KD NYSE Russell 1000 Earnings call
Kyndryl (KD) · Q2 2026 results and valuation
Share price: $17.13 · 2026-11-11
Results Q2 2026 vs Q1 2026 · previous quarter · fiscal Q1 2027 · published 5 Aug 2026 and 6 May 2026
Net income turned to a loss from a profit last quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
Turned loss
Net income vs Q1 2026
Outlook given
Net income -55.0M vs 17.0M
Revenue −4.0%
2 · How management spoke
Typical
More upbeat than 55% of company calls
Answers to analysts: typical, in line with the script.
Similar to last call.
3 · What stood out
Guidance
Kyndryl's focus this year is to drive progress across the targeted growth areas of its business, including Kyndryl Consult.
Valuation
Is Kyndryl undervalued?
Reverse DCF. Free cash flow from the last full fiscal year (2026-03-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At −3.9% growth a year (3-year revenue growth), the model's fair value is $0.80 a share — the stock trades 2029% above it. Today's price assumes 7.1% growth a year.
Current price
$17.13
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+7.1% for 10 yrs
Fair value / share
$0.80
Buy below
$0.60
Price vs fair value
Overvalued >200%
Price vs buy-below price
Overvalued >200%
Read between the lines
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Guidance
KD expects meaningfully higher earnings in the second half of the year and stronger working capital to drive free cash flow.
Source quote
“As we move through the year, we expect meaningfully higher earnings, particularly in second half and stronger working capital to drive free cash flow.”
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Guidance
Kyndryl Consult and alliances-related revenue streams are expected to continue to grow, which affects the updated revenue guidance.
Source quote
“Within we expect Kyndryl Consult and our alliances-related revenue streams will continue to grow.”
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Figure
Higher-margin post-spin signings are expected to increase the quality of the revenue base for this year and next.
Source quote
“With more revenue expected to come from higher-margin post-spin signings this year and next, the quality of that revenue base...”
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Fading
Kyndryl Consult and alliances-related revenue streams are expected to keep growing.
Source quote
“Look, I'm not sure that on any individual customer basis that the environment is going to return, let's say, or resume... Yes. Again, given the nature of what we do, the choices our customers have in the environments in which they operate, I think everything -- every bit of technology evolution continues to add complexity.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Next, we expanded our scope with a leading European financial institution to transform its operations and technology while improving efficiency and meeting increasingly complex regulatory requirements.”
“Over the past 4 years, we have addressed most of the focus accounts, leading to improved profitability gains.”
“With the expectation that higher-value signings continue to improve, our focus is clear, drive profitable growth and stronger free cash flow.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-30)
| Metric | Q2 2026period end 2026-06-30 | Q1 2026period end 2026-03-31 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 3.62B | 3.77B | −4.0% | 3.74B | −3.3% |
| Gross profit | 776.0M | 849.0M | −8.6% | 796.0M | −2.5% |
| Operating income | -69.0M | 171.0M | Turned loss | 92.0M | Turned loss |
| Net income | -55.0M | 17.0M | Turned loss | 56.0M | Turned loss |
| EPS | -0.25 | 0.08 | Turned loss | 0.23 | Turned loss |
| P/E today 31.4 | 30.6 | 15.4 | +15.2 | 34.1 | −3.5 |
Topics
Most discussed now
- New Ellen officially starts in the role tomorrow, August 6, and I know she's looking forward to meeting with Kyndryl's investors,...
- Kyndryl's scale gives it an ability to invest there in what is a very common and...
- As well as the European segment of Strategic Markets, like that has been what Kyndryl has continued to see.
- These charges had more than a 4-point impact on adjusted pretax income margin in the quarter.
- Kyndryl's differentiated capabilities, including Kyndryl Bridge and Agentic AI are helping customers deliver tangible business outcomes…
Faded since Q1 2026
- Dropped Customers are telling us that they are eager to embrace innovative solutions and modernization strategies, yet they are increasingly…
- Dropped Both revenue and signings were impacted by extended sales cycles, particularly in the U.K.
- Dropped The second thing that happens is because of the regulation in that European market, they have to get their services,...
- Fading Adjusted EBITDA margin increased 100 basis points, and Kyndryl's adjusted pretax margin increased 60 basis points year-over-year…
Latest announcements
Official filings, newest first.
- Other events · SEC 8-K
- Results of operations · SEC 8-K
- Director or officer change; Shareholder vote results · SEC 8-K
- Director or officer change; Regulation FD disclosure · SEC 8-K
- Results of operations; Restructuring costs · SEC 8-K
- Results of operations · SEC 8-K
- Director or officer change; Regulation FD disclosure · SEC 8-K
- Director or officer change · SEC 8-K