Kyndryl Holdings Inc Q3 2025 Earnings Call Summary

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

Question: Tien-Tsin Huang - JPMorgan - Analyst : Hey, thanks a lot. Really great signings here. So I just wanted to ask about your pipeline from here. I know you've crossed the calendar year. Any change in tone on the ground from what you've seen on the pipeline standpoint and confidence in converting the backlog in a timely way, that kind of thing?

Question: Tien-Tsin Huang - JPMorgan - Analyst : Great. Thanks for that. My follow-up is you delivered on the profits and the outlook here looks strong. I know FX is obviously a drag and there's a lot of debate around the outlook on a dollar. Just curious here on your -- on the hedging and the efficiency and contract profitability given potential volatility in the dollar, I know there's a good history here for you, but is it worth going through that? Maybe, David, just to make sure that we're good on hedge efficiency?

Question: Tyler DuPont - Bank of America - Analyst : It was nice to see another quarter of bookings growth. A quarterly book-to-bill above 1 is always good to see. So I just wanted to ask where you can pinpoint this growth is coming from, whether it's across specific practices or industries. And if you could sort of provide an update on the ramp of the recent large deals that you signed, it sounds like there were around 20 deals fiscal year to date over $100 million. How is that ramp compared to expectations and any call-outs there?

Question: Tyler DuPont - Bank of America - Analyst : Great. That's very helpful. David and Martin, I appreciate that. And just speaking of macro, I wanted to also ask about tariffs and recent client conversations you're having with respect to potential tariff implications as yesterday kind of proved you can definitely get whiplash keeping up with back and forth, but many of your clients are impacted by potential tariffs. And given where we are in the calendar year with enterprise IT budgets being finalized right around this time, I'd be curious if maybe you could speak to any client dynamics you're seeing there, potentially tariff implications leading to sort of elongated time lines, just anything there worth calling out?

Question: Divya Goyal - Scotiabank GBM - Analyst : So Martin, on this macro theme, I wanted to actually try to get Kyndryl's take or Kyndryl's positioning on AI front with DeepSeek-like models potentially coming to the forefront. How does Kyndryl and Kyndryl's business get impacted one way or the other with the proliferation of potentially these firm models coming to the market in the near future, if I may say?

Question: Divya Goyal - Scotiabank GBM - Analyst : That's helpful. Maybe in the same vein, I'll just ask a follow-up. So across your US business -- and we've not talked about this in the past, so I'm trying to get your perspective here. Could the DOGE or the efficiencies that are getting created with DOGE and the Federal US government, could that have any impact whatsoever, again, positively or negatively on Kyndryl? And that's all for me.

Question: Ian Zaffino - Oppenheimer & Co. Inc. - Analyst : Not to really beat a dead horse here on the AI side. But is there anything on -- to your benefit and how you run your business like something like a DeepSeek could bring if it's Bridge or anywhere else and kind of how are you thinking about that? Thanks.

Question: Ian Zaffino - Oppenheimer & Co. Inc. - Analyst : Okay. Great. And then if I was to turn to the Consult business a little bit, how are you thinking about that growth as far as the pace of growing at, the ability to continue that? And then when you look at the growth, where is that per se coming from? Is that share gains? Is that winning new business? Is it expanding with additional accounts or existing accounts? Maybe kind of give us an understanding of the sources of growth there. Thanks.

Question: Jamie Friedman - Susquehanna Financial Group, LLLP - Analyst : Hi, thank you, and good results here. So Martin, I wanted to ask you also about Consult, I thought that was an excellent prior question. But to step back, how would you describe the mind share of Consult? Like what is Consult known for? If you ask the industry, what -- I'll just say Infosys is known for extreme offshoring. Accenture is known for best practices. I'm just giving you the one liners. What's the mind share that Kyndryl Consult is or what is it that you anticipate it will be for Consult?

Question: Jamie Friedman - Susquehanna Financial Group, LLLP - Analyst : Thank you. And then, David, in terms of where we are in the evolution of the IBM relationship, could you just remind us about that transition to the P times Q? When that happened, if it already has happened or if it will happen and how to think about the -- what's that about and how to quantify it? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 04, 2025 / 1:30PM, KD.N - Q3 2025 Kyndryl Holdings Inc Earnings Call