Kyndryl Posts Q1 FY2027 Loss, Books $152M in Workforce Rebalancing Charges, and Reaffirms Full-Year Outlook
KD sits 41% above its 52-week low of $10.1.
Summary
Kyndryl reported a Q1 FY2027 net loss of $55 million, including $152 million in workforce rebalancing charges, while reaffirming its full-year profit and cash flow targets. Growth in Kyndryl Consult and hyperscaler revenue helped offset a 3% overall revenue decline.
Key Events · Earnings and Guidance · KD
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Q1 FY2027 Net Loss
The company swung to a net loss of $55 million, or $0.25 per share, from net income of $56 million a year ago. Revenue fell 3% to $3.6 billion.
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Workforce Rebalancing Charges
Workforce reduction charges totaled $152 million in the quarter, with roughly $200 million expected for the full year. Once completed, these actions are projected to deliver $400–500 million in annualized savings by fiscal 2028.
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Full-Year Outlook Reaffirmed
Management reaffirmed its fiscal 2027 guidance: adjusted pretax income of $600–700 million, free cash flow of $400–500 million, and constant-currency revenue ranging from flat to a 2% decline.
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Growth in Strategic Areas
Kyndryl Consult revenue rose 10% year-over-year, while hyperscaler-related revenue exceeded $530 million—a 34% increase—pushing the annualized run-rate above $2.1 billion.
Analysis · KD · Technology
A net loss of $55 million marked Kyndryl's first quarter of fiscal 2027, as $152 million in workforce rebalancing charges weighed on results while the company streamlines operations. Revenue slipped 3% to $3.6 billion, yet Kyndryl Consult and hyperscaler-related revenue grew 10% and 34%, respectively—evidence of momentum in higher-value services. The full-year outlook was reaffirmed, targeting adjusted pretax income of $600–700 million and free cash flow of $400–500 million, signaling confidence that the restructuring will unlock $400–500 million in annualized savings by fiscal 2028. Set against an adverse auditor opinion on internal controls and an ongoing SEC investigation, these results underscore both operational headwinds and a clear path to improved profitability.
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At the time of this filing, KD was trading at $14.25 on NYSE in the Technology sector, with a market capitalization of approximately $3.2B. The 52-week trading range was $10.10 to $37.01. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.