Revenue has been essentially flat near $3.7B to $3.8B per quarter while operating margin of 4.0% in 2027Q2 and net margin of 1.6% suggest SG&A continues to absorb most gross profit and limit operating leverage.
Kyndryl Holdings, Inc. (KD) annual income statement — 7-year revenue, gross profit & net income history
| Metric | TTM | Mar'26 | Mar'25 | Mar'24 | Mar'23 | Mar'22 | Mar'21 | Mar'20 |
|---|
| Sales/Revenue | 26.37B | 15.09B | 15.06B | 16.05B | 17.03B | 18.66B | 18.66B | 20.28B |
| Revenue Growth % | 75.71% | 0.23% | -6.2% | -5.72% | -8.74% | 0% | -8% | - |
| Cost of Goods Sold | 20.54B | 11.8B | 11.91B | 13.19B | 14.5B | 16.55B | 16.55B | 17.68B |
| COGS % of Revenue | - | 78.21% | 79.13% | 82.16% | 85.15% | 88.71% | 88.71% | 87.19% |
| Gross Profit | 5.84B | 3.29B | 3.14B | 2.86B | 2.53B | 2.11B | 2.11B | 2.6B |
| Gross Margin % | 22.13% | 21.79% | 20.87% | 17.84% | 14.85% | 11.29% | 11.29% | 12.81% |
| Gross Profit Growth % | - | 4.65% | 9.78% | 13.25% | 19.98% | 0% | -18.87% | - |
| Operating Expenses | 4.93B | 2.65B | 2.59B | 2.77B | 2.91B | 2.78B | 2.78B | 3.23B |
| OpEx % of Revenue | - | 17.59% | 17.21% | 17.28% | 17.11% | 14.88% | 14.88% | 15.92% |
| Selling, General & Admin | 4.67B | 2.65B | 2.59B | 2.77B | 2.91B | 2.78B | 2.78B | 3.15B |
| SG&A % of Revenue | - | 17.59% | 17.21% | 17.28% | 17.11% | 14.88% | 14.88% | 15.51% |
| Research & Development | 0 | 0 | 49M | 58M | 79M | 23M | 0 | 83M |
| R&D % of Revenue | - | - | 0.33% | 0.36% | 0.46% | 0.12% | - | 0.41% |
| Other Operating Expenses | 2M | 0 | -49M | -58M | -79M | -23M | 0 | 0 |
| Operating Income | 904M | 635M | 552M | 90M | -386M | -669M | -669M | -631M |
| Operating Margin % | 3.43% | 4.21% | 3.67% | 0.56% | -2.27% | -3.59% | -3.59% | -3.11% |
| Operating Income Growth % | - | 15.04% | 513.33% | 123.32% | 42.3% | 0% | -6.02% | - |
| EBITDA | 2.11B | 3.41B | 1.57B | 1.27B | 988M | 995M | 995M | 867M |
| EBITDA Margin % | 8% | 22.59% | 10.42% | 7.93% | 5.8% | 5.33% | 5.33% | 4.28% |
| EBITDA Growth % | -17.96% | 117.34% | 23.25% | 28.85% | -0.7% | 0% | 14.76% | - |
| D&A (Non-Cash Add-back) | 1.21B | 2.77B | 1.02B | 1.18B | 1.37B | 1.66B | 1.66B | 1.5B |
| EBIT | 924M | 503M | 535M | -46M | -757M | -1.84B | -1.84B | -523M |
| Net Interest Income | -176M | -89M | -100M | -122M | -94M | -64M | -64M | -76M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 176M | 89M | 100M | 122M | 94M | 64M | 64M | 76M |
| Other Income/Expense | -155M | -221M | -117M | -258M | -465M | -1.23B | -1.23B | 52M |
| Pretax Income | 749M | 414M | 435M | -168M | -851M | -1.9B | -1.9B | -579M |
| Pretax Margin % | 2.84% | 2.74% | 2.89% | -1.05% | -5% | -10.2% | -10.2% | -2.86% |
| Income Tax | 417M | 215M | 184M | 172M | 524M | 402M | 402M | 364M |
| Effective Tax Rate % | 55.67% | 51.93% | 42.3% | -102.38% | -61.57% | -21.12% | -21.12% | -62.87% |
| Net Income | 331M | 198M | 252M | -340M | -1.37B | -2.3B | -2.3B | -943M |
| Net Margin % | 1.26% | 1.31% | 1.67% | -2.12% | -8.07% | -12.35% | -12.35% | -4.65% |
| Net Income Growth % | -18.67% | -21.43% | 174.12% | 75.25% | 40.36% | 0% | -144.33% | - |
| Net Income (Continuing) | 331M | 199M | 251M | -340M | -1.38B | -2.31B | -2.31B | -943M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 99M | 117M | 113M | 107M | 97M | 3M | 3M | 56M |
| EPS (Diluted) | 1.51 | 0.85 | 1.05 | -1.48 | -6.06 | -10.28 | -8.99 | -4.21 |
| EPS Growth % | -14.52% | -19.05% | 170.95% | 75.58% | 41.05% | -14.35% | -113.54% | - |
| EPS (Basic) | - | 0.87 | 1.09 | -1.48 | -6.06 | -10.28 | -8.99 | -4.21 |
| Diluted Shares Outstanding | 219.1M | 233.8M | 239.1M | 229.2M | 226.7M | 224.1M | 223.92M | 223.92M |
| Basic Shares Outstanding | 218M | 228.3M | 231.5M | 229.2M | 226.7M | 224.1M | 223.92M | 223.92M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying KD stock.
