KYNDRYL REPORTS FOURTH QUARTER AND FULL-YEAR 2026 RESULTS
Rhea-AI Summary
Kyndryl (NYSE: KD) reported fiscal 2026 revenue of $15.1B (flat reported, -3% constant currency) and fiscal Q4 revenue of $3.8B (-1% reported, -5% cc). Fiscal 2026 GAAP net income was $198M and adjusted pretax income was $581M (+21% year-over-year). The company repurchased 14.3M shares (~6% of shares outstanding) and provided fiscal 2027 outlook: adjusted pretax income $600–700M, free cash flow $400–500M, revenue flat to -2% cc.
Positive
- Adjusted pretax income +21% to $581M in fiscal 2026
- Adjusted net income increased to $341M (vs $285M prior)
- Hyperscaler-related revenue +59% to $1.9B, exceeding $1.8B target
- Kyndryl Consult revenue +18% to $3.5B
- Signings $13.5B with 38 deals >$50M and >30% new scope
Negative
- Revenue down 3% on a constant-currency basis for fiscal 2026
- Q4 revenue declined 5% on a constant-currency basis
- GAAP net income fell to $198M from $252M year-over-year
- Income tax expense increased due to a non-recurring, non-cash tax accrual
Key Figures
Market Reality Check
Peers on Argus
KD was up 2.15% with higher volume while peers were mixed: GDS gained 2.42%, G was roughly flat, and EPAM, EXLS, PSN declined. Momentum data shows only one peer in a move, pointing to stock‑specific drivers.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Apr 23 | Cloud partnership expansion | Positive | -6.0% | Expanded Google Cloud collaboration for large‑scale IT modernization and AI adoption. |
| Apr 22 | Cloud services expansion | Positive | -2.3% | Expanded distributed cloud services with Google Cloud for sovereign and AI workloads. |
| Apr 21 | Industry awards win | Positive | -0.8% | Won five 2026 Google Cloud Partner of the Year Awards across key categories. |
| Apr 20 | Analyst recognition | Positive | +1.7% | Named a Leader in three categories in ISG’s 2026 mainframes services report. |
| Apr 16 | Government contract win | Positive | +0.9% | Selected to modernize North Carolina DMV systems and migrate workloads to Azure. |
Recent partnership and award headlines have often seen muted or negative price reactions, with several positive-sounding news items followed by declines.
Over the last month, Kyndryl issued multiple positive strategic updates, including Google Cloud awards, expanded distributed cloud services, and a DMV modernization win. Despite these, the stock reaction was mixed, with three declines and two advances over April 16–23, 2026. Today’s full-year 2026 earnings and 2027 outlook add concrete financials to that narrative, contrasting earlier partnership-driven news with detailed profitability and cash flow metrics.
Market Pulse Summary
This announcement details Kyndryl’s fiscal 2026 performance, featuring $15.1 billion in revenue, stronger adjusted pretax income of $581 million, and $2.7 billion in adjusted EBITDA, alongside robust hyperscaler and consulting growth. At the same time, GAAP net income declined and revenue was flat on a reported basis. The FY 2027 outlook for adjusted pretax income and free cash flow, plus execution on AI and cloud initiatives, are key metrics to watch.
Key Terms
adjusted ebitda financial
free cash flow financial
restricted stock units financial
agentic ai technical
constant currency financial
AI-generated analysis. Not financial advice.
- Revenues for the quarter ended March 31, 2026 total
$3.8 billion $132 million $17 million $688 million $162 million - Fiscal year 2026 revenues total
$15.1 billion $414 million $198 million $2.7 billion $581 million - Company provides fiscal year 2027 outlook
"With our mission-critical engineering expertise, we continue to support our customers' most complex IT environments while taking disciplined actions to strengthen our business," said Kyndryl Chairman and Chief Executive Officer Martin Schroeter. "Enterprises are turning to Kyndryl for our high-value services across agentic AI, IT modernization, public and private cloud and cybersecurity to help them modernize at scale, strengthen resilience and unlock greater business value."
"As we move into fiscal 2027, we are focused on consistent execution and improving business fundamentals to drive profitability and cash flow and support our multi-year objectives."
