Financial Analysis

NOTE 14. COMMITMENTS AND CONTINGENCIES The Company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at March 31, 2025 and 2024 were not material. Additionally, the Company has contractual commitments that are noncancellable with certain software, hardware and cloud partners used in the delivery of services to customers. The Company has determined that these commitments may exceed the Companys needs over the next two to three years. If the Company is unable to satisfy, reduce or amend its contractual commitments, it will record the future charges for any payments related to excess commitments as cost of services. At March 31, 2025, we had short-term (April 2025 through March 2026), mid-term (April 2026 through March 2028) and long-term (April 2028 onward) purchase commitments in the amount of $0.2 billion, $0.6 billion and $0.1 billion, respectively. During the year ended March 31, 2025, contractual commitments decreased due to satisfaction of existing commitments outpacing new additions. As a Fortune 500 company with customers and employees around the world, Kyndryl is subject to, or could become subject to, either as plaintiff or defendant, a variety of contingencies, including claims, demands and suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of its business. Given …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 12. BORROWINGS Debt The following table presents the components of our debt: March 31, March 31, (Dollars in millions) Interest Rate Maturity 2025 2024 Commercial loan agreement 3.00% July 2026 $ 39 $ 68 Unsecured senior notes due 2026 2.05% October 2026 700 700 Unsecured senior notes due 2028 2.70% October 2028 500 500 Unsecured senior notes due 2031 3.15% October 2031 650 650 Unsecured senior notes due 2034 6.35% * February 2034 500 500 Unsecured senior notes due 2041 4.10% October 2041 550 550 Finance lease obligations 5.74% 2025-2031 250 291 $ 3,190 $ 3,259 Less: Unamortized discount 4 5 Less: Unamortized debt issuance costs 14 16 Less: Current portion of long-term debt 129 126 Total long-term debt $ 3,042 $ 3,112 * Including the cross-currency swaps that the Company entered into subsequent to the issuance of the unsecured senior notes due 2034, the effective interest rate on such notes was approximately 3.84% at the time of issuance. For more information, see Note 7 Financial Assets and Liabilities. Weighted-average discount rate Contractual obligations of long-term debt outstanding at March 31, 2025, exclusive of finance lease obligations, were as follows: (Dollars in millions)* Principal Year ending March 31: 2026 $ 29 2027 710 2028 2029 500 2030 Thereafter 1,700 Total $ 2,939 * Contractual obligations approximate scheduled repayments. Senior Unsecured Notes In October 2021, in preparation for our Spin-off, we completed the offering of $2.4 billion in aggregate pr …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 16. STOCK-BASED COMPENSATION Stock-based incentive awards are granted to employees under the terms of Kyndryls employment and the Kyndryl Plan (see Note 1 Significant Accounting Policies). Awards under the Kyndryl Plan principally include Restricted Stock Units (RSUs), market-conditioned and performance-conditioned stock units and stock options. RSUs and stock options generally vest based on continued passage of time. Market-conditioned and performance-conditioned stock units are cliff-vested at the end of the performance period if the market or performance conditions have been satisfied. The following table summarizes stock-based compensation cost, which is included in net income (loss). Year Ended March 31, (Dollars in millions) 2025 2024 2023 Cost of services $ 12 $ 16 $ 21 Selling, general and administrative expense 89 78 92 Pretax stock-based compensation expense $ 100 $ 95 $ 113 Income tax benefits (7) (5) (5) Stock-based compensation cost, net of tax $ 93 $ 90 $ 108 The Companys total unrecognized compensation cost related to non-vested awards at March 31, 2025 was $123 million and is expected to be recognized over a weighted-average period of approximately 2.1 years. Capitalized stock-based compensation cost was not material during any period presented. Stock Units The following table summarizes the activity related to Kyndryls RSUs, market-conditioned stock units and performance-conditioned stock units: Market-Conditioned Performance-Conditioned RSUs Stock Units …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

