure, resilient. These are words we've used for a long time, but intelligent fiber solutions as well, and we want to deliver them digitally and on demand to our customers to give control for a change, for a change. This is something that they've seen in the cloud space with compute and storage, and we want to give it to them from a networking perspective. A couple of words that are new here and are essential to our build-out that Jim's gonna take you through in a few minutes. This notion of ubiquitous. We want to be available everywhere that our customers are, which is everywhere, and we want them to have optionality to send their data from anywhere to anywhere. That's why we universally cover every combination, whether it's on-prem, at the edge, in any data center or any cloud, because on-net or off-net, we want our customers to move data from anywhere to anywhere, anytime. Intelligent. We talk about being the trusted network for AI. This is incredibly important, this word, because we want our products and services to be infused with AI as well. It's not just about helping other companies use it, we're on the hook to become masters of leveraging AI, to reimagine what the networking business is, and that's well underway. Finally, on demand. This is a new business model. On demand, we know about this model from cloud. Bringing it to telecom is completely new. We're driving consumption patterns in our NaaS business that I'll talk about shortly. It's an incredibly important shift, and again, it's about putting control in the customer's hands. You only pay what you use. That's value to you. This value is coming at just the right time, because CIOs, they've got a real problem. As always, they're on the hook to drive insight at the speed of thought. Today, it's in a sea of complexity with Cloud 2.0 and AI. Cloud 1.0 was about the simple on-prem to cloud connection, static, point-to-point, analog. Cloud 2.0 is about intelligent, application-centric, serverless environments. With explosive growth in data centers and clouds, it just makes moving your data more and more complex. The problem is becoming more and more intense with AI. I want to unpack the AI economy a little bit and how we see it and the role that we play in it. It really starts, I'm sorry, it really starts with the supply side, right? $2 trillion being spent on data center expansion over the next decade. Why? Because data centers are becoming AI factories. They're where intelligence is being created. These are where the new knowledge worker, the AI agent, live. What do they need? They need chips, the fastest depreciating asset on planet Earth. That's why we think about TCO, it's 'cause we're trying to add that value for our customers to help them with a very real and complex problem. There's obviously the great search for affordable, clean energy. Third, and we think most critical, is you need networking, 'cause otherwise, those data centers are just bricks. The biggest proof point that Lumen is critical infrastructure in the construction of the supply side of the AI economy is the $13 billion of Private Connectivity Fabric deals that we've done. As big tech is building out the infrastructure to provide AI services to enterprises, they've tapped Lumen as the trusted network for AI. There's a demand side, and the demand side actually is gonna be the focus of today. It's where the most of our growth lies, it's where the exciting part of our valuation will come into play, there's a massive shift that's happening. Today, enterprises spend about 36% of their network spend connecting premise to cloud or premise, right? About 64% on what we call cloud core. That's the interconnection between all those net new data centers and clouds, multi-cloud over to prem, all of that interconnection, and with AI corridors emerging, it becomes more and more important. Over the next three years, we see that shifting pretty dramatically to 84% of their spend being there. Why? Yes, they have to connect, those data centers. Probably more importantly, they also need services to help them move their data in an agile way between them. That's the essence of our strategy. They need 5 things in order to do that quickly, securely, and effortlessly. It starts with massive amounts of bandwidth, extreme bandwidth and low latency. They need data center interconnect to happen, which we're a fundamental part of that story. They need to take advantage of those AI corridors that are emerging. We have line of sight into that and are expanding into those corridors. They need on-ramps, on-ramps into cloud, on-ramps into the AI corridors. Basically, we're investing, as Jim is gonna say, in all of the right places, and all of that depends on 1 very, very important concept. We are making our physical network programmable and API-driven. It enables the whole strategy. It's an essential part of the story. We're gonna tell you exactly what that means today. These are the things that we're investing in, and we've got a laser-focused strategy that is enduring and delivering results. Three pieces. We will continue to be the undisputed leader as the backbone for AI. That's our commitment to constantly invest in our physical network, to drive massive expansion for greater coverage in chase of that ubiquity concept I talked about, but also investing in state-of-the-art fiber and equipment to make sure that it's a no-brainer to choose us as your backbone. Second, on the digital side, making everything programmable, it's all about that customer experience. It's all about recognizing we have to make it easy for enterprises to move their data from anywhere to anywhere, anytime, in real time. The connected ecosystem, we're gonna bring this to life today and show you why it's so important. Huge part of our growth strategy to bring third-party services to our customers via a very elegant implementation. We'll bring that to life with real stories and how our customers are doing it today. whole thing on a commitment to constantly address our technology debt, simplify our IT backbone from quote to cash, make sure we have state-of-the-art implementation of all core systems, ERP, CRM, ServiceNow, et cetera. All sitting on that culture that we continue to invest in because it helps us go fast. I'm gonna ask Jim Fowler to come up to the stage in just a second. I wanna tell you about Jim and how Jim and I know each other. We worked with each other at GE a bunch of years ago. I was always impressed with Jim. Smart, able to execute, visionary, great to work with, incredible collaborator. When the board of Lumen had a chance to bring him on to the board as a director, I was gleeful, so excited. The role that Jim played over the past two years is, he represented the customer. He's been a CIO for a couple of decades, and CTO, and all the other labels that we put on people who care for the technology that makes our business possible. He always represented the customer perfectly, and he brought incredible value to our story. He helped shape the strategy, and he brought commercial truth to it. He would say: "I'd pay for that. I wouldn't pay for that." That's invaluable for this company. When we had a chance to bring him from the board to become our Chief Technology and Product Officer, we jumped at the chance. Jim, come on up. Thanks, Kate. Really appreciate it. As Kate mentioned, earlier this year, I had the opportunity to make the transition from board member to management team, and I'm now 52 days into the job, and the question that I keep getting all the time is: "Was it a hard decision?" The answer I keep giving everybody is: "It's the hardest, easiest decision that I ever had to make." It was hard because, one, I was leaving a company I loved, a brand I loved working for. Two, I was rolling off the board, and I'll tell you, for the last two years, it has been a very interesting point of view to have, to be able to watch the transformation that Kate talked about in the role of governance on the board of directors. The easy part of it really kind of boiled down to 3 things. One, this is a spectacular management team. I can't tell you how well they work together and work off of each other. It feels very much like a startup mentality in how they're thinking about the way the company gets run. The second is the culture of the company. Kate and the management team have really kind of taken this old telecom mentality, and they've taken it out of the organization. When you meet the leaders across the organization, what you're gonna find are people who are passionate. They're passionate about change, they're passionate about what they see the opportunity for. The third is kind of what Kate alluded to. After 30 years in enterprise tech, 20 years in some various role as either a CTO or a CIO in lots of different industries, the problem couldn't be more clear to me. Like, I see it. Like, I was experiencing it as an enterprise technology leader. My first CTO role was 20 years ago, and what seemed really complicated to me then is actually not that complicated. All of my applications and my data sat in two data centers. Those data centers were about 300 miles apart. If one failed, the other took over. All of my users sat in about 100 locations around the world. They were connected by T1 and T3 lines back into those data centers. We had firewalls that protected us. The perimeter, the perimeter was actually pretty easy to manage. I would say all of that has changed in the past 10 years in the enterprise. The perimeter now is the whole of the Internet, and it's really driven by a few things. One, there isn't one enterprise leader who hasn't moved to Software as a Service. Their CRM is sitting in Salesforce. Their ERP is sitting in SAP, in SAP's cloud environment. They're running MRP systems that are running in other companies' data centers that manage them for them. SaaS really started to expand the perimeter of the data and the applications that enterprise leaders have to manage. That made it more difficult. Those two data centers I talked about, we moved them to the cloud, right? Now they're not just sitting in 2 data centers, they're sitting in 20 data centers, and by the way, not just 1 cloud, they're sitting in AWS... some combination of AWS, Azure, and GCP, depending on the workloads that you were trying to move. That workforce that sat in those 100 locations, well, now they're sitting in 20,000 locations because they're a hybrid workforce, and they're working from home periodically. That increased the edge of what you had to protect and how you had to think about data movement. Then I mentioned it was a global organization. When you think about data sovereignty laws requiring you to keep data around the world, this perimeter issue really drove the problem that Kate unpacked for you earlier, which is AI-driven proliferation is real. Data is sitting everywhere. Apps and data and users are widely dispersed, and as an enterprise technology leader, that was a core problem that I was faced with: how do you manage every day? As the perimeter expanded, the second thing that really happened is you ended up with a proximity issue of how you thought about data. From a proximity perspective, the perimeter breakdown really means that data, which is really the fuel for business, is distributed everywhere. The days of having compute and data together, like those two data centers, I could have the data and the compute sitting next to each other, those days are over, and they're never coming back to us, quite frankly.... compute and data are going to be sitting at the edge, and the value of investments that we're making in things like artificial intelligence, they're really being throttled by the public internet. 'Cause that's really the way we've been connecting the data and the compute together as it sits in different clouds and different data centers around the world. Those hybrid architectures, they're not going away. They're only going to get more complicated, and they're only going to continue to grow. The third problem that I clearly saw is kind of an enterprise technology, one of reliability and resilience. There was a day last year where one of the major cloud providers had an outage in a region. We couldn't book product for the day. We couldn't service products for the day. Think about the complexity change that happened in 20 years from a resiliency and a reliability perspective. All my apps, all my data set in 2 data centers, fail from one to the other. Pretty simple. Well, today, a business process, not even a system, a business process can span multiple data centers and multiple cloud providers. How, as an enterprise leader, as an enterprise technology leader, can you really manage that? Those are some of the key problems, and frankly, it was the key problem that I could see that really made it so easy to say yes to Kate and the management team. Kate, thank you for calling. It's gonna be a fun ride. You don't have to look far to see examples of this playing out today, data that you can look at to see this happening. The first one I'll call out is data center growth. Over the next five years, we're gonna see a 10x increase in the number of data centers located in the United States as we build out the capacity for artificial intelligence in the world that we see coming at us. Those data centers are not gonna be in the same space as the data centers are today because they're gonna follow the 3x increase in power builds that are gonna move to rural America. They're gonna move to where there's fuel, where there's capacity, and where there's land, and where there's tax abatements, and that perimeter that we've been talking about is gonna continue to get worse as a pro- for enterprises to really think: How do you manage this dispersion of data and systems and processing? The second is one of cost. I have a friend who's a CIO of a large bank, and I was talking to them about what they're doing to build their own large language model. They're one of the few enterprises that I see doing this, but they recognize they've got 20 years of data, about their customers, about the transactions they've made, and they believe that there's a financial planning capability that they can build in a specialized model. The problem that this CIO is faced with is, to be able to get to the GPUs, which are in short need, they're having to go to neo cloud providers that are providing GPU as a service. That's not where their data's at. Here they are, they're paying $2,000 an hour for these chips to be able to build this model, They've got to bring petabytes of data from their data centers to get there, The problem they're faced with is the CPUs, the GPUs that they had to pre-reserve to be able to get them are sitting idle at $2,000 an hour. We just kinda give you a quick example here. If you think about moving a petabyte of data over what most companies have traditionally had, a 10-gig circuit, that's 222 hours. That's 222 hours of potential downtime for that CPU while you're trying to get the data to the GPU to actually train it. This is why you're gonna hear us talk about the need of the future is around high bandwidth, getting to 400 gig circuits, 800 gig circuits, 1.6 TB circuits. It reduces this from a 222-hour problem to a 6-hour problem, and that's worth almost half a million dollars of savings from a GPU cost perspective for that one customer in doing training. Cost, you're seeing this start to unfold as a big issue in idle time within the infrastructure, driven by the capacity limits of the network. The third thing you're gonna hear more and more about, right? We're at this point where companies have moved on from experimentation of artificial intelligence to implementation. Latency is gonna matter so much. One of the biggest examples when I talk to my peers in the technology industry that most enterprises are going after is the call center. There's a lot of great new technologies that can be that first call received, either a text or a chat or a voice call. This isn't the voice systems of the past 20 years. This is gonna seem and feel like you're talking to a real person that's able to talk to you. You're gonna have this issue of inference that's gonna come into play. For that application to matter, for that virtual agent to be able to talk to you clearly and plainly and be able to converse at the speed that you want to converse at, it has to be able to infer and get data from the rest of the system that's spread out. If that doesn't happen for voice applications in a 5-20 millisecond level, it's not gonna feel real, and it's not gonna work. Think about all of the different applications here: image recognition, 50-millisecond cycle time. You go to some of the more advanced capabilities, like telesurgery, drones, and robotics, you've got to be under 5 milliseconds. It's one of the big reasons that, from a Lumen perspective, we've been really focused