Shares of Kyndryl Holdings surged nearly 13% to $17.51 in morning trading following the release of their fiscal second-quarter results. The company, which was recently spun off from IBM, displayed impressive performance, narrowing its second-quarter loss to 5 cents per share. Analysts had predicted a loss of 13 cents per share.
Despite the challenging economic climate, Kyndryl’s revenue for the quarter reached $4.07 billion, surpassing analysts’ expectations of $3.91 billion. This positive outcome can be attributed to the strong demand for the company’s information-technology-infrastructure services, which have remained resilient amid the broader slowdown in enterprise technology spending.
Kyndryl CEO Martin Schroeter emphasized the company’s non-discretionary nature, stating, “We sit at the center of the secular trends that our customers want to be a part of.” This positioning has allowed Kyndryl to uphold a solid performance and successfully navigate through market uncertainties.
In line with its strategic goals, Kyndryl has made significant progress in expanding its business catering to cloud hyperscalers. During the first half of the fiscal year, the company generated $180 million in revenue from these customers and aims to achieve $300 million in such revenue by the end of the fiscal year.
Building on this momentum, Kyndryl is actively securing higher-margin contracts. CEO Martin Schroeter expressed confidence, declaring, “We’ve put adjusted pretax losses behind us.” The company has raised its fiscal-year outlook for adjusted pretax income to at least $140 million, up from the previous estimate of over $100 million.
Kyndryl’s remarkable second-quarter results reflect its ability to adapt and thrive in a challenging business landscape. With a strong focus on customer needs and strategic initiatives, the company is well-positioned for continued growth and success.