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Jun 30, 2025
Kyndryl Q1 2026 Earnings Report
Kyndryl reported its first quarter fiscal 2026 results, showing steady progress in key growth areas and increased earnings.
Key Takeaways
Kyndryl reported revenues of $3.74 billion for the first quarter of fiscal year 2026, with net income of $56 million and diluted EPS of $0.23. The company saw significant increases in adjusted EBITDA and adjusted net income, driven by contributions from Kyndryl Consult and hyperscaler-related activities. Kyndryl reaffirmed its fiscal 2026 outlook for revenue, earnings, and free cash flow.
Revenues for the quarter ended June 30, 2025, totaled $3.74 billion, showing slight year-over-year growth.
Net income increased significantly to $56 million, or $0.23 per diluted share, compared to $11 million in the prior-year period.
Adjusted EBITDA rose 16% year-over-year to $647 million, and adjusted net income increased to $90 million, or $0.37 per diluted share.
Kyndryl Consult revenues grew 30% year-over-year, and hyperscaler-related revenue increased by 86% to $400 million.
Revenue by Geographic Location
Forward Guidance
Kyndryl reaffirmed its fiscal year 2026 outlook, expecting continued growth in adjusted pretax income, adjusted EBITDA margin, and free cash flow, with constant-currency revenue growth of 1%.
Positive Outlook
- Adjusted pretax income of at least $725 million, representing a year-over-year increase of at least $243 million.
- Adjusted EBITDA margin of approximately 18%, an increase of approximately 130 basis points year-over-year.
- Free cash flow of approximately $550 million.
- Constant-currency revenue growth of 1%.
- Progressing well toward hyperscaler revenue target of $1.8 billion in fiscal 2026.
Challenges Ahead
- No specific negative forward guidance points were provided in the report.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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