on making sure that our network is within 5 milliseconds of 85% of the hyperscalers of the data centers inside the United States. Latency is gonna be the third big problem, that enterprises are gonna feel that they're gonna need a new network, a new way of thinking about the network to be able to deal with. When Lumen talks about Cloud 2.0, this is what we mean. It's about helping customers unlock these value levers. How do they get to scalability without runaway cost, right? That first bucket. How do they get to bandwidth that keeps the GPUs, the XPUs, all of the new processing unit types for being productive and from being idle? How do we get latency that is really low enough to enable an entirely new class of artificial intelligence-driven applications. This all starts with a network that's high bandwidth, that's low latency, and that is programmable by design, that's resilient, and ability for our customers to be able to control that world. Kate talked about supply and demand, and she started to define kind of two markets that we're focused on within Lumen. I wanna make sure everybody understands these two markets. The first we'll talk about is kind of the north-south. Think about north-south as an enterprise connecting their premises, their buildings, to their data centers or to their cloud, or their premises connecting to each other. This is the complex version of the world that I described I was in 20 years ago. It's not new. It's about a $12 billion TAM for us. It's not growing, but it is getting far more complex. Whereas 20 years ago, I was connecting a set of buildings together within two data centers that I own, I now have to connect into 20, 30 different data centers, to the SaaS providers, to the hyperscalers. The market itself, though, is not. The second market, the one that's the really interesting market for us, is east-west. As the world generates more data, as data becomes the fuel for business, as we think about what's sitting in the data centers and the hyperscalers, the east-west traffic of moving petabytes of data back and forth between hyperscalers to neo clouds, between neo clouds and on-premise data centers, that's where a lot of the growth is gonna be. We don't believe, this is an $11 billion TAM for us today. It's growing at about a 13% CAGR. We expect this to be a $20 billion TAM for us by 2030. This is where AI training and inference really matter because you're moving really large amounts of data around. What's important for all of you to understand is that most providers are focused on one or the other. They're either focused on that north-south traffic, and how do I get my enterprise and my customer's enterprise connected to the cloud? There's a set of companies that are focused on cloud to cloud. Very few are building a platform that's designed to serve both markets. Cloud 2.0 is Lumen's answer to that. We're building a network architecture that addresses both enterprise to cloud and cloud-to-cloud connectivity together, at scale, with the bandwidth, the latency, and the control that these workloads demand. Now, here's the rest of the story. I told you that the north-south is static, it's not growing. What we also believe is the winner on east-west is going to take share from north-south, because what enterprise, right, this is me, the customer, 53 days ago, what customer wants to have to go to multiple providers to deal with the end-to-end issue that I have as an enterprise? From our perspective, winning east-west is also about taking share from a north-south perspective. That's something I want to make sure everybody understands about our strategy here. Now the fun stuff. This is the stuff that I geek out about. This is where we get to get into the how do we make it work? This is our roadmap. How are we doing this? This is the roadmap that we're going to really make Cloud 2.0 real. In 2026, we'll invest about $500 million, really to build a truly programmable network for AI-driven workloads. We're doing this across 3 really tightly integrated layers of building blocks, and Kate kind of took you through this. The first is the physical network. We talked about large capacity, low latency networks. We need to do this at the inner-city level. That's our RapidRoutes work that we're doing to get 400 gig circuits across the United States. Once you've built inner city, you need to do within city. That's our Metro work, where we're doing a Metro network that is able to be able to support high-speed Ethernet within the individual Metro areas where our network exists. You've got to get it out to the data centers. How do you make sure that you can go from the Metro to the data center again with that 400-Gb band circuit? All of that supporting the work that we're doing to get to the cloud on-ramps, the AI on-ramps, and making sure that we can get that enterprise connectivity from a wing-to-wing perspective in place. We started, if you recall, with the PCF deals. That was about helping the hyperscalers to be able to build out the large language model capabilities within their clouds. What you see is the building blocks above that are what we, Lumen, are building out for our enterprises to be able to get their data to and from. This is a very much a homogenous relationship between what we've done with the PCF and what we're now doing at the enterprise level to build out the physical network. taken together. The second part of this, sorry, the second part of this is the digital platform. Once we've given the physical network, we want to give control to our customer. It starts with how we go to market. That's Network as a Service. Again, you heard our successes this week. We crossed the 2,000 port number as Network as a Service. That is the motion that we will go forward to have one port and many services. To make that work, we're building a platform called Lumen Connect. Lumen Connect is that digital skin that we're giving to our customers to be able to own their own connectivity, their own service addition and modification, to be able to manage the network much the way they manage the cloud. The third is the Fabric Port. This is the physical device and the network components that make it happen, that allow this all to get connectivity together. Multi-Cloud Gateways is a way to give customers a 1 point of connection into all of the clouds, all of the SaaS providers that we're building, to make it easier for them to not have to build individual connections. Once we've got the physical layer and the digital layer, the platform together, we know that we have partners that need access to the same level of connectivity. Through Lumen Validated Designs and Marketplaces, being able to use the underlying platform that we've built to allow our customers to get connectivity in. Taken together, this is how we turn the network into a programmable asset, a platform, 1 that supports both enterprise and cloud core use cases, both north-south and east-west. It scales with AI demand as we go forward, and it really lets customers consume connectivity the same way they consume compute and storage in the cloud. All of the benefits that I got as an enterprise leader of moving to cloud from a time-to-market perspective, we want to provide at the network layer as well. I'm gonna drill into a few of these just to kind of give you an idea of where we're at. The first one I'm gonna start with is RapidRoutes. This is where we're looking inner-city across the U.S. How do I make sure that I've got 400 gig circuits that run across the United States? The progress we've made, we've got 36 new routes, high speed, can spin them up in just a matter of days for customers to be able to get 400 gig inner-city capacity. By the end of this year, we'll grow that to 49 new routes, and we'll expand 18 additional routes to have that 400 gig capacity to be able to move large amounts of data between cities across the U.S. Now you've landed in a city. We've got to make sure we're doing it there. That's our Metro Expansion. Metro Expansion is where we're providing high-speed Ethernet services in key Metro markets where we know a lot of these AI-enabled growth is happening. Today, we have six gateways in six markets, and by the end of this year, that's gonna grow to 35 gateways, 32 markets. It'll be in over 248 of our wiring centers around the U.S. This is, once you get in the Metro, how do I get to your premise, and how do I get to the data center? Which leads into the third big component for us, which is data center expansion. Data center expansion is, I got you to the Metro, now I need to get you from the Metro to the data center with a 400-gig circuit. Today, there are 68 data centers that we have this level of connectivity to in 15 markets. By the end of this year, that'll grow to 139 data centers in 28 markets. Now, wing to wing, city to city, within a city, all the way out to the data centers, I've provided that wing-to-wing capability for you to get high-bandwidth services in place. By the way, this is just 400 gig. We're building this out on a way to grow it to 800 gig and to 1.6 TB of capacity as the demand grows over time. This isn't, this isn't an endpoint, this is a stopover point as we're building out that capacity. All of it focuses on this: recognizing that we need access to both the cloud on-ramps and the AI on-ramps that are developed across the United States. Today, we have about 44% coverage of the on-ramps with this level of capacity. By the end of this year, of the existing on-ramps, we'll cover 90% of them. Again, really focused on that enterprise need to be able to get to the large language model capabilities that the hyperscalers have built on top of our PCF network. We need to be able to provide the enterprise networking capabilities to be able to get them there. That's the physical layer. Now we're going to talk about the digital piece of this. Network as a Service is how customers are going to consume our services going forward. What we're talking about is really a shift from a process where you contacted your salesperson, you put a manual order in place, they did some design work, we rolled a truck, we did a network configuration for you. At its core, what we're trying to do is really shift that experience to have it be more like a programmable network for you. Traditionally, this has been static. It's been manually procured. In fact, if you ask to make a change to your service today, the cycle time for us inside is about 20 to 30 days of average cycle time from the time that you start that ordering process till we get it through our systems. That's just not acceptable anymore. What Network as a Service does is it really flips that traditional telecom model on its head. It turns connectivity into a software-driven configuration that can be provisioned, it can be scaled, and it can be reconfigured really as the customer needs to. It will behave like cloud infrastructure. Customers want flexibility. An example here, in my last role, I had a large team of data scientists who sat across the United States. One of the problems we uncovered is their day would start off by them coming in and saying, "I need to move a large chunk of data from point A to our premise to be able to get it into the analytical models I'm running on my laptop and get it back out." That was a 2-hour window of time to move data for them sometimes. What NaaS gives us the capability to do is to be able to say, "You know what? You're gonna schedule that job between 6:00 A.M. and 7:00 A.M., and between 6:00 A.M. and 7:00 A.M., I'm gonna dedicate more of the bandwidth that I have to those data movements so that we have standard times of moving data around the organization to reduce your downtime, so I don't lose two hours of a data scientist's day." That's how we're thinking about this. This is what we want the capabilities of the programmable network to be. As you think about Network as a Service, and you think about Lumen, this isn't just a product shift for us, this is a business model shift. We're really thinking about how we monetize the programmable network, how we improve our capital efficiency, how we align the economics of how Lumen runs to how our customers actually want to buy and use connectivity going forward. As you kinda anchor the digital story, it anchors off NaaS. The second part that this digital platform anchors off of is Lumen Connect. This is the front end of our programmable network. It's where customers go when they're using Network as a Service to replace the manual processes and give them on-demand control to change bandwidth, to add services, to modify services over time. This is an evolution from a product we had called Control Center. This is not a reskin or a refresh, this is a brand-new strategic platform that will replace that and be the front end of our NaaS product. It'll let customers discover the services that are available to them and the capabilities that are on their network today. It'll help them provision new services. It'll help them, it'll help them manage the services they have to scale up or down on demand. We're already seeing in NaaS, customers who, on a nightly basis, spin up or spin down the capacity they have in their network based on specific needs. We know we're gonna see more of that, and we know that it's gonna be API-driven, digital workflow-driven, and Lumen Connect is the place where that's gonna happen. Rather than me telling you more about it, let's show you a quick video about how Lumen Connect works. Welcome to the future of digital business, where cloudified, on-demand networking puts you in the driver's seat. In 2026, Lumen is reinventing innovative service management with Lumen Connect, making it easy to quickly scale services up or down, automate workflows, and manage environments with intuitive controls. Get unified insights for Lumen services, along with proactive alerts, guided onboarding, and customizable views for frictionless self-service. Stay ahead with agile service offerings built on an expansive modern fiber network, delivering the speed, security, and reach that innovative leader demand. Lumen Connect is your springboard into the AI-powered future. With digital control and Cloud 2.0 flexibility that can scale and adapt with you. With Lumen's digital offerings, you get effortless, programmable control, rapid innovation, and a seamless experience at every turn. I'd encourage you, when after the meeting today, there's a booth outside if you wanna see more, they'd be happy to kinda share with you a little bit about Lumen Connect and get to see it. This is really what makes NaaS economically compelling, 'cause it really helps reduce the manual work that our customers have, it accelerates service delivery, and it allows us to scale revenue without really scaling the costs of how we operate the business at the same time. Underneath this, kind of the next layer of that roadmap I talked about, is the Fabric Port. Some of you have heard us talk about this capacity, this capability in the past, as Project Berkeley. Berkeley was a development effort that we've been working on for the past year, really to come up with the technical capabilities at the port level to be able to support what we're talking about. Fabric Port is the productized outcome of that work. Going forward, that's how you'll hear us talk about it. At the center of the Fabric Port is a fabric network interface that is a single physical port that can support multiple services. In the past, in the old world, a port and a service were pretty synonymous with each other. They didn't have a lot of flexibility. It's what drove a lot of truck rolls, et cetera. Going forward, our technology will actually bring those together, where you can have multiple services on that same port. It'll make it more of a user-driven experience. The Fabric Port also extends Lumen's network to the customer site. This allows them to add services, to modify them kinda locally. It allows us to issue APIs that will allow us to do a lot of the configuration work back and forth with the customer, all without new hardware rolls, hardware rolls out to the customer. The important part of the Fabric Port is really this is what makes NaaS scalable for us. This is how the physical network of what we're doing really becomes programmable going forward, and it's really how Cloud 2.0, for us, becomes a repeatable, margin-accretive business. A lot of the work we've been doing in the last 12 months is to come up with this Fabric Port capability. Then the last piece of the digital building blocks that I'll talk about is really the Multi-Cloud Gateway. This is a self-service, virtualized routing solution that really simplifies how enterprise get connections into the multicloud. My old world, we were in multiple clouds. Each one of those clouds was a separate physical connection that we had to design and build to be able to get into those cloud providers. At