Despite cloud growth, Kyndryl shares drop 5.4% on quarterly revenue decline
Shares of Kyndryl Holdings Inc. closed 5.38% lower today after it reported a larger-than-expected sales decline for its fiscal first quarter.
The technology services giant ended the three months through June 30 with $3.61 billion in revenue. That’s 3% less than a year earlier and 1.2% below the consensus estimate. Nevertheless, there were a number of bright spots in Kyndryl’s sales numbers.
The company, a former IBM Corp. unit, spun off in 2021 with a focus on providing infrastructure management services. Such services have relatively low profit margins. In 2022, Kyndryl broadened its focus by launching a unit called Kyndryl Consult. During the first quarter, the business helped cushion the declines that the company experienced in certain other areas.
Kyndryl Consult helps companies with high-stakes technology projects such as building artificial intelligence applications. Its sales grew 10% in the first quarter thanks to 10 deals worth over $50 million. A specific quarterly revenue number was not disclosed. However, Kyndryl did specify that the unit’s sales in the past 12 months amounted to $3.6 billion, a 16% jump from a year earlier.
