FY26 Outlook Cut

The company reiterated its fiscal‑year‑2026 outlook, projecting adjusted pre‑tax income of $575 million to $600 million, an adjusted EBITDA margin of approximately 17.5 %, and free cash flow of $325 million to $375 million—down from the prior guidance of $550 million. Kyndryl also reversed its previous 1 % growth outlook, now forecasting a constant‑currency revenue decline of 2 % to 3 % for FY 26. The revised guidance was driven by longer sales cycles, a 3.5‑point revenue headwind from the evolving IBM relationship, and the company's focus on investing in its Consult arm, which has grown 20 % in constant currency and now represents 25 % of total revenue. Hyperscaler revenue surged 58 % YoY to $500 million, a key growth engine.