Kyndryl is betting big on AI to fuel its future growth. Will it pay off?Kyndryl (KD 3.37%) just signed off on a vigorous week. According to data from S&P Global Market Intelligence, the leading provider of IT infrastructure services saw share prices rise 32.1% from one Friday closing bell to the next, lifted by a promising fourth-quarter earnings report.Kyndryl's quarterly results by the numbersIn Q4 of fiscal year 2024, Kyndryl's sales fell 10% year over year to $3.85 billion. The bottom line landed at a n ...

2 Martin Schroeter, Chairman and Chief Executive Officer Up 3% in fiscal 2024, with 9% projected pretax margins 5 Fourth Quarter 2024 Earnings 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 "will," "anticipate," "predict," "project," "contemplate," "plan," "forecast," "future," "estimate," "expect," "intend," "target," "may," "should," "w ...

Financial Data and Key Metrics Changes - Revenue for the fourth quarter totaled $3.8 billion, reflecting a 9% decline in constant currency, primarily due to the intentional exit from low-margin revenue streams [26][29] - Adjusted EBITDA grew 20% to $2.4 billion for the fiscal year, with adjusted pretax income increasing by $382 million year-over-year to $165 million [28][60] - The company generated adjusted free cash flow of $291 million in fiscal year 2024, with a cash balance of $1.6 billion at year-end [64][65] Business Line Data and Key Metrics Changes - Kyndryl Consult revenue grew by 15% year-over-year in constant currency, contributing significantly to overall growth [59][107] - Hyperscaler-related revenue reached $500 million for the fiscal year, tripling from the previous year [35][70] - Total signings grew by 3% year-over-year in constant currency, with a notable 30% growth in Consult signings [27][28] Market Data and Key Metrics Changes - The company expects hyperscaler-related revenue to approach $1 billion in fiscal 2025, doubling the previous year's level [70] - The demand for Kyndryl's services is driven by trends in AI adoption, cloud migration, and cybersecurity, which are expected to continue [19][24] Company Strategy and Development Direction - The company is focusing on expanding its higher-margin post-spin signings, with expectations that by fiscal 2026, two-thirds of revenue will come from these signings [12][49] - Kyndryl is leveraging its Kyndryl Bridge platform to enhance service delivery and customer engagement, with over 1,200 customers currently using the platform [18][54] - The strategic initiatives, referred to as the "3As," are aimed at driving cost savings and improving profitability, with expectations of significant benefits in the coming years [37][70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to revenue growth in the fourth quarter of fiscal 2025, citing strong performance in Consult and hyperscaler relationships [16][49] - The company anticipates adjusted pretax income of at least $435 million for fiscal 2025, reflecting a year-over-year increase of over $270 million [22][99] - Management highlighted the importance of AI and data architecture in driving future growth, positioning Kyndryl as both a beneficiary and enabler of AI [54][106] Other Important Information - The company has a strong liquidity position with $4.7 billion available at fiscal year-end, allowing for continued investment in growth initiatives [65][66] - Kyndryl's focus on operational excellence and collaboration is expected to enhance its competitive position in the IT services market [24][43] Q&A Session Summary Question: What is driving the significant growth in Kyndryl Consult? - Management noted that the non-discretionary nature of Consult services and the focus on optimizing systems for customers are key drivers of growth [122][123] Question: How does Kyndryl plan to achieve revenue growth in Q4 FY '25? - Management indicated that the elimination of low-margin revenue streams and the focus on higher-margin services provide confidence in achieving revenue growth [138][139] Question: What are the expectations for the advanced delivery initiative? - The advanced delivery initiative is expected to generate significant cost savings, with an increase in annualized savings projected to reach $800 million [37][70]

Kyndryl Holdings, Inc. (KD) came out with a quarterly loss of $0.01 per share versus the Zacks Consensus Estimate of a loss of $0.12. This compares to loss of $0.21 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 91.67%. A quarter ago, it was expected that this company would post earnings of $0.10 per share when it actually produced a loss of $0.05, delivering a surprise of -150%.Over the last four quarters, the company has su ...

