Kyndryl (NYSE:KD) Announces Earnings Results, Beats Estimates By $0.04 EPS

Key Points

• Kyndryl beat quarterly estimates: EPS was $0.42 versus the $0.38 consensus, while revenue of $3.65 billion topped expectations of $3.62 billion.
• Revenue remained under pressure, declining 1.9% year over year. The company maintained its full-year revenue outlook of flat to down 2%.
• Profitability and deal momentum improved: Adjusted EBITDA margin rose 190 basis points to 19.1%, and first-half signings grew 34%; management also reaffirmed its $400 million–$500 million free-cash-flow forecast.

Kyndryl (NYSE:KD - Get Free Report) released its quarterly earnings data 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. Kyndryl had a return on equity of 12.24% and a net margin of 0.58%. The firm had revenue of $3.65 billion during the quarter, compared to analysts' expectations of $3.62 billion. During the same quarter in the prior year, the business posted $0.38 earnings per share. Kyndryl's revenue was down 1.9% compared to the same quarter last year.

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 Price Performance

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

Wall Street Analysts Forecast Growth

A number of brokerages have recently issued reports on KD. JPMorgan Chase & Co. increased their price target on shares of Kyndryl from $13.00 to $14.00 and gave the company an "underweight" rating in a report on Monday, August 10th. Zacks Research raised shares of Kyndryl from a "strong sell" rating to a "hold" rating in a report on Monday, September 14th. BMO Capital Markets restated a "market perform" rating and set a $16.00 target price on shares of Kyndryl in a research report on Thursday, August 6th. Finally, Weiss Ratings cut shares of Kyndryl from a "sell (d+)" rating to a "sell (d)" rating in a report on Thursday, August 6th. Seven equities research analysts have rated the stock with a Hold rating and two have issued a Sell rating to the company. According to MarketBeat, the company currently has a consensus rating of "Reduce" and a consensus price target of $16.50.

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

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.

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