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What changed in Kyndryl Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Kyndryl Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+297 added−331 removedSource: 10-K (2025-05-30) vs 10-K (2024-05-30)

Top changes in Kyndryl Holdings, Inc.'s 2025 10-K

297 paragraphs added · 331 removed · 238 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

73 edited+12 added−32 removed64 unchanged
Biggest changeThe Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, proxy statements and amendments to those documents filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), are also available free of charge on the Company’s internet website at www.kyndryl.com as soon as reasonably practicable after those documents are electronically filed with or furnished to the SEC. 13 Table of Contents We routinely post on or make accessible through our corporate website at www.kyndryl.com and Investor Relations website at https;//investors.kyndryl.com information that may be material or of interest to our investors, including news and materials regarding our financial performance, business developments, investor events and other important information regarding the Company.
Biggest changeThe Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, proxy statements and amendments to those documents filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), are also available free of charge on the Company’s internet website at www.kyndryl.com as soon as reasonably practicable after those documents are electronically filed with or furnished to the SEC.
These services allow our customers to operate without issue or disruption in response to attacks, outages, natural disasters and geopolitical events. ● Network Services & Edge: We provide network and edge services to help customers meet their technological and commercial requirements for connectivity and compute across their digital environments.
These services allow our customers to operate without issue or disruption in response to attacks, outages, natural disasters and geopolitical events. ● Network & Edge Services: We provide network and edge services to help customers meet their technological and commercial requirements for connectivity and compute across their digital environments.
They tailor the full suite of our services to customers’ needs to deliver value and business outcomes across a wide range of technology environments. Account leaders are supported by dedicated, multi-disciplinary technical sales and delivery teams, consulting teams, as well as by shared services teams, to support an effective and efficient engagement.
They tailor the full suite of our services to customers’ needs to deliver value and business outcomes across a wide range of technology environments. Account leaders are supported by dedicated, multi-disciplinary technical sales, delivery and consulting teams, as well as by shared services teams, to support an effective and efficient engagement.
In the area of AI and generative AI, we both (i) apply AI and machine learning to deliver services through our Kyndryl Bridge operating platform and (ii) enable our customers to deploy AI and generative AI solutions through our data architecture, data governance, network and security services.
In the area of AI and generative AI, we both (i) apply AI and machine learning to deliver services through our Kyndryl Bridge operating platform and (ii) enable our customers to deploy AI and generative AI solutions through our data architecture, data governance, network, security, applications and AI services.
This position enables us to meet customers where they are in their unique digital transformations, work alongside our customers to take them where they want to be and in turn enable them to realize the full, at-scale value of that journey. Underpinning all of this are our intellectual property, mission-critical expertise across industries and a broad ecosystem of technology alliances.
This position enables us to meet customers where they are in their unique digital transformations, work alongside our customers to take them where they want to be and in turn enable them to realize the full, at-scale value of that progression. Underpinning all of this are our intellectual property, mission-critical expertise across industries and a broad ecosystem of technology alliances.
We deliver unique value by providing intellectual property derived from insights at scale, deploying mission-critical expertise and leveraging a broad ecosystem – while building and strengthening partnerships to enhance the customer experience. We position ourselves uniquely, leveraging a core strength in governance and management of complex IT infrastructure environments, delivered through a global footprint.
We deliver differentiated value by providing intellectual property derived from insights at scale, deploying mission-critical expertise and leveraging a broad ecosystem – while building and strengthening partnerships to enhance the customer experience. We position ourselves uniquely, leveraging a core strength in governance and management of complex IT infrastructure environments, delivered through a global footprint.
On November 3, 2021, the Separation was achieved through the former Parent’s pro rata distribution of 80.1% of the shares of common stock of Kyndryl to holders of the former Parent’s common stock as of the close of business on the record date of October 25, 2021.
On November 3, 2021, the Separation was achieved through the former Parent’s pro rata distribution of 80.1% of the shares 3 Table of Contents of common stock of Kyndryl to holders of the former Parent’s common stock as of the close of business on the record date of October 25, 2021.
Our Strategies Our strategy is centered on our ability to build and enrich trusted relationships with customers and technology partners, differentiating Kyndryl through our proven ability to create and deploy scale-derived intellectual property, provide mission-critical expertise across industries and partner with a broad ecosystem for contemporary capabilities that best suit customers’ needs.
Our Strategies Our strategy is centered on our ability to build and enrich trusted relationships with customers and technology partners, differentiating Kyndryl through our proven ability to create and deploy scale-derived intellectual property, provide mission-critical expertise across industries and partner with a broad ecosystem of leading technology providers for contemporary capabilities that best suit customers’ needs.
Kyndryl’s stock began trading 3 Table of Contents as an independent company on November 4, 2021, and IBM disposed of its 19.9% retained interest in Kyndryl common stock in the year following the Spin-off. Our Industry and Market Opportunity We operate in an industry that provides services for the technology environments that power customers’ businesses.
Kyndryl’s stock began trading as an independent company on November 4, 2021, and IBM disposed of its 19.9% retained interest in Kyndryl common stock in the year following the Spin-off. Our Industry and Market Opportunity We operate in an industry that provides services for the technology environments that power customers’ businesses.
Our increased use of automation and AI within our delivery operations helps to reduce costs across the entire organization. ● Accounts initiative – Addressing elements of our business with substandard margins. We are working to transform the profitability of certain revenue streams that represent a meaningful portion of our business.
Our increased use of automation and AI within our delivery operations helps to reduce costs across the entire organization. ● Accounts initiative – Addressing elements of our business with substandard margins. We have been working to transform the profitability of certain revenue streams that represent a meaningful portion of our business.
The information contained on the websites referenced above is not, and shall not be deemed to be, incorporated into this filing or any of our other filings with the SEC. Executive Officers of the Registrant: ​ Our executive officers as of the date hereof are as follows: Martin Schroeter. Mr.
The information contained on the websites referenced above is not, and shall not be deemed to be, incorporated into this filing or any of our other filings with the SEC. 12 Table of Contents Executive Officers of the Registrant ​ Our executive officers as of the date hereof are as follows: ​ Martin Schroeter. Mr.
This account coverage model ensures consistent and reliable delivery of services for our existing relationships over the lifetime of current and renewal contracts. In addition, the model supports the potential expansion of existing relationships based on our deep industry perspective and expertise and knowledge of customers’ unique needs.
This account coverage model ensures consistent and reliable delivery of services for our existing relationships over the lifetime of current and renewal contracts. In addition, the model supports the potential expansion of existing relationships based on our deep industry perspective and expertise and knowledge of customers’ 9 Table of Contents unique needs.
This is all underpinned by our ability to integrate and operate mission-critical technology at scale using deep engineering expertise and intellectual property. Our approach has enabled us to reach significant scale, with $16.1 billion in revenue in fiscal year 2024, which ended March 31, 2024.
This is all underpinned by our ability to integrate and operate mission-critical technology at scale using deep engineering expertise and intellectual property. Our approach has enabled us to reach significant scale, with $15.1 billion in revenue in fiscal year 2025, which ended March 31, 2025.
Kyndryl’s Spin-off In November 2021, our former parent company, International Business Machines Corporation (“IBM”, “Parent” or “former Parent”) effected the spin-off (the “Separation” or the “Spin-off”) of the infrastructure services unit (the “Kyndryl Businesses”) of its Global Technology Services segment through the distribution of shares of Kyndryl’s common stock to IBM stockholders (the “Distribution”).
Kyndryl’s Spin-off In November 2021, our former parent company, International Business Machines Corporation (“IBM” or “former Parent”) effected the spin-off (the “Separation” or the “Spin-off”) of the infrastructure services unit of its Global Technology Services segment through the distribution of shares of Kyndryl’s common stock to IBM stockholders.
We offer a range of high-value capabilities including cloud services and security and resiliency services, providing us with a sustainable competitive advantage when helping customers transform 6 Table of Contents their technology environments.
We offer a range of high-value capabilities including cloud services and security and resiliency services, providing us with a sustainable competitive advantage when helping customers transform their technology environments.
Wyshner, 57, was appointed our Chief Financial Officer in September 2021. From March 2020 until his appointment as our Chief Financial Officer, Mr. Wyshner served as the Chief Financial Officer at XPO Logistics, Inc., where he led all financial functions for the global transportation and contract logistics company. Prior to that, Mr.
Wyshner, 58, was appointed our Chief Financial Officer in 2021. From 2020 until his appointment as our Chief Financial Officer, Mr. Wyshner served as the Chief Financial Officer at XPO Logistics, Inc., where he led all financial functions for the global transportation and contract logistics company. Prior to that, Mr.
Our depth of experience implementing and operating complex architectures across technology sets has yielded valuable experience and intellectual property. We have more than 3,300 patents that relate to various areas of running complex technology environments, including patents related to multi-cloud management, orchestration, integrated monitoring, issue triage and resolution and other areas that enable quality of service.
Our depth of experience implementing and operating complex architectures across technology sets has yielded valuable experience and intellectual property. We have approximately 3,000 patents that relate to various areas of running complex technology environments, including patents related to multi-cloud management, orchestration, integrated monitoring, issue triage and resolution and other areas that enable quality of service.
Our multi-cloud management capabilities are differentiated by our ability to deliver an integrated view of our customers’ diverse technology environments and to provide our services and solutions digitally.
Our multi-cloud management capabilities are differentiated by our ability to 6 Table of Contents deliver an integrated view of our customers’ diverse technology environments and to provide our services and solutions digitally.
We are the trusted advisor and partner to thousands of customers worldwide, in technology-intensive and often highly regulated environments, managing mission-critical technology environments across a wide range of industries. ● Nearly 50 percent of our revenue is derived from companies in the financial services industry, where we serve hundreds of global, multinational and regional banks, insurance companies, mutual fund complexes, credit card and transaction processors and providers of other financial services. ● Approximately 20 percent of our revenue is generated from technology, media and telecom companies. ● Nearly 15 percent of our revenue is from retail and travel companies. ● More than 10 percent of our revenue is generated from the industrial sector, which includes some of the largest automotive manufacturers in the world.
We are the trusted advisor and partner to thousands of customers worldwide, in technology-intensive and often highly regulated environments, managing mission-critical technology environments across a wide range of industries. ● Approximately 44 percent of our revenue is derived from companies in the financial services industry, where we serve hundreds of global, multinational and regional banks, insurance companies, mutual fund complexes, credit card and transaction processors and providers of other financial services. ● 15 percent of our revenue is generated from the industrial sector, which includes some of the largest automotive manufacturers in the world. ● 13 percent of our revenue is generated from healthcare companies and the public sector. ● 13 percent of our revenue is generated from technology, media and telecom companies. ● 15 percent of our revenue is from retail, travel and other companies.
For example, we are recognized leaders in the use of automation and operational AI in the delivery of our services, executing more than 100 million automated actions per month in the IT environments we manage, which enables greater quality and efficiency for us and our customers.
For example, we are a recognized leader in the use of automation and operational AI in the delivery of our services, executing more than 180 million automated actions per month in the IT environments we manage, which enables greater quality and efficiency for us and our customers.
Our expanded use of automation and other technology tools allows us to further strengthen the quality of services we deliver to our customers, drive efficiency in our operations, and redeploy professionals in our organization to serve new revenue streams and backfill attrition as they arise.
Our expanded use of Kyndryl Bridge, automation and other technology tools allows us to further strengthen the quality of services we deliver to our customers, drive efficiency in our operations, and redeploy professionals in our organization to serve new revenue streams and backfill attrition.
In parallel, we are extending our operating, governance and compliance models to this broader set of technologies to integrate and provide end-to-end capabilities for our customers as they digitize and evolve their environments. 7 Table of Contents ● Digitally consumable services models .
In parallel, we are extending our operating, governance and compliance models to this broader set of technologies to integrate and provide end-to-end capabilities for our customers as they digitize and evolve their environments. 7 Table of Contents ● Digital service models .
Through these alliances, we are developing more services to expand the role we play with existing customers and to access new customers and markets. We have a long track record of running customers’ technology environments, enabling them to focus on the core aspects of their businesses.
Through these alliances, we continue to develop more services to expand the role we play with existing customers and to access new customers and markets. We have a long track record of running customers’ technology environments, enabling them to focus on other aspects of their businesses.
Charbonnier served as the Chief Human Resources Officer at Wolters Kluwer, where she was responsible for the design and implementation of all human resources strategies, policies and processes. Prior to that, Ms. Charbonnier served as the Chief Human Resources Officer at Broadridge Financial Solutions from August 2008 to December 2014. From August 1995 to August 2008, Ms.
From 2015 until her appointment, Ms. Charbonnier served as the Chief Human Resources Officer at Wolters Kluwer, where she was responsible for the design and implementation of all human resources strategies, policies and processes. Prior to that, Ms. Charbonnier served as the Chief Human Resources Officer at Broadridge Financial Solutions from 2008 to 2014. From 1995 to 2008, Ms.
Wyshner served as the Chief Financial Officer at Wyndham Hotels & Resorts, Inc. from May 2018 to December 2019, and as its senior advisor from December 2019 to March 2020. He served as Executive Vice President and Chief Financial Officer of Wyndham Worldwide Corporation, from which Wyndham Hotels was spun-off, from August 2017 to May 2018.
Wyshner served as the Chief Financial Officer at Wyndham Hotels & Resorts, Inc. from 2018 to 2019, and as its senior advisor from 2019 to 2020. He served as Executive Vice President and Chief Financial Officer of Wyndham Worldwide Corporation, from which Wyndham Hotels was spun-off, from 2017 to 2018. From 2006 to 2017, Mr.
Our global, high-quality service delivery is underpinned by experienced and highly-trained practitioners who deliver our capabilities to our customers on a daily basis. Importantly, our culture of customer service excellence – especially in times of crisis, from pandemics to natural disasters, cyber-attacks and power outages – carries on from our heritage through our people.
Our global, high-quality service delivery is underpinned by experienced and highly-trained practitioners who deliver our capabilities to our customers on a daily basis. Importantly, we are committed to maintaining our culture of customer service excellence – especially in times of crisis, from pandemics to natural disasters, cyber-attacks and power outages.
Companies continue to move workloads to the cloud, adopting new capabilities for flexibility, workload portability and management. Public cloud is an increasingly critical component of enterprise IT strategy, and hybrid and multi-cloud technologies offer flexibility to achieve security, performance and cost savings needed for critical workloads. These transitions are often complex, with companies frequently seeking assistance from service providers.
Public cloud is an increasingly critical component of enterprise IT strategy, and hybrid and multi-cloud technologies offer flexibility to achieve security, performance and cost savings needed for critical workloads. These transitions are often complex, with companies frequently seeking assistance from service providers.
Our services enable us to modernize and manage cloud and on-premises environments as “one” for our customers, enabling them to scale seamlessly. To deliver these services, we rely on our team of skilled practitioners, consisting of approximately 80,000 professionals.
Our services enable us to modernize and manage cloud and on-premises environments as “one” for our customers, enabling them to scale seamlessly. To deliver these services, we rely on our team of tens of thousands of skilled practitioners.
From August 2006 to June 2017, Mr. Wyshner served as the Chief Financial Officer of Avis Budget Group and also served as Avis Budget Group’s president from January 2016 to June 2017. Mr. Wyshner received his MBA from the Wharton School of the University of Pennsylvania and his BA in applied mathematics from Yale University. Elly Keinan. Mr.
Wyshner served as the Chief Financial Officer of Avis Budget Group and also served as Avis Budget Group’s president from 2016 to 2017. Mr. Wyshner received his MBA from the Wharton School of the University of Pennsylvania and his BA in applied mathematics from Yale University. Elly Keinan. Mr. Keinan, 60, was appointed our Group President in 2021.
Charbonnier was an HR executive in a variety of leadership roles at PepsiCo, including Vice President for Talent Sustainability for PepsiCo Foods Americas. Ms. Charbonnier received her MBA from Southern Methodist University and her undergraduate degree from Catholic University. 14 Table of Contents Edward Sebold. Mr.
Charbonnier was an HR executive in a variety of leadership roles at PepsiCo, including Vice President for Talent Sustainability for PepsiCo Foods Americas. Ms. Charbonnier received her MBA from Southern Methodist University and her undergraduate degree from Catholic University. Edward Sebold. Mr. Sebold, 60, was appointed our General Counsel and Secretary in 2021.
This includes building new routes to market across these ecosystems to serve as a multiplier, enabling us to expand business via partners such as public cloud providers, ISVs, technology providers (ranging from established, scaled players to growth-stage start-ups), system integrators, business consulting firms and business services providers.
This includes building new routes to market across these ecosystems to serve as a multiplier, enabling us to expand business via partners such as public cloud providers, ISVs, technology providers, system integrators, business consulting firms and business services providers.
Keinan, 59, was appointed our Group President in March 2021. Since September 2020, Mr. Keinan has served as a venture partner at Pitango Venture Capital, focusing on scaling the success of growth stage technology companies, and as an advisor to Sumitomo Corporation. Prior to that, Mr.
Since 2020, Mr. Keinan has served as a venture partner at Pitango Venture Capital, focusing on scaling the success of growth stage technology companies, and as an advisor to Sumitomo Corporation. Prior to that, Mr.
Our highly skilled workforce provides the expertise (e.g., approximately 41,000 hyperscale cloud provider certifications) to securely and reliably handle many of the most complex issues. We also have unique intellectual property applicable to IT environments, as reflected by our portfolio of more than 3,300 patents. ● We consistently deliver performance and reliability for complex environments .
Our highly skilled workforce provides the expertise (e.g., approximately 40,000 hyperscale cloud provider certifications) to securely and reliably handle many of the most complex issues. We also have unique intellectual property applicable to IT environments, including our substantial patent portfolio. ● We consistently deliver performance and reliability for complex environments .
We proactively source talent both internally and externally with advanced capabilities to ensure that we have the right talent, at the right time, in the right place ● Developing: Providing employees with transparency to understand the skills, capabilities and experiences essential to our growth and their progression over their career by ensuring access to resources specifically designed to advance critical skills and competencies ● Retaining: Communicating our strategy and building our Kyndryl culture; establishing programs that are focused on rewarding value creation; recognizing performance; and driving accountability balanced with workplace flexibility, well-being, continuous learning and a diverse, inclusive and equitable environment We are committed to building the technical careers of the future and have made investments in training and skills to enable our people to be relevant, experienced and technically positioned to serve our customers on their most complex challenges.
We are focused on optimizing the employee experience at Kyndryl through: ● Attracting: Elevating the Kyndryl brand and proactively sourcing talent both internally and externally so that we have the right capabilities, at the right time, in the right place ● Developing: Providing employees with transparency to understand the skills, capabilities and experiences essential to their growth and their progression over their career by providing access to resources specifically designed to advance market-valued skills and competencies ● Retaining: Fostering employee engagement by communicating our strategy and building our Kyndryl culture; establishing programs that are focused on rewarding value creation; recognizing performance; responding to feedback collected through regular employee engagement surveys; and driving accountability balanced with workplace flexibility, well-being, continuous learning and an engaged environment We are committed to building the technical careers of the future and have made investments in training and skills to enable our people to be relevant, experienced and technically positioned to serve our customers on their most complex challenges.
