Technology
Lumen Technologies reports third quarter 2024 results
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15 hours agoon
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DENVER, Nov. 5, 2024 /PRNewswire/ — Lumen Technologies, Inc. (NYSE: LUMN) reported results for the third quarter ended September 30, 2024.
Big Tech is Choosing Lumen to Build the Backbone for the AI Economy
Continued operational progress and sales momentum across our growth portfolio. Record quarter for net subscription adds in Quantum Fiber business.Delivered new Lumen Private Connectivity Fabric (or PCF) sales since our last earnings report, which provides additional liquidity and flexibility to continue reducing our overall debt profile.Growing adoption of Lumen Digital’s unique capabilities. Promising network-as-a-service adoption metrics helping to grow future enterprise revenue in digital services.
“The largest technology companies in the world are choosing Lumen to help build the backbone for the AI economy. What’s more, enterprises are recognizing that every AI strategy needs a network strategy, and they’re coming to Lumen for help,” said Kate Johnson, president and CEO of Lumen Technologies. “We continue to transform Lumen’s business while also leading a once in a generation expansion of the internet.”
Reported Net Loss of $(148) million for the third quarter 2024, compared to reported Net Loss of $(78) million for the third quarter 2023Reported diluted loss per share of $(0.15) for the third quarter 2024, compared to diluted loss per share of $(0.08) for the third quarter 2023. Excluding Special Items, diluted loss per share was $(0.13) for the third quarter 2024, compared to $(0.09) diluted loss per share for the third quarter 2023Generated Adjusted EBITDA of $899 million1 for the third quarter 2024, compared to $1.049 billion1 for the third quarter 2023, excluding the effects of Special Items of $56 million and $55 million, respectivelyReported Net Cash Provided by Operating Activities of $2.0 billion2 for the third quarter 2024Generated Free Cash Flow of $1.2 billion2 for the third quarter 2024, excluding cash paid for Special Items of $16 million, compared to Free Cash Flow of $43 million, excluding cash paid for specials items of $5 million, for the third quarter 2023
1 Adjusted EBITDA and Adjusted EBITDA excluding Special Items for the third quarter of 2023 includes $31 million from the EMEA business (defined below), divested on Nov. 1, 2023 and $17 million from those of our Content Delivery Network (“CDN”) customer contracts sold Oct. 10, 2023, which will not recur in subsequent periods. The Company believes that these figures will allow analysts and investors to understand the amounts associated with these transactions to understand the impact they had on the Company’s past, but not current or future, financial performance. Therefore, these amounts will impact the Company’s ability to match its past performance in current and future periods. The net post-closing financial impact of actual amounts received or paid by the Company under its post-closing agreements with the purchasers of its businesses divested in 2022 and 2023 were a reduction of $(38) million and $(40) million for the third quarter 2024 and 2023, respectively. The Company believes that this provides useful information to investors to understand the impact that the post-closing agreements have had on the Company’s activities and its current financial performance.
2 Includes the impact of $170 million voluntary pension contribution in third quarter 2024.
Financial Results
Metric, as reported
Third Quarter
($ in millions, except per share data)
2024
2023
Large Enterprise(1)
$ 839
914
Mid-Market Enterprise
471
506
Public Sector
427
445
North America Enterprise Channels
1,737
1,865
Wholesale
706
776
North America Business Revenue
2,443
2,641
International and Other(1)(2)
93
264
Business Segment Revenue
2,536
2,905
Mass Markets Segment Revenue
685
736
Total Revenue(3)(4)
$ 3,221
3,641
Cost of Services and Products
1,692
1,850
Selling, General and Administrative Expenses
696
791
Net Loss on Sale of Business
—
22
Stock-based Compensation Expense
10
16
Net Loss
(148)
(78)
Net Loss, Excluding Special Items(5)(6)
(133)
(85)
Adjusted EBITDA(2)(5)(7)(8)
843
994
Adjusted EBITDA, Excluding Special Items(2)(5)(7)(8)(9)
899
1,049
Net Loss Margin
(4.6) %
(2.1) %
Net Loss Margin, Excluding Special Items(5)(6)
(4.1) %
(2.3) %
Adjusted EBITDA Margin(5)
26.2 %
27.3 %
Adjusted EBITDA Margin, Excluding Special Items(5)(9)
27.9 %
28.8 %
Net Cash Provided by Operating Activities
2,032
881
Capital Expenditures(10)
850
843
Unlevered Cash Flow(5)
1,470
358
Unlevered Cash Flow, Excluding Cash Special Items(5)(11)
1,486
363
Free Cash Flow(5)
1,182
38
Free Cash Flow, Excluding Cash Special Items(5)(11)
1,198
43
Net Loss per Common Share – Diluted
(0.15)
(0.08)
Net Loss per Common Share – Diluted, Excluding Special Items(5)(6)
(0.13)
(0.09)
Weighted Average Shares Outstanding (in millions) – Diluted
988.8
983.6
(1) International revenue amounts previously reported in Large Enterprise represent revenue related to our non-domestic regions including (i) Europe, Middle East and Africa (“EMEA”) through the sale of our EMEA business on Nov. 1, 2023 and (ii) Asia Pacific (“APAC”) and any other remaining international operations, which we do not expect to be significant or material in future periods. As such, prior period amounts related to our historical international operations have been reclassified within our Business Segment Revenue to the “International and Other” sales channel. These reporting changes had no impact on total operating revenue, total operating expenses or net income for any period.
(2) Subsequent to the sale of select Content Delivery Network (“CDN”) customer contracts announced on Oct. 10, 2023, certain prior period amounts related to our historical CDN revenue have been reclassified from “Harvest” to “International and Other” sales channel within the “Other” product in the Business Segment Revenue products to conform to our 2024 reporting presentation. These reporting changes had no impact on total operating revenue, total operating expenses or net income for any period. Revenue and Adjusted EBITDA excluding Special Items for the third quarter of 2023 includes $24 million and $17 million, respectively, from our divested CDN customer contracts. The Company believes that these figures will allow analysts and investors to understand the amounts associated with recent transactions and to understand the impacts they had on the Company’s past, but not current or future, financial performance. Therefore, these amounts will impact the Company’s ability to match its past performance in current and future periods.
(3) Revenue for the third quarter of 2023 includes $134 million from the EMEA business divested Nov. 1, 2023, which will not recur in periods following the divestiture. The Company believes that this figure will allow analysts and investors to understand the amounts associated with these transactions and to understand the impact they had on the Company’s past, but not current or future, financial performance. Therefore, these amounts will impact the Company’s ability to match its past performance in current and future periods.
(4) The post-closing revenue received by the Company under its post-closing agreements with purchasers of our businesses divested in 2022 and 2023 was (i) $46 million for the third quarter of 2024 and (ii) $23 million for the third quarter of 2023. The Company believes that this provides useful information to investors to understand the impact that the post-closing agreements have had on the Company’s current financial performance.
(5) See the attached schedules for definitions of non-GAAP metrics and reconciliations to GAAP figures.
(6) Excludes Special Items (net of the income tax effect thereof) which (i) positively impacted this metric by $15 million for the third quarter of 2024 and (ii) negatively impacted this metric by $(7) million for the third quarter of 2023.
(7) Adjusted EBITDA and Adjusted EBITDA excluding Special Items for the third quarter of 2023 includes $31 million from the EMEA business, divested in Nov. 1, 2023, which will not recur in periods following the divestiture. The Company believes that these figures will allow analysts and investors to understand the amounts associated with these transactions to understand the impact they had on the Company’s past, but not current or future, financial performance. Therefore, these amounts will impact the Company’s ability to match its past performance in current and future periods.
(8) The post-closing net financial impacts to adjusted EBITDA of actual amounts received or paid by the Company under its post-closing agreements with the purchasers of our businesses divested in 2022 and 2023 were (i) a net reduction of $(38) million for the third quarter of 2024 and (ii) a net reduction of $(40) million for the third quarter 2023. The Company believes that this figure provides useful information to investors to understand the impact that the post-closing agreements have had on the Company’s financial performance following the completion of these divestitures.
