Abstract

Kyndryl will report fiscal third-quarter 2026 results on February 09, 2026 Pre-Market. This preview summarizes the market’s expectations for revenue, margins, GAAP net profit attributable to the parent company, and adjusted EPS, along with business segment context and prevailing analyst views from October 21, 2025 to February 02, 2026.

Market Forecast

The market projects Kyndryl’s current quarter revenue at USD 3.90 billion, implying year-over-year growth of 2.28%. The company’s financial forecast suggests EBIT of USD 177.67 million with an estimated year-over-year increase of 13.28% and adjusted EPS of USD 0.64 with an estimated year-over-year increase of 146.80%. No explicit company forecast is available for gross profit margin or net profit margin; consensus commentary points to incremental margin improvement alongside continued cost discipline. The main business is expected to show steady momentum supported by mission-critical infrastructure services and managed cloud, with contract renewals and modernization projects sustaining pipeline quality. The most promising segment is managed services tied to cloud migration and automation, which continues to capture higher-value deals; specific revenue and year-over-year data are not disclosed in guidance.

Last Quarter Review

Kyndryl’s previous quarter delivered revenue of USD 3.72 billion, a gross profit margin of 21.53%, GAAP net profit attributable to the parent company of USD 68.00 million, a net profit margin of 1.83%, and adjusted EPS of USD 0.38, with year-over-year revenue down by 1.40% and adjusted EPS up by 3.00%. A notable highlight was EBIT at USD 143.00 million, exceeding the earlier estimate and reflecting operational efficiencies. Main business execution remained resilient across infrastructure services and modernization mandates, although segment-specific revenue and year-over-year details were not disclosed.

Current Quarter Outlook

Managed Infrastructure Services

Managed infrastructure services remain central to revenue mix and near-term momentum as customers prioritize stability, availability, and security across hybrid environments. Deal activity in renewals and expansions should support sequential performance, aided by standardized delivery models and productivity tools that compress delivery costs. Operating leverage from prior restructuring efforts is likely to contribute to EBIT expansion, while the timing of large-scale contract ramps could modulate quarter-to-quarter variability. Pricing discipline, reduced subcontractor costs, and a focus on higher-margin service templates look set to support modest margin gains, though wage inflation and competitive tendering may cap upside. Management’s emphasis on automation and tooling in run operations should underpin consistency in service-level outcomes and financial performance through the fiscal year.

Cloud Migration and Automation

Cloud migration and automation initiatives continue to present the largest incremental growth canvas given the breadth of application modernization, data platform refreshes, and edge-to-core orchestration opportunities. The company’s value proposition is anchored in de-risking complex transitions for global enterprises, leveraging deep architectural expertise and multi-cloud certifications to unlock cost savings and resiliency. Pipeline signals point to constructive demand for workload re-platforming, containerization, and managed FinOps, each of which can expand share-of-wallet and deliver sustained revenue visibility. Cost takeout agendas among customers often elevate automation-led managed services, enhancing contract economics and multi-year retention. Risks concentrate around elongated decision cycles and intensifying competition from hyperscalers’ professional services and integrated solutions; however, differentiated governance and neutrality can keep win rates stable. Successful delivery milestones in this quarter could offer proof points for EBIT and EPS upside relative to the guidance ranges.

Stock Price Drivers This Quarter

Investors will watch revenue cadence relative to the USD 3.90 billion forecast and whether adjusted EPS of USD 0.64 tracks with EBIT progression to USD 177.67 million. Margin commentary will be scrutinized after last quarter’s 21.53% gross profit margin and 1.83% net profit margin, with attention to the sustainability of cost controls and mix improvements. Large contract announcements, renewal quality, and any color on the deal pipeline conversion could influence multiple expansion, while updates on automation penetration and cloud migration engagements may shape sentiment on medium-term growth durability. Execution against delivery milestones and clarity on cash generation will be key to reconciling earnings quality with the estimated year-over-year improvements in EBIT and EPS. Any indication of pricing pressure or wage-cost headwinds could temper near-term enthusiasm.

Analyst Opinions

Recent commentary from the analyst community between October 21, 2025 and February 02, 2026 skews bullish, with the majority emphasizing improving earnings quality, margin trajectory, and demand resilience for modernization and managed services. Positive views highlight operational efficiency gains reflected in last quarter’s EBIT beat to USD 143.00 million and the current quarter’s forecasted margin progress tethered to automation. Institutions underscore that year-over-year estimates for EPS at USD 0.64 and EBIT at USD 177.67 million suggest continued improvement in profitability against a low base, supporting a constructive stance into the print. Analysts also point to the pipeline of cloud migration projects as a durable driver; they anticipate incremental wins and stable renewals lifting revenue visibility toward the USD 3.90 billion mark. While a minority raises caution on pricing intensity and elongated customer decision cycles, the prevailing view expects the company to meet or slightly exceed guidance, with commentary on cost discipline and delivery tooling as key validation points.