What happened
Kyndryl Holdings (KD -3.23%), a relatively recent arrival to the stock market, had quite the trading session on Tuesday.
The company, essentially pieces of the legacy business of tech sector mainstay IBM, posted fiscal first quarter of 2024 results that wowed investors. Thanks to this, its share price vaulted almost 19% higher on the day.
So what
Kyndryl's quarter saw the tech company earn $4.19 billion in revenue. This was down, although not by an alarming level, from the $4.29 billion of second quarter 2022. The company broke even in terms of non-GAAP (adjusted) net income, representing a notable improvement over the $100 million it lost in the year-ago quarter.
Both key metrics were well above what analysts were expecting of Kyndryl. Collectively, they were modeling only $4.09 billion for revenue, and a relatively steep ($0.95 per share) adjusted net loss.
In its earnings release, Kyndryl wrote that it was successful in not only drawing in new business, but signing renewals with existing companies at "meaningfully" higher margins than in the IBM days.
Now what
This was a major dynamic inspiring Kyndryl to raise its full-year guidance for the current fiscal year.
Specifically, it has upped its forecast for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin. The company now feels this will come in at 14% for the year; previously it was anticipating 12% to 13%.
Kyndryl also lifted its projection for adjusted pre-tax net income. It now feels this will be at least $100 million for the period.