(9) Excludes Special Items in the amounts of (i) $56 million for the third quarter of 2024 and (ii) $55 million for the third quarter of 2023.
(10) Capital expenditures for the third quarter of 2023 includes $21 million of capital expenditures relating to EMEA business divested on Nov. 1, 2023, which will not recur in periods following the divestiture. The Company believes that this figure will allow analysts and investors to understand the amounts associated with these transactions and programs to understand the impact they had on the Company’s past, but not current or future, capital expenditures. Therefore, these amounts will impact the Company’s ability to match its past capital expenditure activities in current and future periods.
(11) Excludes cash paid for Special Items in the net amounts of (i) $16 million for the third quarter of 2024 and (ii) $5 million for the third quarter of 2023.
Metrics(1)
Third
Quarter
Second
Quarter
QoQ
Percent
Third
Quarter
YoY
Percent
($ in millions)
2024
2024
Change
2023
Change
Revenue By Sales Channel
Large Enterprise
$ 839
837
— %
914
(8) %
Mid-Market Enterprise
471
478
(1) %
506
(7) %
Public Sector
427
448
(5) %
445
(4) %
North America Enterprise Channels
1,737
1,763
(1) %
1,865
(7) %
Wholesale
706
723
(2) %
776
(9) %
North America Business Revenue
2,443
2,486
(2) %
2,641
(7) %
International and Other
93
91
2 %
264
(65) %
Business Segment Revenue
2,536
2,577
(2) %
2,905
(13) %
Mass Markets Segment Revenue
685
691
(1) %
736
(7) %
Total Revenue(2)
$ 3,221
3,268
(1) %
3,641
(12) %
Business Segment Revenue by Product Category
Grow
$ 1,076
1,063
1 %
1,131
(5) %
Nurture
729
751
(3) %
874
(17) %
Harvest
549
566
(3) %
662
(17) %
Subtotal
2,354
2,380
(1) %
2,667
(12) %
Other
182
197
(8) %
238
(24) %
Business Segment Revenue
$ 2,536
2,577
(2) %
2,905
(13) %
Net Loss
$ (148)
(49)
nm
(78)
90 %
Net Loss Margin
(4.6) %
(1.5) %
nm
(2.1) %
114 %
Net Loss, Excluding Special Items
$ (133)
(124)
7 %
(85)
56 %
Net Loss Income Margin, Excluding Special Items
(4.1) %
(3.8) %
9 %
(2.3) %
77 %
Adjusted EBITDA, Excluding Special Items(3)
$ 899
1,011
(11) %
1,049
(14) %
Adjusted EBITDA Margin, Excluding Special Items
27.9 %
30.9 %
(10) %
28.8 %
(3) %
Capital Expenditures(4)
$ 850
753
13 %
843
1 %
(1) See the notes to our immediately preceding chart for information about our use of non-GAAP metrics, Special Items, and reconciliations to GAAP.
(2) Revenue for the third quarter of 2023 includes amounts from the 2023 divestiture and sale of CDN contracts. Revenue for the second and third quarter of 2024 and third quarter of 2023 includes amounts from the post-closing commercial agreements with the purchasers of our businesses divested in 2022 and 2023. Refer to footnotes 1 through 4 on the preceding table for details.
(3) Adjusted EBITDA excluding Special Items for the third quarter of 2023 includes the financial impacts from the 2023 divestiture and sale of CDN contracts. Adjusted EBITDA excluding Special Items for the second and third quarter of 2024 and the third quarter of 2023 includes the financial impacts from the post-closing commercial agreements with the purchasers of our businesses divested in 2022 and 2023. Refer to footnotes 2, 7 and 8 on the preceding table for details.
(4) Capital expenditures for the third quarter 2023 includes the impacts of capital expenditures related to our divested businesses, which will not recur in periods following the completion of these divestitures. Refer to footnote 10 on the preceding table for details.
nm – Percentages greater than 200% and comparisons between positive and negative values are considered not meaningful.
Revenue
Total Revenue was $3.221 billion for the third quarter 2024, compared to $3.641 billion for the third quarter 2023.
Cash Flow
Free Cash Flow, excluding Special Items, was $1.198 billion in the third quarter 2024, compared to $43 million in the third quarter 2023.
As of September 30, 2024, Lumen had cash and cash equivalents of $2.640 billion.
2024 Financial Outlook
The Company updated its full-year 2024 financial outlook, which is detailed below:
Metric (1)(2)
Current Outlook
Previous Outlook
Adjusted EBITDA
$3.9 to $4.0 billion
$3.9 to $4.0 billion
Free Cash Flow(3)(4)
$1.2 to $1.4 billion
$1.0 to $1.2 billion
Net Cash Interest
$1.15 to $1.25 billion
$1.15 to $1.25 billion
Capital Expenditures
$3.1 to $3.3 billion
$3.1 to $3.3 billion
Cash Income Taxes/(Refund)(4)
($200) to ($300) million
($200) to ($300) million
(1) For definitions of non-GAAP metrics and reconciliations to GAAP figures, see the attached schedules and our Investor Relations website.
(2) Outlook measures in this chart and the accompanying schedules (i) exclude the effects of Special Items, goodwill impairments, future changes in our operating or capital allocation plans, unforeseen changes in regulation, laws or litigation, and other unforeseen events or circumstances impacting our financial performance and (ii) speak only as of Nov. 5, 2024. See “Forward-Looking Statements.”
(3) Current Outlook includes the voluntary pension contribution of $170 million during the third quarter 2024.
(4) Includes an approximately $700 million tax refund received during the first quarter 2024.
Investor Call
Lumen’s management team will host a conference call at 5:00 p.m. ET today, Nov. 5, 2024. The conference call will be streamed live over the Lumen website at ir.Lumen.com . Additional information regarding third quarter 2024 results, including the presentation materials, will be available on the Investor Relations website prior to the call. A webcast replay of the call will also be available on our website for one year.
About Lumen Technologies:
Lumen is unleashing the world’s digital potential. We ignite business growth by connecting people, data, and applications – quickly, securely, and effortlessly. As the trusted network for AI, Lumen uses the scale of our network to help companies realize AI’s full potential. From metro connectivity to long-haul data transport to our edge cloud, security, managed service, and digital platform capabilities, we meet our customers’ needs today and as they build for tomorrow.
For news and insights visit news.lumen.com, LinkedIn: /lumentechnologies, X:@lumentechco, Facebook: /lumentechnologies, Instagram:@lumentechnologies and YouTube: /lumentechnologies. Lumen and Lumen Technologies are registered trademarks of Lumen Technologies LLC in the United States. Lumen Technologies LLC is a wholly-owned affiliate of Lumen Technologies, Inc.