We have several key partnerships, including with Microsoft, Google, Amazon Web Services, SAP, VMware, Cisco, Dell Technologies, Oracle, Cloudflare and ServiceNow that accelerate broader market participation, joint solution development and investment in skills and certification enhancements for Kyndryl.
We have several key partnerships, including with Amazon Web Services, Cisco, Dell, Dynatrace, Google Cloud, HPE, Microsoft, NVIDIA, Oracle, Palo Alto Networks, Red Hat, Rubrik, SAP, ServiceNow and VMware that accelerate broader market participation, joint solution development and investment in skills and certification enhancements for Kyndryl.
Our work helps support our customer’s efforts to become one of the most valued and preferred transportation companies in the world. 10 Table of Contents Sales and Marketing Our customer engagement and brand positioning are focused on deepening our existing customer relationships, attracting and winning new customers and creating an ecosystem built on go-to-market relationships with leading cloud and other technology providers, advisors and integrators to offer best-in-class advisory, implementation and managed services tailored to each existing and new customer’s environment and requirements.
Sales and Marketing Our customer engagement and brand positioning are focused on deepening our existing customer relationships, attracting and winning new customers and creating an ecosystem built on go-to-market relationships with leading cloud and other technology providers, advisors and integrators to offer best-in-class advisory, implementation and managed services tailored to each existing and new customer’s environment and requirements.
We deliver these services with a proprietary framework and architecture coupled with proof of concepts to then implement and manage enterprise networks with the appropriate economics. 5 Table of Contents Our advisory and implementation services are branded as “Kyndryl Consult,” span all six of the practices described above, and represented approximately 15 percent of our total revenue for the year ended March 31, 2024.
We deliver these services with a proprietary framework and architecture coupled with proof of concepts to then implement and manage enterprise networks with the appropriate economics. 5 Table of Contents Our advisory and implementation services are branded as “Kyndryl Consult” and span all six of the practices described above.
Our employees, whom we call Kyndryls, have earned certifications through our learning platform and alliance partners, which provide access to curriculums that span strategic skills, cloud, AI, analytics, design thinking, quantum computing and security.
Kyndryl professionals bring deep industry and technical expertise along with a passion for continuous learning. Our employees, whom we call Kyndryls, have earned certifications through our learning platform and alliance partners, which provide access to curriculums that span strategic skills, cloud, AI, analytics, design thinking, quantum computing and security.
We continue to expand our certifications and accreditations each year through consistent investment in skill development around emerging technologies and key areas for growth. Health, Safety and Well-Being Protecting the health, safety and well-being of our employees is a top priority.
Our employee base adds and maintains various technical certifications and accreditations through consistent investment in skill development around emerging technologies and key areas for growth. Health, Safety and Well-Being Protecting the health, safety and well-being of our employees is a top priority.
This team has implemented a health and safety management system that monitors our locations for compliance with all local health and safety regulations, minimizes workplace health and safety risks, and provides for safe and healthy workplaces so our employees can do their best work.
In addition, our experienced Health and Safety team, comprised of medical doctors, nurses, industrial hygiene, safety and workforce health experts, implemented a health and safety management system that monitors our locations for compliance with all local health and safety regulations, minimizes workplace health and safety risks, and provides for safe and healthy workplaces so our employees can do their best work.
Keinan served a variety of executive roles at IBM from July 1987 to June 2020, including General Manager of IBM North America and Chairman of IBM Japan, and held top leadership roles in Latin America and Europe. Mr. Keinan currently serves on the boards of Cellebrite, Ottopia and United Way of New York City. Mr.
Keinan served a variety of executive roles at IBM from 1987 to 2020, including General Manager of IBM North America and Chairman of IBM Japan, and held top leadership roles in Latin America and Europe. From 2021 to August 2024, Mr. Keinan served on the board of Ottopia. Mr.
Sebold, 59, was appointed our General Counsel and Secretary in October 2021 in connection with the Spin-off. From March 2012 until his appointment as our General Counsel, Mr. Sebold served as Assistant General Counsel at IBM, leading several global legal functions at IBM, including teams that worked with services, IBM's Watson Health, litigation and mergers and acquisitions.
From 2012 until his appointment as our General Counsel, Mr. Sebold served as Assistant General Counsel at IBM, leading several global legal functions at IBM, including teams that worked with services, IBM’s Watson Health, litigation and mergers and acquisitions. Prior to joining IBM in 2012, Mr. Sebold was a partner at Jones Day in the firm’s Cleveland and Houston offices.
Schroeter, 59, was appointed our Chief Executive Officer in January 2021 and was appointed as Chairman of the Board in October 2021 in connection with the Spin-off. Previously, Mr.
Schroeter, 60, was appointed our Chief Executive Officer and Chairman of the Board in 2021. Previously, Mr.
At Kyndryl, we aim to be: ● Restless to power the future; eager to learn and innovate ● Empathetic role models; serving with trust and transparency ● Focused on shared success to achieve both business results and key human capital goals – driving a deep analytic understanding of people, technology and customer challenges 12 Table of Contents ● Fast, agile change leaders with courage to be bold and judgment to manage risk ● Dedicated to building empowered, inclusive and accountable teams; recruiting, retaining and developing diverse talent that enhances performance and capabilities We support new ways of working and accelerated career progression promoting innovation throughout our organization.
At Kyndryl, we aim to be: ● Restless to power the future; eager to learn and innovate ● Empathetic role models; serving with trust and transparency ● Focused on shared success to achieve both business results and key human capital goals – driving a deep analytic understanding of people, technology and customer challenges ● Fast, agile change leaders with courage to be bold and judgment to manage risk ● Dedicated to building empowered, engaged and accountable teams 11 Table of Contents Our business is centered around our people, and our talent strategy revolves around our ability to best serve our customers through ongoing investment in talent and skill development.
With respect to governance matters, Kyndryl also leverages industry best practices to govern its quality management system, processes and tools to enable operations to meet the standards of compliance and responsible business practices that clients and partners expect.
Kyndryl has published its human rights and modern slavery statement and launched the Kyndryl Foundation, which delivers philanthropic grants for community development programs. 8 Table of Contents With respect to governance matters, Kyndryl also leverages industry best practices to govern its quality management system, processes and tools to enable operations to meet the standards of compliance and responsible business practices that clients and partners expect.
Keinan received his MBA from University of Miami Herbert Business School and his Bachelor of Science in Computer Science and Electrical Engineering from Rensselaer Polytechnic Institute. Maryjo Charbonnier. Ms. Charbonnier, 54, was appointed our Chief Human Resources Officer in July 2021. From January 2015 until her appointment, Ms.
Keinan currently serves on the boards of Cellebrite and United Way of New York City. Mr. Keinan received his MBA from the University of Miami Herbert Business School and his Bachelor of Science in Computer Science and Electrical Engineering from Rensselaer Polytechnic Institute. Maryjo Charbonnier. Ms. Charbonnier, 55, was appointed our Chief Human Resources Officer in 2021.
Human Capital Resources Employees As of March 31, 2024, we had approximately 80,000 employees in more than 60 countries. Approximately 90% of our employees work outside the U.S., with workforce hubs in India, Poland, Brazil, Japan, Czechia and Hungary. Our people advance the vital systems that power human progress.
We also own or have the rights to copyrights that protect the content of our products and other proprietary materials. Human Capital Resources Employees As of March 31, 2025, we had approximately 73,000 employees in more than 60 countries. Approximately 90% of our employees work outside the U.S., with workforce hubs in India, Poland, Brazil, Japan, Czechia and Hungary.
Item 1. Business . Our Company Kyndryl Holdings, Inc. (“we,” “Kyndryl” or the “Company”) is a leading technology services company and the largest IT infrastructure services provider in the world, serving thousands of enterprise customers and with operations in over 60 countries.
Item 1. Business . Our Company Kyndryl Holdings, Inc. (“we,” “Kyndryl” or the “Company”) is a leading provider of mission-critical enterprise technology services offering advisory, implementation and managed service capabilities to thousands of customers in more than 60 countries.
For instance, we frequently expand the scope of customer relationships by adding higher-value services and leveraging our new ecosystem partners’ capabilities. When necessary, we reduce scope by removing, or not renewing, unprofitable elements of a contract. We reduce costs by applying our Advanced Delivery tools and processes to replace labor-intensive and/or customized services with automated and/or more standardized solutions.
For instance, we are frequently expanding the scope of customer relationships by adding higher-value services and leveraging our ecosystem partners’ capabilities. When necessary, we have reduced scope by removing, or not renewing, unprofitable elements of a contract.
Khurana was the Chief Financial Officer of IBM Europe from March 2018 through July 2020 and the Vice President and Chief Financial Officer of IBM United Kingdom and Ireland from July 2016 until March 2018. Earlier in his IBM tenure, Mr. Khurana held roles of increasing responsibility spanning IBM’s financial strategy and IBM’s Global Financing division. Mr.
Khurana had been serving as Chief Financial Officer of IBM’s Global Business Services unit. Prior to assuming this role, Mr. Khurana was the Chief Financial Officer of IBM Europe from 2018 through 2020 and the Vice President and Chief Financial Officer of IBM United Kingdom and Ireland from 2016 until 2018. Earlier in his IBM tenure, Mr.
Prior to joining IBM in 2012, Mr. Sebold was a partner at Jones Day in the firm’s Cleveland and Houston offices. Mr. Sebold serves on the board of the Pro Bono Partnership. Mr. Sebold received his JD from University of Michigan and his Bachelor of Arts in economics from John Carroll University. Vineet Khurana. Mr.
Mr. Sebold serves on the board of the Pro Bono Partnership. Mr. Sebold received his JD from the University of Michigan and his Bachelor of Arts in economics from John Carroll University. Vineet Khurana. Mr. Khurana, 52, was appointed our Corporate Controller in 2021. Since 2020, Mr.
Examples include Atos, DXC, Fujitsu, HCL, Infosys, Tata Consultancy Services and Wipro, among others. 11 Table of Contents The basis of competition involves multiple factors, with key elements including quality of service, technical skills and capabilities, industry knowledge and experience, financial value, ability to innovate, intellectual property and methods, contracting flexibility and speed of execution.
Many of these companies offer a mix of advisory, implementation and managed services across infrastructure, application and business processes. The basis of competition involves multiple factors, with key elements including quality of service, technical skills and capabilities, industry knowledge and experience, financial value, ability to innovate, intellectual property and methods, contracting flexibility and speed of execution.
We possess a significant intellectual property portfolio, which we believe is important to our success. However, we believe our business as a whole is not materially dependent on any particular intellectual property right or any particular group of patents, trademarks, copyrights or licenses.
However, we believe our business as a whole is not materially dependent on any particular intellectual property right or any particular group of patents, trademarks, copyrights or licenses. Additionally, we own or have rights to various trademarks, logos, service marks and trade names that are used in the operation of our business.
Beyond our environmental commitments, Kyndryl is focused on building a diverse workforce and an inclusive and equitable culture. Our approach to our workplace consists of empowering employees to advance their careers through ongoing training and upskilling. Kyndryl has published its human rights and modern slavery statement and launched the Kyndryl Foundation, which delivers philanthropic grants for community development programs.
Beyond our environmental commitments, Kyndryl is focused on building an engaged workforce culture. Our approach to our workplace consists of empowering employees to advance their careers through ongoing training and upskilling.
We estimate that these markets, which are a subset of the total IT services market, collectively represent a $586 billion opportunity in calendar year 2024. Growth in this market is driven by services that are aligned to customers’ transformations, including public cloud managed services, data services, security services, intelligent automation services and managed services for edge environments.
Growth in this market is driven by services that are aligned to customers’ transformations, including public cloud managed services, data services, security services, intelligent automation services and managed services for edge environments. Several trends underpin the growth of our market, including: ● Greater demand for digital transformation services.
This trend has expanded in recent years as organizations look to further their digital capabilities and new technologies proliferate. While customers seek to transform, skills availability often represents a challenge, with lack of skills often being an impediment to transformation of the IT environment. ● Ongoing migration to cloud.
While customers seek to transform, skills availability often represents a challenge, with lack of skills often being an impediment to transformation of the IT environment. ● Ongoing migration to cloud. Companies continue to move workloads to the cloud, adopting new capabilities for flexibility, workload portability and management.
A key pillar of our strategy is continuing to invest in knowledge and intellectual property to support extending our services to a broader ecosystem of technology providers and customer challenges and solutions. Our decades of experiences working with our customers has generated operational insights, creating intellectual property that we leverage for the benefit of our customers and deploy at scale.
We remain committed to innovation and the development and maintenance of a focused patent portfolio that is related to our business. A key pillar of our strategy is continuing to invest in knowledge and intellectual property to support extending our services to a broader ecosystem of technology providers, customer challenges and solutions.
Companies will benefit from selecting service providers that have greater insight into their environments and needs, which advantages partners like Kyndryl who have industry-leading scale and long-standing customer relationships. Through decades of collaboration with customers, we have developed deep relationships as we supported the technology environments that advanced their business agendas.
While many companies have strengthened their technology teams, they have also encountered difficulties in sourcing the breadth of expertise needed for their environments and leveraged service providers to address their needs. Companies will benefit from selecting service providers that have greater insight into their environments and needs, which advantages partners like Kyndryl who have industry-leading scale and long-standing customer relationships.
Several trends underpin the growth of our market, including: ● Greater demand for digital transformation services. Companies continue to digitally transform to deliver better customer experiences and compete more effectively, which drives the need for services to support modernization of IT within the enterprise.
Companies continue to digitally transform to deliver better customer experiences and compete more effectively, which drives the need for services to support modernization of IT within the enterprise. This trend has expanded in recent years as organizations look to further their digital capabilities and new technologies proliferate.
We rely on intellectual property protections in the countries in which we operate, along with contractual restrictions, to establish and protect our offerings and services and other applicable rights. In addition, we license third-party software along with other technologies that are used in the provision of or incorporated into some elements of our services.
In addition, we license third-party software along with other technologies that are used in the provision of or incorporated into some elements of our services. We possess a significant intellectual property portfolio (including automations, AI models, reference architectures and thought leadership materials), which we believe is important to our success.
This, in part, is brought on by the increasing complexity of enterprise environments, the incorporation of new technologies and the deployment of different operating models. While many companies have strengthened their technology teams, they have also encountered difficulties in sourcing the breadth of expertise needed for their environments and leveraged service providers to address their needs.
As companies look to modernize their technology estates, they often face a key impediment because of the skills and expertise needed to realize their transformations. This, in part, is brought on by the increasing complexity of enterprise environments, the incorporation of new technologies and the deployment of different operating models.
We will continue to invest in our teams to be at the heart of technological change for our customers. We offer comprehensive market-competitive rewards and benefits programs including health benefits, mental health support and employee assistance plans, retirement savings benefits, paid time off and recognition programs, among others.
We established a global, comprehensive well-being strategy designed to provide programs and benefits that support our employees’ physical, mental, social and financial well-being. We offer comprehensive market-competitive rewards and benefits programs including health benefits, mental health support and employee assistance plans, retirement savings benefits, paid time off and recognition programs, among others.
We have a strong and long-standing foundation developed by governing and managing complex technology environments, including a range of third-party technologies (e.g., SAP, VMware, Red Hat, Dell and ServiceNow). We regularly introduce new capabilities with a highly curated ecosystem of technology providers, including strategic relationships with Microsoft, Google Cloud and Amazon Web Services announced since our Spin-off.
We have a strong and long-standing foundation developed by governing and managing complex technology environments, including a range of third-party technologies (e.g., Cisco, Dell, Dynatrace, HPE, NVIDIA, Oracle, Palo Alto Networks, Red Hat, Rubrik, SAP, ServiceNow and VMware).
This includes achieving net zero greenhouse gas emissions by 2040 and a 50% reduction in global emissions including our value chain by 2030 aligned with the Science Based Targets initiative. The commitment reinforces Kyndryl’s dedication to operating responsibly as it built the foundation of the program globally.
In September 2024, Kyndryl published its latest Corporate Citizenship Report outlining the actions and plans that align our corporate citizenship strategy with our mission. This includes achieving net zero greenhouse gas emissions by 2040 and a 50% reduction in global emissions including our value chain by 2030 aligned with the Science Based Targets initiative.
Since our Spin-off, we have announced business alliances with Microsoft, Amazon Web Services, Google Cloud, SAP, Dell, Cisco, Cloudflare and ServiceNow among others. We continue to expand the cloud-related capabilities we offer to customers and are growing the number of our hyperscale cloud provider certifications. ● Advanced Delivery initiative – Transforming service delivery through upskilling and automation.
We continue to expand the cloud-related capabilities we offer to customers and to hold tens of thousands of hyperscale cloud provider certifications. ● Advanced Delivery initiative – Transforming service delivery through upskilling and automation.
Intellectual Property We are focused on developing leading-edge ideas and technologies and see innovation as a source of competitive advantage. We have more than 3,300 patents that are related to our business model.
We offer choice with consistency through an operating paradigm and management model built from our experiences with complex technologies. 10 Table of Contents Intellectual Property We are focused on developing leading-edge ideas and technologies and see innovation as a source of competitive advantage.
These models will combine our Kyndryl Bridge platform – an open integration platform that delivers IT solutions by leveraging Kyndryl’s core strengths, data-driven insights and expertise, to create an uninterrupted path between a digital business and the technology that delivers it – with our technology governance and capabilities from our ecosystem partners for ease-of-use and scalability, tailored to the needs of specific customer segments.
We are increasingly serving customers through our Kyndryl Bridge platform – an AI-powered open integration platform that leverages Kyndryl’s core strengths, data-driven insights and expertise, to create an uninterrupted path between digital business and the technology that delivers it.
To execute these strategies, our operating model increasingly reflects that of a flat, fast and focused services company, centered around our customers’ success. We are pursuing an investment and co-investment strategy focused on building and maintaining world-class teams, developing aligned intellectual property and automation, and leveraging our ecosystem of technology alliance partners.
We couple our technology governance and capabilities from our ecosystem partners for ease-of-use and scalability, tailored to the needs of specific customer segments. To execute these strategies, our operating model increasingly reflects that of a flat, fast and focused services company, centered around our customers’ success.
Khurana also serves as an External Governor and a member of the Infrastructure and Finance Committee of the University of Portsmouth, United Kingdom. Mr. Khurana received his MBA from University of Warwick, United Kingdom and his undergraduate degree in Chemical Engineering from Manipal Institute of Technology, India.
Khurana held roles of increasing responsibility spanning IBM’s financial strategy and IBM’s Global Financing division. 13 Table of Contents Mr. Khurana received his MBA from University of Warwick, United Kingdom and his undergraduate degree in Chemical Engineering from Manipal Institute of Technology, India.
In fiscal 2025, we intend to continue accelerating our transformation through our three-A’s initiatives, continue growing Kyndryl Consult and optimize our costs and expenses in all areas of our business, from service delivery to corporate functions.
