By Nate Wolf

Kyndryl Holdings stock clawed back some losses Tuesday after the embattled information-technology company filed its delayed quarterly earnings report and gave a positive update about its financial reporting.

The company disclosed Tuesday material weaknesses in its internal controls over financial reporting in a delayed Form 10-Q for the fiscal third quarter and made amendments to three previous quarterly or annual reports. It didn't restate financial results for any of those periods. The company also announced a remediation plan to enhance its reporting practices.

Kyndryl stock rose 10% on Tuesday.

Shares tanked 55% on Feb. 9 after the IT infrastructure provider announced a review of its cash management practices and the departures of its chief financial officer and general counsel. The company disclosed it had received voluntary document requests from the Securities and Exchange Commission.

Kyndryl also delayed the filing of its quarterly report with the SEC, saying it was "unable to file within the prescribed time period, without unreasonable effort and expense."

The company said Tuesday that the material weaknesses in its internal control involved "cash management practices regarding deferring vendor payments quarter to quarter."

Top financial executives "failed to set an appropriate tone at the top," Kyndryl said in Tuesday's filings. In particular, the company cited a lack of transparency between those executives and the CEO and board. Kyndryl also lacked adequate controls for internal investigation and escalation of complaints made through its internal reporting hotline.

The company's remediation plan includes updated training on disclosure controls, improved policies and procedures for information sharing, expanded responsibilities for the company's Disclosure Committee, and an enhanced reporting hotline.

Shareholders hoping for a quick fix may be disappointed. The lack of financial restatements and Kyndryl's more detailed account of the reporting weakness should please investors. But the stock remains down more than 60% over the last 12 months, and multiple analysts moved to the sidelines after last week's disclosures.

Kyndryl is confident the remediation plan will help improve its reporting practices, but warned in the filings Tuesday that it won't be able to judge progress "until a sustained period of time has passed."

Write to Nate Wolf at nate.wolf@barrons.com

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February 17, 2026 09:56 ET (14:56 GMT)

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