Kyndryl (KD) 2025 Conference Summary Company Overview - **Company**: Kyndryl - **Date**: September 03, 2025 - **Speakers**: Martin Schroeder (CEO), David Weiser (CFO) Key Points Company Strategy and Transformation - Kyndryl has undergone a significant cultural transformation since its spin-off from IBM, focusing on becoming a services-oriented business rather than a product-centric one [2][7] - The company emphasizes two main advantages post-spin: the ability to invest in new capabilities and the freedom to form partnerships with major technology players like Microsoft, Google, Amazon, Oracle, and SAP [5][6] - Kyndryl's strategy is encapsulated in the "three A's": advanced delivery, alliances, and focus accounts, which have contributed to improved profitability and growth [8][9] Financial Performance and Growth - Kyndryl's consulting activities have grown from approximately 10% to over 20% of its business, with a target of reaching 25% [11] - The company has invested heavily in skills development, particularly in hyperscaler-related capabilities, with around 35,000 to 40,000 employees now holding hyperscaler credentials [14] - Kyndryl's profitability has improved significantly, with a projected increase from a -3% PTI margin at the time of the spin-off to a +5% margin [16] Focus Accounts Initiative - The focus accounts initiative has been a major contributor to profitability, with annualized benefits reaching $925 million, with a target of $1 billion [19][27] - Kyndryl inherited a challenging revenue profile from IBM, with a backlog of $20 billion and annual revenue of $8 billion, necessitating a reimagining of customer relationships [20][21] - The company has engineered a decline in revenue to improve profitability, removing over $1 billion in revenue while adding over $6.6 billion in profit dollars [22][23] Revenue Growth and Market Dynamics - Kyndryl aims for mid-single-digit revenue growth by fiscal year 2028, supported by strong book-to-bill ratios and growth in alliances and consulting [30][34] - The company has faced challenges in the first quarter, with revenue falling short of expectations, but anticipates improvement in subsequent quarters [28][40] - The inherited backlog and the transition to a more profitable business model are expected to drive future growth [35][38] AI and Infrastructure Services - Kyndryl is leveraging AI to enhance operational efficiency, automate processes, and improve service delivery, with significant monthly automation activities [60][62] - The company views AI as a tailwind for profit growth, as it allows for reduced labor costs while maintaining service quality [63][67] - AI presents both opportunities and challenges in the infrastructure services sector, with Kyndryl positioned to capitalize on its unique capabilities [66][70] Capital Allocation Strategy - Kyndryl plans to utilize its free cash flow for acquisitions and share repurchase programs, with a focus on small tuck-in acquisitions to enhance its service offerings [72][73] - The company has initiated a share repurchase program and is considering further authorizations to return capital to shareholders [74] Additional Insights - Kyndryl's ability to adapt to market demands and invest in new technologies positions it well for future growth [10][18] - The company is focused on maintaining strong customer relationships and delivering mission-critical services, which are essential for its long-term success [24][25]

Financial Data and Key Metrics Changes - The company has seen strong double-digit growth in recent quarters, with a stable budget and demand environment contributing to this performance [18][22] - EBITDA margin is influenced by seasonal factors, with higher costs in Q1 due to salary adjustments in Brazil, and price adjustments throughout the year [35] Business Line Data and Key Metrics Changes - The CI&T Flow platform is heavily utilized, with 90% of teams using it daily, impacting 85% to 90% of revenue [9][10] - The company is focusing on legacy modernization and customer experience renovation as key offerings, which are driving demand [18][24] Market Data and Key Metrics Changes - The U.S. and Brazil represent approximately 90% of the company's revenue, with emerging markets in Europe and APAC making up the remaining 10% [2] - Client behavior shows stability in IT budgets, with no significant differences in spending patterns between U.S. and LATAM clients [18][19] Company Strategy and Development Direction - The company is leveraging AI to enhance customer experience and streamline processes, positioning itself well in the value-based segment of the industry [12][15] - There is a focus on reskilling employees to adapt to AI technologies, which is seen as a competitive advantage [26][40] Management's Comments on Operating Environment and Future Outlook - Management expresses confidence in growth opportunities due to the stability of budgets and the demand for AI-driven solutions [18][20] - The company anticipates a gradual transition to new pricing models, including outcome-based and consumption-based pricing [11][32] Other Important Information - The company is actively screening for M&A opportunities, particularly in the U.S., to complement organic growth [50][55] - There is a strong emphasis on maintaining a flexible work model, combining remote and in-person work [44][45] Q&A Session Summary Question: How is client behavior shaping up in Q3? - Management notes a year of budget and demand stability, which is favorable for growth [18] Question: Are there differences in spending patterns between U.S. and LATAM clients? - No significant differences are observed; variations are more based on verticals than geography [19] Question: What are the company's priorities for capital allocation? - The focus is on R&D for CI&T Flow, stock repurchase programs, and readiness for M&A opportunities [50][51] Question: How is the company addressing talent acquisition and retention? - The company is successfully hiring and retaining talent, leveraging AI in the hiring process and fostering relationships with universities [42][43]