Financial Performance - Kyndryl reported Q4 2024 revenues of $3.8 billion, a year-over-year decline of 10%[4] - For the full fiscal year 2024, Kyndryl's revenues totaled $16.1 billion, a decline of 6% compared to the previous year[7] - Adjusted EBITDA for Q4 2024 was $566 million, a 19% increase from $476 million in the prior-year period[5] - Adjusted EBITDA for fiscal 2024 was $2.4 billion, a 20% increase from $2.0 billion in the prior year[8] - Total revenue for the three months ended March 31, 2024, was $3,850 million, a decrease of 10% compared to $4,255 million in the same period of 2023[28] - For the year ended March 31, 2024, total revenue was $16,052 million, down 6% from $17,026 million in 2023[28] - Net income for the year ended March 31, 2024, was a loss of $340 million, an improvement from a loss of $1,374 million in 2023[32] - Net income for Q1 2024 was a loss of $45 million, an improvement from a loss of $737 million in Q1 2023[43] - Adjusted pretax income for the year ended March 31, 2024, was $165 million, a significant improvement from a loss of $217 million in the previous year[43] Cash Flow and Expenditures - Kyndryl's cash flow from operations for fiscal 2024 was $454 million, with adjusted free cash flow of $291 million[7][8] - The company's cash and equivalents at the end of March 2024 were $1,553 million, down from $1,847 million in March 2023[28] - The company reported a net cash provided by operating activities of $454 million for the three months ended March 31, 2024[32] - Adjusted free cash flow for the year ended March 31, 2024, was $291 million, compared to $352 million in the previous year[46] - The company incurred $199 million in net capital expenditures in Q1 2024, compared to $152 million in Q1 2023[46] - Capital expenditures for the year were $651 million, compared to $865 million in the previous year[32] Future Outlook - Kyndryl expects to return to positive constant-currency revenue growth in Q4 of fiscal year 2025, targeting at least $435 million in adjusted pretax income[6][13] - The company anticipates an adjusted EBITDA margin of at least 16.2% for fiscal 2025, reflecting an increase of at least 150 basis points from 14.7% in fiscal 2024[16] - The company anticipates approximately $100 million in workforce rebalancing charges for fiscal year 2025[37] Segment Performance - Revenue from the United States segment decreased by 14% to $990 million, while Japan's revenue decreased by 10% to $584 million[28] - Kyndryl Consult revenues grew 15% year-over-year in fiscal 2024, with signings increasing by 18%[11] Operational Metrics - Adjusted EBITDA margin for the year ended March 31, 2024, was calculated based on total adjusted EBITDA of $2,367 million against total revenue of $16,052 million[28] - Adjusted EBITDA for Q1 2024 increased to $566 million, compared to $476 million in Q1 2023, reflecting a margin of 14.7%[43] - The operating margin for Q1 2024 was 1.0%, an improvement from a negative margin of 5.7% in Q1 2023[43] - Signings for Q1 2024 were $3.6 billion, unchanged from Q1 2023, while signings for the year increased by 3% to $12.5 billion[46] Earnings Per Share - Diluted earnings per share for Q1 2024 were $(0.20), an improvement from $(3.24) in Q1 2023[43] - Adjusted net loss for Q1 2024 was $2 million, compared to a loss of $519 million in Q1 2023[43]

The IT industry's first AI-powered open integration platform now has more than 1,200 onboarded customers and 190 service offerings, exceeding Company targetsKyndryl Bridge delivers more than 3 million actionable insights per month, with new services that help enterprise customers accelerate business valueNEW YORK, May 2, 2024 /PRNewswire/ -- Kyndryl (NYSE: KD), the world's largest IT infrastructure services provider, today announced that its industry-leading, artificial intelligence (AI)-powered, open integ ...

Kyndryl to modernize and manage the mission-critical systems for Honda's logistics operations with Kyndryl Bridge BRUSSELS, April 23, 2024 /PRNewswire/ -- Kyndryl (NYSE: KD), the world's largest IT infrastructure services provider, and Honda Motor Europe Ltd., announced a multiyear managed infrastructure services renewal agreement. Building on a well-established partnership, Kyndryl will continue to manage Honda's centralized IT infrastructure and modernize the company's mainframe estate with Kyndryl Bridge ...

Kyndryl to help enhance SAP® processes and bolster EY's security through Kyndryl Consult NEW YORK, April 10, 2024 /PRNewswire/ -- Kyndryl (NYSE: KD), the world's largest IT infrastructure services provider, today announces the renewal of a five-year agreement, with Ernst & Young LLP (EY) to continue managing its SAP environment, as well as provide modernization and security services for the mission-critical systems that support its auditing and consulting operations. This work builds on a nearly decade-long ...

Investors interested in Technology Services stocks are likely familiar with Kyndryl Holdings, Inc. (KD) and Thomson Reuters (TRI) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while o ...

Kyndryl Foundation's inaugural grants aim to grow an inclusive cybersecurity workforce and make nonprofits more resilient from cyberattacksNEW YORK, March 19, 2024 /PRNewswire/ -- Kyndryl Foundation, the philanthropic arm of Kyndryl (NYSE: KD), announced that 11 nonprofits from seven countries have been chosen to receive its first year's grants.The grantees chosen to receive the inaugural Kyndryl Foundation Grants are organizations that address the shortage of trained cybersecurity professionals by providin ...