Kyndryl (KD) Citi’s 2025 Global Technology, Media and Telecommunications Conference summary

Strategic transformation and growth drivers

• Gained investment capability and freedom of action post-spin, enabling expansion into new markets and partnerships with major hyperscalers like Microsoft, Google, Amazon, Oracle, and SAP.

• Shifted company culture from a product to a services focus, enhancing customer trust and problem-solving capabilities.

• Strategy centers on Advanced Delivery, Alliances, and Focus Accounts, improving profitability and positioning for future growth.

• Consult business has grown from 10% to over 20% of revenue, targeting 25%, reflecting increased advisory and implementation work.

Investment focus and profitability

• Significant investments in workforce skills, especially hyperscaler credentials, security, resiliency, network operations, applications, data, and AI.

• Developed Kyndryl Bridge platform to automate and enhance service delivery, improving efficiency and labor productivity.

• Transitioned from negative to positive PTI margin, now guiding to around 5%, with ongoing investments built into the business model.

Focus accounts initiative and financial impact

• Focus accounts initiative addressed inherited, uneconomic contracts, reimagining relationships and improving margins.

• Engineered revenue decline to drive profitability, removing low-margin IBM hardware/software content and expanding service scope.

• Achieved $925 million run rate in annual profit from focus accounts, with a new target of $1 billion.

• About 85% of the initiative is complete, with ongoing progress expected.