Core Insights - The campaign "Let's create smarter business" emphasizes the challenges business leaders face in transitioning from AI pilots to real-world applications that deliver organizational value [1][4] - IBM's collaboration with Ogilvy aims to highlight the transformative potential of AI, hybrid cloud, and quantum technologies in enhancing business operations [2][4] Campaign Details - The campaign includes three new broadcast ads featuring Lewis Hamilton, showcasing IBM's partnership with Scuderia Ferrari HP and the redesigned mobile app that integrates data and AI for an improved fan experience [3][4] - The campaign is a strategic evolution of the previous "Let's create" initiative launched in 2022, reintroducing iconic IBM branding elements and set to run through 2025 across various media platforms [4] Company Overview - IBM is a leading provider of hybrid cloud and AI solutions, serving clients in over 175 countries and focusing on data insights, business process optimization, and cost reduction [5] - The company supports critical infrastructure sectors such as financial services, telecommunications, and healthcare with its hybrid cloud platform and consulting services [5]

Core Insights - The company reported a significant increase in AI-related business revenue, achieving 13.332 billion yuan in the first half of 2025, representing a year-on-year growth of 56% [1] - The AI software and service segment saw a remarkable 100% increase in revenue, driven by the "Shenzhou Wenxue Enterprise Agent Platform" and "Shenzhou Wenxue Intelligent Process Workbench" [1] - The company is focusing on domestic computing power development, with its own brand AI computing power equipment generating 660 million yuan in revenue, a 14% increase year-on-year [1] Revenue Breakdown - The third-party AI computing power service business generated 950 million yuan, marking a 62% year-on-year growth, through partnerships with leading cloud service providers like Azure, AWS, GCP, and Alibaba Cloud [1] - The IT distribution business related to AI hardware achieved 11.7 billion yuan in revenue, reflecting a 59% increase year-on-year [1] - Overall, the company reported total revenue of 71.59 billion yuan in the first half of 2025, with a year-on-year growth of 14.4% [2] Strategic Developments - The company has established an AI-native enterprise-level digitalization technology reference architecture to ensure effective implementation of AI for Process [2] - The product matrix has expanded to cover a full range from servers to PCs and from computing infrastructure to privatized solutions, enhancing its industry presence [2] - The company is actively entering new sectors such as finance, energy, and carbon neutrality, significantly increasing the number of AI application products and service opportunities [2]

Core Insights - The financial report of Huasheng Tiancai (600410.SH) for the first half of 2025 shows a net profit of 140 million yuan, a significant turnaround from a loss of 247 million yuan in the same period last year, but underlying issues remain evident [1][2] - The company's revenue for the first half reached 2.262 billion yuan, reflecting a year-on-year growth of 5.11%, yet the main business operations are not performing well [1][3] Revenue and Profit Structure - The profit growth of Huasheng Tiancai is primarily driven by investment income, with a fair value change gain of 271 million yuan from the rise in the stock price of Tailin Micro (688591.SH) [2] - The stock price of Tailin Micro increased significantly from 31.20 yuan at the end of 2022 to 47.90 yuan by June 30, 2025, contributing to the company's financial performance [2] - Without this investment income, the company's main business would have reported a loss [2] Business Performance - The Hong Kong subsidiary ASL (0771.HK) reported a revenue of 1.228 billion yuan, a year-on-year increase of 10.04%, outperforming the mainland business [3] - The mainland business, excluding ASL, generated 1.034 billion yuan in revenue, showing a slight decline of 0.2%, indicating intense competition in the domestic IT service market [3] - Despite emphasizing concepts like "AI + computing power" and "government trust innovation," these strategies have not yet translated into significant revenue growth [3] Cash Flow and Financial Health - The net cash flow from operating activities for the first half was -193 million yuan, a drastic decline of 204.92% year-on-year, raising concerns about the company's cash management [3] - Prepaid accounts increased from 456 million yuan to 702 million yuan, a rise of 53.84%, indicating potential inefficiencies in fund utilization [3] - The company also faces challenges with a high balance of accounts receivable at 675 million yuan and a significant provision for bad debts, common issues in the IT service industry [3]

