Q4 2025 Kyndryl Holdings Inc Earnings Call

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Speaker Change: I'd now like to hand, the conference over to your first speaker today, Laurie Chapman Global head of Investor Relations. Please go ahead.

Speaker Change: Good morning, everyone and welcome to <unk> earnings call for the fourth quarter and fiscal year ended March 31 2025.

Speaker Change: Before we begin I'd like to remind you that our remarks today include forward looking statements. These statements are subject to risk factors that may cause our actual results to differ materially from those expressed or implied these.

Speaker Change: These forward looking statements speak only to our expectations as of today.

Speaker Change: For more details on some of these risks please see the risk factors section of our annual report on Form 10-K for the year ended March 31 2024.

Speaker Change: Also in today's remarks, we refer to certain non-GAAP financial metrics corresponding GAAP metrics and a reconciliation of non-GAAP metrics to GAAP metrics for historical periods are provided in the presentation materials for today's events, which are available on our website at investors Dot Kendall.

Speaker Change: Dot com.

Operator: At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Martin Schroeter: With me for today's call are kindled, Chairman and Chief Executive Officer, Martin Schroeter, and Kendall Chief Financial Officer, David Weisner.

Before we begin, I'd like to remind you that our remarks today include forward-looking statements.

These statements are subject to risk factors that may cause our actual results to different materially from those expressed or implied. These forward-looking statements speak only to our expectations as of today.

Speaker Change: Following our prepared remarks, we will hold a Q&A session.

Speaker Change: I'd now like to turn the call over to Martin Martin.

Martin Martin: Thank you Laurie and thanks to each of you for joining us.

Operator: Please be advised that today's conference is being recorded.

Speaker Change: There has been an independent company for over three years now and I am so proud of what our global team continues to accomplish.

The more details on some of these risks, please see the Risk Factor Section of our annual report on Form 10K for the year ended March 31, 2024.

Lori Chaitman: I would now like to hand the conference over to your first speaker today, Lori Chaitman, Global Head of Investor Relations.

Speaker Change: We've solidified our market leadership position in mission critical technology services, and we've been executing a powerful and highly effective strategy centered around building our capabilities skills partnerships and innovation to drive sustainable growth.

Martin Schroeter: Good morning, everyone, and welcome to Kyndryl's earnest call for the fourth quarter and fiscal year ended March 31, 2025. Before we begin, I'd like to remind you that our remarks today includes forward looking state. These statements are subject to risk factors that may cause our actual results to differ materially from those expressed or implied. These forward-looking statements speak only to our expectations as of today.

Also, in today's remarks, we refer to certain non-GAAP financial metrics.

Speaker Change: With relentless focus and dedication to our customers our people have propelled our success and will continue to do so.

Speaker Change: So on today's call will focus on how we will accelerate our momentum going forward, but first I want to share the highlights from fiscal 2025 simply put we had another great year.

Speaker Change: With me for today's call are Kenjo's Chairman and Chief Executive Officer, Martin Schroeter and Kenjo's Chief Financial Officer, David Wyshner. Following up a pair of remarks, we will hold a Q&A session.

Martin Schroeter: For more details on some of these risks, please see the risk factors section of our annual report on Form 10-K for the year ended March 31, 2024.

Speaker Change: Signings were up 48% in constant currency to more than $18 billion earnings increased $317 million to $482 million and adjusted pre tax income.

Martin Schroeter: I'd now like to turn the call over to Martin. Martin?

Speaker Change: We generated $446 million and adjusted free cash flow, a 53% increase from last year.

Martin Schroeter: Also, in today's remarks, we refer to certain non-GAAP financial metrics. corresponding GAAP metrics and a reconciliation of non-GAAP metrics to GAAP metrics for historical periods are provided in the presentation materials for today's event which are available on our website at investors.kyndryl.com.

Martin Schroeter: Thank you, Lori, and thanks to each of you for joining us.

Speaker Change: Kyndryl has been an independent company for over three years now and I am so proud of what our global team continues to accomplish.

Speaker Change: And in the fourth quarter, we achieved a significant milestone by returning our topline to positive constant currency growth.

Martin Schroeter: We've solidified our market leadership position in mission critical technology services, and we've been executing a powerful and highly effective strategy centered around building our capabilities, skills, partnerships, and innovation to drive sustainable growth.

Speaker Change: Central console continued to deliver above market growth with revenue increasing more than 25%. This year and kinzel bridge continues to enhance the value we deliver to our customers through actionable insights.

Lori Chaitman: With me for today's call are Kyndryl's Chairman and Chief Executive Officer Martin Schroeter and Kyndryl's Chief Financial Officer David Wyshner.

Martin Schroeter: With relentless focus and dedication to our customers, our people have propelled their success and will continue to do so.

Speaker Change: Our <unk> initiatives have transformed our company once again surpassed our full year targets for each of them.

Lori Chaitman: Following our prepared remarks, we will hold a Q&A session.

Martin Schroeter: So on today's call, we'll focus on how we'll accelerate our momentum going forward, but first I want to share the highlights from fiscal 2025. Simply put, we had another great year.

Speaker Change: Among our alliances hyperscale or related revenue more than doubled this year to $1 2 billion.

Martin Schroeter: I'd now like to turn the call over to Martin.

Martin Schroeter: Thank you, Lori. And thanks to each of you for joining us. Kyndryl has been an independent company for over three years now. And I am so proud of what our global team continues to accomplish. We've solidified our market leadership position in mission critical technology. And we've been executing a powerful and highly effective strategy centered around building our capabilities, skills, partnerships, and innovation to drive sustainable growth. With relentless focus and dedication to our customers, our people have propelled their success and will continue to do so.

Speaker Change: We reached $775 million in annual savings from advanced delivery and another $900 million from our accounts initiative.

Martin Schroeter: Sinies are up 48% in constant currency to more than $18 billion, earnings increased $317 million to $482 million in adjusted pre-tax income. We generated $446 million in adjusted free cash flow, a 53% increase from last year.

Speaker Change: As we enter our new fiscal year for Kendall or three days of shifted from being initiatives that drove our turnaround two pillars of our profitable growth strategy.

Speaker Change: In fact, our fiscal 2025 results not only exceeded the earnings cash flow and three eights projections, we laid out at the beginning of the year. They also approved the investment thesis for <unk> evolution that we laid out three years ago.

