Financial Data and Key Metrics Changes - Kyndryl reported a 48% increase in signings in constant currency, totaling over $18 billion for fiscal year 2025 [6] - Adjusted pretax income rose by $317 million to $482 million, with adjusted free cash flow increasing by 53% to $446 million [6][27] - The fourth quarter revenue reached $3.8 billion, reflecting a 1.3% year-over-year increase in constant currency [22] Business Line Data and Key Metrics Changes - Kyndryl Consult's revenue grew by more than 25% for the year, with consult signings increasing by 50% in constant currency [7][14] - Hyperscaler-related revenue more than doubled to $1.2 billion for the year, significantly exceeding the target of nearly $1 billion [26] - The adjusted EBITDA margin for the fourth quarter was 18.4%, up 370 basis points year-over-year [24] Market Data and Key Metrics Changes - The company secured 55 contracts valued at over $50 million in fiscal year 2025, an increase from 40 contracts in the prior year [10] - Nearly half of these contracts were valued over $100 million, indicating strong demand across various geographies and verticals [10] - The revenue book-to-bill ratio remained above one, indicating future revenue growth from committed contracts [10] Company Strategy and Development Direction - Kyndryl's strategy focuses on building capabilities, partnerships, and innovation to drive sustainable growth, particularly in mission-critical technology services [5] - The company aims to leverage its expanded capabilities and strong customer relationships to win higher value opportunities [12] - The 3A initiatives have shifted from turnaround drivers to pillars of profitable growth, with expectations for substantial earnings and cash flow growth in fiscal year 2026 [8][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic uncertainties, emphasizing the essential nature of its technology services [20][21] - The outlook for fiscal year 2026 includes expectations for approximately $550 million in adjusted free cash flow and at least $725 million in adjusted pretax income [19][34] - Management highlighted the importance of continued investment in innovation and capabilities to maintain growth momentum [46] Other Important Information - Kyndryl's cash balance was $1.8 billion, with nearly $5 billion in liquidity at quarter end [31] - The company has a target to keep net leverage below one times adjusted EBITDA, ending the quarter at 0.6 times [32] - The fiscal year 2026 outlook assumes a 1% revenue growth in constant currency, with hyperscaler-related revenue expected to reach $1.8 billion [33][34] Q&A Session Summary Question: Accomplishments in 2025 and positioning for 2026 - Management reflected on the successful execution of their strategy and expressed confidence in their ability to control their own destiny through continued investment in innovation [44][46] Question: Progress with focus accounts - Management indicated they are approximately 75% through their focus accounts, having achieved 90% of targeted savings, with a revised target of $1 billion in annualized benefits [50][52] Question: Book to bill ratio and backlog duration - Management confirmed expectations to maintain a book to bill ratio above one, driven by strong performance in consult and hyperscaler-related services [58] Question: Revenue growth guidance - Management explained that while signings growth was strong, they are not relying solely on revenue growth to achieve profit improvement, as a significant portion of revenue is already contracted [70][72] Question: Impact of macro uncertainties on strategic accounts - Management noted that uncertainty tends to be a tailwind for their business, as clients seek to optimize their infrastructure in response to macro conditions [82][84] Question: Role of Kyndryl Bridge in uncertain conditions - Management affirmed that Kyndryl Bridge can help uncover unused resources and provide actionable insights, aiding clients in optimizing their operations [88][90]

Financial Data and Key Metrics Changes - The group achieved revenue of US$401.5 million, meeting the midpoint of revenue guidance [3][7] - Group bookings totaled US$431.2 million, showing a 2.9% quarter-on-quarter growth and 4.8% year-on-year growth [7] - Group gross margin exceeded 40%, rebounding due to a better product mix [6][8] - Adjusted net profit was HKD83.2 million, up 1.6% quarter-on-quarter but down 53.1% year-on-year [9] Business Line Data and Key Metrics Changes - The semiconductor (semi) segment contributed approximately 64% of the group's revenue, with revenue of US$255.6 million, up 0.6% quarter-on-quarter and 44.7% year-on-year [9][10] - Semi bookings were US$222.9 million, down 19.5% quarter-on-quarter but up 11.4% year-on-year [10][11] - The surface mount technology (SMT) segment delivered revenue of US$145.9 million, a decline of 20.3% quarter-on-quarter and 35.6% year-on-year [12] - SMT bookings were US$208.4 million, up 46.5% quarter-on-quarter, driven by strong seasonal demand [12] Market Data and Key Metrics Changes - The mainstream business continued to be affected by soft demand from automotive and industrial end markets, with growth trajectory difficult to forecast [6][14] - The company noted stabilization in the automotive and industrial end markets, although they remained soft [12][14] Company Strategy and Development Direction - The focus for 2025 is on securing additional orders from both high volume manufacturing (HVM) and logic customers [5][14] - The company remains confident in the demand for advanced packaging (AP) and TCB solutions for AI and high-performance computing applications [14][105] - The global manufacturing footprint provides flexibility to navigate potential tariff impacts [14][105] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining AP revenue and expects mainstream business to improve due to seasonality and better-than-expected Q1 bookings [14] - The indirect impact of tariffs makes the growth trajectory difficult to forecast, but management remains optimistic about the overall market growth [14][26] Other Important Information - The company completed the delivery of the bulk of ECB orders to a leading memory maker, with further orders expected [4][5] - The strong progress in DCB solidifies the company's leadership in the market [5] Q&A Session Summary Question: Booking direction in the second quarter and advanced packaging booking momentum - Management remains confident that Q2 bookings will be within a similar range compared to the last few quarters, assuming no unexpected impacts from tariffs [21][22] Question: Impact of tariffs on SMT business and capacity expansion - Management noted that while there hasn't been significant direct impact on operations, some customers are evaluating their investment timing and location due to tariffs [26][27] Question: Magnitude of orders from the second HBM customer - Orders from the second HBM customer are smaller compared to the first but are considered meaningful, with two orders already received [42] Question: Progress on chip on wafer tools and customer decisions - Management indicated significant progress from qualification to pilot production, with expectations for orders in the second half of 2025 [50][52] Question: Confidence in follow-on orders from the leading HBM customer - Management is hopeful for follow-on orders and is actively engaging with multiple HBM players [62] Question: OpEx management and future profitability - Management emphasized a balance between protecting future R&D investments and maintaining sensible cost control measures [99][100]