In addition, we will continue executing on our three-A’s initiatives, growing Kyndryl Consult and optimizing our costs and expenses throughout our business, from service delivery to corporate functions. We will continue to focus on these initiatives to drive profitable growth and enable us to deliver more value to customers and stockholders.
Our global workforce is highly skilled, reflective of the work we do for our customers’ digital transformations and in support of their mission-critical operations. Kyndryl professionals bring deep industry and technical expertise along with a passion for continuous learning.
Our people advance the vital systems that power human progress and are at the center of designing, building and managing the technology environments that the world depends on every day. Our global workforce is highly skilled, reflective of the work we do for our customers’ digital transformations and in support of their mission-critical operations.
Our services support customers’ digital transformations, as we help accelerate their journeys by providing instrumented and engineered technology environments. We offer choice with consistency through an operating paradigm and management model built from our experiences with complex technologies. These capabilities uniquely position us as both a leading partner and competitor within the same market.
Our services support customers’ digital transformations, as we help accelerate their journeys by providing instrumented and engineered technology environments.
To accelerate our return to profitable growth, we are aggressively executing on our “three-A” initiatives – Alliances, Advanced Delivery and Accounts. We believe our implementation of these strategic priorities will enhance the services we provide to our customers and will make significant positive contributions to our financial performance, both in the near term and over the next several years.
Our implementation of these strategic priorities has enhanced the services we provide to our customers and has made significant positive contributions to our financial performance.
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Looking ahead, we see opportunity to further expand in areas where we can serve customers through consumption models that allow them to experience our services digitally.
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As the world’s largest IT infrastructure services provider, the Company designs, builds, manages and modernizes the complex information systems that the world depends on every day.
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When managed-services contracts are renegotiated and renewed, we adjust pricing and other terms to enhance our margins. Given the mission-critical nature of our services and our long-standing relationships, we are experiencing an openness among our customers to find solutions.
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We regularly introduce new capabilities with these technology providers, including strategic relationships with Amazon Web Services, Google Cloud and Microsoft announced since our Spin-off.
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On the rare occasion when no other resolution is available for a situation with an unsustainable margin profile, we will allow a contract to end without renewing it, and we will optimize the cost to serve until expiration.
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We are focused on building and maintaining world-class teams, developing aligned intellectual property and automation, and leveraging our ecosystem of technology alliance partners. To accelerate our return to profitable growth, we have aggressively executed on our “three-A” initiatives – Alliances, Advanced Delivery and Accounts.
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Kyndryl Consult, which represented approximately 15 percent of our revenue for the year ended March 31, 2024, represents a range of advisory and implementation services that we provide to customers, across all six of our practices and all of our geographic segments.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf the outcome of those arbitrations is unfavorable to Kyndryl, if a mutually acceptable commercial resolution cannot be found, if the terms of any resolution of these matters are unfavorable to us, or if IBM is unable or unwilling to satisfy its respective obligations under these agreements, including indemnification obligations, our business, results of operations and financial condition could be adversely affected. ​ Risks Relating to Our Common Stock and the Securities Market ​ Certain provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-Laws and Delaware law may discourage takeovers and limit the power of our stockholders. ​ Several provisions of our Amended and Restated Certificate of Incorporation, Amended and Restated By-Laws and Delaware law may discourage, delay or prevent a merger or acquisition.
Biggest changeAdditionally, large changes in currency exchange rates relative to our functional currencies can increase the costs of our services to customers relative to local competitors, thereby causing us to lose existing or potential customers to these local competitors. ​ Risks Relating to Our Common Stock and the Securities Market ​ Certain provisions in our Amended and Restated Certificate of Incorporation and Amended and Restated By-Laws and Delaware law may discourage takeovers and limit the power of our stockholders. ​ Several provisions of our Amended and Restated Certificate of Incorporation, Amended and Restated By-Laws and Delaware law may discourage, delay or prevent a merger or acquisition.
Attacks also include social engineering to fraudulently induce customers, business partners, vendors, employees, contractors and other third parties to disclose information, transfer funds or unwittingly provide access to systems or data.
Attacks also include social engineering to fraudulently induce customers, business partners, vendors, employees, contractors and other third parties to unwittingly disclose information, transfer funds or provide access to systems or data.
If we do not sufficiently invest in new technologies and adapt to industry developments, if we are unable to commercialize them in our services and solutions, evolve, expand and scale them with sufficient speed and versatility, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our results of operations and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected. ​ If we are unable to attract and retain key personnel and other skilled employees, our business could be harmed. ​ If any of our key employees were to leave, we could face substantial difficulty in hiring qualified successors and could experience a loss in productivity while any successor obtains the necessary training and experience.
If we do not sufficiently invest in new technologies and adapt to industry developments, if we are unable to commercialize them in our services and solutions, evolve, expand and scale them effectively with sufficient speed and versatility, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our results of operations and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected. ​ If we are unable to attract and retain key personnel and other skilled employees, our business could be harmed. ​ If any of our key employees were to leave, we could face substantial difficulty in hiring qualified successors and could experience a loss in productivity while any successor obtains the necessary training and experience.
Local country, state, provincial or municipal taxation may also be subject to review and potential override by regional, federal, national or similar forms of government, which may also adversely impact our income taxes. In addition, we are subject to periodic examinations of our domestic and foreign tax returns by taxing authorities in the jurisdictions in which we do business.
Furthermore, local country, state, provincial or municipal taxation may also be subject to review and potential override by regional, federal, national or similar forms of government, which may also adversely impact our income taxes. In addition, we are subject to periodic examinations of our domestic and foreign tax returns by taxing authorities in the jurisdictions in which we do business.
These provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that the Board determines is not in our and our stockholders’ best interests. ​ 25 Table of Contents Our Amended and Restated Certificate of Incorporation provides that certain courts in the State of Delaware or the federal district courts of the United States will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. ​ Our Amended and Restated Certificate of Incorporation provides, in all cases to the fullest extent permitted by law, unless we consent in writing to the selection of an alternative forum, the Court of Chancery located within the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of us, any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee or stockholder to us or our stockholders, any action asserting a claim arising pursuant to the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery located in the State of Delaware or any action asserting a claim governed by the internal affairs doctrine or any other action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL, or any action asserting a claim arising under the DGCL, our Amended and Restated Certificate of Incorporation or our Amended and Restated By-Laws.
These provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that the Board determines is not in our and our stockholders’ best interests. ​ Our Amended and Restated Certificate of Incorporation provides that certain courts in the State of Delaware or the federal district courts of the United States will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. ​ Our Amended and Restated Certificate of Incorporation provides, in all cases to the fullest extent permitted by law, unless we consent in writing to the selection of an alternative forum, the Court of Chancery located within the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of us, any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee or stockholder to us or our stockholders, any action asserting a claim arising pursuant to the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery located in the State of Delaware or any action asserting a claim governed by the internal affairs doctrine or any other action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL, or any action asserting a claim arising under the DGCL, our Amended and Restated Certificate of Incorporation or our Amended and Restated By-Laws.
Our relationships with them are critical to our ability to provide many of our services and solutions, and our relationships with alliance partners allow us to enter new markets and take advantage of existing ecosystems built and sustained by our alliance partners.
Our relationships with them are critical to our ability to provide many of our services and solutions, and our relationships with various alliance partners allow us to enter new markets and take advantage of existing ecosystems built and sustained by our alliance partners.
While some customers have accelerated their digital transformation and increased their expenditures, the short-term priorities of other customers continue to be focused on operational stability, flexibility and cash preservation, and as such, we may experience some disruptions in transactional performance. ​ Damage to our reputation could adversely impact our business. ​ Our reputation may be susceptible to damage by events such as significant disputes with customers, internal control deficiencies, delivery failures, cybersecurity incidents, government investigations or legal proceedings or actions of current or former customers, directors, employees, competitors, vendors, alliance partners or joint venture partners.
While some customers have accelerated their digital transformation and increased their expenditures, the short-term priorities of other customers continue to be focused on operational stability, flexibility and cash preservation, and as such, we may experience some disruptions in transactional performance. ​ 16 Table of Contents Damage to our reputation could adversely impact our business. ​ Our reputation may be susceptible to damage by events such as significant disputes with customers, internal control deficiencies, delivery failures, cybersecurity incidents, government investigations or legal proceedings or actions of current or former customers, directors, employees, competitors, vendors, alliance partners or joint venture partners.
In addition, revenues from a small portion of our contracts are recognized using the percentage-of-completion method, which requires estimates of total costs at completion, fees earned on the contract, or both. This estimation process, particularly due to the technical nature of the services being performed and the long-term nature of certain contracts, is complex and involves significant judgment.
In addition, revenues from a small portion of our contracts are recognized using the cost-to-cost method, which requires estimates of total costs at completion, fees earned on the contract, or both. This estimation process, particularly due to the technical nature of the services being performed and the long-term nature of certain contracts, is complex and involves significant judgment.
Even if we have an agreement providing for third parties to indemnify us for the foregoing claims, the indemnifying parties may be unwilling or unable to fulfill their contractual obligations. ​ We may be required to record impairment charges to future earnings if our goodwill or long-lived assets become impaired. ​ We are required under accounting principles generally accepted in the United States of America (“GAAP”) to review our goodwill for impairment at least annually, and to review goodwill and long-lived assets when events or changes in circumstances indicate the carrying value may not be recoverable.
Even if we have an agreement providing for third parties to indemnify us for the foregoing claims, the indemnifying parties may be unwilling or unable to fulfill their contractual obligations. ​ 18 Table of Contents We may be required to record impairment charges to future earnings if our goodwill or long-lived assets become impaired. ​ We are required under accounting principles generally accepted in the United States of America (“GAAP”) to review our goodwill for impairment at least annually, and to review goodwill and long-lived assets when events or changes in circumstances indicate the carrying value may not be recoverable.
Any defective products or inadequate services received from suppliers or partners could reduce the reliability of our services and harm our reputation. ​ If we are not able to continue addressing and adapting to technological developments and trends that serve customer demands, our growth plans, market share and financial performance could be negatively affected. ​ Our growth strategy depends in part on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology, offerings and industry standards to serve the evolving demands of our customers.
Any defective products or inadequate services received from suppliers or partners could reduce the reliability of our services and harm our reputation. ​ If we are not able to continue addressing and adapting to technological developments and trends that serve customer demands or drive efficiency, our growth plans, market share and financial performance could be negatively affected. ​ Our growth strategy depends in part on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology, offerings and industry standards to serve the evolving demands and needs of our customers.
Competition in the markets in which we operate may adversely impact our results of operations. ​ Our competitors include incumbents that have expanded their offerings to migration and management of cloud-based environments; companies that use labor-based models and leverage talent pools primarily in lower-cost countries that have grown to offer a broad range of services with a worldwide presence; and advisory-focused system integrators specializing in bringing together disparate technology environments.
Competition in the markets in which we operate may adversely impact our results of operations. ​ Our competitors include incumbents that have expanded their offerings to migration and management of cloud-based environments; companies that use labor-based models and leverage talent pools primarily in lower-cost countries that have grown to offer a broad range of services with a worldwide presence; and advisory-focused system integrators 14 Table of Contents specializing in bringing together disparate technology environments.
Premium increases could be significant due to the level of insolvencies of unrelated companies in the country at issue. ​ 23 Table of Contents We are exposed to currency risk that can adversely impact our revenue and business. ​ We derive a significant percentage of our revenues and costs in non-U.S. dollar currency environments, and our results are affected by changes in the relative values of non-U.S. currencies and the U.S. dollar, as well as sudden shifts in regional or global economic activity.
Premium increases could be significant due to the level of insolvencies of unrelated companies in the country at issue. ​ We are exposed to currency risk that can adversely impact our revenue and business. ​ We derive a significant percentage of our revenues and costs in non-U.S. dollar currency environments, and our results are affected by changes in the relative values of non-U.S. currencies and the U.S. dollar, as well as sudden shifts in regional or global economic activity.
If we fail to gain a positive reputation as leader in our field, or if our brand image is tarnished by negative perceptions, our ability to attract and retain customers and talent could be impacted. ​ 17 Table of Contents If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected. ​ Our commercial contracts are typically awarded on a competitive or “sole-source” basis.
If we fail to gain a positive reputation as leader in our field, or if our brand image is tarnished by negative perceptions, our ability to attract and retain customers and talent could be impacted. ​ If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected. ​ Our commercial contracts are typically awarded on a competitive or “sole-source” basis.
Funding reductions or delays could adversely impact public sector demand for our services and can result in payment delays, payment reductions or contract terminations, any of which would have an adverse effect on our business, financial condition, results of operations and/or cash flows.
Funding reductions, delays or work stoppages could adversely impact public sector demand for our services and can result in payment delays, payment reductions or contract terminations, any of which would have an adverse effect on our business, financial condition, results of operations and/or cash flows.
In the event of such actions, we, our customers and other third parties could be exposed to liability (whether contractual or otherwise), litigation, and regulatory or other government inquiries, enforcement actions, fines or penalties, as well as the loss of existing or potential customers, negative publicity, damage to brand and reputation, damage to our competitive position and other financial loss. ​ The cost and operational consequences of responding to cybersecurity incidents and implementing remediation measures could be significant.
In the event of such actions, we, our customers and other third parties could be exposed to liability (whether contractual or otherwise), litigation, and regulatory or other government inquiries, enforcement actions, fines or penalties, as well as the loss of existing or potential customers, negative publicity, damage to brand and reputation, damage to our competitive position and other financial loss. ​ 19 Table of Contents The cost and operational consequences of responding to cybersecurity incidents and implementing remediation measures could be significant.
The enactment and expansion of cybersecurity, data governance and privacy laws and regulations around the globe, including an increased focus on international data transfer mechanisms and supply chain management; the lack of harmonization of such laws and regulations; the increase in associated litigation and enforcement activity; the potential for damages, fines and penalties; and the potential regulation of emerging and new technologies, such as AI and generative AI, will continue to result in increased compliance costs and increased risks.
The enactment and expansion of cybersecurity, data governance, privacy, AI and other laws and regulations around the globe, including an increased focus on international data transfer mechanisms and supply chain management, the lack of harmonization of such laws and regulations, the increase in associated litigation and enforcement activity, the potential for damages, fines and penalties, and enacted or potential regulation of emerging and new technologies, such as AI and generative AI, will continue to result in increased compliance costs and increased risks.
Legal and compliance risks, however, will continue to exist, and additional legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, may arise from time to time. ​ We could incur costs for regulated environmental matters. ​ We are subject to various federal, state, local and foreign laws and regulations concerning the discharge of materials into the environment or otherwise related to environmental protection.
Legal and compliance risks, however, will continue to exist, and additional legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, may arise from time to time. ​ 21 Table of Contents We could incur costs for regulated environmental matters. ​ We are subject to various federal, state, local and foreign laws and regulations concerning the discharge of materials into the environment or otherwise related to environmental protection.
If we do acquire other companies, we may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangible assets. ​ 18 Table of Contents We could be adversely impacted by our business with government customers. ​ Our customers include numerous governmental entities within and outside the United States, including foreign governments and U.S. state and local entities.
If we do acquire other companies, we may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangible assets. ​ We could be adversely impacted by our business with foreign, state and local government customers. ​ Our customers include numerous governmental entities within and outside the United States, including foreign governments and U.S. state and local entities.
In such cases, we have, and may in the future, rebalance our workforce, including reducing the rate of new hires and increasing involuntary terminations, which actions could negatively impact employee engagement and retention. ​ Due to our global presence, our business and operations could be adversely impacted by economic, political, public health and other conditions. ​ We are a globally integrated company and have operations worldwide.
In such cases, we have, and may in the future, rebalance our workforce, including reducing the rate of new hires and increasing involuntary terminations, which actions could negatively impact employee engagement and retention. ​ Due to our global presence, our business and operations could be adversely impacted by economic, geopolitical, public health and other conditions. ​ We are a globally integrated company doing business worldwide.
These conditions may adversely affect our credit ratings. ​ Our financial performance could be adversely impacted by changes in market liquidity conditions and by customer credit risk on receivables. ​ Our customer base includes many worldwide enterprises, from the world’s largest organizations and governments to smaller businesses, with a significant portion of our revenue coming from global customers across many sectors.
These conditions may adversely affect our credit ratings. ​ 22 Table of Contents Our financial performance could be adversely impacted by changes in market liquidity conditions and by customer credit risk on receivables. ​ Our customer base includes many worldwide enterprises, from the world’s largest organizations and governments to smaller businesses, with a significant portion of our revenue coming from global customers across many sectors.
The loss of business from any of our major customers, whether by the cancellation of existing contracts, the failure to obtain new business or lower overall demand for our services, could adversely impact our revenue and results of operations. ​ We may not meet our growth and productivity objectives. ​ Our goals for profitability and growth rely upon a number of assumptions, including our ability to make successful investments to grow and further develop our business and simplify our operations.
The loss of business from any of our major customers, whether by the cancellation of existing contracts, the failure to obtain new business or lower overall demand for our services, could adversely impact our revenue and results of operations. ​ We may not meet our growth and productivity objectives and maintain our capital allocation strategy. ​ Our goals for profitability and growth rely upon a number of assumptions, including our ability to make successful investments to grow and further develop our business and simplify our operations.
If we fail to respond successfully to technology challenges and customer demands in a timely or cost-effective manner or fail to effectively leverage new technologies into our services and solutions, or if our competitors or other third parties respond to such challenges more quickly or successfully than we do, the demand for our services and solutions may diminish.
If we fail to respond and adapt successfully to technology developments and trends and customer demands in a timely or cost-effective manner or fail to effectively leverage new technologies into our services and solutions, or if our competitors or other third parties respond to such challenges more quickly or successfully than we do, the demand for our services and solutions may diminish.
Cybersecurity attacks or other security incidents relating to our systems or those of our vendors could result in, for example, one or more of the following: unauthorized access to, disclosure, modification, misuse, loss or destruction of Company, customer or other third-party data or systems; theft or import or export of sensitive, regulated or confidential data including personal information and intellectual property; the loss of access to critical data or systems through ransomware, destructive attacks or other means; and business delays, service or system disruptions or denials of service.
Cybersecurity attacks or other security incidents relating to our technology infrastructure, products, services and solutions or those of our vendors could result in, for example, one or more of the following: unauthorized access to, disclosure, modification, misuse, loss or destruction of Company, customer or other third-party data or systems; theft or import or export of sensitive, regulated or confidential data including personal information and intellectual property; the loss of access to critical data or systems through ransomware, destructive attacks or other means; and business delays, service or system disruptions or denials of service.
New and changing laws can also adversely affect the Company’s business by limiting the Company’s ability to offer a service or feature to customers, imposing changes to the design of the Company’s products and services, impacting customer demand for the Company’s products and services, and requiring changes to the Company’s supply chain and business.
New and changing laws can also adversely affect the Company’s business by limiting the Company’s ability to offer a 20 Table of Contents service or feature to customers, imposing changes to the design of the Company’s products and services, impacting customer demand for the Company’s products and services, and requiring changes to the Company’s supply chain and business.
