KD · Kyndryl Holdings, Inc.

Kyndryl's FY2026 results showed revenues stable at $15.1B despite a 3% constant-currency decline, driven by hyperscaler-related revenue growth to $1.9B (up 59% YoY) and Kyndryl Consult expansion to $3.5B (up 18% YoY), offsetting broader pressures. Pretax income dipped slightly to $414M from $435M due to higher tax expenses from non-recurring accruals, while adjusted pretax income rose 21% to $581M reflecting margin improvements from Advanced Delivery AI automation, Accounts initiative for substandard margins, and high-single-digit projected margins on $13.5B signings (30%+ new scope/logos). Q4 revenues fell 1% to $3.8B with pretax income up 12% to $132M on cost discipline. CEO Martin Schroeter highlighted mission-critical engineering in agentic AI, IT modernization, cloud, and cybersecurity to drive multi-year profitability. To streamline operations, the Company approved workforce rebalancing on May 5, 2026, estimating $200M charges (mostly Q1 FY2027 cash severance) for $400-500M FY2028 run-rate savings, enhancing efficiency amid signings momentum. FY2027 outlook targets $600-700M adjusted pretax income (including charges), $400-500M free cash flow, and flat to -2% constant-currency revenue, signaling execution focus. Share repurchases of 11.6M shares ($304M) underscore capital return confidence with $302M capacity left.