Free cash flow margin swung from -7.1% to 10.1% across recent quarters, indicating cash conversion appears driven by working capital timing rather than a steady operating run rate.
Kyndryl Holdings, Inc. (KD) cash flow statement — 7-year operating, investing & financing cash flows
| Metric | TTM | Mar'26 | Mar'25 | Mar'24 | Mar'23 | Mar'22 | Mar'21 | Mar'20 |
|---|
| Cash from Operations | 789M | 948M | 942M | 454M | 781M | -119M | -119M | 1.13B |
| Operating CF Margin % | - | 6.28% | 6.26% | 2.83% | 4.59% | -0.64% | -0.64% | 5.59% |
| Operating CF Growth % | -81.18% | 0.64% | 107.49% | -41.87% | 756.3% | 0% | -110.49% | - |
| Net Income | 331M | 198M | 252M | -340M | -1.37B | -2.3B | -2.3B | -943M |
| Depreciation & Amortization | 1.21B | 2.77B | 1.02B | 2.94B | 1.37B | 1.66B | 1.66B | 4.04B |
| Stock-Based Compensation | 12M | 64M | 100M | 95M | 113M | 71M | 71M | 0 |
| Deferred Taxes | -57M | -24M | -1M | -13M | 285M | -401M | -401M | -33M |
| Other Non-Cash Items | 1.73B | 115M | 1.55B | -120M | 1.67B | 2.32B | 2.32B | 52M |
| Working Capital Changes | -2.18B | -2.18B | -1.97B | -2.11B | -1.29B | -1.47B | -1.47B | -1.98B |
| Change in Receivables | -50M | -128M | 289M | 11M | 664M | -1.08B | -1.08B | 23M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | -161M | -93M | -89M | -305M | 282M | 125M | 125M | 33M |
| Cash from Investing | -933M | -561M | -404M | -553M | -835M | -572M | -572M | -1.13B |
| Capital Expenditures | -485M | -608M | -605M | -651M | -865M | -752M | -752M | -1.19B |
| CapEx % of Revenue | 1.84% | 4.03% | 4.02% | 4.06% | 5.08% | 4.03% | 4.03% | 5.87% |
| Acquisitions | 46M | 66M | 139M | 0 | 0 | 0 | 0 | 63M |
| Investments | - | - | - | - | - | - | - | - |
| Other Investing | -494M | -19M | 62M | 98M | 30M | 180M | 180M | -1M |
| Cash from Financing | 525M | 457M | -286M | -170M | -141M | 2.92B | 2.92B | 0 |
| Debt Issued (Net) | 822M | 854M | -148M | -150M | -118M | 2.95B | 2.95B | -18M |
| Equity Issued (Net) | -262M | -398M | -138M | -22M | 0 | -1M | -1M | 18M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -262M | -398M | -138M | -22M | 0 | -1M | -1M | 0 |
| Other Financing | -35M | 1M | 0 | 2M | -23M | -31M | -31M | 0 |
| Net Change in Cash | 333M | 834M | 235M | -306M | -294M | 2.2B | 2.2B | 50M |
| Free Cash Flow | 90M | 340M | 337M | -197M | -84M | -871M | -871M | -56M |
| FCF Margin % | 0.34% | 2.25% | 2.24% | -1.23% | -0.49% | -4.67% | -4.67% | -0.28% |
| FCF Growth % | -62.81% | 0.89% | 271.07% | -134.52% | 90.36% | 0% | -1455.36% | - |
| FCF per Share | 0.41 | 1.45 | 1.41 | -0.86 | -0.37 | -3.89 | -3.89 | -0.25 |
| FCF Conversion (FCF/Net Income) | 0.27x | 4.79x | 3.74x | -1.34x | -0.57x | 0.05x | 0.05x | -1.20x |
| Interest Paid | 57M | 115M | 119M | 118M | 98M | 2M | 2M | 0 |
| Taxes Paid | 56M | 151M | 149M | 191M | 167M | 12M | 12M | 0 |
Quick answers to the most common questions about buying KD stock.