NOTE 11. INTANGIBLE ASSETS INCLUDING GOODWILL Intangible Assets The following tables present the Companys intangible asset balances by major asset class: At March 31, 2025 At March 31, 2024 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying (Dollars in millions) Amount Amortization Amount Amount Amortization Amount Capitalized software $ 216 $ (76) $ 141 $ 172 $ (48) $ 125 Customer relationships* 121 (60) 61 152 (96) 56 Completed technology 13 (2) 11 Patents and trademarks* 15 (10) 5 14 (6) 8 Total $ 365 $ (148) $ 218 $ 339 $ (150) $ 188 * Amounts include effects from foreign currency translation. There was no impairment of identifiable intangible assets recorded in the periods reported. The net carrying amount of intangible assets increased by $29 million during the year ended March 31, 2025, primarily due to additions of capitalized software, partially offset by amortization. The aggregate intangible asset amortization expense was $72 million, $63 million, and $46 million for the years ended March 31, 2025, 2024 and 2023, respectively. Aggregate amortization expense in fiscal year 2025 included amortization of capitalized software of $42 million, which was reported in Depreciation of property, equipment and capitalized software on the Consolidated Statement of Cash Flows. During the year ended March 31, 2025, the Company retired approximately $75 million of fully amortized intangible assets, primarily related to customer relationships. The futur …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 5. TAXES Income (loss) before income taxes by geography was as follows: Year Ended March 31, (Dollars in millions) 2025 2024 2023 Income (loss) before income taxes: U.S. operations $ (158) $ (678) $ (1,543) Non-U.S. operations 593 510 692 Total income (loss) before income taxes $ 435 $ (168) $ (851) The components of the provision for income taxes by taxing jurisdiction were as follows: Year Ended March 31, (Dollars in millions) 2025 2024 2023 U.S. federal: Current $ 1 $ 39 $ Deferred (18) (10) (19) $ (17) $ 29 $ (19) U.S. state and local: Current $ 4 $ 2 $ 2 Deferred 2 1 (4) $ 6 $ 3 $ (2) Non-U.S.: Current $ 177 $ 142 $ 236 Deferred 18 (2) 308 $ 195 $ 140 $ 545 Total provision for income taxes $ 184 $ 172 $ 524 A reconciliation of the statutory U.S. federal tax rate to the Companys effective tax rate from continuing operations was as follows: Year Ended March 31, 2025 2024 2023 Statutory rate 21.0 % 21.0 % 21.0 % Tax differential on foreign income 4.5 % (17.4) % (3.9) % State and local taxes 0.7 % 17.8 % 5.7 % Valuation allowances (4.1) % (67.7) % (72.0) % Reserves for uncertain tax positions 14.2 % (7.8) % (6.5) % Global Intangible Low-Taxed Income (GILTI) 1.5 % % (2.0) % Undistributed foreign earnings (2.5) % 2.2 % 1.5 % Impact of foreign operations 20.9 % (43.6) % (8.6) % Basis adjustment % (6.2) % % Tax credits (13.1) % 28.7 % 4.7 % Return to provision (3.1) % (19.3) % 0.3 % Nondeductible items 1.9 % (8.6) % (2.0) % Other % (1.4) % % Effective tax rate 41.9 % (102.2 …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 17. RETIREMENT-RELATED BENEFITS Defined Benefit Pension Plans The Company sponsors and co-sponsors defined benefit pension plans that cover certain non-U.S. employees and retirees. The defined benefit pension plan benefits are based principally on employees years of service and/or compensation levels at or near retirement. These plans are accounted for as defined benefit pension plans for purposes of the consolidated financial statements. Accordingly, the net benefit obligations, plan assets and the related benefit plan expenses of those plans have been recorded in the Companys consolidated financial statements. The following tables present the components of net periodic pension cost for the defined benefit pension plans recognized in the Consolidated Income Statement. Year Ended March 31, (Dollars in millions) 2025 2024 2023 Service cost $ 34 $ 38 $ 44 Interest cost* 52 55 32 Expected return on plan assets* (59) (60) (43) Amortization of prior service costs (credits)* 1 1 1 Recognized actuarial losses* 16 4 40 Curtailments and settlements* 8 13 10 Total net periodic pension cost $ 53 $ 51 $ 84 * These components of net periodic pension cost are included in other expense in the Consolidated Income Statement. The following table presents the changes in net benefit obligation and plan assets for the defined benefit pension plans. Year Ended March 31, (Dollars in millions) 2025 2024 Change in benefit obligation Benefit obligation at beginning of period $ 1,670 $ 1,659 Servi …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 18. TRANSACTIONS WITH FORMER PARENT Change in Beneficial Ownership IBM transferred all of its 19.9% initially retained interest in Kyndryl common stock to a third-party financial institution through exchange agreements in May and August 2022. IBM ceased to be a related party of Kyndryl in August 2022. Transactions related to former Parent after August 11, 2022 are no longer reported as related-party activities. As a result, there was no related-party revenue or cost of services recognized subsequent to August 11, 2022. Revenue and Purchases Related to Former Parent While IBM was a related party, Kyndryl provided various services to IBM, including those related to hosting data centers and servicing IBMs information technology infrastructure, which are reported as revenue in the Companys Consolidated Income Statement. Related-party revenue generated from these services was $287 million for the year ended March 31, 2023. No related-party