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Centurylink Finance

Furthering human progress through innovative financial stewardship by becoming the most trusted technology partner for the 4th Industrial Revolution

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Align the strategy

Centurylink Finance SWOT Analysis

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Furthering human progress through innovative financial stewardship by becoming the most trusted technology partner for the 4th Industrial Revolution

Strengths

  • INFRASTRUCTURE: Extensive fiber network and global technology assets
  • PORTFOLIO: Diversified service offerings across enterprise segments
  • RELATIONSHIPS: Strong foothold in government and large enterprises
  • LIQUIDITY: $1.9B cash with $2.5B revolving credit availability
  • STREAMLINING: Successfully divested non-core assets for $8B+

Weaknesses

  • LEGACY: Declining revenue from traditional telecom services
  • DEBT: High debt load at approximately $20B affecting flexibility
  • INTEGRATION: Challenges merging acquisitions into cohesive offering
  • COMPETITION: Lagging behind industry leaders in advanced solutions
  • INVESTMENT: Insufficient CAPEX for network modernization vs peers

Opportunities

  • EDGE: Expand edge computing services for low-latency applications
  • SECURITY: Enhance cybersecurity offerings as threats increase
  • 5G: Leverage network for private 5G enterprise solutions
  • HYPERSCALERS: Deepen partnerships with cloud service providers
  • AUTOMATION: Streamline financial operations and customer systems

Threats

  • HYPERSCALERS: Cloud giants expanding into networking space
  • RECESSION: Economic downturn reducing enterprise IT spending
  • REGULATIONS: Changing telecom regulations affecting operations
  • TECHNOLOGY: Rapid tech evolution outpacing deployment capacity
  • TALENT: Growing difficulty attracting top financial/technical talent

Key Priorities

  • DEBT: Accelerate debt reduction to improve financial flexibility
  • DIGITAL: Transition portfolio from legacy to digital services
  • EDGE: Invest strategically in edge computing capabilities
  • AUTOMATION: Implement AI-driven financial operations excellence
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Align the plan

Centurylink Finance OKR Plan

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Furthering human progress through innovative financial stewardship by becoming the most trusted technology partner for the 4th Industrial Revolution

DEBT MASTERY

Transform our capital structure for maximum flexibility

  • REDUCTION: Reduce total debt by $1.2B through targeted refinancing and operational cash flow by Q3
  • RATIO: Improve net debt to adjusted EBITDA ratio from 3.8x to 3.3x through strategic deleveraging
  • OPTIMIZATION: Implement AI-powered capital allocation model to prioritize investments by highest ROI
  • PORTFOLIO: Complete financial analysis and roadmap for divestiture of 2 non-core business units
DIGITAL PIVOT

Accelerate transition from legacy to growth services

  • REVENUE: Increase digital services revenue contribution from 34% to 42% of total revenue
  • ANALYSIS: Implement AI-driven profitability analysis across all product lines with executive dashboard
  • MIGRATION: Develop financial incentives program for 500 legacy customers to transition to digital services
  • EFFICIENCY: Achieve 14% reduction in operational costs for legacy service maintenance vs prior year
EDGE INNOVATION

Lead the market in edge computing financial solutions

  • INVESTMENT: Allocate $250M to edge computing infrastructure with detailed ROI analysis by segment
  • PARTNERSHIPS: Secure 3 strategic financial arrangements with edge technology partners worth $75M+
  • PIPELINE: Establish financial tracking system for edge computing sales pipeline with 85% accuracy
  • METRICS: Create comprehensive financial performance dashboard for edge computing business unit
AI TRANSFORMATION

Revolutionize financial operations through AI adoption

  • AUTOMATION: Deploy AI-powered financial forecasting system reducing planning cycle by 65%
  • UPSKILLING: Train 85% of finance staff on AI tools with 90% certification completion rate
  • EFFICIENCY: Reduce manual financial processing costs by 35% through intelligent automation
  • INSIGHTS: Launch predictive financial analytics dashboard for top 250 customers by Q3
METRICS
  • FREE CASH FLOW: $3.2B for 2025
  • DIGITAL REVENUE %: 42% of total revenue
  • NET DEBT TO ADJUSTED EBITDA: 3.3x
VALUES
  • Fairness
  • Integrity
  • Honesty
  • Reliability
  • Positive Attitude
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Align the learnings

Centurylink Finance Retrospective

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Furthering human progress through innovative financial stewardship by becoming the most trusted technology partner for the 4th Industrial Revolution

What Went Well

  • COST: Successfully reduced operating expenses by $345M year-over-year
  • DIVESTITURE: Completed North American ILEC business sale for $7.5B
  • CONTRACTS: Secured $800M in new government and enterprise contracts
  • DIGITAL: Grew enterprise digital services revenue by 8% year-over-year
  • RETENTION: Improved enterprise customer retention rate to 94.5% in Q1

Not So Well

  • REVENUE: Total revenue decreased 7% to $3.8B compared to prior year
  • RESIDENTIAL: Continued decline in consumer broadband subscriber base
  • CAPEX: Lower than projected capital expenditure on network upgrades
  • COMPETITION: Lost market share in mid-market segment to competitors
  • MARGINS: EBITDA margin declined by 2.3 percentage points year-over-year

Learnings

  • FOCUS: Need to accelerate pivot from legacy services to growth areas
  • INVESTMENT: Strategic capital allocation critical for transformation
  • FORECASTING: Improve accuracy of financial projections and guidance
  • HYPERSCALER: Partnership strategies must evolve with cloud dynamics
  • AUTOMATION: Manual financial processes causing efficiency bottlenecks

Action Items

  • AUTOMATION: Implement AI-powered financial forecasting system by Q3
  • TRANSFORMATION: Accelerate legacy to digital portfolio transition plan
  • DEBT: Develop strategy to reduce debt load by additional $2B in 2 years
  • REPORTING: Streamline financial reporting to enhance decision velocity
  • TALENT: Recruit 3 senior financial strategists with digital expertise
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Drive AI transformation

Centurylink Finance AI Strategy SWOT Analysis

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Furthering human progress through innovative financial stewardship by becoming the most trusted technology partner for the 4th Industrial Revolution

Strengths

  • DATA: Massive network data sets available for AI model training
  • INFRASTRUCTURE: Existing data centers suitable for AI deployments
  • CUSTOMERS: Enterprise relationships for AI solution deployment
  • PROCESSES: Established financial forecasting frameworks adaptable to AI
  • SECURITY: Strong data security protocols for AI implementation

Weaknesses

  • TALENT: Limited AI expertise in financial operations teams
  • INTEGRATION: Siloed systems hindering holistic AI implementation
  • INVESTMENT: Underfunded AI initiatives compared to competitors
  • ADOPTION: Cultural resistance to AI-driven financial decisions
  • STRATEGY: Lack of comprehensive AI roadmap for finance function

Opportunities

  • FORECASTING: AI-powered predictive financial analytics
  • AUTOMATION: Streamline financial processes via intelligent automation
  • INSIGHTS: Develop AI-driven customer spending pattern analysis
  • EFFICIENCY: Reduce operational costs through AI optimization
  • RISK: Enhance risk management with AI pattern recognition

Threats

  • COMPETITORS: Industry rivals advancing AI capabilities faster
  • DISRUPTION: AI-powered startups targeting enterprise segments
  • REGULATIONS: Evolving AI compliance requirements adding complexity
  • OBSOLESCENCE: Current financial systems becoming outdated
  • SECURITY: Increasing sophistication of AI-powered cyber threats

Key Priorities

  • TALENT: Recruit and upskill finance team with AI expertise
  • AUTOMATION: Implement AI for core financial process automation
  • INSIGHTS: Develop AI forecasting for improved decision making
  • INTEGRATION: Establish unified data architecture for AI analytics