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Mar 31, 2024
Kyndryl Q4 2024 Earnings Report
Kyndryl reported mixed results with revenue decline but improved profitability in Q4 2024.
Key Takeaways
Kyndryl's Q4 2024 results showed a revenue of $3.8 billion, a net loss of $45 million, and an adjusted EBITDA of $566 million. The company is focusing on strategic initiatives and expects a return to revenue growth in Q4 2025.
Kyndryl's Q4 revenues totaled $3.8 billion, reflecting a year-over-year decline of 10%.
The company reported a net loss of $45 million, or ($0.20) per diluted share, compared to a net loss of $737 million in the prior-year period.
Adjusted EBITDA increased by 19% to $566 million, driven by the company’s three-A initiatives.
Kyndryl Consult revenues grew 13% year-over-year, demonstrating strong performance in the consulting segment.
Revenue by Geographic Location
Forward Guidance
Kyndryl expects revenue growth of (2%) to (4%) in constant currency compared to revenue of $16.1 billion in fiscal 2024, adjusted EBITDA margin of at least 16.2%, and adjusted pretax income of at least $435 million in fiscal 2025.
Positive Outlook
- The Company now expects to deliver year-over-year constant-currency revenue growth in the fourth quarter of the fiscal year.
- Adjusted EBITDA margin of at least 16.2%, an increase of at least 150 basis points compared to 14.7% in fiscal 2024, reflecting incremental benefits from the three-A initiatives.
- Adjusted pretax income of at least $435 million, an increase of at least $270 million compared to $165 million in fiscal 2024.
- Conversion of adjusted pretax income (less cash taxes) to adjusted free cash flow of roughly 100%.
Challenges Ahead
- Revenue growth of (2%) to (4%) in constant currency compared to revenue of $16.1 billion in fiscal 2024, which reflects actions by Kyndryl to reduce certain inherited zero-margin and low-margin revenue streams.
- Based on recent exchange rates, the Company’s outlook implies fiscal 2025 revenue of $15.2 to $15.5 billion.
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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