Nov 6 (Reuters) - IT services provider Kyndryl ( KD )

narrowly beat estimates for second-quarter revenue on Wednesday

as businesses adopting generative AI technology turned to its

consulting services.

The company, the former infrastructure services business of

IBM ( IBM ), posted a 23% rise in consulting business revenue.

Kyndryl ( KD ) has benefited from companies upgrading their IT

systems to incorporate the extensive data and processing needs

of artificial intelligence technology.

"For every company which is considering AI and generative

AI, the heart of that always requires data," CEO Martin

Schroeter told Reuters.

"We play a role in helping them with their data architecture

before they could even start to consider Gen AI."

Kyndryl's ( KD ) second-quarter revenue fell about 7% to $3.77

billion. The average estimate of four analysts polled by LSEG

was $3.72 billion.

The company inherited multiple no-margin contracts from

IBM ( IBM ) and has been looking to re-work them to generate higher

profits, a move that has led to an "engineered decline" in its

revenue.

It will return to revenue growth by the end of this

fiscal year, Schroeter said.

Kyndryl ( KD ) has a target of generating $1 billion in revenue in

its fiscal year 2025 from so called hyperscalers. In the second

quarter, Kyndryl ( KD ) recognized $260 million in revenue tied to

customers using services from large-scale cloud providers.

The company narrowed its net loss to $43 million in the

quarter ended Sept. 30, compared with a net loss of $142 million

in the year-ago-period.

In response to a question on Donald Trump's election as U.S.

president, Schroeter said: "I do expect there will be continued

focus on the security aspects of data and importantly on the

resiliency aspects of the systems that countries rely on."

"Helping customers get ready for a regulatory environment is

going to be a tailwind for us."