Business Description
Kyndryl Holdings, Inc. functions as a global technology and IT infrastructure services specialist. The firm delivers a comprehensive portfolio of IT solutions, encompassing cloud computing, foundational enterprise platforms, application development, data analytics, and artificial intelligence capabilities. Additionally, Kyndryl provides services related to modern digital workplaces, robust security and resiliency, alongside advanced network and edge computing solutions. It caters to a diverse clientele across various sectors such as finance, telecommunications, retail, automotive, and logistics. Established in 2020, its corporate headquarters are situated in New York, New York.
Business History
Generated: Jun 12, 2026 3:03amPrice Overview
Last updated: Jun 12, 2026 3:00am (22h ago)Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 0.87
Total Equity: $1.18B
Shares: 233,800,000
Total Debt: $4.09B
Cash: $2.62B
EBITDA: $3.28B
Total Debt: $4.09B
Cash: $2.62B
Revenue: $15.09B
Revenue: $15.09B
Revenue: $15.09B
Total Equity: $1.18B
Tax Rate: 51.9%
Equity: $1.18B
Total Debt: $4.09B
Cash: $2.62B
Current Liabilities: $6.31B
Long-Term Debt: $2.29B
Total Debt: $4.09B
Total Equity: $1.18B
Shares: 233,800,000
Shares: 233,800,000
CapEx: -$608.00M
Shares: 233,800,000
Stock Price: $11.28
Net Income: $198.00M
Industry Benchmarks
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Income Statement (Annual)
Last updated: Jun 12, 2026 3:07am (22h ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Revenue | $18.7B | $17.0B | $16.1B | $15.1B | $15.1B |
| Cost of Revenue | $16.6B | $14.5B | $13.2B | $11.9B | $11.8B |
| Gross Profit | $2.1B | $2.5B | $2.9B | $3.1B | $3.3B |
| Operating Expenses | $2.8B | $2.9B | $2.8B | $2.6B | $2.7B |
| Operating Income | -$669.0M | -$386.0M | $90.0M | $552.0M | $635.0M |
| Net Income | -$2.3B | -$1.4B | -$340.0M | $252.0M | $198.0M |
| EBITDA | -$175.0M | $617.0M | $1.1B | $1.6B | $3.3B |
| EPS | $-10.28 | $-6.06 | $-1.48 | $1.09 | $0.87 |
| EPS (Diluted) | — | — | — | — | — |
Balance Sheet (Annual)
Last updated: Jun 12, 2026 3:03am (22h ago)| Metric | 2022 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Cash & Equivalents | $2.2B | $1.8B | $1.6B | $1.8B | $2.6B |
| Total Current Assets | $5.8B | $5.0B | $4.7B | $4.6B | $5.5B |
| Total Assets | $13.2B | $11.5B | $10.6B | $10.5B | $12.6B |
| Current Liabilities | $4.5B | $4.9B | $4.6B | $4.3B | $6.3B |
| Long-Term Debt | $3.1B | $3.1B | $3.1B | $3.0B | $2.3B |
| Total Liabilities | $10.4B | $10.0B | $9.5B | $9.1B | $11.3B |
| Total Equity | $2.8B | $1.4B | $1.0B | $1.2B | $1.2B |
| Retained Earnings | -$375.0M | -$2.0B | -$2.3B | -$2.1B | -$1.9B |
Cash Flow (Annual)
Last updated: Jun 12, 2026 3:07am (22h ago)| Metric | 2021 | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|---|
| Operating Cash Flow | -$119.0M | $454.0M | $454.0M | $942.0M | $948.0M |
| Capital Expenditure | -$752.0M | -$651.0M | -$651.0M | -$605.0M | -$608.0M |
| Free Cash Flow | -$871.0M | -$197.0M | -$197.0M | $337.0M | $340.0M |
| Acquisitions (net) | $0 | $0 | $0 | $139.0M | $66.0M |
| Debt Repayment | — | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$1.0M | -$22.0M | -$22.0M | -$138.0M | -$398.0M |
