Kyndryl Holdings Inc. (NYSE: KD) reported fourth-quarter adjusted earnings of $0.18 per share, a wide miss from analyst expectations and a steep drop from a year earlier.
The results come just months after the abrupt departure of Kyndryl’s chief financial officer and general counsel amid a review of its accounting practices. For the upcoming fiscal year 2027, the company guided for revenue to be flat or decline by as much as two percent.
The information-technology services firm, spun out of IBM in 2021, posted the following results for its fiscal fourth quarter ended in March:
Revenue of $3.77 billion was down 0.8 percent from the prior year. Analyst consensus for revenue was varied, with some estimates around $3.75 billion, which Kyndryl beat, while others were as high as $3.87 billion, resulting in a miss. The company’s adjusted earnings per share of $0.18 fell far short of estimates in the $0.43 to $0.46 range and represented a 65 percent decrease from the $0.52 per share earned in the same quarter a year ago.
A bright spot in the report was a 59 percent increase in revenue from cloud computing giants like Microsoft, Google Cloud, and Amazon Web Services, which totaled $1.9 billion for the full fiscal year.
However, that growth failed to translate into a strong forecast. Kyndryl targeted adjusted pretax earnings for fiscal 2027 in a range between $600 million and $700 million on revenue that is projected to be flat to down 2 percent from the $15.09 billion generated in fiscal 2026. The guidance follows a turbulent period for the company, after its CFO and general counsel departed in February following an inquiry from the Securities and Exchange Commission.
The guidance miss signals management expects ongoing turnaround challenges despite strong performance in its hyperscaler business. Investors will watch for further details on the accounting probe and management stability in the coming quarters.
This article is for informational purposes only and does not constitute investment advice.