While we continue to monitor for, identify, investigate, respond to, remediate and develop plans to quickly recover from cybersecurity incidents, notwithstanding our efforts, we may experience a cybersecurity incident in the future that may have a material adverse impact on the Company. ​ 20 Table of Contents As we are a global enterprise, the regulatory environment with regard to cybersecurity, data governance and privacy issues to which we are subject is increasingly complex and will continue to impact our business, including through increased risk, increased compliance costs, and expanded or otherwise altered compliance obligations.
While we continue to monitor for, identify, investigate, respond to, remediate and develop plans to quickly recover from cybersecurity incidents, notwithstanding our efforts, we may experience a cybersecurity incident in the future that may have a material adverse impact on the Company. ​ As we are a global enterprise, the regulatory environment with regard to cybersecurity, data governance, privacy, AI and other issues to which we are subject is increasingly complex and will continue to impact our business, including through increased risk, increased compliance costs, and expanded or otherwise altered compliance obligations.
Computer hackers and others routinely attack the security of technology products, services, systems and networks using a wide variety of methods, including ransomware or other malicious software and attempts to exploit vulnerabilities in hardware, software and infrastructure.
Computer hackers and others routinely attempt to exploit and attack the security of technology products, services, systems and networks using a wide variety of methods, including ransomware or other malicious software and attempts to exploit vulnerabilities and flaws in hardware, software and infrastructure, technology products, services and solutions.
We may be required to record non-cash impairment charges during any period in which we determine that our goodwill or long-lived assets are impaired, which could adversely affect our results of operations. As of March 31, 2024, our goodwill balance was $805 million, which represented 8% of total consolidated assets.
We may be required to record non-cash impairment charges during any period in which we determine that our goodwill or long-lived assets are impaired, which could adversely affect our results of operations. As of March 31, 2025, our goodwill balance was $790 million, which represented 8% of total consolidated assets.
See Note 10 – Intangible Assets Including Goodwill to our financial statements included elsewhere in this report for additional information about our goodwill impairment. ​ 19 Table of Contents Risks Relating to Cybersecurity, Data Governance and Privacy ​ Cybersecurity, data governance and privacy considerations could adversely impact our business. ​ We maintain information, including confidential and proprietary information, in digital form regarding our business and the business of our customers, business partners, vendors, employees, contractors and other third parties.
See Note 11 – Intangible Assets Including Goodwill to our financial statements included elsewhere in this report for additional information about our goodwill impairment. ​ Risks Relating to Cybersecurity, Data Governance and Privacy ​ Cybersecurity, data governance and privacy considerations could adversely impact our business. ​ We maintain information, including confidential and proprietary information, in digital form regarding our business and the business of our customers, business partners, vendors, employees, contractors and other third parties.
Any of these factors could adversely affect our ability to perform and subject us to additional liabilities, which could have an adverse effect on our relationships with customers and on our results of operations. ​ Risks from acquisitions and dispositions include integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels. ​ We may decide to make acquisitions and dispositions in furtherance of our strategy.
Any of these factors could adversely affect our ability to perform and subject us to additional liabilities, which could have an adverse effect on our relationships with customers and on our results of operations. ​ 17 Table of Contents Risks from acquisitions and dispositions include integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels. ​ We have made, and may continue to make, acquisitions and dispositions in furtherance of our strategy.
Our Board believes these provisions will protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with the Board and by providing the Board with more time to assess any acquisition proposal.
Our Board believes these provisions will protect our stockholders from coercive or otherwise unfair takeover 23 Table of Contents tactics by requiring potential acquirers to negotiate with the Board and by providing the Board with more time to assess any acquisition proposal.
Tariffs and international trade sanctions resulting from these disputes could affect our ability to move goods and services across borders, or could impose added costs to those activities. Measures taken to date by us to mitigate these impacts could be made less effective should trade sanctions or tariffs change.
Tariffs, international trade sanctions and other controls on imports or exports resulting from these disputes could affect our ability to move goods and services across borders, or could impose added costs to those activities. Measures taken to date by us to mitigate these impacts could be made less effective should trade sanctions or tariffs change.
The risks associated with such legal proceedings are described in more detail in Note 13 – Commitments and Contingencies in the financial statements elsewhere in this report. We believe that we have adopted appropriate risk management and compliance programs.
The risks associated with known significant legal proceedings are described in more detail in Note 14 – Commitments and Contingencies in the financial statements elsewhere in this report. We believe that we have adopted appropriate risk management and compliance programs.
These services, systems and networks are also used by customers in heavily regulated industries, including those in the financial services, healthcare, critical infrastructure and government sectors.
These products, services and solutions are also used by customers in heavily regulated industries, including those in the financial services, healthcare, critical infrastructure and government sectors.
This includes climate change and carbon emissions, human rights, diversity, equity and inclusion, responsible supply chain management, ethics, cybersecurity and privacy concerns.
This includes matters relating to climate change and carbon emissions, human rights, diversity, equity and inclusion, responsible supply chain management, ethics, cybersecurity and privacy.
We also rely on third-party vendors to provide certain digital services in connection with our business.
We also rely on third-party vendors to provide certain digital services in connection with our business and our delivery of services to customers.
Our services, systems and networks, including cloud-based systems and other third-party systems and technologies that we maintain on behalf of our customers, may be used in critical Company, customer or third-party operations, and involve the storage, processing and transmission of sensitive data, including proprietary or confidential data, regulated data, personal information and intellectual property of employees, customers and others.
Our technology infrastructure, products, services and solutions, including other third-party systems and technologies that we use to deliver our services or maintain on behalf of our customers, may be used in critical Company, customer or third-party operations, and involve the storage, processing and transmission of sensitive data, including proprietary or confidential data, regulated data, personal information and intellectual property of employees, customers and others.
In addition, if we were to violate or become liable under these laws and regulations our reputation could be harmed, which could have a negative impact on demand for our products and services. ​ Expectations relating to environmental, social and governance considerations could expose us to potential liabilities, increased costs and reputational harm. ​ There has been an increasing focus by governments, regulators, investors, employees, customers and other stakeholders on environmental, social and governance considerations relating to businesses.
In addition, if we were to violate or become liable under these laws and regulations our reputation could be harmed, which could have a negative impact on demand for our products and services. ​ Expectations relating to environmental, social and governance initiatives and considerations could expose us to potential liabilities, increased costs and reputational harm. ​ Over the past few years, governments, regulators, investors, employees, customers and other stakeholders have focused on environmental, social and governance initiatives and considerations relating to businesses.
There are numerous and evolving risks relating to cybersecurity, data governance and privacy, including risks originating from intentional acts of criminal hackers, nation states and hacktivists; from intentional and unintentional acts of customers, business partners, vendors, employees, contractors, competitors and other third parties; and from errors and omissions in processes or technologies, as well as the risks associated with an increase in the number of customers, business partners, vendors, employees, contractors and other third parties working remotely.
There are numerous and evolving risks relating to cybersecurity, data governance and privacy, including risks originating from intentional acts of criminal hackers, nation states and hacktivists; from intentional and unintentional acts of customers, business partners, vendors, employees, contractors, competitors and other third parties; and from errors, vulnerabilities and omissions in infrastructure, technology products, services and solutions that we use, as well as the risks associated with the number of customers, business partners, vendors, employees, contractors and other third parties working remotely.
Our results of operations could be affected by economic and political changes in those countries and by macroeconomic changes, including recessions, inflation, currency fluctuations between the U.S. dollar and non-U.S. currencies and adverse changes in trade relationships among those countries. Further, international trade disputes could create uncertainty.
Our results of operations have been and could in the future be affected by unfavorable, volatile or uncertain economic and geopolitical conditions and by macroeconomic changes, including recessions, inflation, currency fluctuations between the U.S. dollar and non-U.S. currencies, capital controls and adverse changes in trade relationships among those countries. Further, international trade disputes could create uncertainty.
We are at risk of security breaches not only of our own services, systems and networks, but also those of customers, business partners, vendors, employees, contractors and other third parties. ​ Cyber threats are continually evolving, making it more challenging to defend against certain threats and vulnerabilities that can persist undetected over extended periods of time.
We are at risk of security breaches not only of our own infrastructure, networks and services, but also those of customers, business partners, vendors, employees, contractors and other third parties. ​ Cyber threats and attacks are increasing in number and sophistication and continually evolving, particularly with the expanding availability of AI and generative AI tools and technologies, making it more challenging to defend against certain threats, attacks and vulnerabilities that can persist undetected over extended periods of time.
Our competitiveness is based on factors including quality of services, technical skills and capabilities, industry knowledge and experience, financial value, ability to innovate, intellectual property and methods, contracting flexibility, and speed of execution.
Our competitiveness is based on factors including quality of services, technical skills and capabilities, industry knowledge and experience, financial value, ability to innovate and respond to rapid and continuing changes in technology to serve the evolving needs of our customers, intellectual property and methods, contracting flexibility, and speed of execution.
In addition, investments in technology systems may not deliver the benefits or perform as expected, or may be 16 Table of Contents replaced or become obsolete more quickly than expected, which could result in operational difficulties or additional costs.
In addition, investments in technology systems, capabilities, talent and resources may not deliver the benefits or perform as expected, may be replaced or 15 Table of Contents become obsolete more quickly than expected, or may reduce or replace some of our current services and offerings, which could result in operational difficulties or additional costs.
Due to the varying degrees of development of the legal systems of the countries in which we operate, local laws may not be well developed or provide sufficiently clear guidance and may be insufficient to protect our rights. ​ Changes in laws and regulations could also mandate significant and costly changes to the way we implement our services or could impose additional taxes on our services.
Due to the varying degrees of development of the legal systems of the countries in which we operate, local laws may not be well developed or provide sufficiently clear guidance and may be insufficient to protect our rights.
If we are unable to find partners to develop cutting-edge innovations in a highly competitive and rapidly 15 Table of Contents evolving environment or are unable to implement and integrate such innovations with sufficient speed and versatility, we could fail in our ongoing efforts to maintain and increase our revenue and profit margins.
If we are unable to find, and maintain relationships with, partners to develop cutting-edge innovations in a highly competitive and rapidly evolving environment or are unable to implement and integrate such innovations with sufficient speed and versatility, we could fail in our ongoing efforts to maintain and increase our revenue and profit margins, achieve and sustain our targeted growth rates or improve our market share, operating margins and competitive position generally or in specific markets or services.
The Organization for Economic Cooperation and Development (the “OECD”) continues to issue guidelines that are different, in some respects, than long-standing international tax principles. As countries unilaterally amend their tax laws to adopt certain parts of the OECD guidelines, this may increase tax uncertainty and may adversely impact our income taxes.
The Organization for Economic Cooperation and Development (the “OECD”) continues to issue guidelines that are different, in some respects, than long-standing international tax principles. Local country adoption of some or all of these rules may increase tax uncertainty and may adversely impact our income taxes.
In our industry, security vulnerabilities are increasingly discovered, publicized and exploited across a broad range of hardware, software or other infrastructure, elevating the risk of attacks and the potential cost of response and remediation for us and our customers.
In our industry, vulnerabilities in technology infrastructure, products, services and solutions are increasingly discovered, publicized and exploited, elevating the risk of attacks and the potential cost of response and remediation for us and our customers.
There can be no assurance that we will be able to maintain such relationships or that the financial terms of our relationships will remain affordable. Among other things, such partners may in the future decide to compete with us, form exclusive or more favorable arrangements with our competitors or otherwise reduce our access to their products or services.
Among other things, such partners may in the future decide to compete with us, form exclusive or more favorable arrangements with our competitors or otherwise reduce our access to their products or services.
Such changes may result in contracts being terminated or work being transferred on-shore, resulting in greater costs to us. 21 Table of Contents Additionally, changes in laws and regulations, including expanding export controls and sanctions resulting from geopolitical developments, could impact our business, including imposing limits on where we can conduct operations, parties with whom we can conduct business, and the nature of work that can be performed.
Changes in laws and regulations, including expanding controls on imports and exports and sanctions resulting from geopolitical developments, could impact our business, including imposing limits on where we can conduct operations, parties with whom we can conduct business, and the nature of work that can be performed.
For example, the COVID-19 pandemic created significant volatility, uncertainty and economic disruption. In the current macroeconomic environment, customers continue to balance short-term challenges and opportunities for transformation.
In the current macroeconomic environment, customers continue to balance short-term challenges and opportunities for transformation.
In addition, the fast-paced, evolving, pervasive and sophisticated nature of certain cyber threats and vulnerabilities, including increased risks posed by generative AI, and the scale and complexity of our business and infrastructure, make it possible that certain threats or vulnerabilities will be undetected or unmitigated in time to prevent or minimize the impact of an attack on us or our customers.
The increasing number and sophistication of cyber threats, attacks and vulnerabilities, and the scale and complexity of our business and infrastructure, make it possible that certain threats, attacks or vulnerabilities will be undetected or unmitigated in time to prevent or minimize the impact on us or our customers.
Furthermore, if we fail to accurately estimate the effort, costs or time required to complete a contract, the profitability of our contracts may be materially and adversely affected. ​ Service delivery issues could adversely impact our business and operating results. ​ We have customer agreements in place that include certain service-level commitments.
Furthermore, if we fail to accurately estimate the effort, costs or time required to complete a contract, the profitability of our contracts may be materially and adversely affected.
Further, as global opportunities and industry demand shift, realignment, training and scaling of skilled resources may not be sufficiently rapid or successful. Any failure to attract, integrate, motivate and retain these employees could harm our business. Alternatively, from time to time, we may have more people than we need in certain skill sets, geographies or compensation levels.
Changing demographics and labor workforce trends also may result in a shortage of or insufficient knowledge and skills. Further, as global opportunities and industry demand shift, realignment, training and scaling of skilled resources may not be sufficiently rapid or successful. Any failure to attract, integrate, motivate and retain these employees could harm our business.
We have established and publicly announced certain goals, commitments and 22 Table of Contents initiatives that reflect our current plans and aspirations on corporate citizenship matters, which are based on available data and estimates and are not guarantees that we will be able to achieve them.
Conflicting regulations and requirements, and a lack of harmonization of legal and regulatory environments across the jurisdictions in which we operate, may create enhanced compliance risks and costs. We have established and publicly announced certain goals, commitments and initiatives that reflect our current plans and aspirations on corporate citizenship matters, which are based on available data and estimates.
The implementation of these goals, commitments and initiatives is subject to numerous risks, many of which are beyond our control.
There are no guarantees that we will be able to achieve these goals and commitments. The implementation of these goals, commitments and initiatives is subject to numerous risks, many of which are beyond our control, and in the future we may determine that further pursuit of them in light of changing circumstances is impracticable or inadvisable.
Skilled and experienced personnel in the areas where we compete often are in high demand, and competition for their talents is often intense. Our inability to retain skilled employees could intensify the adverse impact of a shortage of critical skills. Changing demographics and labor workforce trends also may result in a shortage of or insufficient knowledge and skills.
Skilled and experienced personnel in the areas where we compete often are in high demand, and competition for their talents is often intense.
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As our reliance on data grows, the potential impact of regulations on our business, risks and reputation will grow accordingly.
Added
Our ability and decisions to return capital to shareholders depend on a variety of factors, including our ability to maintain and increase operating margins, cash flow generated from operations, our cash and investment balances, our net income and our overall liquidity position, as well as our debt balance, potential alternative uses of cash and anticipated future economic conditions and financial results.
Removed
For example, changes in laws and regulations to limit using off-shore resources in connection with our work or to penalize companies that use off-shore resources, which have been proposed from time to time in various jurisdictions, could adversely affect our results of operations.
Added
Failure to carry out our capital allocation strategy may adversely impact shareholders’ perception of our business and the trading price of our common stock.
Removed
Additionally, large changes in currency exchange rates relative to our functional currencies can increase the costs of our services to customers relative to local competitors, thereby causing us to lose existing or potential customers to these local competitors. ​ Risks Relating to our Spin-off from IBM ​ If the Spin-off were determined not to qualify as tax-free for U.S. federal income tax purposes, we could have an indemnification obligation to IBM, which could adversely affect our business, financial condition and results of operations. ​ If the Distribution were determined not to qualify for non-recognition of gain or loss under Section 355 and related provisions of the Internal Revenue Code of 1986 (the “Code”), each stockholder that is subject to U.S. federal income tax who received our common stock in the Distribution would generally be treated as having received a distribution in an amount equal to the fair market value of our common stock received, which would generally result in: (i) a taxable dividend to such stockholder to the extent of that such stockholder’s pro rata share of IBM’s current or accumulated earnings and profits; (ii) a reduction in such stockholder’s basis (but not below zero) in IBM common stock to the extent the amount received exceeds the stockholder’s share of IBM’s earnings and profits; and (iii) taxable gain from the exchange of IBM common stock to the extent the amount received exceeded the sum of such stockholder’s share of IBM’s earnings and profits and such stockholder’s basis in its IBM common stock. ​ If, as a result of any of our representations being untrue or our covenants being breached, the Spin-off were determined not to qualify for non-recognition of gain or loss under Section 355 and related provisions of the Code, we could be required to indemnify IBM for the resulting taxes and related expenses.
Added
There can be no assurance that we will be able to develop and maintain such relationships, that the products and services will be available on the expected timelines or for anticipated prices, or that the financial terms of our relationships will remain affordable.
Removed
Any such indemnification obligation could adversely affect our business, financial condition and results of operations. ​ In addition, if we or our stockholders engaged in transactions that resulted in a 50% or greater change by vote or value in the ownership of our stock during the four-year period beginning on the date that begins two years before the date of the Distribution, the Distribution would generally be taxable to IBM, but not to its stockholders, under Section 355(e) of the Code, unless it were established that such transactions and the Distribution were not part of a plan or series of related transactions.
Added
Any performance failure on the part of our critical suppliers or alliance partners, or the discontinuance by such suppliers or alliance partners of technologies or services that we have relied on them to provide for our customers, could impact our performance or require us to engage alternative third parties to perform the services at our cost or to perform them ourselves, any of which could deprive us of potential revenue or adversely impact our profitability.
Removed
If the Distribution were taxable to IBM due to such a 50% or greater change in ownership of our stock, IBM would recognize a gain equal to the excess of the fair market value on the Distribution Date of our common stock distributed to IBM stockholders over IBM’s tax basis in our common stock, and we generally would be required to indemnify IBM for the tax on such gain and related expenses.
Added
The adoption and use of new technologies that are still in their early stages, such as AI and generative AI capabilities, involve significant risks and uncertainties.
Removed
Any such indemnification obligation could adversely affect our business, financial condition and results of operations. ​ We may experience difficulties as we continue to integrate and update our new enterprise resource planning (“ERP”) system, and we have identified deficiencies in our internal control related to the information technology general controls in our new ERP environment, which, if not remediated appropriately or timely, could result in adverse effects to the Company. ​ During the fiscal year ended March 31, 2024, we implemented a new enterprise resource planning system (“ERP”), which replaced the financial and administrative systems that were provided by IBM following the Spin-off.
Added
Our inability to attract and retain skilled employees could intensify the adverse impact of a shortage of critical skills necessary to serve our customers, keep pace with the rapid and continuous technological changes in our industry and further our growth strategy, including talent trained in AI, machine learning, software engineering and other market-leading skills and capabilities in new technologies.
