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Jun 30, 2022
Kyndryl Q1 2023 Earnings Report
Kyndryl's first quarter of fiscal year 2023 resulted in revenue of $4.3 billion and a net loss of $250 million.
Key Takeaways
Kyndryl reported revenues of $4.3 billion for the quarter ended June 30, 2022, a year-over-year decline of 10%. The company's net loss was $250 million, or $1.11 per diluted share. The company is focused on delivering its fiscal year 2023 financial objectives.
Kyndryl reported revenues of $4.3 billion, a year-over-year decline of 10%, or 3% in constant currency.
The Company reported a net loss of $250 million, or $1.11 per diluted share, in the quarter.
Kyndryl signed contracts tied to cloud hyperscaler alliances with an aggregate value of $235 million.
Kyndryl continued to address accounts with substandard margins, bringing the total impact from this initiative to $52 million of annualized benefits.
Kyndryl
Kyndryl
Kyndryl Revenue by Geographic Location
Revenue by Geographic Location
United States Revenue
CapyFin.comJapan Revenue
CapyFin.comPrincipal Markets Revenue
CapyFin.comStrategic Markets Revenue
CapyFin.com Forward Guidance
Kyndryl is reaffirming its fiscal year 2023 outlook, updating revenue forecast for currency effects. Revenue of $16.3 to $16.5 billion, which includes an approximately $1.2 billion or seven-percentage-point negative currency impact. Adjusted EBITDA margin of 13% to 14%. Adjusted pretax margin of 0% to 1%.
Positive Outlook
- Double-digit constant-currency signings growth compared to pro forma signings in calendar year 2021, consistent with the outlook the Company published in May
- Revenue of $16.3 to $16.5 billion, which includes an approximately $1.2 billion or seven-percentage-point negative currency impact. This represents a decline of (4)% to (3)% in constant currency compared to pro forma revenue for the twelve months ended March 31, 2022, which is consistent with the outlook the Company published in May
- Adjusted EBITDA margin of 13% to 14%, consistent with the outlook the Company published in May
- Adjusted pretax margin of 0% to 1%, consistent with calendar year 2021 pro forma results and with the outlook the Company published in May
Challenges Ahead
- Currency movements are negatively impacting fiscal 2023 revenue by approximately $1.2 billion
- Currency movements are negatively impacting adjusted EBITDA by approximately $300 million or 80 basis points
- Currency movements are negatively impacting adjusted pretax income by approximately $200 million or 120 basis points compared to calendar year 2021
- Forecasted adjusted EBITDA also reflects a 60-basis-point negative impact from certain software being expensed rather than capitalized and amortized.