Kyndryl (NYSE:KD – Get Free Report) posted its earnings results on Wednesday. The company reported ($0.12) earnings per share for the quarter, topping the consensus estimate of ($0.16) by $0.04, FiscalAI reports. The firm had revenue of $3.62 billion during the quarter, compared to analysts’ expectations of $3.64 billion. Kyndryl had a return on equity of 20.43% and a net margin of 1.31%.The firm’s revenue was down 3.3% compared to the same quarter last year. During the same quarter in the previous year, the business earned $0.37 earnings per share.
Here are the key takeaways from Kyndryl’s conference call:
- Q1 revenue fell 3% year over year to $3.6 billion, while adjusted pre-tax income was a $37 million loss, primarily reflecting $152 million in workforce rebalancing charges.
- Kyndryl maintained its fiscal 2027 outlook, including constant-currency revenue ranging from flat to down 2%, adjusted pre-tax income of $600 million–$700 million, and free cash flow of $400 million–$500 million.
- Targeted growth areas continued to perform well, with Kyndryl Consult revenue up 14% and hyperscaler-related revenue streams up 48% over the last 12 months; Q1 Consult signings increased 50%.
- Management cited improving signings quality, with new scope and new logos representing about 30% of the value of large deals versus 15% in fiscal 2025, supporting its fiscal 2028 goals of more than $1.2 billion in adjusted pre-tax income and $1 billion in free cash flow.
- Customers procuring more IBM hardware and software directly from IBM remain a revenue headwind, while Q1 free cash flow was a seasonal $401 million outflow due to renewal payments and weaker billing and collections.
Kyndryl Stock Performance
KD traded down $0.81 on Wednesday, hitting $13.88. 9,373,980 shares of the company traded hands, compared to its average volume of 4,054,625. Kyndryl has a 12-month low of $10.10 and a 12-month high of $33.90. The company has a 50 day moving average of $12.09 and a 200-day moving average of $13.73. The company has a quick ratio of 0.88, a current ratio of 0.88 and a debt-to-equity ratio of 1.77. The stock has a market capitalization of $3.06 billion, a PE ratio of 16.32 and a beta of 1.65.
Key Kyndryl News
- Positive Sentiment: Kyndryl reported strong momentum in signings, particularly in Kyndryl Consult and hyperscaler offerings, and said demand for AI-led modernization solutions is increasing. Kyndryl Q1 2027 Earnings Call Transcript
- Positive Sentiment: The company reaffirmed its fiscal 2027 outlook, including revenue guidance of approximately $14.8 billion to $15.1 billion, broadly in line with Wall Street expectations. Adjusted EBITDA was $512 million. Kyndryl Reports First Quarter Fiscal 2027 Results
- Neutral Sentiment: Kyndryl’s reported loss was $0.12 per share on $3.62 billion of revenue. Estimates varied by source, with some indicating an earnings beat and others a miss; revenue was slightly below the approximately $3.64 billion consensus estimate. Kyndryl Earnings Results
- Negative Sentiment: Revenue declined 3.3% year over year, while the company swung from earnings of $0.37 per share in the year-ago quarter to a net loss. Kyndryl also recorded $152 million in workforce-rebalancing charges tied to its operational streamlining efforts. Kyndryl Reports Q1 Loss
- Negative Sentiment: Unusually heavy put-option activity—15,426 puts traded versus an average of 1,843—signals elevated near-term bearish positioning, although it does not necessarily represent actual selling by long-term shareholders.
Institutional Investors Weigh In On Kyndryl
Several hedge funds have recently modified their holdings of KD. Royal Bank of Canada increased its stake in Kyndryl by 50.2% in the 1st quarter. Royal Bank of Canada now owns 148,178 shares of the company’s stock valued at $4,653,000 after buying an additional 49,504 shares during the period. Integrated Wealth Concepts LLC raised its holdings in Kyndryl by 15.8% during the first quarter. Integrated Wealth Concepts LLC now owns 8,025 shares of the company’s stock worth $252,000 after purchasing an additional 1,093 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC increased its position in Kyndryl by 1.5% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 733,068 shares of the company’s stock worth $23,018,000 after purchasing an additional 11,177 shares during the period. Northwestern Mutual Wealth Management Co. boosted its stake in shares of Kyndryl by 116.9% in the second quarter. Northwestern Mutual Wealth Management Co. now owns 2,616 shares of the company’s stock valued at $110,000 after buying an additional 1,410 shares in the last quarter. Finally, First Trust Advisors LP raised its position in Kyndryl by 29.8% in the second quarter. First Trust Advisors LP now owns 408,123 shares of the company’s stock worth $17,125,000 after acquiring an additional 93,726 shares in the last quarter. 71.53% of the stock is owned by institutional investors and hedge funds.
Wall Street Analyst Weigh In
A number of research firms have weighed in on KD. BMO Capital Markets started coverage on shares of Kyndryl in a report on Monday, April 20th. They set a “market perform” rating and a $15.00 price objective on the stock. Susquehanna downgraded shares of Kyndryl from a “positive” rating to a “neutral” rating and dropped their target price for the company from $16.00 to $13.00 in a research report on Thursday, May 21st. Scotiabank cut their price target on shares of Kyndryl from $16.50 to $15.00 and set a “sector perform” rating on the stock in a research note on Friday, May 8th. Wall Street Zen cut shares of Kyndryl from a “buy” rating to a “hold” rating in a research report on Saturday, May 9th. Finally, Zacks Research upgraded shares of Kyndryl from a “strong sell” rating to a “hold” rating in a research note on Monday, July 13th. Seven equities research analysts have rated the stock with a Hold rating and two have given a Sell rating to the company’s stock. Based on data from MarketBeat.com, Kyndryl presently has a consensus rating of “Reduce” and an average target price of $16.67.
Check Out Our Latest Research Report on KD
About Kyndryl
Kyndryl (NYSE: KD) is a global managed infrastructure services provider formed in November 2021 through the spin-off of IBM’s Managed Infrastructure Services business. The company designs, builds, manages and modernizes critical information technology systems for enterprises worldwide. Kyndryl’s core offerings include cloud migration and management, network and edge computing solutions, digital workplace services and IT resiliency and security capabilities.
With a workforce of approximately 90,000 professionals and operations in more than 60 countries, Kyndryl serves clients across a broad range of industries, including financial services, telecommunications, healthcare, manufacturing and retail.
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