Core Insights - Kyndryl Foundation has awarded second-year grants to 12 nonprofit organizations across 11 countries, aiming to impact over 55,000 individuals through initiatives focused on cybersecurity and AI skills development [1][2][3] Group 1: Grant Program Expansion - The foundation is extending its support to five additional countries: Brazil, Canada, Costa Rica, Spain, and the United Kingdom, building on its inaugural year [2] - The introduction of multi-year grants, lasting up to two years, is intended to foster deeper engagement with grantees and create sustainable impacts [2] Group 2: Nonprofit Initiatives - Czechitas (Czech Republic) will train 100 women in cybersecurity and run awareness initiatives for 50,000 women [6] - Data Security Council of India (DSCI) will train 100 women in tier two and three cities and establish a cybersecurity training center in Mumbai [6] - Girl Security (US) aims to prepare over 1,000 participants from low-income communities for careers in cybersecurity by 2026 [6] - NPO Sodateage Net (Japan) will provide cybersecurity training to nearly 1,500 young people and assist with job placements [6] - Fundación Cibervoluntarios (Spain) will extend a cybersecurity skilling course to 5,000 young people from underserved communities [6] - Generation: You Employed (UK) will organize boot camps for 230 individuals facing barriers to IT careers [6] - Junior Achievement (JA) Americas (Brazil and Costa Rica) will train 400 women in cybersecurity and support their job search [6] - Joint Economic and Development Initiative (JEDI) (Canada) will support approximately 50 Indigenous students with digital literacy and IT training [10] - Justice Through Code (JTC) (US) will train 125 individuals in AI skills and job placement [10] - Mamo Pracuj Foundation (Poland) will support 40 women with cybersecurity training and job search guidance [10] - United Way Hungary will train 345 individuals in cybersecurity, focusing on underserved communities [10] Group 3: Industry Context - The Kyndryl Readiness Report indicates that cyberattacks are the top challenge for organizations, with 64% of leaders feeling unprepared for AI implementation due to a skills shortage [7]

Kyndryl Collaborates with Microsoft to Bring Dragon Copilot to Market Dragon Copilot to be enabled by generative AI-powered ambient listening voice recognition NEW YORK, March 3, 2025 /PRNewswire/ -- Kyndryl (NYSE: KD), the world's largest IT infrastructure services provider, today announced it is partnering with Microsoft to support adoption and deployment of a new AI-powered healthcare assistant. Kyndryl will collaborate with Microsoft as a strategic partner for the new Microsoft Dragon Copilot solution ...

Core Insights - Kyndryl has launched a new technology hub in Liverpool, aiming to create up to 1,000 software engineering and AI-related jobs over the next three years to support digital transformation for UK and global customers [1][4][5] - The hub will include a Kyndryl Vital Studio, which will facilitate a collaborative environment for businesses to address complex challenges and implement AI and emerging technologies [2][4] - Kyndryl is expanding its partnership with The Very Group to enhance the retailer's digital capabilities through comprehensive software and platform engineering support [3][4] Company Initiatives - The new technology hub reflects Kyndryl's commitment to nurturing talent and accelerating AI adoption, which is essential for driving economic growth in the UK [4][5] - Kyndryl's early careers program will focus on digital technology degree apprenticeships, emphasizing the importance of investing in talent for maintaining the UK's leadership in innovation and AI [4][5] - The hub will leverage Kyndryl's infrastructure expertise to help companies integrate mission-critical operations with business applications, aligning with the UK Government's AI Opportunities Action Plan [5] Economic Impact - The establishment of the technology hub is seen as a significant boost for the Liverpool City Region's economy, creating well-paid jobs and equipping the workforce with necessary skills for future industries [4] - Local officials highlight the importance of this investment in ensuring that the benefits of technological advancements are felt beyond London and the South East, promoting regional growth [4]

Core Viewpoint - Kyndryl Holdings, Inc. will present at the Morgan Stanley TMT Conference on March 4, 2025, discussing its business and financial performance [1]. Company Overview - Kyndryl is the world's largest IT infrastructure services provider, operating in over 60 countries and serving thousands of enterprise customers [3]. - The company specializes in designing, building, managing, and modernizing complex, mission-critical information systems [3].