Kyndryl Holdings, Inc. (KD) generated $948.0M in net cash from operating activities in 2026. This reflects the cash generated directly from core business operations.
Kyndryl Holdings, Inc. (KD) generated $340.0M in free cash flow in 2026. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Kyndryl Holdings, Inc. (KD) spent $608.0M on capital expenditures in 2026. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2026, Kyndryl Holdings, Inc. (KD) spent $398.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
Working capital drain and leverage
Metrics are mathematically derived from official filings.
Operating Cash Flow Diverges From Net Income
Across the ten reported quarters, operating cash flow has swung sharply against net income, with several quarters showing OCF/NI ratios far above or below 1.0, which according to reported figures suggests earnings quality is driven more by timing than by a steady operating run rate.
Net income has been small and volatile, moving from a loss of $43.0M to profits of $215.0M, while operating cash flow ranged from -$310.0M to $581.0M. Such extreme OCF/NI ratios, including negative readings in the first quarters of 2025 and 2026, appear to reflect working capital swings rather than durable cash generation. Investors should monitor whether the quarterly volatility narrows as legacy contract exits complete.
Working Capital Swings Dominate Cash Generation
Working capital changes of -$916.0M in 2027Q1 and -$881.0M in 2026Q1 dwarf reported net income in those periods, indicating that receivable and payable timing, rather than profitability, is the primary driver of quarterly operating cash flow for Kyndryl.
The recurring large outflows in the first quarter of each fiscal year suggest a seasonal pattern in collections or payables that may compress early-year cash. Subsequent reversals in the fourth quarters, such as the $581.0M operating cash inflow in 2025Q4, imply that working capital is being unwound rather than permanently consumed. This pattern warrants further investigation into receivable aging and vendor payment terms.
Free Cash Flow Oscillates Around Breakeven
Free cash flow margins across the ten quarters range from -7.1% to 10.1%, with the trailing pattern showing repeated negative quarters, which based on Kyndryl's reported figures indicates the business has not yet established a consistent free cash generation baseline.
Negative FCF in four of the ten quarters, including -$459.0M in 2027Q1, suggests that cash conversion remains highly dependent on timing and capital spending decisions. Positive quarters such as 2026Q4 at $382.0M appear insufficient on their own to offset earlier outflows. The trajectory points to a business that is cash-positive on a cumulative basis only with material fluctuation.
Capital Intensity Moderate but Variable
Capital expenditure ran between 1.0% and 6.3% of quarterly revenue, with the highest intensity in 2025Q4 and 2027Q2, which as reported in financial statements suggests spending is lumpy and tied to infrastructure or project timing rather than a steady maintenance base.
Given depreciation and amortization of roughly $250M to $300M per quarter in most periods, capex appears to be running below the depreciation charge in several quarters, which may indicate underinvestment in replacing legacy infrastructure. Investors should monitor whether capex rises to match asset replacement needs as the business transitions toward higher-margin services.
Capital Returns Constrained by Leverage
Dividends have been absent across all ten quarters and buybacks have been modest, with the largest repurchase at $129.0M, which based on Kyndryl's reported figures suggests cash is being prioritized for operations and debt service rather than shareholder distributions.
With a debt-to-equity ratio of 3.84 and negative operating cash flow in several quarters, the absence of dividends appears consistent with a deleveraging posture. Acquisition spending, which turned into a $183.0M inflow in 2025Q3, adds to the volatility of net investing cash flows. Capital allocation seems constrained, so any future returns would likely depend on sustained positive free cash flow.
Cash Flow Smoothing May Obscure Structural Weakness
Summing the ten quarters yields a cumulative free cash flow that is roughly negative, and the strongest quarters may reflect one-time working capital releases, which according to recent SEC filings could mask a weaker underlying cash conversion profile.
The positive quarters that drive the perception of recovery, particularly 2026Q4 and 2025Q4, coincide with large working capital reversals rather than sustained profit growth. Stock-based compensation and D&A add non-cash relief, but these do not substitute for real cash earnings. If working capital normalizes without offsetting profit gains, the cash flow profile could deteriorate further.