Forward-Looking Statements
Except for historical and factual information, the matters set forth in this release and other of our oral or written statements identified by words such as “estimates,” “expects,” “anticipates,” “believes,” “plans,” “intends,” “will,” and similar expressions are forward-looking statements as defined by the federal securities laws, and are subject to the “safe harbor” protections thereunder. These forward-looking statements are not guarantees of future results and are based on current expectations only, are inherently speculative, and are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Actual events and results may differ materially from those anticipated, estimated, projected or implied by us in those statements if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to: the effects of intense competition from a wide variety of competitive providers, including decreased demand for our more mature service offerings and increased pricing pressures; the effects of new, emerging or competing technologies, including those that could make our products less desirable or obsolete; our ability to successfully and timely attain our key operating imperatives, including simplifying and consolidating our network, simplifying and automating our service support systems, attaining our Quantum Fiber buildout schedule, replacing aging or obsolete plant and equipment, strengthening our relationships with customers and attaining projected cost savings; our ability to successfully and timely monetize our network related assets through leases, commercial service arrangements or similar transactions (including as part of our Private Connectivity FabricSM solutions), including the possibility that the benefits of these initiatives may be less than anticipated, that the costs thereof may be more than anticipated, or that we may be unable to satisfy any conditions of any such transactions in a timely manner, or at all; our ability to safeguard our network, and to avoid the adverse impact of cyber-attacks, security breaches, service outages, system failures, or similar events impacting our network or the availability and quality of our services; the effects of ongoing changes in the regulation of the communications industry, including the outcome of legislative, regulatory or judicial proceedings relating to content liability standards, intercarrier compensation, universal service, service standards, broadband deployment, data protection, privacy and net neutrality; our ability to generate cash flows sufficient to fund our financial commitments and objectives, including our capital expenditures, operating costs, debt obligations, taxes, pension contributions and other benefits payments; our ability to effectively retain and hire key personnel and to successfully negotiate collective bargaining agreements on reasonable terms without work stoppages; our ability to successfully adjust to changes in customer demand for our products and services, including increased demand for high-speed data transmission services and artificial intelligence services; our ability to successfully maintain the quality and profitability of our existing product and service offerings, to introduce profitable new offerings on a timely and cost-effective basis and to transition customers from our legacy products to our newer offerings; our ability to successfully and timely implement our corporate strategies, including our transformation, buildout and deleveraging strategies; our ability to successfully and timely realize the anticipated benefits from our 2022 and 2023 divestitures, and to successfully operate and transform our remaining business; changes in our operating plans, corporate strategies, or capital allocation plans, whether based upon changes in our cash flows, cash requirements, financial performance, financial position, market or regulatory conditions, or otherwise; the impact of any future material acquisitions or divestitures that we may transact; the negative impact of increases in the costs of our pension, healthcare, post-employment or other benefits, including those caused by changes in capital markets, interest rates, mortality rates, demographics or regulations; the potential negative impact of customer or shareholder complaints, government investigations, security breaches or service outages impacting us or our industry; adverse changes in our access to credit markets on acceptable terms, whether caused by changes in our financial position, lower credit ratings, unstable markets, debt covenant restrictions or otherwise; our ability to meet the terms and conditions of our debt obligations and covenants, including our ability to make transfers of cash in compliance therewith; our ability to attain the anticipated benefits of our March 22, 2024 and September 24, 2024 debt transactions; our ability to maintain favorable relations with our security holders, key business partners, suppliers, vendors, landlords and lenders; our ability to timely obtain necessary hardware, software, equipment, services, governmental permits and other items on favorable terms; our ability to meet evolving environmental, social and governance (“ESG”) expectations and benchmarks, and effectively communicate and implement our ESG strategies; the potential adverse effects arising out of allegations regarding the release of hazardous materials into the environment from network assets owned or operated by us or our predecessors, including any resulting governmental actions, removal costs, litigation, compliance costs or penalties; our ability to collect our receivables from, or continue to do business with, financially-troubled customers; our ability to continue to use intellectual property used to conduct our operations; any adverse developments in legal or regulatory proceedings involving us; changes in tax, trade, pension, healthcare or other laws or regulations, in governmental support programs, or in general government funding levels, including those arising from governmental programs promoting broadband development; our ability to use our net operating loss carryforwards in the amounts projected; the effects of changes in accounting policies, practices or assumptions, including changes that could potentially require additional future impairment charges; the effects of adverse weather, terrorism, epidemics, pandemics, rioting, vandalism, societal unrest, political discord or other natural or man-made disasters or disturbances; the potential adverse effects if our internal controls over financial reporting have weaknesses or deficiencies, or otherwise fail to operate as intended; the effects of changes in interest rates or inflation; the effects of more general factors such as changes in exchange rates, in operating costs, in public policy, in the views of financial analysts, or in general market, labor, economic, public health or geopolitical conditions; and other risks referenced from time to time in our filings with the U.S. Securities and Exchange Commission. You are cautioned not to unduly rely upon our forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise. Furthermore, any information about our intentions contained in any of our forward-looking statements reflects our intentions as of the date of such forward-looking statement, and is based upon, among other things, our assessment of regulatory, technological, industry, competitive, economic and market conditions as of such date. We may change our intentions, strategies or plans (including our capital allocation plans) at any time and without notice, based upon any changes in such factors or otherwise.
Reconciliation to GAAP
This release includes certain historical and forward-looking non-GAAP financial measures, including but not limited to Adjusted EBITDA and Adjusted EBITDA Margin, Free Cash Flow, Unlevered Cash Flow and adjustments to GAAP and non-GAAP measures to exclude the effect of Special Items.
In addition to providing key metrics for management to evaluate the Company’s performance, we believe these above-described measurements assist investors in their understanding of period-to-period operating performance and in identifying historical and prospective trends.
Reconciliations of non-GAAP financial measures to the most comparable GAAP measures are included in the attached financial schedules. Non-GAAP measures are not presented to be replacements or alternatives to the GAAP measures, and investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP. Lumen may present or calculate its non-GAAP measures differently from other companies.
Lumen Technologies, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(UNAUDITED)
($ in millions, except per share amounts; shares in thousands)
Three months ended
September 30,
(Decrease) /
Increase
Nine months ended
September 30,
(Decrease) /
Increase
2024
2023
2024
2023
OPERATING REVENUE
$ 3,221
3,641
(12) %
9,779
11,040
(11) %
OPERATING EXPENSES
Cost of services and products (exclusive of depreciation and amortization)
1,692
1,850
(9) %
4,997
5,407
(8) %
Selling, general and administrative
696
791
(12) %
2,261
2,302
(2) %
Net loss on sale of business
—
22
nm
17
112
(85) %
Depreciation and amortization
707
755
(6) %
2,198
2,234
(2) %
Goodwill impairment
—
—
nm
—
8,793
nm
Total operating expenses
3,095
3,418
(9) %
9,473
18,848
(50) %
OPERATING INCOME (LOSS)
126
223
(43) %
306
(7,808)
nm
OTHER (EXPENSE) INCOME
Interest expense
(351)
(295)
19 %
(1,015)
(868)
17 %
Net (loss) gain on early retirement of debt
(1)
—
nm
277
618
(55) %
Other income (expense), net
54
(13)
nm
321
(37)
nm
Total other expense, net
(298)
(308)
(3) %
(417)
(287)
45 %
Income tax benefit (expense)
24
7
nm
(29)
(208)
(86) %
NET LOSS
$ (148)
(78)
90 %
(140)
(8,303)
nm
BASIC LOSS PER SHARE
$ (0.15)
(0.08)
88 %
(0.14)
(8.45)
nm
DILUTED LOSS PER SHARE
$ (0.15)
(0.08)
88 %
(0.14)
(8.45)
nm
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic
988,794
983,550
1 %
986,963
982,853
— %
Diluted
988,794
983,550
1 %
986,963
982,853
— %
Exclude: Special Items(1)
$ 15
(7)
nm
(158)
8,413
nm
NET (LOSS) INCOME EXCLUDING SPECIAL ITEMS
$ (133)
(85)
56 %
(298)
110
nm
DILUTED (LOSS) EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS
$ (0.13)
(0.09)
44 %
(0.30)
0.11
nm
(1) Excludes the Special Items described in the accompanying Non-GAAP Special Items table, net of the income tax effect thereof.
nm – Percentages greater than 200% and comparisons between positive and negative values are considered not meaningful.