Core Insights - Kyndryl Holdings experienced a significant share price increase of over 10% during the week, driven by positive quarterly results [1] Financial Performance - For Q3 of fiscal 2025, Kyndryl reported revenue of $3.74 billion, a decrease from nearly $3.94 billion in Q3 of fiscal 2024, and below the consensus estimate of $3.83 billion [2] - The company achieved a non-GAAP net income of $124 million, compared to a loss of $11 million in the previous year, translating to $0.51 per share, exceeding the average projection of $0.43 [3] Growth Drivers - Kyndryl attributed its improved performance to "strong signings growth," particularly noting a double-digit revenue increase from its Kyndryl Consult unit [4] Guidance Updates - Kyndryl raised its guidance for fiscal 2025, projecting a pre-tax income of at least $475 million, indicating a minimum year-over-year growth of $310 million [5] - The adjusted cash flow forecast was increased to approximately $350 million, with revenue expected to rise by 2% on a constant-currency basis compared to fiscal 2024 [5]

Financial Performance - For the three months ended December 31, 2024, the company reported revenue of $3.744 billion, a decline of 5% compared to the prior-year period [126]. - For the nine months ended December 31, 2024, revenue was $11.257 billion, down 8% year-over-year [128]. - Net income for the three months ended December 31, 2024, was $215 million, an improvement of $227 million from the prior-year period [126]. - Adjusted EBITDA for the three months ended December 31, 2024, was $704 million, a 15% increase compared to $615 million in the prior-year period [130]. - For the three months ended December 31, 2024, total revenue was $3.7 billion, a decrease of 5% compared to the prior-year quarter, with adjusted EBITDA of $226 million, reflecting a 19% year-over-year increase [150]. Revenue by Region - United States revenue for the three months ended December 31, 2024, was $961 million, a decrease of 7% year-over-year [139]. - Japan revenue remained unchanged at $579 million for the three months ended December 31, 2024, but increased by 3% in constant currency [141]. - For the nine months ended December 31, 2024, Japan revenue was $1.8 billion, unchanged from the prior-year period, but increased by 6% in constant currency [142]. Revenue by Market - Principal Markets revenue declined by 4% to $1.3 billion for the three months ended December 31, 2024 [130]. - Strategic Markets revenue decreased by 6% to $904 million for the three months ended December 31, 2024 [130]. - Principal Markets revenue for the nine months ended December 31, 2024, was $3.9 billion, a decrease of 5% compared to the prior-year period, while adjusted EBITDA increased by $144 million, primarily due to increased operating efficiencies [145]. - Strategic Markets revenue for the nine months ended December 31, 2024, was $2.7 billion, down 11% year-over-year, with adjusted EBITDA decreasing by $31 million due to workforce rebalancing charges [147]. Cost and Efficiency - Cost of services as a percentage of revenue decreased to 79.6% for the three months ended December 31, 2024, from 80.9% in the prior-year quarter, driven by increased operating efficiencies [150]. - The company attributed revenue declines to actions taken to reduce low-margin components and currency effects [126]. Cash Flow and Investments - Net cash provided by operating activities was $361 million for the nine months ended December 31, 2024, an increase of 16.9% compared to $309 million in the prior-year period [167]. - Net cash used in investing activities decreased to $199 million in the nine months ended December 31, 2024, from $350 million in the prior-year period, primarily due to the sale of the SIS business [168]. - Net cash used in financing activities totaled $172 million for the nine months ended December 31, 2024, compared to $123 million in the prior-year period, mainly due to share repurchases of $30 million [169]. Workforce and Cost Reduction - The company recorded $92 million in workforce rebalancing charges during the nine months ended December 31, 2024, as part of its cost-reduction initiatives [154]. - Management expects total cash outlays for workforce rebalancing and site-rationalization activities to be $140 million, with anticipated savings exceeding $200 million in fiscal year 2026 [155]. Assets and Liabilities - Total assets decreased by $665 million to $9.9 billion from March 31, 2024, primarily due to a $225 million decrease in accounts receivable [164]. - Total liabilities decreased by $747 million to $8.7 billion from March 31, 2024, mainly due to a $262 million decrease in accounts payable [165]. Financing and Capital Structure - The company completed a registered offering of $500 million in aggregate principal amount of 6.35% senior unsecured notes due 2034 in February 2024 [174]. - The company has a $3.15 billion multi-currency revolving credit agreement, which has not been drawn down as of December 31, 2024 [176]. - The company repurchased 0.9 million shares of its common stock at an aggregate cost of $30 million during the three months ended December 31, 2024, under its Share Repurchase Program [182]. Future Outlook - The company expects continued demand for IT services despite macroeconomic concerns, with positive growth anticipated in calendar year 2025 [125]. - The company believes its existing cash and cash equivalents will be sufficient to meet anticipated cash needs for at least the next twelve months [172]. Other Financial Activities - Total signings increased by $362 million, or 10%, in the three months ended December 31, 2024, and by $3.8 billion, or 43%, in the nine months ended December 31, 2024, compared to the prior-year periods [171]. - Gross proceeds from receivables sold to third parties were $760 million and $2.6 billion for the three and nine months ended December 31, 2024, respectively [179]. - The company initiated a supplier financing program with a third-party financial institution, with obligations outstanding being immaterial as of December 31, 2024 [180].

