Financial Data and Key Metrics Changes - Revenue for Q1 2025 totaled $3.7 billion, reflecting an 8% decline in constant currency, primarily due to the intentional exit from low-margin revenue streams [20][21] - Adjusted EBITDA was $556 million, with an adjusted EBITDA margin of 14.9%, an increase of 30 basis points year-over-year [22] - Adjusted pretax income grew 96% to $92 million, indicating strong operational execution [22][24] - The updated forecast for fiscal 2025 includes adjusted pretax income of at least $460 million, reflecting a year-over-year increase of at least $295 million [16][29] Business Line Data and Key Metrics Changes - Kyndryl Consult revenues grew 14% year-over-year in constant currency, accounting for 17% of total revenue [21][9] - Kyndryl Consult signings increased by 49% in constant currency, indicating strong demand for advisory services [21][9] - Hyperscaler-related revenue reached $210 million in Q1, on track to deliver nearly $1 billion for the year, doubling the fiscal 2024 total [23][20] Market Data and Key Metrics Changes - The company is experiencing growing demand for services due to increased cyber regulations, particularly in the EU [9] - The strength in Kyndryl Consult is attributed to the company's expertise in running and transforming IT estates, which is resonating with customers [5][6] Company Strategy and Development Direction - The company is focused on driving growth through Kyndryl Consult and Kyndryl Bridge, leveraging AI and automation to enhance service delivery [4][10] - The strategic emphasis is on shedding low-margin components of revenue and expanding relationships with alliance partners like Microsoft, Google, AWS, and SAP [9][15] - The company aims to pivot to growth in fiscal 2025, with expectations of returning to revenue growth in the fourth quarter [17][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit adjusted pretax margins by fiscal 2027, supported by a shift towards higher-margin contracts [16][40] - The company is well-positioned to help customers optimize their IT environments and prepare for future investments as macroeconomic conditions improve [56][58] - Management highlighted the importance of bridging the gap between business line leaders and IT organizations to facilitate AI adoption [60][61] Other Important Information - The company plans to host its first post-spin Investor Day on November 21, 2024, to discuss future strategies and performance [18] - The company maintains a strong liquidity position with a cash balance of $1.3 billion and nearly $4.5 billion in total liquidity [27][28] Q&A Session Summary Question: Trends in signings composition - Management noted a consistent growth rate in Kyndryl Consult signings, indicating a shift towards advisory services while still maintaining substantial management run business [32][33] Question: Appetite for larger acquisitions - Management reiterated that acquisitions are not necessary for growth, focusing instead on small tuck-in acquisitions that complement existing expertise [35][36] Question: Confidence in margin growth - Confidence in margin growth is supported by consistent performance in signing contracts with high projected margins and the impact of the 3A's initiatives [38][39] Question: Drivers of Kyndryl Consult growth - Management attributed the 49% growth in Kyndryl Consult bookings to the company's unique expertise in run and transform capabilities, which are essential for customers [48][49] Question: Capital returns timeline - Management clarified that while $1 billion in pretax income is a target, capital returns could begin before reaching that figure, depending on adjusted pretax income levels [54] Question: Impact of interest rate changes - Management indicated that a decrease in interest rates could benefit the company by enabling customers to invest more in IT infrastructure and services [56][57] Question: AI implementation readiness - Management discussed the importance of preparing IT infrastructures for AI, emphasizing the need for collaboration between business and IT leaders [60][61] Question: Kyndryl Consult's outperforming position - Management highlighted the combination of deep engineering knowledge, industry-standard skills, and innovative solutions as key factors in Kyndryl Consult's success [66][67]

Kyndryl Holdings, Inc. (KD) came out with quarterly earnings of $0.13 per share, beating the Zacks Consensus Estimate of $0.12 per share. This compares to break-even earnings per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 8.33%. A quarter ago, it was expected that this company would post a loss of $0.12 per share when it actually produced a loss of $0.01, delivering a surprise of 91.67%. Over the last four quarters, the comp ...

Core Viewpoint - Kyndryl Holdings, Inc. reported financial results for the first quarter of fiscal year 2025, showing a decline in revenues but significant improvements in adjusted income metrics and continued growth in Kyndryl Consult services. Financial Performance - Revenues for the quarter ended June 30, 2024, totaled $3.74 billion, reflecting an 11% year-over-year decline and an 8% decline in constant currency [3][10] - The company reported pretax income of $64 million and net income of $11 million, compared to a net loss of $141 million in the prior-year period [3][22] - Adjusted EBITDA was $556 million, with adjusted pretax income increasing by 96% to $92 million compared to $47 million in the prior-year period [4][5] Growth Initiatives - Kyndryl Consult experienced double-digit revenue growth of 10% year-over-year and 14% in constant currency, with signings growing 49% year-over-year in constant currency [6][7] - The company recognized $210 million in revenue tied to cloud hyperscaler alliances, progressing towards a target of nearly $1 billion in fiscal year 2025 [7] - The AI-enabled Kyndryl Bridge operating platform is enhancing service delivery and creating additional revenue opportunities, contributing to annualized savings of approximately $650 million [7] Outlook - Kyndryl raised its adjusted earnings outlook for fiscal year 2025, projecting an adjusted EBITDA margin of at least 16.3% and adjusted pretax income of at least $460 million [9][10] - The company reaffirmed its outlook for constant-currency revenue growth of (2%) to (4%), implying fiscal 2025 revenue of $15.2 to $15.5 billion [10][11] Cash Flow and Expenses - Cash flow used in operations was $48 million in the quarter, reflecting a seasonally weak period for cash flow [3][22] - Adjusted free cash flow was reported at ($116) million, influenced by workforce rebalancing actions [5][34]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer approach may involve investing in bargain stocks that have recently shown price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Kyndryl Holdings, Inc. (KD) Analysis - Kyndryl Holdings, Inc. (KD) has shown a four-week price change of 6.4%, indicating growing investor interest [4] - Over the past 12 weeks, KD's stock has gained 34.6%, with a beta of 1.67, suggesting it moves 67% more than the market [5] - KD has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3: Earnings Estimates and Valuation - KD has received upward revisions in earnings estimates, earning a Zacks Rank 2 (Buy), which is associated with strong momentum effects [7] - The stock is currently trading at a Price-to-Sales ratio of 0.39, suggesting it is undervalued as investors pay only 39 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides KD, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Migration and Transformation: Kyndryl collaborates with customers to create customized business and technical transformation roadmaps tailored to optimize SAP systems and drive efficiencies. Kyndryl also leverages SAP Activate and its advanced data transformation tools and automation capabilities to support customers' transition to RISE with SAP. Kyndryl's comprehensive suite of tools, including advanced data mapping, automated data integrity and intelligent data archiving solutions, integrate with its agil ...