Lumen Technologies, Inc.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023
(UNAUDITED)
($ in millions)
September 30, 2024
December 31, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 2,640
2,234
Accounts receivable, less allowance of $60 and $67
1,225
1,318
Other
871
1,223
Total current assets
4,736
4,775
Property, plant and equipment, net of accumulated depreciation of $22,525 and $21,318
20,344
19,758
GOODWILL AND OTHER ASSETS
Goodwill
1,964
1,964
Other intangible assets, net
4,967
5,470
Other, net
1,978
2,051
Total goodwill and other assets
8,909
9,485
TOTAL ASSETS
$ 33,989
34,018
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt
$ 415
157
Accounts payable
905
1,134
Accrued expenses and other liabilities
Salaries and benefits
700
696
Income and other taxes
434
251
Current operating lease liabilities
263
268
Interest
236
168
Other
179
213
Current portion of deferred revenue
808
647
Total current liabilities
3,940
3,534
LONG-TERM DEBT
18,142
19,831
DEFERRED CREDITS AND OTHER LIABILITIES
Deferred income taxes, net
3,138
3,127
Benefit plan obligations, net
2,249
2,490
Deferred revenue
3,541
1,969
Other
2,637
2,650
Total deferred credits and other liabilities
11,565
10,236
STOCKHOLDERS’ EQUITY
Common stock
1,015
1,008
Additional paid-in capital
18,140
18,126
Accumulated other comprehensive loss
(766)
(810)
Accumulated deficit
(18,047)
(17,907)
Total stockholders’ equity
342
417
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$ 33,989
34,018
Lumen Technologies, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
(UNAUDITED)
($ in millions)
Nine months ended September 30,
2024
2023
OPERATING ACTIVITIES
Net loss
$ (140)
(8,303)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
2,198
2,234
Net loss on sale of business
17
112
Goodwill impairment
—
8,793
Deferred income taxes
(6)
38
Provision for uncollectible accounts
54
77
Net gain on early retirement of debt
(277)
(618)
Debt modification costs and related fees
(80)
—
Gain on sale of investment
(205)
—
Unrealized loss on investments
10
96
Stock-based compensation
21
39
Changes in current assets and liabilities, net
531
(1,336)
Retirement benefits
(185)
(9)
Change in deferred revenue
1,572
161
Changes in other noncurrent assets and liabilities, net
185
33
Other, net
(50)
59
Net cash provided by operating activities
3,645
1,376
INVESTING ACTIVITIES
Capital expenditures
(2,316)
(2,279)
Proceeds from sale of business
15
3
Proceeds from sale of property, plant and equipment, and other assets
283
35
Other, net
19
9
Net cash used in investing activities
(1,999)
(2,232)
FINANCING ACTIVITIES
Net proceeds from issuance of long-term debt
1,325
—
Payments of long-term debt
(2,069)
(145)
Net (payments) proceeds on revolving line of credit
(200)
75
Dividends paid
(3)
(10)
Debt issuance and extinguishment costs and related fees
(282)
(14)
Other, net
(12)
(7)
Net cash used in by financing activities
(1,241)
(101)
Net increase (decrease) in cash, cash equivalents and restricted cash
405
(957)
Cash, cash equivalents and restricted cash at beginning of period
2,248
1,307
Cash, cash equivalents and restricted cash at end of period
$ 2,653
350
Cash, cash equivalents and restricted cash:
Cash and cash equivalents
$ 2,640
311
Cash and cash equivalents and restricted cash included in assets held for sale
—
28
Restricted cash
13
11
Total
$ 2,653
350
Lumen Technologies, Inc.
OPERATING METRICS
(UNAUDITED)
Operating Metrics
3Q24
2Q24
3Q23
Mass Markets broadband subscribers
(in thousands)
Fiber broadband subscribers
1,035
992
896
Other broadband subscribers(1)
1,566
1,666
1,940
Mass Markets total broadband subscribers(2)
2,601
2,658
2,836
Mass Markets broadband enabled units(3)
(in millions)
Fiber broadband enabled units
4.1
3.9
3.5
Other broadband enabled units
17.9
18.0
18.2
Mass Markets total broadband enabled units
22.0
21.9
21.7
(1) Other broadband subscribers are customers that primarily subscribe to lower speed copper-based broadband services marketed under the CenturyLink brand.
(2) Mass Markets broadband subscribers are customers that purchase broadband connection service through their existing telephone lines, stand-alone telephone lines, or fiber-optic cables. Our methodology for counting our Mass Markets broadband subscribers includes only those lines that we use to provide services to external customers and excludes lines used solely by us and our affiliates. It also excludes unbundled loops and includes stand-alone Mass Markets broadband subscribers. We count lines when we install the service. Other companies may use different methodologies.
(3) Represents the total number of units capable of receiving our broadband services at period end. Other companies may use different methodologies to count their broadband enabled units.
Description of Non-GAAP Metrics
Pursuant to Regulation G, the Company is hereby providing definitions of non-GAAP financial metrics and reconciliations to the most directly comparable GAAP measures.
The following describes and reconciles those financial measures as reported under accounting principles generally accepted in the United States (GAAP) with those financial measures as adjusted by the items detailed below and presented in the accompanying news release. These calculations are not prepared in accordance with GAAP and should not be viewed as alternatives to GAAP. In keeping with its historical financial reporting practices, the Company believes that the supplemental presentation of these calculations provides meaningful non-GAAP financial measures to help investors understand and compare business trends among different reporting periods on a consistent basis.
We use the term Special Items as a non-GAAP measure to describe items that impacted a period’s statement of operations for which investors may want to give special consideration due to their magnitude, nature or both. We do not call these items non-recurring because, while some are infrequent, others may recur in future periods.
Adjusted EBITDA ($) is defined as net income (loss) from the Statements of Operations before income tax (expense) benefit, total other income (expense), depreciation and amortization, stock-based compensation expense and impairments.
Adjusted EBITDA Margin (%) is defined as Adjusted EBITDA divided by total revenue.
Management believes that Adjusted EBITDA and Adjusted EBITDA Margin are relevant and useful metrics to provide to investors, as they are an important part of our internal reporting and are key measures used by management to evaluate profitability and operating performance of Lumen and to make resource allocation decisions. Management believes such measures are especially important in a capital-intensive industry such as telecommunications. Management also uses Adjusted EBITDA and Adjusted EBITDA Margin (and similarly uses these terms excluding Special Items) to compare our performance to that of our competitors and to eliminate certain non-cash and non-operating items in order to consistently measure from period to period our ability to fund capital expenditures, fund growth, service debt and determine bonuses. Adjusted EBITDA excludes non-cash stock compensation expense and impairments because of the non-cash nature of these items. Adjusted EBITDA also excludes interest income, interest expense and income taxes, and in our view constitutes an accrual-based measure that has the effect of excluding period-to-period changes in working capital and shows profitability without regard to the effects of capital or tax structure. Adjusted EBITDA also excludes depreciation and amortization expense because these non-cash expenses primarily reflect the impact of historical capital investments, as opposed to the cash impacts of capital expenditures made in recent periods, which may be evaluated through cash flow measures. Adjusted EBITDA further excludes the gain (or loss) on extinguishment and modification of debt and other income (expense), net, because these items are not related to the primary business operations of Lumen.
There are material limitations to using Adjusted EBITDA as a financial measure, including the difficulty associated with comparing companies that use similar performance measures whose calculations may differ from our calculations. Additionally, by excluding the above-listed items, Adjusted EBITDA may exclude items that investors believe are important components of our performance. Adjusted EBITDA and Adjusted EBITDA Margin (either with or without Special Items) should not be considered a substitute for other measures of financial performance reported in accordance with GAAP.
Unlevered Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures, plus cash interest paid and less interest income, all as disclosed in the Statements of Cash Flows or the Statements of Operations. Management believes that Unlevered Cash Flow is a relevant metric to provide to investors, because it reflects the operational performance of Lumen and, measured over time, enables management and investors to monitor the underlying business’ growth pattern and ability to generate cash. Unlevered Cash Flow (either with or without Special Items) excludes cash used for acquisitions and debt service and the impact of exchange rate changes on cash and cash equivalents balances.
There are material limitations to using Unlevered Cash Flow to measure our cash performance as it excludes certain material items that investors may believe are important components of our cash flows. Comparisons of our Unlevered Cash Flow to that of some of our competitors may be of limited usefulness. Additionally, this financial measure is subject to variability quarter over quarter as a result of the timing of payments related to accounts receivable, accounts payable, payroll and capital expenditures. Unlevered Cash Flow should not be used as a substitute for net change in cash, cash equivalents and restricted cash in the Consolidated Statements of Cash Flows.