Core Insights - Kyndryl has launched end-to-end secure access service edge (SASE) services in collaboration with Palo Alto Networks, aimed at enhancing network security through a cloud-first, zero-trust approach [1][2][3] Company Overview - Kyndryl is the world's largest IT infrastructure services provider, operating in over 60 countries and serving thousands of enterprise customers [8] New Service Offerings - The new SASE services integrate Palo Alto Networks' Prisma SASE, which combines network and security into a unified cloud-delivered service, providing organizations with granular control over user authentication and authorization [3][6] - Kyndryl's SASE services include: - **Kyndryl Consult Advisory Services**: Conducting network maturity assessments and recommending SASE and zero-trust approaches based on business objectives [6] - **Kyndryl Design & Implementation Services**: Collaboratively building and deploying Prisma SASE environments, including testing, configuration, migration, and training [6][10] - **Kyndryl Managed SASE Services**: Offering 24/7 management of the Prisma SASE platform, including upgrades, health checks, and optimization [10] Market Context - According to the Kyndryl Readiness Report, 94% of business leaders prioritize technology modernization, yet only 39% believe their IT infrastructure is ready for future risks, highlighting the need for improved cybersecurity measures [4][5] - The shift to a hybrid workforce and the increasing complexity of IT environments necessitate robust security solutions, which Kyndryl aims to address through its new SASE services [5][6] Strategic Partnerships - The new SASE services expand Kyndryl's existing partnership with Palo Alto Networks, which already includes offerings like Prisma Access, next-generation firewalls, and private 5G security [7]

Third Quarter 2025 Earnings February 4, 2025 Disclaimers Forward-looking statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements often contain words such as "aim," "anticipate," "believe," "contemplate," "could," "estimate," "expect," "forecast," "intend," "may," "objectives," "opportunity," "plan," "position," "predict," "project," "should," "seek," "target," "will," "would" and other simi ...

