Kyndryl Q1 revenue misses estimates on weak segment performance

Kyndryl Holdings

05/08/2026 12:14

Overview
US enterprise tech services provider's fiscal Q1 revenue fell 3% and slightly missed analyst expectations
Adjusted EBITDA for fiscal Q1 beat estimates
Company incurred $152 mln workforce rebalancing charges and repurchased 5 mln shares for $64 mln

Outlook
Kyndryl reaffirms fiscal 2027 adjusted pretax income guidance of $600 mln to $700 mln
Company expects fiscal 2027 free cash flow of $400 mln to $500 mln
Kyndryl forecasts fiscal 2027 constant-currency revenue flat to down 2%

Result Drivers
WORKFORCE REBALANCING - $152 mln in workforce rebalancing charges weighed on Q1 results as part of ongoing streamlining efforts
SEGMENT PERFORMANCE - U.S. segment revenue grew 5%, while Japan, Principal Markets, and Strategic Markets declined year-over-year
CONSULT & HYPERSCALER GROWTH - Kyndryl Consult revenue grew 10% and hyperscaler-related revenue rose 34% year-over-year

Company press release: ID:nPnhDYzVa

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
Slight Miss*
$3.62 bln
$3.64 bln (5 Analysts)
Q1 Adjusted Loss Per Share
 
$0.12
 
Q1 Loss Per Share
 
$0.25
 
Q1 Net Loss
 
$55 mln
 
Q1 Adjusted EBITDA
Beat
$512 mln
$445.04 mln (4 Analysts)
*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 5 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the it services & consulting peer group is "buy."
Wall Street's median 12-month price target for Kyndryl Holdings, Inc. is $15.00, about 2.1% above its August 4 closing price of $14.69
The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 6 three months ago

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For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)