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- **Revenue Growth**: 3% YoY with $15.4B trailing signings, despite 3.5pt IBM-related headwind.
- **Margin Expansion**: 17.5% EBITDA margin in FY26, driven by hyperscaler (+58% YoY) and Kyndryl Bridge automation ($950M savings).
- **Challenges**: Elongated sales cycles delay $2B signings, 3.5% labor cost increase from lower attrition.
- **Strategic Momentum**: Private cloud and AI investments position for FY28 >$1.2B pretax income, >$1B free cash flow.
- **Financial Discipline**: $100M share buybacks, $1.35B cash balance, and 0.7x net leverage.

**【Management Opening Remarks】**
- Lori Chaitman provided standard cautionary statements regarding forward-looking statements and non-GAAP financial metrics. She emphasized the importance of reconciling non-GAAP metrics with GAAP results and reminded investors of the risks outlined in the company's SEC filings.

**【CEO Summary Section】**
- **Revenue Performance**: Reported 3% year-over-year revenue growth, unchanged in constant currency, driven by strong signings and margin expansion. Q3 signings totaled $3.9 billion, with 11 contracts exceeding $50 million each, and trailing 12-month signings reached $15.4 billion.
- **Challenges**: Elongated sales cycles due to AI adoption complexity and ERP cloud transitions, impacting Kyndryl Consult's performance. IBM partnership evolution reduced revenue by 3.5 points annually, with IBM-related spend halved from $4B to $2B.
- **Strategic Initiatives**: Hyperscaler-related revenue on track to exceed $2B in FY26, up 58% YoY. Investment in Kyndryl Bridge AI platform and private cloud expansion to address data sovereignty demand.
- **Financial Targets**: FY28 goals include >$1.2B adjusted pretax income and >$1B free cash flow, supported by high-margin post-spin signings.

**【CFO Financial Commentary】**
- **Q3 Financials**: Adjusted EBITDA of $696M (-1% YoY), adjusted pretax income $168M (+5% YoY). Free cash flow $217M, with $100M share buybacks executed.
- **Three-A's Initiatives**: 
  - **Alliances**: Hyperscaler revenue $500M (+58% YoY). 
  - **Advanced Delivery**: Kyndryl Bridge automation saves $950M annually. 
  - **Accounts**: Cumulative profit savings from focus accounts $975M.
- **Outlook**: Revised FY26 adjusted pretax income guidance $575M-$600M, with free cash flow $325M-$375M. FY26 EBITDA margin ~17.5%.

**【Q&A Key Highlights】**
- **Sales Cycle Elongation**: Caused by AI adoption complexity and sovereignty concerns, delaying $2B in signings. Expected to persist but not derail long-term growth.
- **IBM Partnership**: Reduced revenue impact from 40% to 3.5 points annually, with focus on higher-margin post-spin signings.
- **Cost Management**: Addressing 3.5% YoY labor cost increase through attrition reduction and automation. Targeting Q4 cost adjustments.
- **Buyback Confidence**: Maintained despite FY26 challenges, driven by $1.35B cash balance and investment-grade ratings.
- **FY28 Vision**: Unchanged, with >$1.2B pretax income and >$1B free cash flow, supported by 26% gross margin signings and 1.2x gross profit book-to-bill ratio.

Kyndryl Holdings, Inc. (KD) Q3 2026 Earnings Call Transcript

- **Revenue Growth**: Q2 Consult and Hyperscaler revenue up 25% and 50% YoY, respectively.
- **AI Expansion**: 25% of signings include AI-related content, driving IT modernization and cybersecurity demand.
- **Margin Expansion**: 17.2% EBITDA margin, 150+ basis points YoY improvement.
- **Cash Flow & Buybacks**: $550M free cash flow target, $400M share buyback authorization.
- **Strategic Moves**: Solvinity acquisition strengthens private cloud and sovereign cloud capabilities.
- **Pipeline Strength**: Book-to-bill ratio of 1.04, with 25% of signings in high-growth AI and IT modernization sectors.
- **Risk Management**: Focus on high-margin, mission-critical deals with strong customer satisfaction.


