Kyndryl (KD) Investor Day 2024 summary

Strategic direction and growth initiatives

• Executed a clear strategy focused on alliances, advanced delivery, and focused accounts, leading to accelerated and profitable growth and margin expansion.

• Formed and expanded key alliances with major tech players, doubling the addressable market and increasing hyperscaler-related revenue from $100M in FY23 to ~$1B in FY25E.

• Invested in proprietary platforms like Kyndryl Bridge and expanded consulting services, now nearly 20% of revenue and growing at a 17% CAGR, outpacing the market.

• Focused on modernizing mission-critical IT systems, leveraging AI, automation, and deep technical expertise to differentiate in a fragmented $575 billion market.

• Initiated a $300 million share buyback, reflecting strong free cash flow and a shift to capital returns.

Financial outlook and guidance

• Projecting triple adjusted free cash flow, double adjusted pre-tax income, and mid-single-digit annual revenue growth by fiscal 2028 (“triple, double, single”).

• Expecting $1.2 billion adjusted pre-tax income and $1 billion adjusted free cash flow by fiscal 2028, with high single-digit margins and adjusted EBITDA margin outlook of 20–22%.

• Revenue growth to accelerate, reaching $16–$17 billion by fiscal 2028, driven by double-digit growth in Apps, Data & AI, and Security & Resiliency practices.

• Fiscal 2025 targets reaffirmed: revenue of $15.2–$15.5B, adjusted EBITDA margin of 16.3%+, and adjusted pretax income of $460M+.

• 3A's initiatives expected to deliver $2.4B in benefits by fiscal 2028, with significant margin expansion and higher-value contract signings.

Operational execution and differentiation

• Achieved over 400 basis points of margin expansion since fiscal 2023, with contract signings at higher margins and improved business mix.

• Kyndryl Bridge platform delivers millions of AI-driven insights monthly, driving ~$3B in annual customer savings and 2B automations per year.

• Customer retention exceeds 95%, serving most Fortune 100 companies, with average relationships over 10 years and a diversified, global customer base in 60+ countries.

• Reduced capital intensity, with CapEx under 5% of depreciation, and shifted to higher-value, lower-risk contracts.

• Revenue mix diversified across cloud (34%), core enterprise (31%), security & resiliency (14%), and other practices.