Kyndryl's Shift from Adjusted to Reported Free Cash Flow Preceded an Accounting Investigation into Cash Management

Core Viewpoint - Kyndryl Holdings, Inc. is under investigation for its cash management procedures and disclosures following a shift from adjusted to reported free cash flow, raising concerns about the integrity of its financial reporting [1] Group 1: Financial Reporting Changes - Kyndryl's CFO announced a transition to highlighting free cash flow instead of adjusted free cash flow, suggesting improved financial maturity as the gap between GAAP and non-GAAP metrics had narrowed [1] - The February 9, 2026 disclosure indicated that Kyndryl is reviewing its cash management procedures, which may reveal "material weaknesses" in internal controls [1] Group 2: Implications of the Investigation - If the investigation finds that previously reported cash-flow figures were misstated, it could undermine the company's capital-allocation strategy, including a $400 million increase in the share-repurchase program [1] - The company's reported free cash flow of $22 million for Q2 FY2026 and a cash balance of $1.3 billion as of September 30 are now subject to scrutiny under the ongoing investigation [1]