Results for the Fiscal Year Ended March 31, 2026
For the fiscal year ended March 31, 2026, Kyndryl reported revenues of
Adjusted pretax income was
Signings for fiscal year 2026 were
Results for the Fiscal Fourth Quarter Ended March 31, 2026
For the fourth quarter, Kyndryl reported revenues of
Adjusted pretax income was
Share Repurchases
The Company repurchased 11.6 million shares of its common stock at a cost of
Fiscal Year Highlights
- Hyperscaler-related revenue – In fiscal 2026, Kyndryl recognized
$1.9 billion 59% increase year-over-year, exceeding its$1.8 billion - Kyndryl Consult revenue – In fiscal 2026, Kyndryl Consult revenues were
$3.5 billion 18% , with signings of$4 billion - Strong projected margin on signings – Projected pretax margin associated with fiscal 2026 signings was in the high-single-digit range, demonstrating the Company's ability to build expected profit into its services contracts.
- Incremental contribution from three-A's initiatives – The Company's Advanced Delivery initiative, focused on AI-enabled automation through our Kyndryl Bridge operating platform, and its Accounts initiative to address relationships with substandard margins continued to drive earnings growth and margin expansion in fiscal 2026.
- Artificial intelligence – During fiscal 2026, the Company launched the Kyndryl Agentic AI Framework, enabling customers to adopt and scale agentic AI across on-premises, cloud and hybrid environments. Building on this foundation, Kyndryl introduced agentic AI services for workforce readiness, Agentic AI Digital Trust to govern and secure deployments, agentic AI services for the mainframe to accelerate modernization, and most recently launched Agentic Service Management to enable autonomous IT operations at scale.
Fiscal Year 2027 Outlook
Kyndryl is providing the following outlook for its fiscal year 2027:
- Adjusted pretax income of
$600 $700 million - Consistent with our definition of adjusted pretax income since fiscal 2025, this includes workforce rebalancing charges
- Consistent with our definition of adjusted pretax income since fiscal 2025, this includes workforce rebalancing charges
- Free cash flow of
$400 $500 million - Constant-currency revenue flat to down
2%
See "Non-GAAP Metric Definitions and Reconciliations."
Earnings Webcast
Kyndryl's earnings call for the fourth fiscal quarter is scheduled to begin at 8:30 a.m. ET on May 6, 2026. The live webcast can be accessed by visiting investors.kyndryl.com on Kyndryl's investor relations website. A slide presentation will be made available on Kyndryl's investor relations website before the call on May 6, 2026. Following the event, a replay will be available via webcast for twelve months at investors.kyndryl.com.
About Kyndryl
Kyndryl (NYSE: KD) is a leading provider of mission-critical enterprise technology services, offering advisory, implementation and managed service capabilities to thousands of customers in more than 60 countries. As the world's largest IT infrastructure services provider, the Company designs, builds, manages and modernizes the complex information systems that the world depends on every day. For more information, visit www.kyndryl.com.
Forward-Looking and Cautionary Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release, including statements concerning the Company's plans, objectives, goals, beliefs, business strategies, future events, business condition, results of operations, financial position, business outlook and business trends and other non-historical statements, including without limitation the outlook and financial objectives in this press release (which does not assume any future acquisitions or divestitures), are forward-looking statements. Such forward-looking statements often contain words such as "aim," "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "may," "objectives," "opportunity," "plan," "position," "predict," "project," "should," "seek," "target," "will," "would" and other similar words or expressions or the negative thereof or other variations thereon. Forward-looking statements are based on the Company's current assumptions and beliefs regarding future business and financial performance.
The Company's actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others: failure to attract new customers, retain existing customers or sell services to customers; failure to meet growth and productivity objectives and maintain our capital allocation strategy; competition; impacts of relationships with critical suppliers and partners; failure to address and adapt to technological developments and trends; inability to attract and retain key personnel and other skilled employees; impact of economic, geopolitical, public health and other conditions; damage to the Company's reputation and impact on the Company and our stock price resulting from negative publicity; inability to accurately estimate the cost of services and the timeline for completion of contracts; service delivery issues; the Company's ability to successfully manage acquisitions and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels; the Company's ability to refinance maturing debt on favorable terms in a timely manner, or at all, and risks related to the Company's access to capital and credit markets; failure of the Company's intellectual property rights to prevent competitive offerings and the failure of the Company to obtain, retain and extend necessary licenses; the impairment of our goodwill or long-lived assets; risks relating to cybersecurity, data governance and privacy; risks relating to non-compliance with legal and regulatory requirements and changes in laws, regulations and policies in the
Additional risks and uncertainties include, among others, those risks and uncertainties described in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2025 and quarterly report on Form 10-Q for the quarter ended December 31, 2025, as such factors may be updated from time to time in the Company's subsequent filings with the Securities and Exchange Commission. Any forward-looking statement in this press release speaks only as of the date on which it is made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In this release, certain amounts may not add due to the use of rounded numbers; percentages presented are calculated based on the underlying amounts. Forecasted amounts are based on currency exchange rates as of April 2026.
