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Kyndryl Set to Report Q1 Earnings: What's in the Offing?

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Key Takeaways

  • Kyndryl is expected to report Q1 revenues of $3.8B, suggesting 1.6% y/y growth.
  • AI-backed Kyndryl Bridge and strong consult signings likely drove top-line growth.
  • Cost cuts via delivery initiatives are expected to have boosted margins and earnings growth.

Kyndryl (KD - Free Report) will report first-quarter fiscal 2026 results on Aug. 4, after market close.

KD’s earnings surprise history is impressive. It surpassed the Zacks Consensus Estimate in three of the four trailing quarters and met once, delivering an average earnings surprise of 37.5%.

Kyndryl Holdings, Inc. Price and EPS Surprise

 

Kyndryl Holdings, Inc. Price and EPS Surprise

Kyndryl Holdings, Inc. price-eps-surprise | Kyndryl Holdings, Inc. Quote

KD’s Q1 Expectations

The Zacks Consensus Estimate for revenues is set at $3.8 billion, indicating a 1.6% year-over-year rise. We expect Kyndryl Consult to have been the main driver of top-line growth. Our estimate is based on above-market growth in consult signings. Ongoing demand in security and resiliency, along with its capabilities in data discovery, data integrity, AI assessment and governance programs, is likely to have boosted KD’s revenues.

The expansion of the company’s alliance with hyperscalers and leading tech providers, combined with the competitive edge from AI-powered Kyndryl Bridge operating platforms, is another factor that probably enhanced the top line.

The consensus estimate for earnings is pegged at 37 cents per share, indicating a more than 100% upsurge from the year-ago quarter’s actual. Strong margins facilitated by a reduction in costs due to an advanced delivery initiative powered by Kyndryl Bridge are likely to have aided the bottom line.

What Our Model Says About Kyndryl

Our proven model does not conclusively predict an earnings beat for KD this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

KD has an Earnings ESP of -4.05% and a Zacks Rank of 2 at present.

Stocks to Consider

Here are a few stocks from the broader  Business Services sector, which, according to our model, have the right combination of elements to beat on earnings this season.

APi Group (APG - Free Report) : The Zacks Consensus Estimate for the company’s second-quarter 2025 revenues is pegged at $1.9 billion, indicating year-over-year growth of 10%. For earnings, the consensus mark is pegged at 37 cents per share, implying a 12.1% jump from the year-ago quarter’s actual. The company beat the consensus estimate in the past three quarters and met once, with an average surprise of 4.1%.

APG has an Earnings ESP of +4.28% and flaunts a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to declare second-quarter 2025 results on July 31.

AppLovin (APP - Free Report) : The Zacks Consensus Estimate for the company’s second-quarter 2025 revenues is pegged at $1.2 billion, implying year-over-year growth of 12.2%. For earnings, the consensus mark is pegged at $2 per share, indicating a more than 100% upsurge from the year-ago quarter’s actual. The company beat the consensus estimate in the trailing four quarters, with an average surprise of 22.9%.

APP has an Earnings ESP of +3.41% and a Zacks Rank of 3 at present. The company is scheduled to declare second-quarter 2025 results on August 6.


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