0001867072--03-312025FYfalsehttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentNethttp://fasb.org/us-gaap/2024#ShortTermBorrowingshttp://fasb.org/us-gaap/2024#LongTermDebtAndCapitalLeaseObligations226700000http://fasb.org/us-gaap/2024#CostOfRevenuehttp://fasb.org/us-gaap/2024#CostOfRevenuehttp://fasb.org/us-gaap/2024#CostOfRevenuehttp://fasb.org/us-gaap/2024#CostOfRevenuehttp://fasb.org/us-gaap/2024#SellingGeneralAndAdministrativeExpensehttp://fasb.org/us-gaap/2024#SellingGeneralAndAdministrativeExpensehttp://fasb.org/us-gaap/2024#SellingGeneralAndAdministrativeExpensehttp://fasb.org/us-gaap/2024#SellingGeneralAndAdministrativeExpensehttp://www.kyndryl.com/20250331#WorkforceRebalancingCostshttp://www.kyndryl.com/20250331#WorkforceRebalancingCostshttp://www.kyndryl.com/20250331#WorkforceRebalancingCostshttp://www.kyndryl.com/20250331#WorkforceRebalancingCostshttp://www.kyndryl.com/20250331#OtherIncomeAndExpensehttp://www.kyndryl.com/20250331#OtherIncomeAndExpensehttp://fasb.org/us-gaap/2024#OtherAssetsNoncurrent http://fasb.org/us-gaap/2024#PrepaidExpenseAndOtherAssetsCurrenthttp://fasb.org/us-gaap/2024#OtherAssetsNoncurrent http://fasb.org/us-gaap/2024#PrepaidExpenseAndOtherAssetsCurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesNoncurrent http://www.kyndryl.com/20250331#AccruedLiabilitiesAndOtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2024#OtherLiabilitiesNoncurrent http://www.kyndryl.com/20250331#AccruedLiabilitiesAndOtherLiabilitiesCurrentP3YP1YP4YP1YP2YP5YP5YP3Yhttp://www.kyndryl.com/20250331#OtherIncomeAndExpensehttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentNethttp://fasb.org/us-gaap/2024#ShortTermBorrowingshttp://fasb.org/us-gaap/2024#LongTermDebtAndCapitalLeaseObligationsP5Yhttp://fasb.org/us-gaap/2024#BusinessCombinationAcquisitionRelatedCostsP2Y0http://fasb.org/us-gaap/2024#CostOfRevenuehttp://fasb.org/us-gaap/2024#SellingGeneralAndAdministrativeExpensehttp://www.kyndryl.com/20250331#WorkforceRebalancingCosts0001867072us-gaap:CashAndCashEquivalentsMember2025-03-310001867072us-gaap:CashAndCashEquivalentsMember2024-03-310001867072us-gaap:TreasuryStockCommonMember2024-04-012025-03-310001867072us-gaap:TreasuryStockCommonMember2023-04-012024-03-310001867072us-gaap:TreasuryStockCommonMember2022-04-012023-03-310001867072kd:ShareRepurchaseProgramMember2024-04-012025-03-310001867072us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2024-04-012025-03-310001867072us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-04-012024-03-310001867072us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-04-012023-03-310001867072us-gaap:TreasuryStockCommonMember2025-03-310001867072us-gaap:RetainedEarningsMember2025-03-310001867072us-gaap:NoncontrollingInterestMember2025-03-310001867072us-gaap:AccumulatedTranslationAdjustmentMember2025-03-310001867072us-gaap:AccumulatedOtherComprehensiveIncomeMember2025-03-310001867072us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2025-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2025-03-310001867072us-gaap:TreasuryStockCommonMember2024-03-310001867072us-gaap:RetainedEarningsMember2024-03-310001867072us-gaap:NoncontrollingInterestMember2024-03-310001867072us-gaap:AccumulatedTranslationAdjustmentMember2024-03-310001867072us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-03-310001867072us-gaap:TreasuryStockCommonMember2023-03-310001867072us-gaap:RetainedEarningsMember2023-03-310001867072us-gaap:NoncontrollingInterestMember2023-03-310001867072us-gaap:AccumulatedTranslationAdjustmentMember2023-03-310001867072us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-03-310001867072us-gaap:TreasuryStockCommonMember2022-03-310001867072us-gaap:RetainedEarningsMember2022-03-310001867072us-gaap:NoncontrollingInterestMember2022-03-310001867072us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310001867072us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001867072us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-03-310001867072us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2025-03-310001867072us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2024-03-310001867072us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2023-03-310001867072us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember2022-03-310001867072us-gaap:EmployeeStockOptionMember2021-04-012022-03-310001867072us-gaap:EmployeeStockOptionMember2025-03-310001867072us-gaap:EmployeeStockOptionMember2024-03-310001867072us-gaap:EmployeeStockOptionMember2023-03-310001867072us-gaap:EmployeeStockOptionMember2022-03-310001867072us-gaap:EmployeeStockOptionMember2022-04-012023-03-310001867072srt:MinimumMemberkd:MarketConditionedPerformanceSharesMember2023-04-012024-03-310001867072srt:MaximumMemberkd:MarketConditionedPerformanceSharesMember2023-04-012024-03-310001867072us-gaap:RestrictedStockUnitsRSUMember2025-03-310001867072us-gaap:PerformanceSharesMember2025-03-310001867072kd:MarketConditionedPerformanceSharesMember2025-03-310001867072us-gaap:RestrictedStockUnitsRSUMember2024-03-310001867072us-gaap:PerformanceSharesMember2024-03-310001867072kd:MarketConditionedPerformanceSharesMember2024-03-310001867072us-gaap:RestrictedStockUnitsRSUMember2023-03-310001867072us-gaap:PerformanceSharesMember2023-03-310001867072kd:MarketConditionedPerformanceSharesMember2023-03-310001867072us-gaap:RestrictedStockUnitsRSUMember2022-03-310001867072kd:MarketConditionedPerformanceSharesMember2022-03-310001867072us-gaap:RestrictedStockUnitsRSUMember2024-04-012025-03-310001867072kd:MarketConditionedPerformanceSharesMember2024-04-012025-03-310001867072us-gaap:RestrictedStockUnitsRSUMember2023-04-012024-03-310001867072us-gaap:PerformanceSharesMember2023-04-012024-03-310001867072kd:MarketConditionedPerformanceSharesMember2023-04-012024-03-310001867072us-gaap:RestrictedStockUnitsRSUMember2022-04-012023-03-310001867072us-gaap:PerformanceSharesMember2022-04-012023-03-310001867072kd:MarketConditionedPerformanceSharesMember2022-04-012023-03-310001867072srt:MinimumMemberus-gaap:RestrictedStockUnitsRSUMember2024-04-012025-03-310001867072srt:MinimumMemberus-gaap:EmployeeStockOptionMember2024-04-012025-03-310001867072srt:MaximumMemberus-gaap:RestrictedStockUnitsRSUMember2024-04-012025-03-310001867072srt:MaximumMemberus-gaap:EmployeeStockOptionMember2024-04-012025-03-310001867072us-gaap:PerformanceSharesMember2024-04-012025-03-310001867072kd:MarketConditionedStockUnitsMember2024-04-012025-03-310001867072kd:CountriesExcludingUnitedStatesAndJapanMember2024-04-012025-03-310001867072country:US2024-04-012025-03-310001867072country:JP2024-04-012025-03-310001867072kd:CountriesExcludingUnitedStatesAndJapanMember2023-04-012024-03-310001867072country:US2023-04-012024-03-310001867072country:JP2023-04-012024-03-310001867072kd:CountriesExcludingUnitedStatesAndJapanMember2022-04-012023-03-310001867072country:US2022-04-012023-03-310001867072country:JP2022-04-012023-03-310001867072kd:WorkforceRebalancingChargesMemberkd:Fiscal2025ProgramMember2025-03-310001867072kd:WorkforceRebalancingLiabilitiesInheritedFromFormerParentMember2025-03-310001867072kd:Fiscal2025ProgramMember2025-03-310001867072kd:WorkforceRebalancingChargesMemberkd:Fiscal2024ProgramMember2024-03-310001867072kd:WorkforceRebalancingLiabilitiesInheritedFromFormerParentMember2024-03-310001867072kd:Fiscal2024ProgramMember2024-03-310001867072kd:ChargesRelatedToLeaseTerminationsMemberkd:Fiscal2024ProgramMember2023-03-310001867072kd:WorkforceRebalancingLiabilitiesInheritedFromFormerParentMember2023-03-310001867072kd:Fiscal2024ProgramMember2023-03-310001867072kd:WorkforceRebalancingLiabilitiesInheritedFromFormerParentMember2022-03-310001867072kd:AbandonmentOfCertainCompanyOwnedFixedAssetsMember2025-01-012025-12-310001867072us-gaap:OperatingSegmentsMemberkd:Fiscal2025ProgramMemberkd:UnitedStatesSegmentMember2024-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:Fiscal2025ProgramMemberkd:StrategicMarketsSegmentMember2024-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:Fiscal2025ProgramMemberkd:PrincipalMarketsSegmentMember2024-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:Fiscal2025ProgramMemberkd:JapanSegmentMember2024-04-012025-03-310001867072us-gaap:SellingGeneralAndAdministrativeExpensesMemberkd:Fiscal2025ProgramMember2024-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:UnitedStatesSegmentMember2024-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:StrategicMarketsSegmentMember2024-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:PrincipalMarketsSegmentMember2024-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:JapanSegmentMember2024-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:Fiscal2025ProgramMember2024-04-012025-03-310001867072us-gaap:CostOfSalesMemberkd:Fiscal2025ProgramMember2024-04-012025-03-310001867072kd:WorkforceRebalancingChargesBenefitsMemberkd:Fiscal2025ProgramMember2024-04-012025-03-310001867072kd:ChargesRelatedToCeasingToUseLeasedAndFixedAssetsMemberkd:Fiscal2025ProgramMember2024-04-012025-03-310001867072us-gaap:OperatingSegmentsMember2024-04-012025-03-310001867072kd:WorkforceRebalancingChargesBenefitsMember2024-04-012025-03-310001867072kd:ChargesRelatedToCeasingToUseLeasedAssetsMember2024-04-012025-03-310001867072kd:AbandonmentOfCertainCompanyOwnedFixedAssetsMember2024-01-012024-12-310001867072us-gaap:OperatingSegmentsMemberkd:UnitedStatesSegmentMember2023-04-012024-03-310001867072us-gaap:OperatingSegmentsMemberkd:StrategicMarketsSegmentMember2023-04-012024-03-310001867072us-gaap:OperatingSegmentsMemberkd:PrincipalMarketsSegmentMember2023-04-012024-03-310001867072us-gaap:OperatingSegmentsMemberkd:JapanSegmentMember2023-04-012024-03-310001867072us-gaap:OperatingSegmentsMember2023-04-012024-03-310001867072us-gaap:CorporateNonSegmentMember2023-04-012024-03-310001867072kd:WorkforceRebalancingChargesBenefitsMember2023-04-012024-03-310001867072kd:ChargesRelatedToOneOffTerminationsMember2023-04-012024-03-310001867072kd:ChargesRelatedToCeasingToUseLeasedAssetsMember2023-04-012024-03-310001867072us-gaap:OperatingSegmentsMemberkd:Fiscal2024ProgramMemberkd:UnitedStatesSegmentMember2022-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:Fiscal2024ProgramMemberkd:StrategicMarketsSegmentMember2022-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:Fiscal2024ProgramMemberkd:PrincipalMarketsSegmentMember2022-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:Fiscal2024ProgramMemberkd:JapanSegmentMember2022-04-012025-03-310001867072us-gaap:SellingGeneralAndAdministrativeExpensesMemberkd:Fiscal2024ProgramMember2022-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:Fiscal2024ProgramMember2022-04-012025-03-310001867072us-gaap:CostOfSalesMemberkd:Fiscal2024ProgramMember2022-04-012025-03-310001867072us-gaap:CorporateNonSegmentMemberkd:Fiscal2024ProgramMember2022-04-012025-03-310001867072kd:WorkforceRebalancingChargesBenefitsMemberkd:Fiscal2024ProgramMember2022-04-012025-03-310001867072kd:Fiscal2024ProgramMember2022-04-012025-03-310001867072us-gaap:OperatingSegmentsMemberkd:UnitedStatesSegmentMember2022-04-012023-03-310001867072us-gaap:OperatingSegmentsMemberkd:StrategicMarketsSegmentMember2022-04-012023-03-310001867072us-gaap:OperatingSegmentsMemberkd:PrincipalMarketsSegmentMember2022-04-012023-03-310001867072us-gaap:OperatingSegmentsMemberkd:JapanSegmentMember2022-04-012023-03-310001867072kd:WorkforceRebalancingChargesMemberkd:Fiscal2024ProgramMember2022-04-012023-03-310001867072us-gaap:OperatingSegmentsMember2022-04-012023-03-310001867072us-gaap:CorporateNonSegmentMember2022-04-012023-03-310001867072kd:WorkforceRebalancingChargesBenefitsMember2022-04-012023-03-310001867072kd:ChargesRelatedToOneOffTerminationsMember2022-04-012023-03-310001867072kd:ChargesRelatedToCeasingToUseLeasedAssetsMember2022-04-012023-03-310001867072kd:AbandonmentOfCertainCompanyOwnedFixedAssetsMember2022-04-012023-03-310001867072srt:MinimumMemberus-gaap:BuildingMember2025-03-310001867072srt:MinimumMemberkd:OfficeAndOtherEquipmentMember2025-03-310001867072srt:MinimumMemberkd:InformationTechnologyEquipmentAcquiredAsUsedMember2025-03-310001867072srt:MaximumMemberus-gaap:LeaseholdImprovementsMember2025-03-310001867072srt:MaximumMemberus-gaap:BuildingMember2025-03-310001867072srt:MaximumMemberkd:OfficeAndOtherEquipmentMember2025-03-310001867072srt:MaximumMemberkd:InformationTechnologyEquipmentAcquiredAsUsedMember2025-03-310001867072us-gaap:LandImprovementsMember2025-03-310001867072kd:InformationTechnologyEquipmentAcquiredAsNewMember2025-03-310001867072srt:MinimumMemberkd:InformationTechnologyEquipmentAcquiredAsNewMember2024-04-010001867072srt:MaximumMemberkd:InformationTechnologyEquipmentAcquiredAsNewMember2024-04-010001867072us-gaap:TechnologyEquipmentMember2024-04-010001867072kd:CountriesExcludingUnitedStatesMember2025-03-310001867072kd:InternationalBusinessMachinesCorpMemberkd:HardwareSoftwareAndServicesMemberus-gaap:RelatedPartyMember2024-03-310001867072kd:CountriesExcludingUnitedStatesMember2024-03-310001867072us-gaap:TechnologyEquipmentMember2025-03-310001867072us-gaap:LandAndLandImprovementsMember2025-03-310001867072kd:OfficeAndOtherEquipmentMember2025-03-310001867072kd:BuildingsAndLeaseholdImprovementsMember2025-03-310001867072us-gaap:TechnologyEquipmentMember2024-03-310001867072us-gaap:LandAndLandImprovementsMember2024-03-310001867072kd:OfficeAndOtherEquipmentMember2024-03-310001867072kd:BuildingsAndLeaseholdImprovementsMember2024-03-310001867072us-gaap:RetainedEarningsMember2024-04-012025-03-310001867072us-gaap:RetainedEarningsMember2023-04-012024-03-310001867072us-gaap:RetainedEarningsMember2022-04-012023-03-310001867072us-gaap:RevolvingCreditFacilityMember2024-04-012025-03-310001867072kd:SeniorNotesDue2034Member2024-02-012024-02-290001867072kd:ChargesRelatedToLeaseTerminationsMemberkd:Fiscal2024ProgramMember2023-04-012024-03-310001867072kd:WorkforceRebalancingLiabilitiesInheritedFromFormerParentMember2023-04-012024-03-310001867072kd:ChargesRelatedToLeaseTerminationsMemberkd:Fiscal2024ProgramMember2022-04-012023-03-310001867072kd:WorkforceRebalancingLiabilitiesInheritedFromFormerParentMember2022-04-012023-03-310001867072us-gaap:AccumulatedTranslationAdjustmentMember2022-04-012023-03-310001867072us-gaap:AccumulatedTranslationAdjustmentMember2024-04-012025-03-310001867072us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012025-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2024-04-012025-03-310001867072us-gaap:AccumulatedTranslationAdjustmentMember2023-04-012024-03-310001867072us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012024-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-04-012024-03-310001867072us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012023-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-04-012023-03-310001867072us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2024-04-012025-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2024-04-012025-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2024-04-012025-03-310001867072kd:UnrealizedGainLossesOnNetInvestmentHedgesMember2024-04-012025-03-310001867072kd:ForeignCurrencyTranslationAdjustmentsExcludingNetInvestmentHedgesMember2024-04-012025-03-310001867072kd:AccumulatedDefinedBenefitPlansAdjustmentCurtailmentsAndSettlementsMember2024-04-012025-03-310001867072us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-04-012024-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2023-04-012024-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2023-04-012024-03-310001867072kd:UnrealizedGainLossesOnNetInvestmentHedgesMember2023-04-012024-03-310001867072kd:ForeignCurrencyTranslationAdjustmentsExcludingNetInvestmentHedgesMember2023-04-012024-03-310001867072kd:AccumulatedDefinedBenefitPlansAdjustmentCurtailmentsAndSettlementsMember2023-04-012024-03-310001867072us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-04-012023-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2022-04-012023-03-310001867072us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2022-04-012023-03-310001867072kd:ForeignCurrencyTranslationAdjustmentsExcludingNetInvestmentHedgesMember2022-04-012023-03-310001867072kd:AccumulatedDefinedBenefitPlansAdjustmentCurtailmentsAndSettlementsMember2022-04-012023-03-310001867072kd:InternationalBusinessMachinesCorpMemberkd:HardwareSoftwareAndServicesMemberus-gaap:RelatedPartyMember2