Non-GAAP Financial Measures
In an effort to provide investors with additional information regarding its results, the Company has provided certain metrics that are not calculated based on generally accepted accounting principles (GAAP), such as constant-currency results, adjusted EBITDA, adjusted pretax income, adjusted net income, adjusted EPS, adjusted EBITDA margin, adjusted pretax margin, adjusted net margin, net debt, free cash flow, adjusted free cash flow and adjusted operating cash flow. Such non-GAAP metrics are intended to supplement GAAP metrics, but not to replace them. The Company's non-GAAP metrics may not be comparable to similarly titled metrics used by other companies. Definitions and additional information about our calculation of non-GAAP metrics and reconciliations of non-GAAP metrics for historical periods to GAAP metrics are included in the tables in this release.
A reconciliation of forward-looking non-GAAP financial information is not included in this release because the Company is unable to predict with reasonable certainty some individual components of such reconciliation without unreasonable effort. These items are uncertain, depend on various factors and could have a material impact on future results computed in accordance with GAAP.
Investor Contact:
investors@kyndryl.com
Media Contact:
press@kyndryl.com
Table 1 CONSOLIDATED INCOME STATEMENT (in millions, except per share amounts) | ||||||||||||
Three Months Ended | Year Ended | |||||||||||
March 31, | March 31, | |||||||||||
2026 | 2025 | 2026 | 2025 | |||||||||
Revenues | $ | 3,769 | $ | 3,800 | $ | 15,092 | $ | 15,057 | ||||
Cost of services | $ | 2,920 | $ | 2,975 | $ | 11,803 | $ | 11,914 | ||||
Selling, general and administrative expenses | 678 | 640 | 2,654 | 2,591 | ||||||||
Workforce rebalancing charges | (1) | 23 | 60 | 114 | ||||||||
Transaction-related costs (benefits) | 3 | 2 | 41 | (125) | ||||||||
Interest expense | 29 | 23 | 89 | 100 | ||||||||
Other expense (income) | 8 | 18 | 32 | 27 | ||||||||
Total costs and expenses | $ | 3,637 | $ | 3,682 | $ | 14,678 | $ | 14,622 | ||||
Income before income taxes | $ | 132 | $ | 118 | $ | 414 | $ | 435 | ||||
Provision for income taxes | 115 | 50 | 215 | 184 | ||||||||
Net income | $ | 17 | $ | 68 | $ | 198 | $ | 252 | ||||
Earnings per share data | ||||||||||||
Basic earnings per share | $ | 0.08 | $ | 0.30 | $ | 0.87 | $ | 1.09 | ||||
Diluted earnings per share | 0.08 | 0.28 | 0.85 | 1.05 | ||||||||
Weighted-average basic shares outstanding | 224.8 | 231.4 | 228.3 | 231.5 | ||||||||
Weighted-average diluted shares outstanding | 228.0 | 241.7 | 233.8 | 239.1 | ||||||||
Table 2 SEGMENT RESULTS AND SELECTED BALANCE SHEET INFORMATION (dollars in millions) | ||||||||||
Three Months Ended March 31, | Year-over-Year Growth | |||||||||
As | Constant | |||||||||
Segment Results | 2026 | 2025 | Reported | Currency | ||||||
Revenue | ||||||||||
$ | 1,016 | $ | 969 | 5 % | 5 % | |||||
556 | 605 | (8 %) | (5 %) | |||||||
Principal Markets | 1,281 | 1,273 | 1 % | (7 %) | ||||||
Strategic Markets | 916 | 953 | (4 %) | (12 %) | ||||||
Total revenue | $ | 3,769 | $ | 3,800 | (1 %) | (5 %) | ||||
Adjusted EBITDA | ||||||||||
$ | 239 | $ | 228 | |||||||
122 | 102 | |||||||||
Principal Markets | 206 | 231 | ||||||||
Strategic Markets | 147 | 161 | ||||||||
Corporate and other | (26) | (24) | ||||||||
Total adjusted EBITDA | $ | 688 | $ | 698 | ||||||
Year Ended March 31, | Year-over-Year Growth | |||||||||
As | Constant | |||||||||
Segment Results | 2026 | 2025 | Reported | Currency | ||||||
Revenue | ||||||||||
$ | 3,784 | $ | 3,876 | (2 %) | (2 %) | |||||
2,284 | 2,358 | (3 %) | (4 %) | |||||||
Principal Markets | 5,399 | 5,206 | 4 % | (2 %) | ||||||
Strategic Markets | 3,625 | 3,617 | 0 % | (5 %) | ||||||
Total revenue | $ | 15,092 | $ | 15,057 | 0 % | (3 %) | ||||
