Kyndryl (KD) - 2024 Q4 - Annual Results

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]