Kyndryl Adjusted Pretax Income Rises 21% Amid Flat Revenues
The infrastructure services provider reported fiscal year 2026 adjusted pretax income of $581 million.
Kyndryl Holdings (KD), the infrastructure services provider, reported a 21% increase in fiscal year 2026 adjusted pretax income to $581 million.
The results reflected a period of transition as the company shifted its revenue mix toward high-growth segments despite a decline in overall contract signings. While total revenues remained flat on a reported basis at $15.1 billion, they fell 3% on a constant currency basis.
Growth was driven primarily by strategic partnerships and consulting. Hyperscaler-related revenue grew 59% year-over-year to $1.9 billion, surpassing the company's $1.8 billion target. Kyndryl Consult revenues also increased 18% year-over-year to $3.5 billion.
These gains occurred alongside a contraction in the company's pipeline. Fiscal year 2026 signings totaled $13.5 billion, down from $18.2 billion in fiscal 2025. However, the company said the percentage of large deals exceeding $50 million that consisted of new scope and new logos doubled to over 30% from approximately 15% in the prior year.
For the fourth quarter ended March 31, 2026, revenues were $3.8 billion, down 1% reported and 5% in constant currency year-over-year. Pretax income for the quarter rose 12% year-over-year to $132 million, though adjusted EBITDA declined slightly to $688 million from $698 million in the prior-year period.
Fiscal year 2026 adjusted EBITDA for the full year increased 6% to $2.7 billion. Free cash flow decreased to $406 million from $419 million in fiscal 2025.
Kyndryl expects constant-currency revenue for fiscal year 2027 to be flat to down 2%. The company projects adjusted pretax income between $600 million and $700 million and free cash flow between $400 million and $500 million.
The company appointed Ellen Johnson as incoming Chief Financial Officer, effective August 6, 2026, and Andrew Bonzani as General Counsel and Secretary. During fiscal 2026, Kyndryl repurchased 11.6 million shares for $304 million, leaving $302 million of remaining capacity under its November 2024 authorization.