| Net Change in Cash | $2.2B | -$306.0M | -$306.0M | $235.0M | $834.0M |
Analyst Estimates (Annual)
Last updated: Jun 12, 2026 3:00am (22h ago)| Metric | 2026 | 2027 | 2028 | 2029 |
|---|---|---|---|---|
| Revenue |
$15.1B $15.0B – $15.1B
|
$14.9B $14.6B – $15.1B
|
$15.0B $14.4B – $15.4B
|
$15.2B $15.2B – $15.2B
|
| EBITDA |
$6.4B $6.4B – $6.5B
|
$6.4B $6.2B – $6.5B
|
$6.4B $6.1B – $6.6B
|
$6.5B $6.5B – $6.5B
|
| Net Income |
$414.6M $393.2M – $436.1M
|
$420.0M $389.3M – $450.7M
|
$589.4M $535.0M – $643.9M
|
$637.3M $621.3M – $653.3M
|
| EPS | — | — | — | — |
Growth Trends (YoY %)
Last updated: Jun 12, 2026 3:07am (22h ago)| Metric | 2023 | 2024 | 2025 | 2026 |
|---|---|---|---|---|
| Revenue Growth | -8.7% | -5.7% | -6.2% | +0.2% |
| Gross Profit Growth | +20.0% | +13.3% | +9.8% | +4.6% |
| Operating Income Growth | +42.3% | +123.3% | +513.3% | +15.0% |
| Net Income Growth | +40.4% | +75.3% | +174.1% | -21.4% |
| EBITDA Growth | +452.6% | +84.3% | +36.5% | +111.2% |
Insider Trading (Recent)
Last updated: Jun 12, 2026 3:06am (22h ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-03 | Ringes Mark | F-InKind | 525.00 | $12.25 | $6,431 |
| 2026-06-03 | Paulek Mark D | F-InKind | 437.00 | $12.25 | $5,353 |
| 2026-06-03 | Keinan Elly | F-InKind | 13,894.00 | $12.25 | $170,202 |
| 2026-06-03 | Chugh Harsh | F-InKind | 651.00 | $12.25 | $7,975 |
| 2026-06-03 | Schroeter Martin J | F-InKind | 19,407.00 | $12.25 | $237,736 |
| 2026-06-01 | Schroeter Martin J | A-Award | 496,063.00 | $0.00 | $0 |
| 2026-06-02 | Schroeter Martin J | F-InKind | 20,776.00 | $12.62 | $262,193 |
| 2026-06-01 | Chugh Harsh | A-Award | 55,119.00 | $0.00 | $0 |
| 2026-06-02 | Chugh Harsh | F-InKind | 1,157.00 | $12.62 | $14,601 |
| 2026-05-28 | Keinan Elly | A-Award | 309,440.00 | $0.00 | $0 |
| 2026-05-28 | Keinan Elly | F-InKind | 158,786.00 | $12.16 | $1.9M |
| 2026-05-28 | Schroeter Martin J | A-Award | 427,516.00 | $0.00 | $0 |
| 2026-05-28 | Schroeter Martin J | F-InKind | 205,913.00 | $12.16 | $2.5M |
| 2026-05-28 | Paulek Mark D | A-Award | 36,646.00 | $0.00 | $0 |
| 2026-05-28 | Paulek Mark D | F-InKind | 10,757.00 | $12.16 | $130,805 |
| 2026-05-28 | Ringes Mark | A-Award | 10,023.00 | $0.00 | $0 |
| 2026-05-28 | Ringes Mark | F-InKind | 3,615.00 | $12.16 | $43,958 |
| 2026-05-28 | Chugh Harsh | A-Award | 40,718.00 | $0.00 | $0 |
| 2026-05-28 | Chugh Harsh | F-InKind | 9,917.00 | $12.16 | $120,591 |
| 2026-04-01 | Paulek Mark D | 0.00 | $0.00 | $0 |
Narrative Economics
Delvantic AI Findings
The raw numbers tell a more interesting story than "melting ice cube." Revenue has stabilized hard: FY2026 at $15.09B vs FY2025 at $15.06B — essentially flat after three years of 5-8% declines. The quarterly cadence is also stable in a $3.7-3.9B band for eight straight quarters. Gross margin expanded from 11.3% (FY22) to 21.8% (FY26), and operating income swung from -$669M to +$635M — a $1.3B swing on a shrinking revenue base. That's not a melting ice cube; that's a completed restructuring. Operating CF of $948M and FCF of $340M on a $2.48B market cap is a 13.7% FCF yield. EV/EBITDA of 1.79x is genuinely distressed-multiple territory for a company that just posted positive net income two years running.
