Kyndryl (KD) Q1 2026 Earnings
How Did KD Stock React to Q1 2026 Earnings?
S&P 500 over the same 30 days: +3.07%.
Did KD Beat Earnings? Q1 2026 Results
Yes. Kyndryl reported Q1 2026 earnings of $0.37 a share on Aug 4, 2025, beating the $0.36 consensus estimate by 1.8%. Revenue was $3.7B against a $3.8B estimate.
Kyndryl delivered a mixed fiscal first quarter for 2026, posting an earnings beat alongside a modest revenue shortfall as the IT infrastructure giant's profitability transformation continued to outrun its top-line recovery. Adjusted EPS came in at $0.37, clearing the $0.36 consensus estimate by 1.79%, while revenue of $3.74 billion trailed the $3.80 billion consensus by 1.47%, landing essentially flat year-over-year at just +0.1% growth. The standout driver behind the earnings strength was hyperscaler-related revenue, which surged 86% year-over-year to $400 million, keeping the company on track toward its fiscal 2026 target of $1.80 billion; that momentum, combined with AI-enabled automation through the Kyndryl Bridge platform, helped push adjusted EBITDA up 16% to $647 million with margins expanding to 17.3%. The stock's sharp decline following the report reflected investor focus on the revenue miss, though management reaffirmed its full-year outlook, including adjusted pretax income of at least $725 million and free cash flow of approximately $550 million.
- Hyperscaler-related revenue of $400 million, up 86% year-over-year
- Kyndryl Consult revenues grew 30% year-over-year
- Three-A initiatives (Alliances, Advanced Delivery, Accounts) driving earnings growth and margin expansion
- Trailing twelve-month signings of $18.3 billion, up 43% year-over-year
- Projected pretax margin on recent signings in the high-single-digit range
- AI-enabled automation through Kyndryl Bridge platform
“Our first quarter reflected steady progress across key growth areas of our business, with contributions from Kyndryl Consult, hyperscaler-related activity, scope expansions and productivity gains. Our expertise in mission-critical technology and our unique operational capabilities, including Kyndryl Bridge, are helping customers innovate and creating new growth opportunities for Kyndryl.”
Kyndryl CEO, on the earnings call
What Was Kyndryl's Outlook in Q1 2026?
Kyndryl reaffirmed its fiscal 2026 outlook (April 2025 to March 2026): adjusted pretax income of at least $725 million (a year-over-year increase of at least $243 million), adjusted EBITDA margin of approximately 18% (up ~130 basis points year-over-year), free cash flow of approximately $550 million (reflecting cash taxes of approximately $175 million), and constant-currency revenue growth of 1%. The company is also progressing toward its hyperscaler revenue target of $1.8 billion in fiscal 2026.
KD YoY Financials
| Metric | Q1 2026 | Q1 2025 | Year over year |
|---|---|---|---|
| Revenue | $3.7B | $3.7B | +0.1% |
| Operating Income | $92.0M | $148.0M | −37.8% |
| Net Income | $56.0M | $11.0M | +409.1% |
| Gross Profit | $796.0M | $805.0M | −1.1% |
KD Revenue by Segment
KD Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.