Kyndryl Holdings, Inc. · NYSE:KD
Kyndryl — Q4 2025 Earnings Presentation
27 slides from Kyndryl's earnings presentation, May 8, 2025
Slide 1: Fourth Quarter 2025 Earnings
Fourth Quarter 2025 Earnings May 8, 2025
Slide 2: Disclaimers
Disclaimers Forward-looking statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements often contain words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forec
Slide 3: Speakers
Speakers Lori Chaitman, Global Head of Investor Relations Martin Schroeter, Chairman and Chief Executive Officer David Wyshner, Chief Financial Officer 3
Slide 4: Strong execution in fiscal 2025
Strong execution in fiscal 2025 Signings Earnings Cash flow Progress on Over $18B, up 48% Adjusted pretax income of $482M, Adjusted free cash flow our financials year-over-year in constant currency up $317M year-over-year of $446M Kyndryl Consult Kyndryl Bridge Progress on Signings and revenue growt
Slide 5: We're positioned at the nexus of key secular trends
We’re positioned at the nexus of key secular trends Cybersecurity risks Kyndryl signings Artificial intelligence +48% in constant currency $18.2B Cloud migration $12.5B Industry-wide skills shortages Modernizing complex environments FY24 FY25 Our expanded capabilities and growing market presence are
Slide 6: Our signings growth has been significant and broad-based
Our signings growth has been significant and broad-based $50M+ signings in fiscal 2025 55 large contract signings United States (versus 40 in fiscal 2024) Principal Markets Totaling $10 billion Strategic Markets In 22
Slide 7: Example: Expanding services and growing revenue with a healthcare provider
Example: Expanding services and growing revenue with a healthcare provider Innovative IT partner Increasing agility and future- proofing IT platforms Expanded scope Migrating select workloads to cloud and enhancing security, resiliency, data and AI Kyndryl Consult Modernizing hybrid IT estate, Renew
Slide 8: Kyndryl Consult is delivering substantial signings and revenue growth
Kyndryl Consult is delivering substantial signings and revenue growth Kyndryl Consult revenue +29% ‘Right workload on right platform’ in constant currency $3.0B $2.4B Expanding scope of customer relationships Key drivers: AI, applications and cybersecurity FY24 FY25 Signings up 50% in FY25 in consta
Slide 9: Our competitive advantages enable multiple avenues for growth
Our competitive advantages enable multiple avenues for growth Gaining Increasing demand for market share cloud, security, data and AI services (secular trends) Growing ‘share of wallet’ FY28 Adding new customers that currently insource services Returned to revenue growth in 4Q25 FY25 Demand for our
Slide 10: Focused on delivering an impactful 'triple, double, single'
Focused on delivering an impactful ‘triple, double, single’ Adjusted Adjusted pretax Sources of free cash flow income and margin our revenue $1.2B+ Pre-spin <10% $1B+ signings (lower-margin) 50% High- single- $446M $482M digit >90% margin 3.2% ~[X]% 50% Post-spin margin margin signings (higher-margi
Slide 11: Focused on delivering an impactful 'triple, double, single'
Focused on delivering an impactful ‘triple, double, single’ Adjusted Adjusted pretax Sources of free cash flow income and margin our revenue $1.2B+ Pre-spin <10% $1B+ signings 33% (lower-margin) $725M+ 50% ~$550M High- single- $446M $482M digit >90% 4.7%+ margin 67% margin 50% Post-spin 3.2% signing
Slide 12: Financial highlights
Financial highlights Results reflect continued progress and consistent execution Strategic initiatives driving significant margin expansion Capital returns to shareholders powered by free cash flow Projecting substantial earnings growth again We design, build, manage and modernize the mission-critic
Slide 13: Fiscal fourth quarter 2025 financial results
Fiscal fourth quarter 2025 financial results ($ in millions) Quarter ended Quarter ended March 31, 2025 March 31, 2024 Strategic Markets United States Revenue $3,800 $3,850 $953 $969 Growth, in constant currency 1% (9%) Up 10 pts Quarterly Adjusted EBITDA $698 $566 revenue by segment $605 Adjusted E
Slide 14: Fiscal year 2025 financial results
Fiscal year 2025 financial results ($ in millions) Year ended Year ended March 31, 2025 March 31, 2024 Strategic Markets United States Revenue $15,057 $16,052 $3,617 $3,876 Growth, in constant currency (4%) (6%) Up 2 pts Fiscal year Adjusted EBITDA $2,516 $2,367 revenue by segment $2,358 Adjusted EB