023-03-310001867072kd:OtherCountriesExcludingUnitedStatesBelgiumFranceAndItalyMember2025-03-310001867072country:US2025-03-310001867072country:IT2025-03-310001867072country:FR2025-03-310001867072country:BE2025-03-310001867072kd:OtherCountriesExcludingUnitedStatesBelgiumFranceAndItalyMember2024-03-310001867072country:US2024-03-310001867072country:IT2024-03-310001867072country:FR2024-03-310001867072country:BE2024-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-04-012023-03-310001867072us-gaap:DesignatedAsHedgingInstrumentMember2022-04-012023-03-310001867072us-gaap:NetInvestmentHedgingMember2023-03-310001867072us-gaap:NoncontrollingInterestMember2024-04-012025-03-310001867072us-gaap:NoncontrollingInterestMember2023-04-012024-03-310001867072us-gaap:NoncontrollingInterestMember2022-04-012023-03-310001867072kd:InternationalBusinessMachinesCorpMember2021-11-040001867072kd:UnsecuredSeniorNotesMaturingTwoThousandThirtyFourIncludingCrossCurrencySwapsMember2025-03-310001867072srt:WeightedAverageMemberus-gaap:RealEstateMember2025-03-310001867072srt:MinimumMemberus-gaap:EquipmentMember2025-03-310001867072srt:MaximumMemberus-gaap:EquipmentMember2025-03-310001867072kd:EmeaSegmentMember2025-03-310001867072kd:UnitedStatesSegmentMember2025-03-310001867072kd:StrategicMarketsSegmentMember2025-03-310001867072kd:PrincipalMarketsSegmentMember2025-03-310001867072kd:JapanSegmentMember2025-03-310001867072kd:StrategicMarketsSegmentMember2024-03-310001867072kd:PrincipalMarketsSegmentMember2024-03-310001867072kd:JapanSegmentMember2024-03-310001867072kd:StrategicMarketsSegmentMember2023-03-310001867072kd:PrincipalMarketsSegmentMember2023-03-310001867072kd:JapanSegmentMember2023-03-310001867072us-gaap:DevelopedTechnologyRightsMember2024-04-300001867072us-gaap:CustomerRelationshipsMember2024-04-300001867072us-gaap:DevelopedTechnologyRightsMember2025-03-310001867072us-gaap:CustomerRelationshipsMember2025-03-310001867072us-gaap:ComputerSoftwareIntangibleAssetMember2025-03-310001867072kd:PatentsAndTrademarksMember2025-03-310001867072us-gaap:CustomerRelationshipsMember2024-03-310001867072us-gaap:ComputerSoftwareIntangibleAssetMember2024-03-310001867072kd:PatentsAndTrademarksMember2024-03-310001867072us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMemberkd:SecuritiesIndustryServicesMember2024-10-012025-03-310001867072us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMemberkd:SecuritiesIndustryServicesMember2024-12-310001867072srt:MaximumMemberus-gaap:CurrencySwapMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2024-04-012025-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310001867072us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310001867072us-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2025-03-310001867072us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310001867072us-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2025-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001867072us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001867072us-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2024-03-310001867072us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001867072us-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2024-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-04-012024-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2024-04-012025-03-310001867072us-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2024-04-012025-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2023-04-012024-03-310001867072us-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2023-04-012024-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2022-04-012023-03-310001867072us-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2022-04-012023-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-04-012025-03-310001867072us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-04-012025-03-310001867072us-gaap:DesignatedAsHedgingInstrumentMember2024-04-012025-03-310001867072us-gaap:CashFlowHedgingMember2024-04-012025-03-310001867072us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-04-012024-03-310001867072us-gaap:DesignatedAsHedgingInstrumentMember2023-04-012024-03-310001867072us-gaap:CashFlowHedgingMember2023-04-012024-03-310001867072us-gaap:CashFlowHedgingMember2022-04-012023-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-04-012025-03-310001867072us-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2024-04-012025-03-310001867072us-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2023-04-012024-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel2Memberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2025-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310001867072us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2025-03-310001867072us-gaap:FairValueInputsLevel2Member2025-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel2Memberus-gaap:NotDesignatedAsHedgingInstrumentEconomicHedgeMember2024-03-310001867072us-gaap:ForeignExchangeContractMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001867072us-gaap:CrossCurrencyInterestRateContractMemberus-gaap:FairValueInputsLevel2Memberus-gaap:DesignatedAsHedgingInstrumentMember2024-03-310001867072us-gaap:FairValueInputsLevel2Member2024-03-310001867072us-gaap:OtherAggregatedInvestmentsMember2025-03-310001867072us-gaap:FixedIncomeInvestmentsMember2025-03-310001867072us-gaap:DefinedBenefitPlanRealEstateMember2025-03-310001867072kd:InsuranceContractsMember2025-03-310001867072kd:EquitySecuritiesAndFundsMember2025-03-310001867072kd:NonPensionPostretirementBenefitPlansMember2025-03-310001867072kd:NonPensionPostretirementBenefitPlansMember2024-03-310001867072kd:NonPensionPostretirementBenefitPlansMember2023-03-310001867072us-gaap:PensionPlansDefinedBenefitMember2023-03-310001867072kd:UncommittedFacilityMember2024-09-300001867072kd:CommittedFacilityMember2024-09-300001867072kd:SeniorNotesDue2034Member2024-02-290001867072kd:CommittedFacilityMember2021-11-300001867072us-gaap:RevolvingCreditFacilityMember2021-10-310001867072kd:SeniorNotesDue2041Member2021-10-310001867072kd:SeniorNotesDue2031Member2021-10-310001867072kd:SeniorNotesDue2028Member2021-10-310001867072kd:SeniorNotesDue2026Member2021-10-310001867072kd:FixedRateSeniorUnsecuredNotesMember2021-10-310001867072kd:InternationalBusinessMachinesCorpMemberus-gaap:RelatedPartyMember2022-08-122025-03-310001867072kd:InternationalBusinessMachinesCorpMemberus-gaap:RelatedPartyMember2022-04-012024-03-310001867072kd:InternationalBusinessMachinesCorpMemberus-gaap:RelatedPartyMember2022-04-012023-03-310001867072us-gaap:RelatedPartyMember2022-04-012023-03-310001867072kd:SkytapIncMember2024-04-012024-04-300001867072kd:PrepaidSoftwareCostsMember2025-03-310001867072kd:DeferredTransitionCostsMember2025-03-310001867072kd:CapitalizedCostsToObtainContractsMember2025-03-310001867072kd:CapitalizedCostsToFulfillContractsMember2025-03-310001867072kd:PrepaidSoftwareCostsMember2024-03-310001867072kd:DeferredTransitionCostsMember2024-03-310001867072kd:CapitalizedCostsToObtainContractsMember2024-03-310001867072kd:CapitalizedCostsToFulfillContractsMember2024-03-310001867072srt:MinimumMember2025-03-310001867072srt:MaximumMember2025-03-310001867072kd:SkytapIncMemberus-gaap:DevelopedTechnologyRightsMember2024-04-300001867072kd:SkytapIncMemberus-gaap:CustomerRelationshipsMember2024-04-300001867072kd:SkytapIncMember2024-04-300001867072kd:TimeDepositMember2024-04-012025-03-310001867072kd:TimeDepositMember2023-04-012024-03-310001867072kd:TimeDepositMember2022-04-012023-03-310001867072us-gaap:RestrictedStockUnitsRSUMember2024-04-012025-03-310001867072us-gaap:PerformanceSharesMember2024-04-012025-03-310001867072kd:MarketConditionedPerformanceAwardsMember2024-04-012025-03-310001867072us-gaap:RestrictedStockUnitsRSUMember2023-04-012024-03-310001867072us-gaap:PerformanceSharesMember2023-04-012024-03-310001867072us-gaap:EmployeeStockOptionMember2023-04-012024-03-310001867072kd:MarketConditionedPerformanceAwardsMember2023-04-012024-03-310001867072us-gaap:RestrictedStockUnitsRSUMember2022-04-012023-03-310001867072us-gaap:PerformanceSharesMember2022-04-012023-03-310001867072us-gaap:EmployeeStockOptionMember2022-04-012023-03-310001867072kd:MarketConditionedPerformanceAwardsMember2022-04-012023-03-3100018670722023-03-3100018670722022-03-310001867072us-gaap:SellingGeneralAndAdministrativeExpensesMember2024-04-012025-03-310001867072us-gaap:CostOfSalesMember2024-04-012025-03-310001867072us-gaap:SellingGeneralAndAdministrativeExpensesMember2023-04-012024-03-310001867072us-gaap:CostOfSalesMember2023-04-012024-03-310001867072us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-04-012023-03-310001867072us-gaap:CostOfSalesMember2022-04-012023-03-310001867072srt:MaximumMember2024-11-300001867072us-gaap:EmployeeStockOptionMember2024-04-012025-03-310001867072us-gaap:EmployeeStockOptionMember2023-04-012024-03-3100018670722027-04-012025-03-3100018670722025-04-012025-03-310001867072kd:WorkforceRebalancingChargesMemberkd:Fiscal2025ProgramMember2024-04-012025-03-310001867072kd:WorkforceRebalancingChargesMemberkd:Fiscal2024ProgramMember2024-04-012025-03-310001867072kd:ChargesRelatedToCeasingToUseLeasedAssetsMemberkd:Fiscal2025ProgramMember2024-04-012025-03-310001867072kd:ChargesRelatedToCeasingToUseFixedAssetsMemberkd:Fiscal2025ProgramMember2024-04-012025-03-310001867072kd:WorkforceRebalancingLiabilitiesInheritedFromFormerParentMember2024-04-012025-03-310001867072kd:Fiscal2025ProgramMember2024-04-012025-03-310001867072kd:Fiscal2024ProgramMember2024-04-012025-03-310001867072kd:WorkforceRebalancingChargesMemberkd:Fiscal2024ProgramMember2023-04-012024-03-310001867072kd:ChargesRelatedToCeasingToUseLeasedAssetsMemberkd:Fiscal2024ProgramMember2023-04-012024-03-310001867072kd:ChargesRelatedToCeasingToUseFixedAssetsMemberkd:Fiscal2024ProgramMember2023-04-012024-03-310001867072kd:Fiscal2024ProgramMember2023-04-012024-03-310001867072kd:ChargesRelatedToCeasingToUseLeasedAssetsMemberkd:Fiscal2024ProgramMember2022-04-012023-03-310001867072kd:ChargesRelatedToCeasingToUseFixedAssetsMemberkd:Fiscal2024ProgramMember2022-04-012023-03-310001867072kd:Fiscal2024ProgramMember2022-04-012023-03-310001867072kd:InternationalBusinessMachinesCorpMemberkd:HardwareSoftwareAndServicesMemberus-gaap:RelatedPartyMember2022-04-012023-03-310001867072kd:WorkforceRebalancingChargesMemberkd:Fiscal2024ProgramMember2023-03-310001867072kd:ChargesRelatedToCeasingToUseLeasedAssetsMemberkd:Fiscal2024ProgramMember2023-03-3100018670722021-11-032021-11-030001867072kd:InternationalBusinessMachinesCorpMember2022-08-110001867072kd:BmcVIbmMemberkd:InternationalBusinessMachinesCorpMember2022-05-012022-05-3100018670722021-11-012021-11-300001867072srt:MinimumMember2024-04-012025-03-310001867072srt:MaximumMember2024-04-012025-03-310001867072us-gaap:PensionPlansDefinedBenefitMember2022-04-012023-03-310001867072us-gaap:DefinedBenefitPlanDerivativeMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072kd:InsuranceContractsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072kd:GovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072kd:CashAndShortTermInvestmentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072us-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072us-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072us-gaap:DefinedBenefitPlanDerivativeMemberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072us-gaap:CorporateDebtSecuritiesMemberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072kd:InsuranceContractsMemberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072kd:GovernmentDebtSecuritiesMemberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072kd:CashAndShortTermInvestmentsMemberus-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072us-gaap:PensionPlansDefinedBenefitMember2025-03-310001867072us-gaap:DefinedBenefitPlanDerivativeMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072us-gaap:CorporateDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072kd:InsuranceContractsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072kd:GovernmentDebtSecuritiesMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072kd:CashAndShortTermInvestmentsMemberus-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072kd:CashAndShortTermInvestmentsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072us-gaap:FairValueInputsLevel2Memberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072us-gaap:FairValueInputsLevel1Memberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072us-gaap:DefinedBenefitPlanDerivativeMemberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072us-gaap:CorporateDebtSecuritiesMemberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072kd:InsuranceContractsMemberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072kd:GovernmentDebtSecuritiesMemberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072kd:CashAndShortTermInvestmentsMemberus-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072us-gaap:PensionPlansDefinedBenefitMember2024-03-310001867072us-gaap:PensionPlansDefinedBenefitMember2024-04-012025-03-310001867072kd:ForeignPlanAndDefinedBenefitPlansMember2024-04-012025-03-310001867072kd:DirectBenefitPaymentsMember2024-04-012025-03-310001867072kd:ForeignPlanAndDefinedBenefitPlansMember2023-04-012024-03-310001867072kd:DirectBenefitPaymentsMember2023-04-012024-03-310001867072kd:ForeignPlanAndDefinedBenefitPlansMember2022-04-012023-03-310001867072kd:DirectBenefitPaymentsMember2022-04-012023-03-310001867072us-gaap:PensionPlansDefinedBenefitMember2023-04-012024-03-3100018670722021-10-012021-10-310001867072kd:UnsecuredSeniorNotesMaturingTwoThousandTwentySixMember2025-03-310001867072kd:UnsecuredSeniorNotesMaturingTwoThousandTwentyEightMember2025-03-310001867072kd:UnsecuredSeniorNotesMaturingTwoThousandThirtyOneMember2025-03-310001867072kd:UnsecuredSeniorNotesMaturingTwoThousandThirtyFourMember2025-03-310001867072kd:UnsecuredSeniorNotesMaturingTwoThousandFortyOneMember2025-03-310001867072kd:CommercialLoanAgreementMaturingTwoThousandTwentySixMember2025-03-310001867072kd:UnsecuredSeniorNotesMaturingTwoThousandTwentySixMember2024-03-310001867072kd:UnsecuredSeniorNotesMaturingTwoThousandTwentyEightMember2024-03-310001867072kd:UnsecuredSeniorNotesMaturingTwoThousandThirtyOneMember2024-03-310001867072kd:UnsecuredSeniorNotesMaturingTwoThousandThirtyFourMember2024-03-310001867072kd:UnsecuredSeniorNotesMaturingTwoThousandFortyOneMember2024-03-310001867072kd:CommercialLoanAgreementMaturingTwoThousandTwentySixMember2024-03-310001867072us-gaap:TechnologyServiceMembersrt:MinimumMember2024-04-012025-03-310001867072us-gaap:TechnologyServiceMembersrt:MaximumMember2024-04-012025-03-310001867072us-gaap:SalesRevenueNetMember2025-03-310001867072us-gaap:AccountsReceivableMember2025-03-310001867072us-gaap:SalesRevenueNetMember2024-03-310001867072us-gaap:AccountsReceivableMember2024-03-310001867072us-gaap:SalesRevenueNetMember2023-03-310001867072us-gaap:ComputerSoftwareIntangibleAssetMember2024-04-012025-03-310001867072kd:PrepaidSoftwareCostsMember2024-04-012025-03-310001867072kd:DeferredTransitionCostsMember2024-04-012025-03-310001867072kd:PrepaidSoftwareCostsMember2023-04-012024-03-310001867072kd:DeferredTransitionCostsMember2023-04-012024-03-310001867072kd:PrepaidSoftwareCostsMember2022-04-012023-03-310001867072kd:DeferredTransitionCostsMember2022-04-012023-03-310001867072kd:UnitedStatesSegmentMember2024-04-012025-03-310001867072kd:StrategicMarketsSegmentMember2024-04-012025-03-310001867072kd:PrincipalMarketsSegmentMember2024-04-012025-03-310001867072kd:JapanSegmentMember2024-04-012025-03-310001867072kd:UnitedStatesSegmentMember2023-04-012024-03-310001867072kd:StrategicMarketsSegmentMember2023-04-012024-03-310001867072kd:PrincipalMarketsSegmentMember2023-04-012024-03-310001867072kd:JapanSegmentMember2023-04-012024-03-3100018670722023-04-012024-03-310001867072kd:UnitedStatesSegmentMember2022-04-012023-03-310001867072kd:StrategicMarketsSegmentMember2022-04-012023-03-310001867072kd:PrincipalMarketsSegmentMember2022-04-012023-03-310001867072kd:JapanSegmentMember2022-04-012023-03-3100018670722022-04-012023-03-3100018670722025-03-3100018670722024-03-3100018670722024-09-3000018670722025-05-2300018670722024-04-012025-03-31xbrli:sharesiso4217:USDkd:clientkd:itemxbrli:pureiso4217:USDxbrli:shares

