Kyndryl Q4 2025 Earnings: Economic Uncertainty Is Opportunity For This Solution Provider

‘The complexity of the world tends to be a good tailwind for the work we do,’ Kyndryl Chairman and CEO Martin Schroeter said.

Economic uncertainty did not stop Kyndryl from seeing progress on its financials during the final quarter of its fiscal year, with the solution provider reporting record signings of $18.2 billion for the fiscal year, revenue growth ignoring foreign exchange and sharing guidance for $725 million in adjusted pretax income for the next fiscal year.

The New York-based company–No. 9 on CRN’s 2024 Solution Provider 500–also still has confidence in meeting fiscal year 2028 objectives, with Kyndryl CEO Martin Schroeter telling CRN in an interview that Kyndryl is ready to meet customers’ needs whether they turn to Kyndryl to help find ways to save or to help navigate technology investments.

“Things will always change,” Schroeter said. “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.”

Kyndryl reported earnings today for the fourth quarter of its 2025 fiscal year, which ended March 31. The company holds its quarterly earnings call Thursday.

Kyndryl Q4

Kyndryl’s growth opportunities cut across industries, the CEO said. Even with economic uncertainty over global tariff negotiations, Kyndryl itself will continue to invest in its consulting business, its Kyndryl Bridge AI-enabled operating platform, its AI operations (AIOps) and financial operations (FinOps) practices and go deeper with vendor partners ranging from Microsoft and Google to Oracle and SAP.

“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.”

Kyndryl Bridge freed up more than 13,000 delivery professionals and generated annualized savings of about $775 million at year end, beating the goal of $750 million, according to the company.

Tuck-in acquisitions are also on the table for Kyndryl looking ahead, Schroeter said.

The company said to expect adjusted free cash flow in fiscal year 2026 of about $550 million. It reported fourth quarter cash flow from operations of $581 million and adjusted free cash flow of $335 million.

Schroeter told CRN that global tariffs, based on what he’s seen so far, do not directly impact the company.

“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.”

FY 2026 Guidance

Kyndryl said to expect 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.

Adjusted EBITDA margin should be about 18 percent, up 130 basis points year over year.

Q4 In Depth

Kyndryl reported $3.8 billion in total revenue for the fourth quarter, down 1 percent year over year including foreign exchange and up 1.3 percent year over year ignoring foreign exchange.

Pretax income was $118 million compared to a loss of $4 million in the same period a year prior.

Net income was $68 million. In the same period a year prior, Kyndryl lost $45 million in net income.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $698 million, up 23 percent year over year. Adjusted net income was $126 million compared to a net loss for the same period a year prior.

Kyndryl saw $375 million from cloud hyperscaler alliances during the quarter, more than double year over year.

Kyndryl Consult revenue grew 45 percent year over year in the quarter, with singings growing 37 percent year over year.

Adjusted free cash flow for the 2025 fiscal year was $446 million. Kyndryl ended the year with $1.8 billion in cash.

FY 2025 In Detail

Revenues for the entire 2025 fiscal year were $15.1 billion, down 6 percent year over year, 4 percent ignoring foreign exchange.

Kyndryl is working to reduce no-margin and low-margin third-party content in customer contracts to reverse the decline, according to the company.

Pretax income was $435 million compared to a loss of $168 million in fiscal year 2024. Net income was $252 million compared to a net loss of $340 million the prior year.

Adjusted pretax income was $482, almost triple the amount the prior year. Adjusted net income was $285 million compared to a net loss the prior year. Adjusted EBITDA was $2.5 billion, up 6 percent year over year.

The record $18.2 billion in signings was up 46 percent year over year. The company saw 55 contracts in excess of $50 million, up from 40 the prior year and totaling $10 billion across 22 countries.

Kyndryl saw $1.2 billion from cloud hyperscaler alliances during the year, more than double year over year and exceeding its $1 billion target.

Kyndryl’s targeting of contracts with substandard margins brought $900 million in annualized benefits, beating the $850 million target by year end.

Kyndryl Consult revenues grew 26 percent in fiscal 2025 to $3 billion, with signings growing 47 percent.

The company’s stock was flat at about $33 a share after market close Wednesday.