Lumen Technologies (NYSE: LUMN) stock surged 8.91% in the after-hours trading session on Tuesday, following the company's better-than-expected fourth-quarter 2024 results and upbeat outlook for 2025.

The telecom company reported Q4 revenue of $3.33 billion, beating analysts' estimates of $3.20 billion by 4.04%. Its adjusted earnings per share of $0.09 also significantly surpassed the consensus estimate of a loss of $0.05 per share.

Lumen's Q4 performance was driven by robust demand for its data centers amid the AI boom. The company has secured deals worth over $8 billion with major cloud and tech companies like Google, Microsoft, Amazon Web Services, and Meta Platforms for its networking solutions.

For the full year 2025, Lumen provided a solid outlook, projecting adjusted EBITDA in the range of $3.2 billion to $3.4 billion and free cash flow of $700 million to $900 million. The company's strong free cash flow guidance was particularly well-received by investors, as it indicates Lumen's ability to generate substantial cash flows to service its debt and fund growth initiatives.

Kate Johnson, Lumen's President and CEO, expressed confidence in the company's strategy, stating, "This upcoming year, we will continue to drive operational excellence at Lumen, disrupt the industry by cloudifying telecom, and deliver connectivity to hyperscalers and enterprises as their demand for data grows in the era of AI."