Kyndryl’s J.P. Morgan Debut Signals Momentum in High-Margin IT Infrastructure Growth

Kyndryl Holdings, Inc. (NYSE: KD), the world’s largest IT infrastructure services provider, is set to make its first J.P. Morgan Global Technology Conference appearance on May 13, 2025. With CEO Martin Schroeter and CFO David Wyshner at the helm, the presentation will highlight the company’s transformation into a high-margin, growth-oriented enterprise. Kyndryl’s strong fiscal 2025 results, strategic execution, and long-term financial targets position it as a compelling investment opportunity in a sector increasingly defined by hybrid IT, cybersecurity, and AI-driven efficiency.

Financial Performance: Rebuilding Momentum
Kyndryl’s fiscal 2025 results marked a pivotal turnaround. Revenue reached $15.1 billion, while signings surged 48% in constant currency to $18 billion, signaling robust demand for its services. Adjusted pre-tax income soared to $482 million—a 192% jump from 2024—driven by margin expansion and operational improvements. Adjusted free cash flow also grew 53% year-over-year to $446 million, underscoring the company’s ability to convert top-line growth into bottom-line value.

Despite these gains, Kyndryl’s stock has underperformed peers in recent quarters, offering a potential buying opportunity as the company executes its growth roadmap.

Strategic Leverage: Automation, Alliances, and Remediation
Kyndryl’s success hinges on three core strategies:
1. Automation via Kyndryl Bridge: This AI-driven platform has freed up 13,000 delivery professionals, enabling cumulative savings of $775 million. By reducing manual processes, Kyndryl accelerates service delivery and improves client retention.
2. Hyperscale Partnerships: Revenue from cloud alliances doubled to $1.2 billion in fiscal 2025, with targets of $1.8 billion in 2026. Partnerships with hyperscalers like AWS, Microsoft, and Google Cloud position Kyndryl as a critical bridge between enterprises and cloud adoption.
3. Legacy Contract Remediation: Margins improved by $900 million annually as Kyndryl renegotiated contracts inherited from IBM, reducing costs and unlocking profitability.

Growth Outlook: Scaling Toward $1 Billion Targets
Kyndryl’s fiscal 2026 guidance projects 1% constant currency revenue growth, a modest target reflecting its focus on margin expansion over top-line expansion. The company aims to hit $725 million in adjusted pre-tax income—a 50% increase—and achieve $550 million in adjusted free cash flow, advancing toward its $1 billion+ free cash flow goal by 2028.

Long-term, Kyndryl’s $1 billion+ pre-tax income and free cash flow by 2028 are supported by mid-single-digit revenue growth, driven by hyperscale services, AI integration, and enterprise demand for hybrid IT solutions.

Recent Deals and Balance Sheet Strength
Q4 2025 brought landmark wins, including a $1 billion+ six-year contract with a financial services firm for IT modernization and AI deployment, and a European fintech deal for hybrid infrastructure. These deals reflect Kyndryl’s ability to secure high-margin, multi-year contracts.

Kyndryl’s balance sheet remains a source of strength: $1.8 billion in cash, $5 billion in liquidity, and an investment-grade credit rating with net leverage of 0.6x adjusted EBITDA provide ample flexibility for strategic initiatives.

Conclusion: A Steady Hand in a Volatile Market
Kyndryl’s financial turnaround, strategic execution, and fortress balance sheet make it a standout play in the IT infrastructure sector. With 192% pre-tax income growth, $1.8 billion hyperscale revenue targets, and a clear path to $1 billion free cash flow by 2028, the company is well-positioned to capitalize on secular trends.

Investors should note that Kyndryl’s multi-year contracts and focus on non-discretionary services insulate it from macroeconomic volatility, offering stability amid uncertainty. At current valuations—trading at 6.2x 2026E EBITDA—Kyndryl presents a compelling risk-reward profile. The May 13 conference will be a key catalyst, as management outlines how its automation, partnerships, and remediation initiatives will drive margin expansion and free cash flow growth for years to come.

In an era where enterprises increasingly rely on Kyndryl’s mission-critical services, this presentation could solidify the company’s status as a leading infrastructure partner—and a winning investment.