Kyndryl Holdings, Inc. (KD): history, ownership, mission, how it works & makes money

A Brief History of Kyndryl Holdings, Inc.

Kyndryl Holdings, Inc. was established as a wholly-owned subsidiary of IBM in September 2021, specifically to manage the infrastructure services unit of IBM’s Global Technology Services segment. The company officially separated from IBM on November 3, 2021, through a tax-free spin-off, marking its transition into an independent publicly traded entity and solidifying its position as a leading provider of IT infrastructure services worldwide.

Financial Performance Overview

As of June 30, 2024, Kyndryl reported a revenue of $3.739 billion, which reflects an 11% decline compared to $4.193 billion in the same quarter of 2023. This revenue downturn was attributed to strategic decisions aimed at reducing low-margin customer relationships and adverse currency effects.

Segment Performance

Kyndryl's revenues are divided into key segments, each showing varied performance in Q2 2024:

Recent Developments

In April 2024, Kyndryl completed the acquisition of Skytap, Inc. for approximately $46 million, enhancing its hybrid cloud services portfolio. The acquisition was recorded as a business combination, reflecting Kyndryl's strategic growth initiatives in the evolving IT landscape.

Additionally, Kyndryl announced plans to sell its Securities Industry Services (SIS) business for $200 million in cash, further streamlining its operations and focusing on core service areas. This transaction is expected to close before November 30, 2024.

Cash Flow and Liquidity

For the three months ended June 30, 2024, Kyndryl experienced a net cash outflow from operating activities of $(48) million compared to $(173) million in the prior-year period. This improvement reflects ongoing efforts to enhance operational efficiencies and cost management.

As of June 30, 2024, Kyndryl's total assets amounted to $10.163 billion, with total liabilities of $9.062 billion and total equity of $1.101 billion. The company's effective tax rate for the period was 82.7%, a significant increase compared to the negative effective tax rate of (29.6%) in Q2 2023 due to prior-year losses.

A Who Owns Kyndryl Holdings, Inc. (KD)

Ownership Structure

Kyndryl Holdings, Inc. (KD) was spun off from IBM on November 3, 2021. As of June 30, 2024, Kyndryl operates as an independent publicly-traded company. The ownership structure primarily includes institutional investors and individual shareholders.

Major Shareholders

The following table summarizes the major shareholders of Kyndryl Holdings, Inc. as of June 2024, highlighting the percentage of ownership:

These percentages are approximations based on recent filings and may vary slightly due to market changes.

Financial Performance Overview

As of June 30, 2024, Kyndryl reported the following financial metrics:

Market Performance

As of June 30, 2024, Kyndryl's stock performance has shown fluctuations in response to market conditions:

Recent Developments

In April 2024, Kyndryl completed the acquisition of Skytap, Inc. for approximately $46 million, enhancing its hybrid cloud services portfolio. This acquisition aligns with Kyndryl's strategy to expand its service offerings and strengthen its market position.

Conclusion

As an independent entity, Kyndryl continues to establish its identity in the IT infrastructure services market. The ownership landscape is characterized by significant institutional investment, reflecting confidence in the company's potential for growth and innovation.

Kyndryl Holdings, Inc. (KD) Mission Statement

Company Overview

Kyndryl Holdings, Inc. operates as a leading provider of IT infrastructure services, formed as a spin-off from IBM in November 2021. As of June 30, 2024, Kyndryl reported total assets of $10.2 billion and total liabilities of $9.1 billion.

Mission Statement

The mission of Kyndryl is to design, build, manage, and modernize the critical technology systems that the world depends on every day. Kyndryl aims to be the partner of choice for organizations looking to innovate and transform their IT infrastructure while ensuring operational excellence and reliability.

