The following is a summary of the Kyndryl Holdings, Inc. (KD) Q4 2024 Earnings Call Transcript:
Financial Performance:
Kyndryl reported Q4 revenue of $3.8 billion, a decrease of 9%, due to the strategic exit from low-margin ventures.
They posted a 19% increase in adjusted EBITDA to $566 million, raising their adjusted EBITDA margin year-over-year by 350 basis points to 14.7%.
2024 fiscal year's revenue came in at $16.1 billion. The adjusted EBITDA saw growth of 20% to $2.4 billion.
Adjusted pretax income was at $165 million, outstripping last year's figures significantly. The business anticipates an adjusted pretax income of at least $435 million for fiscal 2025.
Business Progress:
The Consult business achieved a 15% growth year-over-year, resulting in an increase of 3% in total signings.
Partnerships with hyperscalers yielded over $150 million in Q4 revenue, making the total year's hyperscaler-related revenue $500 million.
Kyndryl Bridge, with its 9500 delivery professionals, has enabled new revenue opportunities with cost savings of $575 million annually.
Kyndryl anticipates hyperscaler related revenue to be near $1 billion in fiscal 2025.
With strong earnings conversion into cash flow, the business sees a path towards future growth and market leadership.
Performance made in Consult and with hyperscalers gives the company confidence in returning to growth in FY 2025.
Decision to eliminate low-margin, no-margin OEM has accelerated growth, with the 'run and transform' approach resonating well with customers. The company is well-positioned for a successful upcoming fiscal year.
More details: Kyndryl IR
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