Kyndryl Holdings Inc (FRA:7XU)

Q1 2027 Kyndryl Holdings Inc Earnings Call Transcript

Aug 5, 2026 / 12:30 PM GMT

Release Date Price: €12.56 (+0.08%)

Transcript 10-Q8-K

Key Points

Positve

Kyndryl Holdings Inc (KD) delivered 5% revenue growth in the US for the second consecutive quarter, driven by its AI-led modernization approach.
Kyndryl Consult revenue grew 14% year-over-year, and hyperscaler-related revenue streams grew 48% over the last 12 months.
Total signings exceeded revenue over the last six months, with 40 deals over $50 million signed in the past year, 30% of which came from scope expansions or new logos.
The company signed contracts with an average projected gross margin of 25% and high single-digit pre-tax margins, improving the quality of its revenue backlog.
Kyndryl Holdings Inc (KD) reaffirmed its fiscal 2028 targets of over $1.2 billion in adjusted pre-tax income and $1 billion in free cash flow, achievable on low single-digit revenue growth.
The company is embedding AI and automation through its Kindle Bridge platform, with over 1,800 agents in infrastructure, generating significant productivity savings and improving service quality.

Negative

Kyndryl Holdings Inc (KD) reported a 3% year-over-year revenue decline in Q1, with an adjusted pre-tax loss of $37 million due to $152 million in workforce rebalancing charges.
The evolving relationship with IBM, where customers procure hardware and software directly, is creating a persistent headwind, reducing signings and revenue growth.
The company faces lengthening sales cycles and delayed customer decisions, particularly in Europe, where sovereignty concerns and market complexity are impacting performance.
Free cash flow was a $401 million outflow in Q1, driven by higher payments for renewals and lower billing and collections, though this was anticipated for the season.
Kyndryl Holdings Inc (KD) expects the IBM-related headwind to continue throughout fiscal 2027, with revenue projected to be flat to down 2% in constant currency.
The company incurred significant workforce rebalancing charges, with approximately $200 million expected for the full year, impacting near-term profitability.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

KD.N - Kyndryl Holdings, Inc.
Q1 2027 Kyndryl Holdings Inc Earnings Call
Aug 05, 2026 / 12:30PM GMT

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Presentation
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Unidentified_1 [1]
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Good day and thank you for standing by.

Welcome to the fiscal 1st quarter 2027 earnings conference call.

This time, all participants are in a listen-only mode.

After the presentation, there will be a question-and-answer session.

To ask a question during the session, please press 11 on your telephone.

You will then hear an automated message advising your hand is raised.

To withdraw your question, please press 11 again.

Please be advised that today's conference call is being recorded.

I would now like to hand the conference over to your first speaker today.

Laurie Bateman, global head of Investor relations.

Please go ahead.

Good

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