Kyndryl (NYSE:KD) Posts Quarterly Earnings Results, Beats Estimates By $0.04 EPS

Kyndryl (NYSE:KD) issued its earnings results on Wednesday. The company reported $0.42 EPS for the quarter, topping the consensus estimate of $0.38 by $0.04, FiscalAI reports. The company had revenue of $3.65 billion during the quarter, compared to analyst estimates of $3.62 billion. Kyndryl had a return on equity of 13.00% and a net margin of 0.52%. The business’s revenue was down 1.9% on a year-over-year basis. During the same quarter last year, the firm earned $0.38 EPS.

Here are the key takeaways from Kyndryl’s conference call:

• Revenue remained down year over year: Q2 revenue was $3.65 billion, down 0.8% in constant currency, and Kyndryl maintained its full-year forecast of flat to down 2%. U.S. revenue grew 9%, partly benefiting from a one-time commercial matter resolution.
• Profitability improved as adjusted EBITDA margin rose 190 basis points to 19.1% and adjusted pre-tax margin increased 80 basis points to 4.1%. Management attributed margin gains to a better business mix and operating efficiencies, and expects gross margins to keep improving.
• Signings and growth opportunities strengthened: first-half signings grew 34%, while over the last 12 months Kyndryl signed 43 deals exceeding $50 million. Management said a growing share of large deals included new logos or expanded customer scope, supporting future growth in higher-value services.
• Free cash flow guidance was reaffirmed at $400 million–$500 million despite a $434 million use of cash in the first half, primarily from seasonal working-capital needs. Management expects stronger earnings and working-capital contributions in the second half and said its fiscal 2028 goal of $1 billion in adjusted free cash flow remains on track.
• Kyndryl said workforce rebalancing is substantially complete and expects second-half savings to largely offset about $200 million of fiscal 2027 charges; the actions are expected to generate $400 million–$500 million in annualized operating expense savings in fiscal 2028.

Kyndryl Stock Performance

NYSE:KD traded up $0.10 during midday trading on Friday, reaching $16.28. 1,761,461 shares of the company traded hands, compared to its average volume of 4,517,060. The firm has a market capitalization of $3.55 billion, a price-to-earnings ratio of 46.39 and a beta of 1.62. The company has a fifty day moving average price of $12.97 and a 200 day moving average price of $13.41. The company has a debt-to-equity ratio of 1.96, a current ratio of 0.85 and a quick ratio of 0.85. Kyndryl has a twelve month low of $10.10 and a twelve month high of $27.83.

Key Headlines Impacting Kyndryl

Here are the key news stories impacting Kyndryl this week:

• Positive Sentiment: Kyndryl reported fiscal Q2 adjusted EPS of $0.42, topping the $0.38 consensus estimate, while revenue of $3.65 billion also edged past expectations. Commentary highlighted margin gains from AI-led modernization and efficiency efforts. Article: KD Q3 CY2026 deep dive
• Positive Sentiment: A new solution with Amazon Web Services combines Kyndryl’s agentic modernization services with AWS Transform to help customers modernize applications and establish AI-ready systems. The partnership could support demand for Kyndryl’s services. Article: Kyndryl Uses Agentic AI to Accelerate Enterprise Modernization with AWS
• Neutral Sentiment: Kyndryl reaffirmed its fiscal 2027 earnings guidance and forecast of $400 million–$500 million in free cash flow. It also continues to target $400 million–$500 million in annualized operating-cost savings by fiscal 2028, offering execution goals without raising expectations. Article: Kyndryl reaffirms free cash flow and cost-savings targets
• Neutral Sentiment: Susquehanna raised its price target from $13 to $16 but kept a neutral rating; Scotiabank lifted its target from $15 to $19 while maintaining a sector-perform rating. The higher targets are supportive, but neither firm adopted a bullish rating. Article: Kyndryl Stock Price Target Raised at Susquehanna
• Negative Sentiment: Revenue declined 1.9% year over year, and reported profit fell even as adjusted profit improved. A separate analysis also argued the post-earnings rally may leave the shares overvalued, which could limit further gains. Article: Kyndryl stock reports higher adjusted profit as revenue slips Article: Kyndryl Holdings could be overvalued

Analysts Set New Price Targets

KD has been the subject of a number of research reports. BMO Capital Markets reaffirmed a “market perform” rating and issued a $16.00 price objective on shares of Kyndryl in a report on Thursday, August 6th. Zacks Research raised shares of Kyndryl from a “strong sell” rating to a “hold” rating in a report on Monday, September 14th. Susquehanna increased their target price on shares of Kyndryl from $13.00 to $16.00 and gave the stock a “neutral” rating in a report on Thursday. JPMorgan Chase & Co. raised their price target on shares of Kyndryl from $13.00 to $14.00 and gave the stock an “underweight” rating in a research report on Monday, August 10th. Finally, Weiss Ratings reaffirmed a “sell (d)” rating on shares of Kyndryl in a research report on Tuesday. Seven equities research analysts have rated the stock with a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat.com, Kyndryl currently has an average rating of “Reduce” and a consensus target price of $17.67.

About Kyndryl

Kyndryl Holdings, Inc (NYSE:KD) is an information technology services company that designs, builds, manages and modernizes mission-critical technology systems for businesses and public-sector organizations. Its services help customers operate and transform complex IT environments, including cloud, data centers, networks, applications and digital workplaces.

The company provides consulting and implementation services as well as ongoing managed services. Its capabilities include cloud solutions, network and edge services, cybersecurity, data and artificial intelligence, application management, enterprise computing and technology modernization.