Kyndryl Holdings Stock Slides Sharply to 52-Week Low
Kyndryl Reports Q3 FY26 Financial Performance
For the quarter ended December 31, 2025, Kyndryl posted revenue of $3.9 billion. This marked a 3% year-over-year increase on a reported basis. Meanwhile, revenue stayed flat in constant currency. Pretax income reached $91 million. Net income hit $57 million. Diluted EPS came in at $0.25. In comparison, the prior-year quarter showed pretax income of $258 million. Net income stood at $215 million then. However, that included a one-time transaction benefit. On adjusted metrics, results improved. Pretax income rose to $168 million, up from $160 million year over year. Net income totaled $122 million. Adjusted EBITDA climbed to $696 million. Free cash flow generated $217 million. Additionally, operating cash flow surged to $427 million from $260 million a year earlier.
Kyndryl Boosts Signings, Billings and Segment Growth
Trailing twelve-month signings reached $15.4 billion. For example, Kyndryl signed 11 contracts above $50 million in the quarter. Meanwhile, Kyndryl Consult drove strong growth. Consult revenue grew 24% year over year. Trailing twelve-month consult revenue hit $3.6 billion. Consult signings totaled $4.1 billion. Furthermore, revenue from hyperscaler alliances soared to $500 million, up 58% year over year. As a result, Kyndryl stays on track to exceed its $1.8 billion FY26 target.
Kyndryl Advances Margins, Strategy and Leadership
The company’s “three-A” initiatives fueled adjusted profit expansion. These include Alliances, Advanced Delivery, and Accounts. Additionally, Kyndryl announced key leadership changes. Harsh Chugh now serves as Interim CFO. Other interim finance and legal roles followed. Meanwhile, projected pretax margins on new signings hold steady in the high-single-digit range, aligning with recent quarters.
Kyndryl Updates FY26 Outlook
Kyndryl repositioned toward higher-margin services. Specifically, it targets consulting, cloud, and AI offerings. At the same time, the firm exits lower-margin legacy contracts. Consequently, it updated its fiscal 2026 outlook alongside Q3 results.