- **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

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

KD

KD fundamentals

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