Kyndryl Holdings Narrows Loss in Q3 Despite Revenue Decline

Kyndryl Holdings, which was spun off from International Business Machines in 2021, reported a significant reduction in its loss for the third quarter ended Dec. 31. The company's loss narrowed to $12 million, or 5 cents a share, compared to a loss of $106 million, or 47 cents a share, in the same period last year. Adjusted losses were also 5 cents a share, surpassing analysts' expectations of a 26 cents per share loss.

While Kyndryl's revenue declined from $4.3 billion to $3.94 billion, the company attributed this decrease to its efforts in eliminating zero-margin and low-margin third-party content in customer contracts, particularly in its United States and Strategic Markets segments.

Looking ahead to fiscal 2024, Kyndryl raised its adjusted pretax income forecast to at least $150 million, along with an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of at least 14.5%. Previously, the company had projected an adjusted pretax income of at least $140 million and an adjusted EBITDA margin around 14.5%.

Chief Executive Martin Schroeter expressed optimism, stating, "Our strong and consistent execution is enabling us to once again increase our adjusted earnings outlook for the year and stay on track for revenue growth in calendar year 2025."