Why Kyndryl Holdings Stock Rocketed 10% Higher This Week

IT infrastructure specialist Kyndryl Holdings (NYSE: KD) is heading into the weekend on a high note. The company's share price rose by more than 10% over the course of the week, according to data compiled by S&P Global Market Intelligence, on news of encouraging quarterly results.

Headline figures went in opposite directions

For its third quarter of fiscal 2025, Kyndryl posted revenue of $3.74 billion, which was down from the nearly $3.94 billion it earned in the same period of fiscal 2024. It also missed the consensus analyst estimate of $3.83 billion.

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The bottom-line dynamic was notably more positive. The company, which has attracted notice with its utilization of artificial intelligence (AI) in its offerings, flipped into the black with non-GAAP (adjusted) net income coming in at $124 million against the year-ago loss of $11 million. The former shakes out to $0.51 per share, well higher than the average $0.43 pundit projection.

Kyndryl attributed that outperformance to factors such as "strong signings growth," pointing in particular to the double-digit improvement in revenue from its Kyndryl Consult unit.

Earnings and adjusted cash flow guidance raised

This led Kyndryl to raise certain guidance items for the entirety of fiscal 2025. It now feels it will book a pre-tax income of at least $475 million. If achieved, this would mean year-over-year growth of $310 million at a minimum. It also upped its forecast for adjusted cash flow; this is now anticipated to be roughly $350 million. As for revenue, on a constant-currency basis, it should rise 2% from the fiscal 2024 level.

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Kyndryl. The Motley Fool has a disclosure policy.