Lumen, we really wanna eliminate that complexity of managing those individual connections and create a full cloud mesh capability, that once you have the Fabric Port and once you are in the Lumen Multi-Cloud Gateway, it's as simple as a service addition or change to be able to get you access to new clouds, new regions, new SaaS providers, and their capabilities over a private network, where you're not having to fight with traffic with the rest of the internet. That's how we think about what the Multi-Cloud Gateway should work. We just announced this capability last week. This also opens up for us east-west traffic market I talked about, because yes, this helps with the north-south, but it also gives us a capability to allow those customers now to have a better way to be able to transfer data across those cloud providers. That's all part of what we're building within the Multi-Cloud Gateway. The last thing I wanna talk about is now go up to the third element of the stack and talk about the ecosystem. When we talk about Cloud 2.0, the core idea is that the network becomes a platform, not just a transport anymore. We're building a programmable digital foundation that lets us integrate best-in-class solutions at the edge, in the core, and across the multicloud environment, without forcing customers to stitch together the network to make it work. What we know is, there are several partners who need that capability for their solutions to work, for their solutions to be able to scale with the same capacity needs and latency needs that we're talking about. That, we've kind of created this idea of Lumen Validated Designs, where we'll partner with other companies in this ecosystem for solutions that take the best of what we're doing from a network perspective, and the best of what they're doing from a technology perspective and bring them together. Just two examples to leave you with today. The first is Meter. Meter is really thinking about, within the facilities they manage, how do you really unify the local area networking capabilities that they're building out with the wide area network in a single AI-driven experience that really better unifies the connectivity configuration of their customers? The solution that we're working on together as a Lumen Validated Design really simplifies that. It creates a single place to buy. It uses things like natural language processing to give them the ability to ask for what they're looking for, and it accelerates the deployment of those capabilities for both Meter and Lumen. That's one example of a partnership that we really believe comes out in the ecosystem. The second one I really love, because I happen to be responsible for our own internal data, and this is a solution that we're using internally from Commvault. We're using Commvault for our immutable backup system, and the Lumen Validated Design that we're building with them is really to think about: how do you integrate AI-powered data protection directly into our programmable network? You know, they're one of the largest data protection service providers. They are delivering policy-driven backups, this immutable backup space. They're identifying identity resilience, and they're focused on how to build ultra-fast kind of clean rooms for recovery when companies do have losses. When you think about the amount of data that has to transfer at real time to get a company back up and running, those 10 gig circuits aren't gonna work anymore. Having a design where we can scale the network to their needs for these backup solutions, that's a marriage that we wanna move forward with. Those are two examples of what the ecosystem looks like. I'll maybe leave you with one last video to unpack what the relationship with Commvault has looked like. With that, thanks very much. As a CIO, my job is pretty simple to describe and hard to execute. I keep the business running, protect the data, and make sure we can move fast without breaking things. That's why the partnership between Commvault and Lumen matters. We wake up every morning thinking about customer resiliency, resiliency. To me, vault means safe, right? That's what we do at Commvault. We provide a framework for when there is a disruption, that customers can recover quickly with confidence. We protect the largest customers in the world. They range from financial services, healthcare, banking, federal, and technology. Companies can't afford to be down. Lumen's connected ecosystem reduces complexity by validating how solutions work together. The combination between Lumen's edge infrastructure and cyber resiliency framework from Commvault is a powerful combination that is valuable for our customer. Lumen brings global network scale and deep visibility, and Commvault brings cyber resilience, protecting data, identities, and recovery paths. For customers, that means fewer gaps, faster recovery, and less operational friction. Lumen applied this approach inside its own environment, consolidating roughly 90% of legacy backup platforms. The result was more than $3.5 million in annual savings. That's the real power of the connected ecosystem, and it's the same blueprint we can deliver together to customers in an AI-first, multi-cloud world. The most rewarding part of my day is ensuring that we're actually creating impact and value for our customer. Okay, let's bring it all home. Lots covered. Thank you, Jim, for that overview. We're investing in three ways. We talked about the continued expansion of the physical network with upgrades, we talked about building a programmable network with our digital layer. Now we've talked about the connected ecosystem and how we bring third-party capabilities to enrich the offerings that we bring our customer. I believe that most of you have come here today to understand: how does this pivot the company to growth? How do you get there? We wanted to take you through the path, and we thought the best way to do that was to give you an illustrative example of a company and how they will consume our services. The whole story starts with the FabricPort, formerly known as Project Berkeley. This is the revenue socket for our business. Think iPhone, think computer, a piece of hardware that hosts these services, and the value of a Fabric Port grows with services, not with truck rolls. That's an incredibly important part of our story because we're delivering cloud economics in the world of telecom. Increasing scaled revenue, reduced marginal cost, incredibly important part of our value prop over time. Five different demand scenarios. Let's call it a manufacturing company with one site. Very simple example, but brings the whole story to life. Starting off, this manufacturing company, the CIO says, "We've got to get out of TDM circuits. We've outgrown them. We want to modernize our communication capability and our internet access. Let's buy a Fabric Port from Lumen. Let's put some Internet On-Demand on that Fabric Port, and maybe some voice, some Lumen Cloud Voice. Let's see how that works. 1 port, it might require a truck roll for that first instance, multiple services. Get up and running. It's quick, it's secure, it's effortless. New CISO joins the company, says, "Guys, we need some security protection here." He decides maybe he needs some immutable backup from Commvault, maybe some firewall. Adds both of those services with Lumen Validated Design. Now, you've got a secure connection, quick, secure, effortless. The data centers are aging. CIO's on the hook to migrate them to cloud. Chooses AWS for the apps, chooses GCP for the analytics. Multi-Cloud Gateway, the capability that Jim talked about that we just announced availability on Monday, is essential to that storyboard. Same Fabric Port, more service, revenue growing across every one of these demand point examples. 30, 40-year-old ERP, time for an upgrade, want to go SaaS. By the way, this is starting to sound a little bit like our journey at Lumen, but we got our ERP in this year, so we're pretty excited, or last year. It's a tough scenario. First thing you got to do, go to that marketplace, make sure you set up Lumen private data connection through the SaaS provider's marketplace, and get yourself access to a SaaS-based ERP and CRM platform. Finally, maybe this CIO at this manufacturing company wants to build AI-powered services franchise. To do that, they need some models. They're going to put those in Azure, and they need lots and lots of data, which just happens to be over in GCP, and they need a 400 gig intercloud connection that they're going to buy through Lumen Connect in order to do this. Five different scenarios, starting at $990 monthly recurring revenue with Lumen and growing to $5,500 of monthly recurring revenue with the company. Growing via addition of services on 1 Fabric Port over time, no truck rolls. Remotely monitored through a single pane of glass, Lumen Connect. At the bottom of the chart behind me, you'll see the first two scenarios are really about north-south, north-south connectivity, the simplest of the connection. The next three are really about the cloud core, Cloud 2.0, and all of that complexity and growth that we see on the horizon. It's important to note that a customer can start anywhere on this journey, right? Anytime they get the Fabric Port, they can add services, first or third party, in any order that they see fit. Last point on this chart that I think is incredibly important is, how'd you get the pricing, Kate? I want to say that the service prices that you see here are constant, but they reflect a discount providing at billing with a growing commitment with a customer, just like in the cloud world, right? You make a big commitment, you get a bigger discount off your bill, but the service prices are the service prices, and that's reflected in this illustrative example that I just gave you. Let's click on that box all the way over on my left, your left, right, Basic NaaS services. This is where we have 2,000 customers that have chosen Lumen and decided to standardize on our fabric. We have learned a ton in the past two years. First of all, NaaS became GA in January of 2024, and in August of 2025, we announced that we had 1,000 customers that had adopted the platform. It's only 6 months since that point that we've now doubled the business. That's a pretty phenomenal growth rate. This is our organic growth platform inside the company. All of those customers now have Fabric Ports. All of them represent revenue sockets that we can sell into, first and third-party services. We're learning a ton about the consumption business, right? Because that's different. It's different for telco, but we have many of us that came from cloud. We've seen this movie before, and we're applying the lessons. Couple things that I want to point out. 2,000 customers have adopted it. We've actually sold 7,000 ports, more than 7,000 ports to those customers. When Chris gets up here, he's going to show 3,800 of those ports are active. There's consumption happening across them, live services running. How does this work? A customer commits to the first port, then they start expanding. They have multiple ports, but we have to help them get to the consumption point. If it's a net new customer, maybe we've got to send a truck out to do the first Fabric Port. As we turn more services on, the path to consumption gets shorter and shorter, but there is a moment where there's a purchase, and then over time, they've got to implement, and then they get to consumption. The reason why this is important is because the customer success function inside of our go-to-market team has traditionally been focused on stemming the decline of revenue. They're doing a pretty darn good job if you look at our decline rates of legacy business compared to our competition. We are pivoting those resources to say, "Okay, now that we've got the motions here, we want to add to your job that you're going to help our customers get to consumption faster, a faster path, more services, and how do we turn it on as quickly as humanly possible to get that J-curve going?" I thought it might make sense to take you through the consumption of a real customer. This is an example of an engineering design firm that's multi-site. I did not give you the logo because these are real revenue consumption numbers. Land, expand, consume. That's the motion that we're driving with our organic growth engine to pivot the company to revenue growth. It really starts with this customer decided they wanted one high-end on-net port to pilot their WAN modernization. They started using it, they turned it on quickly, they validated the design, and they said, "This works. It's quick, secure, and effortless as advertised. Let's move forward." They expanded to 20 sites; those sites were satellites. They had a mix of bandwidth needs. They weren't all high-end. They basically got to a point where all 20 of those sites were working, and they said, "Let's go out to all of our remaining sites." They just happened to have 60 across North America. Again, different bandwidth at all these different sites. That's important because if you're thinking, "Kate, you told me $990 for a Fabric Port IoD and some voice on it, shouldn't that be $60,000 a month if there are 60 sites?" It depends. It depends on the service, it depends on the bandwidth they're going to consume, and it depends on the overall commitment that they make, 'cause they will achieve discounts if they go all in with Lumen. This is a common pattern, and we're excited about the expansion, and it represents all the things. If you looked at how many ports would this customer have that are active, the number will probably be right now less than 60. They've purchased 60, so that's our sales number, but what's active? They're right in the middle of this implementation. When they get to full steady state consumption, all of those ports will be considered in our active count. How do we grow from here? 46K a month. Like that number to be higher. It's about third party, and that's why the ecosystem is so instrumental to our growth story. This is new for telecom as well. This is a page taken out of the cloud book, right? That's why we're doing it, because connected ecosystems represent opportunity. Executives who are trying to grow their company, they expect their technology partners to be a part of an ecosystem. They want us to do the work with the technology partners to take the friction out of the system. They want that thing working, they want a validated design, they want to snap it in place and get to value as quickly as possible. Ecosystems, on average, deliver about a 2 times accelerated path to ROI with technology solutions, which is why 75% of executives favor them. Finally, I think this is a really important point because it too is new. Every $ spent on our products and services inside of an ecosystem are likely to generate 6 to 8 times those $ in a services ecosystem on top. As we partner with the 17 companies on this page and the dozens more behind them, we are creating opportunity for services firms, consulting firms, to come, advise, guide, direct, design, implement, all the things that they do. We represent an opportunity for them to grow. When they get interested, there becomes this heat, this energy around the ecosystem that gives us a competitive advantage. Go with Lumen. They've got the service industry behind them, they've got a myriad of technology partners, and they can help you go faster. Here to tell more about that Lumen difference is Ryan, our Chief Marketing Officer. Awesome. Awesome. Thanks, Kate. Thanks, Jim. Good morning, everybody. You just heard the what, the how, the strategy, the build, the programmable network, and the ecosystem. It's what we're doing to win in Cloud 2.0. Now I want to talk about what matters most. What's the proof? Because here's the thing, in our category, there are a lot of companies that can go and tell a story. The question is: does the market repeat it back? Do customers, do analysts, do partners, do they start saying the same thing without us prompting them? I want to start with a simple, customer-rooted truth. In the AI economy that we're talking about, trust is becoming the product. Customers are betting their operations, their security posture, their AI ambitions, their infrastructure that has to be fast, it has to be resilient, it has to be safe. When we say the trusted network for AI, that is not marketing poetry, it's actually a buying requirement. Because in Cloud 2.0, if the network doesn't match the moment, AI cannot thrive. What we're doing is we're building these scenarios that have focus on the customer outcomes. Analysts are changing their language, partners are leaning in, Lumen's becoming recognized as different. These are things that reduce friction, improve performance, and ultimately support the economics that you're gonna hear Chris walk through in just