Removed
As discussed in Part II, Item 9A, in the course of preparing this Annual Report on Form 10-K, management identified certain control deficiencies associated with the Company’s current year implementation of our ERP in the area of our information technology general control (“ITGCs”) related to (i) user access and segregation of duty controls that restrict 24 Table of Contents user and privileged access to appropriate personnel; (ii) program development and change management controls; and (iii) certain computer operations controls that, when aggregated, are considered to be a material weakness, as that term is defined in the relevant standards.
Added
If we are unable to hire or deploy employees with the needed skillsets or at scale to meet customer demand or if we are unable to adequately equip our employees with the skills needed, our business could be adversely affected and we may not be able to meet key objectives to further our growth strategy.
Removed
While the Company has found no evidence that the deficiencies gave rise to systems changes that were improper or impacted our financial statements for the fiscal year ended March 31, 2024, management is implementing remedial measures with additional controls and procedures to address the deficiencies.
Added
Alternatively, from time to time, as a result of technological developments or changes in demand, we may have more people than we need in certain skill sets, geographies or compensation levels.
Removed
To the extent management is unable to remediate the identified issue timely, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected, which could subject us to litigation or investigations requiring management resources and other expenses, and could negatively affect investor confidence.
Added
If we are not able to increase our margins as anticipated, we may not be able to meet key objectives to further our growth strategy. ​ Service delivery issues could adversely impact our business and operating results. ​ We have customer agreements in place that include certain service-level commitments.
Removed
As we continue to integrate and update our ERP, we may experience delays, increased costs, the diversion of management’s attention from day-to-day business operations and other difficulties.
Added
In addition, as the Company continues to identify opportunities to reduce its overall cost structure and increase operating efficiencies, including through site rationalization initiatives, if we do not effectively manage such efforts and our infrastructure capacity requirements, it could adversely impact our ability to effectively and efficiently deliver our services.
Removed
Extended delays could also introduce operational and business risk, including cybersecurity risks, business operations risks and other complications. ​ We continue to face a number of risks related to our separation from IBM, which could adversely affect our business, results of operations and financial condition. ​ In connection with the Separation, we and IBM entered into various transaction agreements related to the Spin-off.
Added
Changes in laws and regulations could also mandate significant and costly changes to the way we implement our services or could impose additional taxes on our services.
Removed
These agreements also govern our relationship with IBM following the Spin-off. We rely on IBM to satisfy its performance obligations under these agreements. Since the Spin-off, certain contractual disputes have arisen between us and IBM. We and IBM have commenced arbitration proceedings related to certain of these matters.
Added
At the same time, a number of stakeholders, government entities, regulators and lawmakers have expressed contrary views and expectations, including the proposal or enactment of “anti-ESG” legislation, regulation, policies and enforcement priorities, which may result in scrutiny, reputational risk, lawsuits or market access restrictions.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur key cybersecurity processes include the following: ​ ● Risk-based, layered controls – We regularly assess and adjust our technical controls and methods to identify, respond to and mitigate emerging cybersecurity risks and use a layered approach with overlapping controls to defend against cybersecurity attacks and threats to our networks, end-user devices, servers, applications, data and cloud solutions and the data that our customers entrust to us. 26 Table of Contents ● Cybersecurity incident response plan and testing – We have a global incident response process and a dedicated team responsible for monitoring, detecting and responding to cybersecurity threats and attacks, whether external or internal, coordinating across multiple functions, periodically testing our protocols and regularly communicating and providing reports to our CISO. ​ ● Information sharing and collaboration – We utilize threat intelligence and security information collected from various sources, including but not limited to partners, suppliers, governments and information sharing and analysis centers, to identify, protect against, detect and respond to potential cybersecurity threats and events. ​ ● Training and awareness – We use a combination of online training, including mandatory annual cybersecurity and privacy courses, educational tools, videos and other ongoing awareness initiatives, including phishing simulation exercises, throughout the year to foster a culture of security awareness and responsibility among our workforce. ● Third-party supplier risk assessments – Recognizing that our suppliers can be subject to cybersecurity incidents which may impact us and our customers, our procurement process includes security and risk assessments to identify and evaluate risk associated with certain key suppliers, including reviewing relevant cybersecurity certifications and third-party audit results, assessing technical and organizational controls and evaluating their risk profile. ​ We periodically engage third-party security consultants to conduct evaluations of our cybersecurity controls and procedures, including through penetration testing, third-party audits or consulting on best practices to address new challenges.
Biggest changeOur key cybersecurity processes include the following: ​ ● Risk-based, layered controls – We regularly assess and adjust our technical controls and methods to identify, respond to and mitigate emerging cybersecurity risks and use a layered approach with overlapping controls to defend against cybersecurity attacks and threats to our networks, end-user devices, infrastructure, applications, data and cloud solutions and the data that our customers entrust to us. ​ ● Cybersecurity incident response plan and testing – We have a global incident response process and dedicated teams responsible for monitoring, detecting and responding to cybersecurity threats and attacks, whether external or internal, periodically testing our processes and protocols, and regularly communicating and providing reports to our CISO, Security & Resiliency global practice leader and senior executive leadership. ​ ● Information sharing and collaboration – We utilize threat intelligence and security information collected from various sources, including but not limited to partners, suppliers, governments and information sharing and analysis centers, to identify, protect against, detect and respond to potential cybersecurity threats and events. ​ ● Training and awareness – We use a combination of training and education, including mandatory annual cybersecurity and privacy training, phishing simulation exercises and a multitude of alerts, educational tools, videos and other ongoing awareness initiatives on a variety of topics relating to the rapidly evolving threat landscape, throughout the year that foster a culture of security awareness and responsibility among our workforce. ● Supplier risk assessments – Recognizing that our suppliers can be subject to cybersecurity incidents which may impact us and our customers, our procurement process includes security, data governance and privacy risk assessments to identify and evaluate risk associated with certain key suppliers, including reviewing relevant cybersecurity certifications and third-party audit results, assessing technical and organizational controls and evaluating their risk profile. ​ We periodically engage third-party security consultants to conduct evaluations of our cybersecurity controls and procedures, including penetration testing, third-party audits, and reassessing best practices to address new challenges.
The Audit Committee semi-annually reviews the Company’s enterprise risk management framework, including enterprise risk management processes, and assists the Board of Directors in its oversight over certain key areas of risks, including overseeing cybersecurity, data governance and privacy risk and regularly reporting on such matters to the Board.
The Audit Committee periodically reviews the Company’s enterprise risk management framework, including enterprise risk management processes, and assists the Board of Directors in its oversight over certain key areas of risks, including overseeing cybersecurity, data governance and privacy risk and regularly reporting on such matters to the Board.
In addition, we have a risk-based escalation process outside of our regular reporting process to promptly notify the Board of Directors in the event of any material cybersecurity incident impacting the Company. ​ Based on the information we have as of the date of this Form 10-K, we do not believe that any cybersecurity incident experienced by the Company has materially affected or is reasonably likely to materially affect Kyndryl, including our business strategy, results of operations or financial condition.
In addition, we have a process to promptly notify the Board of Directors, as appropriate, in the event of any cybersecurity incident impacting the Company that may be material. ​ Based on the information we have as of the date of this Form 10-K, we do not believe that any cybersecurity incident experienced by the Company has materially affected or is reasonably likely to materially affect Kyndryl, including our business strategy, results of operations or financial condition.
The Audit Committee and full Board of Directors receive periodic updates from our CISO about Kyndryl’s cybersecurity policies and practices, cybersecurity developments, trends, risks, notable incidents, mitigation strategies, maturity initiatives and other developments throughout the year, as well as periodic updates from our CIO, Security & Resiliency global practice leader and other senior leaders on cybersecurity-related matters. ​ Our information security program is led by our CISO, who reports to the CIO.
The Audit Committee and full Board of Directors receive periodic updates from our CISO about Kyndryl’s cybersecurity policies and practices, cybersecurity developments, trends, risks, notable incidents, mitigation strategies, maturity initiatives and other developments throughout the year, as well as periodic updates from our CIO, Security & Resiliency global practice leader and other senior leaders on cybersecurity-related matters. ​ Our information security program is led by our CISO, who is responsible for the overall security of the enterprise, and our Security & Resiliency global practice leader, who is responsible for the security of the services that we provide to customers.
We continually assess and enhance our cybersecurity risk management program and our cybersecurity posture to protect the confidentiality, integrity and availability of the Company’s infrastructure, resources and information and the information that our customers entrust to us. ​ We designed a multi-faceted risk-management approach based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework and informed by other industry standards and industry-recognized practices to identify and address cybersecurity risks.
We regularly assess and update our cybersecurity risk management program and our cybersecurity posture to protect the confidentiality, integrity and availability of the Company’s and our customers’ infrastructure, resources and information. ​ 24 Table of Contents We designed a multi-faceted risk-management approach based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework and informed by other industry standards and industry-recognized practices to identify and address cybersecurity risks.
For additional information about cybersecurity risks, s ee Item 1A. “Risk Factors.” 27 Table of Contents
For additional information about cybersecurity risks, s ee Item 1A. “Risk Factors.”
Our CISO organization collaborates closely with key stakeholders across the businesses, including our Security & Resiliency and other global practice organizations, in developing and implementing our cybersecurity strategy, policy, operations, threat detection and incident response and remediation.
Our CISO and Security & Resiliency global practice leader collaborate closely with one another and other key stakeholders across the Company in developing and implementing our cybersecurity strategy, policy, controls, operations, threat detection and incident response and remediation.
These evaluations include testing the design and operational effectiveness of our cybersecurity controls and procedures. Our internal audit function conducts additional reviews and assessments of our cybersecurity controls and procedures. Certain results of such assessments and reviews are reported to the Audit Committee and the Board of Directors as appropriate.
These evaluations include testing the design and operational effectiveness of our cybersecurity controls and procedures. Our internal audit function conducts additional reviews and assessments of our cybersecurity controls and procedures and reports to the Audit Committee and the Board of Directors as appropriate. We use the findings from these efforts to improve our practices, procedures and technologies.
We use the findings from these efforts to improve our practices, procedures, and technologies. ​ Cybersecurity Risk Oversight and Governance ​ Our Board of Directors is responsible for the overall oversight of our enterprise risk management.
Cybersecurity Risk Oversight and Governance ​ Our Board of Directors is responsible for the overall oversight of our enterprise risk management.
Our information security teams that support these efforts are comprised of cybersecurity professionals with many years of experience in cybersecurity across multiple sectors, including heavily regulated industries such as financial services and defense, and many of them hold relevant industry certifications. ​ Under our global incident response process, cybersecurity incidents are assessed and classified by severity, and significant incidents are escalated as appropriate to senior executive leadership.
Our teams that support the CISO and Security & Resiliency global practice leader in these efforts are comprised of cybersecurity professionals with many 25 Table of Contents years of experience in cybersecurity across multiple sectors, including heavily regulated industries such as financial services and defense, and many of them hold relevant industry certifications.
Added
Under our global incident response process, cybersecurity incidents are assessed and classified by severity, and significant incidents are escalated as appropriate to senior executive leadership.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeBelow is a summary of the Company’s active properties. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States* ​ Japan ​ Principal Markets ​ Strategic Markets ​ Total ​ ​ Number of ​ Square Feet ​ Number of ​ Square Feet ​ Number of ​ Square Feet ​ Number of ​ Square Feet ​ Number of ​ Square Feet ​ ​ Locations ​ (in millions) ​ Locations ​ (in millions) ​ Locations ​ (in millions) ​ Locations ​ (in millions) ​ Locations ​ (in millions) Leased ​ 31 ​ 1.2 ​ 46 ​ 1.1 ​ 136 ​ 3.9 ​ 135 ​ 2.4 ​ 348 ​ 8.6 Owned ​ 3 ​ 3.1 ​ — ​ — ​ 8 ​ 0.9 ​ 5 ​ 0.8 ​ 16 ​ 4.7 Total ​ 34 ​ 4.3 ​ 46 ​ 1.1 ​ 144 ​ 4.8 ​ 140 ​ 3.2 ​ 364 ​ 13.3 * United States includes our principal executive offices not allocated to the Unites States segment, including our global headquarters located in New York, New York.
Biggest changeBelow is a summary of the Company’s active properties. ​ ​ ​ ​ ​ ​ Owned and Leased Space (millions of square feet) United States * ​ 3.9 Japan ​ 1.0 Principal Markets ​ 3.1 Strategic Markets ​ 2.9 Total ​ 10.9 * United States includes corporate offices not allocated to the Unites States segment, including our global headquarters located in New York, New York.
Removed
Item 2. Properties. As of March 31, 2024, we owned or leased approximately 13.3 million square feet of space worldwide, which excludes certain under-utilized spaces that we inherited from our former Parent at Separation and exited in fiscal years 2023 and 2024. Refer to Note 9 – Leases for more information.
Added
Item 2. Properties. As of March 31, 2025, we owned or leased approximately 10.9 million square feet of space worldwide, which is substantially all data centers and office space used in the normal course of our business. The Company will continue to evaluate space requirements and identify opportunities to improve operating efficiencies.
Removed
The Company will continue to evaluate space requirements and identify opportunities to improve operating efficiencies.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 28 ​ ​ PART II ​ ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. (Reserved) 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 47 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 26 ​ ​ PART II ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. (Reserved) 29 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 30 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 44 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFuture dividends, if any, and the timing of declaration of any such dividends, will be at the discretion of our Board of Directors and will depend upon many factors including, but not limited to, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements and in any preferred stock, business prospects and other factors that our Board of Directors deems relevant. 28 Table of Contents Stock Performance Graph ​ The following graphs compare the cumulative total return of holders of our common stock with the cumulative total return of the S&P 400 Midcap Index and S&P IT Sector Index. ​ The graph below tracks the performance of a $100 investment in our common stock and in each index from November 4, 2021, the date our stock commenced regular-way trading on the NYSE, to March 31, 2024. ​ ​ 29 Table of Contents The graph below tracks the performance of a $100 investment in our common stock and in each index from April 1, 2023, the beginning of our fiscal year, to March 31, 2024. ​ ​
Biggest changeSee further description of the Stock Repurchase Program in “Part II, Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources— Share Repurchase Program.” 27 Table of Contents Stock Performance Graph ​ The following graphs compare the cumulative total return of holders of our common stock with the cumulative total return of the S&P 400 Midcap Index and S&P IT Sector Index. ​ The graph below tracks the performance of a $100 investment in our common stock and in each index from November 4, 2021, the date our stock commenced regular-way trading on the NYSE, to March 31, 2025. ​ ​ 28 Table of Contents The graph below tracks the performance of a $100 investment in our common stock and in each index from April 1, 2024, the beginning of our fiscal year, to March 31, 2025. ​ ​
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol KD. ​ As of May 23, 2024, there were approximately 255,904 stockholders of record of our common stock.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities . Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol KD. ​ As of May 23, 2025, there were approximately 221,000 stockholders of record of our common stock.
Added
Future dividends, if any, and the timing of declaration of any such dividends, will be at the discretion of our Board of Directors and will depend upon many factors including, but not limited to, our results of operations, financial condition, level of indebtedness, capital 26 Table of Contents requirements, contractual restrictions, restrictions in our debt agreements and in any preferred stock, business prospects and other factors that our Board of Directors deems relevant.
Added
In November 2024, the Company’s Board of Directors authorized a share repurchase program of up to $300 million of the Company’s common stock (the “Share Repurchase Program”). During the year ended March 31, 2025, the Company repurchased 2.6 million shares of its common stock under the program at an aggregate cost of $94 million.
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A summary of our common stock repurchases during the three months ended March 31, 2025 is set forth in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total Number of Shares Repurchased (a) ​ ​ Average Price Paid Per Share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ​ ​ Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in millions) January 1 - 31 ​ 268,362 ​ $ 37.91 ​ 268,362 ​ $ 260 February 1 - 28 ​ 566,091 ​ ​ 38.95 ​ 566,091 ​ ​ 238 March 1 - 31 ​ 932,676 ​ ​ 34.54 ​ 932,676 ​ ​ 206 Total ​ 1,767,129 ​ ​ ​ ​ 1,767,129 ​ ​ ​ (a) All shares were repurchased in open market transactions pursuant to the $300 million Share Repurchase Program authorized by our Board of Directors and publicly announced on November 21, 2024.
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The Share Repurchase Program does not have a set expiration date and may be suspended, modified or discontinued at any time without prior notice. Amounts shown herein exclude common stock repurchases to settle tax withholdings related to the vesting of stock-based awards.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeGAAP net income (loss) to adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve ​ ​ ​ ​ ​ ​ Months Ended ​ ​ Year Ended March 31, ​ March 31, (Dollars in millions) 2024 2023 2022 (unaudited) Net income (loss) ​ $ (340) ​ $ (1,374) ​ $ (2,039) Provision for (benefit from) income taxes ​ ​ 172 ​ ​ 524 ​ ​ 350 Interest expense ​ ​ 122 ​ ​ 94 ​ ​ 71 Depreciation of property, equipment and capitalized software ​ ​ 834 ​ ​ 900 ​ ​ 1,206 Amortization expense ​ ​ 1,287 ​ ​ 1,245 ​ ​ 1,310 Workforce rebalancing charges ​ ​ 138 ​ ​ 71 ​ ​ (13) Charges related to ceasing to use leased/fixed assets and lease terminations ​ ​ 39 ​ ​ 80 ​ ​ — Transaction-related costs (benefits) ​ ​ (46) ​ ​ 264 ​ ​ 630 Stock-based compensation expense ​ ​ 95 ​ ​ 113 ​ ​ 86 Impairment expense ​ ​ — ​ ​ — ​ ​ 469 Other adjustments* ​ ​ 68 ​ ​ 59 ​ ​ 124 Adjusted EBITDA (non-GAAP) ​ $ 2,367 ​ $ 1,975 ​ $ 2,195 * Other adjustments represent pension expenses other than pension servicing costs and multi-employer plan costs, significant litigation costs, currency impacts of highly inflationary countries, and an adjustment to reduce amortization expense for the amount already included in transaction-related costs (benefits) above. ​ United States ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) 2024 ​ 2023 Revenue ​ $ 4,295 ​ ​ $ 4,726 ​ Revenue year-over-year change ​ ​ (9) % ​ ​ (0) % Adjusted EBITDA ​ ​ 781 ​ ​ ​ 839 ​ Adjusted EBITDA year-over-year change ​ ​ (7) % ​ ​ ​ ​ ​ For the year ended March 31, 2024, United States revenue of $4.3 billion decreased 9 percent compared to the year ended March 31, 2023, driven by the Company’s efforts to reduce certain low-margin revenues.