Adjusted EBITDA | ||||||||||
$ | 835 | $ | 725 | |||||||
486 | 390 | |||||||||
Principal Markets | 834 | 886 | ||||||||
Strategic Markets | 622 | 606 | ||||||||
Corporate and other | (105) | (90) | ||||||||
Total adjusted EBITDA | $ | 2,672 | $ | 2,516 | ||||||
March 31, | | March 31, | ||||||||
Balance Sheet Data | 2026 | 2025 | ||||||||
Cash and equivalents | $ | 2,623 | $ | 1,786 | ||||||
Debt (short-term and long-term) | 4,089 | 3,172 | ||||||||
Table 3 CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in millions) | ||||||
Year Ended March 31, | ||||||
2026 | 2025 | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 198 | $ | 252 | ||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||
Depreciation and amortization | ||||||
Depreciation of property, equipment and capitalized software | 762 | 660 | ||||
Depreciation of right-of-use assets | 289 | 327 | ||||
Amortization of transition costs and prepaid software | 1,239 | 1,278 | ||||
Amortization of capitalized contract costs | 458 | 420 | ||||
Amortization of acquisition-related intangible assets | 27 | 30 | ||||
Stock-based compensation | 64 | 100 | ||||
Deferred taxes | (24) | (1) | ||||
Net (gain) loss on asset sales and other | 115 | (152) | ||||
Change in operating assets and liabilities: | ||||||
Right-of-use assets and liabilities (excluding depreciation) | (330) | (314) | ||||
Workforce rebalancing liabilities | (19) | (25) | ||||
Current accounts receivable | 84 | 284 | ||||
Lease and other receivables | (212) | 5 | ||||
Accounts payable | (93) | (89) | ||||
Taxes | 107 | (1) | ||||
Deferred transition costs and prepaid software (excluding amortization)1 | (2,189) | (1,338) | ||||
Capitalized contract costs (excluding amortization) | (444) | (425) | ||||
Other assets and other liabilities1 | 916 | (71) | ||||
Net cash provided by operating activities | $ | 948 | $ | 942 | ||
Cash flows from investing activities: | ||||||
Capital expenditures | $ | (608) | $ | (605) | ||
Proceeds from disposition of property and equipment | 65 | 83 | ||||
Acquisitions and divestitures, net of cash acquired | 1 | 139 | ||||
Other investing activities, net | (19) | (20) | ||||
Net cash used in investing activities | $ | (561) | $ | (404) | ||
Cash flows from financing activities: | ||||||
Debt repayments | $ | (146) | $ | (148) | ||
Proceeds from borrowings under the revolving credit facility | 1,000 | — | ||||
Common stock repurchases | (304) | (93) | ||||
Common stock repurchases for tax withholdings | (94) | (45) | ||||
Other financing activities, net | 1 | — | ||||
Net cash provided by (used in) financing activities | $ | 457 | $ | (286) | ||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | $ | (9) | $ | (16) | ||
Net change in cash, cash equivalents and restricted cash | $ | 836 | $ | 235 | ||
Cash, cash equivalents and restricted cash at beginning of period | $ | 1,789 | $ | 1,554 | ||
Cash, cash equivalents and restricted cash at end of period | $ | 2,626 | $ | 1,789 | ||
Supplemental data | ||||||
Income taxes paid, net of refunds received | $ | 151 | $ | 149 | ||
Interest paid on debt | $ | 115 | $ | 119 | ||
_____________________________ | |
1 | Includes |
Table 4
NON-GAAP METRIC DEFINITIONS AND RECONCILIATIONS
(dollars in millions, except signings)
We report our financial results in accordance with GAAP. We also present certain non-GAAP financial measures to provide useful supplemental information to investors. We provide these non-GAAP financial measures as we believe it enhances investors' visibility to management decisions and their impacts on operational performance; enables better comparison to peer companies; and allows us to provide a long-term strategic view of the business going forward. Moreover, we use certain of these non-GAAP financial metrics in measuring performance under our executive compensation plans.
