Kyndryl Holdings Inc at Morgan Stanley Technology, Media & Telecom Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: James Faucette - Morgan Stanley - Analyst : <_ALACRA_META_ABSTRACT>So let's just get right into it. I'll start with you, Martin. Can you give us some detail on how Kyndryl is looking to achieve its triple double single growth objectives, which I have to say is want to catch your summarization of targets that I've heard.

Question: James Faucette - Morgan Stanley - Analyst : So let's dig into the revenue growth component. So you said that you expect to return to revenue growth in Q4 of your fiscal year '25 and you're targeting mid-single-digit growth by fiscal year '28. Can you -- and you've kind of touched on like the visibility, et cetera, but can you help us create a more detailed build of like how you think you get there and what the puts and takes might be?

Question: James Faucette - Morgan Stanley - Analyst : So let me ask you just in terms of question of the day. We've gotten some questions of how potential tariffs, et cetera, could impact hardware pricing and corporate projects, et cetera. What are the key things that we should be looking for that you would be looking at to determine whether that's going to create any type of disruption or at least incremental question from your customers?

Question: James Faucette - Morgan Stanley - Analyst : That's great perspective there, Martin. And so let's dig in a little bit more on the composition of revenue in the Kyndryl business right now. And Wondering if you can elaborate on how the mix between inherited backlog and post-spin is evolving, especially I think on the latest figures that we found were that 50% of revenue comes from post-spin backlog.

Question: James Faucette - Morgan Stanley - Analyst : Got it. So Martin, I want to ask -- so you highlighted the strength in consult. And I'm wondering if you can walk us through how consult is really has been and should be tip of spear for your managed services contracts. And how project work has evolved under that framework?

Question: James Faucette - Morgan Stanley - Analyst : So I want to ask there about -- you mentioned AI and how that's benefiting Kyndryl Consult. And look, Kyndryl consoles growing at double digits, and that's great. But what is the long-term vision for that business unit as it relates to AI. One of the things that we've heard speculated by services companies is the AI may represent a good opportunity for services companies to finally develop their own IP, get pricing on that and even incremental leverage and profitability in the long run. But is that a pipe dream? Or how are you thinking about like the things that you can do with that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 5:15PM, KD.N - Kyndryl Holdings Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: James Faucette - Morgan Stanley - Analyst : Got it. We've been chatting here for about 25 minutes. If there are any questions from the audience, please raise your hand. We'll get you a microphone. There's one right here, in the back. Unidentified Participant Could you guys just talk a little bit about the software -- the IBM software cost. And I think the headwinds have been kind of dramatic over the last few years there from a margin perspective. How do you see that going forward in your triple, double, single philosophy? And then you talked about maybe the opportunity where it's not as structural to just add the cost and every year, you can rationalize the seats. Is there also an -- like is there -- my estimation is a pretty big bill. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 5:15PM, KD.N - Kyndryl Holdings Inc at Morgan Stanley Technology, Media & Telecom Conference Like is there also an opportunity now that you have partnerships outside of IBM to move some of that software to other providers that might be a better deal?

Question: James Faucette - Morgan Stanley - Analyst : Any other questions from the audience? Maybe I'll ask. Just talk about customer acquisition strategy, particularly as it relates to new logos. How do you see the overall project mix trending on a go-forward basis between new and existing customers and logos? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 5:15PM, KD.N - Kyndryl Holdings Inc at Morgan Stanley Technology, Media & Telecom Conference

Question: James Faucette - Morgan Stanley - Analyst : Makes sense. Makes sense. In the last minute or so we have -- let's chat quickly capital allocation. You mentioned you've done a small acquisition, but how are your priorities right now? And -- are you seeing incremental opportunity for M&A versus share buybacks? Or are you still focused on your own shares?

Question: James Faucette - Morgan Stanley - Analyst : Right that's the part where you're going to get the most movement. Well, great. Well, Martin, David, thank you very much for joining us, and look forward to charting how you guys do it. It's great. Thank you appreciate it.