Q4 2025 Kyndryl Holdings Inc Earnings Call Transcript
Key Points
- Kyndryl Holdings Inc (KD) achieved a 48% increase in signings, reaching over $18 billion in constant currency.
- The company reported a significant milestone by returning to positive constant currency revenue growth in the fourth quarter.
- Kyndryl Consult delivered above-market growth with a revenue increase of more than 25% for the year.
- The company generated $446 million in adjusted free cash flow, marking a 53% increase from the previous year.
- Kyndryl's hyperscale-related revenue more than doubled to $1.2 billion, showcasing strong growth in strategic alliances.
- The company faces ongoing challenges with macroeconomic uncertainties that could impact customer investment decisions.
- Despite strong growth, Kyndryl's revenue guidance for fiscal 2026 appears conservative given the 46% signing growth.
- The company is still working through legacy contracts, which may slow the acceleration of revenue growth.
- Kyndryl's exposure to IBM software cost increases remains a concern, although it is expected to stabilize in the future.
- The company acknowledges that while it is insulated, it is not immune to macroeconomic factors, which could affect future performance.
Good day, and thank you for standing by. Welcome to the Kyndryl fourth quarter 2025 earnings conference call. (Operator instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lori Chaitman, Global Head of Investor Relations. Please go ahead.
Good morning, everyone and welcome to Kyndryl's earnings call for the fourth quarter and fiscal year ended March 31, 2025. Before we begin, I'd like to remind you that our remarks today include forward-looking statements. These statements are subject to risk factors that may cause our actual results to differ materially from those expressed or implied. These forward-looking statements speak only to our expectations as of today.
For more details on some of these risks, please see the risk factors section of our annual report on Form 10-K for the year ended March 31, 2024.
Also, in today's remarks, we refer to certain non-GAAP financial metrics.
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