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K/A
(Amendment No. 1)

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________ to _______________________

001-40853

(Commission file number)

Kyndryl Holdings, Inc.

(Exact name of registrant as specified in its charter)


Delaware		86-1185492
(State or other jurisdiction of incorporation or organization)		(IRS employer identification number)

One Vanderbilt Avenue, 15th Floor
New York, New York		10017
(Address of principal executive offices)		(Zip Code)

855-596-3795

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common stock, par value $0.01 per share		KD		New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was $5.3 billion, based on the closing price on September 30, 2024, the last day of business of the registrant’s most recently completed second fiscal quarter, as reported on the New York Stock Exchange.

The number of shares of the registrant’s common stock, par value $0.01 per share, outstanding at May 23, 2025 was 229,944,566.

DOCUMENTS INCORPORATED BY REFERENCE: Portions of the registrant’s Proxy Statement relating to the registrant’s 2025 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

Table of Contents

Index

Explanatory Note	3
PART II
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	4
Item 8. Financial Statements and Supplementary Data	18
Item 9A. Controls and Procedures	68
PART IV
Item 15. Exhibits, Financial Statement Schedules	71
SIGNATURES	75

Table of Contents

EXPLANATORY NOTE

In connection with the review by Kyndryl Holdings, Inc. (“we,” “Kyndryl” or the “Company”), through the Audit Committee of its Board of Directors (the “Board”), of its cash management practices, related disclosures, the efficacy of the Company’s internal control over financial reporting, and certain other matters, the Company re-assessed the effectiveness of its disclosure controls and procedures and internal control over financial reporting as of March 31, 2025. The Company determined that there were material weaknesses in the Company’s internal control over financial reporting as of March 31, 2025 and that the Company’s disclosure controls and procedures and internal control over financial reporting were ineffective as of such date.

As a result, the Company is filing this Amendment No. 1 (this “Amendment”) to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025, originally filed with the Securities and Exchange Commission (“SEC”) on May 30, 2025 (the “Original Form 10-K”), to:

●

include in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” a new paragraph under the subheading “Financial Position—Cash Flow” regarding the Company’s cash management practices in the context of the Company’s cash flows;

●

reflect in the report of PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm, in Item 8. “Financial Statements and Supplementary Data,” that the Company did not maintain, in all material respects, effective internal control over financial reporting as of March 31, 2025;

●

reflect in Item 9A. “Controls and Procedures,” including “Management’s Report on Internal Control over Financial Reporting,” that the Company’s disclosure controls and procedures and internal control over financial reporting were not effective as of March 31, 2025 due to the material weaknesses in the Company’s internal control over financial reporting as of March 31, 2025; and

●

reflect in Item 15. “Exhibits, Financial Statement Schedules” the new certifications and consent referenced below.

This Amendment also includes the following exhibits:

●

new currently dated certifications (as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) by the Company’s principal executive officer and principal financial officer; and

●

a new consent from PricewaterhouseCoopers LLP.

Notwithstanding the material weaknesses identified, the Company has concluded that the material weaknesses did not result in misstatements of previously issued historical consolidated financial statements and that such financial statements, which are also included in their entirety in this Amendment (without restatement or revision of such previously issued consolidated financial statements), continue to present fairly, in all material respects, the Company’s financial position, results of operations and cash flows as of and for the relevant periods presented in conformity with U.S. generally accepted accounting principles (“GAAP”).

Pursuant to Rule 12b-15 under the Exchange Act, this Amendment contains only the items of the Original Form 10-K that are being amended and restated and the newly dated certifications and new consent referenced above. Unaffected items are not included herein. Accordingly, except as set forth herein, this Amendment does not modify or update disclosures included in the Original Form 10-K, nor does it reflect events occurring after the filing of the Original Form 10-K. Among other things, the risk factors and the forward-looking statements included in the Original Form 10-K have not been revised to reflect events, facts or risks that occurred or became known to the Company after the filing of the Original Form 10-K, and any such sections and statements should be read in their historical context. Accordingly, this Amendment should be read in conjunction with the Company’s filings with the SEC that were made subsequent to the filing of the Original Form 10-K, including amendments to those filings.

Table of Contents

PART II

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The only amendment to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Original Form 10-K is to include a new paragraph under the subheading “Financial Position—Cash Flow” regarding the Company’s cash management practices in the context of the Company’s cash flows, and no other changes, modifications or amendments to any other sections, numbers or tables within Item 7 have been made.

Overview

Included below are selected results and year-over-year comparisons for the years ended March 31, 2025, 2024 and 2023. The following discussion and analysis of our financial condition and results of operations should be read together with our audited consolidated financial statements and related notes included elsewhere in this report. For further information on the comparisons between the years ended March 31, 2024 and 2023 not covered in the “Segment Results” below, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “2024 Form 10-K”).


		Year Ended March 31,
(Dollars in millions)		2025			2024			2023
Revenue		$	15,057		$	16,052		$	17,026
Revenue growth (GAAP)			(6)	%		(6)	%		(7)	%	⁽²⁾
Revenue growth in constant currency⁽¹⁾			(4)	%		(6)	%		0	%	⁽²⁾
Net income (loss)		$	252		$	(340)		$	(1,374)
Adjusted EBITDA⁽¹⁾		$	2,516		$	2,367		$	1,975

(1)	Revenue growth in constant currency and adjusted EBITDA are non-GAAP financial metrics. For definitions of these metrics and a reconciliation of adjusted EBITDA to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP, see “⸺Segment Results.”

(2)

In January 2022, the Company changed its fiscal year-end to March 31 from December 31. The year-over-year comparison for the year ended March 31, 2023 and the results of operations for the twelve months ended March 31, 2022 were derived from our unaudited quarterly consolidated financial statements as previously reported.


		March 31,			March 31,
(Dollars in millions)		2025			2024
Assets		$	10,452		$	10,590
Liabilities			9,121			9,468
Equity			1,331			1,122

Organization of Information

Kyndryl Holdings, Inc. was formed as a wholly-owned subsidiary of IBM in September 2021 to hold the operations of the infrastructure services unit of IBM’s Global Technology Services segment. On November 3, 2021, Kyndryl separated from IBM through a spin-off that was tax-free for U.S. federal tax purposes. Following the Separation, Kyndryl became an independent, publicly-traded company and the world’s leading IT infrastructure services provider.

Financial Performance Summary

Macro Dynamics

In fiscal year 2025, we saw continuing demand for information technology services, despite concerns about economic growth, geopolitical tensions and inflationary pressures. Most economists, including the International Monetary Fund, expect positive global macroeconomic growth to continue in calendar year 2025. Global markets have experienced increased volatility in recent months, driven by geopolitical developments, concerns over the imposition of import tariffs by the United States, reactions from other nations and proposed U.S. government spending reductions. Increased economic uncertainty may impact the level of global macroeconomic activity.

Table of Contents

Fiscal 2025 Financial Performance

For the year ended March 31, 2025, we reported $15.1 billion in revenue, a decline of 6 percent compared to the year ended March 31, 2024. The revenue decline was largely attributable to actions the Company has taken to reduce low-margin components of its customer relationships, as well as currency effects. United States revenue declined 10 percent, Japan revenue increased 1 percent, Principal Markets revenue declined 5 percent and Strategic Markets revenue decreased 8 percent, compared to the year ended March 31, 2024. Net income of $252 million improved by $592 million versus the prior year driven by progress on our key initiatives to drive operating efficiencies and increased margins, lower depreciation expense and a $138 million after-tax gain from the sale of our SIS platform in Canada.

Fiscal 2024 Financial Performance

For the year ended March 31, 2024, we reported $16.1 billion in revenue, a decline of 6 percent compared to the year ended March 31, 2023. The revenue decline was largely attributable to actions the Company has taken to reduce unprofitable and low-margin components of its customer relationships. United States revenue declined 9 percent, Japan revenue declined 6 percent, Principal Markets revenue declined 2 percent and Strategic Markets revenue decreased 7 percent, compared to the year ended March 31, 2023. Net loss of $340 million improved by $1.0 billion versus the prior-year period driven by progress on our key initiatives to drive operating efficiencies, increased margins and reduced transaction-related costs tied to our Separation.

Basis of Presentation

We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make estimates and assumptions that impact the amounts reported and disclosed in our consolidated financial statements and the accompanying notes. We prepared these estimates based on the most current and best available information, but actual results could differ materially from these estimates and assumptions. All significant transactions and accounts between Kyndryl entities were eliminated. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts.

Segment Results

The following table presents our reportable segments’ revenue and adjusted EBITDA for the years ended March 31, 2025, 2024 and 2023. Segment revenue and revenue growth in constant currency exclude any transactions between the segments.


		Year Ended March 31,												Year-over-Year Change
(Dollars in millions)		2025				2024				2023				2025 vs. 2024			2024 vs. 2023
Revenue
United States		$	3,876			$	4,295			$	4,726			(10)	%		(9)	%
Japan			2,358				2,344				2,502			1	%		(6)	%
Principal Markets			5,206				5,479				5,556			(5)	%		(1)	%
Strategic Markets			3,617				3,934				4,241			(8)	%		(7)	%
Total revenue		$	15,057			$	16,052			$	17,026			(6)	%		(6)	%
Revenue growth in constant currency⁽¹⁾			(4)	%			(6)	%			0	%
Adjusted EBITDA⁽¹⁾
United States		$	725			$	781			$	839			(7)	%		(7)	%
Japan			390				361				407			8	%		(11)	%
Principal Markets			886				677				323			31	%		110	%
Strategic Markets			606				642				484			(6)	%		33	%
Corporate and other⁽²⁾			(90)				(95)				(77)			NM			NM
Total adjusted EBITDA⁽¹⁾		$	2,516			$	2,367			$	1,975			6	%		20	%

NM - not meaningful

(1)	Revenue growth in constant currency and adjusted EBITDA are non-GAAP financial metrics. See the information below for definitions of these metrics and a reconciliation of adjusted EBITDA to net income (loss).

(2)	Represents net amounts not allocated to segments

Table of Contents

The Company made a minor change to its geographic reportable segments effective June 1, 2024 to reflect how the Company manages its operations and measures business performance, transitioning the reporting and management of its operations in Australia/New Zealand from the Principal Markets segment to the Strategic Markets segment. All historical segment information has been recast to reflect this change.

We report our financial results in accordance with U.S. GAAP. We also present certain non-GAAP financial measures to provide useful supplemental information to investors. We provide these non-GAAP financial measures as we believe they enhance visibility to underlying results and the impact of management decisions on operational performance, enable better comparison to peer companies and allow us to provide a long-term strategic view of the business going forward.

Revenue growth in constant currency is a non-GAAP measure that eliminates the effects of exchange rate fluctuations when translating from foreign currencies to the United States dollar. It is calculated by using the average exchange rates that existed for the same period of the prior year. Constant-currency measures are provided so that revenue can be viewed without the effect of fluctuations in currency exchange rates, which is consistent with how management evaluates our revenue results and trends.

Additionally, management uses adjusted EBITDA to evaluate our performance. Adjusted EBITDA is a non-GAAP measure and defined as net income (loss) excluding income taxes, interest expense, depreciation and amortization (excluding depreciation of right-of-use assets and amortization of capitalized contract costs), charges related to ceasing to use leased/fixed assets, charges related to lease terminations, transaction-related costs and benefits, pension expenses other than pension servicing costs and multi-employer plan costs, stock-based compensation expense, workforce rebalancing charges incurred prior to March 31, 2024, impairment expense, significant litigation costs and benefits, and currency impacts of highly inflationary countries. We believe that adjusted EBITDA is a helpful supplemental measure to assist investors in evaluating our operating results as it excludes certain items whose fluctuation from period to period does not necessarily correspond to changes in the operations of our business.

These disclosures are provided in addition to and not as a substitute for the percentage change in revenue and profit or loss measures on a U.S. GAAP basis compared to the corresponding period in the prior year. Other companies may calculate and define similarly labeled items differently, which may limit the usefulness of this measure for comparative purposes.

The following table provides a reconciliation of U.S. GAAP net income (loss) to adjusted EBITDA:


		Year Ended March 31,
(Dollars in millions)		2025			2024			2023
Net income (loss)		$	252		$	(340)		$	(1,374)
Provision for income taxes			184			172			524
Interest expense			100			122			94
Depreciation of property, equipment and capitalized software			660			834			900
Amortization expense			1,308			1,287			1,245
Workforce rebalancing charges incurred prior to March 31, 2024			—			138			71
Charges related to ceasing to use leased/fixed assets and lease terminations			48			39			80
Transaction-related costs (benefits)			(125)			(46)			264
Stock-based compensation expense			100			95			113
Other adjustments*			(10)			68			59
Adjusted EBITDA (non-GAAP)		$	2,516		$	2,367		$	1,975

Other adjustments represent pension expenses other than pension servicing costs and multi-employer plan costs, significant litigation costs and benefits, and currency impacts of highly inflationary countries. For the year ended March 31, 2024, other adjustments also included an adjustment to reduce amortization expense for the amount already included in transaction-related costs (benefits) above.

Table of Contents

United States


		Year Ended March 31,
(Dollars in millions)		2025				2024
Revenue		$	3,876			$	4,295
Revenue year-over-year change			(10)	%			(9)	%
Adjusted EBITDA			725				781
Adjusted EBITDA year-over-year change			(7)	%

For the year ended March 31, 2025, United States revenue of $3.9 billion decreased 10 percent compared to the year ended March 31, 2024, reflecting the Company’s efforts to reduce certain low-margin revenues and the expiration of other low-margin contracts entered into before the Spin-off. Adjusted EBITDA decreased $56 million from the prior year, primarily driven by lower revenue and the impact of the inclusion of workforce rebalancing charges in adjusted EBITDA in fiscal 2025.

For the year ended March 31, 2024, United States revenue of $4.3 billion decreased 9 percent compared to the year ended March 31, 2023, driven by the Company’s efforts to reduce certain low-margin revenues. Adjusted EBITDA decreased $58 million from the prior year, primarily driven by an increase in software costs of $67 million resulting from an amendment of the contract with a software provider that re-allocated costs among our segments, partially offset by increased operating efficiencies and higher margins on recent signings.

Japan


		Year Ended March 31,
(Dollars in millions)		2025				2024
Revenue		$	2,358			$	2,344
Revenue year-over-year change			1	%			(6)	%
Revenue growth in constant currency			6	%			0	%
Adjusted EBITDA			390				361
Adjusted EBITDA year-over-year change			8	%

For the year ended March 31, 2025, Japan revenue of $2.4 billion increased 1 percent, and increased 6 percent in constant currency, compared to the year ended March 31, 2024, primarily driven by expanding the scope of services we provide to our customers. Adjusted EBITDA increased $29 million from the prior year, primarily driven by progress on our key initiatives.

For the year ended March 31, 2024, Japan revenue of $2.3 billion decreased 6 percent compared to the year ended March 31, 2023, driven primarily by an unfavorable currency exchange rate impact of six points. Adjusted EBITDA decreased $46 million from the prior year, primarily driven by unfavorable currency movements that impacted both non-yen-denominated costs and the translation of earnings into U.S. dollars.

Principal Markets


		Year Ended March 31,
(Dollars in millions)		2025				2024
Revenue		$	5,206			$	5,479
Revenue year-over-year change			(5)	%			(1)	%
Revenue growth in constant currency			(4)	%			(4)	%
Adjusted EBITDA			886				677
Adjusted EBITDA year-over-year change			31	%

For the year ended March 31, 2025, Principal Markets revenue of $5.2 billion decreased 5 percent compared to the year ended March 31, 2024, driven by actions the Company has taken to reduce low-margin components of its customer relationships. Adjusted EBITDA increased $209 million from the prior year, primarily due to increased operating efficiencies and higher margins on recent signings, as well as a vendor credit.

For the year ended March 31, 2024, Principal Markets revenue of $5.5 billion decreased 1 percent compared to the year ended March 31, 2023, including a favorable currency exchange rate impact of three points. The revenue decline was largely

Table of Contents

attributable to actions the Company has taken to reduce low-margin components of its customer relationships. Adjusted EBITDA increased $354 million from the prior year, primarily due to increased operating efficiencies, higher margins on recent signings and a decrease in software costs of $86 million resulting from an amendment of the contract with a software provider that re-allocated costs among our segments.

Strategic Markets


		Year Ended March 31,
(Dollars in millions)		2025				2024
Revenue		$	3,617			$	3,934
Revenue year-over-year change			(8)	%			(7)	%
Revenue growth in constant currency			(5)	%			(10)	%
Adjusted EBITDA			606				642
Adjusted EBITDA year-over-year change			(6)	%

For the year ended March 31, 2025, Strategic Markets revenue of $3.6 billion decreased 8 percent compared to the year ended March 31, 2024. The revenue decline was largely attributable to actions the Company has taken to reduce low-margin components of its customer relationships, as well as an unfavorable currency exchange rate impact of three points. Adjusted EBITDA decreased $36 million from the prior year, primarily driven by the impact of the inclusion of workforce rebalancing charges in adjusted EBITDA in fiscal 2025, partially offset by progress on our key initiatives.

