Kyndryl (NYSE:KD) Issues Earnings Results

Kyndryl (NYSE:KD) issued its quarterly earnings data on Monday. The company reported $0.52 earnings per share for the quarter, missing the consensus estimate of $0.60 by ($0.08), FiscalAI reports. The business had revenue of $3.86 billion during the quarter, compared to the consensus estimate of $3.89 billion. Kyndryl had a return on equity of 25.76% and a net margin of 2.71%.The business’s revenue for the quarter was up .6% compared to the same quarter last year. During the same period in the prior year, the firm earned $0.51 EPS.

Here are the key takeaways from Kyndryl’s conference call:

• Kyndryl reported Q3 revenue of $3.9B (flat in constant currency), delivered margin expansion with Adjusted Pre-Tax Income up 5% to $168M, generated $217M of free cash flow, and booked $3.9B in signings (LTM $15.4B) with a Book‑to‑Bill above 1.0.
• Momentum in higher‑value services continues: Kyndryl Consult grew ~20% YoY and now represents 25% of revenue, while hyperscaler‑related revenue rose 58% YoY to $500M in Q3 and is on track to approach ~$2B by end of FY26.
• Management cut FY26 guidance to Adjusted Pre‑Tax Income $575–$600M and FCF $325–$375M, attributing the revision to longer sales cycles, a ~3.5‑point revenue headwind from the evolving IBM relationship, investments in Consult, and higher near‑term labor costs due to lower attrition.
• Kyndryl disclosed a delayed quarterly filing and voluntary SEC document requests reviewing cash management and internal controls; the company says it does not expect a restatement but cannot provide further comment, adding near‑term uncertainty.
• Management reiterated confidence in its multi‑year targets (>$1.2B adjusted PTI and >$1B adjusted FCF in FY28), citing high‑quality backlog (average projected gross margin ~26% and gross profit book‑to‑bill ~1.2) that should drive future margin and cash‑flow expansion.

Kyndryl Trading Down 55.0%

NYSE:KD opened at $10.57 on Tuesday. Kyndryl has a 12 month low of $10.10 and a 12 month high of $44.20. The company has a current ratio of 1.02, a quick ratio of 1.02 and a debt-to-equity ratio of 2.24. The stock has a market capitalization of $2.42 billion, a price-to-earnings ratio of 6.25 and a beta of 1.85. The firm has a fifty day simple moving average of $25.52 and a two-hundred day simple moving average of $28.28.

Insider Activity

In other news, SVP Vineet Khurana sold 6,641 shares of the firm’s stock in a transaction dated Friday, December 5th. The stock was sold at an average price of $26.69, for a total value of $177,248.29. Following the completion of the sale, the senior vice president directly owned 59,708 shares in the company, valued at $1,593,606.52. This trade represents a 10.01% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at this link. 1.90% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the company. CIBC Bancorp USA Inc. acquired a new stake in Kyndryl in the third quarter valued at approximately $666,000. Danske Bank A S acquired a new stake in Kyndryl in the 3rd quarter valued at $953,000. Advisory Services Network LLC acquired a new stake in Kyndryl in the 3rd quarter valued at $78,000. NewEdge Advisors LLC increased its stake in Kyndryl by 56.1% during the 3rd quarter. NewEdge Advisors LLC now owns 3,596 shares of the company’s stock valued at $108,000 after purchasing an additional 1,293 shares in the last quarter. Finally, CANADA LIFE ASSURANCE Co raised its holdings in Kyndryl by 0.4% during the third quarter. CANADA LIFE ASSURANCE Co now owns 190,036 shares of the company’s stock worth $5,717,000 after buying an additional 748 shares during the last quarter. 71.53% of the stock is owned by institutional investors and hedge funds.

Kyndryl News Summary

Here are the key news stories impacting Kyndryl this week:

• Positive Sentiment: Kyndryl reported Q3 results showing $3.9B revenue, positive adjusted EBITDA and double‑digit growth in its Kyndryl Consult segment — highlights investors may point to for underlying business momentum. KYNDRYL REPORTS THIRD QUARTER FISCAL 2026 RESULTS
• Neutral Sentiment: Trading experienced temporary LULD halts as the stock moved sharply — a market-structure response that can amplify volatility but is procedural. (Trading halt notices) Finviz trading data
• Neutral Sentiment: Oppenheimer reaffirmed a “market perform” rating (mixed signal from brokers amid the turmoil). Oppenheimer item
• Negative Sentiment: Kyndryl announced it will delay its quarterly 10‑Q, cited anticipated material weaknesses in internal control over financial reporting and launched an accounting/control review — a primary driver of the selloff. Reuters: Kyndryl delays quarterly filing
• Negative Sentiment: Chief Financial Officer David Wyshner and General Counsel Edward Sebold departed abruptly amid the review — leadership exits intensify uncertainty about accounting remediation and reporting timelines. WSJ: Finance Chief Leaves
• Negative Sentiment: Kyndryl disclosed voluntary SEC Division of Enforcement document requests related to cash management, adjusted free cash flow drivers and controls — raising regulatory risk. PR Newswire: Results & disclosures
• Negative Sentiment: The company missed Q3 EPS and revenue estimates and cut FY26 revenue guidance (consensus was higher), removing near‑term earnings visibility. MarketBeat: Earnings summary
• Negative Sentiment: Multiple national law firms have opened securities‑fraud investigations and several shareholder‑rights firms are soliciting plaintiffs — increasing litigation risk and potential costs. Newsfile: BFA investigation notice
• Negative Sentiment: Analysts have moved to lower ratings/targets (e.g., JPMorgan cut to underweight), compounding selling pressure and reducing near‑term institutional demand. TickerReport: JPMorgan downgrade

Analysts Set New Price Targets

KD has been the subject of a number of recent analyst reports. Susquehanna set a $35.00 target price on shares of Kyndryl in a research report on Thursday, November 6th. Scotiabank initiated coverage on shares of Kyndryl in a research report on Tuesday, January 27th. They set an “outperform” rating for the company. Guggenheim downgraded shares of Kyndryl from a “buy” rating to a “neutral” rating in a research note on Tuesday. Oppenheimer reaffirmed a “market perform” rating on shares of Kyndryl in a research report on Monday. Finally, Zacks Research raised Kyndryl from a “strong sell” rating to a “hold” rating in a research report on Wednesday, November 12th. Two research analysts have rated the stock with a Buy rating, five have given a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of “Hold” and an average target price of $32.80.

Kyndryl Company Profile

Kyndryl (NYSE: KD) is a global managed infrastructure services provider formed in November 2021 through the spin-off of IBM’s Managed Infrastructure Services business. The company designs, builds, manages and modernizes critical information technology systems for enterprises worldwide. Kyndryl’s core offerings include cloud migration and management, network and edge computing solutions, digital workplace services and IT resiliency and security capabilities.

With a workforce of approximately 90,000 professionals and operations in more than 60 countries, Kyndryl serves clients across a broad range of industries, including financial services, telecommunications, healthcare, manufacturing and retail.