Free Cash Flow is defined as net cash provided by (used in) operating activities less capital expenditures as disclosed in the Statements of Cash Flows. Management believes that Free Cash Flow is a relevant metric to provide to investors, as it is an indicator of our ability to generate cash to service our debt. Free Cash Flow excludes cash used for acquisitions, principal repayments and the impact of exchange rate changes on cash and cash equivalents balances.
There are material limitations to using Free Cash Flow to measure our performance as it excludes certain material items that investors may believe are important components of our cash flows. Comparisons of our Free Cash Flow to that of some of our competitors may be of limited usefulness since until recently we did not pay a significant amount of income taxes due to net operating loss carryforwards, and therefore generated higher cash flow than a comparable business that does pay income taxes. Additionally, this financial measure is subject to variability quarter over quarter as a result of the timing of payments related to interest expense, accounts receivable, accounts payable, payroll and capital expenditures. Free Cash Flow (either with or without Special Items) should not be used as a substitute for net change in cash, cash equivalents and restricted cash on the Consolidated Statements of Cash Flows.
Lumen Technologies, Inc.
Non-GAAP Special Items
(UNAUDITED)
($ in millions)
Actual QTD
Actual YTD
Special Items Impacting Adjusted EBITDA
3Q24
3Q23
3Q24
3Q23
Severance
$ 12
8
119
21
Consumer and other litigation
—
(3)
(1)
(4)
Net loss on sale of business
—
22
17
112
Transaction and separation costs(1)
41
28
232
67
Net gain on sale of select CDN contracts and other(2)
(1)
—
(9)
—
Real estate transactions(3)
4
—
4
75
Total Special Items impacting Adjusted EBITDA
$ 56
55
362
271
Actual QTD
Actual YTD
Special Items Impacting Net Income
3Q24
3Q23
3Q24
3Q23
Severance
$ 12
8
119
21
Consumer and other litigation
—
(3)
(1)
(4)
Net loss on sale of business
—
22
17
112
Transaction and separation costs(1)
41
28
232
67
Net gain on sale of select CDN contracts and other(2)
(1)
—
(9)
—
Real estate transactions(3)
4
—
4
75
Goodwill impairment
—
—
—
8,793
Net loss (gain) on early retirement of debt(4)
1
—
(277)
(618)
Income from transition and separation services(5)
(37)
(64)
(107)
(150)
Gain on sale of investment
—
—
(205)
—
Total Special Items impacting Net Income
20
(9)
(227)
8,296
Income tax effect of Special Items(6)
(5)
2
69
117
Total Special Items impacting Net Income, net of tax
$ 15
(7)
(158)
8,413
Actual QTD
Actual YTD
Special Items Impacting Cash Flows
3Q24
3Q23
3Q24
3Q23
Severance
$ 14
7
115
19
Consumer and other litigation
1
(3)
—
(3)
Transaction and separation costs(1)
31
28
198
77
Income from transition and separation services(5)
(30)
(27)
(82)
(118)
Total Special Items impacting Cash Flows
$ 16
5
231
(25)
(1) Transaction and separation costs associated with (i) the sale of our Latin American business on Aug. 1, 2022, (ii) the sale of our 20-state ILEC business on Oct. 3, 2022, (iii) the sale of our EMEA business on Nov. 1, 2023, (iv) our March 22, 2024 debt transaction support agreement and our September 24, 2024 exchange offer and (v) our evaluation of other potential transactions.
(2) Includes primarily the recognition of (i) Q1 2024 previously deferred gain on sale of select CDN contracts in October 2023, based on the transfer of remaining customer contracts as of March 31, 2024.
(3) Real estate transactions primarily include the Q2 2023 loss on donation of real estate.
(4) Reflects primarily net gains as a result of (i) repurchase of $75 million aggregate principal in Q2 2024, (ii) debt transaction support agreement and resulting debt extinguishment in Q1 2024, (iii) $1.5 billion of debt exchanges in Q1 2023 and (iv) $19 million of debt exchanges in Q2 2023.
(5) Income from transition and separation services includes charges we billed for transition services and IT professional services provided to the purchasers in connection with our 2022 and 2023 divestitures.
(6) Tax effect calculated using the annualized effective statutory tax rate, excluding any non-recurring discrete items, which was 30.0% for Q1 and Q2 of 2024, 26.0% for Q3 of 2024 and 23.5% for Q1, Q2 and Q3 of 2023.
Lumen Technologies, Inc.
Non-GAAP Cash Flow Reconciliation
(UNAUDITED)
($ in millions)
Actual QTD
Actual YTD
3Q24
3Q23
3Q24
3Q23
Net cash provided by operating activities(1)
$ 2,032
881
3,645
1,376
Capital expenditures
(850)
(843)
(2,316)
(2,279)
Free Cash Flow(1)
1,182
38
1,329
(903)
Cash interest paid
306
325
877
886
Interest income
(18)
(5)
(90)
(21)
Unlevered Cash Flow(1)
$ 1,470
358
2,116
(38)
Free Cash Flow(1)
$ 1,182
38
1,329
(903)
Add back: Severance(2)
14
7
115
19
Remove: Consumer and other litigation(2)
1
(3)
—
(3)
Add back: Transaction and separation costs(2)
31
28
198
77
Remove: Income from transition and separation services(2)
(30)
(27)
(82)
(118)
Free Cash Flow excluding cash Special Items(1)
$ 1,198
43
1,560
(928)
Unlevered Cash Flow(1)
$ 1,470
358
2,116
(38)
Add back: Severance(2)
14
7
115
19
Remove: Consumer and other litigation(2)
1
(3)
—
(3)
Add back: Transaction and separation costs(2)
31
28
198
77
Remove: Income from transition and separation services(2)
(30)
(27)
(82)
(118)
Unlevered Cash Flow excluding cash Special Items(1)
$ 1,486
363
2,347
(63)
(1) Includes the impact of (i) $170 million voluntary pension contribution in Q3 2024, (ii) $700 million in cash tax refund received in Q1 2024, (iii) $938 million in cash tax payments in Q2 2023 and (iv) $90 million in cash tax payments in Q1 2023 related to our 2022 divestitures.
(2) Refer to Non-GAAP Special Items table for details of the Special Items impacting cash included above.
Lumen Technologies, Inc.
Adjusted EBITDA Non-GAAP Reconciliation
(UNAUDITED)
($ in millions)
Actual QTD
Actual YTD
3Q24
3Q23
3Q24
3Q23
Net loss
$ (148)
(78)
(140)
(8,303)
Income tax (benefit) expense
(24)
(7)
29
208
Total other expense, net
298
308
417
287
Depreciation and amortization expense
707
755
2,198
2,234
Stock-based compensation expense
10
16
21
39
Goodwill impairment
—
—
—
8,793
Adjusted EBITDA(1)
$ 843
994
2,525
3,258
Add back: Severance(2)
12
8
119
21
Add back: Consumer and other litigation(2)
—
(3)
(1)
(4)
Add back: Net loss on sale of business(2)
—
22
17
112
Add back: Transaction and separation costs(2)
41
28
232
67
Add back: Net gain on sale of select CDN contracts and other(2)
(1)
—
(9)
—
Add back: Real estate transaction costs(2)
4
—
4
75
Adjusted EBITDA excluding Special Items(1)
$ 899
1,049
2,887
3,529
Net (loss) income excluding Special Items(2)
$ (133)
(85)
(298)
110
Total revenue
$ 3,221
3,641
9,779
11,040
Net Loss Margin
(4.6) %
(2.1) %
(1.4) %
(75.2) %
Net (Loss) Income Margin, excluding Special Items
(4.1) %
(2.3) %
(3.0) %
1.0 %
Adjusted EBITDA Margin
26.2 %
27.3 %
25.8 %
29.5 %
Adjusted EBITDA Margin excluding Special Items
27.9 %
28.8 %
29.5 %
32.0 %
(1) Adjusted EBITDA and Adjusted EBITDA excluding Special Items for the first and second quarter of 2023 includes the financial impacts of (i) the EMEA business divested on Nov. 1, 2023 and (ii) the Company’s select CDN contracts sold Oct. 10, 2023 and both the first and second quarter of 2023 and 2024 include the financial impact of the post-closing commercial agreements with the purchasers of our recently divested businesses. Refer to footnote 1 on the first page of this release for details.
