Kyndryl Q3 EPS Misses 52¢ vs 60¢, CFO Exit Spurs Audit Committee Review
Kyndryl reported Q3 adjusted EPS of $0.52, missing consensus of $0.60, with revenues of $3.86 billion versus estimated $3.89 billion. Following a CFO exit, the audit committee launched a review of cash management and internal controls after voluntary SEC document requests, and fiscal 2026 pretax income guidance was cut to $575 million–$600 million.
1. Earnings Performance
Kyndryl posted Q3 adjusted EPS of $0.52, falling short of the $0.60 analyst estimate, while revenue of $3.86 billion missed the $3.89 billion consensus. U.S. revenue held flat at $958 million, and Japan revenue declined 1% to $568 million year-over-year.
2. CFO Departure and Guidance Reduction
The company announced the departure of its chief financial officer, signaling leadership instability. Fiscal 2026 adjusted pretax income forecast was reduced to $575 million–$600 million from a prior target of $725 million, reflecting a more challenging outlook.
3. SEC Inquiry and Audit Committee Review
After receiving voluntary document requests from the SEC’s Division of Enforcement, the audit committee is reviewing cash management practices, adjusted free cash flow disclosures and internal financial controls to address regulatory concerns.
4. Analyst Downgrade
JP Morgan lowered its rating from Overweight to Underweight and cut its price target from $40 to $16, citing sales and profit guidance reductions and ongoing execution risks.