Key Financial Metrics

For the three months ended June 30, 2024, Kyndryl reported:

• Revenue: $3.739 billion
• Net income: $11 million
• Adjusted EBITDA: $556 million
• Basic earnings per share: $0.05
• Cash and cash equivalents: $1.273 billion

Strategic Goals

Kyndryl's strategic goals include enhancing operational efficiency and increasing customer satisfaction through innovative solutions. The company is focused on:

• Reducing costs through workforce rebalancing initiatives.
• Expanding its service offerings in cloud management and digital transformation.
• Strengthening partnerships with technology leaders to provide integrated solutions.

Workforce Rebalancing Program

As part of its ongoing efforts to improve efficiency, Kyndryl initiated a workforce rebalancing program with expected cash outlays of $140 million. Through June 30, 2024, approximately $10 million has been paid, with an anticipated reduction in payroll costs and expenses exceeding $200 million in fiscal 2026.

Financial Performance Summary

The following table summarizes Kyndryl's financial performance for the three months ended June 30, 2024:

Market Position

Kyndryl is positioned as a leader in the IT services market, focusing on sectors such as cloud services, cybersecurity, and data management. The company recorded total signings of $3.1 billion for the three months ended June 30, 2024, reflecting an increase of 11% compared to the prior-year quarter.

Challenges and Opportunities

Despite facing challenges such as declining revenue in certain markets, Kyndryl remains focused on leveraging its strengths in IT infrastructure services to capture growth opportunities in emerging technologies and digital transformation initiatives.

How Kyndryl Holdings, Inc. (KD) Works

Overview of Kyndryl Holdings, Inc.

Kyndryl Holdings, Inc. is a leading IT infrastructure services provider formed as a spin-off from IBM. As of June 30, 2024, Kyndryl operates globally through four reportable segments: United States, Japan, Principal Markets, and Strategic Markets.

Financial Performance

For the three months ended June 30, 2024, Kyndryl reported:

Segment Performance

The revenue and adjusted EBITDA by segment for the three months ended June 30, 2024, are as follows:

Costs and Expenses

For the three months ended June 30, 2024, the costs and expenses were as follows:

Cash Flow Analysis

Net cash flows for the three months ended June 30, 2024, were as follows:

Balance Sheet Highlights

As of June 30, 2024, Kyndryl's balance sheet details are as follows:

Strategic Initiatives

Kyndryl has implemented workforce rebalancing initiatives aimed at reducing costs and enhancing operational efficiency. The expected total cash outlays for these initiatives are projected at $140 million, with anticipated savings exceeding $200 million by fiscal year 2026.

Market Position and Future Outlook

Kyndryl's market position remains strong despite a challenging economic environment. The company is focused on improving operational efficiencies and capitalizing on growth opportunities within the IT services sector.

How Kyndryl Holdings, Inc. (KD) Makes Money

Revenue Streams

Kyndryl Holdings, Inc. generates revenue primarily through the provision of IT infrastructure services. Their services include cloud services, data center management, and network services.

Financial Performance Overview

For the three months ended June 30, 2024, Kyndryl reported total revenue of $3.739 billion, reflecting an 11% decline from $4.193 billion in the same period of 2023. This decline was primarily attributed to reductions in low-margin customer relationships and adverse currency effects.

Adjusted EBITDA

Kyndryl's Adjusted EBITDA for the three months ending June 30, 2024, was $556 million, down from $612 million in 2023, marking a 9% decrease.

Cost Structure

For the three months ended June 30, 2024, Kyndryl's cost of services was 78.5% of revenue, down from 82.3% in the previous year. This improvement was driven by lower depreciation expenses and increased operational efficiencies.

Net Income and Earnings Per Share

Kyndryl reported a net income of $11 million for the three months ended June 30, 2024, in contrast to a net loss of $141 million in the prior year. Basic and diluted earnings per share were both $0.05.

Cash Flow Analysis

For the three months ended June 30, 2024, Kyndryl's cash flows from operating activities were $(48 million), compared to $(173 million) in the prior year, indicating improved cash flow management.

Future Outlook

Kyndryl holds an aggregate amount of remaining performance obligations (RPO) related to customer contracts of $31.6 billion, with approximately 59% expected to be recognized as revenue in the subsequent two years.