For the year ended March 31, 2024, Strategic Markets revenue of $3.9 billion decreased 7 percent compared to the year ended March 31, 2023, including a favorable currency exchange rate impact of three points. The revenue decline was largely attributable to actions the Company has taken to reduce low-margin components of its customer relationships. Adjusted EBITDA increased $158 million from the prior year, primarily due to increased operating efficiencies and higher margins on recent signings, partially offset by an increase in software costs of $29 million resulting from an amendment of the contract with a software provider that re-allocated costs among our segments.

Corporate and Other

Corporate and other generated an adjusted EBITDA loss of $90 million in the year ended March 31, 2025, compared to a loss of $95 million in the year ended March 31, 2024, and a loss of $77 million in the year ended March 31, 2023.

Costs and Expenses


		Year Ended March 31,						Percent of Revenue						Change
(Dollars in millions)		2025			2024			2025			2024			2025 vs. 2024
Revenue		$	15,057		$	16,052		100.0	%		100.0	%		(6)	%
Cost of services			11,914			13,189		79.1	%		82.2	%		(10)	%
Selling, general and administrative expenses			2,591			2,773		17.2	%		17.3	%		(7)	%
Workforce rebalancing charges			114			138		0.8	%		0.9	%		(18)	%
Transaction-related costs (benefits)			(125)			(46)		(0.8)	%		(0.3)	%		NM
Interest expense			100			122		0.7	%		0.8	%		(18)	%
Other expense			27			45		0.2	%		0.3	%		(39)	%
Income (loss) before income taxes		$	435		$	(168)

NM – not meaningful

Table of Contents

Cost of services was 79.1% of revenue in the year ended March 31, 2025, compared to 82.2% in the year ended March 31, 2024, driven by lower depreciation expense, increased operating efficiencies, higher margins on recent signings, and a vendor credit. Selling, general and administrative expenses were 17.2% of revenue in the year ended March 31, 2025, compared to 17.3% in the year ended March 31, 2024. Transaction-related costs (benefits) were (0.8)% of revenue in the year ended March 31, 2025, primarily due to a $145 million pretax gain from the sale of the SIS platform in Canada, compared to transaction-related costs (benefits) of (0.3)% of revenue in the year ended March 31, 2024, which reflected an agreement that allowed us to collect previously reserved receivables from our former Parent. Interest expense was 0.7% of revenue in the year ended March 31, 2025 compared to 0.8% in the year ended March 31, 2024. Other expense was 0.2% of revenue in the year ended March 31, 2025, compared to 0.3% in the year ended March 31, 2024, driven by currency-related hedging gains recorded this year.


		Year Ended March 31,						Percent of Revenue						Change
(Dollars in millions)		2024			2023			2024			2023			2024 vs. 2023
Revenue		$	16,052		$	17,026		100.0	%		100.0	%		(6)	%
Cost of services			13,189			14,498		82.2	%		85.2	%		(9)	%
Selling, general and administrative expenses			2,773			2,914		17.3	%		17.1	%		(5)	%
Workforce rebalancing charges			138			71		0.9	%		0.4	%		95	%
Transaction-related costs (benefits)			(46)			264		(0.3)	%		1.5	%		NM
Interest expense			122			94		0.8	%		0.5	%		30	%
Other expense			45			35		0.3	%		0.2	%		27	%
Income (loss) before income taxes		$	(168)		$	(851)

NM – not meaningful

Cost of services was 82.2% of revenue in the year ended March 31, 2024, compared to 85.2% in the year ended March 31, 2023, driven by increased operating efficiencies, higher margins on recent signings and actions the Company has taken to reduce low-margin components of its customer relationships. Selling, general and administrative expenses were 17.3% of revenue in the year ended March 31, 2024 compared to 17.1% in the year ended March 31, 2023, driven by lower revenue, partially offset by reduced expenses. Workforce rebalancing charges were 0.9% of revenue in the year ended March 31, 2024 versus 0.4% of revenue in the prior-year period, due to increased workforce rebalancing actions taken in fiscal 2024. Transaction-related costs (benefits) were (0.3)% of revenue in the year ended March 31, 2024 compared to 1.5% in the prior-year, driven by reduced rebranding and employee-retention costs and the favorable resolution of certain pre-Separation and Separation-related matters with our former Parent. Interest expense was 0.8% of revenue in the year ended March 31, 2024 compared to 0.5% in the prior year due to higher interest rates in fiscal 2024.

Transaction-Related Costs

The Company classifies certain expenses and benefits related to the Separation, acquisitions and divestitures as “transaction-related costs (benefits)” in the Consolidated Income Statement. Transaction-related costs include gains or losses, employee retention expenses, information technology costs, marketing expenses to establish the Kyndryl brand, legal, accounting, consulting and other professional service costs, costs and benefits resulting from settlements with our former Parent associated with pre-Separation and Separation-related matters, and other costs related to contract and supplier novation and integration, associated with acquisitions, divestitures or the Separation.

Workforce Rebalancing and Site-Rationalization Charges

Fiscal 2025 Program

During the year ended March 31, 2025, management initiated actions to reduce the Company’s overall cost structure and increase our operating efficiency. These actions resulted in workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets, and charges related to lease terminations. During the year ended March 31, 2025, the Company recorded $114 million in workforce rebalancing charges and $48 million in charges related to ceasing to use leased and owned fixed assets, including lease termination charges.

Total cash outlays for this program are expected to be approximately $150 million, of which approximately $110 million has been paid through March 31, 2025, and the remainder is expected to be paid thereafter. Management expects that these workforce

Table of Contents

rebalancing and site-rationalization activities will reduce payroll costs, rent expenses and depreciation of property and equipment by more than $200 million in fiscal year 2026. There can be no guarantee that we will achieve our expected cost savings.

The Company will continue to seek opportunities to improve operational efficiency and reduce costs, which may result in additional charges in future periods. For additional information, see Note 19 - Workforce Rebalancing and Site-Rationalization Charges in the accompanying Consolidated Financial Statements.

Fiscal 2024 Program

During the year ended March 31, 2023, management initiated certain actions to reduce the Company’s overall cost structure and increase our operating efficiency, which continued through the year ended March 31, 2024. These actions resulted in workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets, and charges related to lease terminations. Workforce rebalancing charges arise from cost-reduction actions to enhance productivity and cost-competitiveness and to rebalance skills that result in payments to the terminated employees. In addition, we identified certain leased and owned assets that were inherited from IBM as a result of the Separation that we determined will no longer provide any economic benefit to Kyndryl. During the year ended March 31, 2024, the Company recognized $135 million in workforce rebalancing charges (excluding individual terminations outside of this Company-wide workforce rebalancing program) and $39 million in charges related to ceasing to use leased and owned fixed assets, including lease termination charges.

Total cash outlays for this program are expected to be $300 million, of which approximately $270 million has been paid through March 31, 2025 (including approximately $70 million of contractual payments toward leased assets we have ceased to use), and the remainder is expected to be paid thereafter. Management estimates that these workforce rebalancing and site-rationalization activities reduced payroll costs, rent expenses and depreciation of property and equipment by approximately $400 million in fiscal year 2025.

Income Taxes

The Company’s consolidated provision for income taxes and effective tax rate were as follows:


		Year Ended March 31,
(Dollars in millions)		2025				2024				2023
Provision for income taxes		$	184			$	172			$	524
Effective tax rate			41.9	%			(102.2)	%			(61.6)	%

In the year ended March 31, 2025, we recorded income tax expense of $184 million. In the years ended March 31, 2024 and 2023, we recorded income tax expense of $172 million and $524 million, respectively, on pretax losses, which resulted in negative effective tax rates. Our income tax expense for the year ended March 31, 2025, was primarily related to taxes on foreign operations and uncertain tax positions. Our income tax expense for the year ended March 31, 2024 was primarily related to taxes on foreign operations and uncertain tax positions. Our income tax expense for the year ended March 31, 2023 was primarily related to the increases in valuation allowances in certain jurisdictions against deferred tax assets that are not more likely than not to be realized, taxes on foreign operations and uncertain tax positions.

The effective tax rate for the year ended March 31, 2025 was higher compared to the year ended March 31, 2024, primarily due to the Company’s pretax income in fiscal year 2025, compared to a pretax loss in 2024. The effective tax rate for the year ended March 31, 2024 was lower (more negative) compared to the year ended March 31, 2023 primarily due to the Company’s pretax loss being significantly lower in fiscal year 2024. For more information, see Note 5 - Taxes in the accompanying Consolidated Financial Statements.

Financial Position

Dynamics

Total assets of $10.5 billion at March 31, 2025 decreased by $138 million (and decreased by $52 million adjusted for currency) from March 31, 2024, primarily driven by: a decrease of $254 million in accounts receivable primarily due to lower past-due receivables; a reduction in operating right-of-use assets, net, of $133 million due to amortization outpacing additions; and a

Table of Contents

decrease in property and equipment, net, of $104 million due to depreciation outpacing net additions; partially offset by an increase in cash and cash equivalents of $234 million mainly due to our net income in the period; and an increase in other non-current assets of $95 million due to an increase in long-term prepaid assets.

Total liabilities of $9.1 billion at March 31, 2025 decreased by $347 million (and decreased by $305 million adjusted for currency) from March 31, 2024, primarily as a result of: a decrease in operating lease liabilities of $121 million due to a reduction in right-of-use assets; a decrease in long-term debt of $70 million due to lower finance lease obligations; a decrease in accounts payable of $57 million due to lower costs; and a decrease in accrued contract costs of $51 million due to lower volumes.

Total equity of $1.3 billion at March 31, 2025 increased by $209 million from March 31, 2024, principally due to our net income in the period, partially offset by $94 million of share repurchases under our Share Repurchase Program.

Overall pension funded status as of March 31, 2025 was 77% of estimated pension benefit obligation, an increase from 75% at March 31, 2024. Among our funded pension plans, our funded status as of March 31, 2025 was 103%, an increase from 99% at March 31, 2024.

Cash Flow

Our cash flows from operating, investing and financing activities are summarized in the table below.


		Year Ended March 31,
(Dollars in millions)		2025			2024
Net cash provided by (used in):
Operating activities		$	942		$	454
Investing activities			(404)			(553)
Financing activities			(286)			(170)
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(16)			(37)
Net change in cash, cash equivalents and restricted cash		$	235		$	(306)

Net cash provided by operating activities was $942 million for the year ended March 31, 2025, compared to net cash provided by operating activities of $454 million for the year ended March 31, 2024, mainly due to higher earnings.

Net cash used in investing activities was $404 million for the year ended March 31, 2025, compared to a net cash use of $553 million for the year ended March 31, 2024, due to the sale of our SIS platform in Canada partially offset by our acquisition of Skytap.

Net cash used in financing activities totaled $286 million for the year ended March 31, 2025, compared to net cash used by financing activities of $170 million for the year ended March 31, 2024, mainly due to share repurchases of $94 million under the Company’s share repurchase program.

As part of our ongoing cash and commercial management strategy with customers and suppliers and as previously disclosed, our standard practice since the time of our spin-off from IBM is to actively manage our working capital, including accounts receivables and accounts payables. This includes optimizing payment terms and conditions, accelerating certain cash receipts (including through the sale of trade receivables to third-party financial institutions) and delaying certain cash payments (including deferring vendor payments quarter to quarter, in certain cases beyond vendor payment terms), and undertaking other discretionary cash and working capital management initiatives. The magnitude of these practices (including deferrals) has exceeded $100 million in current or prior periods but varied from quarter to quarter. The effects of these practices, including any impacts on our cash flows, have been and are reflected in our accounts payable, accounts receivable and our operating cash flows, which are accounted for in accordance with U.S. GAAP. Our working capital and cash flows have also reflected the impact of accrued contract costs in certain periods due to the timing of vendor billings. We may, from time to time, revise or adapt our cash and working capital management practices as we deem appropriate.

Liquidity and Capital Resources

We believe that our existing cash and cash equivalents and our revolving credit agreement will be sufficient to meet our anticipated cash needs for at least the next twelve months.

Table of Contents

Senior Unsecured Notes

In October 2021, in preparation for our Spin-off, we completed the offering of $2.4 billion in aggregate principal amount of senior unsecured fixed-rate notes as follows: $700 million aggregate principal amount of 2.05% Senior Notes due 2026, $500 million aggregate principal amount of 2.70% Senior Notes due 2028, $650 million aggregate principal amount of 3.15% Senior Notes due 2031 and $550 million aggregate principal amount of 4.10% Senior Notes due 2041 (the “Initial Notes”). The Initial Notes were offered and sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to non-U.S. persons in reliance on Regulation S of the Securities Act. In connection with the issuance of the Initial Notes, we entered into a registration rights agreement with the purchasers of the Initial Notes, pursuant to which we completed a registered offering to exchange each series of Initial Notes for new notes with substantially identical terms during the quarter ended September 30, 2022.

In February 2024, we completed a registered offering of $500 million in aggregate principal amount of 6.35% senior unsecured notes due 2034 (the “2034 Notes”). We received proceeds of $494 million, net of debt issuance costs and discounts. The 2034 Notes are the Company’s senior unsecured obligations and rank equally in right of payment with all of the Company’s other existing and future senior unsecured indebtedness.

The Initial Notes and the 2034 Notes are subject to customary affirmative covenants, negative covenants and events of default for financings of this type and are redeemable at our option in a customary manner.

Revolving Credit Agreement

In October 2021, we entered into a $3.15 billion multi-currency revolving credit agreement (the “Revolving Credit Agreement”), which expires, unless extended, in October 2026. The Revolving Credit Agreement was amended in June 2023, replacing the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”). In March 2025, we further amended the agreement, extending the maturity to March 2030. Interest rates on borrowings under the Revolving Credit Agreement will be based on prevailing market interest rates, plus a margin, as further described in the Revolving Credit Agreement.

The total facility fees recorded by the Company for the Revolving Credit Agreement were $5 million and $5 million for the years ended March 31, 2025 and 2024, respectively. As of March 31, 2025, there has been no drawdown on the Revolving Credit Agreement.

The Revolving Credit Agreement includes certain customary mandatory prepayment provisions. In addition, it includes customary events of default and affirmative and negative covenants as well as a maintenance covenant that will require that the ratio of our indebtedness for borrowed money to consolidated EBITDA (as defined in the Revolving Credit Agreement) for any period of four consecutive fiscal quarters be no greater than 3.50 to 1.00. The Company is in compliance with its debt covenants.

Transfers of Financial Assets

The Company has entered into arrangements with third-party financial institutions to sell certain financial assets (primarily trade receivables) without recourse. The Company has determined these are true sales. The carrying value of the financial asset sold is derecognized, and a net gain or loss on the sale is recognized, at the time of the transfer. The first agreement, which was executed in November 2021 and subsequently amended, enabled us to sell certain of our trade receivables to the counterparty. The initial term of this agreement was 18 months, and the agreement automatically resets to a term of 18 months after every six months, unless either party elects not to extend. This agreement was further amended during the quarter ended September 30, 2024 to reduce the committed facility limit from $1 billion to $600 million and to add an incremental uncommitted facility limit of $200 million that is subject to the counterparty’s sole discretion to purchase such incremental amounts. The second agreement was executed in June 2022 with a separate third-party financial institution and renews automatically on its anniversary date, unless either party elects not to extend.

The net proceeds from these arrangements are reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows. Gross proceeds from receivables sold to third parties under the aforementioned programs were $3.2 billion for the year ended March 31, 2025 and $3.6 billion for the year ended March 31, 2024. The fees associated with the transfers of receivables were $38 million for the year ended March 31, 2025 and $49 million for the year ended March 31, 2024.

Table of Contents

Supplier Financing Program

In the year ended March 31, 2024, the Company initiated a supplier financing program with a third-party financial institution under which the Company agrees to pay the financial institution the stated amounts of invoices from participating suppliers on the originally invoiced due date, which have an average term of 90 to 120 days. The financial institution offers earlier payment of the invoices at the sole discretion of the supplier for a discounted amount. The Company does not provide secured legal assets or other forms of guarantees under the arrangements. The Company is not a party to the arrangement between its suppliers and the financial institution. The Company or the financial institution may terminate the agreement upon at least 180 days notice. The Company’s obligations under this program continue to be recognized as accounts payable in the Consolidated Balance Sheet. The obligations outstanding under this program at March 31, 2025 and 2024 were immaterial.

Share Repurchase Program

In November 2024, the Company’s Board of Directors authorized a share repurchase program of up to $300 million of the Company’s common stock. Under the Share Repurchase Program, the Company may repurchase shares of its common stock from time to time in open market transactions and may also repurchase shares in accelerated share buyback programs, tender offers, privately negotiated transactions or by other means. Repurchases may also be made under a Rule 10b5-1 trading plan. The timing and amount of repurchase transactions will be determined by the Company’s management based on its evaluation of market conditions, share price, legal requirements and other factors. The program does not have a set expiration date and may be suspended, modified or discontinued at any time without prior notice.

During the year ended March 31, 2025, the Company repurchased 2.6 million shares of its common stock at an aggregate cost of $94 million under the Share Repurchase Program. As of March 31, 2025, $206 million remained of our $300 million Share Repurchase Program authorization.