Company Performance - Kyndryl Holdings, Inc. closed at $27.63, with a gain of +1.28%, outperforming the S&P 500's gain of 1.08% on the same day [1] - Over the past month, shares of Kyndryl have increased by 6.9%, while the Business Services sector experienced a loss of 3.28% and the S&P 500 gained 0.43% [7] Earnings Estimates - The upcoming earnings report is scheduled for July 31, 2024, with a Zacks Consensus Estimate projecting revenue of $3.78 billion, reflecting a decrease of 9.86% from the previous year [2] - For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.38 per share and revenue of $15.38 billion, indicating changes of +1354.55% and -4.21% respectively from last year [8] Analyst Estimates and Valuation - Recent revisions to analyst estimates indicate a positive outlook, with an 11.24% rise in the Zacks Consensus EPS estimate over the past month [4] - Kyndryl currently has a PEG ratio of 3.96, compared to the Technology Services industry's average PEG ratio of 1.41 [5] - The company has a Forward P/E ratio of 19.8, which is lower than the industry average Forward P/E of 23.07 [10] Industry Context - The Technology Services industry, part of the Business Services sector, has a Zacks Industry Rank of 144, placing it in the bottom 43% of all industries [11]

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. Kyndryl Holdings, Inc. is currently sporting a Zacks Rank of #2 (Buy). Over the past three months, MediaAlpha, Inc.'s consensus EPS estimate for the current year has increased 131.9%. The stock currently has a Zacks Rank #2 (Buy). Kyndryl Holdings, Inc. is a mem ...

The most recent trading session ended with Kyndryl Holdings, Inc. (KD) standing at $26.74, reflecting a +0.98% shift from the previouse trading day's closing. This move outpaced the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.53%, while the tech-heavy Nasdaq added 0.4%. Coming into today, shares of the company had gained 3.64% in the past month. In that same time, the Business Services sector gained 1.47%, while the S&P 500 gained 3.78%. The upcoming earnings release of Kyndryl Holdings, Inc. ...

Company will host earnings call on August 1, 2024 NEW YORK, July 15, 2024 /PRNewswire/ -- Kyndryl Holdings, Inc. (NYSE: KD), the world's largest IT infrastructure services provider, today announced that it will release results for the quarter ended June 30, 2024, the first quarter of its 2025 fiscal year, after market close on Wednesday, July 31, 2024. Chairman and Chief Executive Officer Martin Schroeter and Chief Financial Officer David Wyshner will host an earnings conference call and webcast at 8:30 a.m ...

Company Overview - Kyndryl Holdings, Inc. is expected to report earnings of $1.38 per share and revenue of $15.38 billion for the entire year, reflecting a significant increase in earnings of +1354.55% but a revenue decline of -6.57% compared to the previous year [1] - The company closed at $26 in the latest trading session, marking a +0.31% change from the previous day, outperforming the S&P 500's 0.1% gain [7] Valuation Metrics - Kyndryl Holdings, Inc. is currently trading at a Forward P/E ratio of 18.82, which is below the industry average Forward P/E of 22.17, indicating a potential discount [2] - The company has a PEG ratio of 3.76, compared to the average PEG ratio of 1.45 for the Technology Services industry, suggesting that the company's projected earnings growth is not being fully reflected in its valuation [9] Analyst Estimates and Market Performance - Recent changes to analyst estimates for Kyndryl Holdings, Inc. indicate a positive outlook, with a 21.65% rise in the Zacks Consensus EPS estimate over the past month [11] - The upcoming earnings disclosure is anticipated to show revenue of $3.78 billion, which represents a 9.86% decline compared to the same quarter last year [10] - Kyndryl Holdings, Inc. currently holds a Zacks Rank of 1 (Strong Buy), reflecting strong analyst confidence in the company's performance [11] Industry Context - The Technology Services industry, which includes Kyndryl Holdings, Inc., holds a Zacks Industry Rank of 62, placing it in the top 25% of over 250 industries [6] - The Business Services sector, of which the Technology Services industry is a part, has seen Kyndryl's shares lag behind, with a -0.77% decline over the past month compared to a 2.1% gain in the sector and a 4.08% gain in the S&P 500 [4]