The synthesis verdict ("Disconnected from Fundamentals") and Market Forces ("avoid") are, in my read, fighting the last war. They're anchored on the FY22-FY24 disaster and the revenue decline narrative. But the most recent quarter (Q1 FY27, period ending 2026-03-31 — note the fiscal calendar) shows revenue +0.8% YoY and the trailing four quarters are flat-to-slightly-up. The Pre-Flight "deep-value-turnaround" framing is closer to right than the synthesis layer's dismissal. Where I'd push back on Pre-Flight: the most recent quarter's net margin collapsed to 0.5% from 1.8% sequentially, and FY24 NI of $215M in Q3 looks like a tax/one-time benefit (it dwarfs every other quarter), which means the "improving profitability" trajectory is lumpier than the annual roll-up suggests. Strip that quarter and TTM NI is closer to $150M, not $198M, and the P/E moves from 12.8x toward ~16x.
The contrarian-to-contrarian case: IT services is structurally challenged by hyperscalers and offshore consultancies; Kyndryl's $15B revenue base includes a large IBM-mainframe-adjacent book that has real long-tail decay risk. The balance sheet tile is blank on total debt and equity — that's the single biggest analytical gap here. Kyndryl carried roughly $3B+ in long-term debt post-spin; without confirming current leverage, the EV/EBITDA of 1.79x could be understating enterprise value materially. Current ratio of 0.88 is a yellow flag for a services business. The insider activity is entirely awards and tax-withholding (F-InKind), zero open-market buying — management isn't signaling conviction at $11.28 either. And the Narrative layer is right that this is "fragile" — one bad quarter and the bid disappears because there's no cult holding it.
Net: I dissent from the synthesis "Disconnected from Fundamentals / avoid" verdict. The math is too cheap to dismiss. 0.20x sales, 1.8x EV/EBITDA, 13.7% FCF yield, and revenue that has demonstrably stopped declining is the textbook setup for a deep-value re-rating — not a guaranteed one, but the risk/reward asymmetry is favorable. Fair value on a normalized basis: if FY27 FCF holds at $350-400M and the market grants even a modest 8% FCF yield (still cheap for stabilized services), that's $4.4-5.0B equity value, or $20-22/share — roughly 80-95% upside. The bear case requires revenue to resume declining AND margins to compress, which the last eight quarters don't support. I'd want to verify total debt before sizing, but the prior models are overweighting the legacy decline story and underweighting that the stabilization has already happened on the tape.
GPT Critique
Kyndryl Holdings' financial performance indicates a company undergoing significant transformation. Revenues have stabilized at around $15 billion annually after a sharp decline from $18.66 billion in 2022. This stabilization, coupled with a notable improvement in gross margins from 11.3% in 2022 to 21.8% in 2026, suggests a successful restructuring. Operating income has turned positive, reaching $635 million in 2026 from a loss of $669 million in 2022. This turnaround is underscored by a decent free cash flow of $340 million, giving a substantial FCF yield relative to its market cap. The low EV/EBITDA ratio of 1.79x further supports the notion that Kyndryl is trading at distressed levels, potentially undervaluing the company if its restructuring efforts hold.
I agree with Opus that Kyndryl's narrative as a "melting ice cube" is misleading given the evidence of revenue stabilization and margin improvement. Indeed, the company's recent financials reflect a completed restructuring rather than a business in decline. However, I disagree with Opus's view that the FCF yield and EV/EBITDA are sufficient indicators for undervaluation without considering the missing debt figures. The absence of total debt and equity data is a significant oversight, as it directly affects the enterprise value calculation and risk assessment. Opus emphasizes the potential undervaluation based on FCF yield and EV multiples, but these metrics could be misleading if leverage is higher than assumed.
Moreover, Opus rightly questions the sustainability of profitability improvements, noting the variability in net income, particularly the anomalous Q3 FY24 net income. This skepticism is warranted as the recent quarter's net margin fell to 0.5% from 1.8%, highlighting potential volatility in earnings. Therefore, while I concur with Opus that the recent financials show promise, there's a need for caution in assuming this trend will persist without further evidence of debt stabilization.
A skeptic might argue that Kyndryl's challenges remain significant. The company's reliance on legacy IBM contracts and the threat from more agile competitors could pressure both revenue and margins. Furthermore, the lack of insider buying despite the low share price may imply management's uncertainty about the company's prospects. The fragile narrative and current ratio of 0.88 also suggest potential liquidity issues, adding to the risk profile.
