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Jun 30, 2024
Kyndryl Q1 2025 Earnings Report
Kyndryl reported strong Q1 2025 results with revenue of $3.74 billion and net income of $11 million, driven by growth in Kyndryl Consult and hyperscaler-related revenues.
Key Takeaways
Kyndryl's Q1 2025 results showed a revenue of $3.74 billion and a net income of $11 million. The company experienced growth in Kyndryl Consult and hyperscaler-related revenues. They are on track to deliver top-line growth in the fourth quarter of this fiscal year.
Revenues for the quarter totaled $3.74 billion, with a pretax income of $64 million and a net income of $11 million.
Adjusted EBITDA was $556 million, adjusted pretax income was $92 million, and adjusted net income was $31 million.
Kyndryl Consult continued to gain momentum with double-digit revenue growth in the quarter and over the last twelve months.
The company raised its adjusted earnings outlook for fiscal year 2025 and reaffirmed its constant-currency revenue outlook, expecting revenue growth in the fourth quarter.
Revenue by Geographic Location
Forward Guidance
Kyndryl is raising its adjusted earnings outlook for its fiscal year 2025 and reaffirming its outlook for constant-currency revenue growth of (2%) to (4%).
Positive Outlook
- Adjusted EBITDA margin of at least 16.3% compared to its prior outlook of at least 16.2%.
- Represents a year-over-year increase of at least 160 basis points.
- Adjusted pretax income of at least $460 million compared to its prior outlook of at least $435 million.
- Represents a year-over-year increase of at least $295 million.
- The Company continues to expect to deliver year-over-year constant-currency revenue growth in the fourth quarter of the fiscal year.
Challenges Ahead
- Constant-currency revenue growth of (2%) to (4%), which reflects actions by Kyndryl to reduce certain inherited zero-margin and low-margin revenue streams.
- Fiscal 2025 revenue of $15.2 to $15.5 billion based on recent exchange rates.
- Seasonally weak quarter for cash flow.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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