Self-proclaimed “world’s largest IT infrastructure services provider” Kyndryl Holdings (NYSE: KD) stock got a little less large after missing on its Q4 2026 earnings report this morning.
Analysts had expected Kyndryl to earn $0.49 per share on sales of just under $4 billion for the quarter. Instead, Kyndryl earned only $0.08 per share, and its sales were less than $3.8 billion — and so now, Kyndryl stock is down 9.4% through 1:20 p.m. ET Wednesday.
Image source: Getty Images.
Kyndryl’s quarter wasn’t nearly as bad as investors think it was.
Self-proclaimed “world’s largest IT infrastructure services provider” Kyndryl Holdings (KD 10.20%) stock got a little less large after missing on its Q4 2026 earnings report this morning.
Analysts had expected Kyndryl to earn $0.49 per share on sales of just under $4 billion for the quarter. Instead, Kyndryl earned only $0.08 per share, and its sales were less than $3.8 billion — and so now, Kyndryl stock is down 9.4% through 1:20 p.m. ET Wednesday.
Image source: Getty Images.
Kyndryl Q4 earnings
Kyndryl’s news wasn’t horrible, exactly. Sales for the final quarter of the year declined less than 1% year over year, and full-year fiscal 2026 sales were actually up a small fraction of 1%. Despite the tiny changes in sales, however, Kyndryl’s profits plummeted dramatically.
For the quarter, Kyndryl’s $0.08 per share profit represented a 71% year-over-year decline. For the year, Kyndryl’s $0.85 per share profit fell 19%.
Why did the numbers decline? Mainly because Kyndryl operates on such thin margins that almost anything “bad” can upset them. In this case, higher income taxes and a small increase in spending on selling, general, and administrative expenses were enough to upset the apple cart.
Kyndryl
Today’s Change
(-10.20%) $-1.50
Current Price
$13.20
What’s next for Kyndryl?
The good news is that, as bad as earnings may look right now, Kyndryl is still generating plenty of cash — $406 million in positive free cash flow in fiscal 2026, down only 3% from last year. The better news is that Kyndryl expects to generate between $400 million and $500 million in fiscal 2027 — as much as a 23% improvement.
If you ask me, that’s simply not bad enough news to justify selling off Kyndryl stock by more than 9%. Wall Street made a mistake today.
