Kyndryl (US:KD)2025-02-03 21:24Financial 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]