Kyndryl Holdings, Inc. reported a decline in revenue for the three months ended September 30, 2024, totaling $3,774 million, down 7% from $4,073 million in the same period of 2023. For the six months ended September 30, 2024, revenue decreased by 9% to $7,513 million from $8,266 million in the prior year. The revenue decline was attributed to the company's strategic decision to reduce low-margin components of customer relationships and adverse currency effects.
Despite the revenue drop, Kyndryl showed improvement in profitability metrics. The company recorded a net loss of $(43) million for the third quarter, an improvement of $99 million compared to a net loss of $(142) million in the same quarter of 2023. For the six months, the net loss was $(32) million, significantly better than the $(283) million loss reported in the same period last year. This improvement was driven by lower depreciation expenses, reduced transaction-related costs, and enhanced margins.
Adjusted EBITDA for the three months ended September 30, 2024, was $557 million, down from $574 million in the prior year, while for the six months, it decreased to $1,113 million from $1,186 million. The company’s cost of services for the third quarter was $3,024 million, representing 80.1% of revenue, a decrease from 84.0% in the previous year, indicating improved operational efficiency.
Kyndryl's total assets as of September 30, 2024, were $10,396 million, down from $10,590 million as of March 31, 2024. Total liabilities also decreased to $9,224 million from $9,468 million, while total equity increased to $1,172 million from $1,122 million, reflecting comprehensive income during the period.
Strategically, Kyndryl completed the acquisition of Skytap in April 2024 for approximately $46 million, enhancing its capabilities in cloud services. Additionally, the company agreed to divest its Securities Industry Services (SIS) business for about $185 million in cash, with the transaction expected to close in November 2024.
Kyndryl is also undergoing a workforce rebalancing program, with total expected charges for fiscal 2025 estimated at $140 million. As of September 30, 2024, the company incurred $94 million in charges related to this program, which aims to reduce payroll costs and improve operational efficiency.
The company continues to face challenges, including a material weakness in internal controls related to its IT systems, which management is actively addressing. Despite these challenges, Kyndryl's strategic initiatives and operational improvements are aimed at enhancing its financial performance moving forward.
About Kyndryl Holdings, Inc.
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