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Sep 30, 2025
Kyndryl Q2 2026 Earnings Report
Kyndryl posted improved earnings and margins in Q2 FY26 driven by growth in hyperscaler alliances, AI initiatives, and cost discipline.
Key Takeaways
Kyndryl reported Q2 FY26 revenue of $3.72 billion and returned to profitability with $68 million in net income. The company grew its adjusted EBITDA by 15% YoY and maintained solid margins while expanding strategic initiatives like AI, cloud, and hyperscaler partnerships.
Revenue by Geographic Location
Forward Guidance
Kyndryl reaffirmed its FY26 outlook, expecting improved revenue in the second half, driven by strong pipelines and growth in cloud, AI, and Consult segments.
Positive Outlook
- Reaffirmed FY26 outlook with expected revenue growth in H2.
- On track for adjusted pretax income of at least $725M.
- Projected 18% adjusted EBITDA margin for FY26.
- Free cash flow expected to reach $550M for FY26.
- Strong momentum in hyperscaler and AI-related revenue growth.
Challenges Ahead
- Q2 revenue slightly declined YoY.
- Signings decreased 49% YoY due to tough comparison from a large deal in prior year.
- Free cash flow was limited at $22M in Q2.
- Longer sales cycles are affecting new business conversion.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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