Kyndryl Q3 revenue just shy of market expectations; names interim CFO

Overview

• Enterprise tech services firm's Q3 revenue slightly missed analyst expectations

• Company's adjusted EBITDA for Q3 slightly missed analyst estimates

• Kyndryl Consult segment achieved double-digit revenue growth in Q3

• Company also names Harsh Chugh as interim CFO

Outlook

• Kyndryl expects fiscal year 2026 constant-currency revenue decline of 2% to 3%

• Company estimates 2026 adjusted pretax income of $575 to $600 mln

• Company projects fiscal year 2026 adjusted EBITDA margin of approximately 17.5%

• Kyndryl forecasts fiscal year 2026 free cash flow of $325 to $375 mln

Result Drivers

• CONSULT SEGMENT GROWTH - Kyndryl Consult revenues grew 24% year-over-year, contributing significantly to overall revenue growth

• HYPERSCALER REVENUE - Revenue from cloud hyperscaler alliances increased 58% year-over-year, contributing $500 million

• THREE-A INITIATIVES - Initiatives in alliances, advanced delivery, and accounts drove earnings growth and margin expansion

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the it services & consulting peer group is "buy"

• Wall Street's median 12-month price target for Kyndryl Holdings Inc is $38.23, about 62.8% above its February 6 closing price of $23.49

• The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 10 three months ago

Press Release: ID:nPn46XJvla

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