**【CEO Summary Section】**
- Q2 revenue of $3.7 billion, down 1% year-over-year, with 25% growth in Kyndryl Consult and Hyperscaler-related revenue streams.
- Emphasis on AI-driven growth, with 25% of signings including AI-related content.
- Strong pipeline and book-to-bill ratio of 1.04, supported by IT modernization and cybersecurity demand.
- Margin expansion through cost removal of low-margin hardware/software content.
- Acquisition of Solvinity to strengthen private cloud and sovereign cloud capabilities.

**【CFO Financial Commentary】**
- Adjusted EBITDA of $641 million, up 15% YoY, with margin expansion to 17.2%.
- Adjusted pretax income of $123 million, up 171% YoY, driven by higher-margin signings.
- Free cash flow target of $550 million for FY2026, with $400 million share buyback authorization.
- Hyperscaler-related revenue up 50% YoY, exceeding $1.8 billion target.

**【Q&A Highlights】**
- Capital allocation: 70% of CapEx for customer infrastructure, 30% for corporate needs.
- AI as a growth driver, with 25% of signings including AI-related services.
- Pipeline confidence in IT modernization, cybersecurity, and cloud migration.
- Second-half revenue growth expected from Consult, Hyperscaler, and expanded scope deals.
- Risk management through disciplined deal selection and execution.


Kyndryl Holdings, Inc. (KD) Q2 2026 Earnings Call Transcript

- **Revenue Resilience**: Q1 2026 revenue declined 2.6% in constant currency, but adjusted pretax income surged 39% to $128 million.
- **Consult Growth Engine**: Kyndryl Consult revenue up 30% YoY, with 12-month signings at $18.3 billion (43% YoY growth).
- **Hyperscaler Momentum**: $400 million in Q1 hyperscaler revenue, on track for $1.8 billion FY26 target.
- **Focus Accounts Payoff**: Cumulative profit from focus accounts improved by $25 million to $925 million.
- **Cash Flow Strength**: $1.5 billion cash balance, $550 million FY26 free cash flow target.
- **AI Differentiation**: Kyndryl Bridge saves $825 million annually, while AI advisory projects drive double-digit Consult growth.

**【CEO Opening Remarks】**
- Q1 2026 revenue declined 2.6% in constant currency due to focus accounts initiative, but adjusted pretax income grew 39% to $128 million.
- Kyndryl Consult revenue grew 30% YoY, with 12-month signings reaching $18.3 billion (43% YoY growth).
- Hyperscaler-related revenue reached $400 million in Q1, on track for $1.8 billion FY26 target.
- Book-to-bill ratio of 1.2x and high single-digit pretax margins on signings highlight margin expansion.

**【CEO Strategic Initiatives】**
- **Kyndryl Consult**: 32% YoY growth in constant currency, now at $3 billion annual pace. Example: 30%+ revenue growth in a travel sector account.
- **Kyndryl Bridge**: AI-powered platform driving automation, with $825 million annual savings from 2025-26.
- **Alliances**: $400 million hyperscaler revenue in Q1, 50% YoY growth. New partnership with Databricks for AI-at-scale solutions.
- **Focus Accounts**: Cumulative annualized profit improved by $25 million to $925 million, reducing low-margin revenue by 50%.

