Kyndryl CEO Schroeter: ‘We Will Help’ Tariff-Impacted Customers

‘Some of our customers will be affected by this, and we will help navigate,’ he says.

Whether customers continue to invest in infrastructure to succeed in the artificial intelligence era or they look for more savings should global tariffs impact their businesses, Kyndryl CEO and Chairman Martin Schroeter sees opportunity for his solution provider.

Schroeter told CRN in an interview that the New York-based company–No. 9 on CRN’s 2024 Solution Provider 500–does not expect direct tariff impacts at this point to its business and it continues to invest in its AI-enabled Kyndryl Bridge operating platform as well as its AI operations (AIOps).

“Some of our customers will be affected by this, and we will help navigate,” he said. “Anything that adds complexity to their environments–because they need to shift the supply chain, or adjust the supply chain, or become more efficient, or whatever it is–we’re in that business.”

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Kyndryl Q4 2025

On Wednesday, Kyndryl reported a return to revenue growth ignoring foreign exchange, with total revenue in its fourth fiscal quarter of $3.8 billion up 1.3 percent year over year. Counting foreign exchange, that revenue fell 1 percent year over year.

For the 2025 fiscal year, which ended March 31, Kyndryl reported $15.1 billion, down 6 percent year over year, 4 percent ignoring foreign exchange.

Kyndryl said it assumes 1 percent revenue growth in fiscal year 2026 ignoring foreign exchange. The company expects an adjusted pretax income of at least $725 million, an increase of at least $243 million year over year.

Schroeter also told CRN that Kyndryl’s growth opportunities cut across industries and the solution provider is interested in more tuck-in acquisitions akin to its 2024 announced purchase of Microsoft partner Skytap.

“None of what’s coming–whether that is regulatory changes or macro changes or new opportunities–none of that happens without having an infrastructure that is robust and resilient and contemporary and fit for purpose,” he said. “And that’s what we do.”

Here’s more of what Schroeter had to say. Answers have been edited for length and clarity.

What are the big takeaways from the quarter?

Another great quarter in the finish of another great year. But, quite frankly, I think the bigger story is not just the data … and our return to growth.

It’s really about the role we play in our customers’ environments, the role we play in the ecosystem now, as evidenced by the work we do, for instance, with our partners, and how we’ve been talking about this for three-and-a-half years, since we spun out.

We said it would take us a little while to get back to growth, but we turned around probably faster than most had expected. We’ve proven out now, not only the investable thesis that we’ve been talking about. But we’ve proven that there is value in what we do.

We’ve proven that there is growth in this marketplace. We’ve proven that the capabilities we’ve built and the partnerships we have formed are really valuable to our customers.

That’s why you see data, for instance, of more than ($)18 billion of signings.

That’s why you see Kyndryl Consult signings and revenue up for the quarter, for the year, and continuing to outperform what others are doing in the marketplace.

So the quarter and the year were a reflection of how important Kyndryl is to the way the world works, how important it is the way our customers run their infrastructure and our role in the ecosystem.

Are economic conditions having any effect on Kyndryl’s business?

We’ve always been in the productivity business and help customers optimize and prepare for any macro environment.

Sometimes that means they call us in to help them find savings and help them optimize. And we can certainly do that with the insights, for instance, coming out of Kyndryl Bridge. We can certainly do that with the talent and the deep insights we have, both in how we run their systems and in our consulting capabilities.

But just as much people are interested in preparing themselves and getting ready for the opportunities or getting ready to handle the future in a robust way with their infrastructure–whether that’s having our customers call us in to help them with data architecture and security and resiliency around AI, or helping them prepare for a new regulatory environment or a new regulatory regime that they need to they need to keep up with–our business has always been a mix of, ‘Help us find savings and then help us reinvest in the things that are top of mind.’

Sometimes those things that are top of mind are challenges, skill shortages, regulatory changes, security concerns. And sometimes those reinvestments are opportunities like GenAI at the edge and innovation on clouds, etcetera.

Things will always change. Things will always be different. The complexity of the world tends to be a good tailwind for the work we do, for the capabilities we have.

For the work and the role we play in the world and with our customers, there is plenty of opportunity.

It’s not like we just woke up in the last three weeks and the world had changed. The world continuously evolved. And we printed 40-plus percent signings growth for the year. And very consistent Kyndryl Consult revenue and signage growth.

And we just guided to a return to revenue growth for the year, which is not something this business has done in many, many, many, many years.

We feel like there’s plenty of opportunity for what we do.

What are the biggest growth opportunities for Kyndryl looking ahead?

The growth is pretty widespread.

We see growth around the world, and we see growth across industries. The infrastructure today is working for our customers, but they also tell us that they need to do a lot more work in order to be ready for what’s coming.

None of what’s coming–whether that is regulatory changes or macro changes or new opportunities–none of that happens without having an infrastructure that is robust and resilient and contemporary and fit for purpose. And that’s what we do.

How about investments within Kyndryl, how is the company transforming for the AI era?

