Kyndryl (KD) stock surged 6.67% in after-hours trading on Tuesday following the release of its second-quarter fiscal 2026 results, which exceeded analyst expectations on key metrics. The IT infrastructure services provider demonstrated strong performance in its cloud and consulting segments, while also announcing an increase in its share repurchase program.

Kyndryl reported adjusted earnings per share of $0.38, surpassing the consensus estimate of $0.36. While quarterly revenues of $3.721 billion fell slightly short of the expected $3.840 billion, representing a 1% year-over-year decrease, the company's profitability improvements and strategic growth initiatives impressed investors. Notably, adjusted EBITDA reached $641 million, marking a 15% increase compared to the same period last year.

The company's focus on high-growth areas is paying off, with hyperscaler cloud revenue soaring 65% to $440 million this quarter. Kyndryl Consult, another key growth driver, saw its revenues climb 28% year-over-year. In a move that further bolstered investor confidence, Kyndryl's Board of Directors authorized a $400 million increase in its share repurchase program. The company also reaffirmed its fiscal 2026 outlook, projecting constant-currency revenue growth of 1% and an adjusted EBITDA margin of approximately 18%. These positive developments, combined with the company's ongoing expansion of AI-related capabilities globally, appear to be the primary factors driving the stock's after-hours rally.