GICS Sector : Technology
Kyndryl Holdings, Inc.operates as a technology services company and IT infrastructure services provider worldwide.The company offers cloud services; core enterprise and cloud services; application, data, and artificial intelligence services; digital workplace services; security and resiliency services; and network services and edge services.
Kyndryl reported a revenue of $3.7 billion for the second quarter of 2026, a decline of 1% year-over-year, or a 3.7% decline in constant currency. Despite the revenue decline, the company saw a significant increase in adjusted EBITDA, which rose 15% year-over-year to $641 million, resulting in an adjusted EBITDA margin expansion of 250 basis points to 17.2%. The adjusted pretax income grew 171% to $123 million. The company's actual EPS came out at $0.38, beating estimates of $0.35.
Publication Date: Nov -09
Kyndryl Consult revenue grew 25% year-over-year in constant currency, reaching an annual pace of $3.4 billion. Hyperscaler-related revenues have doubled since last year and are tracking above the initial $1.8 billion fiscal 2026 target. This growth is a significant driver of the company's revenue and is expected to continue in the future.
Kyndryl reaffirmed its outlook for fiscal year 2026 and increased its share repurchase program by $400 million, reflecting confidence in achieving its fiscal 2028 objectives. The company expects constant currency revenue growth in fiscal 2026 to be positive 1%, implying revenue growth of 4% to 5% in the second half. Analysts estimate next year's revenue growth at 3.3%.
Kyndryl's current valuation metrics, including a P/E Ratio of 14.92, P/B Ratio of 4.95, and EV/EBITDA of 8.26, indicate a reasonable valuation. The company's top priorities for capital allocation are to maintain strong liquidity, remain investment-grade, reinvest in the business through tuck-in acquisitions, and buy back stock. With a net leverage of 0.7x adjusted EBITDA, the company is well-positioned to execute its capital allocation strategy.
The company's advanced delivery initiative is generating $875 million of annual savings, and it has won 450 new logos over the last 4 years. AI-related work is a growing area for Kyndryl, with about 25% of its signings having AI-related content. The company is focused on data architecture and data migration services that allow customers' AI models to operate, and has seen broad-based demand across industries.
Franklin Resources Inc. Purchases 29,588 Shares of Kyndryl Holdings, Inc. $KD
Dec -02
208,430 Shares in Kyndryl Holdings, Inc. $KD Acquired by Boston Partners
Nov -29
Kyndryl Wins Wall Street Support As 'Triple A' Plan Fixes Profits After IBM Split: Analyst
Nov -28
Fidelity Stock Selector Mid Cap Fund Q3 2025 Performance Review
Nov -26
AXQ Capital LP Reduces Stock Holdings in Kyndryl Holdings, Inc. $KD
Nov -25
Kyndryl Launches Agentic AI Framework and Services for the Mainframe
Nov -24
Kyndryl: Revenue Trade-Off Drives Margins, Stock Remains Deeply Undervalued
Nov -20
Kyndryl Extends Partnership with Vodafone Idea Limited to Deliver Automated IT Operations and Delivery Transformation
Nov -20
Kyndryl Holdings, Inc.'s Technology Services segment growth of 10.42% is driven by increasing demand for cloud-based services, digital transformation, and cybersecurity solutions. Additionally, the company's strategic partnerships, investments in AI and automation, and expansion into new markets are contributing to its growth momentum.
Kyndryl's Cloud Services provide a comprehensive suite of cloud-based solutions, including cloud migration, cloud management, and cloud security, to help businesses optimize their cloud infrastructure and reduce costs.
Kyndryl's Network Services provide a range of solutions to design, build, and manage complex network infrastructures, including network optimization, network security, and network management.
Kyndryl's Cybersecurity Services provide a comprehensive suite of security solutions, including threat detection, incident response, and security consulting, to help businesses protect themselves from cyber threats.
Kyndryl's Application Services provide a range of solutions to design, develop, and manage custom applications, including application modernization, application integration, and application management.
Kyndryl's Data and AI Services provide a range of solutions to help businesses extract insights from their data, including data analytics, data science, and artificial intelligence.
Kyndryl's IT Operations Services provide a range of solutions to manage and optimize IT operations, including IT service management, IT monitoring, and IT automation.
Kyndryl's Consulting Services provide strategic guidance and advisory services to help businesses optimize their IT infrastructure and operations.
The threat of substitutes for Kyndryl Holdings, Inc. is medium due to the presence of established competitors in the IT services market. While there are some substitutes available, they are not significantly cheaper or more convenient, limiting their impact.
The bargaining power of customers for Kyndryl Holdings, Inc. is low due to the company's strong brand reputation and the complexity of its services, making it difficult for customers to switch to alternative providers.
The bargaining power of suppliers for Kyndryl Holdings, Inc. is medium due to the presence of multiple suppliers in the market, but the company's large scale and established relationships with suppliers limit their bargaining power.
The threat of new entrants for Kyndryl Holdings, Inc. is low due to the high barriers to entry in the IT services market, including the need for significant capital investment and specialized expertise.
The intensity of rivalry for Kyndryl Holdings, Inc. is high due to the presence of several established competitors in the IT services market, leading to a highly competitive environment.
| Value | |
|---|---|
| Debt Weight | 75.66% |
| Debt Cost | 3.95% |
| Equity Weight | 24.34% |
| Equity Cost | 12.17% |
| WACC | 5.95% |
| Leverage | 310.92% |
Value: 8.7
Growth: 6.0
Quality: 4.0
Yield: 4.0
Momentum: 4.5
Volatility: 3.0
1-Year Total Return ->
Value: 1.1
Growth: 6.6
Quality: 6.8
Yield: 0.0
Momentum: 8.0
Volatility: 3.7
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Value: 5.2
Growth: 4.7
Quality: 4.1
Yield: 0.0
Momentum: 7.5
Volatility: 4.3
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Value: 3.9
Growth: 6.9
Quality: 7.0
Yield: 0.0
Momentum: 2.5
Volatility: 5.3
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Value: 9.3
Growth: 4.4
Quality: 4.8
Yield: 0.0
Momentum: 1.0
Volatility: 5.0
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Value: 3.0
Growth: 8.4
Quality: 5.0
Yield: 0.0
Momentum: 0.5
Volatility: 5.0
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