Martin Schroeter: In the fourth quarter, we achieved a significant milestone by returning our top line to positive of constant currency growth.

Martin Schroeter: Kendral Consult continued to deliver above market growth with revenue increasing more than 25% this year, and Kendral Bridge continues to enhance the value we delivered our customers through actionable insights.

Martin Schroeter: So on today's call, we'll focus on how we'll accelerate our momentum going forward, but first I want to share the highlights from fiscal 2025. Simply put, we had another great year. Signings are up 48% in constant currency to more than $18 billion. Earnings increased $317 million to $482 million in adjusted pre-tax income. We generated $446 million in adjusted free cash flow, a 53% increase from last year. And in the fourth quarter, we achieved a significant milestone by returning our top line to positive constant currency growth. Kyndryl Consul continue to deliver above market growth with revenue increasing more than 25% this year.

We are leaders in our space, we are important to our customers. We can execute on our strategy that is unique to us. We can grow we are profitable and we generate cash.

Martin Schroeter: R3A initiatives have transformed our company and we once again surpassed our full-your targets for each of them.

Speaker Change: In fiscal 2026, we're expecting another year of substantial earnings and cash flow growth as well as positive constant currency revenue growth.

Martin Schroeter: Among our alliances, hyperscaler-related revenue, more than double this year to $1.2 billion. We reach $775 million in annual I Savings from Advanced Delivery and another $900 million from our Accounts Initiative.

Speaker Change: And as I'll discuss in a few minutes our outlook for this year is consistent with the financial objectives for fiscal 2028 that we laid out at our Investor Day last November.

Speaker Change: As many of you have heard me say before <unk>.

Martin Schroeter: As we enter a new fiscal year for Kendral, our three A's have shifted from being initiatives that drove our turnaround to pillars of our profitable growth strategy.

Speaker Change: We are uniquely positioned to address the secular it trends like cloud migration increasingly hybrid it environments cyber security risks and the adoption of AI.

Martin Schroeter: And Kyndryl Bridge continues to enhance the value we deliver to our customers through actionable insights. Our 3A initiatives have transformed our company and we once again surpassed our full year targets for each of Among our alliances, hyperscaler-related revenue more than doubled this year to $1.2 billion. We reached $775 million in annual savings from advanced delivery and another $900 million from our accounts initiative. As we enter a new fiscal year for Kyndryl, our three A's have shifted from being initiatives that drove our turnaround to pillars of our profitable growth strategy. In fact, our fiscal 2025 results not only exceeded the earnings, cash flow, and 3As projections we laid out at the beginning of the year, they also proved the investment thesis for Kyndryl's evolution that we laid out three years ago.

Martin Schroeter: In fact, our fiscal 2025 results not only exceeded the earnings cash flow and three-eighths projections we laid out the beginning of the year, they also proved the investment thesis for Kyndryl's evolution that we laid out three years ago.

Speaker Change: Our approach to designing optimizing running in transforming mission critical hybrid it states is driving increased demand for our services.

Speaker Change: This is reflected in the strong signings growth we delivered in fiscal 2025, which brought our full year revenue book to Bill to one two and included consult signings growth that was right in line with our aggregate signings growth.

Martin Schroeter: We are leaders in our space. We are important to our customers. We can execute on our strategy that is unique to us. We can grow. We are profitable and regenerate cash.

Speaker Change: We've previously highlighted how our freedom of action as an independent company has unlocked long term growth opportunities that were unique to Kendall and our signings growth in fiscal 2025 is a powerful evidence of that.

Martin Schroeter: In fiscal 2026, we're expecting another year of substantial earnings in cash flow growth as well as positive constant currency revenue growth

Martin Schroeter: And as I'll discuss in a few minutes, our outlook for this year is consistent with the financial objectives for fiscal 2028 that we laid out at our investor day last November .

Speaker Change: Moreover, having our revenue book to Bill ratio above one foreshadows future revenue growth from committed contracts since our signings typically convert into revenue over a three to five year period.

Martin Schroeter: As many of you have heard me say before, we are uniquely positioned to address the secular IT trends like cloud migration, increasingly hybrid IT environments, cyber security risks, and the adoption of AI.

Speaker Change: In fact, our signings growth has been significant and broad based across a range of geographies vertical markets and our practices.

Martin Schroeter: We are leaders in our space. We are important to our customers. We can execute on our strategy that is unique to us. We can grow, we are profitable, and we generate cash.

Martin Schroeter: Air approach to designing, optimizing, running, and transforming mission-critical hybrid IT estates is driving increased demand for our services.

Speaker Change: We secured 55 contracts valued at over $50 million in fiscal 2025, an increase from 40 such contracts in the prior year. These.

Martin Schroeter: In fiscal 2026, we're expecting another year of substantial earnings and cash flow growth, as well as positive constant currency revenue growth. And as I'll discuss in a few minutes, our outlook for this year is consistent with the financial objectives for fiscal 2028 that we laid out at our investor day last November. As many of you heard me say before, we are uniquely positioned to address the secular IT trends like cloud migration, increasingly hybrid IT environments, cybersecurity risks, and the adoption of AI. Our approach to designing, optimizing, running, and transforming mission-critical hybrid IT estates is driving increased demand for our service.

Speaker Change: These larger deals accounted for nearly $10 billion of total signings and spend 22 countries, reflecting the important work, we're doing for our blue chip customers all around the world.

Martin Schroeter: This is reflected in the strong signings growth we delivered in fiscal 2025 which brought our full-year revenue book to bill to 1.2 and included consult signings growth that was right in line with our aggregate signings growth.

Speaker Change: Nearly half of these contracts were over 100 billion.

Martin Schroeter: We've previously highlighted how our freedom of action as an independent company has unlocked long-term growth opportunities that were unique to Kyndryl and our signings growth in fiscal 2025 as a powerful evidence of that.

Speaker Change: In the fourth quarter alone, we signed a large deal that will generate a $1 billion of revenue for us over the next six years with a financial services firm that we've been serving for a long time.

Speaker Change: Going forward, we'll be modernizing and transforming the firms it estate and implementing AI technology at scale with Kindle Bridge.

Martin Schroeter: Moreover, having our revenue book to bill ratio above one, Fortuna's future revenue growth from committed contractions are signings typically converted to revenue over three to five

Speaker Change: And at the same time, we'll continue supporting their core technology, providing security and resiliency and driving compliance with regulatory requirements.