For fiscal year 2026, Kyndryl Holdings, Inc. (KD) reported total revenue of $15.09B. This represents a 25.6% decline compared to $20.28B in 2020.
Kyndryl Holdings, Inc. (KD) is profitable, generating $198.0M in net income for the fiscal year ending 2026 with a net profit margin of 1.3%.
Kyndryl Holdings, Inc. (KD) reported an operating income of $635.0M, resulting in an operating profit margin of 4.2%. This margin reflects the operational efficiency of the business before interest and taxes.
Kyndryl Holdings, Inc. (KD) generated $3.29B in gross profit for the year, representing a gross profit margin of 21.8%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Leverage constraining earnings recovery
Metrics are mathematically derived from official filings.
Flat Top Line Masks Mix Shift
Based on Kyndryl's reported figures, trailing revenue of $15.1B grew only 0.2% year over year, suggesting the top line is stagnating while legacy contracts roll off.
The near-zero growth rate is consistent with management deliberately exiting low-margin focus accounts inherited from IBM, which would depress headline revenue even as the mix improves. The quarterly pattern, with growth swinging between roughly -2% and +3%, does not show a clear acceleration, so investors should monitor whether Kyndryl Consult signings convert into reported revenue. Without visible growth durability, the thesis depends on margin mix rather than volume expansion.
Gross Margin Stuck Near Twenty-Two Percent
Gross margin has hovered between 20.4% and 23.5% across the last ten quarters, which, according to recent SEC filings, indicates limited pricing power relative to higher-margin peers such as Leidos at 17.7%.
The range is narrow, and the most recent quarter's 23.5% gross margin is the high of the period, which may reflect early benefit from exiting zero-margin contracts rather than a durable structural shift. Compared with Cisco's 64.5% and Leidos's operating margin of 12.3%, Kyndryl's 4.0% operating margin suggests its cost base remains heavy relative to delivered value. Sustained expansion would require evidence that automation through the Kyndryl Bridge platform is lowering delivery costs.
Operating Leverage Remains Thin
As reported in financial statements, operating income of $147.0M on $3.7B of quarterly revenue equals a 4.0% margin, implying SG&A absorbs most of the gross profit and limits operating leverage.
SG&A runs at roughly 18% of revenue in the latest quarter, consuming about $669M against $857M of gross profit, which indicates overhead is scaling in step with revenue rather than below it. The modest operating margin movement across periods suggests overhead efficiency has not yet produced meaningful incremental margin. Investors should watch whether SG&A declines as a share of revenue as the consulting mix grows.
Net Income Diverges From Operating Trend
Based on Kyndryl's reported figures, net income swung from a $43M loss to a $215M profit within four quarters, a pattern that appears driven by non-operating items rather than the operating run rate.
Operating income stayed in a relatively narrow band, so the large net income swings point to below-the-line items such as separation costs, tax effects, or other gains that the headline EPS does not isolate. The latest quarter's EPS of $0.27 against a $0.77 estimate further highlights how sensitive reported earnings are to these items. Investors should treat the net income line as low-quality until the composition of these adjustments is clearer.
Margin Recovery Thesis Faces Execution Risk
The strongest challenge is that a 1.3% trailing net margin and a 3.84 debt-to-equity ratio leave little room for error if legacy contract exits take longer than management expects.
Bears would argue that the valuation gap versus peers reflects a structurally low-margin business rather than a temporary transition, and that restructuring charges have recurred long enough to question the 'one-time' framing. A persistent EPS shortfall, such as the latest $0.27 miss, combined with flat revenue could signal that margin expansion is slower than consensus assumes. Investors should monitor whether GAAP profitability emerges without heavy adjustments.