May 7 (Reuters) - IT services provider Kyndryl ( KD ) beat Wall Street estimates for

fourth-quarter revenue on Wednesday, helped by robust demand from businesses adopting artificial

intelligence technology.

The company, formerly IBM's ( IBM ) infrastructure services business, recognized $1.2

billion in revenue tied to customers using services from large-scale cloud providers in its

fiscal year 2025, exceeding its "hyperscaler" revenue target of nearly $1 billion.

Companies enhancing their IT systems to incorporate the extensive data and processing needs

of AI technology have benefited Kyndryl ( KD ), which helps businesses manage key data architecture.

"We expanded our capabilities in cloud, modernization, applications, AI and security,"

Kyndryl ( KD ) CEO Martin Schroeter said in a statement.

Kyndryl's ( KD ) fourth-quarter revenue fell about 1% to $3.80 billion. The average estimate of

five analysts polled by LSEG was $3.77 billion.

The company inherited multiple no-margin contracts from IBM ( IBM ) and has been looking to

restructure them to generate higher profits, a move that has led to a decline in its revenue.

Net income in the three months ended March 31 stood at $68 million, compared to a net loss

of $45 million in the year-ago period.

For fiscal 2026, the company expects adjusted pretax income of at least $725 million,

representing a year-over-year increase of at least $243 million.

After rising more than 66% last year, Kyndryl's ( KD ) stock is down more than 3% this year,

pressured by macroeconomic uncertainty stemming from U.S. President Donald Trump's trade policy.