(2) Refer to Non-GAAP Special Items table for details of the Special Items included above.
Outlook
To enhance the information in our outlook with respect to non-GAAP metrics, we are providing a range for certain GAAP measures that are components of the reconciliation of the non-GAAP metrics. The provision of these ranges is in no way meant to indicate that Lumen is explicitly or implicitly providing an outlook on those GAAP components of the reconciliation. In order to reconcile the non-GAAP financial metric to GAAP, Lumen has to use ranges for the GAAP components that arithmetically add up to the non-GAAP financial metric. While Lumen believes that it has used reasonable assumptions in connection with developing the outlook for its non-GAAP financial metrics, it fully expects that the ranges used for the GAAP components will vary from actual results. We will consider our outlook of non-GAAP financial metrics to be accurate if the specific non-GAAP metric is met or exceeded, even if the GAAP components of the reconciliation are different from those provided in an earlier reconciliation.
Lumen Technologies, Inc.
2024 OUTLOOK (1) (2) (3) (4)
(UNAUDITED)
($ in millions)
Adjusted EBITDA Outlook
Twelve Months Ended December 31, 2024
Range
Low
High
Net (loss) income
$ (300)
100
Income tax expense
50
250
Total other expense, net
1,190
920
Depreciation and amortization expense
2,900
2,700
Stock-based compensation expense
60
30
Adjusted EBITDA
$ 3,900
4,000
Free Cash Flow Outlook
Twelve Months Ended December 31, 2024
Range
Low
High
Net cash provided by operating activities
$ 4,300
4,700
Capital expenditures
(3,100)
(3,300)
Free Cash Flow
$ 1,200
1,400
(1) For definitions of non-GAAP metrics and reconciliation to GAAP figures, see the above schedules and our Investor Relations website.
(2) Outlook measures in this chart (i) exclude the effects of Special Items, goodwill impairments, future changes in our operating or capital allocation plans, unforeseen changes in regulation, laws or litigation, and other unforeseen events or circumstances impacting our financial performance and (ii) speak only as of Nov. 5, 2024. See “Forward-Looking Statements.”
(3) Outlook includes the voluntary pension contribution of $170 million during the third quarter 2024.
(4) Includes an approximately $700 million tax refund received during the first quarter 2024.
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SOURCE Lumen Technologies
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BIO-TECHNE TO PRESENT AT THE SOCIETY FOR IMMUNOTHERAPY OF CANCER (SITC) 39TH ANNUAL MEETING
Published
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November 6, 2024By
MINNEAPOLIS, Nov. 6, 2024 /PRNewswire/ — Bio-Techne Corporation (NASDAQ: TECH) today announced it will showcase its market-leading portfolio to advance cancer research from target discovery to personalized medicine and cell therapy development at the Society for Immunotherapy of Cancer (SITC) 39th Annual Meeting, taking place November 6-10, 2024, in Houston, Texas.
Bio-Techne’s spatial biology brands, Advanced Cell Diagnostics (ACD) and Lunaphore, are revolutionizing spatial biology research with their pioneering innovations that are advancing the development of tailored immunotherapies to improve patient outcomes.
At booth #613, ACD will present its wide range of spatial multiomics products. These products leverage the precise RNAscope™ technology and an advanced protease-free workflow for same-section RNA and protein detection assays. In combination, these capabilities empower drug discovery research, accelerate cell and gene therapy workflows, enable the characterization of key soluble factors and the immune landscape, and support the development of improved diagnostic tools for an accelerated path from translational research to clinical applications.
At booth #701, Lunaphore will showcase its fully-automated, end-to-end COMET™ suite, designed to provide innovative solutions in spatial biology for the translational research community. The complete portfolio will be showcased through product demonstrations. Furthermore, attendees can test the HORIZON™ image analysis software, tailored for COMET hyperplex images, offering new features for intuitive multiomics data and neighborhood analysis.
“Bio-Techne’s spatial biology solutions lead the way in developing groundbreaking innovations, shaping the future of scientific discovery,” said Dr. Matt McManus, President of Bio-Techne’s Diagnostics & Spatial Biology Segment. “Our mission is to empower scientists with cutting-edge technologies to accelerate research and develop the next-generation therapies. We are excited to feature our spatial portfolio at this prestigious conference.”
Several scientists from the company and its partners will present posters at the conference highlighting how the industry-leading capabilities of Bio-Techne’s solutions enable key research and clinical applications.
Bio-Techne poster presentations:
Multiomic mapping of the brain: same-section, fully-automated spatial RNA and protein detection on mouse frozen tissues
Friday, November 8 at 12:15 – 13:45 & 17:30 – 19:00
Presenter: Alice Comberlato, Ph.D., Lunaphore, a Bio-Techne Brand
Poster number: #81
Novel fully-automated multiomics assay for profiling immune cell landscape and activation states
Friday, November 8 at 12:15 – 13:45 & 17:30 – 19:00
Presenter: Anushka Dikshit, Ph.D, Advanced Cell Diagnostics, a Bio-Techne Brand
Poster number: #85
Qualification of immune checkpoint biomarker antibodies in glioblastoma with multiplex immunofluorescence
Friday, November 8 at 12:15 – 13:45 & 17:30 – 19:00
Presenter: Ruha Adelkar, Bio-Techne
Poster number: #69
High throughput spatial mulitomic assay for assessing immune cell phenotype and function in the tumor microenvironment
Saturday, November 9 at 12:15- 13:45 & 19:00 – 20:30
Presenter: Anushka Dikshit, Ph.D., Advanced Cell Diagnostics, a Bio-Techne Brand
Poster number: #86
Fully automated, novel protease-free workflow for co-detection of protein-protein interaction, individual proteins and mRNA using RNAscope Multiomic LS assay
Saturday, November 9 at 12:15 -13:45 & 19:10 – 20:30
Presenters: Ge-Ah Kim, Advanced Cell Diagnostics, a Bio-Techne Brand
Poster number: #106
A new automated RNAscopeTM assay for the fluorescent co-detection of multiple RNA and protein biomarkers on Roche DISCOVERY ULTRA™
Saturday, November 9 at 12:15- 13:45 & 19:10 – 20:30
Presenters: Renzo Adilardi, Advanced Cell Diagnostics, a Bio-Techne Brand
Poster number: #206
Poster presentations, in collaboration
Application of a novel multiplex imaging-based immunotherapy panel and AI-powered analysis solution for spatial biomarker identification on immunotherapy-treated melanoma patients [research conducted in collaboration with Prof. Paolo Ascierto, National Tumor Institute Fondazione G. Pascale and Nucleai]
Friday, November 8 at 12:15 – 13:45 & 17:30 – 19:00
Presenter: Ettai Markovits, Ph.D., Nucleai
Poster number: #117
Enhanced analysis of tumor microenvironment and immune regulation via an automated adjustable signal amplification technique for multiplex immunofluorescence [research conducted in collaboration with Prof. Janis Taube, Johns Hopkins University School of Medicine]
Saturday, November 9 at13:45 & 19:10 – 20:30
Presenter: François Rivest, Ph.D., Lunaphore, a Bio-Techne Brand
Poster number: #124
About Bio-Techne
Bio-Techne Corporation (NASDAQ: TECH) is a global life sciences company providing innovative tools and bioactive reagents for the research and clinical diagnostic communities. Bio-Techne products assist scientific investigations into biological processes and the nature and progress of specific diseases. They aid in drug discovery efforts and provide the means for accurate clinical tests and diagnoses. With hundreds of thousands of products in its portfolio, Bio-Techne generated approximately $1.2 billion in net sales in fiscal 2024 and has approximately 3,100 employees worldwide. For more information on Bio-Techne and its brands, please visit https://www.bio-techne.com or follow the Company on social media at: Facebook, LinkedIn, Twitter or YouTube.
