10-K · May 29, 2026
Kyndryl's 2026 Annual Report shows flat revenue of $15.1 billion, driven primarily by a decline in the U.S. segment, offset by growth in Kyndryl Consult and hyperscaler-related revenues. The company faces challenges…
Earnings analysis · 10-Q
KD earnings analysis
Filed November 4, 2026 · Our reading of the company's report
The latest report
Kyndryl exceeded consensus with $3.651 billion of revenue and $0.42 of adjusted EPS, and reaffirmed its fiscal 2027 outlook. However, GAAP diluted EPS was $0.27, quarterly free cash flow was negative $34 million, and…
Read full summary
Kyndryl exceeded consensus with $3.651 billion of revenue and $0.42 of adjusted EPS, and reaffirmed its fiscal 2027 outlook. However, GAAP diluted EPS was $0.27, quarterly free cash flow was negative $34 million, and disclosure controls remained ineffective as of September 30, 2026 because of material weaknesses. The unresolved control issues, paused buybacks, and newly established $3.15 billion commercial paper program outweigh the earnings beat in assessing the filing.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.27
What stood out
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Revenue and EPS beat estimates
Revenue was $3.651 billion, exceeding the $3.6184 billion consensus estimate by approximately $32.6 million, while GAAP diluted EPS was $0.27 and adjusted EPS was $0.42.
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Fiscal 2027 outlook reaffirmed
Management maintained fiscal 2027 targets of $600 million-$700 million in adjusted pretax income and $400 million-$500 million in free cash flow, with constant-currency revenue expected to be flat to down 2%.
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Control remediation advanced
During the second quarter of fiscal 2027, management completed the design and implementation of enhanced controls addressing the material weaknesses and began testing operating effectiveness.
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Share repurchases executed before pause
The company repurchased 2,516,410 shares during the quarter, although the program was temporarily paused in September 2026 to preserve financial flexibility.
What to watch
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Material weaknesses remain unresolved
Management concluded that disclosure controls were not effective as of September 30, 2026 because of material weaknesses in internal control over financial reporting. The company expects remediation as of March 31, 2027, but the controls must operate for a sufficient period before the weaknesses can be considered remediated.
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Negative quarterly free cash flow
The company reported negative quarterly free cash flow of $34 million, while fiscal 2027 guidance calls for full-year free cash flow of $400 million-$500 million, creating execution risk against the outlook.
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Capital returns paused
Kyndryl temporarily paused its share repurchase program in September 2026 to preserve financial flexibility, after repurchasing 2,516,410 shares during the quarter.
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New short-term funding exposure
The company established a commercial paper program with a maximum aggregate principal amount of $3.15 billion and maturities of up to 397 days. No borrowings had been initiated under the program, but future issuance would reduce available capacity under the revolving credit facility.
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Multiple control deficiencies
The company disclosed three categories of material weaknesses involving tone at the top and finance competency, information and communication controls, and investigation and escalation of hotline complaints.
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No risk-factor improvement disclosed
The 10-Q states that there were no material changes to the risk factors in the fiscal 2026 Form 10-K, limiting evidence of improvement in the company’s previously disclosed risk profile.
Management's outlook
The 10-Q does not provide numeric EPS or revenue guidance. The company reaffirmed its fiscal 2027 outlook in the associated earnings disclosure: adjusted pretax income of $600 million-$700 million, free cash flow of $400 million-$500 million, and constant-currency revenue flat to down 2%.
Earlier filings 4
10-Q · February 17, 2026
Kyndryl Holdings reported a revenue of $3.86 billion for Q3 2026, representing a 3% increase versus the prior year, although it missed analyst expectations with a diluted EPS of $0.52 compared to the estimated $0.56.…
10-Q · November 5, 2025
Kyndryl Holdings, Inc. reported revenue of $3.72 billion for the three months ended September 30, 2025, a slight decline of 1% year-over-year, while net income increased to $68 million, signifying a turnaround in…
10-Q · August 5, 2025
Kyndryl Holdings, Inc. (KD) reported a slight increase in revenue to $3.74 billion for the quarter ended June 30, 2025, up 0.1% from the prior year despite a 3% decline in constant currency. The net income rose…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.