Kyndryl (NYSE:KD) Issues Earnings Results

Kyndryl (NYSE:KD) released its quarterly earnings results on Wednesday. The company reported $0.42 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.38 by $0.04, FiscalAI reports. The company had revenue of $3.65 billion for the quarter, compared to analysts’ expectations of $3.62 billion. Kyndryl had a net margin of 0.58% and a return on equity of 12.24%. The firm’s revenue for the quarter was down 1.9% compared to the same quarter last year. During the same period last year, the company earned $0.38 EPS.

Here are the key takeaways from Kyndryl’s conference call:

• Revenue remained down year over year: Q2 revenue was $3.65 billion, down 0.8% in constant currency, and Kyndryl maintained its full-year forecast of flat to down 2%. U.S. revenue grew 9%, partly benefiting from a one-time commercial matter resolution.
• Profitability improved as adjusted EBITDA margin rose 190 basis points to 19.1% and adjusted pre-tax margin increased 80 basis points to 4.1%. Management attributed margin gains to a better business mix and operating efficiencies, and expects gross margins to keep improving.
• Signings and growth opportunities strengthened: first-half signings grew 34%, while over the last 12 months Kyndryl signed 43 deals exceeding $50 million. Management said a growing share of large deals included new logos or expanded customer scope, supporting future growth in higher-value services.
• Free cash flow guidance was reaffirmed at $400 million–$500 million despite a $434 million use of cash in the first half, primarily from seasonal working-capital needs. Management expects stronger earnings and working-capital contributions in the second half and said its fiscal 2028 goal of $1 billion in adjusted free cash flow remains on track.
• Kyndryl said workforce rebalancing is substantially complete and expects second-half savings to largely offset about $200 million of fiscal 2027 charges; the actions are expected to generate $400 million–$500 million in annualized operating expense savings in fiscal 2028.

Kyndryl Stock Up 37.0%

Shares of KD stock traded up $4.79 on Wednesday, hitting $17.73. The stock had a trading volume of 10,169,520 shares, compared to its average volume of 4,497,793. The stock’s 50 day moving average is $12.81 and its 200-day moving average is $13.50. The firm has a market capitalization of $3.86 billion, a price-to-earnings ratio of 47.79 and a beta of 1.62. Kyndryl has a 52-week low of $10.10 and a 52-week high of $28.83. The company has a debt-to-equity ratio of 1.96, a quick ratio of 0.85 and a current ratio of 0.85.

Trending Headlines about Kyndryl

Here are the key news stories impacting Kyndryl this week:

• Positive Sentiment: Adjusted earnings were $0.42 per share, above estimates of $0.37–$0.38 and up from $0.38 a year earlier. Revenue of $3.65 billion also topped the $3.62 billion consensus. Kyndryl surpasses Q2 earnings and revenue estimates
• Positive Sentiment: Management reaffirmed its fiscal 2027 outlook, citing strong signings and continued growth in Kyndryl Consult and hyperscaler-related revenue, supporting confidence in its full-year plans. Kyndryl reports second-quarter fiscal 2027 results
• Negative Sentiment: Revenue declined 1.9% year over year to $3.65 billion, indicating that growth remains a challenge despite the quarterly beat. Kyndryl earnings report

Wall Street Analysts Forecast Growth

KD has been the topic of a number of analyst reports. Weiss Ratings lowered shares of Kyndryl from a “sell (d+)” rating to a “sell (d)” rating in a research report on Thursday, August 6th. BMO Capital Markets reissued a “market perform” rating and set a $16.00 price target on shares of Kyndryl in a research note on Thursday, August 6th. JPMorgan Chase & Co. raised their price objective on Kyndryl from $13.00 to $14.00 and gave the stock an “underweight” rating in a report on Monday, August 10th. Finally, Zacks Research upgraded Kyndryl from a “strong sell” rating to a “hold” rating in a research note on Monday, September 14th. Seven investment analysts have rated the stock with a Hold rating and two have given a Sell rating to the company. According to MarketBeat.com, Kyndryl presently has an average rating of “Reduce” and a consensus price target of $16.50.

About Kyndryl

Kyndryl Holdings, Inc (NYSE:KD) is an information technology services company that designs, builds, manages and modernizes mission-critical technology systems for businesses and public-sector organizations. Its services help customers operate and transform complex IT environments, including cloud, data centers, networks, applications and digital workplaces.

The company provides consulting and implementation services as well as ongoing managed services. Its capabilities include cloud solutions, network and edge services, cybersecurity, data and artificial intelligence, application management, enterprise computing and technology modernization.