Martin Schroeter: In fact, our signing growth has been significant and broad-based across a range of geographies, vertical markets, and our practices.

Martin Schroeter: This is reflected in the strong signings growth we delivered in fiscal 2025, which brought our full year revenue book to bill to 1.2 and included consult signings growth that was right in line with our aggregate signings. We've previously highlighted how our freedom of action as an independent company has unlocked long-term growth opportunities that were unique to Kyndryl, and our signings growth in fiscal 2025 is a powerful evidence of that. Moreover, having our revenue book to bill ratio above one foreshadows future revenue growth from committed contracts since our signings typically convert into revenue over a three to five year period.

Speaker Change: We also displaced an incumbent to win a new logo contract with a European fintech to build the new hybrid it infrastructure platform and provide cloud migration cyber security resiliency and regulatory compliance services.

Martin Schroeter: We secured 55 contracts, valued at over $50 million in fiscal 2025, and increased from 40 such contracts in the prior year.

Speaker Change: And with one of our large online retail customers, we signed new scope and extended our contract for the next five years.

Martin Schroeter: These larger deals account for nearly 10 billion of total signings and span 22 countries reflected in the important work we're doing for our blue chip customers all around the world.

Speaker Change: We're now providing application management services and software engineering development to deliver innovation that complements the modernization work we were already doing supported by clinical bridge.

Martin Schroeter: and nearly half of these contracts were over a hundred million dollars. In the fourth quarter alone we find a large deal that will generate a billion dollars of revenue for us over the next six years with the financial services firm that we've been serving for a long time.

Speaker Change: What's key here is the pattern of leveraging our expanded capabilities partnerships strong customer relationships and great reputation to win more scope and higher value opportunities.

Martin Schroeter: In fact, our signings growth has been significant and broad based across a range of geographies, vertical markets, and our practice. We secured 55 contracts valued at over $50 million in fiscal 2025, an increase from 40 such contracts in the prior year. These larger deals accounted for nearly $10 billion of total signings and spanned 22 countries, reflecting the important work we're doing for our blue chip customers all around the world. Nearly half of these contracts were over $100 million. In the fourth quarter alone, we signed a large deal that will generate a billion dollars of revenue for us over the next six years with a financial services firm that we've been serving for a long time.

Martin Schroeter: Going forward, we'll be modernizing and transforming the firm's IT estate and implementing AI technology at scale with Kinville Bridge. And at the same time, we'll continue supporting their core technology, providing security and resiliency and driving compliance with regulatory requirements.

Speaker Change: In fact under each of these three new contracts, we're providing hyperscale or related services. This pattern highlights <unk> position as a trusted advisor for it services.

Speaker Change: Embraced for how we can help customers operate in the present and for how we can help organizations modernize for the future.

Martin Schroeter: We also displaced an incumbent to win a new logo contract with the European FinTech to build a new hybrid IT infrastructure platform and provide cloud migration, cybersecurity, resiliency and regulatory compliance services.

Speaker Change: Our expanding scope not only strengthens our customers technology operations. It also drives revenue and earnings growth for us.

Speaker Change: This share of wallet opportunity is so strategically important to us, but I want to drill down for a moment into one more example.

Martin Schroeter: And with one of our large online retail customers, we signed New Scope and extended our contract for the next five years. We're now providing application management services and software engineering development to deliver innovation that complements the modernization work we were already doing, supported by Kindle Bridge.

Another significant signing this quarter was in the healthcare sector. We've been partnering with this U S health care provider for years and they were ready to invest in more innovation. So together with one of our hyperscale or partners and leveraging insights from Central Bridge, we're co developing a comprehensive solution designed to transform and optimize their it.

Martin Schroeter: Going forward, we'll be modernizing and transforming the firm's IT estate and implementing AI technology at scale with Kyndryl Bridge. And at the same time, will continue supporting their core technology, providing security and resiliency and driving compliance with regulatory requirements. We also displaced an incumbent to win a new logo contract with the European FinTech to build a new hybrid IT infrastructure platform and provide cloud migration, cybersecurity, resiliency, and regulatory compliance services. And with one of our large online retail customers, we signed Newscope and extended our contract for the next five years. We're now providing application management services and software engineering development to deliver innovation that complements the modernization work we were already doing, supported by Kindle Bridge.

Martin Schroeter: With Key here is the pattern of leveraging our expanded capabilities, partnerships, strong customer relationships and great reputation to win more scope and higher value opportunities.

Speaker Change: <unk>.

Speaker Change: This entails cloud migration system consolidation data rationalization and application modernization.

Martin Schroeter: In fact, under each of these three new contracts, we're providing hyper-scaler-related services. This pattern highlights Kyndryl's position as a trusted advisor for IT services, embrace for how we can help customers operate in the present, and for how we can help organizations modernize for the future.

Speaker Change: All of which will enhance patient experience and practitioner efficacy.

Speaker Change: As we design implement and manage this new hybrid it estate, we will focus on optimization agility and ongoing innovation.

Martin Schroeter: Our expanding scope not only strengthens our customers' technology operations, it also drives revenue and earnings growth for us.

Speaker Change: And as a result of the increased scale and scope of services. Our annual revenue with this customer we will grow by 33% over the next five years.

Martin Schroeter: This share of wallet opportunity is so strategically important to us that I want to drill down for a moment into one more example.

Speaker Change: The takeaway here is that <unk> is a deeply trusted scaled services provider with differentiated capabilities across hybrid it landscapes can help large enterprises modernized in the cloud.

Martin Schroeter: What's key here is the pattern of leveraging our expanded capabilities, partnerships, strong customer relationships, and great reputation to win more scope and higher value opportunities. In fact, under each of these three new contracts, we're providing hyperscaler-related services. This pattern highlights Kyndryl's position as a trusted advisor for IT services. embrace for how we can help customers operate in the present and for how we can help organizations modernize for the future. Our expanding scope not only strengthens our customers technology operations, it also drives revenue and earnings growth for us.

Another significant signing this quarter was in the healthcare sector.

Martin Schroeter: We've been partnering with this US healthcare provider for years and they were ready to invest in more innovation. So together with one of our hyperskiller partners and leveraging insights from Kyndryl Bridge, we're co-developing a comprehensive solution designed to transform and optimize their IT environment.

