Kyndryl Holdings Inc., the provider of IT-infrastructure services that was spun off from International Business Machines in 2021, has reported a narrowed loss for its fiscal first quarter. The company’s focus on reducing costs and targeting higher-margin accounts helped improve its financial performance.
In the three months ended June 30, Kyndryl recorded a loss of $141 million, or 62 cents a share, compared to a loss of $250 million, or $1.11 a share, in the same period last year. Excluding charges related to workforce rebalancing and other one-time items, the company broke even on an adjusted basis. Analysts had expected an adjusted loss of 95 cents per share.
Despite a slight decline in revenue by approximately 2% to $4.19 billion, Kyndryl’s results outperformed analysts’ expectations, who had projected sales of $4.09 billion.
Kyndryl’s Chief Executive, Martin Schroeter, emphasized the company’s focus on parting ways with low- or no-profit accounts inherited from the IBM spinoff. This strategic shift has impacted sales but is expected to improve profitability in the long run. Schroeter stated that the company aims to complete this process during the current year.
Schroeter also expressed optimism about customer spending on IT services, highlighting that despite increasing interest rates and pressure to cut costs, Kyndryl’s customers continue to prioritize investments in mission-critical infrastructure. While some enterprise-tech providers have experienced delays in closing deals and greater scrutiny from CFOs, Kyndryl remains confident in maintaining its position as a trusted partner for its clients.