The Kyndryl Holdings Inc (NYSE: KD) stock price fell 7.86% after releasing the financial results for its fiscal fourth quarter ended 31 March 2023. The company revealed a pretax loss of $288 million and a net loss of $737 million, marking a significant increase from last year’s $229 million net loss.
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The IBM spinoff generated revenues worth $4.3 billion during the quarter representing an annualised decline of 4% and a constant currency increase of 1%. The company attributed its poor performance to workforce rebalancing charges, transaction-related costs and lease-exit costs.
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Kyndryl generated revenues worth $17.0 billion for the financial year ended 31 March 2023, representing a 7% decline or an unchanged figure in constant currency terms. The Company reported a pretax loss of $851 million for the above reasons.
The company recorded a net loss of $1.4 billion and a net margin of -8.1% for the year. The clear message from Kyndryl’s latest earnings report is that the company has struggled to become profitable since its spinoff from IBM in 2021.
Despite being the world's largest provider of IT infrastructure services, serving thousands of enterprise customers in over 60 countries, the company did not profit in the past year due to the costs released to workforce rebalancing charges, transaction-related costs and lease-exist costs.
The company wants to expand its margin and become profitable through its renewed strategy for the 2024 financial year.
Kyndryl CFO, David Wyshner, said: “Our progress in the fiscal year 2023 demonstrated that we’re executing a powerful strategy to move our business forward. In fiscal 2024, we’re driving margin expansion through our three-A initiatives as we accelerate our transformation.”
Kyndryl Chairman and CEO Martin Schroeter said: “We delivered strong financial results in the fourth quarter, and we solidified our leadership position in infrastructure services throughout the fiscal year 2023. We are successfully leveraging our alliances with leading technology providers, driving quality and efficiency through the advanced delivery of our services, and positioning our business for margin expansion.”
The three-A initiative is split into Alliances, Advanced Delivery, and Accounts.
*This is not investment advice.
Kyndryl stock price.
The Kyndryl stock price was trading down 7.86% at $13.25 from Tuesday’s closing price of $14.38.
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