Slide 15: Strong projected margins on signings support our medium-term goals
Strong projected margins on signings support our medium-term goals Gross margin Gross profit book-to-bill 1 Pretax margin expected on post-spin signings expected on post-spin signings 1.5x 26% 26% 26% 1.2x 1.1x 9% 9% 9% Supports our high-single-digit margin target FY23 FY24 FY25 FY23 FY24 FY25 FY23
Slide 16: Balance sheet and cash flow aligned to our strategy
Balance sheet and cash flow aligned to our strategy Adjusted free cash flow Balance sheet and cash flow metrics ($ in millions, twelve months ended March 31) $1.8B $3.2B Cash Debt ($522) $656 $1.4B $4.9B ($148) ($149) Net debt Available liquidity2 ($22) $482 $446 $942M $64M Cash flow from operations
Slide 17: Fiscal 2026 outlook
Fiscal 2026 outlook Fiscal 2026 outlook Adjusted pretax income At least $725 million, a year-over-year increase of at least $243 million Adjusted EBITDA margin Approximately 18%, a year-over-year increase of approximately 130 basis points Adjusted free cash flow Approximately $550 million, reflectin
Slide 18: Investment highlights
Investment highlights Leader in mission-critical enterprise technology services Innovative and differentiated approach to delivery with AI-powered Kyndryl Bridge Competitive advantage stemming from our people, data, expertise, scale and intellectual property Kyndryl Consult leverages our cus
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Slide 20: Our services
Our services Diversified sources Practice Overview Revenue of revenue Delivering seamless, integrated, multicloud management in a 34% Cloud hybrid model Technology, media Financial and telecom services Delivering full line of cybersecurity, business continuity and disaster 13% Security & 14% recover
Slide 21: Recent accolades and industry recognition
Recent accolades and industry recognition A Global Leader in the IDC MarketScape: 2025 Google Cloud Global Partner of the Year Recognized as a Leader in the March 2025 Gartner® Hybrid IT Infrastructure Consulting and Award for Infrastructure Modernization Magic Quadrant for Outsourced Digital Workpl
Slide 22: Fiscal year 2025 adjusted pretax income and adjusted EBITDA
Fiscal year 2025 adjusted pretax income and adjusted EBITDA ($ in millions) $100 $1,278 $2,516 $656 ($125) $172 $435 $482 Pretax Transaction- Intangibles Other Adjusted Depreciation Amortization Interest Adjusted Pretax income related costs amortization, adjustments 1 stock- pretax expense 2 expense
Slide 23: Fiscal year 2025 adjusted EBITDA and adjusted free cash flow
Fiscal year 2025 adjusted EBITDA and adjusted free cash flow ($ in millions) ($522) ($1,327) $2,516 ($119) ($149) $46 $446 Adjusted Net capital Deferred Interest Cash taxes Working capital Adjusted EBITDA expenditures 1 costs 2 paid paid (excl. deferred free cash flow costs) & other 3 1 Net capital
Slide 24: Additional items
Additional items IBM software • Prior to our spin-off, IBM put in place a Kyndryl-specific, escalating structure for our IBM software licenses. Under this contract, the cost of IBM software licenses to us was structured to increase by $200M each year for three consecutive years (CY23, CY24 and CY25,
Slide 25: Definitions and rationale for non-GAAP metrics
Definitions and rationale for non-GAAP metrics We present certain non-GAAP financial measures to provide useful supplemental information to investors. We provide these non-GAAP financial measures as we believe it enhances investors' visibility to management decisions and their impacts on operational
Slide 26: Reconciliation of non-GAAP metrics
Reconciliation of non-GAAP metrics ($ in millions, except per-share amounts) Three months Three months Reconciliation of adjusted pretax income ended ended to adjusted net income (loss) and adjusted EPS March 31, 2025 March 31, 2024 Adjusted pretax income (non-GAAP) $185 $30 Reconciliation of net in
Slide 27: Reconciliation of non-GAAP metrics
Reconciliation of non-GAAP metrics ($ in millions, except per-share amounts) Reconciliation of net income (loss) Twelve months Twelve months Twelve months Twelve months Reconciliation of adjusted pretax income to adjusted pretax income ended ended ended ended to adjusted net income (loss) and adjust