Kyndryl Holdings Inc
NYSE:KD
Kyndryl Holdings Inc
Kyndryl Holdings Inc., a name that might sound unfamiliar to some, was born from one of the most significant corporate separations in recent history. Spun off from IBM in November 2021, Kyndryl took on the task of managing the vast IT infrastructure services that Big Blue had cultivated over decades. This separation allowed Kyndryl to direct its focus squarely on advancing IT services across cloud-based solutions, networking, hosting, and customer data centers. The company's operations primarily revolve around designing, building, and managing critical information systems. Its business model leverages ongoing engagements with large organizations, providing essential services such as disaster recovery, security, and systems management, ensuring that clients' digital transformations are seamless and secure.
Kyndryl's revenue stream is firmly anchored in its partnerships and contractual agreements with a diverse array of industries, including financial services, telecoms, retail, and healthcare. By committing to long-term contracts, the company ensures a steady flow of income and builds deep relationships with its clients, who rely on its expertise to keep their IT infrastructure running smoothly. This model allows Kyndryl to customize solutions that specifically address the strategic needs of each client, thereby creating value not only through operational efficiency but also through innovative technology deployment tailored to meet the evolving business landscape. The firm’s ability to adapt and grow alongside its partners underscores its core strength, positioning Kyndryl as a pivotal player in the IT services domain, with a clear vision for both its operational execution and future growth trajectory.
Kyndryl Holdings Inc., a name that might sound unfamiliar to some, was born from one of the most significant corporate separations in recent history. Spun off from IBM in November 2021, Kyndryl took on the task of managing the vast IT infrastructure services that Big Blue had cultivated over decades. This separation allowed Kyndryl to direct its focus squarely on advancing IT services across cloud-based solutions, networking, hosting, and customer data centers. The company's operations primarily revolve around designing, building, and managing critical information systems. Its business model leverages ongoing engagements with large organizations, providing essential services such as disaster recovery, security, and systems management, ensuring that clients' digital transformations are seamless and secure.
Kyndryl's revenue stream is firmly anchored in its partnerships and contractual agreements with a diverse array of industries, including financial services, telecoms, retail, and healthcare. By committing to long-term contracts, the company ensures a steady flow of income and builds deep relationships with its clients, who rely on its expertise to keep their IT infrastructure running smoothly. This model allows Kyndryl to customize solutions that specifically address the strategic needs of each client, thereby creating value not only through operational efficiency but also through innovative technology deployment tailored to meet the evolving business landscape. The firm’s ability to adapt and grow alongside its partners underscores its core strength, positioning Kyndryl as a pivotal player in the IT services domain, with a clear vision for both its operational execution and future growth trajectory.
Margin Expansion: Kyndryl delivered higher earnings and strong margin improvement in Q2, with adjusted EBITDA margin up 250 basis points year-over-year.
Revenue Miss: Quarterly revenue was $100 million below internal targets, primarily due to deal timing and the impact of removing low-margin hardware and software from customer relationships.
Growth Drivers: Kyndryl Consult revenue grew 32% in the past year, Hyperscaler-related revenue doubled, and both are expected to drive second-half revenue growth.
Raised Buyback: The company increased its share repurchase program by $400 million, demonstrating confidence in future cash generation.
Full-Year Guidance Affirmed: Management reaffirmed the fiscal 2026 outlook, including 1% constant currency revenue growth and at least $725 million adjusted pretax income.
AI Momentum: About 25% of new contract signings contain AI-related content, spanning multiple sectors and supporting Kyndryl’s positioning in IT modernization.
Tuck-in Acquisition: Kyndryl announced an agreement to acquire Solvinity, a midsized cloud service provider in Europe, for EUR 100 million to expand sovereign cloud capabilities.