Off-Balance Sheet Arrangements and Contractual Obligations

From time to time, we may enter into (i) off-balance sheet arrangements as defined by SEC Financial Reporting Release 67 (FRR-67), “Disclosure in Management’s Discussion and Analysis about Off-Balance Sheet Arrangements and Aggregate Contractual Obligations” or (ii) purchase commitments, which we expect to use in the ordinary course of business.

At March 31, 2025 and March 31, 2024, we had no such off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. We do not have retained interests in assets transferred to unconsolidated entities or other material off-balance sheet interests or instruments.

At March 31, 2025, the Company’s material future contractual obligations were primarily related to leases, debt and pension liabilities. See Note 9 - Leases, Note 12 - Borrowings, Note 13 - Other Liabilities and Note 17 - Retirement-Related Benefits of Notes to the Company’s consolidated financial statements. Additionally, the Company has contractual commitments that are noncancellable with certain software, hardware and cloud partners used in the delivery of services to customers. The Company has determined that these commitments may exceed the Company’s needs over the next two to three years. If the Company is unable to satisfy, reduce or amend its contractual commitments, it will record the future charges for any payments related to excess commitments as cost of services. At March 31, 2025, we had short-term (April 2025 through March 2026), mid-term (April 2026 through March 2028) and long-term (April 2028 onward) purchase commitments in the amount of $0.2 billion, $0.6 billion and $0.1 billion, respectively.

Other Information

Signings

The following table presents the Company’s signings for the years ended March 31, 2025, 2024 and 2023.


		Year Ended March 31,
(Dollars in billions)		2025			2024			2023
Total signings		$	18.2		$	12.5		$	12.2

Table of Contents

Signings increased $5.7 billion, or 46%, in the year ended March 31, 2025 compared to the year ended March 31, 2024, driven by growth in each of our four operating segments. The Company’s global signings growth spanned a broad range of industries and included a record 55 contracts valued in excess of $50 million. Signings increased by $332 million, or 3%, in the year ended March 31, 2024 compared to the year ended March 31, 2023.

Management uses signings as a tool to monitor the performance of the business including the business’ ability to attract new customers and sell additional scope into our existing customer base. There are no third-party standards or requirements governing the calculation of signings. We define signings as an initial estimate of the value of a customer’s commitment under a contract. The calculation involves estimates and judgments to gauge the extent of a customer’s commitment, including the type and duration of the agreement and the presence of termination charges or wind-down costs. Contract extensions and increases in scope are treated as signings only to the extent of the incremental new value. Signings can vary over time due to a variety of factors including, but not limited to, the timing of signing a small number of larger outsourcing contracts as well as the length of those contracts. The conversion of signings into revenue may vary based on the types of services and solutions, customer decisions and other factors, which may include, but are not limited to, the macroeconomic environment or external events.

Critical Accounting Estimates

The application of U.S. GAAP requires us to make estimates and assumptions about certain items and future events that directly affect our reported financial condition. The accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to our financial statements. Our significant accounting policies are described in Note 1 - Significant Accounting Policies to our consolidated financial statements.

A quantitative sensitivity analysis is provided where that information is reasonably available, can be reliably estimated and provides material information to investors. The amounts used to assess sensitivity (e.g., 10 percent, 25 basis points, etc.) are included to allow users of this report to understand a general effect of changes in the estimates and do not represent management’s predictions of variability. For all of these estimates, it should be noted that future events rarely develop exactly as forecasted and estimates require regular review and adjustment.

Revenue Recognition

Application of GAAP related to the measurement and recognition of revenue requires us to make judgments and estimates. Specifically, complex arrangements with nonstandard terms and conditions may require significant contract interpretation to determine the appropriate accounting, including whether promised goods and services specified in an arrangement are separate performance obligations. In certain arrangements, revenue is recognized based on progress toward completion of the performance obligation using a cost-to-cost measure of progress. The estimation of future costs, which is updated as the project progresses, is complex and requires us to make judgments. Other significant judgments include determining whether we are acting as the principal in a transaction and whether separate contracts should be combined and considered part of one arrangement.

Revenue recognition is also impacted by our ability to determine when a contract is probable of collection and to estimate variable consideration, including, for example, rebates, price concessions, service-level penalties and performance bonuses. We consider various factors when making these judgments, including a review of specific transactions, historical experience and market and economic conditions. Evaluations are conducted each quarter to assess the adequacy of the estimates.

Costs to Complete Service Contracts

During the contractual period, revenue, cost and profits may be impacted by estimates of the ultimate profitability of each contract, especially contracts for which we use cost-to-cost method to measure progress. The Company performs ongoing profitability analyses of its design-and-build services contracts accounted for using a cost-to-cost measure of progress to determine whether the latest estimates of revenues, costs and profits require updating. If at any time these estimates indicate that the contract will be unprofitable on a gross-margin basis, the entire estimated loss for the remainder of the contract is recorded immediately. For other types of services contracts, any losses are recorded as incurred. Key factors reviewed to estimate the future costs to complete each contract are future labor costs, product costs and expected productivity efficiencies.

Table of Contents

Capitalization of Contract Costs

In connection with services arrangements, we incur and capitalize direct costs for transition and setup activities performed at the inception of these long-term contracts that are necessary to enable us to perform under the terms of the arrangement. These costs are capitalized and are amortized on a straight-line basis over the expected period of benefit. We perform periodic reviews to assess the recoverability of deferred contract transition and setup costs. To assess recoverability, undiscounted estimated cash flows of the contract are projected over its remaining life and compared to the carrying amount of contract-related assets, including the unamortized deferred cost balance. Such estimates require judgment and assumptions, and actual future cash flows could differ from these estimates. A significant change in an estimate or assumption on one or more contracts could have a material effect on our results of operations.

Retirement-related Benefit Plan Assumptions

For Company-sponsored and co-sponsored defined benefit pension plans, the measurement of the benefit obligation to plan participants and net periodic benefit cost requires the use of certain assumptions, including, among others, estimates of discount rates and expected return on plan assets.

Changes in the discount rate assumptions would impact the actuarial (gain)/loss amortization, service cost and interest cost components of the net periodic benefit cost calculation and the projected benefit obligation (PBO). If the average discount rate assumption for the non-U.S. defined benefit pension plans had increased or decreased by 25-basis-points from 3.68% on March 31, 2025, this would not result in a material change to pretax net periodic benefit cost recognized in fiscal 2026. Further changes in the discount rate assumptions would impact the PBO which, in turn, may impact our funding decisions if the PBO exceeds plan assets. A 25-basis-point increase or decrease in the discount rate would result in an approximate corresponding decrease or increase, respectively, of approximately $38 million in the Plans’ estimated PBO based upon March 31, 2025 data.

The expected long-term return on plan assets assumption is used in calculating the net periodic benefit cost. Expected returns on plan assets are calculated based on the market-related value of plan assets, which recognizes changes in the fair value of plan assets systematically over a five-year period in the expected return on plan assets line in net periodic benefit cost. The differences between the actual return on plan assets and the expected long-term return on plan assets are recognized over five years in the expected return on plan assets line in net periodic benefit cost and also as a component of actuarial (gains)/losses, which are recognized over the service lives or life expectancy of the participants, depending on the plan, provided such amounts exceed thresholds which are based upon the benefit obligation or the value of plan assets, as provided by accounting standards.

To the extent the outlook for long-term returns changes such that management changes its expected long-term return on plan assets assumption, a 25-basis-point increase or decrease in the expected long-term return on plan assets assumption would not have a material estimated decrease or increase on the following year’s pretax net periodic benefit cost (based upon plan assets at March 31, 2025 and expected contributions and benefit payments for fiscal 2026).

We may voluntarily make contributions or be required, by law, to make contributions to our pension plans. Actual results that differ from the estimates may result in more or less future funding into the pension plans than is planned by management. Impacts of these types of changes on our pension plans would vary depending upon the status of each respective plan.

In addition to the above, we evaluate other pension assumptions involving demographic factors, such as retirement age and mortality and update these assumptions to reflect experience and expectations for the future. Actual results in any given year can differ from actuarial assumptions because of economic and other factors.

For additional information on our pension plans and the development of these assumptions, see Note 17 - Retirement-Related Benefits to our consolidated financial statements.

Income Taxes

Our income tax provisions are calculated based on Kyndryl’s operating footprint, as well as our tax return elections and assertions. Liabilities related to unrecognized tax benefits for which the Company is liable are reported within the Consolidated Balance Sheet based upon tax authorities’ ability to assert the Company may be the primary obligor for historical taxes, among other factors. Significant judgment is required in determining any valuation allowance recorded against deferred tax assets. In assessing the

Table of Contents

need for a valuation allowance, management considers all available evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies and actions. In the event that we change our determination as to the amount of deferred tax assets that can be realized, we will adjust the valuation allowance with a corresponding impact to income tax expense in the period in which such determination is made.

Valuation of Assets

The application of valuation and impairment accounting requires the use of significant estimates and assumptions. Impairment testing for assets, other than goodwill, requires the allocation of cash flows to those assets or group of assets and if required, an estimate of fair value for the assets or group of assets. Our estimates are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. These valuations require the use of management’s assumptions, which would not reflect unanticipated events and circumstances that may occur. Assumptions used to perform a recoverability test are consistent with those used for goodwill impairment; see “Valuation of Goodwill” for further detail.

Valuation of Goodwill

We review goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable by first assessing qualitative factors to determine if it is more likely than not that fair value is less than carrying value.

We assess qualitative factors in each of our reporting units that carry goodwill including relevant events and circumstances that affect the fair value of reporting units. Examples include, but are not limited to, macroeconomic, industry and market conditions, as well as other individual factors such as:

●

A significant adverse shift in the operating environment of the reporting unit such as unanticipated competition;

●

Significant pending litigation;

●

A more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed of; and

●

A significant adverse action or assessment by a regulator.

We assess these qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. This quantitative test is required only if we conclude that it is more likely than not that a reporting unit’s fair value is less than its carrying amount.

In conjunction with our annual review of goodwill for impairment, we prepared qualitative analysis as of January 1, 2025. Based on this analysis of the qualitative factors, quantitative tests were not required. See Note 11 - Intangible Assets Including Goodwill for further discussion.

Loss Contingencies

We are currently involved in various claims and legal proceedings. At least quarterly, we review the status of each significant matter and assess our potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise our estimates. These revisions in the estimates of the potential liabilities could have a material impact on our results of operations and financial position.

Change in Accounting Estimate

Table of Contents

technology equipment from five to six years. This change in accounting estimate became effective on April 1, 2024. Based on the carrying amount of information technology equipment included in property and equipment, net as of March 31, 2024, the effect of this change in estimate was a reduction in depreciation expense and an improvement of income before income taxes of approximately $180 million, or $0.80 before income taxes per basic share and $0.77 before income taxes per diluted share, for the year ended March 31, 2025.

Cautionary Note Regarding Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this report, including statements concerning the Company’s plans, objectives, goals, beliefs, business strategies, future events, business condition, results of operations, financial position, business outlook and business trends and other non-historical statements in this report are forward-looking statements. Such forward-looking statements often contain words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “objectives,” “opportunity,” “plan,” “position,” “predict,” “project,” “should,” “seek,” “target,” “will,” “would,” and other similar words or expressions or the negative thereof or other variations thereon. Forward-looking statements are based on the Company’s current assumptions and beliefs regarding future business and financial performance. The Company’s actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others:

●

failure to attract new customers, retain existing customers or sell additional services to customers;

●

failure to meet growth and productivity objectives and maintain our capital allocation strategy;

●

competition;

●

impacts of relationships with critical suppliers and partners;

●

failure to address and adapt to technological developments and trends;

●

inability to attract and retain key personnel and other skilled employees;

●

impact of economic, geopolitical, public health and other conditions;

●

damage to the Company’s reputation;

●

inability to accurately estimate the cost of services and the timeline for completion of contracts;

●

service delivery issues;

●

the Company’s ability to successfully manage acquisitions and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels;

●

the impact of our business with foreign, state and local government customers;

●

failure of the Company’s intellectual property rights to prevent competitive offerings and the failure of the Company to obtain, retain and extend necessary licenses;

●

the impairment of our goodwill or long-lived assets;

●

risks relating to cybersecurity, data governance and privacy;

●

risks relating to non-compliance with legal and regulatory requirements;

●

adverse effects from tax matters and environmental matters;

Table of Contents

●

legal proceedings and investigatory risks and potential indemnification obligations;

●

impact of changes in market liquidity conditions and customer credit risk on receivables;

●

the Company’s pension plans;

●

the impact of currency fluctuations; and

●

risks related to the Company’s common stock and the securities market.

Additional risks and uncertainties include, among others, those risks and uncertainties described in the “Risk Factors” section of this report, as such factors may be updated from time to time in the Company’s subsequent filings with the SEC. Any forward-looking statement in this report speaks only as of the date on which it is made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 8. Financial Statements and Supplementary Data

The only amendment to Item 8. “Financial Statements and Supplementary Data” included in the Original Form 10-K is to the Report of Independent Registered Public Accounting Firm only with respect to the effectiveness of the Company’s internal control over financial reporting as of March 31, 2025 due to the subsequent determination that the Company’s internal control over financial reporting was ineffective as of March 31, 2025, as a result of the material weaknesses disclosed in this Amendment.

Table of Contents

Index to Consolidated Financial Statements

	Page

Report of Independent Registered Public Accounting Firm (PCAOB ID 238)	20
Consolidated Income Statement for the Years Ended March 31, 2025, 2024 and 2023	23
Consolidated Statement of Comprehensive Income (Loss) for the Years Ended March 31, 2025, 2024 and 2023	24
Consolidated Balance Sheet as of March 31, 2025 and 2024	25
Consolidated Statement of Cash Flows for the Years Ended March 31, 2025, 2024 and 2023	26
Consolidated Statement of Equity for the Years Ended March 31, 2025, 2024 and 2023	27
Notes to Consolidated Financial Statements	28

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Kyndryl Holdings, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Kyndryl Holdings, Inc. and its subsidiaries (the “Company”) as of March 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income (loss), of equity and of cash flows for each of the three years in the period ended March 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of March 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of March 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date related to (i) the Company’s senior finance executives failing to set an appropriate tone at the top within the control environment component of the COSO framework, including a lack of transparency such that disclosure processes were impacted and lacked an appropriate complement of finance personnel with sufficient understanding of their responsibilities as disclosure committee members; (ii) the Company not designing and maintaining effective controls to ensure appropriate communication pertaining to the disclosure process between certain functions within the Company; and (iii) the Company not designing and maintaining effective controls regarding the internal investigation, escalation, and documentation of complaints made through the Company’s reporting hotline and certain other available reporting channels.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses referred to above are described in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2025 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

Restatement of Management’s Conclusion Regarding Internal Control over Financial Reporting

Management and we previously concluded that the Company maintained effective internal control over financial reporting as of March 31, 2025. However, management has subsequently determined that material weaknesses in internal control over financial reporting existed as of that date related to (i) the Company’s senior finance executives failing to set an appropriate tone at the top within the control environment component of the COSO framework, including a lack of transparency such that disclosure processes were impacted and lacked an appropriate complement of finance personnel with sufficient understanding of their responsibilities as disclosure committee members; (ii) the Company not designing and maintaining effective controls to ensure appropriate communication pertaining to the disclosure process between certain functions within the Company; and (iii) the Company not designing and maintaining effective controls regarding the internal investigation, escalation, and documentation of complaints made through the Company’s reporting hotline and certain other available reporting channels. Accordingly, management’s report has been restated and our present opinion on internal control over financial reporting, as presented herein, is different from that expressed in our previous report.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management’s report referred to above. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in

Table of Contents

accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition for Certain Services

As described in Notes 1 and 3 to the consolidated financial statements, the Company recorded total revenues of $15,057 million for the year ended March 31, 2025, of which a majority relates to services that are single performance obligations comprised of a series of distinct services. The Company offers services such as cloud managed services, application hosting and modernization, security and resiliency services, enterprise infrastructure services, digital workplace services, network services and distributed cloud services to support its customers through technological change. Revenue is recognized when, or as, control of a promised service transfers to a client, in an amount that reflects the consideration to which management expects to be entitled in exchange for transferring those services. If the consideration promised in a contract includes a variable amount, management estimates the amount to which it expects to be entitled using either the expected value or most likely amount method.

Table of Contents

The principal consideration for our determination that performing procedures relating to revenue recognition for certain services is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process. These procedures also included, among others (i) evaluating the Company’s accounting policies related to the recognition of revenue for services; (ii) testing revenue recognized for a sample of certain services revenue transactions by obtaining and inspecting source documents such as master services agreements, individual statements of work, invoices, and cash receipts; and (iii) confirming, on a sample basis, outstanding customer invoice balances as of year-end and, for confirmations not returned, obtaining and inspecting source documents, such as invoices and subsequent cash receipts, where applicable.

/s/ PricewaterhouseCoopers LLP

New York, New York

May 30, 2025, except with respect to our opinion on internal control over financial reporting insofar as it relates to the effects of the matter discussed in the third paragraph of Management’s Report on Internal Control over Financial Reporting, as to which the date is February 17, 2026

We have served as the Company’s auditor since 2020.