If I broadly talk about our investments, one set of investments will continue into the innovation that we bring to our customers in the form of Kyndryl Bridge and the insight generated for our customers. We’ll continue to build out our AIOps (AI operations) and our FinOps (financial operations) and all the things that sit on our Kyndryl Bridge platform.

We’ll obviously continue to invest in our partnerships because they’re really important to our customers that we show up with the Microsofts and the Googles and the AWSes and Oracles and the SAPs and all and that community.

And then thirdly, we’re going to actually accelerate our investments in our Kyndryl Consult business.

The guide (guidance to what Kyndryl expects to make) is another good step up in profit. The guide is another good step up in cash flow. And consistent with what we pointed to back in November for where we’ll finish in a few years.

That step up and that growth in profit and cash flow include an acceleration in investments in our Consult capabilities and in the countries in which we operate and across the industries in which we operate. So we’re actually accelerating investments given the unique role we play and the unique capabilities we have.

Are acquisitions part of Kyndryl’s strategy looking ahead?

We have one acquisition under our belt (of Skytap, a deal announced in May 2024).

That’s going really, really well. It reflects what I call an ideal situation for us. It’s a position in the market where we know our customers need help, so a technology that’s important to them.

It’s an acquisition that we can engage with a really strong partner–in this case, it’s Microsoft.

It’s an element in the marketplace that we have brand permission to operate because we have such deep technical expertise across that part of the infrastructure.

So that Venn diagram is (in) an acquisition we’ve already done. And we’ll continue to look for the tuck-in acquisitions that meet most of those criteria.

It’s really good to go to market with a partner. You need brand permission, and obviously we have to know about it.

It has to be something that we see the demand for. But we’ll continue to do tuck-in acquisitions as well.

We will generate more cash this year. We’ll be within $1 billion in a couple of years. And so we’ll continue to both reinvest in ourselves, in the business, through acquisitions, some tuck-ins and and we have now a share repurchase program. So we’ll continue to return capital to shareholders as well.

Do you have a message to AI vendors on ways they can work with Kyndryl?

We have a partnership, a really good partnership, with Nvidia. And what did with Nvidia, as an example, is we embedded their toolsets into Kyndryl Bridge, which was really important for our customers, because they don’t need or want another toolset to deal with in order for them to take advantage of this innovation.

So given the role we play as the largest infrastructure provider, Nvidia was, I think, very smart–they’re always very smart–to work with the leading infrastructure services manager so that their toolsets are available within the ways of working that they have today, which for our customer base is Kyndryl Bridge.

And it’s a great model for all the tech vendors to work with and replicate the ways of working our customers have in order to get their technology accepted and as part of the way they operate.

The Nvidia example is a good one, and it’s what we think everybody should be doing. It’s getting their toolsets, the things that their potential customers need, into the largest infrastructure services company so that they can work the way they work.

How is Kyndryl navigating the competitive landscape? Any competition with your former parent, IBM, and its consulting wing?

We’re really the only infrastructure services business solely focused on infrastructure.

There are others who have parts of their business that are in infrastructure. There are others that I would call hobbyists that dabble in infrastructure. But we’re the only one that’s in infrastructure. And we’re also the only one that’s really invested heavily in this space.

So what that means for our customers, what it means for our partners, is that we’re bringing innovation to supplement the other innovation. We work with tech vendors, we work with the cloud providers to complement the innovation that our customers are seeing and are able to consume with our focus on infrastructure.

IBM has an applications focus. They have a high-level, management consulting focus.

I think they’re trying to move into a different space. It’s just not our space.

The reason our customers come to us is because of both the innovation we’re bringing in infrastructure; the deep, deep knowledge we have about their systems; our ability to make things work–we have a very strong engineering culture here, and that strong engineering culture means we can meet customers where they are–in addition to the supplementation of an innovation culture that allows us to not just meet them where they are, but allows us to take them where they want to go.

It’s a unique space and a unique opportunity.

Is the ability to help customers leverage existing infrastructure to meet the AI moment important should the economy impact customers–maybe it’s helpful for overall AI adoption regardless?

We are in the productivity business as well. So we can help our customers optimize, fine-tune, consolidate, etcetera, all in an effort to help them become more efficient with what they have.

And look, 90-plus percent of customers are testing, piloting, trying AI. But fewer than half of those are at a point where they’re seeing the returns.

It’s for a bunch of different reasons, including that you need to figure out, how does this fit into and work with what you already have. And bringing innovation into the kinds of mission critical work we do, bringing innovation into hearts and lungs is really hard.

They ask us for help. And it takes a lot of work to get ready to do that, but you can’t just take care. You can’t just start over. Nobody gets a redo on this. There is tech debt everywhere. Our customer base has built for themselves an increasingly complex hybrid IT environment. And we help them both optimize what they have, and then, as I said, get ready for the future with things like AI.

Kyndryl’s public sector business–and concerns there on cuts by Elon Musk’s DOGE team, or perhaps opportunities are there to help organizations get more efficient?

We really don’t have a federal business.

It’s really small. Not something that we worry about.

We do see opportunities to help customers be more productive. So to the extent that there is a concerted effort to consolidate and optimize and move to the future, then that is absolutely something that we can help with.