Speaker Change: Can do this in ways that presents significant growth opportunities for us.

Speaker Change: <unk> consult has also been a key driver of our signing strength and a return to revenue growth in fiscal 2025, consult signings grew 50% in constant currency and accounted for 22% of our total signings.

Martin Schroeter: This entails cloud migration, system consolidation, data rationalization, and application modernization, all of which will enhance patient experience and practitioner efficacy.

Speaker Change: This is our third consecutive year of above market kingsville, consult signings growth and as I mentioned, we saw that convert into 29% constant currency revenue growth this year.

Martin Schroeter: This share of wallet opportunity is so strategically important to us that I want to drill down for a moment into one more example. Another significant signing this quarter was in the health care sector. We've been partnering with this U.S. health care provider for years, and they were ready to invest in more innovation. So together with one of our hyperscaler partners and leveraging insights from Kyndryl Bridge, we're co-developing a comprehensive solution designed to transform and optimize their IT environment. This entails cloud migration, system consolidation, data rationalization and application modernization, all of which will enhance patient experience and practitioner efficacy.

Martin Schroeter: As we design implement and manage this new hybrid IT estate, we'll focus on optimization, agility and ongoing innovation.

Speaker Change: Many of our customer engagements are focused on putting the right workload on the right platform cloud migration optimization addressing tech debt and more recently application management services.

Martin Schroeter: And as a result of the increased scalant scope of services, our annual revenue with this customer will grow by 33% over the next five years.

Speaker Change: With our expanded capabilities and heritage in mission critical systems and data management, we're very well positioned to build robust data foundations for the AI enabled future through project based consulting engagements.

Speaker Change: We're also seeing demand in security and resiliency, leveraging our capabilities and data discovery data integrity, AI assessment and governance programs.

Martin Schroeter: Kyndryl Consult has also been a key driver of our signing strength and our return to revenue growth. In fiscal 2025, consults signings grew 50% in constant currency and accounted for 22% of our total signings.

Speaker Change: These trends are driving double digit signings growth across all six of our practices and they will continue to be meaningful growth opportunities, especially since 95% of our companies are adopting AI, but nearly two thirds haven't yet implemented and AI governance framework.

Martin Schroeter: As we design, implement, and manage this new hybrid IT estate, we'll focus on optimization, agility, and ongoing innovation. And as a result of the increased scale and scope of services, our annual revenue with this customer will grow by 33% over the next five years. The takeaway here is that Kyndryl, as a deeply trusted, scaled services provider with differentiated capabilities across hybrid IT landscapes, can help large enterprises modernize in the cloud. And we can do this in ways that present significant growth opportunities for us. Kyndryl Consult has also been a key driver of our signing strength and our return to revenue growth.

Martin Schroeter: This is our third consecutive year of above market, Kyndryl Consult signings growth and as I mentioned we saw that convert into 29% constant currency revenue growth this year.

Speaker Change: So because of our strong fiscal 2025 results in expanding capabilities, we're entering a new fiscal year with a lot of momentum.

Martin Schroeter: Many of our customer engagements are focused on putting the right workload on the right platform, cloud migration, optimization, addressing tech debt, and more recently application management services.

Speaker Change: And we are laser focused on driving profitable growth and delivering value to our customers.

Speaker Change: The strategy, we outlined three years ago continues to resonate and our competitive advantages are powering multiple avenues for our growth.

Martin Schroeter: With our expanded capabilities and heritage and mission critical systems and data management, we're very well positioned to build robust data foundations for the AI and able future through project-based consult engagements.

Speaker Change: Increasing scope with existing customers and winning new logos, providing industry, leading managed services and growing our control consult advisory revenues and expanding our capabilities through our practices with our strategic alliances and with Kindle Bridge.

Martin Schroeter: In fiscal 2025, consult signings grew 50% in constant currency and accounted for 22% of our total signings. This is our third consecutive year of above market Kyndryl Consult signings growth. And as I mentioned, we saw that convert into 29% constant currency revenue growth this year. Many of our customer engagements are focused on putting the right workload on the right platform, cloud migration, optimization, addressing tech debt, and more recently, application management services. With our expanded capabilities and heritage in mission critical systems and data management, we're very well positioned to build robust data foundations for the AI-enabled future through project-based consult engagement.

Martin Schroeter: We're also seeing demand in security and resiliency, leveraging our capabilities in data discovery, data integrity, AI assessment, and governance programs.

Speaker Change: Our position as a vital partner to our customers in both running and transforming their mission critical technology of states is very powerful and through our six global practices and kinzel consoles will continue to build new capabilities and skills that our customers need to advance their business objectives.

Martin Schroeter: These trends are driving double-digit signings growth across all six of our practices, and they will continue to be meaningful growth opportunities, especially since 95% of the companies are adopting AI, but nearly two-thirds have it yet implemented in AI governance framework.

Speaker Change: Our alliances with Hyperscale and leading technology providers are extensive and continually expanding.

Martin Schroeter: So because of our strong fiscal 2025 results and expanding capabilities, we're entering our new fiscal year with a lot of momentum and we're laser focused on driving profitable growth and delivering value to our customers.

Speaker Change: And our AI powered <unk> bridge operating platform distinguishes us from our peers power service excellence and drives efficiency.

Speaker Change: This combination of leading expertise strategic alliances and technological innovation opens new doors with existing customers and attract new customers, creating incremental growth opportunities for us and ensuring that we remain a critical part of our customers' evolution.

Martin Schroeter: The strategy we outlined three years ago continues to resonate and our competitive advantages are powering multiple avenues for our growth.

Martin Schroeter: We're also seeing demand in security and resiliency, leveraging our capabilities and data discovery, data integrity, AI assessment and governance programs. These trends are driving double-digit signings growth across all six of our practices. And there will continue to be meaningful growth opportunities, especially since 95% of our companies are adopting AI, but nearly two-thirds haven't yet implemented an AI governance framework. So because of our strong fiscal 2025 results and expanding capabilities, we're entering our new fiscal year with a lot of momentum. and we're laser focused on driving profitable growth and delivering value to our customers. The strategy we outlined three years ago continues to resonate, and our competitive advantages are powering multiple avenues for our growth.

Martin Schroeter: Increasing scope with existing customers and winning new logos, providing industry leading managed services and growing our Kindle Consult Advisor revenues, and expanding our capabilities through our practices with our strategic alliances and with Kindle Bridge.

