Lumen Acquiring Networking Company Alkira for $475 Million
The company beat revenue expectations in the first quarter.
WASHINGTON, May 6, 2026 – Lumen reached a deal to acquire networking software company Alkira for $475 million in cash, the company announced Tuesday.
Lumen beat Wall Street’s revenue expectations in the first quarter of 2026, posting $2.89 billion, but still reported a net loss of $200 million. The company closed the $5.75 billion sale of its consumer fiber business to AT&T during the quarter.
With the consumer business gone, Lumen is looking to provide connectivity to enterprises and hyperscalers. The company now has 2,500 network-as-a-service (NaaS) customers, CEO Kate Johnson said on the company’s earnings call Tuesday, up from 2,000 in February.
She said 20 percent of new NaaS customers were entirely new to Lumen, and that 60 percent were expanding their footprint rather than migrating off legacy Lumen services.
“These trends are encouraging as they suggest market share gain,” she said.
Lumen earned $78 million in the quarter from private connectivity fabric (PCF) deals with hyperscalers like Meta, Microsoft, and Anthropic. Executives noted $32 million of that was related to a milestone and wouldn’t repeat next quarter.
The company has announced $13 billion in PCF deals so far, and CFO Chris Stansbury said the company would “remain opportunistic on additional accretive opportunities.”
The Alkira acquisition is aimed at allowing Lumen to offer interconnection between different data centers and clouds on its network, what it calls east-west connectivity, while Lumen currently offers mostly connections from a company's various premises to the cloud, what it calls north-south connectivity. Other cloud providers have begun to offer similar services.
The deal is expected to close in the third quarter of 2026. Lumen said its capex would fall by $100-200 million per year after the deal, money that it would have spent on making something similar to Alkira’s software itself, and that it expects its total addressable market would be $70 billion after the transaction.
MoffettNathanson founder Craig Moffett wrote in an investor note that one-time benefits like the AT&T sale and the PCF milestone payment gave the company a needed boost in the quarter.
“Taken together, today’s financial results were weaker than headline results would suggest, but some of the comments regarding NaaS new vs. existing customers and new vs. cannibalized revenue were encouraging,” he wrote.
He wrote that it was too soon to evaluate the Alkira deal, but noted that “network service providers have a mixed track record, at best, of making acquisitions outside of network infrastructure work as planned.”
BNP Paribas senior analyst Sam McHugh also wrote in an investor note that the better-than-expected revenue was “unlikely to continue.”
Lumen stock was up three percent Wednesday, after dropping more than 10 percent after the earnings call Tuesday evening and quickly recovering.
Correction: A previous version of the headline on this story said the purchase price was $425 million. The correct number is $475 billion. The body of the story is unchanged.