Advanced Analysis Forensic deep-dive · two lenses
Quality at 5 and Value at 15 are telling a consistent story: this is a genuine operational turn (margin curve up four straight years, FCF inflected, clean accruals, Beneish fine) wrapped in a sub-scale, 4%-margin, Altman-distress-zone services carve-out that's still shrinking on the top line. At $11.28 I'm getting maybe 20–35% upside to a deserved $13–16, which is real but not the 2x asymmetry I want when equity sits behind $1.5B of net debt in a commoditized industry. The market is pricing the pre-turn IBM stepchild; reality is somewhere between that and a self-funding services business — and the gap, while genuine, deserves a balance-sheet haircut.
My play: open a starter at ~25–33% of target weight here (call it 50–75 bps in a diversified book), and explicitly reserve the rest for sub-$9, which is where Lens 2 says it becomes a fat pitch and where I'd back up the truck to a full 2% position. I add aggressively on any quarter that shows revenue flat-to-up year-over-year with margins holding — that's the catalyst that re-rates this from 'distressed carve-out' to 'self-funding services compounder.' I cut and walk if FCF rolls back negative, if they do a dilutive raise to plug the balance sheet, or if operating margin gives back more than ~100bps. No insider buying and a still-shrinking top line keep me from getting cute with size today — this is a measured nibble on a real inflection, not a conviction pound-the-table call.
Kyndryl, the 2021 IBM managed-infrastructure spinoff, has executed a real operational turn. Gross margin has climbed every single year from 11.3% (2022) to 21.8% (2026), operating margin has swung from -3.6% to +4.2%, and the company crossed into GAAP profitability in 2025 ($252M net income) with $337-340M FCF in the last two years versus cumulative FCF losses of ~$1.27B in the prior three. OCF/NI of 1.38x and accruals of -10.5% of assets say the reported earnings are backed by cash, not accounting sugar, and Beneish M of -2.8 shows no manipulation flags.
The catch is that this is a low-margin IT services business (4% operating margin even after the turnaround) running on a constrained balance sheet: net debt of $1.47B against only $340M of annual FCF, and an Altman Z of 1.22 in the textbook distress zone. Revenue is still contracting on an absolute basis ($18.66B → $15.09B over five years), so the margin gains are coming from shedding unprofitable contracts rather than growth. Dilution is mild (~1.1% CAGR) and buybacks exceed SBC (160.9% ratio), which is shareholder-friendly, but the insider tape is purely award/withholding activity with no open-market conviction buys.
Net: a legitimate self-help story with clean accounting, but not yet a fortress and not yet a proven grower. Quality is improving, not proven.
Verify before trusting this (6)
- Composition of $1.47B net debt — maturity ladder, fixed vs. floating, covenants
- Whether the revenue stabilization in 2026 reflects end of contract pruning or genuine demand return (signings/book-to-bill)
- Customer concentration — legacy IBM-related revenue % and renewal economics
- Pension/OPEB liabilities inherited from IBM spin (often material for Altman Z in services co's)
- Segment-level margins (Kyndryl Consult vs. core managed services) to test whether mix shift is driving margin gains
- Capex intensity — is the FCF sustainable or aided by underinvestment in delivery infrastructure?
The setup is a fallen-angel carve-out trading at ~0.13x sales with a market cap of $2.5B against $19B of revenue and freshly-inflected positive FCF. If you give the business even a mid-single-digit EV/EBITDA on a normalized ~4% operating margin base, deserved equity value lands meaningfully north of $11 — call it $13–16 — once you net out net debt. The e2e synthesis flagged 'Disconnected from Fundamentals,' which I read as the methods diverging wildly (typical for low-margin, high-revenue carve-outs); I'm not anchoring on any single DCF print here.
What's priced in at $11.28 is essentially: revenue keeps shrinking, margins stall around 4%, and the balance sheet stays in the Altman distress zone. That's a plausible bear case, not a heroic one — which is why I can't call this Deep Value. The turnaround is real (clean cash conversion, consistent margin curve) but it's early and sub-scale in a commoditized industry. The gap to deserved value exists but it's a 20–40% gap, not a 2x gap, and it comes with real balance-sheet risk that should haircut the multiple.
Net: modestly cheap, not a fat pitch. You're paid to wait if execution continues, but you're not getting a Graham-style margin of safety.
Verify before trusting this (5)
- FY guidance on revenue stabilization — is the decline narrowing toward flat?
- Net debt trajectory and any refinancing schedule that would re-rate balance-sheet risk
- Signings book-to-bill and AI/cloud consulting bookings mix vs legacy run-off
- Free cash flow conversion sustainability — is the inflection durable or working-capital-aided?
- Segment-level margin disclosure to confirm the 4% op margin is structural, not mix-driven