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Kyndryl (KD) - 2025 Q3 - Quarterly Results
KDKyndryl (KD)2025-02-03 21:24

Financial Performance - Kyndryl reported revenues of 3.74billionforQ3FY2025,ayear−over−yeardeclineof53.74 billion for Q3 FY2025, a year-over-year decline of 5%[5] - Adjusted pretax income increased by 154% to 160 million compared to 63millionintheprior−yearperiod[6]−TotalrevenueforthethreemonthsendedDecember31,2024,was63 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 3,936millioninthesameperiodof2023[24]−FortheninemonthsendedDecember31,2024,totalrevenuewas3,936 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 12,202millionin2023[24]−NetincomeforthethreemonthsendedDecember31,2024,was12,202 million in 2023[24] - Net income for the three months ended December 31, 2024, was 215 million, compared to a loss of 12millioninthesameperiodof2023[39]−Thecompanyreportedanetincomeof12 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 295millioninthesameperiodof2023[28]−AdjustednetincomeforthethreemonthsendedDecember31,2024,was295 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 11millioninthesameperiodof2023[39]RevenueGrowthandSignings−Totalsigningsforthequarterreached11 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 4.1billion,comparedto4.1 billion, compared to 3.7 billion in the same period of 2023[42] Adjusted Earnings and Cash Flow - Adjusted EBITDA for the quarter was 704million,a14704 million, a 14% year-over-year increase[7] - Adjusted EBITDA for the same period was 704 million, an increase from 615millionyear−over−year[24]−AdjustedEBITDAforthethreemonthsendedDecember31,2024,was615 million year-over-year[24] - Adjusted EBITDA for the three months ended December 31, 2024, was 704 million, up from 615millioninthesameperiodof2023,reflectinganadjustedEBITDAmarginof18.8615 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 171millioninthequarter[7]−CashflowsfromoperatingactivitiesforthethreemonthsendedDecember31,2024,were171 million in the quarter[7] - Cash flows from operating activities for the three months ended December 31, 2024, were 260 million, down from 436millioninthesameperiodof2023[42]−AdjustedfreecashflowforthethreemonthsendedDecember31,2024,was436 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 348millioninthesameperiodof2023[42]DebtandCapitalExpenditures−Totaldebtwas348 million in the same period of 2023[42] Debt and Capital Expenditures - Total debt was 3,201 million, slightly reduced from 3,238million[24]−CapitalexpendituresfortheninemonthsendedDecember31,2024,were3,238 million[24] - Capital expenditures for the nine months ended December 31, 2024, were 365 million, compared to 449millionin2023[28]WorkforceandCharges−Thecompanyincurredworkforcerebalancingchargesof449 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 100millionofanticipatedworkforcerebalancingcharges[34]−Thecompanyincurredworkforcerebalancingchargesof100 million of anticipated workforce rebalancing charges[34] - The company incurred workforce rebalancing charges of 19 million prior to March 31, 2024, and 115millionfortheninemonthsendedDecember31,2023[39]OtherNotableEvents−ThedivestitureoftheSecuritiesIndustryServices(SIS)platformresultedinanafter−taxgainof115 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 145millionpretaxrelatedtothedivestitureofitsSecuritiesIndustryServicesplatforminCanada[39]−Kyndrylrecognized145 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 1billionrevenuetargetforFY2025[10]−TheAI−enabledKyndrylBridgeplatformhasgeneratedannualizedsavingsofapproximately1 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]