Biggest changeGAAP net income (loss) to adjusted EBITDA: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) 2025 2024 2023 Net income (loss) ​ $ 252 ​ $ (340) ​ $ (1,374) Provision for income taxes ​ ​ 184 ​ ​ 172 ​ ​ 524 Interest expense ​ ​ 100 ​ ​ 122 ​ ​ 94 Depreciation of property, equipment and capitalized software ​ ​ 660 ​ ​ 834 ​ ​ 900 Amortization expense ​ ​ 1,308 ​ ​ 1,287 ​ ​ 1,245 Workforce rebalancing charges incurred prior to March 31, 2024 ​ ​ — ​ ​ 138 ​ ​ 71 Charges related to ceasing to use leased/fixed assets and lease terminations ​ ​ 48 ​ ​ 39 ​ ​ 80 Transaction-related costs (benefits) ​ ​ (125) ​ ​ (46) ​ ​ 264 Stock-based compensation expense ​ ​ 100 ​ ​ 95 ​ ​ 113 Other adjustments* ​ ​ (10) ​ ​ 68 ​ ​ 59 Adjusted EBITDA (non-GAAP) ​ $ 2,516 ​ $ 2,367 ​ $ 1,975 * Other adjustments represent pension expenses other than pension servicing costs and multi-employer plan costs, significant litigation costs and benefits, and currency impacts of highly inflationary countries.
Adjusted EBITDA is a non-GAAP measure and defined as net income (loss) excluding income taxes, interest expense, depreciation and amortization (excluding depreciation of right-of-use assets and amortization of capitalized contract costs), charges related to ceasing to use leased/fixed assets, charges related to lease terminations, transaction-related costs and benefits, pension expenses other than pension servicing costs and multi-employer plan costs, stock-based compensation expense, workforce rebalancing charges incurred prior to March 31, 2024, impairment expense, significant litigation costs and currency impacts of highly inflationary countries.
Adjusted EBITDA is a non-GAAP measure and defined as net income (loss) excluding income taxes, interest expense, depreciation and amortization (excluding depreciation of right-of-use assets and amortization of capitalized contract costs), charges related to ceasing to use leased/fixed assets, charges related to lease terminations, transaction-related costs and benefits, pension expenses other than pension servicing costs and multi-employer plan costs, stock-based compensation expense, workforce rebalancing charges incurred prior to March 31, 2024, impairment expense, significant litigation costs and benefits, and currency impacts of highly inflationary countries.
Valuation of Goodwill We review goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable by first assessing qualitative factors to determine if it is more likely than not that fair value is less than carrying value. 44 Table of Contents We assess qualitative factors in each of our reporting units that carry goodwill including relevant events and circumstances that affect the fair value of reporting units.
Valuation of Goodwill We review goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable by first assessing qualitative factors to determine if it is more likely than not that fair value is less than carrying value. 42 Table of Contents We assess qualitative factors in each of our reporting units that carry goodwill including relevant events and circumstances that affect the fair value of reporting units.
Such forward-looking statements often contain words such as “aim,” “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “opportunity,” “plan,” “position,” “predict,” “project,” “should,” “seek,” “target,” “will,” “would,” and other similar words or expressions or the negative thereof or other variations thereon. Forward-looking statements are based on the Company’s current assumptions and beliefs regarding future business and financial performance.
Such forward-looking statements often contain words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “objectives,” “opportunity,” “plan,” “position,” “predict,” “project,” “should,” “seek,” “target,” “will,” “would,” and other similar words or expressions or the negative thereof or other variations thereon. Forward-looking statements are based on the Company’s current assumptions and beliefs regarding future business and financial performance.
To the extent the outlook for long-term returns changes such that management changes its expected long-term return on plan assets assumption, a 25-basis-point increase or decrease in the expected long-term return on plan assets assumption would not have a material estimated decrease or increase on the following year’s pretax net periodic benefit cost (based upon plan assets at March 31, 2024 and expected contributions and benefit payments for fiscal 2025).
To the extent the outlook for long-term returns changes such that management changes its expected long-term return on plan assets assumption, a 25-basis-point increase or decrease in the expected long-term return on plan assets assumption would not have a material estimated decrease or increase on the following year’s pretax net periodic benefit cost (based upon plan assets at March 31, 2025 and expected contributions and benefit payments for fiscal 2026).
We do not have retained interests in assets transferred to unconsolidated entities or other material off-balance sheet interests or instruments. At March 31, 2024, the Company’s material future contractual obligations were primarily related to leases, debt and pension liabilities.
We do not have retained interests in assets transferred to unconsolidated entities or other material off-balance sheet interests or instruments. At March 31, 2025, the Company’s material future contractual obligations were primarily related to leases, debt and pension liabilities.
In connection with the issuance of the Initial Notes, we entered into a registration rights agreement with the purchasers of the Initial Notes, pursuant to which we completed a registered offering to exchange each series of Initial Notes for new notes with substantially identical terms during the quarter ended September 30, 2022. ​ 39 Table of Contents In February 2024, we completed a registered offering of $500 million in aggregate principal amount of 6.35% senior unsecured notes due 2034 (the “2034 Notes”).
In connection with the issuance of the Initial Notes, we entered into a registration rights agreement with the purchasers of the Initial Notes, pursuant to which we completed a registered offering to exchange each series of Initial Notes for new notes with substantially identical terms during the quarter ended September 30, 2022. ​ In February 2024, we completed a registered offering of $500 million in aggregate principal amount of 6.35% senior unsecured notes due 2034 (the “2034 Notes”).
Costs and Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ Percent of Revenue ​ Change (Dollars in millions) 2024 ​ 2023 2024 ​ 2023 2024 vs. 2023 Revenue ​ $ 16,052 ​ $ 17,026 ​ 100.0 % ​ 100.0 % ​ (6) % Cost of services ​ ​ 13,189 ​ ​ 14,498 ​ 82.2 % ​ 85.2 % (9) % Selling, general and administrative expenses ​ ​ 2,773 ​ ​ 2,914 ​ 17.3 % ​ 17.1 % (5) % Workforce rebalancing charges ​ 138 ​ 71 0.9 % ​ 0.4 % 95 % Transaction-related costs (benefits) ​ ​ (46) ​ ​ 264 ​ (0.3) % ​ 1.5 % ​ NM ​ Interest expense ​ 122 ​ 94 0.8 % ​ 0.5 % 30 % Other expense ​ 45 ​ 35 0.3 % ​ 0.2 % 27 % Income (loss) before income taxes ​ $ (168) ​ $ (851) ​ ​ ​ ​ ​ NM – not meaningful ​ Cost of services was 82.2% of revenue in the year ended March 31, 2024, compared to 85.2% in the year ended March 31, 2023, driven by increased operating efficiencies, higher margins on recent signings and actions the Company has taken to reduce low-margin components of its customer relationships.
Other expense was 0.2% of revenue in the year ended March 31, 2025, compared to 0.3% in the year ended March 31, 2024, driven by currency-related hedging gains recorded this year. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ Percent of Revenue ​ Change (Dollars in millions) 2024 ​ 2023 2024 ​ 2023 2024 vs. 2023 Revenue ​ $ 16,052 ​ $ 17,026 ​ 100.0 % ​ 100.0 % ​ (6) % Cost of services ​ ​ 13,189 ​ ​ 14,498 ​ 82.2 % ​ 85.2 % (9) % Selling, general and administrative expenses ​ ​ 2,773 ​ ​ 2,914 ​ 17.3 % ​ 17.1 % (5) % Workforce rebalancing charges ​ 138 ​ 71 0.9 % ​ 0.4 % 95 % Transaction-related costs (benefits) ​ ​ (46) ​ ​ 264 ​ (0.3) % ​ 1.5 % ​ NM ​ Interest expense ​ 122 ​ 94 0.8 % ​ 0.5 % 30 % Other expense ​ 45 ​ 35 0.3 % ​ 0.2 % 27 % Income (loss) before income taxes ​ $ (168) ​ $ (851) ​ ​ ​ ​ ​ NM – not meaningful ​ Cost of services was 82.2% of revenue in the year ended March 31, 2024, compared to 85.2% in the year ended March 31, 2023, driven by increased operating efficiencies, higher margins on recent signings and actions the Company has taken to reduce low-margin components of its customer relationships.
We provide these non-GAAP financial measures as we believe they enhance visibility to underlying results and the impact of management decisions on operational performance, enables better comparison to peer companies and allows us to provide a long-term strategic view of the business going forward. ​ Revenue growth in constant currency is a non-GAAP measure that eliminates the effects of exchange rate fluctuations when translating from foreign currencies to the United States dollar.
We provide these non-GAAP financial measures as we believe they enhance visibility to underlying results and the impact of management decisions on operational performance, enable better comparison to peer companies and allow us to provide a long-term strategic view of the business going forward. ​ Revenue growth in constant currency is a non-GAAP measure that eliminates the effects of exchange rate fluctuations when translating from foreign currencies to the United States dollar.
Any forward-looking statement in this report speaks only as of the date on which it is made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. ​ 46 Table of Contents
Any forward-looking statement in this report speaks only as of the date on which it is made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. ​
Transaction-related costs (benefits) were (0.3)% of revenue in the year ended March 31, 2024 compared to 1.5% in the prior-year, driven by reduced rebranding and employee-retention costs and the favorable 36 Table of Contents resolution of certain pre-Separation and Separation-related matters with our former Parent.
Transaction-related costs (benefits) were (0.3)% of revenue in the year ended March 31, 2024 compared to 1.5% in the prior-year, driven by reduced rebranding and employee-retention costs and the favorable resolution of certain pre-Separation and Separation-related matters with our former Parent.
Interest rates on borrowings under the Revolving Credit Agreement will be based on prevailing market interest rates, plus a margin, as further described in the Revolving Credit Agreement. ​ The total facility fees recorded by the Company for the Revolving Credit Agreement were $5 million for the years ended March 31, 2024 and 2023.
Interest rates on borrowings under the Revolving Credit Agreement will be based on prevailing market interest rates, plus a margin, as further described in the Revolving Credit Agreement. ​ The total facility fees recorded by the Company for the Revolving Credit Agreement were $5 million and $5 million for the years ended March 31, 2025 and 2024, respectively.
Examples include, but are not limited to, macroeconomic, industry and market conditions, as well as other individual factors such as: ● A significant adverse shift in the operating environment of the reporting unit such as unanticipated competition; ● Significant pending litigation; ● A loss of key personnel; ● A more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed of; and ● An adverse action or assessment by a regulator.
Examples include, but are not limited to, macroeconomic, industry and market conditions, as well as other individual factors such as: ● A significant adverse shift in the operating environment of the reporting unit such as unanticipated competition; ● Significant pending litigation; ● A more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed of; and ● A significant adverse action or assessment by a regulator.
We believe that adjusted EBITDA is a helpful supplemental measure to assist 33 Table of Contents investors in evaluating our operating results as it excludes certain items whose fluctuation from period to period does not necessarily correspond to changes in the operations of our business.
We believe that adjusted EBITDA is a helpful supplemental measure to assist investors in evaluating our operating results as it excludes certain items whose fluctuation from period to period does not necessarily correspond to changes in the operations of our business.
For all of these estimates, it should be noted that future events rarely develop exactly as forecasted and estimates require regular review and adjustment. Revenue Recognition Application of GAAP related to the measurement and recognition of revenue requires us to make judgments and estimates.
For all of these estimates, it should be noted that future events rarely develop exactly as forecasted and estimates require regular review and adjustment. 40 Table of Contents Revenue Recognition Application of GAAP related to the measurement and recognition of revenue requires us to make judgments and estimates.
If the average discount rate assumption for the non-U.S. defined benefit pension plans had increased or decreased by 25-basis-points from 3.30% on March 31, 2024, this would not result in a material change to pretax net periodic benefit cost recognized in fiscal 2025.
If the average discount rate assumption for the non-U.S. defined benefit pension plans had increased or decreased by 25-basis-points from 3.68% on March 31, 2025, this would not result in a material change to pretax net periodic benefit cost recognized in fiscal 2026.
Adjusted EBITDA increased $143 million from the prior year, primarily due to increased operating efficiencies and higher margins on recent signings, partially offset by an increase in software costs of $23 million resulting from an amendment of the contract with a software provider that re-allocated costs among our segments.
Adjusted EBITDA increased $158 million from the prior year, primarily due to increased operating efficiencies and higher margins on recent signings, partially offset by an increase in software costs of $29 million resulting from an amendment of the contract with a software provider that re-allocated costs among our segments.
See Note 9 – Leases, Note 11 – Borrowings, Note 12 – Other Liabilities and Note 16 – Retirement-Related Benefits of Notes to the Company’s consolidated financial statements. Additionally, the Company has contractual commitments that are noncancellable with certain software, hardware and cloud partners used in the delivery of services to customers.
See Note 9 – Leases, Note 12 – Borrowings, Note 13 – Other Liabilities and Note 17 – Retirement-Related Benefits of Notes to the Company’s consolidated financial statements. Additionally, the Company has contractual commitments that are noncancellable with certain software, hardware and cloud partners used in the delivery of services to customers.
Adjusted EBITDA increased $369 million from the prior year, primarily due to increased operating efficiencies, higher margins on recent signings and a decrease in software costs of $80 million resulting from an amendment of the contract with a software provider that re-allocated costs among our segments.
Adjusted EBITDA increased $354 million from the prior year, primarily due to increased operating efficiencies, higher margins on recent signings and a decrease in software costs of $86 million resulting from an amendment of the contract with a software provider that re-allocated costs among our segments.
The Company’s actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others: ​ ● failure to attract new customers, retain existing customers or sell additional services to customers; ● failure to meet growth and productivity objectives; ● competition; ● impacts of relationships with critical suppliers and partners; ● failure to address and adapt to technological developments and trends; ● inability to attract and retain key personnel and other skilled employees; ● impact of economic, political, public health and other conditions; ● damage to the Company’s reputation; ● inability to accurately estimate the cost of services and the timeline for completion of contracts; ● service delivery issues; ● the Company’s ability to successfully manage acquisitions and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels; ● the impact of our business with government customers; ● failure of the Company’s intellectual property rights to prevent competitive offerings and the failure of the Company to obtain, retain and extend necessary licenses; ● the impairment of our goodwill or long-lived assets; ● risks relating to cybersecurity, data governance and privacy; ● risks relating to non-compliance with legal and regulatory requirements; ● adverse effects from tax matters and environmental matters; ● legal proceedings and investigatory risks and potential indemnification obligations; ● impact of changes in market liquidity conditions and customer credit risk on receivables; ● the Company’s pension plans; ● the impact of currency fluctuations; ● risks related to the Company’s spin-off from IBM; ● risks related to deficiencies identified in our information technology general control; and ● risks related to the Company’s common stock and the securities market . ​ Additional risks and uncertainties include, among others, those risks and uncertainties described in the “Risk Factors” section of this report, as such factors may be updated from time to time in the Company’s subsequent filings with the SEC.
The Company’s actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others: ​ ● failure to attract new customers, retain existing customers or sell additional services to customers; ● failure to meet growth and productivity objectives and maintain our capital allocation strategy; ● competition; ● impacts of relationships with critical suppliers and partners; ● failure to address and adapt to technological developments and trends; ● inability to attract and retain key personnel and other skilled employees; ● impact of economic, geopolitical, public health and other conditions; ● damage to the Company’s reputation; ● inability to accurately estimate the cost of services and the timeline for completion of contracts; ● service delivery issues; ● the Company’s ability to successfully manage acquisitions and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels; ● the impact of our business with foreign, state and local government customers; ● failure of the Company’s intellectual property rights to prevent competitive offerings and the failure of the Company to obtain, retain and extend necessary licenses; ● the impairment of our goodwill or long-lived assets; ● risks relating to cybersecurity, data governance and privacy; ● risks relating to non-compliance with legal and regulatory requirements; ● adverse effects from tax matters and environmental matters; ● legal proceedings and investigatory risks and potential indemnification obligations; ● impact of changes in market liquidity conditions and customer credit risk on receivables; ● the Company’s pension plans; ● the impact of currency fluctuations; and ● risks related to the Company’s common stock and the securities market . ​ Additional risks and uncertainties include, among others, those risks and uncertainties described in the “Risk Factors” section of this report, as such factors may be updated from time to time in the Company’s subsequent filings with the SEC.
The amounts used to assess sensitivity (e.g., 1 percent, 10 percent, etc.) are included to allow users of this report to understand a general effect of changes in the estimates and do not represent management’s predictions of variability.
The amounts used to assess sensitivity (e.g., 10 percent, 25 basis points, etc.) are included to allow users of this report to understand a general effect of changes in the estimates and do not represent management’s predictions of variability.
The fees associated with the transfers of receivables were $49 million for the year ended March 31, 2024 and $47 million for the year ended March 31, 2023. ​ 40 Table of Contents Supplier Financing Program In the year ended March 31, 2024, the Company initiated a supplier financing program with a third-party financial institution under which the Company agrees to pay the financial institution the stated amounts of invoices from participating suppliers on the originally invoiced due date, which have an average term of 90 to 120 days.
The fees associated with the transfers of receivables were $38 million for the year ended March 31, 2025 and $49 million for the year ended March 31, 2024. ​ Supplier Financing Program In the year ended March 31, 2024, the Company initiated a supplier financing program with a third-party financial institution under which the Company agrees to pay the financial institution the stated amounts of invoices from participating suppliers on the originally invoiced due date, which have an average term of 90 to 120 days.
During the year ended March 31, 2024, the Company recognized $135 million in workforce rebalancing charges (excluding individual terminations outside of this Company-wide workforce rebalancing program) and $39 million in charges related to ceasing to use leased and owned fixed assets and lease termination charges. ​ Total cash outlays for this program are expected to be approximately $300 million, of which approximately $210 million has been paid through March 31, 2024 (including approximately $40 million of contractual payments toward leased assets we have ceased to use) and approximately $60 million is expected to be paid in fiscal year 2025.
During the year ended March 31, 2024, the Company recognized $135 million in workforce rebalancing charges (excluding individual terminations outside of this Company-wide workforce rebalancing program) and $39 million in charges related to ceasing to use leased and owned fixed assets, including lease termination charges. ​ Total cash outlays for this program are expected to be $300 million, of which approximately $270 million has been paid through March 31, 2025 (including approximately $70 million of contractual payments toward leased assets we have ceased to use), and the remainder is expected to be paid thereafter.
The second agreement was executed in June 2022 with a separate third-party financial institution and renews automatically on its anniversary date. ​ The net proceeds from these arrangements are reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows.
The second agreement was executed in June 2022 with a separate third-party financial institution and renews automatically on its anniversary date, unless either party elects not to extend. ​ The net proceeds from these arrangements are reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows.
The Company is in compliance with its debt covenants. Transfers of Financial Assets The Company has entered into agreements with third-party financial institutions to sell certain financial assets (primarily trade receivables) without recourse. The Company has determined these are true sales.
The Company is in compliance with its debt covenants. 38 Table of Contents Transfers of Financial Assets The Company has entered into arrangements with third-party financial institutions to sell certain financial assets (primarily trade receivables) without recourse. The Company has determined these are true sales.
Gross proceeds from receivables sold to third parties under the aforementioned programs were $3.6 billion for the year ended March 31, 2024 and $3.1 billion for the year ended March 31, 2023.
Gross proceeds from receivables sold to third parties under the aforementioned programs were $3.2 billion for the year ended March 31, 2025 and $3.6 billion for the year ended March 31, 2024.