Financial Performance - Kyndryl reported revenues of $3.74 billion for Q3 FY2025, a year-over-year decline of 5%[5] - Adjusted pretax income increased by 154% to $160 million compared to $63 million in the prior-year period[6] - Total revenue for the three months ended December 31, 2024, was $3,744 million, a decrease of 5% compared to $3,936 million in the same period of 2023[24] - For the nine months ended December 31, 2024, total revenue was $11,257 million, down 8% from $12,202 million in 2023[24] - Net income for the three months ended December 31, 2024, was $215 million, compared to a loss of $12 million in the same period of 2023[39] - The company reported a net income of $183 million for the nine months ended December 31, 2024, compared to a net loss of $295 million in the same period of 2023[28] - Adjusted net income for the three months ended December 31, 2024, was $124 million, compared to a loss of $11 million in the same period of 2023[39] Revenue Growth and Signings - Total signings for the quarter reached $4.1 billion, representing a year-over-year increase of 10%[7] - Kyndryl Consult achieved a revenue growth of 26% year-over-year and signings growth of 35% in Q3[10] - Signings for the three months ended December 31, 2024, increased by 10% to $4.1 billion, compared to $3.7 billion in the same period of 2023[42] Adjusted Earnings and Cash Flow - Adjusted EBITDA for the quarter was $704 million, a 14% year-over-year increase[7] - Adjusted EBITDA for the same period was $704 million, an increase from $615 million year-over-year[24] - Adjusted EBITDA for the three months ended December 31, 2024, was $704 million, up from $615 million in the same period of 2023, reflecting an adjusted EBITDA margin of 18.8%[39] - Cash flow from operations was $260 million, with adjusted free cash flow of $171 million in the quarter[7] - Cash flows from operating activities for the three months ended December 31, 2024, were $260 million, down from $436 million in the same period of 2023[42] - Adjusted free cash flow for the three months ended December 31, 2024, was $171 million, compared to $348 million in the same period of 2023[42] Debt and Capital Expenditures - Total debt was $3,201 million, slightly reduced from $3,238 million[24] - Capital expenditures for the nine months ended December 31, 2024, were $365 million, compared to $449 million in 2023[28] Workforce and Charges - The company incurred workforce rebalancing charges of $38 million in the nine months ended December 31, 2024[25] - The fiscal year 2025 outlook includes approximately $100 million of anticipated workforce rebalancing charges[34] - The company incurred workforce rebalancing charges of $19 million prior to March 31, 2024, and $115 million for the nine months ended December 31, 2023[39] Other Notable Events - The divestiture of the Securities Industry Services (SIS) platform resulted in an after-tax gain of $138 million in Q3[10] - The company reported a transaction-related gain of $145 million pretax related to the divestiture of its Securities Industry Services platform in Canada[39] - Kyndryl recognized $300 million in revenue from cloud hyperscaler alliances, positioning to exceed its $1 billion revenue target for FY2025[10] - The AI-enabled Kyndryl Bridge platform has generated annualized savings of approximately $725 million, tracking to exceed the $750 million goal for FY2025[10]

Core Insights - Kyndryl Holdings, Inc. reported strong signings growth and significant margin expansion in the third quarter of fiscal year 2025, driven by Kyndryl Consult, Kyndryl Bridge, and alliances with hyperscalers [2][6] - The company raised its full-year outlook for adjusted earnings and adjusted free cash flow, expecting constant-currency revenue growth in the fourth quarter [2][11] Financial Performance - Kyndryl reported revenues of $3.74 billion for the third quarter, a year-over-year decline of 5% and 3% in constant currency [4][9] - The company achieved pretax income of $258 million and net income of $215 million, compared to a net loss of $12 million in the prior-year period [4][9] - Adjusted pretax income was $160 million, a 154% increase from $63 million in the prior-year period [5][9] - Adjusted EBITDA was $704 million, reflecting a 14% year-over-year increase [5][9] Signings and Growth Initiatives - Total signings for the quarter were $4.1 billion, representing a year-over-year increase of 10% on a reported basis and 12% in constant currency [6][41] - Kyndryl's three-A initiatives contributed to strong signings growth, with Kyndryl Consult revenues growing 26% year-over-year [7][11] - The company initiated a $300 million share repurchase program, indicating confidence in future growth [3][11] Strategic Developments - Kyndryl recognized $300 million in revenue tied to cloud hyperscaler alliances, positioning the company to exceed its hyperscaler revenue target of nearly $1 billion for fiscal year 2025 [10] - The AI-enabled Kyndryl Bridge operating platform has enhanced service delivery and created additional revenue opportunities, generating annualized savings of approximately $725 million [10] Outlook - Kyndryl expects to deliver constant-currency revenue growth of approximately 2% in the fourth quarter of fiscal year 2025 [11] - The company aims to triple adjusted free cash flow and more than double adjusted pretax earnings over the next three years [3]