IT services provider Kyndryl has today missed Wall Street estimates for the first quarter as lower demand and charges tied to its workforce rebalancing plan weighed on results.
The company’s shares closed more than 5% lower yesterday. They have declined nearly 50% so far this year.
Revenue in Kyndryl’s largest geographic segment, Principal Markets, fell 7% in the quarter to $1.26 billion.
The company’s first-quarter revenue of $3.62 billion missed analysts’ average estimate of $3.64 billion, according to data compiled by LSEG.
Its pretax loss for the quarter came in at $69m, compared with estimates of a $61.5m loss.
The New York-based company was spun off from IBM in 2021 and provides IT infrastructure, cloud, AI and cybersecurity services to businesses.
Kyndryl also incurred $152m of workforce rebalancing charges during the first quarter.
The company had announced a “workforce rebalancing plan” last quarter aimed at cutting annual operating costs by $400-500m by fiscal 2028.
Kyndryl reaffirmed its fiscal 2027 outlook for adjusted pretax income of $600-700m and free cash flow of $400-500m.
Adjusted loss per share for the quarter was 12 cents, narrower than analysts’ estimate of a 14-cent loss.
Total signings rose to $3.9 billion in the quarter from $3.2 billion a year earlier.
Kyndryl signed 10 customer contracts exceeding $50m each during the quarter.
The company has partnered with Amazon Web Services, Google Cloud and Microsoft Azure to help customers move and manage their IT systems in the cloud.
It also provides IT support and maintenance to Irish companies including Bank of Ireland.