Constant-currency information compares results between periods as if exchange rates had remained constant period over period. We define constant-currency revenues as total revenues excluding the impact of foreign exchange rate movements and use it to determine the constant-currency revenue growth on a year-over-year basis. Constant-currency revenues are calculated by translating current period revenues using corresponding prior-period exchange rates.
Adjusted pretax income is defined as pretax income excluding transaction-related costs and benefits, charges related to ceasing to use leased / fixed assets, charges related to lease terminations, pension costs other than pension servicing costs and multi-employer plan costs, stock-based compensation expense, amortization of acquisition-related intangible assets, workforce rebalancing charges incurred prior to March 31, 2024, impairment expense, significant litigation costs and benefits, and currency impacts of highly inflationary countries. Adjusted pretax margin is calculated by dividing adjusted pretax income by revenue.
Adjusted EBITDA is defined as net income excluding net interest expense, income taxes, depreciation and amortization (excluding depreciation of right-of-use assets and amortization of capitalized contract costs), charges related to ceasing to use leased / fixed assets, charges related to lease terminations, transaction-related costs and benefits, pension costs other than pension servicing costs and multi-employer plan costs, stock-based compensation expense, workforce rebalancing charges incurred prior to March 31, 2024, impairment expense, significant litigation costs and benefits, and currency impacts of highly inflationary countries. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue.
Adjusted net income is defined as adjusted pretax income less the reported provision for income taxes, minus or plus the tax effect of the non-GAAP adjustments made to calculate adjusted pretax income, and excluding exceptional items impacting the reported provision for income taxes. Adjusted net margin is calculated by dividing adjusted net income by revenue.
Adjusted earnings per share (EPS) is defined as adjusted net income divided by diluted weighted average shares outstanding to reflect shares that are dilutive or anti-dilutive based on the amount of adjusted net income. The weighted average common shares outstanding used to calculate adjusted earnings per share will differ from such shares used to calculate diluted earnings per share (GAAP) when the inclusion of dilutive shares has an anti-dilutive effect for one calculation but not for the other.
Free cash flow is defined as cash flows from operating activities (GAAP), less net capital expenditures. Adjusted free cash flow is defined as cash flows from operating activities (GAAP) after adding back transaction-related payments, charges related to lease terminations, payments related to workforce rebalancing charges incurred prior to March 31, 2024, and significant litigation payments (collectively referred to as adjusted operating cash flow), less net capital expenditures. Management uses free cash flow and adjusted free cash flow as measures to evaluate our operating results, plan strategic investments and assess our ability and need to incur and service debt. We believe these metrics are useful supplemental financial measures to aid investors in assessing our ability to pursue business opportunities and investments and to service our debt. Free cash flow, adjusted free cash flow and adjusted operating cash flow are financial measures that are not recognized under
Signings are defined by Kyndryl as an initial estimate of the value of a customer's commitment under a contract. The calculation involves estimates and judgments to gauge the extent of a customer's commitment. We calculate this based on various considerations including the type and duration of the agreement as well as the presence of termination charges or wind-down costs. Contract extensions and increases in scope are treated as signings only to the extent of the incremental new value. Signings can vary over time due to a variety of factors including, but not limited to, the timing of signing a small number of larger outsourcing contracts, as well as the length of those contracts. The conversion of signings into revenue may vary based on the types of services and solutions, customer decisions and other factors, which may include, but are not limited to, macroeconomic environment or external events. Management uses signings to monitor the performance of the business, as a measure of customer engagement and our ability to drive growth.
