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NEW YORK - Kyndryl Holdings , Inc. (NYSE:KD) reported mixed third-quarter results, with earnings beating expectations but revenue falling short, causing shares to drop 3% in after-hours trading Monday.
The world’s largest IT infrastructure services provider posted adjusted earnings per share of $0.51 for the quarter ended December 31, 2024, surpassing analyst estimates of $0.43. However, revenue came in at $3.74 billion, below the consensus forecast of $3.83 billion and down 5% YoY (3% in constant currency).
Kyndryl’s Chairman and CEO Martin Schroeter highlighted the company’s "strong signings growth and significant margin expansion" in the quarter, driven by Kyndryl Consult, Kyndryl Bridge, and alliances with hyperscalers. The company reported total signings of $4.1 billion, up 12% YoY in constant currency.
Despite the revenue miss, Kyndryl raised its fiscal year 2025 outlook for adjusted earnings and cash flow. The company now expects adjusted pretax income of at least $475 million and adjusted free cash flow of approximately $350 million for the full year.
"Once again, we delivered strong progress on our three-A’s initiatives and robust signings growth that demonstrate customer demand for the essential services and insights we offer," said David Wyshner, Kyndryl’s Chief Financial Officer.
Kyndryl Consult, a key growth driver, saw revenues increase by 26% YoY in the third quarter. The company also reported $300 million in revenue tied to cloud hyperscaler alliances, putting it on track to exceed its target of nearly $1 billion for fiscal year 2025.
Looking ahead, Kyndryl expects to deliver constant-currency revenue growth of approximately 2% in the fourth quarter, maintaining its focus on margin expansion and strategic initiatives.
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