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

Kyndryl (NYSE:KD) posted its quarterly earnings data on Wednesday. The company reported ($0.12) EPS for the quarter, topping analysts’ consensus estimates of ($0.16) by $0.04, FiscalAI reports. The firm had revenue of $3.62 billion for the quarter, compared to analyst estimates of $3.64 billion. Kyndryl had a return on equity of 20.43% and a net margin of 1.31%.The company’s revenue was down 3.3% on a year-over-year basis. During the same quarter last year, the company earned $0.37 EPS.

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 Down 5.5%

Shares of KD traded down $0.81 during trading hours on Wednesday, reaching $13.88. 9,373,980 shares of the stock traded hands, compared to its average volume of 4,054,625. The company has a current ratio of 0.88, a quick ratio of 0.88 and a debt-to-equity ratio of 1.77. The stock has a fifty day simple moving average of $12.09 and a 200 day simple moving average of $13.73. Kyndryl has a 52 week low of $10.10 and a 52 week high of $33.90. The company has a market cap of $3.06 billion, a price-to-earnings ratio of 16.32 and a beta of 1.65.

Kyndryl News Summary

Here are the key news stories impacting Kyndryl this week:

• 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

A number of institutional investors have recently added to or reduced their stakes in the company. AQR Capital Management LLC lifted its position in shares of Kyndryl by 386.2% during the 3rd quarter. AQR Capital Management LLC now owns 4,187,177 shares of the company’s stock worth $125,113,000 after buying an additional 3,326,025 shares in the last quarter. UBS Group AG increased its position in shares of Kyndryl by 50.0% during the third quarter. UBS Group AG now owns 2,028,338 shares of the company’s stock valued at $60,911,000 after acquiring an additional 675,943 shares during the last quarter. Bank of America Corp DE boosted its position in Kyndryl by 39.5% in the second quarter. Bank of America Corp DE now owns 1,767,574 shares of the company’s stock worth $74,167,000 after purchasing an additional 500,309 shares during the last quarter. Invesco Ltd. grew its stake in Kyndryl by 26.6% in the 4th quarter. Invesco Ltd. now owns 2,213,986 shares of the company’s stock valued at $58,803,000 after purchasing an additional 465,539 shares during the period. Finally, First Trust Advisors LP increased its position in shares of Kyndryl by 79.5% during the 3rd quarter. First Trust Advisors LP now owns 732,458 shares of the company’s stock valued at $21,996,000 after purchasing an additional 324,335 shares during the last quarter. 71.53% of the stock is owned by institutional investors.

Wall Street Analyst Weigh In

KD has been the subject of several analyst reports. Scotiabank dropped their target price on shares of Kyndryl from $16.50 to $15.00 and set a “sector perform” rating for the company in a research report on Friday, May 8th. Weiss Ratings reissued a “sell (d+)” rating on shares of Kyndryl in a research note on Monday, June 15th. BMO Capital Markets began coverage on Kyndryl in a research report on Monday, April 20th. They issued a “market perform” rating and a $15.00 price target on the stock. Wall Street Zen downgraded Kyndryl from a “buy” rating to a “hold” rating in a 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 assigned a Sell rating to the company. According to MarketBeat.com, Kyndryl presently has an average rating of “Reduce” and a consensus target price of $16.67.

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.