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Q2 26 EPS
$0.38
BEAT +6.15%
Est. $0.36
Q2 26 Revenue
$3.72B
MISS 3.10%
Est. $3.84B
vs S&P Since Q2 26
-69.6%
TRAILING MARKET
KD -61.4% vs S&P +8.3%
Market Reaction
Did KD Beat Earnings? Q2 2026 Results
Kyndryl delivered a mixed but fundamentally encouraging fiscal second quarter, posting adjusted earnings per share of $0.38 against a consensus estimate of $0.36, a 6.15% beat, even as revenue of $3.72 billion fell 3.10% short of the $3.84 billion Wa… Read more Kyndryl delivered a mixed but fundamentally encouraging fiscal second quarter, posting adjusted earnings per share of $0.38 against a consensus estimate of $0.36, a 6.15% beat, even as revenue of $3.72 billion fell 3.10% short of the $3.84 billion Wall Street expected and declined 1.4% from the year-ago period. The profitability story, however, was the quarter's defining theme: the IT infrastructure services company swung to GAAP net income of $68 million from a net loss of $43 million a year earlier, while adjusted EBITDA surged 15% to $641 million, pushing margins to 17.2% from 14.8%. The revenue softness reflects Kyndryl's deliberate pruning of low-margin legacy contracts, a strategic trade-off that management argues is already paying off in margin expansion and a hyperscaler-related revenue line that jumped 65% year-over-year to $440 million. Looking ahead, Kyndryl reaffirmed its fiscal 2026 guidance, targeting adjusted pretax income of at least $725 million, approximately 18% adjusted EBITDA margins, and free cash flow of roughly $550 million, with stronger second-half revenue expected as backlog conversion accelerates.
Key Takeaways
- • Three-A initiatives (Alliances, Advanced Delivery, Accounts) driving earnings growth and margin expansion
- • Hyperscaler-related revenue of $440 million in Q2, up 65% year-over-year
- • Kyndryl Consult revenues grew 28% year-over-year
- • Deliberate reduction of inherited no-margin and low-margin third-party content in customer contracts
- • Strong projected pretax margin on new signings in high-single-digit range
KD YoY Financials
Q2 2026 vs Q2 2025, source: SEC Filings
KD Revenue by Segment
With YoY comparisons, source: SEC Filings
KD Revenue by Geography
With YoY comparisons, source: SEC Filings
“Our second quarter performance reflects the momentum we're building across key growth priorities – Kyndryl Consult, alliances with hyperscalers and other leading technology providers, and our innovative services in AI, cloud and security. We expect activity to strengthen in the second half of fiscal 2026, supported by our pipeline and the constructive discussions we're having with new and existing customers.”
— Martin Schroeter, Q2 2026 Earnings Press Release
KD Earnings Trends
KD vs Market 30 Day Price Reactions
30-day stock return vs benchmark after each earnings
KD EPS Trend
Earnings per share: estimate vs actual
KD Revenue Trend
Quarterly revenue: estimate vs actual
KD Quarterly Results
5 quarters of earnings data
| Quarter | EPS Est. | EPS Act. | Surprise | Revenue | Rev. Surprise |
|---|---|---|---|---|---|
| Q4 26 MISS FY | $0.47 | $0.18 | -61.62% | $3.77B | +0.19% |
| FY Full Year | $1.74 | $1.46 | -16.20% | $15.09B | +0.05% |
| Q3 26 MISS | $0.60 | $0.52 | -13.75% | $3.86B | -0.67% |
| Q2 26 BEAT | $0.36 | $0.38 | +6.15% | $3.72B | -3.10% |
| Q1 26 BEAT | $0.36 | $0.37 | +1.79% | $3.74B | -1.47% |
| Q4 25 BEAT FY | $0.51 | $0.52 | +2.73% | $3.80B | +0.69% |
| FY Full Year | $1.14 | $1.19 | +4.28% | $15.06B | +0.16% |