a little bit. I want to start with some of the early indicators that show some of this, our brand, our reputational shift. What we did was, in the beginning of 2024, we talked about how we are the trusted network for AI. It wasn't to be clever, it was to be very clear, and customers were waking up to a new requirement. You heard Jim talk about this. New requirements that they have to support. AI changes the network demands, and customers need a partner to build for it. The market's validating the strategy. I wanna talk about a couple places that we see this. If you first look at brand clarity, +12 points. It is rare to actually see double-digit growth in this category, but what we're seeing is the market's embracing the vision. It means more enterprise decision-makers understand the simple story about Lumen. What do we do? Why does it matter? Why are we different? Our brand helps clarify that vision so that those people that are telling the story, that need to understand this, the CIOs, we can go have a clear conversation as they look end-to-end for their business. As we think about the narrative shifts, +63 points in media sentiment, and this is a sharp, favorable move. The headlines tell you why we're seeing that kind of growth: AI infrastructure, partnerships, leadership visibility. It's credibility compounding in public. If you look at customer advocacy, +21 points in recommendations. I trust this metric a lot, and it means a lot. It means this because ITDMs are trusting Lumen more with our conversations that we're having. We're having them with different decision-makers. It's not just the network operations person, it's the CIO, because the CIO knows to have an AI strategy, you have to have a data strategy, and you have to have a network strategy at the same time. We also know you don't recommend a network partner unless they can go deliver. Delivery, reliability, security, responsiveness. you know, you see a couple of these awards up there, year-over-year NaaS Leadership Awards, cybersecurity accolades. These slogans are earned, and, you know, this is really about how can third parties recognize us also as this trusted backbone and having these capabilities? The awards are great, very happy to receive those, but it's about the customer experience. It's always about the customer, and our customer experience is showing up in different market signals that are making a difference. We know that when customers win, brands strengthen, analyst coverage shifts, and our recommendation rises, and that's what we're seeing happen here. I wanna translate this here into customer choice. Why are customers picking Lumen? In Cloud 2.0, customers need four things at one time: capacity, performance, control, and reach, and they need it without complexity. Those four boxes you see at the top, they're not just labels, but they're differentiators our customers can feel. If you first look at capacity, access to Corning's cutting-edge fiber technology, this benefits our customers with some of the highest quality and bandwidth glass available on the market, and it's for Lumen customers. You then think about performance, 400 gig-ready, less than five-millisecond performance. Jim talked about this. This is AI-era physics. It changes the workloads that are even possible: telesurgery, drones, robotics, and there's so many emerging tech scenarios that require this. Third, you've got control, on-demand services. Turn it up for your needs, take complete control. Our network becomes our customer's network. You get cloud-like controls, you get provision, you get scale, you get change. Fourth, Kate talked about this, ubiquitous and universal design. It's a consistent experience across environments. Connect from anywhere, you're gonna get the same experience: on-prem, edge, cloud, data center. Now, if you think about the other network players here, customers, as they're looking, typically see three main archetypes. Lumen is the one who's bringing them all together. Jim also talked about, as a customer, you're looking for someone that can help you do this all together in the right way. If you think about legacy telcos, national scale, but oriented around wireless, fiber to the home, convergence, they have a different center of gravity. If you then think about cloud-based network providers, modern customer experience, but they don't own the physical network, and that limits the economics, it limits capacity, it limits control at scale. You also have fragmented fiber. You have this strong in pockets, but it's fragmented backbones. It's fewer on-net data centers, they're challenged to scale, and they're not built for the AI demands that we are talking about. It all comes back to what this means for customers. For the first time, customers have one place to get the four things at the top: capacity, performance, control, and reach from one trusted partner. In other words, Lumen is here to build and lead that reset that we use because we've got the owned physical advantage, digital programmability, and a modern customer experience. We are focused on how we get ready to get our customers ready for the demands of AI. Speaking of customers, I want to take you through a couple, 'cause let's make it real with them. In our mission, we talk about igniting business growth by connecting people, data, and apps. How do we do that? How do we talk about it? Quickly, securely, and effortlessly. This is the how that customers feel. Let's take how you can really translate these words, and I'll tell you, it's not something that has really been associated with Telco ever. We're gonna work really hard to make sure our customers feel that every single day. If I start with Pac-12 over here, longtime customer, legacy connectivity, longtime Vyvx relationship, they are modernizing how live sports gets produced. Remote production, tons of live events, zero room for failure. The broadcast landscape needs are changing as well, and yesterday's networks won't do for them. Here's the game changer that they were thinking about. They had to figure out a way to turn up gigabit capacity in minutes, especially when you think about multiple events, multiple sports happening all simultaneously, and they started to run into these scenarios. They had real cancellation risks, time-sensitive, high visibility, revenue on the line. What they did was they partnered with us, they looked beyond Vyvx, they looked at our NaaS capabilities, and they enabled a fast way to turn this up that saved the moment. They repeated it, they used this again and again for their live events. They were able to reduce that risk and ensure that we, watching those sports, never miss one of those critical moments that we get excited about, and that's what we mean by quick. I think about Apex Datacom, they're an IT consulting and software company, and it's really about trust that you can operationalize. You think about the rise of ransomware, DDoS, all these sophisticated attacks. It is hard to stay protected, yet nothing could be more important. They started with infrastructure at the edge, as they thought about how they could build this platform, they really leaned into security in a different way, using Lumen Defender Plus. What we were able to do is, we were able to take their solutions, stack these together, and make it so that they could get this to their customer in a really quick and seamless way. Not adding it later, it's not a bolt-on, can't think about security later. Customers want this embedded. They need the protection with fast deployment, less customer work. What was great about this platform that Apex Datacom was building is that they're a customer, but they're also a channel seller. They were able to take this and get it to their customers quick, easy, fast. I wanna talk about on the right side, you see Arctic Glacier. As we know, it's a bit too cold in New York this week, but I'm gonna tell you a little story about a cool customer, because one of the things you've heard of them before. You've been to your grocery store, you've been to a gas station, you've likely bought ice from them. They should not be slowed down by IT. What they would tell you is that their IT was disjointed. They had outdated tools, they had strict compliance, and they needed it all to simply work. What they did was they moved from a legacy connectivity solution into managed services. They got a NOC, they had a service desk, they're using something called Customer Premises Equipment as a Service. What this means is, they get these new hardware upgrades without the upfront cost. They stay modern, they have a simpler, more reliable environment. What changed for them was fewer vendors, fewer handoffs, fewer steps, and that gave them better uptime and faster time to value. It means more cold drinks at the neighborhood party. Here's the thing, when you distribute 2 billion pounds of ice across 75 customer locations, I gotta tell you, they're the ones with the cool network. Across all three of these, you've got quick, secure and effortless. Quick helps businesses be agile, which means they're more competitive. Secure reduces risk and increases customer confidence. Effortless reduces cost and complexity. That's how the strategy we've been talking about is turning into customer preference, and preference we're watching turn into momentum. I wanna close quickly with just some outside validation, because it's what keeps us honest as well as we build this. Our customers, they include the largest hyperscalers, the largest social networks, the neo clouds. If you saw today, we just talked about Anthropic as a customer of ours as well. They are choosing us because we are sharing a vision. We are pushing the boundaries of what cloud and network together; those solutions can enable. They're trusting us both on the supply side and on the demand side. Our AI ecosystem recognizes us as part of this infrastructure layer that customers need to become AI winners, which is what every customer is after right now. It goes from building customer GTM plans with Palantir to security solutions with Microsoft. Our analysts also recognize this shift. They're seeing us as revitalized. New leadership, new culture. You heard Kate talk about this, you heard Jim talk about this. When our management team works together, we are painting the picture of what this AI economy needs and thinking about our customers first. We're doing it in a way that is ready to disrupt, 'cause we see this emergence of this new category for AI-ready networking. Old Telco playbook: it's sell contracts, it's compete on price, it's explain churn. Disruption is different. You sell outcomes, you remove that friction, you become a platform customers can trust with their own business. Because the only way this changes is through the lens of the customer, and it is being customer-obsessed, one of the behaviors that we've been talking about. It's the shift that we are seeing. You have to go from connectivity as a commodity to the network as a platform. Our customers are seeing this benefit every day. We're working with them, and I'd love for you to take a look. Let's roll the tape. I'm Raju Kakalapudi. I'm the Chief Technology Officer at FanDuel Sports Network. FanDuel Sports Network is building the next generational sports platform. We broadcast, produce, and stream thousands of live sports events across the country. From our fans' experience perspective, we want a highly reliable, secure, low-latency platform. When I took over the role a few years ago, not only did we not have the scale, the latency was a challenge. If you look at Lumen, they have delivered at the highest levels on sports media broadcasts. Here in sports media, milliseconds matter. From the time you capture an image on the camera at the venue to the time you see it on your screen, it's all data that is traveling behind the scenes. Lumen is the backbone for us to move the data in milliseconds, also keep it secure and reliable as the data is moving across the country. They're also able to provide content at the edge. Now I can personalize for you as a fan, the ads that we generate, if you like a certain player. Now you can see all the highlights in milliseconds. Lumen made the impossible possible. The network transition was supposed to take 9 months. In 3 months, we were able to achieve the entire backbone of the network transition, which resulted immediately in a 10x reduction on the latency side. Speed, scale, seamless, secure. I said, "Jesse, look, I'll give a story because you guys truly made a difference for us and continue to make a difference. We will now take a break. Please be back by 10:20 P.M. Thank you. Ladies and gentlemen, please take your seats. Our program will resume shortly. Please take your seats. Thank you! Ladies and gentlemen, please take your seats. Our program is about to resume. Please take your seats, and just a reminder, please silence your cell phones as a courtesy to our presenters. Thank you I was hoping you guys weren't expecting me to come in in a suit or anything like that. I'm Brent Bensten. I'm the CTO of QTS Data Centers. QTS is the largest global data center provider on the face of the planet. We're building, you know, 16 or so campuses around the country at this exact second. We're doing some of the most advanced computing inside of our buildings. When you hear people talk about the cloud, the cloud lives in our buildings. Our customers need access to some of the largest networks in the world. You know, when this AI thing becomes terabit, how do we go deliver the infrastructure for that? We need a partner that can match that scale. Lumen, at the end of the day, is one of the largest, what we would consider a Tier 1 carrier. A really reliable, really robust, technologically advanced network, breadth of services, totally differentiated, specifically in Metro interconnect world. We think of it as one of our premier partners in the ecosystem. It's that one stop that our customers can come and get a complete assortment of services. A hyperscale customer who has terabits worth of network needs, you can go do that with Lumen. If you're a smaller ISP and you need private networks, you can go do that with Lumen. The measure for us that's super important is how much of our customer demand we can meet with one provider, and I think that's where Lumen steps to the top. The products specific to Lumen are driven by the high bandwidth needs we have for these AI workloads. It needs to be reliable; it needs to be secure. Everything from the 18 buildings worth of direct fiber access, wave-based technologies that we use. We are also a big believer in network as a service. We tap into Lumen's Private Connectivity Fabric. Those are the types of things that drive us back to the Lumen network. We're thrilled to welcome to the stage Lumen's Chief Financial Officer, Chris Stansbury. Good morning, everybody. Nice to be with everybody today. You know, when Kate opened, she talked about drawing a line between our past and our future. As I sat watching the presentations this morning, and as I look around this audience today, I can't help but take a little walk down memory lane back to April of 2022, when I started at Lumen. There's particular faces in this room and particular moments that will be forever etched in my mind when I got what they call candid feedback. When I think about our past and our future, I think about two words. I think about trust, and I think about opportunity. We're going to talk about both of those things today. I'm going to focus first a little bit on the past. The reality is we had to earn your trust, and we have to continue earning that trust. How do we do that? You know, we had 4 objectives. The first was to return the company back to free cash flow growth. There was a crisis in the company. It was debt, and we're going to talk about that and unpack that a little bit more. We had to show that we could get back to a future that had solid free cash flow. We saw the opportunity in both digitizing the network but also in PCF, and that's really what started to unlock our future. The 2nd was, I just touched on it, we had to transform the capital structure. The capital structure, sadly, was the story. That's all we talked about, and I'll unpack that a little bit more in a minute. The third thing, we've got to get EBITDA back to growth. We committed to making that happen in our guidance this year, and that's really driven by our modernization and simplification efforts in the near term, but then longer term, the PCF revenue coming into the model and the growth of our digital and ecosystem platforms. Lastly, we've got to return to revenue growth. That's going to take a couple more years, but there's really favorable tailwinds, and we'll talk about why our confidence in hitting that number is so high. I'm also going to give you the answer on what you need to watch for, because there's