Table of Contents

KYNDRYL HOLDINGS, INC.

CONSOLIDATED INCOME STATEMENT

(In millions, except per share amounts)


		Year Ended March 31,
	Notes	2025		2024		2023
Revenues *	3	$	15,057	$	16,052	$	17,026

Cost of services †	3	$	11,914	$	13,189	$	14,498
Selling, general and administrative expenses			2,591		2,773		2,914
Workforce rebalancing charges	19		114		138		71
Transaction-related costs (benefits)			(125)		(46)		264
Interest expense	12		100		122		94
Other expense			27		45		35
Total costs and expenses		$	14,622	$	16,221	$	17,876

Income (loss) before income taxes		$	435	$	(168)	$	(851)
Provision for income taxes	5	$	184	$	172	$	524
Net income (loss)		$	252	$	(340)	$	(1,374)

Basic earnings (loss) per share	6	$	1.09	$	(1.48)	$	(6.06)
Diluted earnings (loss) per share			1.05		(1.48)		(6.06)

Weighted-average basic shares outstanding	6		231.5		229.2		226.7
Weighted-average diluted shares outstanding			239.1		229.2		226.7

* Including related-party revenue of $287 for the year ended March 31, 2023

† Including related-party cost of service of $1,382 for the year ended March 31, 2023

The accompanying notes are an integral part of the financial statements.

Table of Contents

KYNDRYL HOLDINGS, INC.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)

(Dollars in millions)


	Year Ended March 31,
	2025		2024		2023
Net income (loss)	$	252	$	(340)	$	(1,374)
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments:
Foreign currency translation adjustments		(50)		(36)		(186)
Unrealized gains (losses) on net investment hedges		4		(11)		—
Total foreign currency translation adjustments		(46)		(47)		(186)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period		(14)		22		(4)
Reclassification of (gains) losses to net income		11		(21)		2
Total unrealized gains (losses) on cash flow hedges		(2)		1		(3)
Retirement-related benefit plans:
Prior service costs (credits)		2		(3)		4
Net gains (losses) arising during the period		17		(56)		175
Curtailments and settlements		7		10		10
Amortization of prior service (credits) costs		—		1		1
Amortization of net (gains) losses		16		5		40
Total retirement-related benefit plans		42		(42)		229
Other comprehensive income (loss), before tax		(6)		(88)		40
Income tax (expense) benefit related to items of other comprehensive income (loss)		(10)		6		(14)
Other comprehensive income (loss), net of tax		(16)		(82)		27
Total comprehensive income (loss)	$	236	$	(423)	$	(1,347)

The accompanying notes are an integral part of the financial statements.

Table of Contents

KYNDRYL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEET

(In millions, except per share amounts)


			March 31,
	Notes		2025			2024
Assets:
Current assets:
Cash and cash equivalents			$	1,786		$	1,553
Restricted cash				3			1
Accounts receivable (net of allowances for credit losses of $13 at March 31, 2025 and $22 at March 31, 2024)				1,345			1,599
Deferred costs (current portion)	3			1,009			1,081
Prepaid expenses and other current assets				446			514
Total current assets			$	4,589		$	4,747

Property and equipment, net	8		$	2,570		$	2,674
Operating right-of-use assets, net	9			731			864
Deferred costs (noncurrent portion)	3			1,040			920
Deferred taxes	5			204			220
Goodwill	11			790			805
Intangible assets, net	11			218			188
Pension assets	17			148			105
Other noncurrent assets				162			67
Total assets			$	10,452		$	10,590

Liabilities:
Current liabilities:
Accounts payable			$	1,351		$	1,408
Value-added tax and income tax liabilities				256			327
Current portion of long-term debt	12			129			126
Accrued compensation and benefits				652			609
Deferred income (current portion)	3			746			825
Operating lease liabilities (current portion)	9			274			285
Accrued contract costs				437			487
Other accrued expenses and liabilities	13			454			521
Total current liabilities			$	4,300		$	4,589

Long-term debt	12		$	3,042		$	3,112
Retirement and nonpension postretirement benefit obligations	17			483			500
Deferred income (noncurrent portion)	3			341			314
Operating lease liabilities (noncurrent portion)	9			511			622
Other noncurrent liabilities	13			443			332
Total liabilities			$	9,121		$	9,468
Commitments and contingencies	14

Equity:
Stockholders’ equity	15
Common stock, par value $0.01 per share, and additional paid-in capital (shares authorized: 1,000.0; shares issued: March 31, 2025 – 238.2, March 31, 2024 – 233.7)			$	4,631		$	4,524
Accumulated deficit				(2,067)			(2,319)
Treasury stock, at cost (shares: March 31, 2025 – 7.5, March 31, 2024 – 3.3)				(184)			(45)
Accumulated other comprehensive income (loss)				(1,160)			(1,145)
Total stockholders’ equity before non-controlling interests			$	1,219		$	1,015
Non-controlling interests				113			107
Total equity			$	1,331		$	1,122
Total liabilities and equity			$	10,452		$	10,590

The accompanying notes are an integral part of the financial statements.

Table of Contents

KYNDRYL HOLDINGS, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in millions)


	Year Ended March 31,
	2025		2024		2023
Cash flows from operating activities:
Net income (loss)	$	252	$	(340)	$	(1,374)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization:
Depreciation of property, equipment and capitalized software		660		834		900
Depreciation of right-of-use assets		327		319		428
Amortization of transition costs and prepaid software		1,278		1,256		1,199
Amortization of capitalized contract costs		420		531		472
Amortization of acquisition-related intangible assets		30		30		46
Stock-based compensation		100		95		113
Deferred taxes		(1)		(13)		285
Net (gain) loss on asset sales and other		(152)		43		6
Change in operating assets and liabilities:
Deferred costs (excluding amortization)		(1,762)		(1,569)		(1,592)
Right-of-use assets and liabilities (excluding depreciation)		(314)		(335)		(361)
Workforce rebalancing liabilities		(25)		(38)		41
Receivables		289		11		664
Accounts payable		(89)		(305)		282
Taxes		(1)		(2)		90
Other assets and other liabilities		(71)		(63)		(415)
Net cash provided by operating activities	$	942	$	454	$	781

Cash flows from investing activities:
Capital expenditures	$	(605)	$	(651)	$	(865)
Proceeds from disposition of property and equipment		83		138		23
Acquisitions and divestitures, net of cash acquired		139		—		—
Other investing activities, net		(20)		(40)		7
Net cash used in investing activities	$	(404)	$	(553)	$	(835)

Cash flows from financing activities:
Debt repayments	$	(148)	$	(644)	$	(118)
Proceeds from issuance of debt, net of debt issuance costs		—		494		—
Common stock repurchases		(93)		—		—
Common stock repurchases for tax withholdings		(45)		(22)		(19)
Other financing activities, net		—		2		(4)
Net cash used in financing activities	$	(286)	$	(170)	$	(141)

Effect of exchange rate changes on cash, cash equivalents and restricted cash	$	(16)	$	(37)	$	(100)
Net change in cash, cash equivalents and restricted cash	$	235	$	(306)	$	(294)

Cash, cash equivalents and restricted cash at beginning of period	$	1,554	$	1,860	$	2,154
Cash, cash equivalents and restricted cash at end of period	$	1,789	$	1,554	$	1,860

Supplemental data
Income taxes paid, net of refunds received	$	149	$	191	$	167
Interest paid on debt	$	119	$	118	$	98

The accompanying notes are an integral part of the financial statements.

Table of Contents

KYNDRYL HOLDINGS, INC.

CONSOLIDATED STATEMENT OF EQUITY

(In millions)


	Common Stock and				Accumulated
	Additional				Other						Non-
	Paid-In Capital				Comprehensive		Treasury		Accumulated		Controlling		Total
	Shares		Amount		Income (Loss)		Stock		Deficit		Interests		Equity
Equity - March 31, 2022		224.5	$	4,315	$	(1,089)	$	(4)	$	(605)	$	94	$	2,711
Net income (loss)										(1,374)				(1,374)
Other comprehensive income (loss), net of tax						27								27
Activity related to employee stock plans		4.8		113										113
Purchases of treasury stock		(1.7)						(19)						(19)
Changes in non-controlling interests												4		4
Equity – March 31, 2023		227.7	$	4,428	$	(1,062)	$	(23)	$	(1,978)	$	97	$	1,462
Net income (loss)										(340)				(340)
Other comprehensive income (loss), net of tax						(82)								(82)
Activity related to employee stock plans		4.1		95										95
Purchases of treasury stock		(1.4)						(22)						(22)
Changes in non-controlling interests												10		10
Equity – March 31, 2024		230.4	$	4,524	$	(1,145)	$	(45)	$	(2,319)	$	107	$	1,122
Net income (loss)										252				252
Other comprehensive income (loss), net of tax						(16)								(16)
Activity related to employee stock plans		4.5		107										107
Purchases of treasury stock		(4.2)						(139)						(139)
Changes in non-controlling interests												6		6
Equity – March 31, 2025		230.6	$	4,631	$	(1,160)	$	(184)	$	(2,067)	$	113	$	1,331

The accompanying notes are an integral part of the financial statements.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Kyndryl Holdings, Inc. (“we”, “the Company” or “Kyndryl”) is a leading provider of mission-critical enterprise technology services, offering advisory, implementation and managed service capabilities to thousands of customers in more than 60 countries. As the world’s largest IT infrastructure services provider, the Company designs, builds, manages and modernizes the complex information systems that the world depends on every day.

Description of Business

Our purpose is to design, build and manage secure and responsive private, public and multi-cloud environments to serve our customers’ needs and accelerate their digital transformations. We have a long track record of helping enterprises navigate major technological changes, particularly by enabling our customers to focus on the core aspects of their businesses during these shifts while trusting us with their most critical systems.

We provide engineering talent, operating solutions and insights derived from our knowledge and data around IT systems. This enables us to deliver advisory, implementation and managed services at scale across technology infrastructures that allow our customers to de-risk and realize the full value of their digital transformations. We do this while embracing new technologies and solutions and continually expanding our skills and capabilities, as we help advance the vital systems that power progress for our customers. We deliver technology services capabilities, insights and depth of expertise to modernize and manage IT environments based on our customers’ unique needs. We offer services across domains such as cloud services, core enterprise and zCloud services, applications, data and artificial intelligence services, digital workplace services, security and resiliency services and network and edge services as we continue to support our customers through technological change. Our services enable us to modernize and manage cloud and on-premises environments as “one” for our customers, enabling them to scale seamlessly. To deliver these services, we rely on our global team of skilled practitioners.

Kyndryl’s History

Prior to November 3, 2021, the Company was wholly owned by International Business Machines Corporation (“IBM” or “former Parent”). In November 2021, our former Parent effected the spin-off (the “Separation” or the “Spin-off”) of the infrastructure services unit of its Global Technology Services segment through the distribution to IBM stockholders of shares of Kyndryl’s common stock representing 80.1% of total shares outstanding. Kyndryl’s stock began trading as an independent company on November 4, 2021, and IBM disposed of its 19.9% retained interest in Kyndryl common stock in the year following the Spin-off. In connection with the Separation, the Company entered into several agreements with IBM governing the relationship of the parties following the Separation.

Basis of Presentation

We prepare our consolidated financial statements in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”), which requires us to make estimates and assumptions that impact the amounts reported and disclosed in our consolidated financial statements and the accompanying notes. We prepared these estimates based on the most current and best available information, but actual results could differ materially from these estimates and assumptions.

Principles of Consolidation

All significant transactions and intercompany accounts between Kyndryl entities were eliminated. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain items have been recast to conform to current-period presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts that are reported in the consolidated financial statements and accompanying disclosures. Estimates are used in determining the following, among others: revenue, costs to complete service contracts, income taxes, pension assumptions, valuation of assets including goodwill and intangible assets, the depreciable and amortizable lives of long-lived assets, loss

Table of Contents

contingencies, allowance for credit losses, deferred transition costs and other matters. Actual results may be different from these estimates.

Revenue

The Company accounts for a contract with a client when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection.

Revenue is recognized when, or as, control of a promised service or product transfers to a client, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. If the consideration promised in a contract includes a variable amount, the Company estimates the amount to which it expects to be entitled using either the expected value or most likely amount method. The Company’s contracts may include terms that could cause variability in the transaction price, including, for example, rebates, volume discounts, service-level penalties and performance bonuses or other forms of variable consideration. In certain rare circumstances, if we grant the customer the right to return a product and receive a full or partial credit or refund of any consideration paid, the Company (i) recognizes revenue for the transferred products in the amount of consideration to which it expects to be entitled, (ii) records a refund liability and (iii) recognizes an asset for its right to recover products from customers on settling the refund liability.

The Company only includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company may not be able to reliably estimate variable consideration in certain long-term arrangements due to uncertainties that are not expected to be resolved for a long period of time or when the Company’s experience with similar types of contracts is limited. Changes in estimates of variable consideration are included in Note 3 – Revenue Recognition.

The Company’s standard billing terms are that payment is due upon receipt of invoice, payable within 30 days. Invoices are generally issued as services are rendered and/or as control transfers, either at monthly or quarterly intervals or upon achievement of contractual milestones. In some services contracts, the Company bills the client prior to recognizing revenue from performing the services. In these cases, deferred income is presented in the Consolidated Balance Sheet. In other services contracts, the Company performs the services prior to billing the client. When the Company performs services prior to billing the client, the right to consideration is typically subject to milestone completion or client acceptance, and the amount is recorded as a contract asset. Contract assets are generally classified as current and are recorded on a net basis with deferred income (i.e., contract liabilities) at the contract level. The Company’s rights to consideration are presented separately depending on whether those rights are conditional or unconditional. Conditional contract assets are included in prepaid expenses and other current assets in the Consolidated Balance Sheet. Unconditional contract assets (“unbilled accounts receivable”) are included in accounts receivable in the Consolidated Balance Sheet. Refer to Note 3 – Revenue Recognition for contract assets for the periods presented.

Additionally, in determining the transaction price, the Company would adjust the promised amount of consideration for the effects of the time value of money if the billing terms are not standard and the timing of payments agreed to by the parties to the contract provide the client or the Company with a significant benefit of financing, in which case the contract contains a significant financing component. As a practical expedient, the Company does not account for significant financing components if the period between when the Company transfers the promised product or service to the client and when the client pays for that product or service will be one year or less.

The Company may include subcontractor services or original equipment manufacturer (OEM) hardware and/or OEM software components in certain integrated services arrangements. In these types of arrangements, revenue from sales of OEM hardware and/or OEM software components or services is recorded net of costs when the Company is acting as an agent between the client and the vendor and gross when the Company is the principal for the transaction. To determine whether the Company is an agent or principal, the Company considers whether it obtains control of the products or services before they are transferred to the customer. In making this evaluation, several factors are considered, most notably whether the Company has primary responsibility for fulfillment to the client, as well as inventory risk and pricing discretion.

The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions.

Table of Contents

Performance Obligations

The Company’s capabilities as an infrastructure services company include offerings that often encompass multiple types of services and may integrate various OEM hardware and/or OEM software components. When an arrangement contains multiple separate performance obligations, revenue follows the specific revenue recognition policies for each performance obligation, depending on the type of offering. The Company determines if the products or services are distinct and allocates the consideration to each separate performance obligation on a relative standalone selling price basis. When products and services are not distinct, the Company determines an appropriate measure of progress based on the nature of its overall promise for the single performance obligation.

The revenue policies below are applied to each performance obligation, as applicable.

Standalone Selling Price

The Company allocates the transaction price to each performance obligation on a relative standalone selling price basis. The standalone selling price (SSP) is the price at which the Company would sell a promised product or service separately to a client. The Company establishes SSP based on management’s estimated selling price or observable prices of products or services sold separately in comparable circumstances to similar clients. For OEM hardware and/or OEM software components, the Company is able to establish SSP based on the cost from the vendor. The Company reassesses SSP ranges on a periodic basis or when facts and circumstances change.

In certain instances, the Company may not be able to establish an SSP range based on observable prices and the Company estimates SSP. The Company estimates SSP by considering multiple factors including, but not limited to, overall market conditions, including geographic or regional specific factors, competitive positioning, competitor actions, internal costs, profit objectives and pricing practices. Estimating SSP is a formal process that includes review and approval by the Company’s management.

Nature of Products and Services

The Company delivers transformation and secure cloud services capabilities, insights and depth of expertise to modernize and manage IT environments based on its customers’ needs. The Company offers services such as cloud managed services, application hosting and modernization, security and resiliency services, enterprise infrastructure services, digital workplace services, network services and distributed cloud services to support its customers through technological change. Many of these services can be delivered entirely or partially through cloud or as-a-service delivery models. The Company’s services are provided on a time-and-material basis, as a fixed-price contract or as a fixed-price-per-measure-of-output contract, and the contract terms range from less than one year to over 10 years. The Company typically satisfies the performance obligation and recognizes revenue over time in services arrangements because the client simultaneously receives and consumes the benefits provided as the Company performs the services.

In outsourcing, other managed services, application management and other cloud-based services arrangements, the Company determines whether the services performed during the initial phases of the arrangement, such as setup activities, are distinct. In most cases, the arrangement is a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). The Company applies a measure of progress (typically time-based) to any fixed consideration and allocates variable consideration to the distinct periods of service based on usage. As a result, revenue is generally recognized over the period the services are provided on a usage basis. This results in revenue recognition that corresponds with the value to the client of the services transferred to date relative to the remaining services promised.

