- Revenues for the quarter ended December 31, 2025 total $3.9 billion, pretax income is $91 million, and net income is $57 million
- Adjusted EBITDA is $696 million, adjusted pretax income is $168 million, and adjusted net income is $122 million
- Kyndryl Consult delivers double-digit revenue growth in the quarter and over the last twelve months
- Company updates fiscal year 2026 outlook
- Company announces leadership changes
NEW YORK, February 9, 2026 — Kyndryl (NYSE: KD), a leading provider of mission-critical enterprise technology services, today released financial results for the quarter ended December 31, 2025, the third quarter of its 2026 fiscal year.
“In the third quarter, we drove growth in Kyndryl Consult and through our alliances with hyperscalers and other leading technology providers. Our signings continue to reflect the vital role we play in the operation of customers’ technology estates, our deep expertise in mission-critical services and our innovation in AI, cloud and security,” said Kyndryl Chairman and Chief Executive Officer Martin Schroeter.
“We are operating with a clear strategic mindset. We remain focused on delivering our multi-year objectives, driving profitable growth and most importantly providing innovative and world-class services for our customers.”
Results for the fiscal third quarter ended December 31, 2025
For the third quarter, Kyndryl reported revenues of $3.9 billion, up 3% year-over-year on a reported basis and unchanged in constant currency. Kyndryl reported pretax income of $91 million, compared to pretax income of $258 million in the prior-year period, in which the Company recorded a significant transaction-related benefit. Net income was $57 million, or $0.25 per diluted share, in the quarter, compared to net income of $215 million, or $0.89 per diluted share, in the prior-year period. Cash flow from operations was $427 million compared to $260 million in the prior-year period.
Adjusted pretax income was $168 million, an $8 million increase compared to adjusted pretax income of $160 million in the prior-year period, reflecting contributions from Kyndryl’s three-A initiatives – Alliances, Advanced Delivery and Accounts. Adjusted net income was $122 million, or $0.52 per diluted share, compared to adjusted net income of $124 million, or $0.51 per diluted share, in the prior-year period. Adjusted EBITDA was $696 million, and free cash flow was $217 million. See “Non-GAAP Metric Definitions and Reconciliations.”
Signings for the trailing twelve months ended December 31, 2025 were $15.4 billion. In the third quarter, Kyndryl signed eleven customer contracts exceeding $50 million each.
Recent developments
- Leadership changes – Kyndryl today announced that Harsh Chugh has been named Interim Chief Financial Officer, Mark Ringes has been named Interim General Counsel and Bhavna Doegar has been named Interim Corporate Controller effective immediately.
- Hyperscaler-related revenue – In the third quarter, as part of Kyndryl’s Alliances initiative, the Company generated $500 million in revenue tied to cloud hyperscaler alliances, a 58% year-over-year increase, and is on track to exceed its initial hyperscaler revenue target of $1.8 billion for fiscal 2026.
- Double-digit growth in Kyndryl Consult – In the third quarter, Kyndryl Consult revenues grew 24% year-over-year. Over the last twelve months, Kyndryl Consult revenues were $3.6 billion, and Kyndryl Consult signings were $4.1 billion.
- Strong projected margin on recent signings – In the quarter, the projected pretax margin associated with signings was in the high-single-digit range, in line with recent quarters, demonstrating the Company’s ability to build expected profit into its services contracts.
- Incremental contribution from three-A’s initiatives – The Company’s Advanced Delivery initiative, focused on AI-enabled automation through our Kyndryl Bridge operating platform, and its Accounts initiative to address relationships with substandard margins continued to drive earnings growth and margin expansion in the quarter.
- Artificial intelligence – Kyndryl continues to expand its AI-related capabilities. The Company has recently announced new agentic AI services to support workforce readiness, Agentic AI Digital Trust to securely manage agentic AI deployments across hybrid and multi-cloud environments, and agentic AI services for the mainframe to accelerate modernization. Through Kyndryl Consult, the Company’s global AI hubs and the Kyndryl Agentic AI Framework, a quarter of Kyndryl’s signings now include AI-related content.
- Solvinity acquisition – The Company announced an agreement to acquire Solvinity Group, B.V., a provider of secure managed cloud platforms and services in the Netherlands. The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close in the first half of calendar-year 2026.
- Regulatory designation – Kyndryl has been designated as one of 19 “critical third-party providers” under the European Union’s Digital Operational Resilience Act due to the mission-critical nature of the work the Company does for large financial institutions.
- Share repurchases – The Company repurchased 3.7 million shares of its common stock at a cost of $100 million in the third quarter. Since the authorization of its share repurchase program in November 2024, the Company has bought back 11 million shares for $349 million, or 5% of its shares outstanding.
Fiscal year 2026 outlook
Kyndryl is providing the following outlook for its fiscal year 2026:
- Adjusted pretax income of $575 to $600 million
- Adjusted EBITDA margin of approximately 17.5%
- Free cash flow of $325 to $375 million
- Constant-currency revenue decline of 2% to 3%
See “Non-GAAP Metric Definitions and Reconciliations.”