Liquidity and Capital Resources We believe that our existing cash and cash equivalents and the Revolving Credit Agreement entered into in October 2021 will be sufficient to meet our anticipated cash needs for at least the next twelve months.
Liquidity and Capital Resources We believe that our existing cash and cash equivalents and our revolving credit agreement will be sufficient to meet our anticipated cash needs for at least the next twelve months.
Following the Separation, Kyndryl became an independent, publicly-traded company and the world’s leading IT infrastructure services provider. ​ Financial Performance Summary Macro Dynamics In fiscal year 2024, we saw continuing demand for information technology services, despite concerns about economic growth, increased geopolitical tensions, inflationary pressures and government efforts to stem inflation.
Following the Separation, Kyndryl became an independent, publicly-traded company and the world’s leading IT infrastructure services provider. ​ Financial Performance Summary Macro Dynamics In fiscal year 2025, we saw continuing demand for information technology services, despite concerns about economic growth, geopolitical tensions and inflationary pressures.
GAAP, which requires us to make estimates and assumptions that impact the amounts reported and disclosed in our consolidated financial statements and the accompanying notes. We prepared these estimates based on the most current and best available information, but actual results could differ materially from these estimates and assumptions.
GAAP, which requires us to make estimates and assumptions that impact the amounts reported and disclosed in our consolidated financial statements and the accompanying notes. We prepared these estimates based on the most current and best available information, but actual results could differ materially from these estimates and assumptions. All significant transactions and accounts between Kyndryl entities were eliminated.
At March 31, 2024, we had short-term (April 2024 through March 2025), mid-term (April 2025 through March 2027) and long-term (April 2027 onward) purchase commitments in the amount of $0.6 billion, $0.4 billion and $0.4 b illion, respectively.
At March 31, 2025, we had short-term (April 2025 through March 2026), mid-term (April 2026 through March 2028) and long-term (April 2028 onward) purchase commitments in the amount of $0.2 billion, $0.6 billion and $0.1 b illion, respectively.
A 25-basis-point increase or decrease in the discount rate would result in an approximate corresponding decrease or increase, respectively, of approximately $42 million in the Plans’ estimated PBO and accumulated postretirement benefit obligation (APBO) based upon March 31, 2024 data. The expected long-term return on plan assets assumption is used in calculating the net periodic benefit cost.
A 25-basis-point increase or decrease in the discount rate would result in an approximate corresponding decrease or increase, respectively, of approximately $38 million in the Plans’ estimated PBO based upon March 31, 2025 data. 41 Table of Contents The expected long-term return on plan assets assumption is used in calculating the net periodic benefit cost.
Our income tax expense for the year ended March 31, 2023 was primarily related to the increases in valuation allowances in certain jurisdictions against deferred tax assets that are not more likely than not to be realized, taxes on foreign operations and uncertain tax positions.
Our income tax expense for the year ended March 31, 2023 was primarily related to the increases in valuation allowances in certain jurisdictions against deferred tax assets that are not more likely than not to be realized, taxes on foreign operations and uncertain tax positions. ​ The effective tax rate for the year ended March 31, 2025 was higher compared to the year ended March 31, 2024, primarily due to the Company’s pretax income in fiscal year 2025, compared to a pretax loss in 2024.
Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies and actions.
In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies and actions.
Net loss of $340 million improved by $1.0 billion versus the prior-year period driven by progress on our key initiatives to drive operating efficiencies, increased margins and reduced transaction-related costs tied to our Separation.
Net loss of $340 million improved by $1.0 billion versus the prior-year period driven by progress on our key initiatives to drive operating efficiencies, increased margins and reduced transaction-related costs tied to our Separation. Basis of Presentation We prepare our consolidated financial statements in accordance with U.S.
Transaction-related costs include employee retention expenses, information technology costs, marketing expenses to establish the Kyndryl brand, legal, accounting, consulting and other professional service costs required, pre-Separation and post-Separation, to prepare for and execute the Separation, costs and benefits resulting from settlements with our former Parent associated with pre-Separation and Separation-related matters, and other costs related to contract and supplier novation and integration. ​ Workforce Rebalancing and Site-Rationalization Charges ​ During the year ended March 31, 2023, management initiated certain actions to reduce the Company’s overall cost structure and increase our operating efficiency, which continued through the fiscal year ended March 31, 2024.
Transaction-related costs include gains or losses, employee retention expenses, information technology costs, marketing expenses to establish the Kyndryl brand, 35 Table of Contents legal, accounting, consulting and other professional service costs, costs and benefits resulting from settlements with our former Parent associated with pre-Separation and Separation-related matters, and other costs related to contract and supplier novation and integration, associated with acquisitions, divestitures or the Separation. ​ Workforce Rebalancing and Site-Rationalization Charges ​ Fiscal 2025 Program ​ During the year ended March 31, 2025, management initiated actions to reduce the Company’s overall cost structure and increase our operating efficiency.
The revenue decline was largely attributable to actions the Company has taken to reduce low-margin components of its customer relationships.
The revenue decline was largely attributable to actions the Company has taken to reduce 30 Table of Contents low-margin components of its customer relationships, as well as currency effects.
For further information on (i) the comparisons between the year ended March 31, 2023 and the twelve months ended March 31, 2022 not covered in the “Segment Results” below, (ii) the comparison between the three months ended March 31, 2023 and the three months ended March 31, 2022 (the 2022 transition period) and (iii) the year ended December 31, 2021, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (the “2023 Form 10-K”). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Months Ended ​ ​ ​ ​ ​ ​ March 31, ​ ​ Year Ended March 31, ​ 2022 (Dollars in millions) ​ 2024 ​ 2023 ​ (unaudited) Revenue ​ $ 16,052 ​ ​ $ 17,026 ​ ​ $ 18,317 ​ Revenue growth (GAAP) ​ ​ (6) % ​ ​ (7) % ​ ​ (5) % Revenue growth in constant currency (1) ​ ​ (6) % ​ ​ 0 % ​ ​ (5) % Net income (loss) ​ $ (340) ​ ​ $ (1,374) ​ ​ $ (2,039) ​ Adjusted EBITDA (1) ​ $ 2,367 ​ ​ $ 1,975 ​ ​ $ 2,195 ​ (1) Revenue growth in constant currency and adjusted EBITDA are non-GAAP financial metrics.
For further information on the comparisons between the years ended March 31, 2024 and 2023 not covered in the “Segment Results” below, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “2024 Form 10-K”). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ 2025 ​ 2024 ​ 2023 Revenue ​ $ 15,057 ​ ​ $ 16,052 ​ ​ $ 17,026 ​ ​ Revenue growth (GAAP) ​ ​ (6) % ​ ​ (6) % ​ ​ (7) % (2) ​ Revenue growth in constant currency (1) ​ ​ (4) % ​ ​ (6) % ​ ​ 0 % (2) ​ Net income (loss) ​ $ 252 ​ ​ $ (340) ​ ​ $ (1,374) ​ ​ Adjusted EBITDA (1) ​ $ 2,516 ​ ​ $ 2,367 ​ ​ $ 1,975 ​ ​ (1) Revenue growth in constant currency and adjusted EBITDA are non-GAAP financial metrics.
If the Company is unable to satisfy, reduce or amend its contractual commitments, it will record the future charges for any payments related to excess commitments as cost of services.
The Company has determined that these commitments may exceed the Company’s needs over the next two to three years. If the Company is unable to satisfy, reduce or amend its contractual commitments, it will record the future charges for any payments related to excess commitments as cost of services.
Contract extensions and increases in scope are treated as signings only to the extent of the incremental new value. Signings can vary over time due to a variety of factors including, but not limited to, the timing of signing a small number of larger outsourcing contracts as well as the length of those contracts.
Signings can vary over time due to a variety of factors including, but not limited to, the timing of signing a small number of larger outsourcing contracts as well as the length of those contracts.
The 2034 Notes are the Company’s senior unsecured obligations and rank equally in right of payment with all of the Company’s other existing and future senior unsecured indebtedness. ​ The Initial Notes and the 2034 Notes are subject to customary affirmative covenants, negative covenants and events of default for financings of this type and are redeemable at our option in a customary manner. ​ Term Loan and Revolving Credit Facility ​ In October 2021, we entered into a $500 million three-year variable rate term loan credit agreement (the “Term Loan Credit Agreement”), which was scheduled to mature in November 2024.
The 2034 Notes are the Company’s senior unsecured obligations and rank equally in right of payment with all of the Company’s other existing and future senior unsecured indebtedness. ​ The Initial Notes and the 2034 Notes are subject to customary affirmative covenants, negative covenants and events of default for financings of this type and are redeemable at our option in a customary manner. ​ Revolving Credit Agreement ​ In October 2021, we entered into a $3.15 billion multi-currency revolving credit agreement (the “Revolving Credit Agreement”), which expires, unless extended, in October 2026.
Based on our usage experience and data analysis, we determined we should increase the estimated useful lives of our information technology equipment from five to six years.
Change in Accounting Estimate ​ In March 2024, the Company completed its assessment of the useful lives of its information technology equipment. Based on our usage experience and data analysis, the Company determined it should increase the estimated useful lives of its information technology equipment from five to six years.
The revenue decline was largely attributable to actions the Company has taken to reduce low-margin components of its customer relationships.
The revenue decline was largely attributable to actions the Company has taken to reduce low-margin components of its customer relationships, as well as an unfavorable currency exchange rate impact of three points.
Results for the twelve months ended March 31, 2022 were derived from our quarterly consolidated financial statements as previously reported. The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements and related notes included elsewhere in this report.
The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements and related notes included elsewhere in this report.
These disclosures are provided in addition to and not as a substitute for the percentage change in revenue and profit or loss measures on a U.S. GAAP basis compared to the corresponding period in the prior year.
These disclosures are provided in addition to and not as a substitute for the percentage change in revenue and profit or loss measures on a U.S. GAAP basis compared to the corresponding period in the prior year. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.
Other expense was 0.2% of revenue in the year ended March 31, 2023 compared to 0.2% in the twelve months ended March 31, 2022. ​ Transaction-Related Costs (Benefits) ​ The Company classifies certain expenses and benefits related to the Separation, acquisitions and divestitures (if any) as “transaction-related costs (benefits)” in the Consolidated Income Statement.
Interest expense was 0.8% of revenue in the year ended March 31, 2024 compared to 0.5% in the prior year due to higher interest rates in fiscal 2024. ​ Transaction-Related Costs ​ The Company classifies certain expenses and benefits related to the Separation, acquisitions and divestitures as “transaction-related costs (benefits)” in the Consolidated Income Statement.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . Overview ​ In January 2022, the Company changed its fiscal year-end to March 31 from December 31. Included below are selected results and year-over-year comparisons for the years ended March 31, 2024 and 2023, and the twelve months ended March 31, 2022 (unaudited).
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . Overview ​ Included below are selected results and year-over-year comparisons for the years ended March 31, 2025, 2024 and 2023.
Adjusted EBITDA decreased $46 million from the prior year, primarily driven by unfavorable currency movements that impacted both non-yen-denominated costs and the translation of earnings into U.S. dollars. For the year ended March 31, 2023, Japan revenue of $2.5 billion decreased 13 percent compared to the twelve months ended March 31, 2022.
Adjusted EBITDA decreased $46 million from the prior year, primarily driven by unfavorable currency movements that impacted both non-yen-denominated costs and the translation of earnings into U.S. dollars.
Cash Flow Our cash flows from operating, investing and financing activities are summarized in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) 2024 2023 Net cash provided by (used in): ​ ​ Operating activities ​ $ 454 ​ $ 781 Investing activities ​ (553) ​ (835) Financing activities ​ (170) ​ (141) Effect of exchange rate changes on cash, cash equivalents and restricted cash ​ (37) ​ (100) Net change in cash, cash equivalents and restricted cash ​ $ (306) ​ $ (294) ​ Net cash provided by operating activities was $454 million for the year ended March 31, 2024, compared to net cash provided by operating activities of $781 million for the year ended March 31, 2023.
Cash Flow Our cash flows from operating, investing and financing activities are summarized in the table below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) 2025 2024 Net cash provided by (used in): ​ ​ Operating activities ​ $ 942 ​ $ 454 Investing activities ​ (404) ​ (553) Financing activities ​ (286) ​ (170) Effect of exchange rate changes on cash, cash equivalents and restricted cash ​ (16) ​ (37) Net change in cash, cash equivalents and restricted cash ​ $ 235 ​ $ (306) ​ Net cash provided by operating activities was $942 million for the year ended March 31, 2025, compared to net cash provided by operating activities of $454 million for the year ended March 31, 2024, mainly due to higher earnings. 37 Table of Contents Net cash used in investing activities was $404 million for the year ended March 31, 2025, compared to a net cash use of $553 million for the year ended March 31, 2024, due to the sale of our SIS platform in Canada partially offset by our acquisition of Skytap.
Key factors reviewed to estimate the future costs to complete each contract are future labor costs, product costs and expected productivity efficiencies. 42 Table of Contents Capitalization of Contract Costs In connection with services arrangements, we incur and capitalize direct costs for transition and setup activities performed at the inception of these long-term contracts that are necessary to enable us to perform under the terms of the arrangement.
Capitalization of Contract Costs In connection with services arrangements, we incur and capitalize direct costs for transition and setup activities performed at the inception of these long-term contracts that are necessary to enable us to perform under the terms of the arrangement. These costs are capitalized and are amortized on a straight-line basis over the expected period of benefit.
A significant change in an estimate or assumption on one or more contracts could have a material effect on our results of operations.
Such estimates require judgment and assumptions, and actual future cash flows could differ from these estimates. A significant change in an estimate or assumption on one or more contracts could have a material effect on our results of operations.
To assess recoverability, undiscounted estimated cash flows of the contract are projected over its remaining life and compared to the carrying amount of contract-related assets, including the unamortized deferred cost balance. Such estimates require judgment and assumptions, and actual future cash flows could differ from these estimates.
We perform periodic reviews to assess the recoverability of deferred contract transition and setup costs. To assess recoverability, undiscounted estimated cash flows of the contract are projected over its remaining life and compared to the carrying amount of contract-related assets, including the unamortized deferred cost balance.
Segment revenue and revenue growth in constant currency exclude any transactions between the segments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Months Ended ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ March 31, ​ Year-over-Year Change (Dollars in millions) 2024 ​ 2023 ​ 2022 (unaudited) ​ 2024 vs. 2023 ​ 2023 vs. 2022 Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 4,295 ​ ​ $ 4,726 ​ ​ $ 4,745 ​ ​ (9) % ​ (0) % Japan ​ ​ 2,344 ​ ​ ​ 2,502 ​ ​ ​ 2,866 ​ ​ (6) % ​ (13) % Principal Markets ​ ​ 5,823 ​ ​ ​ 5,957 ​ ​ ​ 6,838 ​ ​ (2) % ​ (13) % Strategic Markets ​ ​ 3,590 ​ ​ ​ 3,840 ​ ​ ​ 3,867 ​ ​ (7) % ​ (1) % Total revenue ​ $ 16,052 ​ ​ $ 17,026 ​ ​ $ 18,317 ​ ​ (6) % ​ (7) % Revenue growth in constant currency (1) ​ ​ (6) % ​ ​ 0 % ​ ​ (5) % ​ ​ ​ ​ ​ ​ Adjusted EBITDA (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 781 ​ ​ $ 839 ​ ​ $ 910 ​ ​ (7) % ​ (8) % Japan ​ ​ 361 ​ ​ ​ 407 ​ ​ ​ 532 ​ ​ (11) % ​ (23) % Principal Markets ​ ​ 740 ​ ​ ​ 371 ​ ​ ​ 387 ​ ​ 99 % ​ (4) % Strategic Markets ​ ​ 579 ​ ​ ​ 436 ​ ​ ​ 535 ​ ​ 33 % ​ (19) % Corporate and other (2) ​ ​ (95) ​ ​ ​ (77) ​ ​ ​ (170) ​ ​ NM ​ ​ NM ​ Total adjusted EBITDA (1) ​ $ 2,367 ​ ​ $ 1,975 ​ ​ $ 2,195 ​ ​ 20 % ​ (10) % NM – not meaningful (1) Revenue growth in constant currency and adjusted EBITDA are non-GAAP financial metrics.
Segment revenue and revenue growth in constant currency exclude any transactions between the segments. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ Year-over-Year Change (Dollars in millions) 2025 ​ 2024 ​ 2023 ​ 2025 vs. 2024 ​ 2024 vs. 2023 Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 3,876 ​ ​ $ 4,295 ​ ​ $ 4,726 ​ ​ (10) % ​ (9) % Japan ​ ​ 2,358 ​ ​ ​ 2,344 ​ ​ ​ 2,502 ​ ​ 1 % ​ (6) % Principal Markets ​ ​ 5,206 ​ ​ ​ 5,479 ​ ​ ​ 5,556 ​ ​ (5) % ​ (1) % Strategic Markets ​ ​ 3,617 ​ ​ ​ 3,934 ​ ​ ​ 4,241 ​ ​ (8) % ​ (7) % Total revenue ​ $ 15,057 ​ ​ $ 16,052 ​ ​ $ 17,026 ​ ​ (6) % ​ (6) % Revenue growth in constant currency (1) ​ ​ (4) % ​ ​ (6) % ​ ​ 0 % ​ ​ ​ ​ ​ ​ Adjusted EBITDA (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 725 ​ ​ $ 781 ​ ​ $ 839 ​ ​ (7) % ​ (7) % Japan ​ ​ 390 ​ ​ ​ 361 ​ ​ ​ 407 ​ ​ 8 % ​ (11) % Principal Markets ​ ​ 886 ​ ​ ​ 677 ​ ​ ​ 323 ​ ​ 31 % ​ 110 % Strategic Markets ​ ​ 606 ​ ​ ​ 642 ​ ​ ​ 484 ​ ​ (6) % ​ 33 % Corporate and other (2) ​ ​ (90) ​ ​ ​ (95) ​ ​ ​ (77) ​ ​ NM ​ ​ NM ​ Total adjusted EBITDA (1) ​ $ 2,516 ​ ​ $ 2,367 ​ ​ $ 1,975 ​ ​ 6 % ​ 20 % NM – not meaningful (1) Revenue growth in constant currency and adjusted EBITDA are non-GAAP financial metrics.
GAAP, see “⸺Segment Results.” ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ March 31, (Dollars in millions) 2024 2023 Assets ​ $ 10,590 ​ $ 11,464 Liabilities ​ ​ 9,468 ​ ​ 10,002 Equity ​ ​ 1,122 ​ ​ 1,462 ​ Organization of Information Kyndryl Holdings, Inc. was formed as a wholly-owned subsidiary of IBM in September 2021 to hold the operations of the infrastructure services unit of IBM’s Global Technology Services segment.
The year-over-year comparison for the year ended March 31, 2023 and the results of operations for the twelve months ended March 31, 2022 were derived from our unaudited quarterly consolidated financial statements as previously reported. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ March 31, (Dollars in millions) 2025 2024 Assets ​ $ 10,452 ​ $ 10,590 Liabilities ​ ​ 9,121 ​ ​ 9,468 Equity ​ ​ 1,331 ​ ​ 1,122 ​ Organization of Information Kyndryl Holdings, Inc. was formed as a wholly-owned subsidiary of IBM in September 2021 to hold the operations of the infrastructure services unit of IBM’s Global Technology Services segment.