Contact: David Clair, Vice President, Investor Relations & Corporate Development
david.clair@bio-techne.com
612-656-4416
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SOURCE Bio-Techne Corporation
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XpertDox Partners with Lone Star Circle of Care to Optimize Medical Coding Using AI
Published
3 seconds agoon
November 6, 2024By
XpertDox teams up with Lone Star Circle of Care, a Federally Qualified Health Center (FQHC), to improve charge-entry lag, reduce days in accounts receivable, and increase billing and coding efficiency.
SCOTTSDALE, Ariz., Nov. 6, 2024 /PRNewswire/ — XpertDox, an AI-powered medical coding solutions provider, has partnered with Lone Star Circle of Care, a Federally Qualified Health Center (FQHC) in Texas, to optimize the center’s medical coding processes. This collaboration aims to reduce charge-entry lag, decrease the number of days in accounts receivable (AR), and ensure compliance with Medicare’s FQHC coding and billing standards while improving overall revenue cycle efficiency.
For more than 15 years, Lone Star Circle of Care has provided essential healthcare services to underserved populations across Texas. It offers various services, including Pediatrics, Family Medicine, Behavioral Health, and Senior Care.
Revenue Cycle Improvement with AI-Powered Medical Coding
Recently, Lone Star Circle of Care implemented XpertCoding, which utilizes an AI-powered coding engine to automatically process Medicare Part A G-codes and Medicare Part B claims.
Dr. Tracy Angelocci, Senior Strategic Advisor for Clinical Innovation & Integration at Lone Star Circle of Care, remarked, “With XpertCoding’s AI medical coding solution, we’ve cleared our claims backlog, improved our collections, and made our coding much more efficient. These improvements in our coding efficiency allow us to focus more on delivering high-quality care to underserved populations while remaining fully compliant with FQHC coding requirements.”
Dr. Sameer Ather, CEO of XpertDox, emphasized the value of this partnership, “We’re proud to partner with Lone Star Circle of Care to help them improve their operational efficiency. Our autonomous medical coding solution supports FQHCs in enhancing revenue cycle management while allowing them to focus on patient care.”
The Impact of AI on FQHC Operations
The partnership with Lone Star Circle of Care demonstrates how adopting XpertCoding, an AI-driven medical coding solution, can streamline FQHC operations, enabling healthcare centers to enhance efficiency while continuing to deliver exceptional care. Additionally, with real-time data insights from the XpertCoding Business Intelligence Dashboard, Lone Star Circle of Care continuously monitors and optimizes its coding performance, ensuring accuracy and compliance across all providers and clinics.
Founded in 2015 and headquartered in Phoenix, Arizona, XpertDox specializes in AI-powered data analytics and autonomous medical coding software designed to optimize FQHC revenue cycle management. The partnership with Lone Star Circle of Care marks a significant advancement in using AI technology to streamline operations and improve care delivery in the FQHC sector.
For more information about XpertDox’s AI-assisted medical coding software, please contact XpertDox at info@xpertdox.com.
This press release was issued through 24-7PressRelease.com. For further information, visit http://www.24-7pressrelease.com.
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Mastech Digital Reports 8% Year-over-Year Revenue Growth and 5% Sequential Revenue Growth for the Third Quarter 2024
Published
5 seconds agoon
November 6, 2024By
Consolidated Gross Margins of 28.5% Set a New Mastech Digital Record for the Quarter
PITTSBURGH, Nov. 6, 2024 /PRNewswire/ — Mastech Digital, Inc. (NYSE AMERICAN: MHH), a leading provider of Digital Transformation IT Services, announced today its financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Highlights:
Total consolidated revenues increased by $4.1 million on a year-over-year basis and by $2.3 million on a sequential quarterly basis to $51.8 million and represented our third consecutive quarter of revenue growth;The Company’s Data and Analytics Services segment reported revenues of $9.4 million, which were 17% higher than revenues in the third quarter of 2023 and 6% higher on a sequential basis from the second quarter of 2024;The IT Staffing Services segment delivered revenues of $42.4 million, achieving year-over-year growth of 7% and sequential quarterly growth of 4% when compared to revenues reported in the second quarter of 2024;Gross margins achieved during the third quarter of 2024 were a Company performance record 28.5%, surpassing our previous gross margin record from the previous quarter;GAAP diluted earnings per share was $0.16 in the third quarter of 2024, versus $0.01 in the third quarter of 2023 and $0.12 in the second quarter of 2024; andNon-GAAP diluted earnings per share was $0.23 in the third quarter of 2024, versus $0.11 in the third quarter of 2023 and $0.19 in the second quarter of 2024.
Third Quarter Results:
Revenues for the third quarter of 2024 totaled $51.8 million, compared to $47.8 million during the corresponding quarter of 2023. Gross profits in the third quarter of 2024 were $14.8 million, compared to $12.6 million in the same quarter of 2023. Gross margins improved to a Company performance record 28.5% in the 2024 third quarter, versus 26.3% in the 2023 third quarter. GAAP net income for the third quarter of 2024 totaled $1.9 million or $0.16 per diluted share, compared to $125,000 or $0.01 per diluted share, during the same period of 2023. Non-GAAP net income for the third quarter of 2024 totaled $2.8 million or $0.23 per diluted share compared to $1.3 million, or $0.11 per diluted share, in the third quarter of 2023.
Activity levels at the Company’s Data and Analytics Services segment continued to be solid in the third quarter of 2024. Order bookings totaled $11.1 million during the quarter, as the Company saw numerous existing clients increase spending due to an improved economic outlook. This bookings performance exceeded our 2023 third quarter bookings by $6 million. Our IT Staffing Services clients have also shown a willingness to start new assignments during 2024 compared to the previous year, as we grew our billable consultant base by 13% over the first nine months of 2024.
Vivek Gupta, the Company’s President and Chief Executive Officer, stated: “The third quarter of 2024 was a continuation of the positive momentum that we experienced during the first half of the year. A healthier macro-economic outlook and increased operational efficiencies within both of our business segments have elevated our demand trajectory in 2024. Additionally, our higher gross margin performance has highlighted several upgrades we made to the delivery-side of our organization during the year. In summary, I’m excited about our third quarter 2024 financial performance and the opportunities that we have in front of us.”
Commenting on the Company’s financial position, Jack Cronin, Mastech Digital’s Chief Financial Officer, stated: “On September 30, 2024, we had $23.9 million of cash balances on hand, no bank debt, and borrowing availability of approximately $25 million under our revolving credit facility. Our Days Sales Outstanding (DSO) measurement was a healthy 55 days on September 30, 2024. Our free cash flow for the first nine months of 2024 totaled $2.3 million and included $4.3 million of funding investments in operating working capital levels to support revenue growth.”
About Mastech Digital, Inc.:
Mastech Digital (NYSE American: MHH) is a leading provider of Digital Transformation IT Services. The Company offers Data Management and Analytics Solutions, Digital Learning, and IT Staffing Services with a Digital First approach. A minority-owned enterprise, Mastech Digital is headquartered in Pittsburgh, PA, with offices across the U.S., Canada, Europe, and India.
Use of Non-GAAP Measures:
This press release contains non-GAAP financial measures to supplement our financial results presented on a GAAP basis. The presentation of these financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. Reconciliations of these non-GAAP measures to their comparable GAAP measures are included in the attached financial tables.
