Companies /Technology

Kyndryl Holdings Inc

NYSE: KD Information Technology Services
$13.20
▼ $0.05 (−0.38%) today
Markets closed · 6:41pm ET

Q3 2026 Earnings

Reported Feb 9, 2026, 7:13am ET · SEC source
$0.52
Miss −13.75%
EPS · est. $0.60
$3.9B
Miss −0.67%
Revenue · est. $3.9B
+22.6%
Beating market
KD vs S&P since report
1 quarter
Consecutive EPS beats

Market Reaction

% change · around the report
−30%0+30%Feb 9Feb 10report 7:13am ETearnings+0.6%−28.6%
−30%0+30%Feb 9Feb 10earnings+0.6%−28.6%
KD −28.6%S&P 500 +0.6%
−30%0+30%Feb 9Feb 10report 7:13am ETearnings+0.9%−28.6%
−30%0+30%Feb 9Feb 10earnings+0.9%−28.6%
KD −28.6%NASDAQ +0.9%
−30%−20%−10%0Feb 9Feb 17report 7:13am ETearnings−1.6%−8.4%
−30%−20%−10%0Feb 9Feb 17earnings−1.6%−8.4%
KD −8.4%S&P 500 −1.6%
−30%−20%−10%0Feb 9Feb 17report 7:13am ETearnings−1.9%−8.4%
−30%−20%−10%0Feb 9Feb 17earnings−1.9%−8.4%
KD −8.4%NASDAQ −1.9%
−54.92%
Day of report
+5.00%
Next session
+28.33%
One week
+18.60%
30 days

S&P 500 over the same 30 days: −4.02%.

Did KD Beat Earnings? Q3 2026 Results

Kyndryl delivered a mixed fiscal third-quarter report, missing on both the top and bottom lines as an unusual set of charges clouded otherwise steady operational progress. The IT infrastructure services company posted adjusted EPS of $0.52, falling short of the $0.60 consensus estimate by 13.75%, while revenue of $3.86 billion came in 0.67% below expectations despite growing 3.1% year-over-year. The earnings shortfall was compounded by a $38.00 million pretax loss tied to an interim arbitration decision on a legacy pre-spin matter, which weighed on GAAP net income, and the company disclosed that its 10-Q filing will be delayed pending an internal accounting review, a development that has since drawn multiple securities class action lawsuits alleging inadequate internal controls. Against that backdrop, hyperscaler-related revenue surged 58% to $500.00 million, putting Kyndryl on pace to exceed its $1.80 billion full-year hyperscaler target. Looking ahead, management guided for fiscal 2026 adjusted pretax income of $575.00 to $600.00 million and free cash flow of $325.00 to $375.00 million.

Key Takeaways
  • Three-A initiatives: Alliances, Advanced Delivery, and Accounts driving earnings growth and margin expansion
  • Hyperscaler-related revenue of $500 million in Q3, up 58% year-over-year
  • Kyndryl Consult revenue growth of 24% year-over-year
  • Strong projected pretax margin on recent signings in the high-single-digit range
  • AI-enabled automation through Kyndryl Bridge operating platform
  • Operating cash flow improvement to $427 million from $260 million year-over-year

“In the third quarter, we drove growth in Kyndryl Consult and through our alliances with hyperscalers and other leading technology providers. Our signings continue to reflect the vital role we play in the operation of customers' technology estates, our deep expertise in mission-critical services and our innovation in AI, cloud and security.”

Kyndryl CEO, on the earnings call

Forward Guidance & Outlook

For fiscal year 2026, Kyndryl guided to adjusted pretax income of $575 to $600 million, adjusted EBITDA margin of approximately 17.5%, free cash flow of $325 to $375 million, and a constant-currency revenue decline of 2% to 3%. The company is on track to exceed its initial $1.8 billion hyperscaler revenue target for fiscal 2026.

KD YoY Financials

Q3 2026 vs Q3 2025 · SEC filings Q3 2025 Q3 2026
$0$2.0B$4.0B$3.7B$3.9BRevenue$763.0M$843.0MGross Profit$116.0M$91.0MOperating Income$215.0M$57.0MNet Income
$0$2.0B$4.0BRevenueGross ProfitOperating IncomeNet Income

KD Revenue by Segment

Principal Markets$1.4B+10.0%
United States$958.0M+0.0%
Strategic Markets$905.0M+0.0%
Japan$568.0M−2.0%

KD Revenue by Geography

United States$958.0M+0.0%
Japan$568.0M−2.0%

Figures from SEC filings and company reports. Not investment advice.