Kyndryl (US:KD)2026-02-09 12:13Financial Performance - Kyndryl reported revenues of $3.9 billion for Q3 FY2026, a 3% increase year-over-year, with net income of $57 million, or $0.25 per diluted share[4]. - Adjusted pretax income was $168 million, reflecting an $8 million increase from the prior year, while adjusted net income was $122 million, or $0.52 per diluted share[5]. - Total revenue for the three months ended December 31, 2025, was $3,859 million, representing a 3% year-over-year growth[22]. - Net income for Q4 2025 was $57 million, a decrease from $215 million in Q4 2024, resulting in a net income margin of 1.5%[37]. - Adjusted EBITDA for Q4 2025 was $696 million, compared to $704 million in Q4 2024, with an adjusted EBITDA margin of 18.0%[37]. - Adjusted net income for the nine months ended December 31, 2025 was $301 million, compared to $159 million for the same period in 2024[37]. - Adjusted earnings per share (EPS) for Q4 2025 was $0.52, slightly up from $0.51 in Q4 2024[37]. Revenue Growth - Kyndryl Consult achieved a revenue growth of 24% year-over-year, with total revenues of $3.6 billion and signings of $4.1 billion over the last twelve months[8]. - The company generated $500 million in revenue from hyperscaler alliances, marking a 58% year-over-year increase, and is on track to exceed its fiscal 2026 target of $1.8 billion[8]. - Signings for the trailing twelve months reached $15.4 billion, with eleven customer contracts signed in Q3 exceeding $50 million each[7]. - Total signings for Q4 2025 were $3.9 billion, down from $4.1 billion in Q4 2024, with currency movements contributing five points to signings growth[40]. Cash Flow and Expenditures - Free cash flow for the quarter was $217 million, compared to $260 million in the prior-year period[5]. - Cash flows from operating activities for Q4 2025 were $427 million, compared to $260 million in Q4 2024[39]. - The company reported a net change in cash, cash equivalents, and restricted cash of $(437) million for the nine months ended December 31, 2025[24]. - The company experienced a decrease in net capital expenditures, which were $210 million in Q4 2025 compared to $93 million in Q4 2024[39]. - Capital expenditures for the nine months ended December 31, 2025, were $492 million, up from $365 million in 2024[24]. Share Repurchase and Debt - The company repurchased 3.7 million shares for $100 million in Q3, totaling 11 million shares repurchased for $349 million since the program's authorization[8]. - The company repurchased $250 million in common stock during the nine months ended December 31, 2025, compared to $30 million in the previous year[24]. - The total debt (short-term and long-term) was $3,100 million as of December 31, 2025[22]. Future Outlook - Kyndryl's fiscal year 2026 outlook includes adjusted pretax income of $575 to $600 million and free cash flow of $325 to $375 million[12]. - The projected pretax margin associated with recent signings is in the high-single-digit range, indicating strong profitability potential[8].