Reconciliation of net income | ||||||||||||
to adjusted pretax income, | ||||||||||||
adjusted EBITDA, adjusted net | Three Months Ended | Year Ended | ||||||||||
income and adjusted EPS | March 31, | March 31, | ||||||||||
(in millions, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||
Net income (GAAP) | $ | 17 | $ | 68 | $ | 198 | $ | 252 | ||||
Provision for income taxes | 115 | 50 | 215 | 184 | ||||||||
Pretax income (GAAP) | $ | 132 | $ | 118 | $ | 414 | $ | 435 | ||||
Charges related to ceasing to use leased/fixed | — | 19 | — | 48 | ||||||||
Transaction-related costs (benefits)1 | 3 | 2 | 41 | (125) | ||||||||
Stock-based compensation expense (benefit) | (10) | 22 | 64 | 100 | ||||||||
Amortization of acquisition-related intangible | 7 | 7 | 27 | 30 | ||||||||
Other adjustments2 | 30 | 17 | 36 | (6) | ||||||||
Adjusted pretax income (non-GAAP) | $ | 162 | $ | 185 | $ | 581 | $ | 482 | ||||
Interest expense | 29 | 23 | 89 | 100 | ||||||||
Depreciation of property, equipment and | 185 | 186 | 762 | 656 | ||||||||
Amortization of transition costs and prepaid | 312 | 304 | 1,239 | 1,278 | ||||||||
Adjusted EBITDA (non-GAAP) | $ | 688 | $ | 698 | $ | 2,672 | $ | 2,516 | ||||
Net income margin | 0.5 % | 1.8 % | 1.3 % | 1.7 % | ||||||||
Adjusted EBITDA margin | 18.3 % | 18.4 % | 17.7 % | 16.7 % | ||||||||
Adjusted pretax income (non-GAAP) | $ | 162 | $ | 185 | $ | 581 | $ | 482 | ||||
Provision for income taxes (GAAP) | (115) | (50) | (215) | (184) | ||||||||
Tax effect of non-GAAP adjustments | (7) | (9) | (25) | (14) | ||||||||
Adjusted net income (non-GAAP) | $ | 40 | $ | 126 | $ | 341 | $ | 285 | ||||
Diluted weighted average shares outstanding for | 228.0 | 241.7 | 233.8 | 239.1 | ||||||||
Diluted earnings per share (GAAP) | $ | 0.08 | $ | 0.28 | $ | 0.85 | $ | 1.05 | ||||
Adjusted earnings per share (non-GAAP) | $ | 0.18 | $ | 0.52 | $ | 1.46 | $ | 1.19 | ||||
_____________________________ | |
1 | Kyndryl's reported results for the year ended March 31, 2025 include a transaction-related gain of |
2 | Other adjustments represent pension costs other than pension servicing costs and multi-employer plan costs, significant litigation costs and benefits, and currency impacts of highly inflationary countries. |
Three Months Ended | Year Ended | |||||||||||
Reconciliation of cash flows from operations | March 31, | March 31, | ||||||||||
to free cash flow (in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||
Cash flows from operating activities (GAAP) | $ | 499 | $ | 581 | $ | 948 | $ | 942 | ||||
Less: Net capital expenditures1 | (111) | (228) | (543) | (522) | ||||||||
Free cash flow (non-GAAP)2 | $ | 388 | $ | 353 | $ | 406 | $ | 419 | ||||
_____________________________ | |
1 | Net capital expenditures consists of capital expenditures less proceeds from dispositions of property and equipment. |
2 | See "Non-GAAP Metric Definitions and Reconciliations" for more information about our calculation of free cash flow. |
Reconciliation of cash flows from operations | Year Ended | |||||||||||
to adjusted operating cash flow and | March 31, | |||||||||||
adjusted free cash flow (in millions) | 2026 | 2025 | ||||||||||
Cash flows from operating activities (GAAP) | $ | 948 | $ | 942 | ||||||||
Plus: Transaction-related payments (benefits) | 2 | (14) | ||||||||||
Plus: Workforce rebalancing payments related to | — | 25 | ||||||||||
Plus: Significant litigation payments | 12 | 15 | ||||||||||
Adjusted operating cash flow (non-GAAP)1 | $ | 963 | $ | 968 | ||||||||
Less: Net capital expenditures | (543) | (522) | ||||||||||
Adjusted free cash flow (non-GAAP)1 | $ | 420 | $ | 446 | ||||||||
_____________________________ | |
1 | See "Non-GAAP Metric Definitions and Reconciliations" for more information about our calculation of adjusted operating cash flow and adjusted free cash flow. |
Three Months Ended | Year Ended | |||||||||||
March 31, | March 31, | |||||||||||
Signings (in billions) | 2026 | 2025 | 2026 | 2025 | ||||||||
Signings1 | $ | 3.6 | $ | 5.5 | $ | 13.5 | $ | 18.2 | ||||
_____________________________ | |
1 | Currency movements favorably impacted the year‑over‑year change by approximately two points in the three‑ and twelve‑month periods ended March 31, 2026, respectively. |
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SOURCE Kyndryl