‘Let me just say that we’re excited to be focused on the channel. We’re excited to continue to recruit help our partners be as productive as humanly possible. We’re seeing improvement there, but it’s not enough yet, and so I just look at it as a huge opportunity to have more feet on the street, selling these net new capabilities,’ President and CEO Kate Johnson said during Lumen’s Q1 2024 earnings call on Tuesday evening.

Lumen Technologies, formerly CenturyLink, is advancing its mid-market and North America enterprise sales through its crucial relationships with channel partners as part of the service provider’s turnaround story, company executives said Tuesday.

“Let me just say that we’re excited to be focused on the channel. We’re excited to continue to recruit and help our partners be as productive as humanly possible. We’re seeing improvement there, but it’s not enough yet, and so I just look at it as a huge opportunity to have more feet on the street, selling these net new capabilities. And I think we’re getting better at building the rhythms around a true commercial engine, which is both direct and indirect for these net new capabilities, like enterprise to cloud connectivity, and like our security offerings,” President and CEO Kate Johnson told investors during Lumen’s Q1 2024 earnings call on Tuesday evening.

Despite financial results that declined overall during the first quarter of the year, Lumen’s “Grow” business product revenue category, which includes some of the company’s next-gen services, such as network as a service (NaaS), edge fabric and security tools, accounted for 43 percent Lumen’s revenue during the first quarter of the year. The category pulled in $758 million for Lumen, up 3.3 percent year over year.

[Related: Lumen Technologies Moves Customer Experience Officer Into New CRO Seat]

Lumen’s Q1 2024 Financial Results

Lumen’s revenues across the board continued to decline as the company works through its transformation strategy. The company said that its debt restructuring that occurred during the second half of 2023 created uncertainty for customers and partners, which ultimately translated into softer sales and weaker Q1 2024 revenue.

Lumen’s Large Enterprise segment dipped 5.8 percent to $858 million during Q1 compared with revenues of $911 million a year ago. The midmarket enterprise segment declined 7 percent to $486 million in the first quarter compared to $523 million in Q1 2023. North America Enterprise Channels fell 5.3 percent to $1.76 billion from $1.86 billion a year prior.

Chris Stansbury, Lumen’s CFO, said that the channel, a well-established sales motion with deep connections to the customer, was non-existent in the company’s midmarket. Instead, there has historically been a high reliance on a direct selling motion in this segment. He said that “tremendous work” has been implemented to fix the product set and expand the partner ecosystem to reach the base, which is now seeing “double-digit” growth through partners.

The company plans on employing the same strategy with its Large Enterprise segment, but because of the category’s size, it will be much slower to turn around, Stansbury said.

“Large enterprise is the most difficult pivot because it’s big, and because it was probably least prepared for where we’re going … a lot of work has happened there, it’s just going to be longer to see that turnaround take place,” he said.

Overall, Lumen’s total Business segment revenue slipped 12.4 percent, totaling $2.60 billion in the first quarter compared to $2.97 billion a year ago. A new reporting segment for Lumen, North America Business Revenue, pulled in $1.76 billion compared to $1.86 billion a year ago.

The Mass Markets segment fell 9.2 percent to $699 million from $770 million in Q1 2023. Wholesale revenue slumped 11.3 percent during the quarter to $730 million from $823 million in the year-ago quarter.

For the first quarter of 2024 that ended March 31, Lumen reported total revenue of $3.29 billion, which fell short of Wall Street’s expectations by $100 million. The results reflected a decline of 11.7 percent compared to $3.73 billion in the year-ago period. The company reported diluted earnings per share of 6 cents, an 88.4 percent decline compared with 52 cents per share in the first quarter of 2023.