revenue was recognized after August 2022. During the year ended March 31, 2024, the Company reached an agreement to collect previously reserved receivables from our former Parent, which resulted in a gain recorded within transaction-related costs (benefits). Kyndryl utilizes various IBM products and services, recognized as costs of services, in the fulfillment of services contracts. While IBM was a related party, total cost of services recognized from these related-party transactions in the Companys Consolidated Income Statement was $1.4 bi …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 19. WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES During the year ended March 31, 2025, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency which continued through the end of the 2025 fiscal year. These actions resulted in workforce rebalancing charges and charges related to ceasing to use leased and owned fixed assets (collectively, the Fiscal 2025 Program). The total charges incurred related to the Fiscal 2025 Program were $162 million, consisting of $114 million in workforce rebalancing charges and $48 million in charges related to ceasing to use leased and owned fixed assets. The Company expects that these actions will reduce future payroll costs, rent expenses and depreciation of property and equipment. During the year ended March 31, 2023, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency, which continued through the year ended March 31, 2024. These actions resulted in workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets, and lease termination charges (collectively, the Fiscal 2024 Program). The total charges incurred related to the Fiscal 2024 Program were $310 million, consisting of approximately 60% for workforce rebalancing charges and approximately 40% for charges related to ceasing to use leased and owned fixed assets and lease termination charges. The Company expects that these actions will reduce futu …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 3. REVENUE RECOGNITION Disaggregation of Revenue The Company views its segment results to be the best view of disaggregated revenue. Refer to Note 4 Segments. Remaining Performance Obligations The remaining performance obligation (RPO) represents the aggregate amount of contractual deliverables yet to be recognized as revenue at the end of the reporting period. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed. The customer is not considered committed when it is able to terminate for convenience without payment of a substantive penalty. The RPO also includes estimates of variable consideration. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustments for revenue that has not materialized and adjustments for currency. At March 31, 2025, the aggregate amount of RPO related to customer contracts that are unsatisfied or partially unsatisfied was $34.7 billion. Approximately 57 percent of the amount is expected to be recognized as revenue in the next two years, approximately 37 percent in the subsequent three years, and the balance thereafter. Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods For the year ended March 31, 2025, revenue increased by $59 million for performance obligations satisfied (or part …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

NOTE 4. SEGMENTS Our reportable segments correspond to how the chief operating decision maker (CODM), our chief executive officer, reviews performance and allocates resources. Our four reportable segments consist of the following: United States: This reportable segment is comprised of Kyndryls operations in the United States. Japan: This reportable segment is comprised of Kyndryls operations in Japan. Principal Markets: This reportable segment represents the aggregation of our operations in Canada, France, Germany, India, Italy, Spain / Portugal, and the United Kingdom / Ireland. Strategic Markets: This reportable segment is comprised of our operations in all other countries in which we operate. The Company made a minor change to its geographic reportable segments effective June 1, 2024 to reflect how the Company manages its operations and measures business performance, transitioning the reporting and management of its operations in Australia/New Zealand from the Principal Markets segment to the Strategic Markets segment. All historical segment information has been recast to reflect this change. The measure of segment operating performance used by Kyndryls CODM is adjusted EBITDA , which allows our CODM to evaluate operating results excluding certain items whose fluctuation from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA is defined as net income (loss) excluding income taxes, interest expense, depreciation and …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 15. EQUITY The following tables present reclassifications and taxes related to items of other comprehensive income (loss) for the years ended March 31, 2025, 2024 and 2023: (Dollars in millions) Pretax Tax (Expense) Net-of-Tax