Kyndryl (KD) Q3 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Mon, February 9, 2026 astatine 9:28 AM CST 32 min read

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Monday, February 9, 2026 astatine 8:30 a.m. ET

• Chairman and Chief Executive Officer — Martin J. Schroeter

• Interim Chief Financial Officer — Harsh Chug

• Vice President, Investor Relations — Lori C. Chaitman

I'd present similar to crook the telephone implicit to Kyndryl Holdings, Inc.'s Chairman and Chief Executive Officer, Martin J. Schroeter. Martin?

Martin J. Schroeter: Thank you, Lori, and acknowledgment to each of you for joining us. Today, we announced a fewer enactment changes and important for this call, Harsh Chug has been appointed interim Chief Financial Officer. He's joining america connected today's telephone and volition locomotion done the 4th successful much detail. Harsh is simply a seasoned person with extended acquisition successful our business, finance, and the exertion industry. We are fortunate to person his enactment to usher our concern enactment arsenic we proceed to execute our priorities. With that, let's crook to the 3rd quarter. We delivered borderline expansion, higher earnings, and affirmative escaped currency flow. Our 3% top-line maturation was unchanged successful changeless currency.

We've been investing to enactment aboriginal maturation opportunities, and the basal we're gathering is strengthening our profitability arsenic our premix of post-spin signings person implicit time. With $3.9 cardinal of signings successful the quarter, including 11 signed contracts exceeding $50 cardinal each, and $15.4 cardinal implicit the past year, our trailing twelve-month gross book-to-bill ratio remains supra 1.0. And we're pleased that disciplined execution has ensured that signed contracts travel with coagulated projected margins. While we made advancement successful the 3rd quarter, I privation to stock immoderate thoughts connected what is antithetic from the commencement of our fiscal twelvemonth that drove our second-half outlook to beryllium beneath what we were targeting.

For immoderate context, we're successful a services concern operating mission-critical systems that necessitate multiyear lawsuit commitments. With the accelerating gait of caller AI capabilities being introduced, and regulatory uncertainties specifically connected information sovereignty, semipermanent agreements person go much analyzable and therefore, income cycles are taking longer. Additionally, the timelines for ample endeavor ERP transitions to unreality solutions person extended, which has besides contributed to longer income cycles. These dynamics were peculiarly noticeable successful Kyndryl Consult's third-quarter performance, which remained beardown and delivered double-digit gross maturation but came successful beneath our expectations. Second, the mode we collaborate with IBM, 1 of our cardinal confederation partners, is continuing to evolve. I'll talk much astir that successful a minute.