Revenue from time-and-material contracts is recognized on an output basis as labor hours are delivered and/or direct expenses are incurred. Revenue from as-a-service type contracts is recognized either on a straight-line basis or on a usage basis, depending on the terms of the arrangement (such as whether the Company is standing ready to perform or whether the contract has usage-based metrics). If an as-a-service contract includes setup activities, those promises in the arrangement are evaluated to determine if they are distinct.

In design and build arrangements, revenue is recognized based on progress toward completion of the performance obligation using a cost-to-cost measure of progress (e.g., labor costs incurred to date as a percentage of the total estimated labor costs to fulfill the contract). The estimation of cost at completion is complex, subject to many variables and requires significant judgment. Changes in original estimates are reflected in revenue on a cumulative catch-up basis in the period in which the circumstances that gave rise to

Table of Contents

the revision become known by the Company. Refer to Note 3 – Revenue Recognition for the amount of revenue recognized in the reporting period on a cumulative catch-up basis (i.e., from performance obligations satisfied, or partially satisfied, in previous periods).

The Company performs ongoing profitability analyses of its design and build services contracts accounted for using a cost-to-cost measure of progress to determine whether the latest estimates of revenues, costs and profits require updating. If at any time these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately. For other types of services contracts, any losses are recorded as incurred.

The Company’s services offerings may include the integration and/or sale of OEM hardware and/or software components. Contracts that include hardware and/or software components are evaluated to determine if they are separate performance obligations as discussed in “Performance Obligations” above. For distinct OEM hardware sales, revenue is recognized when control has transferred to the customer, which typically occurs when the hardware has been shipped to the client, risk of loss has transferred to the client and the Company has a present right to payment for the hardware.

Cost of Services

Recurring operating costs for services contracts are recognized as incurred. Certain eligible, nonrecurring costs (i.e., setup costs) incurred in the initial phases of outsourcing contracts and other cloud-based services contracts, are capitalized when the costs relate directly to the contract, the costs generate or enhance resources of the Company that will be used in satisfying the performance obligation in the future and the costs are expected to be recovered. These costs consist of transition and setup costs related to the installation of systems and processes and other deferred fulfillment costs, including, for example, prepaid assets used in services contracts (i.e., prepaid software or prepaid maintenance). Capitalized costs are amortized on a straight-line basis over the expected period of benefit, which approximates the pattern of transfer to the client of the services to which the asset relates and includes anticipated contract renewals or extensions. Additionally, fixed assets associated with these contracts are capitalized and depreciated on a straight-line basis over the expected useful life of the asset and recorded in cost of sales. If an asset is contract-specific and cannot be repurposed, then the depreciation period is the shorter of the useful life of the asset or the contract term. The Company performs periodic reviews to assess the recoverability of deferred contract transition and setup costs. If the carrying amount is deemed not recoverable, an impairment loss is recognized. Refer to Note 3 – Revenue Recognition for the deferred costs to fulfill contracts for the periods presented.

In situations in which an outsourcing contract is terminated, the terms of the contract may require the client to reimburse the Company for the recovery of unbilled accounts receivable, unamortized deferred contract costs and additional costs incurred by the Company to transition the services.

Incremental Costs of Obtaining a Contract

Incremental costs of obtaining a contract (e.g., sales commissions) are capitalized and amortized on a straight-line basis, which approximates the pattern that the assets’ economic benefits are expected to be consumed, over the expected customer relationship period if the Company expects to recover those costs. The expected customer relationship period is determined based on the average customer relationship period, including expected renewals, for each offering type and ranges from three to six years. Expected renewal periods are only included in the expected customer relationship period if commission amounts paid upon renewal are not commensurate with amounts paid on the initial contract. Incremental costs of obtaining a contract include only those costs the Company incurs to obtain a contract that it would not have incurred if the contract had not been obtained. The Company has determined that certain commissions programs meet the requirements to be capitalized. For contracts shorter than one year, the Company has elected the practical expedient to recognize sales commissions as incurred. Additionally, some commission programs are not subject to capitalization as the revenue for services is received over time and the commission expense is paid and recognized as the related revenue is recognized. Refer to Note 3 – Revenue Recognition for capitalized costs to obtain contracts for the periods presented.

Table of Contents

Expense and Other (Income)

Selling, General and Administrative Expenses

Selling, general and administrative expense (“SG&A”) is charged to income as incurred, except for certain sales commissions, which are capitalized and amortized. For further information regarding capitalizing sales commissions, see “Incremental Costs of Obtaining a Contract” above. Expenses of promoting and selling services are classified as selling expense and, in addition to sales commissions, include such items as compensation, advertising and travel. General and administrative expense includes such items as compensation, legal costs, office supplies, non-income taxes, insurance and office rental. In addition, general and administrative expense includes other operating items such as allowance for credit losses, amortization of certain intangible assets and research, development and engineering (“RD&E”) costs. Total RD&E costs were $49 million, $58 million, and $79 million for the years ended March 31, 2025, 2024 and 2023, respectively.

Advertising and promotional costs are expensed as incurred. Advertising and promotional expense, which includes media, agency and promotional expense directly incurred by the Company was $83 million, $115 million, and $136 million for the years ended March 31, 2025, 2024 and 2023, respectively. Costs related to the initial establishment of the Kyndryl brand are recorded in Transaction-related costs in the Consolidated Income Statement. All other advertising and promotional costs are recorded in SG&A in the Consolidated Income Statement.

Other Expense

Other expense primarily consists of (income) and expense related to certain components of retirement-related costs, including interest costs, expected return on plan assets, amortization of prior service costs (credits), curtailments and settlements and other net periodic benefit costs. Also included are gains and losses from foreign currency transactions.

Defined Benefit Pension and Nonpension Postretirement Benefit Plans

For defined benefit pension plans, the benefit obligation is the projected benefit obligation (PBO), which represents the actuarial present value of benefits expected to be paid upon retirement based on employee services already rendered and estimated future compensation levels. For nonpension postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation (APBO), which represents the actuarial present value of postretirement benefits attributed to employee services already rendered. The fair value of plan assets represents the current market value of assets held for the benefit of participants. For co-sponsored plans, the fair value of plan assets based on Company contributions, distributions and market returns and the benefit obligation attributed to employees of the Company are allocated to Kyndryl.

Overfunded plans, in which the fair value of plan assets exceeds the benefit obligation, are aggregated, and recorded in pension assets in the Consolidated Balance Sheet. Underfunded plans, in which the benefit obligation exceeds the fair value of plan assets, are aggregated and the noncurrent portion of this excess is recorded in retirement and nonpension postretirement benefit obligations in the Consolidated Balance Sheet. The current portion of the benefit obligation in excess of the fair value of plan assets represents the actuarial present value of benefits payable in the next twelve months, measured on a plan-by-plan basis. The current portion of this obligation is recorded in accrued compensation and benefits in the Consolidated Balance Sheet.

Net periodic benefit cost of defined benefit pension and nonpension postretirement benefit plans is recorded in the Consolidated Income Statement and includes service cost, interest cost, expected return on plan assets, amortization of prior service costs (credits) and actuarial (gains) losses previously recognized as a component of other comprehensive income (loss) (“OCI”). The service cost component of net benefit cost is recorded in Cost of services and SG&A in the Consolidated Income Statement (unless eligible for capitalization) based on the employees’ respective functions. The other components of net benefit cost are presented separately from service cost within other expense in the Consolidated Income Statement.

Actuarial (gains) losses and prior service costs (credits) are recognized as a component of OCI in the Consolidated Statement of Comprehensive Income (Loss) as they arise. Those actuarial (gains) losses and prior service costs (credits) are subsequently recognized as a component of net periodic benefit cost pursuant to the recognition and amortization provisions of applicable accounting guidance. Actuarial (gains) losses arise as a result of differences between actual experience and assumptions or as a result of changes in actuarial assumptions. Prior service costs (credits) represent the cost of benefit changes attributable to prior service granted in plan amendments.

Table of Contents

The measurement of benefit obligations and net periodic benefit cost is based on estimates and assumptions approved by the Company’s management. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain assumptions, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates.

The Company participates in non-U.S. multi-employer pension plans and makes required contributions to those plans, which are recorded in Cost of services and SG&A in the Consolidated Income Statement based on the employees’ respective functions.

Defined Contribution Plans

Prior to the Separation, the former Parent offered various defined contribution plans for U.S. and non-U.S. employees. In September 2021, in preparation for the Separation, Kyndryl established standalone defined contribution plans, and employees identified as Kyndryl employees were enrolled into these plans. Contribution expense associated with employer matching benefits is recorded when the employee renders service to the Company. The charge is recorded in Cost of services and SG&A in the Consolidated Income Statement based on the employees’ respective functions.

Stock-Based Compensation

Stock-based compensation expense represents the cost related to stock-based awards granted to employees under Kyndryl’s stock-based compensation plan (the “Kyndryl Plan”). The Company establishes stock-based compensation values at the grant date, based on the estimated fair value of the award and recognizes the cost on a straight-line basis (net of actual forfeitures) over the requisite employee service period. Kyndryl grants the Company’s employees Restricted Stock Units (RSUs), market-conditioned stock units, performance-conditioned stock units and stock options. RSUs are stock units granted to employees that entitle the holder to shares of Kyndryl common stock as the award vests, typically over a one- to four-year period. Market-conditioned stock units are granted to employees with vesting conditions based on the Company’s achievement of a market condition and are cliff vested at the end of the three-year service period. Performance-conditioned stock units are granted to employees with vesting conditions based on the attainment of operational targets (e.g., signings and free cash flows) and are cliff vested at the end of the three-year performance period. Stock options are vested over a one- to four-year period and have a ten-year contractual term. As of March 31, 2025, 47.9 million shares of common stock have been approved to be granted to employees under the Kyndryl Plan. Dividend equivalents are not paid on the stock-based awards described above.

The fair value of the RSUs is determined on the grant date based on Kyndryl’s stock price, adjusted for the exclusion of dividend equivalents where applicable. The fair value of market-conditioned stock units is determined on the date of grant using a Monte Carlo simulation model which estimates the probability of satisfying market conditions. The fair value of the performance-conditioned stock units is determined on the grant date based on Kyndryl’s stock price and subsequently adjusted based upon the probability of attainment. The fair value of stock options is determined on the grant date using a Black-Scholes model. Stock-based compensation cost is recorded in Cost of services and SG&A in the Consolidated Income Statement based upon the employees’ respective functions.

The Company records deferred tax assets for awards that result in tax deductions in the consolidated financial statements calculated based on the amount of compensation cost recognized and the relevant statutory tax rates. The differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the income tax return are recorded as a benefit or expense to the provision for income taxes in the Consolidated Income Statement.

Derivative Financial Instruments

Derivative financial instruments that qualify for hedge accounting are designated as either cash flow hedges or net investment hedges. The Company may enter into derivative contracts that economically hedge certain risks, even when hedge accounting does not apply, or the Company elects not to apply hedge accounting. The Company does not use derivative financial instruments for trading or speculative purposes.

Derivatives are recognized in the Consolidated Balance Sheet at fair value on a gross basis as either assets or liabilities and classified as current or noncurrent based upon the timing of the instrument’s expected cash flows.

Table of Contents

Changes in the fair value of derivatives designated as cash flow hedges are recorded, net of applicable taxes, in OCI and subsequently reclassified into the same income statement line item as the hedged exposure when the underlying hedged item is recognized in earnings. Derivatives designated as net investment hedges are accounted for using the spot method, with changes in the fair value of the derivatives attributable to changes in spot rates recorded within foreign currency translation adjustments (“CTA”) as a component of other comprehensive income (loss) and remaining there until the hedged net investments are sold or substantially liquidated. The changes in the fair value of the derivatives that are attributable to changes in the difference between the forward rate and spot rate are excluded from the assessment of hedge effectiveness. The changes in fair value that are attributable to the excluded components are initially recorded in CTA and then recognized in interest expense on the Consolidated Income Statement over the life of the derivative instruments. Changes in fair value of derivatives not designated as hedges are reported in other expense in the Consolidated Income Statement. See Note 7 – Financial Assets and Liabilities for further information.

The cash flows associated with derivatives designated as cash flow hedges are reported as cash flows from operating activities in the Consolidated Statement of Cash Flows. Cash flows from derivatives designated as net investment hedges are reported as cash flows from investing activities in the Consolidated Statement of Cash Flows, except for cash flows from the periodic interest settlements of cross-currency interest rate swaps designated as net investment hedges, which are reported as cash flows from operating activities in the Consolidated Statement of Cash Flows. Cash flows from derivatives not designated as hedges are reported as cash flows from investing activities in the Consolidated Statement of Cash Flows.

Translation of Non-U.S. Currency Amounts

Assets and liabilities of non-U.S. subsidiaries that have a local functional currency are translated to U.S. dollars at year-end exchange rates. Translation adjustments are recorded in OCI. Income and expense items are translated at weighted-average rates of exchange prevailing during the year.

Property and equipment, deferred income and other non-monetary assets and liabilities of non-U.S. subsidiaries and branches that operate in U.S. dollars are translated at the approximate exchange rates prevailing when the Company acquired the assets or liabilities. All other assets and liabilities denominated in a currency other than U.S. dollars are translated at year-end exchange rates with the transaction gain or loss recognized in other expense. Income and expense items are translated at the weighted-average rates of exchange prevailing during the year. These translation gains and losses are included in net income for the period in which exchange rates change.

Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or less on the date of purchase are considered to be cash equivalents.

Accounts Receivable and Allowance for Current Expected Credit Losses

The Company classifies the right to consideration in exchange for products or services transferred to a client as a receivable. Receivables are recorded concurrent with billing and delivery of a service to customers. An allowance for uncollectible receivables and contract assets, if needed, is estimated based on specific customer situations, current and future expected economic conditions and past experiences of losses, as well as an assessment of potential recoverability of the balance due.

Receivable losses are charged against the allowance in the period in which the receivable is deemed uncollectible. Subsequent recoveries, if any, are credited to the allowance. Write-offs of receivables and associated reserves occur to the extent that the customer is no longer in operation and/or there is no reasonable expectation of additional collections or repossession.

Transfers of Financial Assets

Table of Contents

facility limit from $1 billion to $600 million and to add an incremental uncommitted facility limit of $200 million that is subject to the counterparty’s sole discretion to purchase such incremental amounts. The second agreement was executed in June 2022 with a separate third-party financial institution and renews automatically on its anniversary date, unless either party elects not to extend.

The net proceeds from these arrangements are reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows. Gross proceeds from receivables sold to third parties were $3.2 billion, $3.6 billion, and $3.1 billion for the years ended March 31, 2025, 2024 and 2023, respectively. The fees associated with the transfers of receivables were $38 million, $49 million, and $47 million for the years ended March 31, 2025, 2024 and 2023, respectively.

Fair Value Measurement

In determining the fair value of its financial instruments, the Company uses methods and assumptions that are based on market conditions and risks existing at each balance sheet date. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company classifies certain assets and liabilities based on the following fair value hierarchy:

●

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date;

●

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

●

Level 3 — Unobservable inputs for the asset or liability.

The level of an asset or liability within the fair value hierarchy is determined based on the lowest level of any input that is significant to the fair value measurement. The determination of fair value considers various factors including yield curves and time value underlying the financial instruments. For derivatives and debt securities, the Company uses a discounted cash flow analysis using discount rates commensurate with the duration of the instrument.

In determining the fair value of financial instruments, the Company considers certain market valuation adjustments to the “base valuations” using the methodologies described below for several parameters that market participants would consider in determining fair value:

●

Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument.

●

Credit risk adjustments are applied to reflect the Company’s own credit risk when valuing liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company’s credit risk as observed in the credit default swap market.

Certain non-financial assets such as property, plant and equipment, operating right-of-use assets, land, goodwill and intangible assets are recorded at fair value or at cost, as appropriate, in the period they are initially recognized, and such balances may be adjusted in subsequent periods if an event occurs or circumstances change that indicate that the asset may be impaired. The impairment models used for non-financial assets depend on the type of asset. The fair value measurements, in such instances, would be classified in Level 3 of the fair value hierarchy.

Supplier Financing Program

Table of Contents

forms of guarantees under the arrangements. The Company is not a party to the arrangement between its suppliers and the financial institution. The Company or the financial institution may terminate the agreement upon at least 180 days’ notice. The Company’s obligations under this program continue to be recognized as accounts payable in the Consolidated Balance Sheet. The obligations outstanding under this program at March 31, 2025 and March 31, 2024 were immaterial.

Leases

When procuring goods or services, the Company determines whether an arrangement contains a lease at its inception. As part of that evaluation, the Company considers whether there is an implicitly or explicitly identified asset in the arrangement and whether the Company, as the lessee, has the right to control the use of that asset. Leases are classified as either finance leases or operating leases.

The Company recognized right-of-use (“ROU”) assets and associated lease liabilities in the Consolidated Balance Sheet for leases with a term of more than twelve months when a majority percentage of utilization was attributed to the Company. As an implicit rate of return is not readily determinable in transactions where the Company is the lessee, an incremental borrowing rate is used in determining the present value of lease payments, calculated based on information available at the lease commencement date. The ROU asset equals the lease liability adjusted for any initial direct costs, prepaid rent and lease incentives. The Company’s variable lease payments generally relate to payments tied to various indexes, non-lease components and payments above a contractual minimum fixed amount.

