Kyndryl (KYND) Downgrades FY26 Outlook Amid SEC Review and Leadership Changes

Kyndryl (KYND) downgraded its full-year revenue guidance to a 2%-3% constant-currency decline, missing Q3 estimates and reporting lower-than-expected profit. The downgrade follows a review of its financial reporting practices at the request of the SEC, with the company任命 of interim CFO Harsh Chugh, interim corporate controller Bhanva Doegar, and general counsel Mark Ringes. The company now projects adjusted pretax income of $575M-$600M and free cash flow of $325M-$375M, down from prior guidance of at least $725M pretax and about $550M free cash. Q3 results: profit $57M (25¢/share) vs. $215M (89¢/share) a year earlier; non-GAAP 52¢/share vs. 60¢/share expected; revenue $3.86B, up from $3.74B and ahead of $3.89B expected. Cloud hyperscaler revenue reached $500M, up 58% YoY, on track to exceed $1.8B for the year; Kyndryl Consult revenue up 24% YoY. The 10-Q will be delayed as the board reviews cash management, free cash flow disclosures and broader reporting. The company anticipates material weakness in internal control over financial reporting for Q3 and FY2025, with prior audits not deemed reliable. The review is not expected to result in restatements or impact financial statements.