some really simple assumptions in this that we've made, and there's only one big one. I think the upside there is more significant than the downside, and we're going to show you that today. How did we transform the capital structure? Obviously, those PCF cash flows gave us fuel, but we entered the market at the beginning of last year, and over the course of the year, we did six transactions touching $11 billion of our debt structure. This is before the sale of the fiber to the home business. We sold the fiber to the home business to AT&T, as Kate said, paid down $4.8 billion of highly restrictive super priority debt, and the combination of those two things reduced our interest expense burden by almost half a billion dollars. Again, more fuel. That lowered our cost to capital. As Kate touched on, our bonds are trading at all-time highs, and our job is to earn a return greater than our cost to capital. Kind of hard to do when your cost to capital is north of 20%. We had to get that fixed, and we did that. What we're seeing as we go through the simplification efforts on our debt structure, we've eliminated about 40% of the tranches that were out there. We're getting more covenant flexibility; ratings upgrades are starting to happen. Now we're in that cycle where we should see continued lower cost to capital, more opportunities for us to refinance, et cetera. This is the last time I want to show this slide. I think it's important. The upper left was the existential threat, right? When I arrived, when Kate arrived, we were looking at a situation where $20 billion of debt, that was a thing. The real thing was almost half of that was due in 2027. You all know the storied history that we went through as we renegotiated that debt, which had a lot of complexity behind it. That didn't fix the problem. It bought time. I'm going to remind you that many of you, frankly, many of our advisors, a lot of the media, said: "Why on earth would you go through all of that effort?" The reason was, we knew that there was underlying demand for this incredible asset that has been in the ground for a quarter of a century, and that was our ability to deploy PCF. We had the ability to sell the hyperscalers the one resource they don't have, time. Because we could deploy those networks faster than building their own, and had we gone down a different path, had we gone down a path like many of our predecessors in the industry and said, "We're just going to go through a Chapter 11 kind of restructuring," we wouldn't have capitalized on what, at the time, we thought was a $12 billion opportunity. As Kate said today, we've delivered 13. That's why we did it. Now we're in a position to go digitize the industry. The impact of the refinancings I talked about, the lower left or the lower right, is where we sit today, post the sale to AT&T. We're looking at a normal capital structure with normal maturities and a leverage ratio that's below 4. We're here, and I think we can stop talking about this now. Where do we go from here? There's a few more things we can do. We're actually actively engaging in conversations right now to put a new revolver in place. That's just normal course of business. We will continue to focus on collapsing the number of debt silos and reported entities so that we can simplify the way we report to you, and so that what you look at and how you look at evaluating the company is exactly the same way we're managing the company. Lastly, as EBITDA continues to grow, we will see continued deleverage, and we'll look for opportunistic ways where we can further reduce debt. All of that really results in a near-term leverage target of 3-3.5 times. We're at about 3.8 right now. The good news is that I think the objective we set for ourselves, which is a really boring balance sheet, we've achieved. Boring is good. Now we can pivot to the future. All right, where do we go from here? You've seen a lot today. I want to get into why the economics that stem from that strategy are so compelling. The PCF builds and the scaling of digital, combined with what we see in the legacy business that continues on a dollar basis to get smaller and smaller, are huge tailwinds and give us enormous confidence in that inflection back to revenue growth. Our capital allocation around that, we're going to go through in a little more detail today, but what that results in is higher margins and lower capital intensity, better free cash flow. We're going to continue to focus on our modernization and simplification efforts, and I'll jump into that in just a second. Free cash flow generation, as I said, is going to be what really is the result of all of that. On modernization and simplification, remember last year when we gave our guidance, we said we thought we would do $250 million as we exited 2025 and are on our journey to deliver the $1 billion that we committed exiting 2027. We delivered $400 million last year. Our target for this year is $700 million. We're still targeting the $1 billion and are highly confident in that for 2027. What I really want to focus on here is this isn't just about the dollars. This is not a traditional cost-out program. This is truly about getting into the DNA of a company and fixing things that have accumulated over decades. This is about eliminating IT systems. It's eliminating real estate. It's consolidating to new and modern platforms. It's about using AI first in how we manage ourselves, and there's savings that results from that. The big outcome is focus. The amount of effort that goes into trying to keep software alive, where the people that wrote the code have long since gone and there's really no support left, it's enormous. Every passing day, we're seeing more and more focus on the enterprise vision that we've laid out. Let's talk about CapEx. We talked about the physical, the digital, and the ecosystem, but underneath all of that is basically the stuff I just talked about. There are some things that have to be fixed. Phase one of our ERP went in last year. Phase two will be going in in a few months. We've got to do CRM. We've got to exercise against and execute against our North Star vision for IT, a much more simplified, modernized IT structure. We also still have a lot of success-based capital. We're still selling the old way while we pivot to the new. That's about half of our total CapEx. That layer, that foundation, is about a billion and a half dollars. PCF, another $1 billion. We've talked about that a lot publicly, and it's going to stay at that level for a while, and I'll get into some more detail in a second. The rest of it, the $500 million, is really going into what we talked about today. That's the expansion of things like RapidRoutes, and Metro, and DC to DC, and Cloud Connect, but it's also about developing the digital layer and the, and the in the ecosystem layer. We promised we'd give you some visibility on PCF. Here it is. We're giving you ranges for every year because we know what the numbers are, and we know what the numbers are because we're only sharing what's been contracted. We have been very consistent in saying we are not going to forecast PCF cash inflows based off of a deal that we might or might not get, because they are really big, and they're super chunky, and they're hard to predict. What you're gonna see as I close out with the economic model today, is the assumption that we don't sign any more. That's upside. This is just what we've signed. What you see is the cash inflows, obviously, front-end loaded. For those of you that have already started your modeling, I see you're gonna say: "That doesn't add up to $13 billion." I'll give you that answer now. It doesn't add up to $13 billion for 2 reasons. There were some inflows on the builds in 2024. There will be some more inflows post-2030 on the builds that are contracted. Don't forget, roughly 10% of the contract value is for operating and maintenance, really over the remaining 20 years of those contracts, and that'll obviously, you know, be a huge piece that flows in after this time period. CapEx lags those inflows. You've got those estimates here. Again, big, chunky. It's gonna bounce around quarter to quarter. Last year, we were, you know, answering a lot of questions about whether we were gonna come in under our CapEx guidance. There was obviously a lot of CapEx in Q4. That's this, right? That's what drives this. Revenue is pretty simple. We know what the construction schedule is, and as those routes get delivered to the customer, that's when the revenue starts to get recognized. It moves off the balance sheet and into the income statement, and that's what you see here. We've said that we expect to be between $400 million and $500 million in 2028, which is what you see here, and we would expect that with the recent signings to go up to about $550 million-$650 million by the time we exit 2030. Okay, a quick refresher. Part of the very candid feedback that many of you gave to me when I first came into Lumen resulted in this thing called Grow, Nurture, and Harvest. That was our best attempt to give more visibility to the market into what the heck was going on inside of Enterprise. It served its purpose. It really has helped us. It's allowed the market to track progress over the last few years, but it's also come of age, and it's time for us to simplify. Really, since the end of the third quarter last year, we've been talking about this. This is a map on how you get from Grow, Nurture, Harvest to Strategic and Legacy. What we did is we went 1 layer deeper. We said, rather than saying all Waves is Grow, well, 1 gig Waves isn't Grow, right? That's moving more into the Legacy bucket. This is finally about taking a product lifecycle mindset to the way we manage the company financially. We pulled those 1 gig Waves out. The same is true in the other direction. Not all Ethernet, which sat in Nurture, is in decline. Ethernet On-Demand is a huge growth opportunity for us as we move to more software delivery and the digital motion. That's what we've done here. Coincidentally, you get to a place where Strategic is about the same size as Grow. Now, one of my favorite charts, this is just gravity. This isn't big assumptions. This is saying if we take what we sell today and we grow or decline it with market, and we layer in only what's contracted under PCF based off of the delivery schedules that we are meeting with our customers today, and we layer in digital, this is where you get. The reality is, mix is finally a tailwind. This year, Strategic is going to be over half of what we sell, and by the time we get to 2030, because of PCF, and because of digital coming into the model, and because of the absolute dollar volume of our Legacy business declining, we get to over 70% that's Strategic. By the way, that legacy business isn't a bad thing. That's cash. That's what's allowing us to invest as aggressively as we are in our digital future. Okay, digital. Let's talk a little bit about what's in digital. It's the first time we're disclosing a number here today. $117 million in digital in 2025, in digital revenue. As we said, we want to get to $500 million-$600 million by the time we get to 2028. Pretty good start. What do we know about digital? If you look at this shift to a consumption model across other areas of tech, all of them have experienced J-curve growth at one point or another, where you've got steady growth, and then you hit an exponential curve. We think that'll play out here. We don't know where that is. What we're not projecting, as I get into the numbers in a minute, is a J-curve. We're projecting linear growth. That's upside. What do we sell today? We sell infrastructure services, which is really edge, fabric, and Fabric Ports, connectivity services, that's where NaaS sits, communications, security. What I really want you to focus on is the right-hand side, because this is where if you're really interested in the Lumen opportunity, forget about revenue. You have to ground yourself in adoption metrics, because if we drive customer adoption, we get more customers, they land and expand and consume, we get more ports, we get more services, the revenue will come. That's what ultimately leads to that J-curve moment. These are the things that we've been tracking. These are the things we've been talking to the market about for a number of quarters now. We will continue to do so. As Kate said, we sold a lot more than 3,800 ports. Some of that are redundant ports, because wherever you have a port and a lot of services on it, you're gonna want redundancy. Some of it is ports that have been sold that haven't been installed yet. This is moving very rapidly, and while this doesn't look like a very big number in terms of services, the same thing is going on there, right? Services haven't been deployed yet. In the example that Kate showed of the engineering firm and how they've grown, we're seeing more in the 3-4 services range today. Obviously, there's the ability to grow that as more and more services come online. I do want to do one housekeeping thing, though. One of the competitors that provides this service kind of on top of networks, Ryan talked about earlier, they count the numbers differently. They assume the port, including a redundant port, is a service, so it inflates those numbers. The way we're looking at it, we're really trying to give you transparency into this. The port is not in the service count. These are software services that are delivered on top of those ports. Here we are, P x Q math. If I were to use one word to describe this chart, and boy, does it feel good, optionality. Haven't had too much of that in the past. What it's showing you is that we have multiple pathways to get to $600 million. If you look at the assumptions that are underneath each of these scenarios, the key assumption is really the amount of north-south versus east-west traffic. I want to drill in a little bit on something that Jim said earlier, that north-south bucket isn't growing in dollars. You know what is growing? The amount that's being consumed in that bucket. What is that? That's the old enterprise telco feedback that we've gotten from many of you around, but it's a commodity. As fast as volume is growing, price is falling. That's north-south. The only north-south value added that really has existed in the marketplace is what we've been able to do with PCF. East-west is where the gold is. That's where the growth is, that's where the margin is, and as Jim said, there's a huge opportunity that as we capture more and more east-west traffic, that we can capture more share in north-south. What you're seeing here are 4 different scenarios. The first scenario is what's in our model. We picked 1, and the reality is we will go where the market demand goes. If there are 2 attributes of Lumen that I admire the most, it's the fact that we are nimble and we're agile, and we go where we need to go to execute. How we got here isn't necessarily what we thought the plan was when we started all this, and the same will unfold here. We'll deploy our resources where we see the market moving, and again, the opportunities here are huge. Really important number. Okay, look at this number of ports. You see somewhere between 20 and 40,000 ports. What is that as a percentage of the total footprint that Lumen has today, excluding TDM? That's a low single-digit% of our network today. What am I saying? I'm saying the opportunity for scalability here is huge. Okay, let's talk about the key drivers of our long-term growth algorithm. I've already touched on a lot of this. digital revenue, you know, 500 to 600. We've talked about that by 2028, that obviously grows by the time we get to 2030 to more like $800 million or $900 million. PCF revenue, just touched on that a few minutes ago. Growth businesses in the base grow with market. Legacy businesses decline with market. What you see happening within strategic is that PCF, early on, gives us a boost in terms of revenue, but it's really digital that is the bigger opportunity as we go forward. Both of those have upside, as we talked about, digital is really what becomes the growth driver for the company over the long run. All of this leads to better margins, both PCF and digital. PCF, if you think about what we've done, we've invested significantly in a fixed cost base to go deploy these things. As more and more of that revenue scales into our model, you're going to see operating leverage benefits which impact our margins. Digital, obviously, as we've said, no truck rolls. On demand, quicker time to revenue, all of those things help our margin structure. Okay, here's the algorithm. What you'll see is our revenue growth last year, we were down about 4.5% in the business segment. We expect that to moderate a bit this year. We guided that. In 2027, it's a much more significant impact, and it's a more significant impact because we see digital