- Revenues for the quarter ended September 30, 2025 total $3.7 billion, pretax income is $98 million, and net income is $68 million
- Adjusted EBITDA is $641 million, adjusted pretax income is $123 million, and adjusted net income is $89 million
- Company reaffirms fiscal 2026 outlook
- Company announces additional $400 million share repurchase authorization
NEW YORK, Nov. 4, 2025 -- Kyndryl (NYSE: KD), a leading provider of mission-critical enterprise technology services, today released financial results for the quarter ended September 30, 2025, the second quarter of its 2026 fiscal year.
"Our second quarter performance reflects the momentum we're building across key growth priorities – Kyndryl Consult, alliances with hyperscalers and other leading technology providers, and our innovative services in AI, cloud and security. We expect activity to strengthen in the second half of fiscal 2026, supported by our pipeline and the constructive discussions we're having with new and existing customers," said Kyndryl Chairman and Chief Executive Officer Martin Schroeter.
"With our deep expertise in mission-critical services and our AI-powered Kyndryl Bridge platform, we continue to help our customers realize greater value from their modernization and AI-related technology investments, fueling innovation and driving stronger business outcomes. Looking ahead, we remain committed to our multi-year objectives and to prudent capital allocation, including our significantly expanded share repurchase program."
Results for the Fiscal Second Quarter Ended September 30, 2025
For the second quarter, Kyndryl reported revenues of $3.7 billion, down 1% year-over-year on a reported basis and down 3.7% in constant currency. Similar to the first quarter, the year-over-year constant-currency revenue comparison reflects the Company's progress in reducing inherited no-margin and low-margin third-party content in customer contracts, as well as longer sales cycles, partially offset by growth in other areas. The Company reported pretax income of $98 million, a year-over-year increase of $103 million compared to a pretax loss of $5 million in the prior-year period. Net income was $68 million, or $0.29 per diluted share, in the quarter, compared to a net loss of $43 million, or ($0.19) per diluted share, in the prior-year period. Cash flow from operations was $147 million, a decrease of $2 million compared to the prior-year period.
Adjusted pretax income was $123 million, a $78 million increase compared to adjusted pretax income of $45 million in the prior-year period, reflecting contributions from Kyndryl's three-A initiatives – Alliances, Advanced Delivery and Accounts. Adjusted net income was $89 million, or $0.38 per diluted share, compared to adjusted net income of $3 million, or $0.01 per diluted share, in the prior-year period. Adjusted EBITDA was $641 million, a 15% year-over-year increase. Free cash flow was $22 million.
Signings for the trailing twelve months ended September 30, 2025 were $15.6 billion, exceeding trailing twelve months' revenue of $15.0 billion.
"We continued to advance our strategic and financial goals while maintaining attractive margins across our operations and on our new signings," said David Wyshner, Kyndryl's Chief Financial Officer. "We remain focused on expanding our scope with customers, sustaining our margin momentum, and achieving our fiscal 2028 objectives, which include generating more than $1 billion in free cash flow. Through our disciplined approach and operational rigor, we will continue to be tenacious in creating value for our customers and shareholders."
Share Repurchase Authorization
The Company today announced that its Board of Directors has authorized a $400 million increase in its share repurchase program. This authorization is in addition to the $300 million buyback program announced in November 2024, under which the Company has repurchased 7.3 million shares of stock, representing 3% of its outstanding shares, at a cost of $249 million as of September 30, 2025. The program does not have a set expiration date and may be suspended, modified or discontinued at any time without prior notice.
Recent Developments
- Hyperscaler-related revenue – In the second quarter, as part of Kyndryl's Alliances initiative, the Company generated $440 million in revenue tied to cloud hyperscaler alliances, a 65% year-over-year increase, and is now positioned to exceed its initial hyperscaler revenue target of $1.8 billion for fiscal 2026.
- Strong projected margin on recent signings – In the quarter, the projected pretax margin associated with signings was in the high-single-digit range, in line with recent quarters, demonstrating the Company's ability to build expected profit into its services contracts.
- Double-digit growth in Kyndryl Consult – In the second quarter, Kyndryl Consult revenues grew 28% year-over-year. Kyndryl Consult signings have grown 11% over the last twelve months.
- Incremental contribution from three-A's initiatives – The Company's Advanced Delivery initiative, focused on AI-enabled automation through our Kyndryl Bridge operating platform, and its Accounts initiative to address relationships with substandard margins continued to drive earnings growth and margin expansion in the quarter.
- Artificial intelligence – Kyndryl is continuing to expand its AI-related capabilities by establishing technology hubs in England, France and Singapore and, most recently, launching an AI Innovation Lab in India. Through the Kyndryl Agentic AI Framework, the Company is enabling enterprise customers to develop and deploy AI solutions at scale and in security-rich environments. A quarter of Kyndryl's signings already contain AI-related content.