Speaker Change: And this combination is what will fuel our top line growth in fiscal 2026 and beyond.

Speaker Change: I want to reiterate the targets we set for fiscal 2028 at our Investor Day in November we expect to deliver more than $1 billion in adjusted free cash flow, we expect to deliver more than 1 billion to an adjusted pre tax income and to achieve these earnings and cash flow targets, we only need to reach mid single digit revenue growth that will progress towards by fiscal 2028.

Martin Schroeter: Our position as a vital partner to our customers in both running and transforming their mission critical technology estates is very powerful, and through our six global practices in Kyndryl Consult, we'll continue to build new capabilities and skills that our customers need to advance their business objectives.

Martin Schroeter: Air alliances with hyperscalers and leading technology providers are extensive and continually expanding. And our AI-powered Kyndral Bridge Operating Platform distinguishes us from our peers, power service excellence and drives efficiency.

Speaker Change: <unk>.

Speaker Change: With strong conversion of earnings to free cash flow will balance our approach to capital allocation by investing in organic growth opportunities and occasional tuck in acquisitions and at the same time, returning capital to shareholders through our share repurchase program.

Martin Schroeter: Increasing scope with existing customers and winning new logos. Providing industry leading managed services and growing our Kyndryl Consult advisory revenues and expanding our capabilities through our practices with our strategic alliances and with Kyndryl Bridge. Our position as a vital partner to our customers in both running and transforming their mission-critical technology estates is very powerful, and through our six global practices and Kyndryl Consult, we'll continue to build new capabilities and skills that our customers need to advance their business objectives. Our alliances with hyperscalers and leading technology providers are extensive and continually expanding. And our AI-powered Kyndryl bridge operating platform distinguishes us from our peers, powers service excellence and drives efficiency.

Martin Schroeter: This combination of leading expertise, strategic alliances, and technological innovation opens new doors with existing customers and attracts new customers, creating incremental growth opportunities for us, and ensuring that we remain a critical part of our customer's IT evolution.

Speaker Change: It should be clear that the fiscal 2026 outlook. We published yesterday is consistent with the path. We previously laid out for our growth from fiscal 2025% for fiscal 2028.

Speaker Change: And as David will discuss in fiscal 2026, we expect to generate approximately $550 million and adjusted free cash flow.

Martin Schroeter: and this combination is what will fuel our top line growth in fiscal 2026 and beyond.

Speaker Change: We will grow our pre tax earnings by more than $240 million to at least $725 million and will generate positive constant currency revenue growth.

Martin Schroeter: I want to reiterate the targets we set for fiscal 2028 at our investor day in November . We expected to deliver more than a billion in adjusted free cash flow. We expected to deliver more than a billion to an adjusted pre-tax income. And to achieve these earnings in cash flow targets, we only need to reach mid-single digit revenue growth that will progress toward by fiscal 2028.

Speaker Change: This fiscal year, two thirds of our P&L will be derived from our higher margin post spin signings.

Speaker Change: And while we understand that it's a challenging environment in which to provide guidance given the heightened macro uncertainty since our last earnings call. Let's remember, though there are always reasons for companies to delay investment decisions.

Martin Schroeter: This combination of leading expertise, strategic alliances, and technological innovation opens new doors with existing customers and attracts new customers, creating incremental growth opportunities for us and ensuring that we remain a critical part of our customers' IT evolution.

Martin Schroeter: With strong conversion of earnings to free cash flow, we'll balance our approach to capital allocation by investing in organic growth opportunities and occasional tuck-in acquisitions and at the same time returning capital to shareholders through a share of a purchase program.

Speaker Change: But the nature of our business, providing mission critical services under multi year contracts means that we are significantly insulated from although not immune.

Speaker Change: Two macro factors.

Martin Schroeter: And this combination is what will fuel our top line growth in fiscal 2026 and beyond.

Speaker Change: In enterprise Tech that isn't going away because of potential tariffs or other geo-economics factors, our Q4 and fiscal 2025 signings growth is a testament to the unique kendra specific opportunities available to us or.

Martin Schroeter: It should be clear that the fiscal 2026 outlook we published yesterday is consistent with the path we previously laid out for our growth from fiscal 2025 to fiscal 2028. And as David will discuss in fiscal 2026, we expected generate approximately 550 million in adjusted free cash flow.

Martin Schroeter: I want to reiterate the targets we set for fiscal 2028 at our Investor Day in November. We expect to deliver more than a billion in adjusted free cash flow. We expect to deliver more than a billion to an adjusted pre-tax income. And to achieve these earnings and cash flow targets, we only need to reach mid single digit revenue growth that will progress toward by fiscal 2028. With strong conversion of earnings to free cash flow, we'll balance our approach to capital allocation by investing in organic growth opportunities and occasional tuck-in acquisitions, and at the same time, returning capital to shareholders through our share repurchase program.

Speaker Change: Our technology services are essential and non discretionary and we provide efficiency resiliency and innovation to our customers.

Martin Schroeter: We'll grow our pre-tax earnings by more than 240 million to at least 725 million, and we'll generate positive constant currency revenue growth. This fiscal year, two-thirds of our P&L will be derived from our higher margin post-spin

Speaker Change: As a result, while we'll continue to monitor economic and geopolitical developments carefully are significant insulation from macro factors gives us confidence in the outlook, we provided and in our longer term trajectory.

David: With that I'd like to pass the call over to David.

Martin Schroeter: And while we understand that it's a challenging environment in which to provide guidance given the heightened macro uncertainty since our last earnings call, let's remember though, there are always reasons for companies to delay investment decisions.

David: Thanks, Martin and Hello, everyone today, I'd like to discuss our fourth quarter results. Our continued progress on our <unk> initiatives the solid margins at which we are signing customer contracts and our outlook for fiscal year 2026, which began on April one.

Martin Schroeter: It should be clear that the Fiscal 2026 outlook we published yesterday is consistent with the path we previously laid out for our growth from Fiscal 2025 to Fiscal 2028. And as David will discuss, in Fiscal 2026, we expect to generate approximately $550 million in adjusted free cash flow. We'll grow our pre-tax earnings by more than $240 million to at least $725 million, and we'll generate positive constant currency revenue growth. This fiscal year, two thirds of our P&L will be derived from our higher margin post spin signing. And while we understand that it's a challenging environment in which to provide guidance, given the heightened macro uncertainty since our last earnings call, let's remember, though, there are always reasons for companies to delay investment decisions.