We believe that providing non-GAAP net income and non-GAAP diluted earnings per share offers investors useful supplemental information about the financial performance of our business, enables comparison of financial results between periods where certain items may vary independent of business performance, and allows for greater transparency with respect to key metrics used by management in operating our business. Additionally, management uses these non-GAAP financial measures in evaluating the Company’s performance.
Specifically, the non-GAAP financial measures contained herein exclude the following expense items:
Amortization of acquired intangible assets: We amortize intangible assets acquired in connection with our June 2015 acquisition of Hudson IT, our July 2017 acquisition of the services division of InfoTrellis, Inc. and our October 2020 acquisition of AmberLeaf Partners. We exclude these amortization expenses in our non-GAAP financial measures because we believe it allows investors to make more meaningful comparisons between our operating results and those of other companies within our industry and facilitates a helpful comparison of our results with other periods.
Stock-based compensation expenses: We incur material recurring expenses related to non-cash, stock-based compensation. We exclude these expenses in our non-GAAP financial measures because we believe that it provides investors with meaningful supplemental information regarding operational performance. In particular, because of varying available valuation methodologies, subjective assumptions, and the variety of award types that companies can use under ASC 718, we believe that providing non-GAAP financial measures that exclude these expenses allows investors to make more meaningful comparisons between our operating results and those of other companies within our industry and facilitates comparison of our results with other periods.
Settlement reserve on employment-related claim, net of recoveries: In the second quarter of 2023, we recognized a pre-tax reserve of $3.1 million related to an employment claim asserted by a former employee who alleged various employment-related claims against the Company, including a claim of wrongful termination. During the third quarter of 2023, we formally settled this claim in accordance with the economic terms and conditions that were reflected in our second quarter 2023 financial statements. We have excluded this reserve in our non-GAAP financial measures because we believe it is not indicative of our ongoing operating performance and thus its exclusion allows investors to make more meaningful comparison between our operating results and those of other companies within our industry and facilitates a helpful comparison of our results with other periods.
Forward-Looking Statements:
Certain statements contained in this release are forward-looking statements based on management’s expectations, estimates, projections, and assumptions. Words such as “expects,” “anticipates,” “plans,” “believes,” “scheduled,” “estimates” and variations of these words and similar expressions are intended to identify forward-looking statements, which include but are not limited to projections of and statements regarding the Company’s ability to generate revenues, earnings, and cash flow. These statements are based on information currently available to the Company and it assumes no obligation to update the forward-looking statements as circumstances change. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecasted in forward-looking statements due to a variety of factors, including, without limitation, the level of market demand for the Company’s services, the highly competitive market for the types of services offered by the Company, the impact of competitive factors on profit margins, market and general economic conditions that could cause the Company’s customers to reduce their spending for its services, the Company’s ability to create, acquire and build new lines of business, to attract and retain qualified personnel, reduce costs and conserve cash, the extent to which the Company’s business is adversely affected by the impacts of the COVID-19 pandemic or any other pandemics or outbreaks disrupting day-to-day activities and other risks that are described in more detail in the Company’s filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2023.
MASTECH DIGITAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited)
September 30,
December 31,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$ 23,885
$ 21,147
Accounts receivable, net
34,054
29,815
Prepaid and other current assets
7,876
5,501
Total current assets
65,815
56,463
Equipment, enterprise software and leasehold improvements, net
2,083
1,913
Operating lease right-of-use assets, net
4,147
5,106
Deferred income taxes
607
793
Deferred financing costs, net
213
284
Non-current deposits
452
457
Goodwill, net of impairment
27,210
27,210
Intangible assets, net of amortization
10,958
13,001
Total assets
$ 1,11,485
$ 1,05,227
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$ 4,636
$ 4,659
Current portion of operating lease liability
1,257
1,236
Accrued payroll and related costs
14,717
12,354
Other accrued liabilities
1,491
1,622
Total current liabilities
22,101
19,871
Long-term liabilities:
Long-term operating lease liability, less current portion
2,857
3,843
Long-term accrued income taxes
–
69
Total liabilities
24,958
23,783
Shareholders’ equity:
Common stock, par value $0.01 per share
134
133
Additional paid-in capital
37,473
35,345
Retained earnings
55,520
52,415
Accumulated other comprehensive income (loss)
(1,715)
(1,644)
Treasury stock, at cost
(4,885)
(4,805)
Total shareholders’ equity
86,527
81,444
Total liabilities and shareholders’ equity
$ 1,11,485
$ 1,05,227
MASTECH DIGITAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Three Months ended September 30,
Nine Months ended September 30,
2024
2023
2024
2023
Revenues
$ 51,839
$ 47,779
$ 1,48,196
$ 1,55,046
Cost of revenues
37,068
35,213
1,07,314
1,15,354
Gross profit
14,771
12,566
40,882
39,692
Selling, general and administrative expenses:
Operating expenses
12,332
12,615
37,156
38,937
Employment-related claim, net of recoveries
–
–
–
3,100
Total selling, general and administrative expenses
12,332
12,615
37,156
42,037
Income (loss) from operations
2,439
(49)
3,726
#
(2,345)
Other income/(expense), net
133
203
373
200
Income (loss) before income taxes
2,572
154
4,099
(2,145)
Income tax expense (benefit)
697
29
994
(358)
Net income (loss)
$ 1,875
$ 125
$ 3,105
$ (1,787)
Earnings (loss) per share:
Basic
$ 0.16
$ 0.01
$ 0.27
$ (0.15)
Diluted
$ 0.16
$ 0.01
$ 0.26
$ (0.15)
Weighted average common shares outstanding:
Basic
11,695
11,597
11,654
11,618
Diluted
12,011
11,968
11,949
11,618
MASTECH DIGITAL, INC.
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES
(Amounts in thousands, except per share data)
(Unaudited)
Three Months ended September 30,
Nine Months ended September 30,
2024
2023
2024
2023
GAAP Net Income (Loss)
$ 1,875
$ 125
$ 3,105
#
$ (1,787)
Adjustments:
Amortization of acquired intangible assets
657
693
2,043
2,079
Stock-based compensation
542
824
1,553
2,501
Employment-related claim, net of recoveries
–
–
–
3,100
Income tax adjustments
(305)
(385)
(920)
(1,944)
Non-GAAP Net Income
$ 2,769
$ 1,257
$ 5,781
$ 3,949
GAAP Diluted Earnings (Loss) Per Share
$ 0.16
$ 0.01
$ 0.26
$ (0.15)
Non-GAAP Diluted Earnings Per Share
$ 0.23
$ 0.11
$ 0.48
$ 0.33
Weighted average common shares outstanding:
GAAP Diluted Shares
12,011
11,968
11,949
11,618
Non-GAAP Diluted Shares
12,011
11,968
11,949
#
11,998
MASTECH DIGITAL, INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(Amounts in thousands)
(Unaudited)
Three Months ended September 30,
Nine Months ended September 30,
2024
2023
2024
2023
Revenues:
Data and analytics services
$ 9,398
$ 8,038
$ 26,341
$ 26,206
IT staffing services
42,441
39,741
1,21,855
1,28,840
Total revenues
$ 51,839
$ 47,779
$ 1,48,196
$ 1,55,046
Gross Margin %:
Data and analytics services
50.7 %
45.8 %
48.9 %
43.1 %
IT staffing services
23.6 %
22.4 %
23.0 %
22.0 %
Total gross margin %
28.5 %
26.3 %
27.6 %
25.6 %
Segment Operating Income:
Data and analytics services
$ 1,145
$ (832)
$ 1,435
$ (2,393)
IT staffing services
1,951
1,476
4,334
5,227
Subtotal
3,096
644
5,769
2,834
Amortization of acquired intangible assets
(657)
(693)
(2,043)
(2,079)
Employment-related claim, net of recoveries
–
–
–
(3,100)
Interest income (expense) and other, net
133
203
373
200
Income before income taxes
$ 2,572
$ 154
$ 4,099
$ (2,145)
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SOURCE Mastech Digital, Inc.
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