scaling, because we see the deployment of those PCF builds scaling. We hit inflection in 2028, and then we think we'll get to kind of low single-digit growth thereafter. EBITDA margins rise substantially from the mid-to-high 20s right now to the mid-30s. We're very confident in that. Cash interest stays about the same, and our capital intensity ex-PCF. Why ex-PCF? Because PCF isn't capital intensive. It's paid for upfront. Ex-PCF, our capital intensity goes down by 25%, so significant impacts. Let me tell you what isn't on the page, but is in this model, 'cause it's really important. Everything is funded. Everything. What do I mean? It means all the capital that we need to invest to fix that foundational layer and get our IT environment cleaned up. It's everything that Jim talked about that we're building physically and digitally. It's PCF. It's all funded. What else is in there? Things like pension funding requirements, all funded. What else? All of our tax liabilities, we're assuming that as debt matures, it's paid down at maturity. Whether we do or we don't, that's obviously a choice point at that time, given market conditions, given where our leverage is with EBITDA growth, right now, the model assumes that. Why am I saying it? Because when you model all that out with those assumptions, you're gonna get to a remainder that's positive. This business, after all of that, if you model this out, is generating free cash flow after all of those items. What are we gonna do with that? Well, as leaders of the company, we have a responsibility. The first is growth, and so we'll invest in organic growth first, always, where we see a return. Second, inorganic growth. If we see an opportunity to acquire something that furthers our vision and accelerates our ability to convert to a digital consumption model, and there's a return on that for shareholders, we'll do that. The third thing, we'll continue to manage our capital structure really efficiently, and after all of that has been exhausted, if there's something left, then we'll consider share repurchases. Okay, we're gonna finish where we started. We've covered a lot today, I want us, you know, to go back to where we started, which is our strategy. I think the most important thing is we have turned a page on our past. This is not the Lumen that we walked into. This is not the Lumen that I got all that feedback on, right? We couldn't have done that without the team that we have and the culture we have, and quite frankly, I don't think too many people thought we would be here today. What truly differentiates us, that physical network, the digital model that we're building, the ecosystem partners, this isn't a legacy telecom anymore. We're a digital network services company, that's why you need to change the way you think about modeling, because it really is all about those adoption metrics. How would I summarize it? The first thing we had to do was disrupt ourselves. Now, we're ready to go disrupt an industry. We're gonna go to Q&A next, but first, a quick video from some friends up the street. I've always been a Babe Ruth fan. The house that Ruth built was originally Yankee Stadium. I've been with the organization for 20 years. I'm Mike Lane. I'm the CIO and Senior Vice President of Technology and Broadcasting for the Yankees. Digitally, we're a world-class organization. We have to develop a world-class set of systems. We're excited to partner with Lumen. For us, it's all about unlocking that smarter, faster, more resilient digital foundation, supporting more content, more venues, continuous audience growth. The scalability is huge. Lumen's massive fiber backbone is huge. Having a secure environment that you can trust, a cloud-first provider, is one of the first check boxes on the list. We're exploring Lumen's Network as a Service, Internet on Demand, Ethernet on Demand. This will allow me to scale on demand, only pay for what I need right now. Ethernet On-Demand gives us the fabric we need to tie all of our venues together, from our data center in Tampa, Florida, our spring training facilities, our player development, to Yankee Stadium. I'm confident that the Yankees-Lumen partnership will show what's possible in a modern, data-driven enterprise. You can, take pictures with me. Oh! You guys want to do it? We're now opening the floor for Q&A. If you have a question, please raise your hand, and we'll bring a mic your way. Okay. All right. Thank you so much for, spending the time with us. I hope that was insightful. We're, ready and open to answer any kind of questions. first thing I wanna do is just quickly run through the faces that weren't on stage today, an integral part of our team, and we'll start with you, Mark. Great. Can you just tell them who you are? Yeah. Thanks, Kate. I'm Mark Hacker. I've been with Lumen about 10 months now. I'm the Chief Legal Officer. I'm responsible for the legal team, as well as the public policy team, and also the public sector segment. Hi, everyone. My name is Kye Prigg. I've been with Lumen for two and a half years. Interestingly, my first day at Lumen was the last investor day here in- That's right. in New York, I can tell you, it is a completely different company compared to the company that I joined, a couple of years ago. I'm the chief commercial operations officer. I look after the planning, the design, the deployment, managed professional service, operations of the network. As of a couple of weeks ago, also have the accountability for the remaining mass markets business. Hi, everyone. I'm Ana White. I'm the Chief People Officer, and I've, similar to Kye, been here for two and a half years, joined a few months after you, and I head up HR, and really drive the people and culture agenda to increase employee engagement and also work to drive business performance. Three extremely humble people. I think of Mark as the guy who helps us safely get to yes in transforming a telecom into a digital company. I think of Kye as the person that took us from negative net promoter score to positive across literally every single segment and did it on time and on budget. Thanks, buddy. Okay. I think about Ana as the culture ninja, literally inculcating everything about our culture into all of our processes. It's why we're here. Thanks to the 3 of you. There's a new kid in town. I appreciate you calling me a kid, by the way. He's You got it. You got it. Anything by the way, return the favor. Jeff Sharritts joined us, 2 weeks ago, 3 weeks ago? Two weeks. Two weeks. Have you sold anything yet? Yes, we're working on it. All right. Yes. Why don't you tell them about yourself? Good morning. I'm Jeff Sharritts, Chief Revenue Officer, and I joined the company, like Kate said, about 2 weeks ago. I spent 24 years at Cisco Systems prior to coming to Lumen. Awesome. Think connected ecosystem and think Cisco sales model, and you might be onto what we're trying to accomplish here. Yeah. We're super excited about that. You're the moderator. Did I tell you that? Yeah, I get to moderate. Yeah. You go. We've got mic runners. Please wait for the mic to get there to ask a question because we've got hundreds of people that are streaming in today for this, and we wanna make sure they can hear your question. Also, please say your name and the company that you're with. With that, why don't we get started? Giddy up! Batya Levi from UBS. Thanks for all the information that you provided. Maybe stepping back, what we're really focused on, this transition of digital revenues ramping and legacy base coming down. Can you set the stage in terms of where we are right now in terms of that MRR 990 of digital? Where is the legacy piece, and where is the sort of the new digital customers? Are they all new? Are they accelerating the legacy declines to take on these digital services? You have made assumptions that maybe legacy decline's similar to market rate, but because you're accelerating the digital effort, does that accelerate the legacy decline? That path would be helpful. Maybe just what do you see as the biggest risk to this 5-year outlook? Thank you. I'll take the customer patterns. You take the rest. Yep. You take the hard stuff? Sure. Okay, great. Yeah. If we think about who's buying NaaS and why, we really, again, kind of started this as a test. It was a little bit of a hobby, and what we saw were customers that were requiring a network upgrade, and they wanted to modernize and do so quickly, were the ones that came. Lots of mid-sized companies, and frankly, the platform was tailor-made for them. As we started taking our storage to large enterprise, there were a few things that we needed to do in order to, you know, cover their requirements, which I think we've gotten locked and loaded, and we've got some really exciting large enterprise, multi-site opportunities in the pipe right now. It's, it, you know, it's a mix. These are companies that are, you know, in existence today. They've recognized that their networks aren't big enough, fast enough, smart enough, or secure enough. They're making the transition. Sometimes we're doing a migration project. There's services involved. Sometimes it's the beginning of the life cycle. It's just a test. Once that test happens, we usually get to yes pretty quickly after there. I think we're gonna have a hybrid environment, Batya, for a really long time. I will just say when we're Cloud, we've seen this movie before. Remember when we thought everything was going to cloud? Oh, first, nothing was going to cloud. I'm not putting my data in that thing." When CIOs got their head around moving data into the cloud, it was kind of like, "Okay, now everything's gonna go," and that's just not the case. It's what's the most cost-efficient way for me to drive storage and compute? How can I have a programmable network that helps me achieve that cost efficiency curve? That's gonna be hybrid. There's still gonna be on-prem, there's still gonna be edge, there's gonna be lots of multi-cloud and data center, and it's the opportunity for our company. We move data for a living, and it needs to be moved from anywhere to anywhere all the time. You want to translate that into numbers? Sure. Good luck. Yeah, first of all, in the model, the assumption on that $600 million is the incremental piece. With that, there isn't one of us on stage, if granted one wish, who wouldn't wish for complete cannibalization of our legacy business. What we're seeing in the customers that consume digitally is a much lower rate of churn, a much higher rate of service adoption, and a much faster time to revenue at higher margins. The reality is this is an industry. Again, let's go back to that phrase, playing not to lose. Oh, protect the legacy, protect the legacy, versus playing to win. Playing to win is, I want to take all that share to myself, and if we can get customers on that platform, then we would expect the $600 million to be higher, so first of all. Second of all, we think that that's got much better lasting economics for our shareholders. I think there's one more point to add, and Jim, I might ask for your help here. What we described today in the tech platform, the intelligence sits in Lumen Connect, right? Lumen Connect, the single pane of glass, the control panel for a programmable network, is what makes a Fabric Port a Fabric Port. What we're testing, and we don't have this, you know, baked into our numbers, is our ability to go into our install base and remotely see legacy ports and convert them to become Fabric Ports. Now, that wouldn't, you know, change the state of the customer. It would simply enable us to make that customer port into a port that could carry multiple services, wouldn't require a truck roll, and would become a point of growth. It's limited by several factors, including what's the bandwidth of that port, you know, where is it? A bunch of different things that we're trying to figure out right now, but it's a potential accelerator. Anything to add to that? No, you got it. Kind of picture, if you will, we have a customer today that uses us for direct internet access. Our vision is they go into Lumen Connect, they flip a switch, and all of a sudden, it is now a Fabric Port, and they have the ability to add additional services, like Multi-Cloud Gateway, which then gets them kind of one place across all their meet-me rooms to be able to route traffic east-west across their cloud providers. That's how we see what we have as our install base turning into a growth engine. Yeah. Go ahead here. Yep. Bill Matthews from Global Credit Advisers. If you think about the kind of EBITDA margin expansion from 27% to the mid-30s and that $600 million revenue piece of it, can you just help us kind of understand how much that margin expansion is driven from these new revenue additions versus kind of cost saves? Maybe tying that to, if you think about this NaaS network up and down dynamic positioning, where customers can dial up and back, how is that pricing versus existing long-term contracts they have in place? The, the margin expansion, I would say, is coming from four areas, right? The, the digital expansion, PCF onboarding, and our modernization and simplification programs are all margin accretive. As EBITDA starts to grow, we're also going to get operating leverage benefits because our fixed cost structure isn't going to change materially. All of those initiatives are feeding that. We're not splitting that out, and I think you probably understand that. I don't want to hand that to our competitors. They're all high-margin services, and they all benefit us over the long run. Do you want to talk about the pricing? I'll let our Chief Marketing Officer. Yeah Strategy Head talk about it. Yeah, one of the things that we're doing is we are going across all of our products. We're looking at margin. The first thing we have to do is we have to get our customers loving our customer experience. Everything is rooted first in that customer experience. We're bringing those services to them. We're also making sure that they have value accretive services added to that, and then we're able to go and deliver the experience they're after and match the pricing, where they're able to go in and have those bundles and, you know, one view that a CIO can look at end to end to look at a real value accretive solution together from a trusted partner, where we're bringing it all together for them. That's right, it's no secret I came from a world of cloud, from Microsoft. I learned a ton there, wherever I can plagiarize from the playbook of the movie that we all saw in cloud, we're going to do so. I think an extremely efficient pricing model that we are applying to our Network as a Service platform is the service price is the service price. You make a bigger commitment to us; we're going to make a bigger commitment to you in terms of driving price efficiency. I think that's new to telecom. It provides a little bit of resiliency in terms of the go-to-market offerings and the pricings and the way that we do it drives loyalty and commitment, worked like a charm in the days of cloud, we'll be copy-pasting that one. Hi, Bill Kavaler -. Okay ... of Odeon Capital. I may be a little confused, so can you walk me through two things? They're both on the legacy side. What's going on in the legacy copper business that, you know, last time we, you know, you discussed it was worth, like, $6 billion as a, you know, NAV? Is the $600 million that you're talking about incremental and is the way you're converting your legacy business revenues that are declining? Is that the business that you're talking about? So- I think we're all confused about where does this $600 million come in, and how does that fit in with the kind of growing orange bar? Yeah. On the $600 million, you know, Kate talked about over 2,000 customers. Many of those customers are new, some of them are existing. What we're seeing is that as customers engage in a digital motion, they're buying more, they're buying it more quickly, it's getting deployed more quickly, it's at higher margin, and they churn less. That's really the path forward for growth across the entirety of our platform. As it relates to legacy, our legacy business, when we talk about its largely copper-based, and it's going away, right? Those are the businesses that are naturally declining. That's what we forecasted in the model. They're cash rich, and there's a tremendous opportunity inside of that. There's an opportunity around how we expand the amount of cash that we can extract from that business. There's also an opportunity to say, "Hey, customer, there's this new thing over here." How we go about that, the timing in which we'll engage with a customer on that, is gonna depend. Kye's really leading our efforts on how we manage the legacy business from a copper standpoint, and maybe you could. Yeah, of course. Provide some color. The copper network or we call it the ILEC