Martin Schroeter: But the nature of our business, providing mission critical services under multi-year contracts means that we are significantly insulated from, although not immune.

Martin Schroeter: to macrofactors. An enterprise tech debt isn't going away because of potential tariffs or other geoeconomic factors. Our Q4 and fiscal 2025 signings growth is a testament to the unique, Kindle-specific opportunities available to us.

David: We're proud of finishing strong in fiscal 2025, and we're enthusiastic about how our market leadership strategy and capabilities have positioned kindred for profitable growth in fiscal 2026 and beyond.

Martin Schroeter: Our technology services are essential and non-discretionary, and we provide efficiency, resiliency, and innovation to our customers.

David: Our fourth quarter results reflect strong operational execution and continued progress on our key initiatives.

Martin Schroeter: As a result, while we continue to monitor economic and geopolitical development carefully, our significant insulation from macro factors gives us confidence in the outlook we provided and in our longer-term trajectory. With that, I'd like to pass the call over to David.

David: In the quarter revenue totaled $3 8 billion.

David: A one 3% year over year increase in constant currency.

Martin Schroeter: But the nature of our business providing mission critical services under multi year contracts means that we are significantly insulated from although not immune to Macrofactor. And enterprise tech debt isn't going away because of potential tariffs or other geoeconomic factors. Our Q4 and fiscal 2025 signings growth is a testament to the unique Kyndryl specific opportunities available to us. Our technology services are essential and non-discretionary, and we provide efficiency, resiliency, and innovation to our customers. As a result, while we'll continue to monitor economic and geopolitical developments carefully, our significant insulation from macro factors gives us confidence in the outlook we provided and in our longer term trajectory.

David: Returning to positive constant currency revenue growth is an important milestone for us key.

David Wyshner: Thanks, Martin, and hello everyone. Today I'd like to discuss our fourth quarter results, our continued progress on our three A's initiatives, the Solved margins at which we're signing customer contracts, and our outlook for fiscal year 2026, which began on April 1.

David: Key drivers of our growth were kindred console, where revenues grew 45% in the quarter and our hyper scaler related work where revenues more than doubled.

David: Our $5 $5 billion of signings made Q4, our sixth consecutive quarter of signings growth and brings our full year signings growth to 46%.

David Wyshner: We're proud of finishing strong in fiscal 2025 and we're enthusiastic about how our market leadership strategy and capabilities have positioned Kyndryl for profitable growth in fiscal 2026 and beyond.

David: Our strength continues to be broad based across our practices and geographic segments with kindred consult signings growing at the same rate as our aggregate signings growth.

David Wyshner, David Togut, David Wyshner,

David Wyshner: Our fourth quarter results reflect strong operational execution and continued progress on our key initiatives.

David Wyshner: With that, I'd like to pass the call over to David.

David: Our fourth quarter, adjusted EBITDA was $698 million and our adjusted EBITDA margin was 18, 4% up 370 basis points year over year.

David Wyshner: Thanks, Martin.

David Wyshner: And hello, everyone. Today, I'd like to discuss our fourth quarter results, our continued progress on our three A's initiatives, the solid margins at which we're signing customer contracts, and our outlook for fiscal year 2026, which began on April 1. We're proud of finishing strong in fiscal 2025. And we're enthusiastic about how our market leadership strategy and capabilities have positioned Kyndryl for profitable growth in fiscal 2026 and beyond. Our fourth quarter results reflect strong operational execution and continued progress on our key initiatives. In the quarter, revenue totaled $3.8 billion, a 1.3% year-over-year increase in constant currency.

David Wyshner: In the quarter, revenue totaled $3.8 billion, a 1.3% year-over-year increase in constant currency.

David: Adjusted pre tax income was $185 million.

David Wyshner: Returning a positive constant currency revenue growth is an important milestone for us.

David: Six times, what it was a year earlier and our adjusted pre tax margin increased 410 basis points year over year.

David Wyshner: Key drivers of our growth were Kindro Consult, where a revenues grew 45% in the quarter, and a hyper-scaler-related work, where a revenues more than doubled.

David: Included in our $185 million of adjusted pre tax income was $23 million in workforce rebalancing charges and the contractually committed $50 million year over year increase in IBM software costs that we've discussed on prior calls.

David Wyshner: Our five-and-a-half billion dollars of signings made Q4 our sixth consecutive quarter of signings growth and brings our full year signings growth to 46 percent.

David: As a result, our underlying operational momentum is even stronger than the $150 million plus increase in adjusted pretax income we reported in Q4.

David Wyshner: Our strength continues to be broad-based across our practices and geographic segments, with Monroe Consult signings growing at the same rate as our aggregate signings growth.

David Wyshner: returning a positive constant currency revenue growth is an important milestone for us. Key drivers of our growth were Kyndryl Consult, where our revenues grew 45% in the quarter, and hyperscaler-related work, where our revenues more than doubled. Our five and a half billion dollars of signings made Q4 our sixth consecutive quarter of signings growth and brings our full year signings growth to 46%. Our strength continues to be broad based across our practices and geographic segments, with Kyndryl Consult signings growing at the same rate as our aggregate signings growth. Our fourth quarter adjusted EBITDA was $698 million and our adjusted EBITDA margin was 18.4%, up 370 basis points year over year.

David Wyshner: Our fourth quarter adjusted EBITDA was $698 million and our adjusted EBITDA margin was 18.4% up 370 basis points each year.

David: Through our alliances we generated $378 million in hyper scaler related revenue in the fourth quarter.

David: Our $1 $2 billion full year total was more than double the prior year level and significantly exceeded our target of nearly $1 billion of hyperscale or related revenue.

David Wyshner: Adjusted pre-tax income was $185 million, six times what it was a year earlier, and our Adjusted pre-tax margin increased 410 basis points year-re-year.

David: Through our advanced delivery initiative powered by Kindred Bridge, we continue to drive automation driver delivery operations incorporate more technology into our offerings reduce our costs and increase our already strong service levels to.

David Wyshner: Included in our $185 million of adjusted pre-tax income was $23 million in workforce rebalancing charges and the contractually committed $50 million year-over-year increase in IBM software costs that we've discussed on prior calls.