The revenue decline was largely attributable to actions the Company has taken to reduce unprofitable and low-margin components of its customer relationships. United States revenue declined 9 percent, Japan revenue declined 6 percent, Principal Markets revenue declined 2 percent and Strategic Markets revenue decreased 7 percent, compared to the year ended March 31, 2023.
For the year ended March 31, 2024, Strategic Markets revenue of $3.9 billion decreased 7 percent compared to the year ended March 31, 2023, including a favorable currency exchange rate impact of three points. The revenue decline was largely attributable to actions the Company has taken to reduce low-margin components of its customer relationships.
Management expects that these workforce rebalancing and site-rationalization activities will reduce payroll costs, rent expenses and depreciation of property and equipment by approximately $400 million in fiscal year 2025. There can be no guarantee that we will achieve our expected cost savings.
Management expects that these workforce rebalancing and site-rationalization activities will reduce payroll costs, rent expenses and depreciation of property and equipment by more than $200 million in fiscal year 2026.
Other Information Signings ​ The following table presents the Company’s signings for the years ended March 31, 2024 and 2023, and the twelve months ended March 31, 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve ​ ​ ​ ​ ​ ​ ​ ​ Months ​ ​ ​ ​ ​ ​ Ended ​ ​ Year Ended March 31, ​ March 31, (Dollars in billions) 2024 2023 2022 Total signings ​ $ 12.5 ​ $ 12.2 ​ $ 14.2 ​ Signings increased by $332 million, or 3%, in the year ended March 31, 2024, compared to the prior year.
Other Information Signings ​ The following table presents the Company’s signings for the years ended March 31, 2025, 2024 and 2023. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in billions) 2025 2024 2023 Total signings ​ $ 18.2 ​ $ 12.5 ​ $ 12.2 ​ Signings increased $5.7 billion, or 46%, in the year ended March 31, 2025 compared to the year ended March 31, 2024, driven by growth in each of our four operating segments.
There are no third-party standards or requirements governing the calculation of signings. We define signings as an initial estimate of the value of a customer’s commitment under a contract. The calculation involves estimates and judgments to gauge the extent of a customer’s commitment, including the type and duration of the agreement and the presence of termination charges or wind-down costs.
The calculation involves estimates and judgments to gauge the extent of a customer’s commitment, including the type and duration of the agreement and the presence of termination charges or wind-down costs. Contract extensions and increases in scope are treated as signings only to the extent of the incremental new value.
For definitions of these metrics and a reconciliation of adjusted EBITDA to the most directly comparable financial measure calculated and presented in accordance with U.S.
For definitions of these metrics and a reconciliation of adjusted EBITDA to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, see “⸺Segment Results.” (2) In January 2022, the Company changed its fiscal year-end to March 31 from December 31.
Facility fees were immaterial for the three months ended March 31, 2022 and the year ended December 31, 2021. As of March 31, 2024, there has been no drawdown on the Revolving Credit Agreement. ​ The Revolving Credit Agreement includes certain customary mandatory prepayment provisions.
As of March 31, 2025, there has been no drawdown on the Revolving Credit Agreement. ​ The Revolving Credit Agreement includes certain customary mandatory prepayment provisions.
If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable.
At least quarterly, we review the status of each significant matter and assess our potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss.
In addition, we identified certain leased and owned assets that were inherited from IBM as a result of the Separation that we determined will no longer provide any economic benefit to Kyndryl. As a result, we disposed of these assets through 37 Table of Contents abandonment or early termination.
Workforce rebalancing charges arise from cost-reduction actions to enhance productivity and cost-competitiveness and to rebalance skills that result in payments to the terminated employees. In addition, we identified certain leased and owned assets that were inherited from IBM as a result of the Separation that we determined will no longer provide any economic benefit to Kyndryl.
The obligations outstanding under this program at March 31, 2024 were immaterial. ​ Off-Balance Sheet Arrangements and Contractual Obligations From time to time, we may enter into (i) off-balance sheet arrangements as defined by SEC Financial Reporting Release 67 (FRR-67), “Disclosure in Management’s Discussion and Analysis about Off-Balance Sheet Arrangements and Aggregate Contractual Obligations” or (ii) purchase commitments, which we expect to use in the ordinary course of business.
As of March 31, 2025, $206 million remained of our $300 million Share Repurchase Program authorization. ​ Off-Balance Sheet Arrangements and Contractual Obligations From time to time, we may enter into (i) off-balance sheet arrangements as defined by SEC Financial Reporting Release 67 (FRR-67), “Disclosure in Management’s Discussion and Analysis about Off-Balance Sheet Arrangements and Aggregate Contractual Obligations” or (ii) purchase commitments, which we expect to use in the ordinary course of business. 39 Table of Contents At March 31, 2025 and March 31, 2024, we had no such off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Post-Separation, our income tax provisions are calculated based on Kyndryl’s operating footprint, as well as our tax return elections and assertions. Liabilities related to unrecognized tax benefits for which the Company is liable are reported within the Consolidated Balance Sheet based upon tax authorities’ ability to assert the Company may be the primary obligor for historical taxes, among other factors.
Liabilities related to unrecognized tax benefits for which the Company is liable are reported within the Consolidated Balance Sheet based upon tax authorities’ ability to assert the Company may be the primary obligor for historical taxes, among other factors. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets.
For more information, see Note 5 – Taxes in the accompanying Consolidated Financial Statements. ​ Financial Position Dynamics Total assets of $10.6 billion at March 31, 2024 decreased by $873 million (and decreased by $737 million adjusted for currency) from March 31, 2023, primarily driven by: a decrease in cash and cash equivalents of $295 million mainly due to our net loss in the period; a decrease in deferred costs of $236 million due to amortization outpacing additions; and a decrease in fixed assets of $105 million due to depreciation outpacing new capital expenditures.
For more information, see Note 5 – Taxes in the accompanying Consolidated Financial Statements. ​ Financial Position Dynamics Total assets of $10.5 billion at March 31, 2025 decreased by $138 million (and decreased by $52 million adjusted for currency) from March 31, 2024, primarily driven by: a decrease of $254 million in accounts receivable primarily due to lower past-due receivables; a reduction in operating right-of-use assets, net, of $133 million due to amortization outpacing additions; and a decrease in property and equipment, net, of $104 million due to depreciation outpacing net additions; partially offset by an increase in cash and cash equivalents of $234 million mainly due to our net income in the period; and an increase in other non-current assets of $95 million due to an increase in long-term prepaid assets.
Net cash used by financing activities totaled $170 million for the year ended March 31, 2024, compared to net cash used by financing activities of $141 million for the year ended March 31, 2023 mainly driven by higher repayments of finance lease obligations.
Net cash used in financing activities totaled $286 million for the year ended March 31, 2025, compared to net cash used by financing activities of $170 million for the year ended March 31, 2024, mainly due to share repurchases of $94 million under the Company’s share repurchase program.
Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise our estimates.
As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise our estimates. These revisions in the estimates of the potential liabilities could have a material impact on our results of operations and financial position.
These actions include workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets, and charges related to lease terminations. Workforce rebalancing charges arise from cost-reduction actions to enhance productivity and cost-competitiveness and to rebalance skills that result in payments to the terminated employees.
These actions resulted in workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets, and charges related to lease terminations.
Post-Separation, the income tax provisions are calculated based on Kyndryl’s operating footprint, as well as our tax return elections and assertions. 32 Table of Contents Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts.
Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Segment Results The following table presents our reportable segments’ revenue and adjusted EBITDA for the years ended March 31, 2025, 2024 and 2023.
Principal Markets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) 2024 ​ 2023 Revenue ​ $ 5,823 ​ ​ $ 5,957 ​ Revenue year-over-year change ​ ​ (2) % ​ ​ (13) % Revenue growth in constant currency ​ ​ (4) % ​ ​ (4) % Adjusted EBITDA ​ ​ 740 ​ ​ ​ 371 ​ Adjusted EBITDA year-over-year change ​ ​ 99 % ​ ​ ​ ​ ​ For the year ended March 31, 2024, Principal Markets revenue of $5.8 billion decreased 2 percent compared to the year ended March 31, 2023, including a favorable currency exchange rate impact of two points.
Strategic Markets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) 2025 ​ 2024 Revenue ​ $ 3,617 ​ ​ $ 3,934 ​ Revenue year-over-year change ​ ​ (8) % ​ ​ (7) % Revenue growth in constant currency ​ ​ (5) % ​ ​ (10) % Adjusted EBITDA ​ ​ 606 ​ ​ ​ 642 ​ Adjusted EBITDA year-over-year change ​ ​ (6) % ​ ​ ​ ​ ​ For the year ended March 31, 2025, Strategic Markets revenue of $3.6 billion decreased 8 percent compared to the year ended March 31, 2024.
Adjusted EBITDA decreased $71 million from the prior twelve-month period, primarily driven by certain software agreements moving from prepaid and amortized agreements to monthly subscription agreements as well as investments made to support being an independent company, partially offset by progress on our key initiatives. 34 Table of Contents Japan ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) 2024 ​ 2023 Revenue ​ $ 2,344 ​ ​ $ 2,502 ​ Revenue year-over-year change ​ ​ (6) % ​ ​ (13) % Revenue growth in constant currency ​ ​ 0 % ​ ​ 5 % Adjusted EBITDA ​ ​ 361 ​ ​ ​ 407 ​ Adjusted EBITDA year-over-year change ​ ​ (11) % ​ ​ ​ ​ ​ For the year ended March 31, 2024, Japan revenue of $2.3 billion decreased 6 percent compared to the year ended March 31, 2023 , driven primarily by an unfavorable currency exchange rate impact of six points.
Adjusted EBITDA increased $29 million from the prior year, primarily driven by progress on our key initiatives. For the year ended March 31, 2024, Japan revenue of $2.3 billion decreased 6 percent compared to the year ended March 31, 2023 , driven primarily by an unfavorable currency exchange rate impact of six points.
Actual results in any given year can differ from actuarial assumptions because of economic and other factors.
Actual results in any given year can differ from actuarial assumptions because of economic and other factors. For additional information on our pension plans and the development of these assumptions, see Note 17 – Retirement-Related Benefits to our consolidated financial statements.
The Company will continue to seek opportunities to improve operational efficiency and reduce costs, which may result in additional charges in future periods.
There can be no guarantee that we will achieve our expected cost savings. ​ The Company will continue to seek opportunities to improve operational efficiency and reduce costs, which may result in additional charges in future periods. For additional information, see Note 19 – Workforce Rebalancing and Site-Rationalization Charges in the accompanying Consolidated Financial Statements.
Although government efforts to stem inflation are expected to suppress economic growth, most economists, including the International Monetary Fund, continue to expect positive global macroeconomic growth in calendar year 2024. 31 Table of Contents Fiscal 2024 Financial Performance For the year ended March 31, 2024, we reported $16.1 billion in revenue, a decline of 6 percent compared to the year ended March 31, 2023.
Increased economic uncertainty may impact the level of global macroeconomic activity. Fiscal 2025 Financial Performance For the year ended March 31, 2025, we reported $15.1 billion in revenue, a decline of 6 percent compared to the year ended March 31, 2024.
For additional information, see Note 19 – Workforce Rebalancing and Site-Rationalization Charges in the accompanying Consolidated Financial Statements. ​ Income Taxes The Company’s consolidated provision for income taxes and effective tax rate were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Twelve Months ​ ​ Year Ended ​ Year Ended ​ Ended March ​ ​ March 31, ​ March 31, ​ 31, 2022 (Dollars in millions) 2024 2023 (unaudited) Provision for income taxes ​ $ 172 ​ ​ $ 524 ​ ​ $ 350 ​ Effective tax rate ​ ​ (102.2) % ​ ​ (61.6) % ​ ​ (20.7) % ​ In the years ended March 31, 2024 and 2023, and the twelve months ended March 31, 2022, we recorded income tax expense of $172 million, $524 million and $350 million, respectively, on pretax losses, which resulted in negative effective tax rates.
Management estimates that these workforce rebalancing and site-rationalization activities reduced payroll costs, rent expenses and depreciation of property and equipment by approximately $400 million in fiscal year 2025. ​ Income Taxes The Company’s consolidated provision for income taxes and effective tax rate were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) 2025 2024 2023 Provision for income taxes ​ $ 184 ​ ​ $ 172 ​ ​ $ 524 ​ Effective tax rate ​ ​ 41.9 % ​ ​ (102.2) % ​ ​ (61.6) % ​ In the year ended March 31, 2025, we recorded income tax expense of $184 million.
Total equity of $1.1 billion at March 31, 2024 decreased $340 million from March 31, 2023, principally due to our comprehensive loss in the period. Overall pension funded status as of March 31, 2024 was 75% of estimated pension benefit obligation, an increase from 74% at March 31, 2023.
Overall pension funded status as of March 31, 2025 was 77% of estimated pension benefit obligation, an increase from 75% at March 31, 2024. Among our funded pension plans, our funded status as of March 31, 2025 was 103%, an increase from 99% at March 31, 2024.
For the year ended March 31, 2023, Principal Markets revenue of $6.0 billion decreased 13 percent compared to the twelve months ended March 31, 2022.
United States revenue declined 9 percent, Japan revenue declined 6 percent, Principal Markets revenue declined 2 percent and Strategic Markets revenue decreased 7 percent, compared to the year ended March 31, 2023.
See Note 10 – Intangible Assets Including Goodwill for further discussion. ​ Loss Contingencies We are currently involved in various claims and legal proceedings. At least quarterly, we review the status of each significant matter and assess our potential financial exposure.
In conjunction with our annual review of goodwill for impairment, we prepared qualitative analysis as of January 1, 2025. Based on this analysis of the qualitative factors, quantitative tests were not required. See Note 11 – Intangible Assets Including Goodwill for further discussion. ​ Loss Contingencies We are currently involved in various claims and legal proceedings.
For the year ended March 31, 2023, United States revenue of $4.7 billion was unchanged compared to the twelve months ended March 31, 2022.
For the year ended March 31, 2024, United States revenue of $4.3 billion decreased 9 percent compared to the year ended March 31, 2023, driven by the Company’s efforts to reduce certain low-margin revenues.
See the information below for definitions of these metrics and a reconciliation of adjusted EBITDA to net income (loss). (2) Represents net amounts not allocated to segments ​ We report our financial results in accordance with U.S. GAAP. We also present certain non-GAAP financial measures to provide useful supplemental information to investors.
All historical segment information has been recast to reflect this change. ​ We report our financial results in accordance with U.S. GAAP. We also present certain non-GAAP financial measures to provide useful supplemental information to investors.
Signings also declined as a result of an increased focus on higher-margin services, which tend to be shorter in length and therefore smaller in value than historical agreements. 41 Table of Contents Management uses signings as a tool to monitor the performance of the business including the business’ ability to attract new customers and sell additional scope into our existing customer base.
Management uses signings as a tool to monitor the performance of the business including the business’ ability to attract new customers and sell additional scope into our existing customer base. There are no third-party standards or requirements governing the calculation of signings. We define signings as an initial estimate of the value of a customer’s commitment under a contract.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hypothetical 10 percent adverse change in the levels of interest rates would not be material to our consolidated results of operations or cash flow. 47 Table of Contents Currency Exchange Rate Risk A hypothetical 10 percent adverse change in the levels of currency exchange rates relative to the U.S. dollar, with all other variables held constant, would result in a $154 million and a $220 million impact in the fair value of our financial instruments, primarily our cash, debt and derivatives, at March 31, 2024 and 2023, respectively. ​ 48 Table of Contents
Biggest changeCurrency Exchange Rate Risk A hypothetical 10 percent adverse change in the levels of currency exchange rates relative to the U.S. dollar, with all other variables held constant, would result in a $26 million and a $154 million impact in the fair value of our financial instruments, primarily our cash, debt and derivatives, at March 31, 2025 and 2024, respectively. ​ 45 Table of Contents
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . Currency Rate Fluctuations Changes in the relative values of non-U.S. currencies to the U.S. dollar affect our financial results and financial position. At March 31, 2024, currency changes resulted in assets and liabilities denominated in local currencies being translated into fewer dollars than the prior year.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . Currency Rate Fluctuations Changes in the relative values of non-U.S. currencies to the U.S. dollar affect our financial results and financial position. At March 31, 2025, currency changes resulted in assets and liabilities denominated in local currencies being translated into fewer dollars than the prior year.
The discount rates used for the present value computations were selected based on market interest and foreign currency exchange rates in effect at March 31, 2024 and 2023. The differences in this comparison are the hypothetical losses associated with each type of risk.
The discount rates used for the present value computations were selected based on market interest and foreign currency exchange rates in effect at March 31, 2025 and 2024. The differences in this comparison are the hypothetical losses associated with each type of risk.
Based on the currency rate movements in the year ended March 31, 2024, total revenue decreased 6 percent as reported and 6 percent in constant currency versus the year ended March 31, 2023. For non-U.S. subsidiaries and branches that operate in U.S. dollars or whose economic environment is highly inflationary, translation adjustments are reflected in results of operations.
Based on the currency rate movements in the year ended March 31, 2025, total revenue decreased 6 percent as reported and 4 percent in constant currency versus the year ended March 31, 2024. For non-U.S. subsidiaries and branches that operate in U.S. dollars or whose economic environment is highly inflationary, translation adjustments are reflected in results of operations.
The results of the sensitivity analysis at March 31, 2024 and 2023 are as follows: Interest Rate Risk Our exposure to market risk for changes in interest rates relates primarily to our fixed-rate and variable-rate debt obligations (See Note 11 – Borrowings in the accompanying Consolidated Financial Statements ).
The results of the sensitivity analysis at March 31, 2025 and 2024 are as follows: Interest Rate Risk Our exposure to market risk for changes in interest rates relates primarily to our fixed-rate and variable-rate debt obligations (See Note 12 – Borrowings in the accompanying Consolidated Financial Statements ).
A hypothetical 10 percent adverse change in the levels of interest rates, with all other variables held constant, would result in a $22 million and a $12 million impact in the fair value of our financial instruments at March 31, 2024 and 2023, respectively.
A hypothetical 10 percent adverse change in the levels of interest rates, with all other variables held constant, would result in a $20 million and a $22 million impact in the fair value of our financial instruments at March 31, 2025 and 2024, respectively.
At March 31, 2023, currency changes resulted in assets and liabilities denominated in local currencies being translated into fewer dollars than the prior year. During periods of sustained movements in currency, the marketplace and competition adjust to the changing rates.
At March 31, 2024, currency changes resulted in assets and liabilities denominated in local currencies being translated into fewer dollars than the prior year. During periods of sustained 44 Table of Contents movements in currency, the marketplace and competition adjust to the changing rates.
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A hypothetical 10 percent adverse change in the levels of interest rates would not be material to our consolidated results of operations or cash flow.

Other KD 10-K year-over-year comparisons