network supports a large enterprise base as well as a consumer base. What we've been spending our time on is really mapping out the entire base, understanding each and every one of our wire centers, and of course, there's hundreds of wire centers across the country. We've been able to map the P&L for every single one of those wire centers. We know the direction of travel. When one of those wire centers becomes unprofitable, that will be a trigger point for us to then work with our customers to move them to go-forward products, right? Go-forward products for consumer, go-forward products for enterprise. We will then be able to shut down those wire centers methodically over the next few years as each and every one of those approaches that. In the meantime, though, we have to care for those customers, there's a lot of work, obviously, that goes into maintaining, the network, making sure that when the customers have outages, that we're able to respond, to those customers and look after those customers to the best of our abilities. You'll see us working on the operations, on the maintenance, keeping the systems, up and running, serving the customers that rely on those systems day in, day out. You'll see us taking action where we need to take action, where we see the P&L of a particular area of the network is heading in that direction, where it's cash flow negative, and then we'll be taking different actions with the customers and with the network in those areas. Great. Thanks. Frank Louthan with Raymond James. Two questions: when we look out to your longer-term guidance of sorta mid-30% EBITDA margins, if we back out the MAR from the revenue and the EBITDA, what would that margin look like under that kind of scenario? For Jeff, just curious, your vision for the organization, and how long do you think it's going to take to sort of implement that to see the benefits from the changes you're going to make? Thanks. Yeah, on the first one, we're not, we're not gonna break it out that way. I would just go back to the answer that I gave earlier. If you think about the key initiatives, right? Growth in the digital and the ecosystem, growth in PCF, modernization and simplification, and operating leverage, that's all those things individually contribute to the margin expansion that we're seeing. Again, let's not forget, this is where I think a lot of people get wrapped around the axle, is they're like: But the legacy business is super high margin. Yeah, is this stuff, okay? We're gonna be okay. It's about when is the right time, as Kye said, to convert a customer from old to new, and we're gonna be very methodical abo ut that. But- Yeah, go ahead. I mean, I think from a go-to-market perspective, I mean, Kate talked about the transition in the cloud business, you know, software going from on-prem or perpetual-based licensing into subscription-based licensing. You know, when I was at Cisco, we did roughly 20% of our business was subscription. We moved that to north of 50%. We've kind of seen this motion and the transformation that's required in a go-to-market model to be able to deliver. The good news is, I think there's some good foundational pieces in place. If you think about the work that's being done in the connected ecosystem, we have some good work and pilots going on around customer success in the new motion. There is some work to do on, you know, how do we upskill our sellers as it relates to moving up the stack, delivering more value to clients, calling on a different buying center that's a little higher in the stack than what they're used to traditionally? Think about scaling customer success motion, scaling the connected ecosystem, there's a significant opportunity to scale through general partners in the marketplace as well. If you think about VARs, resellers, SIs, et cetera, we think there's an opportunity to drive growth through an extended channel as well. There's work to do, but I think there's a good foundation in place to build upon. We've got one back here. Yep. Jeff Kvaal with Barclays. Chris, two things. First, on the revenue outlook slide, when you said legacy decline in line with market, grow in line with the market, can you quantify that a little bit? The comment on opportunistic deleveraging, anything else you can say about that. Is that gonna be through the free cash flow you expect in 2026? I know you know, you've pushed out a lot of your maturities, you know, to 2028, 2029, et cetera. Yeah. On the deleveraging piece, we will be opportunistic, and it's really gonna depend on what happens with things like our borrowing rates, right? That'll be a market condition. It'll also be based off of what happens with upgrades. If we see an opportunity where it makes economic sense to retire something earlier, then we'll do that. Again, the model assumes, for now, nothing opportunistic. It simply assumes that everything is paid on maturity, you know, when it comes due. Sorry, the first part of the question? Slipped my mind. The other one was on, the revenue out of growth versus legacy, can you quantify? Oh, yeah. In terms of what defines the market rates of growth and decline for strategic and legacy, that's really what you would see published by industry analysts. The Gartner, the Forrester of the world, it's really those numbers. Hey, Nick Del Deo with MoffettNathanson. Thanks for hosting the event. Two questions. First, on NaaS, you know, the slide with all the different logos, a lot of diversity there. I was wondering if you could talk about some of the commonalities, you know, between those customers and why they came to you for the service, and the education process required to get them to sign up. Then from an M&A perspective, a few months ago at your industry analyst event, Kate, I think you talked about potentially acquiring service capabilities, and I was wondering if you could expand a bit on that and whether that's still something that's of interest. Thanks. We are looking actively for any capabilities that are available in the marketplace that will help us accelerate our path to growth. We have a very crystal clear vision about what a programmable network looks like, what Lumen Connect and a single pane of glass looks like, and the kinds of things that would help us leapfrog. We're not looking for continued linearity, you know, that's expensive. That's not interesting. If we see a leapfrog, you're gonna see us move to grab it. And when I say service, I want to make sure we're not talking about professional services, we're talking about digital services that we would be able to put on ports and grow that NaaS business through the J-curve. Okay? NaaS customers and themes. It's interesting because I took you through an engineering design firm with 60 sites. You think financial services, retail, hospitals, they're all multi-site. They all have a need to move data in between these buildings. It's not just about networking buildings anymore, it's about networking workloads and agents, you know, and applications. They all are seeing that fundamental need, with this urgency around being on the most efficient point of the cost curve. Like, CIO, deliver insight at the speed of thought in a sea of complexity, you know, at a cost point that probably is less money than you were allowed to spend last year. NaaS helps us do that in a number of different ways because operationally, it's easier to manage. Once you get that first Fabric Port in there, you can grow and expand without the traditional marginal cost associated with that. There's an efficiency of cloud-based solutions. You're counting on Lumen to do the innovation for you, so you get that, you know, by default, and we continue to give you more and more, so it's gonna put a little bit of wind in your sails. These are the kinds of things that the companies that first took a step into this thought about. we are... It's still pretty early, but I think what you'll see is, you know, with Lumen Validated Designs and with our technology partners, as technology companies mature, they start to really align by industry so that they can speak the language, really have mastery over the business outcomes, and for the first time ever for this company, and probably in networking, link the value of the network to the business outcomes that our customers are trying to drive. That will be the next couple of steps that we take, and we'll do so as and when, you know, we can. I think Jeff and Ryan, who's jumping to add to this, would obviously share. The one thing I would add here is, I talked about quick, secure, and effortless during the presentation, but when you talk to some of our customers, they are saying that what we've actually promised, we are delivering, and that is not something that always happens. They're surprised at the customer experience. You heard, as Kye talked, changing our NPS scores and some of the metrics that our customer satisfaction plays a key role into. Some of the things that we're delivering with RapidRoutes, where you're actually turning up some of these routes much, much faster than ever before, and then you're turning the bandwidth up and down as you need it, that is not something that these customers have had before. We see this across industries, and we are committed to what we're presenting here, actually delivering and exceeding that, and that's what we've been doing, which is why you see the growth of the customer count going up significantly in that manner. There's a cluster out here. Yeah. I'll start. Hey, guys. Thanks for the day. David Barden from New Street Research. Kate, I really liked your presentation because you did something I've never seen before, which is try to create a P times V construct around this industry, something that I know Chris has been working on for a long time. What I saw was customers, active ports, services per port, and MRR per port. If you could kind of continue to disclose that, I think that that would strengthen people's conviction in getting to that $600 million number. Mm-hmm. Are you guys going to do that? Don't answer that question. She was waiting for you to ask the question. Yeah. Yes, it's certainly to begin with, it's number of customers, ports, services. The MRR piece, in time, I don't know that we'll do that right away, but yes, we will continue to share adoption metrics so that you guys can see the pacing of what we're doing. I think what's really encouraging and gives us conviction is that if you just look back over the last few quarters, those rates of growth have been in the high 20s to 30s, quarter-on-quarter. It's important that we continue to do that, and we will. Chris, a follow-up for you. How does that long-term outlook slide change if, you know, an old person like me wants to back out the non-cash IRU revenue? Which seems to be a big part of the pivot in revenue growth and EBITDA margin. Yeah. Isn't really about what's happening in the business today, it's about what happened last year and two years ago? Yeah. That's a good question. What we have said publicly about that is that if you get the model right, what you're going to see, is that the PCF business generates a lot of free cash flow, and then everything else is effectively break even. We're burdening that a little bit too much because we're assuming all the tax liability of PCF actually sits in the base, so we've got to do a little more work on that. The reality is that the non-PCF business is fully funding itself, including all the things that I talked about, like pension and debt retirement and whatnot. We're not allocating any of that to PCF in our thinking. We like where that lands right now because we're in growth mode. We're investing every extra dollar that we have from that business back into that business. I think that's what you'd find if you, if you split it out. Thanks. Michael Rollins from Citi. Thanks for hosting us, and congrats on the progress. Thank you. I have three questions, if I could. The first is on the TAM, the second on strategy, and third, a financial question. On the TAM, you've gotten to 2,000 NaaS customers in a very short period of time. Can you help frame that relative to the number of customers that your company has captured over the past 25 years? Also, how many customers are out there that you could go after that you currently don't have? Just trying to size that TAM. The second is how much- Do we want to. Oh. We'll let you go-. You go first. We'll let you keep going. While this is hot, let's dive in. Let's answer that, and then we'll go back to the other two. Yeah. Yeah. Yeah. When you look at the TAM that we talked about for both north-south and east-west, and you look at our customer base, and you look at the numbers that we showed you from Chris's presentation, it's a small single-digit% of the total capacity that we can go after. We've taken a very conservative view in how we've built out the financials and how we think about what the market is, but it is a small single digit% of what we think the total market share is. The thing I didn't cover as much on mine. We have access to both on-net and off-net for these services. When we talk about NaaS, it's not just an on-net capability for us. We can do these same services for both on-net and off-net customers, which increases the population we can go at even greater than what our existing install base is. As I described earlier, I think that install base, Mike, is going to become an asset in the acceleration of our digital business as we figure out the ability to turn or convert legacy ports, the ones that qualify to Fabric Ports. Great. Then secondly, how much of your opportunity do you expect to go through network neutral data centers, you know, which have been a meeting place for a wide range of diverse networks and ecosystems, versus how much of this can you bypass these neutral data centers, get it completely on the Lumen network or those of your customers? Mm-hmm ... which could create a different experience, value proposition. Yeah et cetera? I think I'll start, and I'll let Jim finish. What I've learned from our customers is that they really want choice. What I've learned from the ecosystem is that they're trying to figure out where everybody's playing and what constructs are going to endure versus which ones are going to change. My prediction, and it is only that, is that taxing constructs of the Cloud 1.0 era are going to become obsolete, and I think revenues associated with that, like cross-connect fees, like egress fees, are at risk. Value with quick, secure, effortless connections to where you need to be without that taxing system, anytime we charge something for a customer, it will be because there's innovation behind it, whether it's Multi-Cloud Gateway, whether it's, you know, the fiber solutions that we have in our physical network, whether it's on-ramps, et cetera, et cetera. I talked to Batya about a hybrid world. It's not like every CIO is going to shut down their network and pivot over overnight. These are sticky, structural issues that if you go back to the cloud movie and you rewatch it, you know that it takes some time... but after maybe 5, 6 years, you hit this acceleration moment where there's critical mass leaning into the changes because there's value there. It's not, you know, our, you know, data center cross-connect model or ours. We think our customers are gonna probably want both. Guess what? Those data centers, they need us to connect to those 400, you know, giga on-ramps as well. We get the business from both sides of the equation. The disruption is all about knowing that these models are actually gonna have an impact on the old taxation system. Do you have anything to add? Yeah, I do. You know, I got this question at the break, and I did a horrible job of answering it. It's really around this Multi-Cloud Gateway, is where your question is really headed. The meet-me room you brought up, meet-me room are really a Cloud 1.0 construct. They're a physical instantiation of a way to connect into the clouds. That's a 1.0 construct. There are thousands of them across the United States. What our Multi-Cloud Gateway does, is it takes the inter-cloud communications that go from meet-me room to meet-me room, and we push it up into our network. It doesn't have to come back to your facility anymore. Our ability to facilitate the cross-cloud communications through the Multi-Cloud Gateway reduce the number of hops back and/or reduce the number of hops you're making on the public internet to run your business, versus over the private Lumen connection framework we've built across all the cloud on-ramps. When you think meet-me room, that's Cloud 1.0. Cloud 2.0 is our Multi-Cloud Gateway that pushes that up into our connection framework. I would just add, the compelling event for the customer is also the new type of scenarios. We gave a couple examples of the less than 5-millisecond scenarios, as more and more of those come, that's a compelling event that requires it. There's also that financial benefit of ingress, egress fees and looking at cross-connect fees that could be at risk, the customers may be compelled to move because scenarios will look different and perform differently for their customers, when we can quickly move that into a service faster with a Multi-Cloud Gateway out there. I think in all of that, we're starting to see new KPIs emerge. Fastest time to first token. Yeah ... is a new metric that we are obsessed with because we have a right to win when it comes to performance against that. I think TCO is also something which Jim hit directly in his presentation. It's like you can't have DPUs sitting idle. You can't, and so you need bigger, fatter pipes, you know, washing those GPUs with data, and that's exactly what we bring to bear. Really- Very helpful. In fact, just to follow up on the financial. He's got more. He's being very brief today. Go ahead, please. Sorry. I'm sorry. Just quick on the financials. Mass markets. It looks like in the margin calculation, mass market revenue is in that revenue denominator. It's total revenue, the margin on that, and the question is, if that's fair, what's the average rate of mass market revenue decline that is the base case for Lumen? Thanks for all the questions. Yeah. The revenue forecast that I showed is business segment only, okay? What we've said is that the business segment, we think, inflects in 2028. Total business is 2029 because of that mass markets piece. As it relates to mass markets, our best guess is again, basically continuing with market trends, which would put us kind of in the low double-digit decline rate territory. It's gonna take many years for that to go away, which leans into what Kye said earlier. By the way, part of the thinking with the mass markets customer there is: Is there an alternative service that we could provide through wholesale arrangement or something like that? There's multiple pathways, but the reality is, it is cash rich, and that's how we're gonna manage it. Remember, our locations where we have copper, broadly speaking, are more remote, and the customer skews older and generally doesn't like change. The proof point in that is they didn't move to cable 20 years ago, right? They've stayed on DSL and copper voice. Part of this is just gonna be customer atrophy. Again, there's a long runway there for us to harvest that cash. There's a long runway, and we have transparency. Yeah. I think what Kye has brought, you know, to us is rigor for process, but also, you know, transparency of data. He talked about, you know, when something goes cash flow negative, it used to surprise us. Now we can see it turn orange before it turns red. The orange is the trigger point for activation, for us to use all of our tools to exit that market, which is super cool. Yep. Great. Thank you. Mike Funk from Bank of America. AWS and Google signed or formed a multi-cloud agreement in December, which makes me wonder if the PCF deals, you're signing today, if you're potentially arming, future competition for that east-west traffic that you talked about, and why those customers could not provide that service. I'll take the first part. The one thing that we've been very clear about in that regard is that those pipes, that capacity, is for their own internal consumption for model training. It can't be resold, period. I don't know if- Well... That's it. Okay. There's one here. Hi, Sebastiano Petti, J.P. Morgan. Thank you for all the information today. Just a quick question on Chris, clarification on 2026 EBITDA growth. I think in the prepared remarks on the fourth quarter call, you talked about an inflection in 2026, but not necessarily each quarter, and then today it's exiting the year. Any kind of nuance there that we're reading into? No, there's no hidden message there. EBITDA will inflect for the year. We're not predicting the quarter that happens in, but for the full year, EBITDA will be higher in 2026 than it was in 2025. Okay, thank you. Just to follow up on cash interest expense, if you're focusing on deleveraging, EBITDA is growing, why should we assume cash interest expense is flat over the forecast period? That's an inherent assumption on where market rates go. If you look at the debt that matures the soonest, it's pretty low coupon debt that was put into place years ago. When you replace that, you know, you pay that down, and then there will be some replacement along the way, we would expect that we end up in relatively the same place. You could argue there's some conservatism in that, but I think for now, it's a fairly safe assumption. Got it. I guess one last shot at EBITDA trajectory after 2027. Operating leverage makes sense, mix shift, but are there any other transformational kind of investments, or is that basically embedded within the operating leverage that you're kind of assuming? It's really, the only other one that we've talked about extensively is really the modernization and simplification, that $1 billion run rate exiting 2027. I mean, look, we've been really candid that, yes, we're going to inflect EBITDA this year. It's a huge accomplishment. It's not a huge inflection, right? Because we're navigating kind of that trough where we move from a downward trend to an upward trend. From here forward, the growth rate gets more meaningful as those other things start to come online. Question back here? No. Over here. Hi, thanks. Jiten Joshi from BNP Paribas. This question is for Chris. When you announced the first set of PCF deals, you did the video that kind of explained the timing of the cash flows and then the IRU. Do you mind just quickly refreshing us on that? That's question one. Two, do most of the PCF deals that you have signed subsequently and that you expect to sign going forward, will they look similar? Lastly, I think more importantly, how do we think about sort of the embedded IRR in those PCF deals that. Yeah ... that Lumen is earning, and that kind of would help us, I think, sort of split out in the forecast, the PCF part of it. Sure. Okay, I'll try to remember all those. If we go back to what we said when we and the guidance on how to think about the economics, we really touched on a lot of it today. What we've said is as follows: the cash contribution margins, roughly 30%. That's net of the CapEx. We've said that roughly 90% of the contract value is cash received to fund the builds. There's obviously, a, you know, a profit in that that is what's remaining, and that's, you know, what we talked about today, and it's what's helped us get to where we got. Then, the revenue, that cash as it comes in, sits in deferred revenue on the balance sheet, and it gets recognized as routes are delive red. It's not the whole contract, it's, the contract is broken down segment by segment. As those segments are delivered, Guy's team's been hitting home runs on that, we're on budget on time, then that starts to get recognized. The, the 10% that is the operating and maintenance for the network, once that segment is delivered, generally speaking, that's where that comes into play, and that is cash and revenue and EBITDA that's earned in year from there through the remaining 20 years of the contract. Okay? In terms of IRR, it's interesting because technically, to do an IRR, you have to have an outflow before you have an inflow. We don't. I mean, one of the beautiful things, financially about what PCF is doing for us is it's an investment that was put in the ground 26 years ago. In fact, our first PCF announcement was within a month of the long time ago CEO being on the front page of Barron's, talking about this vision to build this conduit network around the country. What happened is that because of advances in fiber optic technology, there was a lot of that capacity that remained, and now it's met its time, and so we're able to monetize it. From an IRR standpoint, it's infinite. The way we think about it is, we price those conduit based off of what the market conditions are. We're earning our rightful value vis-a-vis what a market price would be, or a replacement cost would be, and then the margin and whatnot flows from that. In terms of the last part of your question on what about from here? First of all, I would say everything that's been signed, the $13 billion, you can fit into the framework I just laid out. What we're not going to do is go do what they did 26 years ago. We are not going to go build a bunch of empty pipes around the country and wait for people to show up. That is not a playbook that works. That's been proven. That's what almost bankrupted Lumen the first time. We still have, and we disclose every quarter, a lot of embedded capacity in our network today, and that can continue to be monetized. What's not in the slide that we share every quarter is we still have the opportunity to rip and replace from low-count fiber to high-count fiber in the conduit that exists. There is a lot of capacity in the network. If we did build something new, it's gonna be like a new route. It's gonna be because a customer demands it, and we have a contract that backs th at up. Have you recently... I haven't been on recent earnings calls, but have you talked about what the pipeline looks like right now for some of these bigger deals? We aren't disclosing pipeline numbers anymore because the reality is, when we did that a few years ago, we were wrong. We've now surpassed that. What we're seeing is more and more demand as the complexity gets bigger and bigger, and people are trying to get more and more places with low latency and big pipes. That's why our initial estimate of a $12 billion opportunity for Lumen has turned into $13 billion. There is more opportunity out there. There are conversations happening, but we're not gonna try to, you know, to frame how big that is. That would just be considered upside, and as we sign those, we'll announce them. Great. Thank you very much. Hi, Greg Williams, TD Cowen. Following up on that, is there a resource issue with taking on additional PCF of the $13 billion pipeline? You know, obviously, the capital's there because the hyperscalers pay you up front, but, you know, how about your internal resources as you focus now more on digital? Kye's got loads of time. Why don't you take that? The short answer is we're not seeing any issues at the moment. We started a brand-new team- Mm-hmm ... about 18 months ago? Yeah. Mm-hmm. Yeah. That we call Custom Networks. That team was built with the sole purpose of serving these hyperscaler PCF contracts. There's a separate team that was started of program management, where we have a program management team that interfaces each and every hyperscaler. There's a dedicated account team who are there to serve the customer and make sure the customer gets what they need, and then it's all executed through this Custom Networks team. You think about the United States split into three different regions, with a vice president who heads that up, with the construction management, the health and safety teams, the governance teams, planning engineering teams, all highly scalable. As we add more customers, we can easily scale those processes. We built new tools and systems, so it's all underpinned by a system that we call Lumen Vision, partnered with a company called One Vision. That system enables us to do risk-based planning, so we have a 6-month, 9-month view ahead in terms of any bottlenecks, any issues we see with materials, with construction permits, with crew availability, and so on and so forth. We're able to kind of predict way in advance any kind of resource issue. Finally, we built an ecosystem. We work very closely with Corning. We have dedicated facilities, so we have certainty of the supply of fiber coming in. We built dedicated facilities with a company called ThermoBond in South Dakota, who are producing all of the huts or the ILA facilities for us that are then shipped across the country. We did almost 300 locations last year, which is a lot. We've partnered with some of the bigger construction companies across the country as well, right? We have, I think, built tremendous scale across the country with multiple vendors, partners, down to a very granular level. We're in good shape, I would say. I'd just like to add to that, Kye. Yeah, yeah. Your team is doing a brilliant job partnering with all those partners you just mentioned, and I think you have a different way of engaging. One example I would give is Kate mentioned the Luminate culture in the very beginning. That culture goes far beyond our own four walls of Lumen into when we work with our partners. Yeah. We get exceptional feedback from our partners on how we live different than some other companies they see as well. Absolutely. Absolutely. I think we've got time for one last question. Yeah. Mm-hmm. Hi, Ana Goshko from Bank of America. Two questions. First of all, I know Kate mentioned a preference on the inorganic front for services that would be accretive, especially on NaaS ports, et cetera. What is the potential for, you know, kind of old-school, traditional telco consolidation, especially? Blah! Well, especially among, like, you know, fiber networks, where, you know, there could be room for additional synergies. That's the first question. That was the best non-verbal answer I've ever heard. I don't know what else to say. If we need it, we will get it. We'll either build it or we'll buy it. But our commitment to driving utilization of our assets is first and foremost, 'cause that's what's gonna generate the return to our shareholders. Tha t's frankly long overdue. Yeah. Anything to add? I would just say that, and I'm actually glad that question was asked. we talked about the division between the past and the future. That's old playbook. New playbook is how we monetize the assets we have and how we create a different layer. Your question, if I think really specifically, is a north-south question, right? The real growth opportunity, the real economic opportunity is the east-west. If it fits into that model, to Kate's point, and it furthers that, then yes, b ut if not, that's not a play book. To your point, there's a line around the block. ... of bankers coming to us with ideas for legacy consolidation plays. I love that because we're looked at as a strong player now, and we could get acquisitive in that way, but it's only to serve the need of building a digital network services company. If we were to make any such moves, it would be in service of that. Okay, great. Chris, I know, and hard to believe just that you've gotten to this point, but I know you have an all to your credit, I think... Was that a compliment? I think it was. Yeah, it is, it is a compliment. Enjoy that for a moment, okay? Hard to come by. I think you've passed, in the past, you've mentioned the potential or goal of reaching investment grade ratings on your debt. You know, you also mentioned the fact that you do have some interest rates in your capital structure back from when money was free, you know. Yeah ... a few years back. It's gonna be hard to kind of refi your way into reducing interest expense. As you simplify your capital structure, how much have you thought about going into the ABS market? I think virtually a lot of your peers really have been able to go and get sort of investment grade parts of their capital structure. Yeah We will continue to look at all of those options, and if it makes economic sense, then we'll pursue it. I think the key thing for us at a higher level is the target on our leverage is 3 to 3.5, and I would include ABS as part of that. The one thing that we've got to be cautious about with ABS, and it doesn't mean that it's a no, is that what is ABS, right? You're basically selling EBITDA streams on your assets, which by default means those assets now become less flexible. If you get underneath the transaction with AT&T, there's a number of different reasons, but a key reason why we sold from the edge of the neighborhood into the neighborhood and kept the pipes, is because we need those wire centers, not all of them, but many of them, to further our enterprise ambitions. This is where a lot of those on-ramps are gonna sit physically. Again, everything we do is around our ability to expand that, so absolutely would consider it if it's economically beneficial, but would look at those other factors as well and say: Does this limit us in terms of our flexibility in using assets to do something bigger? We're gonna be very thoughtful about that. Okay. All right, number 1, thank you so much for the time and the engagement. Great questions, and this was fun for us to bring our story to you. Thank you for listening. We are gonna stay out there with you. Anybody who wants to stay who's in the room, we've got a box lunch for you and can take more questions at your leisure. Thank you so much for the time. Thank you. Thank you.