For the year ended March 31, 2025 Amount Benefit Amount Foreign currency translation adjustments: Foreign currency translation adjustments $ (50) $ $ (50) Unrealized gains (losses) on net investment hedges 4 (2) 2 Total foreign currency translation adjustments $ (46) $ (2) $ (48) Unrealized gains (losses) on cash flow hedges: Unrealized gains (losses) arising during the period $ (14) $ 3 $ (11) Reclassification of (gains) losses to net income 11 11 Total unrealized gains (losses) on cash flow hedges $ (2) $ 3 $ Retirement-related benefit plans: Prior service (credits) costs $ 2 $ (1) $ 1 Net gains (losses) arising during the period 17 (4) 13 Curtailments and settlements 7 (2) 5 Amortization of net (gains) losses 16 (4) 12 Total retirement-related benefit plans $ 42 $ (10) $ 32 Other comprehensive income (loss) $ (6) $ (10) $ (16) (Dollars in millions) Pretax Tax (Expense) Net-of-Tax For the year ended March 31, 2024 Amount Benefit Amount Foreign currency translation adjustments: Foreign currency translation adjustments $ (36) $ $ (36) Unrealized losses on net investment hedges (11) (11) Total foreign currency translation adjustments $ (47) $ $ (47) Unrealized gains (losses) on cash flow hedges: Unrealized gains (losses) arising during the period $ …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 11. COMMITMENTS AND CONTINGENCIES The Company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at December 31, 2025 and March 31, 2025 were not material. Additionally, the Company has contractual commitments that are noncancellable with certain software, hardware and cloud partners used in the delivery of services to customers. During the nine months ended December 31, 2025, contractual commitments decreased due to satisfaction of existing commitments outpacing new additions. As a Fortune 500 company with customers and employees around the world, Kyndryl is subject to, and could become subject to, either as plaintiff or defendant, a variety of contingencies, including claims, demands and suits, investigations, tax matters and other legal proceedings that arise from time to time, including in the ordinary course of its business. In addition, given the rapidly evolving external landscape of cybersecurity, privacy and data protection laws, regulations and threat actors, the Company or its clients has and could become subject to actions or proceedings in various jurisdictions. The Company is also subject to, and could become subject to, actions and proceedings in various jurisdictions involving a wide range of labor and employment issues (including matters related to contested employment decisions, country-specific labor …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 10. BORROWINGS Debt The following table presents the components of our debt: December 31, March 31, (Dollars in millions) Interest Rate Maturity 2025 2025 Unsecured senior notes due 2026 2.05% October 2026 $ 700 $ 700 Unsecured senior notes due 2028 2.70% October 2028 500 500 Unsecured senior notes due 2031 3.15% October 2031 650 650 Unsecured senior notes due 2034 6.35%* February 2034 500 500 Unsecured senior notes due 2041 4.10% October 2041 550 550 Finance lease and other obligations 5.53% 2026-2031 216 290 $ 3,116 $ 3,190 Less: Unamortized discount 4 4 Less: Unamortized debt issuance costs 12 14 Less: Current portion of long-term debt 805 129 Total long-term debt $ 2,295 $ 3,042 * Including the cross-currency swaps that the Company entered into subsequent to the issuance of the unsecured senior notes due 2034, the effective interest rate on such notes was approximately 3.84% at the time of issuance. For more information, see Note 7 Financial Assets and Liabilities. Weighted-average discount rate. Contractual obligations of long-term debt outstanding at December 31, 2025, exclusive of finance lease obligations, are as follows: (Dollars in millions)* Principal Year ending March 31: 2026 (remaining three months) $ 7 2027 710 2028 2029 500 2030 Thereafter 1,700 Total $ 2,917 * Contractual obligations approximate scheduled repayments. As of December 31, 2025, there were no borrowings under the Companys revolving credit agreement. The Company is in compliance with its debt …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 9. INTANGIBLE ASSETS INCLUDING GOODWILL Intangible Assets The following table presents the Companys intangible asset balances by major asset class. At December 31, 2025 At March 31, 2025 Gross Carrying Accumulated Net Carrying Gross Carrying Accumulated Net Carrying (Dollars in millions) Amount Amortization Amount Amount Amortization Amount Capitalized software $ 162 $ (51) $ 111 $ 216 $ (76) $ 141 Customer relationships* 118 (73) 45 121 (60) 61 Completed technology 13 (4) 9 13 (2) 11 Patents and trademarks* 14 (11) 3 15 (10) 5 Total $ 307 $ (140) $ 167 $ 365 $ (148) $ 218 * Amounts include effects from foreign currency translation. The net carrying amount of intangible assets decreased by $51 million during the nine months ended December 31, 2025, primarily due to the reclassification of certain capitalized software intangibles to prepaid assets and other noncurrent assets resulting from the migration of on-premises software to a cloud-based solution. The aggregate intangible asset amortization expense was $14 million and $42 million for the three and nine months ended December 31, 2025, compared to $18 million and $54 million for the three and nine months ended December 31, 2024, respectively. This included amortization of capitalized software of $7 million and $22 million for the three and nine months ended December 31, 2025, respectively, which was reported in Depreciation of property, equipment and capitalized software on the Consolidated Statement of Cash Flows. Th …

GoodwillAndIntangibleAssetsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 5. TAXES For the three months ended December 31, 2025, the Companys effective tax rate was 37.4%, compared to 16.7% for the three months ended December 31, 2024. For the nine months ended December 31, 2025, the Companys effective tax rate was 35.7%, compared to 42.2% for the nine months ended December 31, 2024. The Companys effective tax rate for the three and nine months ended December 31, 2025, and the nine months ended December 31, 2024, was higher than the Companys statutory tax rate primarily due to taxes on foreign operations and valuation allowances recorded in certain jurisdictions against deferred tax assets that are not more likely than not to be realized. The Companys effective tax rate for the three months ended December 31, 2024 was lower than the Companys statutory tax rate because the tax expense associated with the Companys Securities Industry Services divestiture (see Note 8 Acquisitions and Divestitures) was below the statutory rate. In July 2025, the U.S. government enacted new tax legislation that, among other things, made permanent items such as 100% bonus depreciation on certain fixed assets, immediate expensing of domestic research costs and an increased business interest expense limitation. It also included modifications to several international tax provisions. The Company has recorded no material incremental tax expense or benefit related to the legislation. …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent Pronouncements In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures , which is intended to enhance the transparency and usefulness of income tax disclosures through improved reporting related to the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which is intended to improve the usefulness of expense information contained in public entity income statements through the disaggregation of relevant expense captions in the notes to the financial statements. The guidance should be applied prospectively, effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements. In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity , which amends the guidance for determining the acquire …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

NOTE 13. RETIREMENT-RELATED BENEFITS The following table presents the components of net periodic pension cost for the defined benefit pension plans recognized in the Consolidated Income Statement for the three and nine months ended December 31, 2025 and 2024. Three Months Ended December 31, Nine Months Ended December 31, (Dollars in millions) 2025 2024 2025 2024 Service cost $ 8 $ 9 $ 24 $ 26 Interest cost* 15 13 44 40 Expected return on plan assets* (16) (15) (47) (44) Amortization of prior service costs (credits)* 1 1 1 Recognized actuarial losses (gains)* 3 4 8 12 Curtailments and settlements* (2) (1) Net periodic pension cost $ 10 $ 9 $ 29 $ 33 * These components of net periodic pension cost are included in other expense (income) in the Consolidated Income Statement. The components of net periodic benefit cost for the nonpension postretirement benefit plans and multi-employer plans recognized in the Consolidated Income Statement were not material for any period presented. …

PensionAndOtherPostretirementBenefitsDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 14. WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES During the nine months ended December 31, 2025, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency which we expect to continue through the end of the fiscal year 2026. We expect these actions will result in workforce rebalancing charges (the Fiscal 2026 Program) of approximately $60 million. During the year ended March 31, 2025, the Company implemented actions to reduce our overall cost structure and increase our operating efficiency (the Fiscal 2025 Program). The total charges incurred related to the Fiscal 2025 Program were $162 million, consisting of $114 million in workforce rebalancing charges and $48 million in charges related to ceasing to use leased and owned fixed assets. The Company expects that these actions will reduce future payroll costs, rent expenses and depreciation of property and equipment. The following