"Our performance was once again led by double-digit growth in Control consult and strong momentum in hyperscaler related revenue..."
— Martin Schroeter
03Detailed Report
KD
Kyndryl Holdings Inc
Period
Q2 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 13, 2026
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Executive Summary
In the second quarter of 2025, Kyndryl Holdings Inc (KD) reported a total revenue of $3.774 billion, reflecting a 7% year-over-year decline in constant currency, primarily due to an intentional shift away from lower-margin customers. However, the company experienced a record quarter for signings with a remarkable 132% growth compared to the prior year, leading to an annualized total of $16 billion in signings. The strategic emphasis on high-margin advisory services, demonstrated by a significant increase in Kyndryl Consult revenues, which grew 23% YoY, showcases the company’s resilience amidst a challenging revenue environment. Management remains optimistic about returning to revenue growth in the upcoming quarters, driven by strong growth in consult services and notable advancements in AI integration.
Key Performance Indicators
Revenue
Decreasing
3.77B
QoQ: 0.94% | YoY: -7.34%
Gross Profit
Increasing
750.00M
19.87% margin
QoQ: -6.83% | YoY: 15.21%
Operating Income
Increasing
61.00M
QoQ: -58.78% | YoY: 377.27%
Net Income
Increasing
-43.00M
QoQ: -490.91% | YoY: 69.72%
EPS
Increasing
-0.19
QoQ: -480.00% | YoY: 69.35%
Revenue Trend
Margin Analysis
Financial Highlights
1. Revenue: $3.774 billion (YoY: -7.34%, QoQ: +0.94%)
2. Gross Profit: $750 million (Gross Profit Margin: 19.8%, YoY: +15.21%)
3. Operating Income: $61 million (Operating Income Margin: 1.6%, YoY: +377.27%)
4. Net Income: -$43 million (Net Income Margin: -1.1%, YoY: +69.72%)
5. Adjusted EBITDA: $557 million (EBITDA Margin: 14.8%)
6. Free Cash Flow: $15 million
7. Cash Balance at Quarter End: $1.325 billion
8. Debt: $4.099 billion (Net Debt: $2.774 billion)
Noteworthy Management Comments:
- "We delivered another strong quarter for signings, margins and cash flow generation, with total signings growing 132% year-over-year."
- "The projected pretax margins on our signings continue to be in the high single digits."
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.77B
-7.34%
0.94%
Gross Profit
750.00M
15.21%
-6.83%
Operating Income
61.00M
377.27%
-58.78%
Net Income
-43.00M
69.72%
-490.91%
EPS
-0.19
69.35%
-480.00%
Key Financial Ratios
Gross Profit Margin
Weak
19.90%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Weak
1.62%
Operating margin is below industry norms, profitability concerns
Net Profit Margin
Weak
-0.01%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
0.00%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
-0.04%
Return on equity suggests inefficient capital allocation
Current Ratio
Adequate
1.03
Current ratio meets minimum requirements but limited cushion
Debt to Equity
High Risk
3.85
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Negative
-30.24x
Negative earnings make P/E ratio not meaningful
Price to Book
Premium
4.88x
Trading at premium to book value, reflects strong intangibles or growth
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