Kyndryl Reports Third Quarter Results for Fiscal 2026
Kyndryl (NYSE: KD), a prominent provider of essential enterprise technology solutions, has shared its financial results for the third quarter of fiscal year 2026, ending December 31, 2025. The results indicate strong revenue growth, improvements in key financial metrics, and notable developments within the company.
Financial Highlights of the Quarter
During the quarter in review, Kyndryl achieved revenues totaling $3.9 billion. This figure marks a 3% increase compared to the same quarter last year. Notably, the company reported pretax income of $91 million, down from $258 million in the previous year, primarily due to a significant transaction-related benefit recorded in that period. The net income for this quarter stood at $57 million, equating to $0.25 per diluted share, a decrease from $215 million, or $0.89 per share, recorded last year.
Furthermore, Kyndryl's adjusted EBITDA reached $696 million. Adjusted pretax income was $168 million, reflecting an increase compared to $160 million in the prior year, attributable to gains from the company's strategic initiatives focusing on alliances, advanced delivery, and account management. Adjusted net income amounted to $122 million, translating to $0.52 per diluted share.
Growth in Kyndryl Consult and Strategic Alliances
Kyndryl Consult has emerged as a key driver for the company’s growth, reporting double-digit revenue growth for the quarter as well as for the past twelve months. This growth underpins Kyndryl's commitment to leveraging partnerships with hyperscalers and various technology providers to enhance services and expand its customer base.
Recent Leadership Changes
In addition to its financial accomplishments, Kyndryl announced leadership changes aimed at reinforcing its strategic direction. Harsh Chugh is now the Interim Chief Financial Officer, Mark Ringes has stepped in as Interim General Counsel, and Bhavna Doegar has assumed the role of Interim Corporate Controller.
Future Outlook for Fiscal Year 2026
Kyndryl has updated its guidance for fiscal year 2026, predicting an adjusted pretax income between $575 million and $600 million. The anticipated adjusted EBITDA margin is expected to be around 17.5%, and the company projects free cash flow to range between $325 million and $375 million. Despite these positive forecasts, the firm expects a constant currency revenue decline ranging from 2% to 3%.
Investments in AI and Cloud Technologies
Kyndryl’s dedication to innovation is evident in its investments in artificial intelligence and cloud technologies. The company introduced new AI services to bolster workforce readiness and enhance security measures across hybrid and multi-cloud environments. As a result, a significant portion of recent signings now incorporates AI-related services, reflecting the growing demand for such technology-driven solutions.
Shareholder Actions and Stock Performance
In the third quarter, Kyndryl repurchased 3.7 million shares of its common stock, costing $100 million. This buyback effort is part of the company's larger share repurchase program initiated in November 2024, which has seen the purchase of 11 million shares overall, representing approximately 5% of its total outstanding shares.
Conclusion
Kyndryl's third quarter performance illustrates a significant commitment to driving growth through strategic partnerships, robust financial management, and leadership innovation. With a focus on technology and enhanced services, Kyndryl is set to maximize shareholder value while addressing the evolving needs of its clients.
Frequently Asked Questions
What are Kyndryl's main financial highlights for Q3 2026?
Kyndryl reported $3.9 billion in revenues, $57 million in net income, and an adjusted EBITDA of $696 million in Q3 2026.
How has Kyndryl Consult performed in the past quarter?
Kyndryl Consult achieved double-digit revenue growth, solidifying its impact on the company's overall performance.
What updates were made to Kyndryl's fiscal outlook?
Kyndryl has revised its fiscal year 2026 outlook, predicting adjusted pretax income between $575 million and $600 million and an adjusted EBITDA margin of approximately 17.5%.
What are the recent leadership changes at Kyndryl?
Leadership changes include Harsh Chugh as Interim CFO, Mark Ringes as Interim General Counsel, and Bhavna Doegar as Interim Corporate Controller.
What measures is Kyndryl taking regarding stock performance?
The company has been active in share buybacks, repurchasing 3.7 million shares for $100 million in the last quarter, part of its broader strategy to enhance shareholder value.
