One of the world's largest IT infrastructure services providers, Kyndryl keeps computer systems, networks, and security running for companies across cloud, data, and digital workplace services in dozens of countries. It was spun off from IBM in 2021, inheriting the tech giant's infrastructure business. Its name blends "kinship" and "tendril" — chosen to suggest strong relationships and steady new growth.
Kyndryl posts a $55M net loss as workforce rebalancing charges increase to $152M, overshadowing a 22% rise in signings.
Kyndryl returned to a net loss this quarter. fell 3% to $3.6 billion and the company reported a $55 million net loss, driven by a $152 million charge for workforce rebalancing that management expects will yield $400-$500 million in annual payroll savings. The company is betting on cost cuts to restore profitability even as new business signings rose 22%.
Key takeaways
fell 3% to $3.6 billion, as growth in Kyndryl Consult and hyperscaler-related work was offset by lengthening sales cycles and evolving content from its former parent.
The company reported a net loss of $55 million, a swing from a $56 million profit a year ago, driven by a $152 million workforce rebalancing charge compared to just $25 million in the prior-year period.
fell 21% to $512 million, with the Strategic Markets down 62% and Principal Markets down 24%, as the higher rebalancing charges weighed on results.
Section summaries
Management's Discussion and Analysis
Kyndryl Q1 FY2027 revenue fell 3% to $3.6B with a $55M net loss, driven by $152M in workforce rebalancing charges.
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Total decreased 3% to $3.6 billion, with growth in Kyndryl Consult and hyperscaler-related revenues offset by lengthening sales cycles and evolving content from the former parent.
Total signings increased 22% to $3.9 billion, with growth in the United States, Principal Markets, and Strategic Markets segments.
was a use of $310 million, driven by payments for multi-year software renewals and incentive compensation, while was negative $459 million.
The United States was the only geographic to report growth, rising 5% to $954 million, while Japan, Principal Markets, and Strategic Markets all declined.
What changed
The question of whether constant-currency would turn positive was answered with a continued decline; reported revenue fell 3% and the company noted lengthening sales cycles and evolving former-parent content as headwinds.
The trajectory of was stable at 21.4%, down slightly from 22.5% in the prior quarter but up 0.2 points , showing the cost-of-services ratio is holding near recent levels.
The pace of share repurchases appears to have paused, with declining 9.7% sequentially to $1.2 billion and cash and equivalents falling to $2.1 billion, while remained at $3.9 billion.
The material weaknesses in internal controls and the SEC investigation flagged in prior filings remain unresolved, with no new disclosures on remediation or regulatory outcomes in this report.
What to watch
Whether the $152 million in leads to the expected $400-$500 million in annual payroll savings and a return to net profitability in the next quarter.
The trajectory of constant-currency now that signings have grown 22% — specifically whether the new business commitments can overcome the lengthening sales cycles and former-parent content headwinds.
generation after a negative $459 million quarter, and whether the company can fund operations without further drawing on its $2.2 billion in available capacity.
Any updates on the SEC investigation into cash management practices or the remediation of material weaknesses in internal controls, which remain unaddressed.
United States grew 5% to $954 million, while Japan, Principal Markets, and Strategic Markets declined 8%, 7%, and 3% respectively; Japan grew 2% in .
fell 21% to $512 million, with the largest declines in Strategic Markets (down 62%) and Principal Markets (down 24%), primarily due to higher .
surged to $152 million from $25 million in the prior-year period, with management expecting $400-$500 million in annual payroll savings from these actions.
Net cash used in operating activities was $310 million, driven by payments for multi-year software renewals and incentive compensation; the company has $2.1 billion in cash and $2.2 billion in available capacity.
Total increased 22% to $3.9 billion, with growth in the United States, Principal Markets, and Strategic Markets segments.
Quantitative and Qualitative Disclosures About Market Risk
For our disclosures about market risk, see the information under the heading “Quantitative and Qualitative Disclosures About Market Risk” in the Form 10-K. There have been no material changes to the Company’s disclosure about market risk in the Form 10-K.
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For our disclosures about market risk, see the information under the heading “Quantitative and Qualitative Disclosures About Market Risk” in the Form 10-K. There have been no material changes to the Company’s disclosure about market risk in the Form 10-K.
For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Form 10-K for the year ended March 31, 2026. There have been no material changes with respect to the risk factors disclosed in the Form 10-K.
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For a discussion of our potential risks and uncertainties, see the information under the heading “Risk Factors” in our Form 10-K for the year ended March 31, 2026. There have been no material changes with respect to the risk factors disclosed in the Form 10-K.