Kyndryl Holdings IncRevenue declined 3% due to IBM headwinds, though AI-led growth offsets some impact.
Kyndryl Holdings reported a 3% year-over-year revenue decline in the first quarter of fiscal 2027, with an adjusted pre-tax loss of $37 million due to $152 million in workforce rebalancing charges. The company delivered 5% revenue growth in the US for the second consecutive quarter, driven by its AI-led modernization approach, while Kyndryl Consult revenue grew 14% and hyperscaler-related revenue streams grew 48% over the last 12 months. Total signings exceeded revenue over the last six months, with 40 deals over $50 million signed in the past year, 30% of which came from scope expansions or new logos. The evolving relationship with IBM, where customers procure hardware and software directly, is creating a persistent headwind that is expected to continue throughout fiscal 2027, with revenue projected to be flat to down 2% in constant currency. Kyndryl reaffirmed its fiscal 2028 targets of over $1.2 billion in adjusted pre-tax income and $1 billion in free cash flow, achievable on low single-digit revenue growth.
Kyndryl Holdings IncRevenue declined 3% due to IBM headwinds, though AI-led growth offsets some impact.
International Business MachinesIBM's direct procurement model creates persistent headwind for Kyndryl, reducing demand for Kyndryl's services.