David: To date, we've been able to free up more than 13000 delivery professionals to address new revenue opportunities and backfill attrition.

David Wyshner: As a result, our underlying operational momentum is even stronger than the $150 million plus increase in adjusted pre-tax income we reported in Q4.

David: This is now worth accumulative $775 million a year to us surpassing our fiscal 2025 target.

David Wyshner: Adjusted pre-tax income was $185 million, six times what it was a year earlier, and our adjusted pre-tax margin increased 410 basis points year-over-year. Included in our $185 million of adjusted pre-tax income was $23 million in workforce rebalancing charges and the contractually committed $50 million year-over-year increase in IBM software costs that we've discussed on prior calls. As a result, our underlying operational momentum is even stronger than the $150 million plus increase in adjusted pre-tax income we reported in Q4. Through our alliances, we generated $378 million in hyperscaler-related revenue in the fourth quarter. Our $1.2 billion full year total was more than double the prior year level and significantly exceeded our target of nearly a billion dollars of hyperscaler related revenue.

David Wyshner: Through our alliances, we generated $378 million in hyperscaler-related revenue in the fourth quarter. Our $1.2 billion full-year total was more than double the prior year level and significantly exceeded our target of nearly a billion dollars of hyperscaler-related revenue.

David: Our accounts initiative continues to remediate elements of contracts, we inherited with substandard margins in the fourth quarter, we increased the cumulative annualized profit from our focus accounts by $75 million to $900 million.

David: This also topped our target for the year.

David Wyshner: Through our Advanced Delivery Initiative, powered by Kyndryl Bridge, we continue to drive automation through other delivery operations, incorporate more technology into our offerings, reduce our costs and increase our already strong service levels.

David: The concept underlying the <unk> continue to be an important source of margin expansion and value creation for us and are now integral parts of our operational and go to market approach.

David: We're more confident than ever that the benefits from our <unk> initiatives will meet and ultimately exceed the targets. We laid out in early 2022 and raised in early 2024.

David Wyshner: To date, we've been able to free up more than 13,000 delivery professionals to address new revenue opportunities and back filtration. This is now worth accumulative $775 million a year to us, surpassing our fiscal 2025 target.

David: For fiscal year 'twenty five as a whole we generated $15 $1 billion of revenue our adjusted EBITDA was $2 5 billion and our adjusted pre tax income was $482 million.

David Wyshner: Our Accounts Initiative continues to remediate elements of contracts we inherited with

David Wyshner: Through our advanced delivery initiative, powered by Kyndryl Bridge, we continue to drive automation throughout our delivery operations, incorporate more technology into our offerings, reduce our costs, and increase our already strong service level. To date, we've been able to free up more than 13,000 delivery professionals to address new revenue opportunities in backfill attrition. This is now worth a cumulative $775 million a year to us, surpassing our fiscal 2025 target. Our accounts initiative continues to remediate elements of contracts we inherited with substandard margins. In the fourth quarter, we increased the cumulative annualized profit from our focus accounts by $75 million to $900 million.

David: Representing a $317 million or 192% increase from the prior year.

David Wyshner: In the fourth quarter, we increase accumulated annualized profit from our focus accounts by $75 million to $900 million. This also topped our target for the year.

David: We expanded our adjusted EBITDA margin by 200 basis points and our adjusted pre tax margin by 220 basis points year over year.

David Wyshner: The concepts underlying the three A's continue to be an important source of margin expansion and value creation for us, and are now integral parts of our operational and go-to-market

David: Increases that represent continued progress on our path to high single digit adjusted pre tax margins.

David: Our financial progress reflects our strategic achievements leveraging technology alliances stepping away from empty calorie revenues fixing focus accounts growing the consoles portion of our business driving efficiency throughout our operations and positioning <unk> to meet our customers.

David Wyshner: We're more confident than ever that the benefits from our 3A's initiatives will meet and ultimately exceed the targets we laid out in early 2022 and raised in early 2024.

David Wyshner: For fiscal year 25 as a whole, we generated 15.1 billion dollars of revenue. Our Justin David Togut was 2.5 billion dollars and our adjusted pre-tax income was $482 million.

David: Future needs are.

David Wyshner: This also topped our target for the year. The concepts underlying the 3As continue to be an important source of margin expansion and value creation for us, and are now integral parts of our operational and go-to-market approach. We're more confident than ever that the benefits from our three A's initiatives will meet and ultimately exceed the targets we laid out in early 2022 and raised in early 2024.

David: Our performance in fiscal 2025 gives us strong momentum as we move forward.

David Wyshner: representing a $317 million or 192% increase from the prior year.

David: In fact, we continue to position <unk> for future revenue margin and profit growth.

David: Not only by growing signings this past quarter in year, but also by commanding attractive margins on our signings.

David Wyshner: We expanded our adjusted EBITDA margin by 200 basis points and our adjusted pre-tax margin by 220 basis points year-over-year. Increases that represent continued progress on our path to high single-digit adjusted pre-tax margins.

David: Throughout fiscal 2025, just like fiscal 2023, and 24, we signed contracts with projected gross margins in the mid twenties and projected pre tax margins in the very high single digits.

David Wyshner: For fiscal year 25 as a whole, we generated $15.1 billion of revenue, our adjusted EBITDA was $2.5 billion, and our adjusted pre-tax income was $482 million, representing a $317 million or 192% increase from the prior year. We expanded our adjusted EBITDA margin by 200 basis points and our adjusted pre-tax margin by 220 basis points year-over-year, increases that represent continued progress on our path to high single-digit adjusted pre-tax margin. Our financial progress reflects our strategic achievements, leveraging technology alliances, stepping away from empty calorie revenues, fixing focus accounts, growing the consult portion of our business, driving efficiency throughout our operations, and positioning Kyndryl to meet our customers' future IT needs.

Our financial progress reflects our strategic achievements.

David: Therefore, as our business mix increasingly shifts towards more post spin contracts, you'll see significant margin expansion in our reported results.

David Wyshner: Leveraging technology alliances, stepping away from empty gallery revenues, fixing focus accounts, growing the consult portion of our business, driving efficiency throughout our operations, and positioning Kyndryl to meet our customers' future IT needs.

David: We've again included a gross profit book to Bill chart that accentuates, how we have been creating and capturing value in our business.