**【CFO Financial Highlights】**
- Q1 2026: 
  - Revenue: $3.7 billion (slight increase vs. prior year, 2.6% decline in constant currency)
  - Adjusted EBITDA: $647 million (17.3% margin, +240bps YoY)
  - Free cash flow: $550 million FY26 target, $222M outflow in Q1 due to seasonal payments
- Cash position: $1.5 billion, net leverage 0.6x (investment-grade rated)
- Share buybacks: $65 million in Q1, $141 million remaining under $200 million authorization

**【Q&A Highlights】**
1. **Revenue Growth Cadence**: 
   - Q2 YoY growth to accelerate from Q1, FY26 exit rate ~1% constant currency
   - 67% of FY26 P&L driven by post-spin signings (vs. 50% in FY25)
2. **Focus Accounts**: 
   - 1 deal closed 23 minutes after Q1 end, others delayed due to innovation discussions
   - Cumulative profit benefit from focus accounts: $925 million (vs. $800M target)
3. **Buybacks**: 
   - $65M in Q1, $141M remaining; decisions based on cash flow, share price, and market conditions
4. **AI Impact**: 
   - Kyndryl Bridge reduces costs via automation, while Kyndryl Consult captures AI advisory revenue
   - 8-figure AI project with national government to enhance public services
5. **Visibility**: 
   - FY26 guidance: $725M adjusted pretax income (+$243M YoY), 18% EBITDA margin
   - FY28 targets: >$1B free cash flow, >$1.2B pretax income, mid-single-digit revenue growth

Kyndryl Holdings, Inc. (KD) Q1 2026 Earnings Call Transcript

- **Record 2025 Performance**: $18.2B signings (+48%), $482M pretax profit (+65%), $446M free cash flow (+53%).
- **Consult Growth Engine**: 50% signings growth, 29% revenue growth, now 25% of total revenue.
- **2026 Outlook**: $550M free cash flow, $725M pretax profit, 18% EBITDA margin, positive revenue growth.
- **Hyperscaler Expansion**: $1.2B in 2025, targeting $1.8B in 2026 (+50% YoY).

**【CEO Summary Section】**
- Fiscal 2025 signings grew 48% in constant currency to $18.2 billion, with adjusted pretax income up $317 million to $482 million. Adjusted free cash flow increased 53% to $446 million.
- Kyndryl Consult signings grew 50% in constant currency, driving 29% revenue growth. Hyperscaler-related revenue doubled to $1.2 billion.
- 2026 outlook includes $550 million in adjusted free cash flow, $725 million in adjusted pretax income, and positive constant currency revenue growth.

**【CFO Financial Commentary】**
- Q4 2025 revenue of $3.8 billion (+1.3% YoY in constant currency), with adjusted EBITDA margin of 18.4% (up 370bps YoY). Adjusted pretax income of $185 million (+6x YoY).
- 2026 guidance: $1.8 billion hyperscaler-related revenue (+50% YoY), double-digit Kyndryl Consult growth, and 18% adjusted EBITDA margin.

**【Q&A Key Highlights】**
- signings growth of 46% in 2025 driven by Consult (47% growth) and managed services. 75% of 2026 revenue already under contract.
- 2026 capital allocation: $675M in capex, $175M in taxes, 100% conversion of pretax income to free cash flow.
- Kyndryl Bridge delivers $775M annual savings through automation, freeing 13,000+ delivery professionals.
- 95% of companies adopting AI, but only 35% with governance frameworks, creating growth opportunities for Kyndryl's advisory services.

Kyndryl Holdings, Inc. (KD) Q4 2025 Earnings Call Transcript

- **Record Growth and Margins**: Q3 signings up 31% YoY, Consult revenue +26%, adjusted EBITDA margin hits 18.8%. Free cash flow $171M, with $30M share buybacks.
- **AI and Cloud Leadership**: Hyperscaler revenue >$300M, AI private cloud expansion in Japan. Kyndryl Bridge frees 12,300 professionals for new opportunities.
- **Customer Loyalty and Expansion**: 90%+ retention, 300+ new customers. Q4 revenue growth expected at 2% constant currency, FY25 free cash flow guidance raised to $350M.
- **FX and IBM Transition**: Hedging limits FX impact to $5M variance. IBM cost headwind ends Q1 2025, enabling better software cost management.


**【CEO Summary Section】**
- **Revenue Growth and signings**: Q3 signings reached $4.1 billion, with trailing 12-month signings up 31% to $16.3 billion. Kyndryl Consult revenue grew 26% YoY, and signings rose 35%. Hyperscaler-related revenue exceeded $300 million, tracking toward a $1 billion annual target.
- **Margin Expansion**: Adjusted pretax margin increased 270 basis points YoY to 18.8%, driven by higher-margin Consult signings and cost efficiency. Gross profit book-to-bill ratio of 1.4 reflects strong future margin potential.
- **AI and Innovation**: Kyndryl Bridge enabled automation and efficiency, freeing 12,300 professionals for new opportunities. The company is expanding AI private cloud solutions in Japan and other regions, supporting secure AI deployment.
- **Customer Retention and Expansion**: 90%+ customer retention over three years, with 300+ new customers added. Strategic alliances with Microsoft, AWS, and others drive hybrid cloud migration and modernization services.

**【CFO Financial Commentary】**
- **Q3 Financial Highlights**: Revenue $3.7 billion (-3% reported, -0.5% constant currency). Adjusted EBITDA $704 million (18.8% margin, +320 bps YoY). Adjusted free cash flow $171 million, with $30 million share buybacks under the new $1.5 billion repurchase program.
- **FY25 Outlook**: Raised adjusted EBITDA margin to 16.7%+ and adjusted pretax income to $475 million+. Q4 constant currency revenue growth expected at 2%, with FY25 free cash flow guidance increased to $350 million.
- **Liquidity and Capital Allocation**: $1.5 billion cash balance, $4.5 billion total liquidity. Net debt at 0.7x EBITDA, below target leverage ratio. Capital allocation prioritizes growth, M&A, and shareholder returns.

**【Q&A Key Takeaways】**
- **Order Growth Drivers**: Broad-based across geographies and practices, with 5/6 practices seeing >20% signings growth. 20+ deals >$100 million YTD, including new logos. Consult growth from in-sourcing and multi-vendor objectivity.
- **FX Hedging Effectiveness**: Year-over-year $80 million headwind, but hedging limits impact to $5 million variance from initial guidance. Q4 reported revenue will reflect U.S. dollar strength.
- **AI and Tariff Impact**: Customers prioritize IT modernization amid regulatory and tariff uncertainty. Kyndryl helps navigate complexity, positioning for AI adoption and risk mitigation.
- **IBM Transition**: Exited TSA agreements, now P×Q pricing model for software. $200 million annual IBM cost increase ends in Q1 2025, enabling better cost management.


Actual		-3.3	-1.24	-0.47	-2.2408		0	-0.05	-0.05	-0.01	0.13	0.01	0.51	0.52	0.37	0.38	0.52
Forecast		-0.47	-0.4811	0.05	-0.07		-1.1096	-0.165	0.1885	-0.0233	0.174	-0.0302	0.4079	0.5062	0.3635	0.3575	0.604
Surprise	0.00%	-602.13%	-157.74%	-1040.00%	-3101.14%	0.00%	+100.00%	+69.70%	-126.53%	+57.08%	-25.29%	+133.11%	+25.03%	+2.73%	+1.79%	+6.29%	-13.91%

KD

KD fundamentals

KD Q3 2026 Earnings

Earnings Call

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KD

KD fundamentals

KD Q3 2026 Earnings

Earnings Call

KD Earnings Call Summary for Q3/20268:30 AM on Feb 9, 2026

KD Earnings Call Summary for Q2/20268:30 AM on Nov 5, 2025

KD Earnings Call Summary for Q1/20268:30 AM on Aug 5, 2025

KD Earnings Call Summary for Q4/20258:30 AM on May 8, 2025

KD Earnings Call Summary for Q3/20258:30 AM on Feb 4, 2025

You can ask Aime