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

Kyndryl (NYSE:KD) issued its earnings results on Wednesday. The company reported $0.42 EPS for the quarter, beating analysts’ consensus estimates of $0.38 by $0.04, FiscalAI reports. The firm had revenue of $3.65 billion for the quarter, compared to the consensus estimate of $3.62 billion. Kyndryl had a return on equity of 12.24% and a net margin of 0.58%. The business’s quarterly revenue was down 1.9% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.38 earnings per share.

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

NYSE KD traded up $4.68 on Wednesday, hitting $17.62. 10,659,195 shares of the company were exchanged, compared to its average volume of 4,500,426. The firm has a 50 day moving average of $12.81 and a two-hundred day moving average of $13.50. The company has a market cap of $3.84 billion, a P/E ratio of 47.41 and a beta of 1.62. The company has a current ratio of 0.85, a quick ratio of 0.85 and a debt-to-equity ratio of 1.96. Kyndryl has a 1-year low of $10.10 and a 1-year high of $28.83.

Key Stories Impacting Kyndryl

Here are the key news stories impacting Kyndryl this week:

• Positive Sentiment: Kyndryl reported earnings of $0.42 per share, above estimates of $0.38, and revenue of $3.65 billion, ahead of the $3.62 billion consensus. EPS also improved from $0.38 a year earlier. Quarterly earnings results
• Positive Sentiment: Management reaffirmed its fiscal 2027 outlook, citing strong signings and continued growth in Kyndryl Consult and hyperscaler-related revenue. That supports confidence in the company’s full-year plans. Kyndryl second-quarter fiscal 2027 results
• Negative Sentiment: Revenue declined 1.9% year over year, a sign that the earnings beat has not yet translated into top-line growth. Kyndryl reported $59 million in net income, compared with $92 million in adjusted net income. Kyndryl second-quarter fiscal 2027 results

Wall Street Analysts Forecast Growth

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

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.