Kyndryl Reports Strong Financial Performance for Q2 Fiscal 2026
Kyndryl Reports Strong Financial Performance for Q2 Fiscal 2026
On November 4, 2025, Kyndryl Holdings Inc. (NYSE: KD) announced its financial results for the second quarter of its fiscal year 2026, which concluded on September 30, 2025. The company reported total revenues of $3.7 billion, reflecting a slight year-on-year decrease of 1%. However, notable achievements include a $98 million pretax income compared to a loss of $5 million in the same quarter of the previous year. Kyndryl's net income stood at $68 million, translating to $0.29 per diluted share, demonstrating a remarkable turnaround from a loss reported a year prior.
Strong Adjusted Metrics
Kyndryl's adjusted metrics indicated substantial growth, with adjusted pretax income rising by $78 million to approximately $123 million. This achievement is attributed to the company's strategic focus on initiatives like Kyndryl Consult, along with partnerships with leading hyperscalers. Adjusted EBITDA increased by 15%, reaching $641 million, showcasing Kyndryl's ability to maintain operational efficiency despite market challenges.
Emphasis on AI and Cloud
The CEO of Kyndryl, Martin Schroeter, emphasized the strong momentum across key business areas such as AI, cloud services, and security solutions. The company's innovative offerings, particularly through its AI-powered Kyndryl Bridge platform, play a crucial role in assisting clients in enhancing their technological investments for modern business needs. The performance of Kyndryl Consult, which saw 28% revenue growth year-on-year, illustrates the successful demand for Kyndryl's advisory services, with signings increasing by 11% in the last year.
Cash Flow and Share Repurchase
Kyndryl reported operational cash flow of $147 million, slightly below the previous year's $149 million. Importantly, the company also authorized an additional $400 million for its share repurchase program, reflecting a commitment to shareholder value. This authorization builds upon the existing $300 million program announced in late 2024, highlighting Kyndryl's focus on maintaining robust capital allocation strategies.
Looking Ahead
Kyndryl's outlook for fiscal 2026 remains optimistic, forecasting adjusted pretax income of at least $725 million and an adjusted EBITDA margin of approximately 18%. The anticipated revenue growth for the second half of the fiscal year is supported by a solid pipeline of ongoing and prospective deals, including significant contributions from its hyperscaler alliances.
In Summary
Despite facing challenges like longer sales cycles and the need to reshape existing contracts to eliminate low-margin third-party content, Kyndryl's strategic initiatives in AI, cloud services, and consulting seem well-positioned for the future. By continuing to emphasize innovation and strategic partnerships, Kyndryl aims to solidify its status as a leader in enterprise technology services. As the company enhances its operational efficiencies and concentrates on high-value market segments, stakeholders can expect continued improvements in performance and shareholder returns in the upcoming quarters. Kyndryl's upcoming earnings call on November 5, 2025, is expected to provide further insights into these strategies and the company's performance trajectory.
Topics Business Technology）
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