We do work with other governments on this topic, and we certainly work with states here in the U.S. to help them modernize and optimize their system. So that’s part of what we do.

Any impact to Kyndryl from tariffs?

In terms of a direct impact, if you will, to Kyndryl, based on everything I’ve seen, which … has been very much on the physical good side, there is no impact to us directly.

Some of our customers will be affected by this, and we will help navigate.

Anything that adds complexity to their environments–because they need to shift the supply chain, or adjust the supply chain, or become more efficient, or whatever it is–we’re in that business.

So I would expect that while there’s no direct impact to Kyndryl, there is sort of a derivative benefit to us because being in the productivity business, when people are focused on productivity, it is a good place to be.

And then from a delivery perspective, you know, we run a global delivery platform, but that’s not a physical goods thing. That’s really about digital services. And we deliver digital services from lots of different places.

Is Kyndryl working to go deeper with its vendor partners, add more vendor partners?

We were very fast to take advantage of the freedom of action we got post-spin (from IBM in 2021).

We have really deep and meaningful partnerships with the hyperscalers, Microsoft within a week, Google a month later, Amazon, etcetera.

We’ve talked a lot about the business that we’ve created around the services that we deliver related to that hyperscaler work. That’s over $1 billion of revenue last year, and from a standing start, by the way.

We created a $1.2 billion business in three years, essentially, because of the role we play in our customers just around hyperscalers.

We talk a lot about hyperscalers. They’re really important to our customers.

But at the same time, we’ve been building deep and meaningful partnerships with the Oracles of the world and the Nvidias and, quite frankly, the SAPs of the world.

In addition to building more than $1 billion from a standing start around from the hyperscalers, we are now working as an SAP Rise (the vendor’s package of tools, services and methodologies for migrating migration to SAP cloud products) partner to help SAP get their customers on Rise and manage those workloads.

We’re already doing that for hundreds of customers. But that’s just another step up, if you will.

With the engineering talent (we have), we have a deep understanding of how our customer systems work. And the the obvious importance of SAP to them, we need to be part of that equation. SAP needs us there, and our customers need us there.

We’ll build another $1 billion business out of the work we do at SAP and Rise over time.

I talked about Nvidia. We do similar partnerships with the Dells of the world and Cisco and others too. As an example, we run more VMware instances than anybody else on the planet. So Broadcom is a partner that we work very closely with to make sure that we can continue to deliver services around that.

So while we focus very heavily and talked about the hyperscalers because they’re important and it’s worthwhile, our ecosystem is much broader. And each of those can be a very big growth opportunity for us over time.

Is Kyndryl acquiring new customers or is the work more so going deeper with existing ones?

We didn’t talk a lot about new customers since the spin because our focus was on bringing our customers on the journey, expanding the wallet share, etcetera.

While we didn’t talk a lot about it, I will tell you that back last year, already, we had added over 300 new customers, even without really focusing on it.

That continues. So while we haven’t talked about it, of course we have new customers. Of course we’re bringing the innovation that they’ve been looking for.

Sometimes we displace (an incumbent partner). Sometimes they were doing the work themselves, but they just don’t have the skills and the long-term ability to invest in the kinds of capabilities one needs to run these complex systems.

So we’ve added a ton of new customers. We continue to add.

The (new customer) logo space for us is coming from incumbents who haven’t invested in this space. So sometimes we’re taking the work, we’re taking the mission from others. And sometimes it’s because the customer just can’t afford to invest at the pace and the magnitude that they need to in order to have a world-class infrastructure, which is what we do.

The signings from last year, again, over ($)18 billion is a record for us. It represents a book-to-build north of 1.2-to-one. So that you know that’s good for future revenue growth. It’s pretty widespread.

Any other details to note on the VMware practice given all the heightened competition around displacing the technology?

Look, VMware is a technology that’s pretty widely implemented.

As the biggest infrastructure manager, I guess it wouldn’t surprise anybody that we run more VMware instances.

While we don’t tend to have architectural control, our customers do, we have to make sure we have the capabilities and the deep expertise so that we can be helpful to them. And that’s what we’re doing.

Any final comments?

The quarter of the year we’re a reflection of, again, what we’ve been talking about for over three years and the ownership of our future and the control of our own destiny that we have, our ability to tell the world we’re going to grow in three-and-a half years once we fix the backlog and we get signings growth, our ability to tell the world where we’re going over the next few years is different from a lot of other companies.

It’s reflective of the role we play, the capabilities that we have, and the trust we’ve built with our customers. As long as we keep investing for innovation, as long as we keep bringing the best engineering skills, and as long as we keep showing up with the companies that matter, the ecosystem that matters, we are very well positioned to deliver what we said we could.

That’s different from most others because in the last three-and-a-half years … the world’s changed quite a bit. There’s inflation, there’s a different view on geopolitics, there’s a different view on regulatory regimes, there’s a different view on macro. All these things have changed.

Kyndryl has been able to predict and then deliver exactly what it said it was going to do over time. And that will continue, because of what we are.