Core Viewpoint - Insight Enterprises (NSIT) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - For Insight Enterprises, the Zacks Consensus Estimate for earnings per share (EPS) for the fiscal year ending December 2025 is projected to be $9.88, showing no year-over-year change, but estimates have increased by 0.6% over the past three months [8]. Institutional Investor Influence - Institutional investors utilize earnings estimates to determine the fair value of stocks, and their buying or selling actions based on these estimates can lead to significant price movements [4]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Insight Enterprises to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - The implementation of an intelligent campus traffic management system at Central South University aims to enhance the efficiency and warmth of campus transportation, addressing the challenges posed by the growing number of students and faculty [1][10]. Group 1: Intelligent Access Management - A new intelligent access verification system has been introduced to maintain order while preserving the campus's openness, allowing online registration and identity verification for both students and visitors [4][12]. - The system enables quick access for registered individuals and requires advance online appointments for external visitors, promoting a harmonious coexistence of mobility and management [4][10]. Group 2: Non-Motorized Vehicle Management - The initiative includes a "civilized convention" for non-motorized vehicles, where each vehicle is registered and linked to its owner, preventing the accumulation of abandoned "zombie cars" [5][10]. - The management system monitors violations, sending SMS alerts to owners for infractions, thereby enhancing compliance and order on campus [7][10]. Group 3: Traffic Flow Optimization - The traffic management system categorizes vehicles based on area, time, and type, allowing for precise control of access permissions and reducing congestion on campus roads [10][12]. - Since the implementation of a reservation system for external vehicles, the average daily vehicle flow into the campus has decreased by nearly 30%, improving the commuting experience for faculty [10][12]. Group 4: Integrated Service Platform - Central South University has developed a seamless integration of various systems, allowing students and faculty to manage access permissions, handle violations, invite visitors, and pay fees through a single mobile application [11][12]. - This integration reduces the administrative burden on users, making the process more efficient and user-friendly [11][12].

Group 1: Market Performance - The Big Data Industry ETF (516700) showed active performance with a morning increase of 2.4% on September 1 [1] - Among the constituent stocks, Data Port hit the daily limit, while Guanghua New Network and Unisplendour had notable increases of 7.74% and 7.42% respectively [1] - Conversely, Shenzhou Taiyue, Tianrongxin, and Glodon experienced relatively weak performance with declines of 1.09%, 0.84%, and 0.13% respectively [1] Group 2: Index Tracking and Major Stocks - The Big Data Industry ETF passively tracks the CSI Data Index (930902), which rose by 2.53% on the same day [1] - The top ten weighted stocks in the index include iFLYTEK, Inspur Information, and Hang Seng Electronics, among others [1] - The total market capitalization of the top ten constituent stocks ranges from 380 billion to 1320 billion [1] Group 3: Industry Trends and Developments - Gartner's latest report indicates that AI agents and AI-ready data are among the fastest-growing technologies, entering the expectation expansion phase [1] - Tencent Cloud launched its first deeply integrated cloud development platform, CloudBase AI CLI, enhancing developer command line efficiency [1] - The release of Claude Opus version 4.1 marks significant upgrades in programming performance, agent tasks, and reasoning capabilities [1] Group 4: Policy and Future Outlook - Hu Long Securities highlighted the "Artificial Intelligence +" action plan aiming for deep integration of AI in six key sectors by 2027, with industrial applications prioritized [2] - The plan anticipates over 70% penetration of new intelligent terminals and agents by 2027, increasing to over 90% by 2030 [2] - The focus on AI chips, computing power software, and intelligent computing clusters indicates a strong policy-driven push for AI-driven industry transformation [2] Group 5: Sector Performance Insights - Guojin Securities noted that sectors like AI industry chain, smart driving, domestic substitution, and overseas expansion show relatively better performance [3] - Profitability is expected to benefit from efficiency improvements and cost savings driven by AI, with significant growth anticipated in the second half of the year [3] - High-growth areas identified for 2025 include AI computing power and lidar, while stable growth is expected in software outsourcing and financial IT [3]

Group 1 - Sword Group has made its 2025 Interim Financial Report publicly available, filed with the Commission de Surveillance du Secteur Financier (CSSF) and the Luxembourg Stock Exchange [1] - The financial report can be accessed and downloaded from the company's official website [1] - Sword Group employs over 3,500 IT and digital specialists across more than 50 countries, focusing on supporting organizations in their digital growth [1] Group 2 - Sword Group is recognized as a leader in technological and digital transformation, with a strong reputation in managing complex IT and business projects [2] - The company aims to optimize processes and enhance data for its clients [2]

Group 1: Liquidity Contract Details - As of June 30, 2025, the liquidity account for Sword Group shows 4,088 shares and €567,563 [1] - During the semester, 1,406 purchase transactions and 1,527 sale transactions were executed [1] - The total volume exchanged for purchases was 77,590 shares amounting to €2,602,845.15, while for sales it was 82,257 shares amounting to €2,782,527.5 [1] - The previous balance sheet on December 31, 2024, indicated 8,755 shares and €387,881 in the liquidity account [1] - The liquidity contract is in accordance with AMF Decision No. 2018-01, which establishes liquidity contracts on equity securities as accepted market practice [1] Group 2: Company Overview - Sword Group employs over 3,500 IT/Digital specialists across more than 50 countries [2] - The company is recognized as a leader in technological and digital transformation [2] - Sword Group specializes in complex IT and business project management, optimizing processes and enhancing data [2]