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Kyndryl has announced plans to acquire Healthcare IT Leaders, a provider of enterprise IT services for hospitals and health systems. The acquisition aims to strengthen Kyndryl's ability to serve US healthcare organisations with AI-led modernisation services. The deal will combine Healthcare IT Leaders' consulting expertise in clinical, operational and workforce platforms with Kyndryl's infrastructure capabilities and AI technology. This will enable healthcare providers and payors to work with a single vendor across applications, platforms and IT environments. Kyndryl already supports numerous healthcare organisations running large-scale, regulated IT environments across the US. The acquisition will deepen relationships with national healthcare systems and expand access to application and consulting services. Transaction terms were not disclosed. The deal is expected to close during Kyndryl's second fiscal quarter of 2027, subject to regulatory approval.

Kyndryl Q1 earnings call highlights. August 8, 2026 Key points. * Revenue and profitability declined: Kyndryl's fiscal Q1 revenue fell 3% to $3.6 billion, while adjusted EBITDA was $512 million and adjusted pre-tax income was a $37 million loss. Workforce rebalancing charges of $152 million significantly reduced margins. * Growth areas gained momentum: U.S. revenue rose 5%, Kyndryl Consult revenue increased 14%, and hyperscaler-related revenue grew 48% to more than $530 million for the quarter, supported by demand for AI, cloud modernization and cybersecurity services. * Outlook reaffirmed despite IBM headwinds: Kyndryl maintained its fiscal 2027 targets for flat-to-2% constant-currency revenue decline, $600 million-$700 million in adjusted pre-tax income and $400 million-$500 million in free cash flow. Management expects IBM-related revenue pressure to continue, while workforce actions are projected to generate $400 million-$500 million in annualized savings by fiscal 2028. * MarketBeat previews top five stocks to own in September. Kyndryl NYSE: KD reported fiscal first-quarter revenue of $3.6 billion, down 3% from a year earlier on both a reported and constant-currency basis, while maintaining its full-year outlook as it pursues growth in consulting, hyperscaler partnerships and AI-led modernization services. For the quarter ended June 30, the company generated adjusted EBITDA of $512 million and an adjusted pre-tax loss of $37 million. Interim Chief Financial Officer Harsh Chugh said earnings and margin declined year over year primarily because of $152 million in workforce rebalancing charges, which reduced adjusted pre-tax income margin by more than four points. Kyndryl continued to see growth in the U.S., where revenue increased 5% for a second consecutive quarter. The company exited the period with $14.2 billion in trailing 12-month signings, including $3.9 billion signed during the quarter. Consulting and alliance growth. Chairman and Chief Executive Officer Martin Schroeter said Kyndryl Consult and hyperscaler-related activities were helping offset revenue pressure from focus accounts, extended sales cycles and customers purchasing certain IBM hardware and software directly from IBM. Kyndryl Consult revenue rose 14% over the last 12 months, while hyperscaler-related revenue streams increased 48%. In the first quarter, Kyndryl generated more than $530 million in hyperscaler-related revenue, bringing the trailing 12-month total to $2 billion. Schroeter said customers are increasingly seeking help with AI deployment, modernization of hybrid technology estates, cybersecurity and data-residency requirements. He said the company has expanded its AWS alliance to support enterprise adoption of agentic AI and broadened work with Microsoft Azure around cloud architectures and operational requirements. Kyndryl also cited partnerships with Broadcom, Dell, Hewlett Packard Enterprise and Red Hat. The company signed 40 deals valued at more than $50 million during the past 12 months, including 10 in the first quarter. About 30% of the value of those larger deals came from scope expansions or new customers, compared with 15% in fiscal 2025, according to Schroeter. * Kyndryl Consult signings rose 50% in the first quarter, Schroeter said during the question-and-answer session. * New scope and new-logo business represented 30% of large-deal signings, management said. * Average projected gross margin on signings over the last 12 months was 25%, according to Chugh. IBM relationship and revenue headwinds. Chugh said Kyndryl's changing commercial relationship with IBM has created a three-point adverse effect on constant-currency revenue performance, alongside earlier effects from the company's focus-account initiative. Discover more investment Stock Market News Customers have increasingly chosen to procure some IBM hardware and software directly from IBM while continuing to rely on Kyndryl for services. Chugh said the shift reduces the size of signings and future revenue but does not affect the service scope or margin profile of Kyndryl's work. Kyndryl's spending with IBM was less than $2 billion over the past 12 months, down from an annualized run rate of nearly $4 billion when Kyndryl was spun off. Management said it expects a similar IBM-related revenue headwind through the remainder of fiscal 2027. Schroeter said the company continues to work closely with IBM, particularly in helping customers modernize technology environments that may include mainframes, private cloud, public cloud and software-as-a-service applications. He said Kyndryl has between 8,000 and 9,000 mainframe experts and runs more than half of the world's outsourced mainframes. Workforce actions, cash flow and outlook. Kyndryl is taking workforce rebalancing actions in response to lower-than-normal voluntary attrition and SG&A costs. Savings from those actions are expected to begin in the second half of fiscal 2027. The company expects about $200 million in workforce rebalancing charges during the year, offset by a similar amount of savings, with annualized savings of $400 million to $500 million expected in fiscal 2028. Schroeter said Kyndryl is using automation and AI through its Kyndryl Bridge platform and Advanced Delivery initiative to improve productivity and redeploy workers into higher-value roles. He said the company has about 1,800 agents in its infrastructure operations and has redeployed tens of thousands of employees since beginning its automation efforts. First-quarter free cash flow was an outflow of $401 million, reflecting seasonal working-capital timing, higher payments associated with multiyear renewals and software subscriptions, and lower billing and collections. Kyndryl ended the quarter with $2.1 billion in cash and a net leverage ratio of 0.8 times. It repurchased 5 million shares for $64 million during the quarter. The company reaffirmed its fiscal 2027 outlook for adjusted pre-tax income of $600 million to $700 million, free cash flow of $400 million to $500 million, and constant-currency revenue ranging from flat to down 2%. Management expects revenue trends to improve each quarter and anticipates stronger revenue in the second half than the first half. For fiscal 2028, Kyndryl continues to target more than $1.2 billion in adjusted pre-tax income and $1 billion in free cash flow, based on low-single-digit constant-currency revenue growth. Finance leadership transition. Schroeter also said Chugh has decided to retire after serving as interim CFO for the past six months. Chugh will remain an executive adviser to Schroeter and the leadership team. Ellen Johnson, previously announced as the incoming CFO, was scheduled to begin in the role on Aug. 6. About Kyndryl (NYSE:KD). Kyndryl NYSE: KD is a global managed infrastructure services provider formed in November 2021 through the spin-off of IBM's Managed Infrastructure Services business. The company designs, builds, manages and modernizes critical information technology systems for enterprises worldwide. Kyndryl's core offerings include cloud migration and management, network and edge computing solutions, digital workplace services and IT resiliency and security capabilities. With a workforce of approximately 90,000 professionals and operations in more than 60 countries, Kyndryl serves clients across a broad range of industries, including financial services, telecommunications, healthcare, manufacturing and retail. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. Continue following MarketBeat Before you consider Kyndryl, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Kyndryl wasn't on the list. 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