Alkira
Lumen to acquire Alkira to accelerate its push into multi-cloud and data center interconnect services
Lumen Technologies today announced it would buy cloud networking platform company Alkira for $475 million in cash. The transaction is expected to close in the third quarter of 2026, subject to customary regulatory approvals and closing conditions. Alkira is a cloud-native, carrier-agnostic networking platform that enables enterprises to design, deploy, and operate connectivity and network services across hybrid and multi-cloud environments. The acquisition is expected to accelerate Lumen’s push into cloud-to-cloud (AKA multi-cloud) and data center interconnect services and expand its total addressable market to about $70 billion through Alkira’s global footprint and cloud-native platform.
Alkira serves enterprise customers – across financial services, retail, technology, healthcare, and manufacturing around the world. Customers use Alkira to manage connectivity across AWS, Azure, Google Cloud, and other environments through a single platform built for enterprise-grade security and compliance. Lumen said the acquisition will “accelerate its vision with a single control plane that orchestrates connectivity beyond our network – across data centers, multiple clouds, partner ecosystems, and on-premises environments – in one unified system.”
The Programmable Network Imperative:
AI is reshaping how enterprises operate and how their networks must perform. More than half of internet traffic today is automated traffic generated by software systems rather than human users. Networks have to be big enough, fast enough, intelligent enough, and secure enough to keep up. Yet many enterprise networks remain static, manually configured, and fragmented across providers. Lumen is working to define a new category of enterprise networking: one built on world-class physical infrastructure, a programmable network, and a connected ecosystem of clouds, applications, and partners.
Quotes:
Kate Johnson, CEO of Lumen Technologies said:
“For decades, networking ran in the background. Today, it’s the nervous system, determining how fast you can move, how much you spend, and whether your AI investments produce value. With Alkira, Lumen will pair the trusted network for AI with a cloud-native control plane, which will give customers a programmable network designed for the AI era. It’s what the market needs, and it’s what we’re building at Lumen.”
Lumen President and CFO Chris Stansbury said:
“Strategic revenue now represents more than half of our business revenue, and we are pleased with increasing customer interest in our programmable network solutions. The pending Alkira acquisition reflects a disciplined and opportunistic capital allocation strategy that supports our path to revenue growth outlined at Investor Day, while remaining on track to meet full-year guidance.”
In a letter to its customers, Amir Khan, Co-Founder & CEO, Alkira wrote, in part:
Why we’re excited to join forces with Lumen:
“Looking to the future, we’re thrilled about the powerful combination of Alkira’s on-demand network infrastructure and Lumen’s fiber and AI-ready platform. Lumen brings extensive enterprise reach and a richly connected ecosystem of clouds, applications, and partners. Together, our network infrastructure-as-a-service paired with Lumen’s Connectivity Fabric will deliver the market a connectivity solution purpose-built for the AI era. After close and our planned integration with Lumen, Alkira customers will benefit from deeper integration with Lumen’s network and dramatically broader reach. In the meantime, our priority is unwavering stability and continuity for every customer.”
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According to Lumen, the deal is unlikely to have a near-term impact on margins, but is expected to boost earnings as the digital platform grows, while improving long-term free cash flow and lowering buildout costs and risk.
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“The acquisition of Alkira substantially completes the digital platform that we had to build. It accelerates it, it is capex that we do not have to invest now,” CFO Chris Stansbury told Reuters in an interview.
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Lumen reported revenue of $2.9 billion for the first quarter ended March 31, above analysts’ average estimate of $2.83 billion, according to data compiled by LSEG.
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“We had a very strong quarter on private connectivity fabric (PCF), because we lit up some State of California business,” Stansbury said, adding that PCF growth was in the mid-single digit and Lumen’s digital offerings were a “big piece” of it.
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The company’s quarterly adjusted loss came in at 47 cents per share, compared with expectations of a 13-cent per share loss.
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Lumen raised its annual free cash flow forecast to a range of $1.9 billion to $2.1 billion, from an earlier projection of $1.2 billion to $1.4 billion, as its auditors determined that $729 million of the cash inflows associated with the sale of its consumer fiber operations to AT&T should be classified as operating cash flows.
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In February, Lumen was selected to expand Anthropic’s fiber network across North America, contributing to its nearly $13 billion in total PCF contracts.
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About Lumen Technologies:
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- Level 3 Communications (2017): A transformative $25 billion deal that brought a massive global fiber network, significantly boosting enterprise capabilities.
- Qwest Communications International (2011): A major acquisition, adding extensive fiber conduit and expanding the network in the western U.S..
- Global Crossing (2011): Provided a substantial international footprint and a global network.
- Savvis (2011): Expanded the company’s capabilities in cloud computing and data center hosting.
- Embarq (2009): The former landline operations of Sprint Nextel which included metro Ethernet and various data networking services.
- Centel (1993): An early, foundational acquisition of landline operations.
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- Alkira (2026): Planned acquisition to extend leadership in programmable networking.
- NetAura (2016): Focused on security services and government customers.
- Cognilytics (2014): A predictive analytics company.
- DataGardens, Inc. (2014): A Disaster Recovery as-a-Service (DRaaS) provider.
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References:
https://ir.lumen.com/news-section/lumen-to-acquire-alkira/default.aspx
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