Kyndryl Profit Dips as Restructuring Costs Mount

Net income fell to 27 cents a share from 29 cents a year prior, even as adjusted earnings reached 42 cents a share, beating the 38-cent consensus among analysts polled by FactSet. Revenues dropped 1.9% to $3.65 billion for the period ending Sept. 30, though this figure still edged past the projected $3.62 billion. Growth remained concentrated in specific segments, with consulting revenue up 4.2% and hyperscaler-related income surging 27% to over $550 million.

Chief Executive Martin Schroeter credited the performance to robust demand for artificial-intelligence-led modernization services. To facilitate this pivot, the company absorbed $38 million in workforce-rebalancing charges this quarter. These initiatives are projected to yield up to $500 million in annual savings starting in fiscal 2028. Following the spin-off from IBM in 2021, Kyndryl maintained its full-year guidance, anticipating revenue to remain flat or decline by up to 2% on a constant-currency basis.