Core Insights - Cisco and ServiceNow have announced a deepened partnership aimed at enabling secure and confident AI adoption for businesses at scale, combining Cisco's infrastructure and security platforms with ServiceNow's AI-driven solutions [2][6] - The integration of Cisco's AI Defense capabilities with ServiceNow's SecOps will provide a more comprehensive approach to AI risk management and governance, addressing the complexities and risks associated with AI applications [4][5] Partnership Details - The partnership builds on seven years of collaboration between Cisco and ServiceNow, responding to increasing customer demand for joint solutions that simplify technology and enhance operational workflows [8] - Initial field trials for the integration are set to begin soon, with mutual customers expected to benefit from this integration in the second half of 2025 [7] Market Context - A recent survey indicated that security practitioners spend an average of 36% of their budget with a single vendor, reflecting a desire to reduce complexity in tools and suppliers [3] - The rapid growth of enterprise AI presents both opportunities and challenges, necessitating changes in infrastructure, security frameworks, and governance requirements [3] Solution Features - The integration will provide customers with capabilities such as visibility into AI workloads, automated vulnerability assessments, real-time protection for AI applications, and enhanced incident response [13] - Customers will be able to map Cisco AI Defense controls to relevant standards in ServiceNow's Integrated Risk Management platform, facilitating compliance measurement [13]

Financial Data and Key Metrics Changes - In Q1 2025, adjusted diluted EPS increased by 49% to $0.64, driven by higher adjusted operating profit and lower interest expenses [31][32] - Organic net sales rose by 25% year-over-year, exceeding sales guidance by over $100 million [32][33] - Adjusted operating profit increased by 35% to $337 million, with a 130 basis point expansion in adjusted operating margin [16][33] - Adjusted free cash flow reached $265 million, up 162% year-over-year, with a free cash flow conversion of over 100% [17][34] - Net leverage currently stands at 0.8%, with an investment-grade credit rating recently assigned by Fitch [35][36] Business Line Data and Key Metrics Changes - Strong growth was observed in both the Americas and APAC regions, while EMEA's growth lagged due to slower AI infrastructure build [37] - Adjusted operating margin increased across all three regions, with a notable 160 basis point expansion in the Americas [38] Market Data and Key Metrics Changes - The trailing 12-month organic orders growth was reported at 20%, with Q1 orders up 21% sequentially and 13% year-over-year [15][16] - In the Americas, TTM organic orders increased by over 30%, while APAC showed order strength and pipeline growth [21][22] - EMEA's order pipeline is robust and growing, despite lagging behind other regions [37][38] Company Strategy and Development Direction - The company is focused on capitalizing on the digital revolution and robust data center demand, particularly around AI infrastructure [8][14] - A strong emphasis on operational excellence and supply chain resilience has been established to navigate tariff challenges [24][30] - The company is committed to maintaining a strong balance sheet and cash generation to support future investments and M&A opportunities [36][94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to handle tariff situations and emphasized the importance of operational flexibility [10][11] - The outlook for 2025 remains strong, with expectations for continued growth driven by demand signals from customers and technology partners [20][52] - The company raised its full-year organic sales growth guidance to 18%, supported by a strong backlog and pipeline [51][43] Other Important Information - The company is actively working on a project with NVIDIA to deliver a prefabricated AI factory, showcasing its capabilities in advanced AI infrastructure [54][57] - The company has developed a detailed tariff playbook to monitor and respond to evolving trade dynamics [30] Q&A Session Summary Question: How do you see the mitigation efforts phasing in through '25? - Management indicated that countermeasures include price actions on new contracts and existing backlog repricing, with benefits expected to increase as the year progresses [61][64] Question: What is driving the impressive performance on orders? - Management noted that growing pipelines and order durability are key factors, with stable pipeline velocity indicating consistent demand [72][74] Question: Can you provide details on China import exposure? - Management refrained from disclosing specific numbers but confirmed that supply reconfiguration and pricing are both contributing to mitigation efforts [80][82] Question: How are you managing production given market dynamics? - Management stated that demand remains strong across various segments, allowing for increased capacity and delivery to the market [98][100] Question: What is the ability to reprice the backlog regarding tariffs? - Ongoing conversations with customers are taking place, with a general understanding of the unique challenges posed by the current tariff environment [103][105] Question: Will Europe start to contribute to bookings? - Management expressed cautious optimism about European growth, while the Americas continue to be a primary growth engine [114][115] Question: What is the total gross tariff-related pressure for 2025? - Management did not disclose specific figures but emphasized a focus on reducing gross impact through pricing and supply chain countermeasures [89][90]