KD earnings analysis
What we found in KD's 10-K: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Kyndryl's 2026 Annual Report shows flat revenue of $15.1 billion, driven primarily by a decline in the U.S. segment, offset by growth in Kyndryl Consult and hyperscaler-related revenues. The company faces challenges with longer sales cycles and issues related to its historical ties with IBM. Management expects to incur significant costs from workforce rebalancing initiatives aimed at operational efficiency, with anticipated savings materializing in the coming fiscal years.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Flat Revenue in Fiscal 2026
- Kyndryl reported revenues of $15.1 billion for the fiscal year ended March 31, 2026, unchanged from the previous fiscal year.
- Free Cash Flow Recovery
- The free cash flow increased to $948 million in FY2026, up from $942 million in FY2025, driven by improved collections.
- Successful Cost Management
- Operating expenses decreased to 78.2% of revenue in FY2026 from 79.1% in FY2025, indicating effective cost measures.
- Share Repurchase Program Expansion
- The company executed a share repurchase of 11.6 million shares for $304 million in FY2026, showing commitment to enhancing shareholder value.
- Ongoing Workforce Restructuring
- Kyndryl anticipates $200 million in workforce rebalancing charges in FY2027 with expected savings of $400 to $500 million in FY2028.
- Improved Operating Margins
- Kyndryl's adjusted EBITDA for FY2026 was $2.7 billion, an increase from $2.6 billion in FY2025.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Material Weaknesses in Internal Controls
- Kyndryl identified significant material weaknesses in internal controls, impacting reliability, which could expose the company to financial inaccuracies.
- Increased Competition and Pricing Pressure
- Intensified competition may pressure profit margins, potentially affecting revenue. The report indicates ongoing pressures in the U.S. and other key markets.
- Dependence on Major Clients
- Although no single client represented over 10% of revenue, reliance on a concentrated client base poses risks if major clients reduce spending.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.87
- Gross margin
- 21.8%
- Operating margin
- 0.05%
- Segment
- United States
- Segment
- Japan
- Segment
- Principal Markets
- Segment
- Strategic Markets
What they said about what is next.
Kyndryl expects to incur $200 million in workforce rebalancing charges for FY2027, aiming for $400 million in savings by FY2028.
The filing reads worse than the one before it.
What came before.
- 10-Q · February 17, 2026
- Kyndryl Holdings reported a revenue of $3.86 billion for Q3 2026, representing a 3% increase versus the prior year, although it missed analyst expectations with a diluted EPS of $0.52 compared to the estimated $0.56.…
- 10-Q · November 5, 2025
- Kyndryl Holdings, Inc. reported revenue of $3.72 billion for the three months ended September 30, 2025, a slight decline of 1% year-over-year, while net income increased to $68 million, signifying a turnaround in…
- 10-Q · August 5, 2025
- Kyndryl Holdings, Inc. (KD) reported a slight increase in revenue to $3.74 billion for the quarter ended June 30, 2025, up 0.1% from the prior year despite a 3% decline in constant currency. The net income rose…
- 10-K · May 30, 2025
- Kyndryl Holdings, Inc. reported a 6% decline in revenues to $15.06 billion in FY 2025, driven by restructuring actions targeting lower-margin contracts. Net income improved to $252 million, marking a recovery from the…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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