Overview

* Kyndryl ( KD ) fiscal Q2 revenue declines 1% yr/yr, missing analyst expectations

* Adjusted EBITDA for fiscal Q2 beats analyst expectations

* Company announces additional $400 mln share repurchase authorization

Outlook

* Kyndryl ( KD ) reaffirms fiscal 2026 outlook with adjusted pretax income of at least $725 mln

* Company expects adjusted EBITDA margin of approximately 18% for fiscal 2026

* Kyndryl ( KD ) anticipates free cash flow of approximately $550 mln for fiscal 2026

Result Drivers

* HYPERSCALER ALLIANCES - Revenue from cloud hyperscaler alliances grew 65% yr/yr, exceeding initial targets

* KYDRYL CONSULT GROWTH - Kyndryl Consult revenues grew 28% yr/yr, driven by strategic initiatives

* AI AND AUTOMATION - AI-enabled automation through Kyndryl Bridge platform contributed to earnings growth

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q2 Miss $3.72 $3.84

Revenue bln bln (3

Analysts

)

Q2 EPS $0.29

Q2 Net $68 mln

Income

Q2 Beat $641 mln $618.33

Adjusted mln (3

EBITDA Analysts

)

Analyst Coverage

* The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

* The average consensus recommendation for the it services & consulting peer group is "buy"

* Wall Street's median 12-month price target for Kyndryl Holdings Inc ( KD ) is $39.12, about 26.5% above its November 3 closing price of $28.75

* The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 16 three months ago

Press Release:

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)