Earnings webcast
Kyndryl’s earnings call for the third fiscal quarter is scheduled to begin at 8:30 a.m. ET on February 9, 2026. The live webcast can be accessed by visiting investors.kyndryl.com on Kyndryl’s investor relations website. A slide presentation will be made available on Kyndryl’s investor relations website before the call on February 9, 2026. Following the event, a replay will be available via webcast for twelve months at investors.kyndryl.com.
Form 10-Q
As Kyndryl disclosed today, the filing of Kyndryl’s Quarterly Report on Form 10-Q will be delayed pending the review described in Kyndryl’s Form 12b-25 filed with the Securities and Exchange Commission (the SEC Filing). Kyndryl does not expect a restatement or other impact to its financial statements. See “Non-GAAP Metric Definitions and Reconciliations.”
About Kyndryl
Kyndryl (NYSE: KD) is a leading provider of mission-critical enterprise technology services, offering advisory, implementation and managed service capabilities to thousands of customers in more than 60 countries. As the world’s largest IT infrastructure services provider, the Company designs, builds, manages and modernizes the complex information systems that the world depends on every day. For more information, visit www.kyndryl.com.
Forward-looking and cautionary statements
This press release and the related conference call contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release or related conference call, including statements concerning the Company’s plans, objectives, goals, beliefs, business strategies, future events, business condition, results of operations, financial position, business outlook and business trends and other non-historical statements, including without limitation the outlook and financial objectives in this press release or related conference call (which does not assume any future acquisitions or divestitures), as well as all statements relating to the ongoing review described in the SEC Filing, are forward-looking statements. Such forward-looking statements often contain words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “objectives,” “opportunity,” “plan,” “position,” “predict,” “project,” “should,” “seek,” “target,” “will,” “would” and other similar words or expressions or the negative thereof or other variations thereon. Forward-looking statements are based on the Company’s current assumptions and beliefs regarding future business and financial performance and the matters discussed in this press release.
The Company’s actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others: the timing, scope and completion of the ongoing review described in the SEC Filing and any results thereof; the timing of the filing of the Quarterly Report on Form 10-Q; failure to attract new customers, retain existing customers or sell additional services to customers; failure to meet growth and productivity objectives and maintain our capital allocation strategy; competition; impacts of relationships with critical suppliers and partners; failure to address and adapt to technological developments and trends; inability to attract and retain key personnel and other skilled employees; impact of economic, geopolitical, public health and other conditions; damage to the Company’s reputation; inability to accurately estimate the cost of services and the timeline for completion of contracts; service delivery issues; the Company’s ability to successfully manage acquisitions and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels; the Company’s ability to refinance maturing debt on favorable terms in a timely manner, or at all; failure of the Company’s intellectual property rights to prevent competitive offerings and the failure of the Company to obtain, retain and extend necessary licenses; the impairment of our goodwill or long-lived assets; risks relating to cybersecurity, data governance and privacy; risks relating to non-compliance with legal and regulatory requirements and changes in laws, regulations and policies in the U.S. and countries where the Company and its customers do business, including with respect to tariffs, taxes and other controls on imports or exports; adverse effects from tax matters; legal proceedings and investigatory risks; the impact of changes in market liquidity conditions and customer credit risk on receivables; the Company’s pension plans; the impact of currency fluctuations; and risks related to the Company’s common stock and the securities market.
Additional risks and uncertainties include, among others, those risks and uncertainties described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, and may be further updated from time to time in the Company’s subsequent filings with the Securities and Exchange Commission. Any forward-looking statement in this press release or related conference call speaks only as of the date on which it is made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In this press release, certain amounts may not add due to the use of rounded numbers; percentages presented are calculated based on the underlying amounts. Forecasted amounts are based on currency exchange rates as of January 2026.
Non-GAAP financial measures
In an effort to provide investors with additional information regarding its results, the Company has provided certain metrics that are not calculated based on generally accepted accounting principles (GAAP), such as constant-currency results, adjusted EBITDA, adjusted pretax income, adjusted net income, adjusted EPS, adjusted EBITDA margin, adjusted pretax margin, adjusted net margin, net debt, free cash flow and adjusted free cash flow. Such non-GAAP metrics are intended to supplement GAAP metrics, but not to replace them. The Company’s non-GAAP metrics may not be comparable to similarly titled metrics used by other companies. Definitions and additional information about our calculation of non-GAAP metrics and reconciliations of non-GAAP metrics for historical periods to GAAP metrics are included in the tables in this release.
A reconciliation of forward-looking non-GAAP financial information is not included in this release because the Company is unable to predict with reasonable certainty some individual components of such reconciliation without unreasonable effort. These items are uncertain, depend on various factors and could have a material impact on future results computed in accordance with GAAP.
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