Operating leases are included in operating right-of-use assets net, operating lease liabilities (current and non-current) in the Consolidated Balance Sheet. Finance leases are included in property and equipment, current portion of long-term debt and long-term debt in the Consolidated Balance Sheet. The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

The Company made a policy election to not recognize leases with a lease term of twelve months or less in the Consolidated Balance Sheet.

For all asset classes, the Company has elected the lessee practical expedient to combine lease and non-lease components (e.g., maintenance services) and account for the combined unit as a single lease component. A significant portion of the Company’s lease portfolio is real estate leases, which are mainly accounted for as operating leases and are primarily used for corporate offices and data centers. The average term of the real estate leases is approximately five years. The Company also has equipment leases, such as for IT equipment and vehicles, which have lease terms that range from two to five years. For certain of these operating and finance leases, the Company applies a portfolio approach to account for the lease assets and lease liabilities.

Intangible Assets Including Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets. The primary drivers that generate goodwill are the value of synergies between the acquired entities and the Company and the acquired assembled workforce, neither of which qualifies as a separately identifiable intangible asset. Goodwill recorded in an acquisition is assigned to applicable reporting units based on expected revenues or expected cash flows. Goodwill inherited from the former Parent pre-Separation represents the historical goodwill balances in the former Parent’s managed infrastructure services business arising from acquisitions specific to the Company. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their useful lives, which approximates the pattern that the assets’ economic benefits are expected to be consumed over time. Amortization of completed technology is recorded in cost of services, and amortization of all other intangible assets is recorded in SG&A in the Consolidated Income Statement. All costs related to internally developed computer software during the preliminary project stage and post-implementation operation stage are expensed as incurred. Costs incurred during application development stage are capitalized and included in intangibles and amortized over the estimated useful life of the software.

Impairment

Long-lived assets, other than goodwill, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The impairment test is based on undiscounted cash flows and, if impaired, the asset is written down to fair value based on either discounted cash flows or appraised values. Goodwill is tested for impairment at least annually and whenever changes in circumstances indicate an impairment may exist. The goodwill impairment test is performed at the

Table of Contents

reporting unit level, which aligns with our operating segments. Impairment charges related to long-lived assets, intangible assets and goodwill, if any, are recorded as impairment expense in the Consolidated Income Statement.

Transaction-Related Costs

Workforce Rebalancing and Site-Rationalization Charges

The Company has incurred workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets and charges related to lease terminations. We record a liability for employee termination benefits either when it is probable that an employee is entitled to it and the amount of the benefits can be reasonably estimated or when management has communicated the termination plan to employees. Workforce rebalancing charges are recorded as a separate line on the Consolidated Income Statement. Charges related to ceasing to use leased assets and owned fixed assets and charges related to lease terminations are recognized as cost of services or selling, general and administrative expenses based on our classification policy for each category. Refer to Note 19 – Workforce Rebalancing and Site-Rationalization Charges for details of this program.

Property and Equipment

Property and equipment are recorded at cost, or in the case of acquired property and equipment, at fair value at the date of the acquisition. Expenditures for repairs and maintenance costs are expensed as incurred, whereas expenditures that extend the life or increase the functionality of the asset are capitalized as additions to property and equipment. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the determination of net income or loss.

In March 2024, the Company completed its assessment of the useful lives of its information technology equipment. Based on our usage experience and data analysis, the Company determined it should increase the estimated useful lives of its information technology equipment from five to six years. This change in accounting estimate became effective on April 1, 2024. Based on the carrying amount of information technology equipment included in property and equipment, net as of March 31, 2024, the effect of this change in estimate was a reduction in depreciation expense and an improvement of income before income taxes of approximately $180 million, or $0.80 before income taxes per basic share and $0.77 before income taxes per diluted share, for the year ended March 31, 2025.

We compute depreciation expense on a straight-line method over the estimated useful lives of the assets as follows:


Classification		Estimated Useful Life
Buildings		30 to 50 years
Land improvements		20 years
Leasehold improvements*		Estimated useful life or term of lease
Office and other equipment		2 to 20 years
Information technology equipment (acquired as used)		1.5 to 3 years
Information technology equipment (acquired as new)†		6 years

* Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease term, rarely exceeding 10 years.

† Extended from five to six years effective April 1, 2024.

Table of Contents

Environmental

The costs of internal environmental protection programs that are preventative in nature are expensed as incurred. When a cleanup program becomes likely and it is probable that the Company will incur cleanup costs and those costs can be reasonably estimated, the Company accrues remediation costs for known environmental liabilities.

Income Taxes

Income tax provisions are calculated based on Kyndryl’s operating footprint, as well as tax return elections and assertions. Liabilities related to unrecognized tax benefits for which the Company is liable are reported within the Consolidated Balance Sheet based upon tax authorities’ ability to assert the Company may be the primary obligor for historical taxes, among other factors.

Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the tax effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws. U.S. tax reform introduced Global Intangible Low-Taxed Income (“GILTI”), which subjects a U.S. shareholder to current tax on income earned by certain foreign subsidiaries. GAAP allows companies to either (i) recognize deferred taxes for temporary differences that are expected to reverse as GILTI in future years or (ii) account for taxes on GILTI as period costs in the year the tax is incurred. The Company has elected to recognize GILTI impact in the specific period in which it occurs.

Valuation allowances are recognized to reduce deferred tax assets to the amount that will more likely than not be realized. In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies and actions. When there is a change in the determination as to the amount of deferred tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to provision for income taxes in the period in which such determination is made.

The Company recognizes additional tax liabilities when the Company believes that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. The noncurrent portion of tax liabilities is included in other noncurrent liabilities in the Consolidated Balance Sheet. To the extent that new information becomes available which causes the Company to change its judgment regarding the adequacy of existing tax liabilities, such changes to tax liabilities will impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense.

Earnings per Share

Basic earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average shares of common stock outstanding during the period and potentially dilutive securities, including restricted stock units, performance-conditioned awards, market-conditioned awards, and stock options using the treasury stock method. Refer to Note 6 – Earnings per Share for a reconciliation as well as Note 16 – Stock-based Compensation for further discussion on awards.

NOTE 2. ACCOUNTING PRONOUNCEMENTS

Standards Implemented

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The guidance should be applied retrospectively, effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted the guidance for the fiscal year ended March 31, 2025. For additional information, see Note 4 – Segments.

Table of Contents

Recent Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which is intended to enhance the transparency and usefulness of income tax disclosures through improved reporting related to the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company has elected not to early adopt this ASU and is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which is intended to improve the usefulness of expense information contained in public entity income statements through the disaggregation of relevant expense captions in the notes to the financial statements. The guidance should be applied prospectively, effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which amends the guidance for determining the accounting acquirer in certain transactions. The guidance should be applied prospectively, effective for the fiscal years beginning after December 15, 2026 and interim reporting periods within fiscal years beginning after December 15, 2026, with early adoption permitted. The Company has evaluated the impact of the guidance and does not expect it to have a material impact on the Company’s consolidated financial statements.

NOTE 3. REVENUE RECOGNITION

Disaggregation of Revenue

The Company views its segment results to be the best view of disaggregated revenue. Refer to Note 4 – Segments.

Remaining Performance Obligations

The remaining performance obligation (“RPO”) represents the aggregate amount of contractual deliverables yet to be recognized as revenue at the end of the reporting period. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed. The customer is not considered committed when it is able to terminate for convenience without payment of a substantive penalty. The RPO also includes estimates of variable consideration. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustments for revenue that has not materialized and adjustments for currency.

At March 31, 2025, the aggregate amount of RPO related to customer contracts that are unsatisfied or partially unsatisfied was $34.7 billion. Approximately 57 percent of the amount is expected to be recognized as revenue in the next two years, approximately 37 percent in the subsequent three years, and the balance thereafter.

Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods

For the year ended March 31, 2025, revenue increased by $59 million for performance obligations satisfied (or partially satisfied) in previous periods, mainly due to changes in estimates.

Table of Contents

Contract Balances

The following table provides information about accounts receivable, contract assets and deferred income balances:


		At March 31,
(Dollars in millions)		2025			2024
Accounts receivable (net of allowances for credit losses of $13 at March 31, 2025 and $22 at March 31, 2024) *		$	1,345		$	1,599
Contract assets †			50			30
Deferred income (current)			746			825
Deferred income (noncurrent)			341			314

*	Including unbilled receivable balances of $425 million at March 31, 2025 and $377 million at March 31, 2024.

†

Contract assets represent services performed by the Company prior to billing the client, which give the Company the right to consideration that is typically subject to milestone completion or client acceptance. They are included within prepaid expenses and other current assets in the Consolidated Balance Sheet.

The amount of revenue recognized during the year ended March 31, 2025 that was included within the deferred income balance at March 31, 2024 was $754 million.

The following table provides roll-forwards of the accounts receivable allowance for expected credit losses for the years ended March 31, 2025, 2024 and 2023:


	Year Ended March 31,
(Dollars in millions)	2025			2024			2023
Beginning balance	$	22		$	32		$	44
Additions (releases)		(7)			4			6
Write-offs		(1)			(4)			(13)
Other *		(1)			(9)			(5)
Ending balance	$	13		$	22		$	32

* Primarily represents translation adjustments.

The contract assets allowance for expected credit losses was not material in any of the periods presented.

Major Clients

No single client represented more than 10 percent of the Company’s total revenue during the years ended March 31, 2025, 2024 and 2023. No single client represented more than 10 percent of the Company’s total accounts receivable balance as of March 31, 2025. Other than receivables with the former Parent, no single client represented more than 10 percent of the Company’s total accounts receivable balance as of March 31, 2024.

Deferred Costs

The following table provides amounts of capitalized costs to acquire and fulfill customer contracts at March 31, 2025 and 2024:


	At March 31,
(Dollars in millions)	2025			2024
Deferred transition costs	$	697		$	753
Prepaid software costs		876			770
Capitalized costs to fulfill contracts		195			212
Capitalized costs to obtain contracts		281			265
Total deferred costs *	$	2,049		$	2,000

* Of the total deferred costs, $1,009 million was current and $1,040 million was noncurrent at March 31, 2025, and $1,081 million was current and $920 million was noncurrent at March 31, 2024.

Table of Contents

The amount of total deferred costs amortized during the year ended March 31, 2025 was $1.7 billion, composed of $291 million of amortization of deferred transition costs, $986 million of amortization of prepaid software and $420 million of amortization of capitalized contract costs. The amount of total deferred costs amortized during the year ended March 31, 2024 was $1.8 billion, composed of $335 million of amortization of deferred transition costs, $921 million of amortization of prepaid software and $531 million of amortization of capitalized contract costs. The amount of total deferred costs amortized during the year ended March 31, 2023 was $1.7 billion, composed of $342 million of amortization of deferred transition costs, $857 million of amortization of prepaid software and $472 million of amortization of capitalized contract costs. There were no material impairment losses incurred in any period. Refer to Note 1 – Significant Accounting Policies for additional information on deferred costs to fulfill a contract and capitalized costs of obtaining a contract.

NOTE 4. SEGMENTS

Our reportable segments correspond to how the chief operating decision maker (“CODM”), our chief executive officer, reviews performance and allocates resources. Our four reportable segments consist of the following:

United States: This reportable segment is comprised of Kyndryl’s operations in the United States.

Japan: This reportable segment is comprised of Kyndryl’s operations in Japan.

Principal Markets: This reportable segment represents the aggregation of our operations in Canada, France, Germany, India, Italy, Spain / Portugal, and the United Kingdom / Ireland.

Strategic Markets: This reportable segment is comprised of our operations in all other countries in which we operate.

The measure of segment operating performance used by Kyndryl’s CODM is adjusted EBITDA, which allows our CODM to evaluate operating results excluding certain items whose fluctuation from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA is defined as net income (loss) excluding income taxes, interest expense, depreciation and amortization (excluding depreciation of right-of-use assets and amortization of capitalized contract costs), charges related to ceasing to use leased and owned fixed assets, charges related to lease terminations, transaction-related costs and benefits, pension expenses other than pension servicing costs and multi-employer plan costs, stock-based compensation expense, workforce rebalancing charges incurred prior to March 31, 2024, impairment expense, significant litigation costs and benefits, and currency impacts of highly inflationary countries. The CODM reviews budget-to-actual variances of revenue and adjusted EBITDA to assess performance and allocate resources to the segments.

Our geographic markets frequently work together to sell and implement certain contracts. The resulting revenues and costs from these contracts may be apportioned among the participating geographic markets. The economic environment and its effects on the industries served by our geographic markets affect revenues and operating expenses within our geographic markets to differing degrees. Currency fluctuations also tend to affect our geographic markets differently, depending on the geographic concentrations and locations of their businesses.

Table of Contents

The following tables reflect the results of the Company’s segments:


		Year Ended March 31, 2025
		United						Principal			Strategic			Total
(Dollars in millions)		States			Japan			Markets			Markets			Segments
Revenue		$	3,876		$	2,358		$	5,206		$	3,617		$	15,057
Cost of service, excluding depreciation and amortization *			(2,476)			(1,613)			(3,471)			(2,405)			(9,964)
Selling, general and administrative expenses, excluding depreciation and amortization *			(638)			(343)			(831)			(561)			(2,372)
Other items†			(37)			(13)			(19)			(46)			(115)
Segment adjusted EBITDA		$	725		$	390		$	886		$	606		$	2,606

		Year Ended March 31, 2024
		United						Principal			Strategic			Total
(Dollars in millions)		States			Japan			Markets			Markets			Segments
Revenue		$	4,295		$	$2,344		$	5,479		$	$3,934		$	16,052
Cost of service, excluding depreciation and amortization *			(2,778)			(1,651)			(3,957)			(2,720)			(11,106)
Selling, general and administrative expenses, excluding depreciation and amortization *			(735)			(322)			(847)			(577)			(2,480)
Other items†			(2)			(9)			2			4			(5)
Segment adjusted EBITDA		$	781		$	361		$	677		$	642		$	2,461

		Year Ended March 31, 2023
		United						Principal			Strategic			Total
(Dollars in millions)		States			Japan			Markets			Markets			Segments
Revenue		$	4,726		$	2,502		$	5,556		$	4,241		$	17,026
Cost of service, excluding depreciation and amortization *			(3,072)			(1,747)			(4,430)			(3,063)			(12,312)
Selling, general and administrative expenses, excluding depreciation and amortization *			(812)			(340)			(810)			(696)			(2,657)
Other items†			(4)			(9)			7			2			(3)
Segment adjusted EBITDA		$	839		$	407		$	323		$	484		$	2,052

* Cost of service, excluding depreciation and amortization and selling, general and administrative expenses, excluding depreciation and
amortization are both used in calculating segment adjusted EBITDA and exclude depreciation of property, equipment and capitalized software
and amortization of transition costs and prepaid software.

† Other items include workforce rebalancing charges incurred subsequent to March 31, 2024 and other expense.

Table of Contents

The following table reconciles segment adjusted EBITDA to consolidated pretax income (loss):


		Year Ended March 31,
(Dollars in millions)		2025			2024			2023
Segment adjusted EBITDA		$	2,606		$	2,461		$	2,052
Workforce rebalancing charges incurred prior to March 31, 2024			—			(138)			(71)
Charges related to ceasing to use leased/fixed assets and lease terminations			(48)			(39)			(80)
Transaction-related (costs) benefits			125			46			(264)
Stock-based compensation expense			(100)			(95)			(113)
Interest expense			(100)			(122)			(94)
Depreciation of property, equipment and capitalized software			(660)			(834)			(900)
Amortization expense			(1,308)			(1,287)			(1,245)
Corporate expense not allocated to the segments			(90)			(95)			(77)
Other adjustments*			10			(68)			(59)
Pretax income (loss)		$	435		$	(168)		$	(851)

* Other adjustments represent pension expenses other than pension servicing costs and multi-employer plan costs, significant litigation costs and benefits, and currency impacts of highly inflationary countries. For the year ended March 31, 2024, other adjustments also included an adjustment to reduce amortization expense for the amount already included in transaction-related (costs) benefits above.

Segment Assets and Other Items

The Company does not allocate assets to the above reportable segments for our CODM’s review.

Geographic Information

The following tables provide information for those countries that represent 10 percent or more of the specific category. Refer to Note 8 – Property and Equipment and Note 9 – Leases for more information on allocation methodologies.


		Year Ended March 31,
(Dollars in millions)		2025			2024			2023
Revenue*
United States		$	3,876		$	4,295		$	4,726
Japan			2,358			2,344			2,502
Other countries			8,823			9,413			9,797
Total revenue		$	15,057		$	16,052		$	17,026

*	Revenues are attributed to countries based on the location of the client and exclude certain allocations.


		At March 31,
(Dollars in millions)		2025			2024
Property and equipment, net
United States *		$	883		$	951
Other countries			1,687			1,724
Total property and equipment, net		$	2,570		$	2,674

Operating right-of-use assets, net
United States *		$	134		$	113
Belgium

Kyndryl Holdings, Inc. 10-K/A