- Share repurchases – The Company repurchased 2.9 million shares of its common stock at a cost of $89 million in the second quarter, under the $300 million share repurchase program authorized in November 2024.
Reaffirms Fiscal Year 2026 Outlook
Kyndryl reaffirms its outlook for its fiscal 2026, which runs from April 2025 to March 2026:
- Adjusted pretax income of at least $725 million, representing a year-over-year increase of at least $243 million.
- Adjusted EBITDA margin of approximately 18%, representing a year-over-year increase of approximately 130 basis points.
- Free cash flow of approximately $550 million, reflecting cash taxes of approximately $175 million.
- Constant-currency revenue growth of 1%.
The Company's full-year outlook reflects second-half revenue that is expected to be stronger than first-half revenue, driven by a larger revenue contribution from opening backlog, accelerated growth in Kyndryl Consult and hyperscaler-related revenue, and a record pipeline of in-process deals.
Earnings Webcast
Kyndryl's earnings call for the second fiscal quarter is scheduled to begin at 8:30 a.m. ET on November 5, 2025. The live webcast can be accessed by visiting investors.kyndryl.com on Kyndryl's investor relations website. A slide presentation will be made available on Kyndryl's investor relations website before the call on November 5, 2025. Following the event, a replay will be available via webcast for twelve months at investors.kyndryl.com.
About Kyndryl
Kyndryl (NYSE: KD) is a leading provider of mission-critical enterprise technology services, offering advisory, implementation and managed service capabilities to thousands of customers in more than 60 countries. As the world's largest IT infrastructure services provider, the Company designs, builds, manages and modernizes the complex information systems that the world depends on every day. For more information, visit www.kyndryl.com.
Forward-Looking and Cautionary Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements concerning the Company's plans, objectives, goals, beliefs, business strategies, future events, business condition, results of operations, financial position, business outlook and business trends and other non-historical statements, including without limitation the outlook and financial objectives in this press release (which does not assume any future acquisitions or divestitures), are forward-looking statements. Such forward-looking statements often contain words such as "aim," "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "may," "objectives," "opportunity," "plan," "position," "predict," "project," "should," "seek," "target," "will," "would" and other similar words or expressions or the negative thereof or other variations thereon. Forward-looking statements are based on the Company's current assumptions and beliefs regarding future business and financial performance.
The Company's actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others: failure to attract new customers, retain existing customers or sell additional services to customers; failure to meet growth and productivity objectives and maintain our capital allocation strategy; competition; impacts of relationships with critical suppliers and partners; failure to address and adapt to technological developments and trends; inability to attract and retain key personnel and other skilled employees; impact of economic, geopolitical, public health and other conditions; damage to the Company's reputation; inability to accurately estimate the cost of services and the timeline for completion of contracts; service delivery issues; the Company's ability to successfully manage acquisitions and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels; failure of the Company's intellectual property rights to prevent competitive offerings and the failure of the Company to obtain, retain and extend necessary licenses; the impairment of our goodwill or long-lived assets; risks relating to cybersecurity, data governance and privacy; risks relating to non-compliance with legal and regulatory requirements and changes in laws, regulations and policies in the U.S. and countries where the Company and its customers do business, including with respect to tariffs, taxes and other controls on imports or exports; adverse effects from tax matters; legal proceedings and investigatory risks; the impact of changes in market liquidity conditions and customer credit risk on receivables; the Company's pension plans; the impact of currency fluctuations; and risks related to the Company's common stock and the securities market.
Additional risks and uncertainties include, among others, those risks and uncertainties described in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025, and may be further updated from time to time in the Company's subsequent filings with the Securities and Exchange Commission. Any forward-looking statement in this press release speaks only as of the date on which it is made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In this release, certain amounts may not add due to the use of rounded numbers; percentages presented are calculated based on the underlying amounts. Forecasted amounts are based on currency exchange rates as of October 2025.
Non-GAAP Financial Measures
In an effort to provide investors with additional information regarding its results, the Company has provided certain metrics that are not calculated based on generally accepted accounting principles (GAAP), such as constant-currency results, adjusted EBITDA, adjusted pretax income, adjusted net income, adjusted EPS, adjusted EBITDA margin, adjusted pretax margin, adjusted net margin, net debt, free cash flow and adjusted free cash flow. Such non-GAAP metrics are intended to supplement GAAP metrics, but not to replace them. The Company's non-GAAP metrics may not be comparable to similarly titled metrics used by other companies. Definitions of non-GAAP metrics and reconciliations of non-GAAP metrics for historical periods to GAAP metrics are included in the tables in this release.
A reconciliation of forward-looking non-GAAP financial information is not included in this release because the Company is unable to predict with reasonable certainty some individual components of such reconciliation without unreasonable effort. These items are uncertain, depend on various factors and could have a material impact on future results computed in accordance with GAAP.
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