table presents the segment breakout of charges incurred during the three and nine months ended December 31, 2025 and 2024. Three Months Ended Nine Months Ended Costs Incurred to Date December 31, December 31, Fiscal 2026 Fiscal 2025 (Dollars in millions) 2025 2024 2025 2024 Program Program United States $ 11 $ 18 $ 20 $ 59 $ 20 $ 62 Japan 1 5 4 5 12 Principal Markets 1 4 15 18 15 30 Strategic Markets 4 4 21 40 21 58 Total charges $ 16 $ 26 $ 61 $ 120 $ 61 $ 162 The following table presents the classification of workforce rebalancing and site …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 3. REVENUE RECOGNITION Disaggregation of Revenue The Company views its segment results to be the best view of disaggregated revenue. Refer to Note 4 Segments. Remaining Performance Obligations The remaining performance obligation (RPO) represents the aggregate amount of contractual deliverables yet to be recognized as revenue at the end of the reporting period. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts for which the customer is not committed. The customer is not considered committed when it is able to terminate for convenience without payment of a substantive penalty. The RPO also includes estimates of variable consideration. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustments for revenue that has not materialized and adjustments for currency. At December 31, 2025, the aggregate amount of RPO related to customer contracts that are unsatisfied or partially unsatisfied was $33.6 billion. Approximately 57 percent of the amount is expected to be recognized as revenue in the next two years, approximately 38 percent in the subsequent three years, and the balance thereafter. During the three and nine months ended December 31, 2025, revenue was increased by $42 million and $39 million, respectively, and during the three and nine months ended December 31, 2024, revenue was increased …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

NOTE 4. SEGMENTS Our reportable segments correspond to how the chief operating decision maker (CODM), our chief executive officer, reviews performance and allocates resources. Our four reportable segments consist of the following: United States: This reportable segment is comprised of Kyndryls operations in the United States. Japan: This reportable segment is comprised of Kyndryls operations in Japan. Principal Markets: This reportable segment represents the aggregation of our operations in Canada, France, Germany, India, Italy, Spain / Portugal, and the United Kingdom / Ireland. Strategic Markets: This reportable segment is comprised of our operations in all other countries in which we operate. The measure of segment operating performance used by Kyndryls CODM is adjusted EBITDA , which allows our CODM to evaluate operating results excluding certain items whose fluctuation from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA is defined as net income excluding income taxes, interest expense, depreciation and amortization (excluding depreciation of right-of-use assets and amortization of capitalized contract costs), charges related to ceasing to use leased and owned fixed assets, charges related to lease terminations, transaction-related costs and benefits, pension expenses other than pension servicing costs and multi-employer plan costs, stock-based compensation expense, workforce rebalancing charges incurred prior …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

NOTE 12. EQUITY The following tables present reclassifications and taxes related to items of other comprehensive income (loss) for the three and nine months ended December 31, 2025 and 2024: Pretax Tax (Expense) Net-of-Tax (Dollars in millions) Amount Benefit Amount For the three months ended December 31, 2025: Foreign currency translation adjustments: Foreign currency translation adjustments $ (17) $ $ (17) Unrealized gains (losses) on net investment hedges 26 2 28 Total foreign currency translation adjustments $ 9 $ 2 $ 11 Unrealized gains (losses) on cash flow hedges: Unrealized gains (losses) arising during the period $ 10 $ $ 10 Reclassification of (gains) losses to net income (3) (2) (5) Total unrealized gains (losses) on cash flow hedges $ 7 $ (2) $ 5 Retirement-related benefit plans: Prior service (costs) credits $ (36) $ 9 $ (27) Net gains (losses) arising during the period (2) 1 (1) Amortization of prior service costs (credits) 1 Amortization of net (gains) losses 3 (1) 2 Total retirement-related benefit plans $ (34) $ 9 $ (26) Other comprehensive income (loss) $ (19) $ 9 $ (10) For the three months ended December 31, 2024: Foreign currency translation adjustments: Foreign currency translation adjustments $ (248) $ $ (248) Unrealized gains (losses) on net investment hedges 55 55 Total foreign currency translation adjustments $ (193) $ $ (193) Unrealized gains (losses) on cash flow hedges: Unrealized gains (losses) arising during the period $ (4) $ (3) $ (7) Reclassi …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing