US fiber company Lumen reported a net loss of $201 million in its Q1 2025 earnings report amid growth in its AI-related offerings.

Lumen reported a net income of $85 million in the previous quarter and $57 million for Q1 2024.

Total revenue was $3.1bn, down 3.3 percent year-on-year (YoY) and 4.4 percent quarter-on-quarter (QoQ).

Lumen traditionally specialises in fiber optic networks, but it provides cloud and network products and services to enterprise customers as well.

Lumen’s North American enterprise business saw a 1.7 percent decrease in revenue to $1.7bn, with growth driven by its AI-related businesses.

Dubbed ‘Grow’ by Lumen, these products include cloud services, dark fiber, and waves. It grew 9.9 percent YoY to $834m in revenue.

Chris Stansbury, CFO, attributed this to “large enterprise and public sector growth”. The company announced last August that it had secured $5bn in AI-related business, signing partnerships with Google Cloud and AWS.

Kate Johnson, Lumen CEO, said that increased demand around connectivity fabric was attributable to the “unprecedented increase in volume of data generated from AI.”

The other parts of Lumen’s North American enterprise business made up the losses. ‘Nurture’, which includes VPN and Ethernet services, saw revenues drop by 16.6 percent YoY to $452m. ‘Harvest’, which includes older services like voice and private line, constituted only 16 percent of revenue ($266m) from its North American enterprise, declining 9.8 percent YoY and 8.6 percent QoQ.

Stansbury commented that the Harvest products would likely “decline over time,” and it would be an area to “manage for cash.”

Lumen’s consumer fiber unit, which could be sold to AT&T for $5.5bn, generated $658m in revenue, down 5.9 percent YoY. Substantial updates about the potential sale were unavailable.

Stansbury said: “We’ve been very consistent in saying we’re proud of the consumer fiber platform we’ve built, but the investment and return profile are not consistent with our desire to focus on the enterprise connectivity and services market. We have no news to report now, but we will update the market when it’s appropriate to do so.”

Lumen’s public sector business, up 14.7 percent to $483m in revenue, also showed signs of strength. Johnson waved aside the potential impact of DOGE-led budget cuts, stating that DOGE’s attempts to enable America to become more “competitive” presented a “huge opportunity for [Lumen]”.

Johnson added that “telecom [has not] innovated in a long, long time. And we made some really tough choices two years ago to rethink how we spend our capital.”