David Wyshner: Our performance in fiscal 2025 gives us strong momentum as we move forward.

David: With an average projected gross margin of 26% on our $18 $2 billion in signings over the last year, we've added over $4 $5 billion of projected gross profit to our backlog.

David Wyshner: In fact, we continue to position Kyndryl for future revenue, margin, and profit growth, not only by growing signings this past quarter and year, but also by commanding attractive margins on our signings.

David: Over the same period of time, we've reported gross profit of $3 1 billion.

David Wyshner: Throughout fiscal 2025, just like fiscal 2023 and 2024, we signed contracts with projected gross margins in the mid-20s and projected pre-tax margins in the very high single digits.

David: This means we've been adding significantly more gross profit to our backlog and our contracted book of business has been producing in our P&L.

David: Having a gross profit book to bill ratio above one.

David: At 1.5 over the latest 12 months is a key measure of how we're growing what matters most.

David Wyshner: Therefore, as our business mix increasingly shifts toward more post spin contracts, you'll see significant margin expansion in our reported results.

David Wyshner: Our performance in fiscal 2025 gives us strong momentum as we move forward. In fact, we continue to position Kyndryl for future revenue, margin and profit growth, not only by growing signings this past quarter and year, but also by commanding attractive margins on our signings. Throughout fiscal 2025, just like fiscal 2023 and 2024, we signed contracts with projected gross margins in the mid-20s and projected pre-tax margins in the very high single digits. Therefore, as our business mix increasingly shifts toward more post-spin contracts, you'll see significant margin expansion in our reported results. We've again included a gross profit book to bill chart that accentuates how we've been creating and capturing value in our business.

David: Expected future profit from committed contracts.

David Wyshner: We've again included a gross profit book to bill chart that accentuates how we've been creating and capturing value in our business.

David: And with our gross profit book to Bill ratio, having been consistently above one that means that we have been consistently growing our gross profit backlog over the last three years.

David Wyshner: With an average projected gross margin of 26% on our 18.2 billion dollars in signings over the last year, we've added over 4.5 billion dollars of projected gross profit to our backlog.

David: Turning to our cash flow and balance sheet, our adjusted free cash flow was $446 million for the year and our net capital expenditures were $522 million.

David Wyshner: Over the same period of time, we've reported gross profit of $3.1 billion.

David: We've provided a bridge from our adjusted pre tax income to our free cash flow as well as a bridge from our adjusted EBITDA to our free cash flow in the appendix.

David Wyshner: This means we've been adding significantly more gross profit to our backlog than our contracted book of business has been producing in our P&L.

David: Under the share repurchase authorization, we announced in late November we bought back one 8 million shares of our common stock in the quarter at a cost of $64 million as.

David Wyshner: With an average projected gross margin of 26% on our $18.2 billion of signings over the last year, we've added over $4.5 billion of projected gross profit to our backlog. Over the same period of time, we've reported gross profit of $3.1 billion. This means we've been adding significantly more gross profit to our backlog than our contracted book of business has been producing in our P&L. Having a gross profit book to bill ratio above one at 1.5 over the latest 12 months is a key measure of how we're growing what matters most, the expected future profit from committed contracts.

David: As of March 31, we had $206 million of repurchase capacity remaining under our share repurchase authorization.

David Wyshner: And with our Gross Profit book to Bill Ratio having been consistently above one, that means that we've been consistently growing our Gross Profit backlog over the last three years.

David: Our.

David: <unk> position remains strong our cash balance was $1 8 billion.

David: Our cash combined with available debt capacity under committed borrowing facilities gave us nearly $5 billion of liquidity at quarter end.

David Wyshner: Turning to our cash flow and balance sheet, our just free cash flow was $446 million for the year, and our net capital expenditures were $522 million.

David: Our debt maturities are well ladder from late 2026 to 2041, we.

We had no borrowings outstanding under our revolving credit facility and our net debt at quarter end with only $1 4 billion.

David Wyshner: We've provided a bridge from our adjusted pre-tax income to our free cash flow, as well as a bridge from our adjusted EBITDA to our free cash flow in the appendix.

David: Our target has been to keep net leverage below one times adjusted EBITDA and we ended the quarter well within our target range of 0.6 times were rated investment grade by Moody's Fitch and S&P.

David Wyshner: Under the share repurchase authorization we announced in late November , we bought back 1.8 million shares of our common stock in the quarter at a cost of $64 million.

David Wyshner: And with our gross profit book to bill ratio having been consistently above one, that means that we've been consistently growing our gross profit backlog over the last three years. Turning to our cash flow and balance sheet, our adjusted free cash flow was $446 million for the year, and our net capital expenditures were $522 million. We provided a bridge from our adjusted pre-tax income to our free cash flow, as well as a bridge from our adjusted EBITDA to our free cash flow in the appendix. Under the share repurchase authorization we announced in late November, we bought back 1.8 million shares of our common stock in the quarter at a cost of $64 million.

David Wyshner: As of March 31, we have $206 million of repurchased capacity remaining under our share repurchased authorization.

David: We continue to monitor economic and geopolitical developments, our direct exposure to U S. Federal government spending is extremely limited with less than half of 1% of our revenue coming from U S government contracts.

David Wyshner: Our financial position remains strong. Our cash balance was $1.8 billion. Our cash, combined with available debt capacity under committed borrowing facilities, gave us nearly $5 billion of liquidity at quarter-end.

David: Our operations in China represent only about 1% of our revenue and our costs and our direct exposure to various tariffs that had been proposed is quite limited.

Our debt maturities are well-lattered from late 2026 to 2041.

David: On capital allocation, our top priorities are to maintain strong liquidity remain investment grade reinvest in our business and regularly return capital to shareholders.

David Wyshner: We had no borrowings outstanding under our revolving credit facility and our net debt at quarter and with only $1.4 billion.

David Wyshner: As of March 31, we have $206 million of repurchase capacity remaining under our share repurchase authorization. Our financial position remains strong. Our cash balance was $1.8 billion. Our cash combined with available debt capacity under committed borrowing facilities gave us nearly $5 billion of liquidity at quarter end. Our debt maturities are well laddered from late 2026 to 2041. We had no borrowings outstanding under our revolving credit facility, and our net debt at quarter end was only $1.4 billion. Our target has been to keep net leverage below one times adjusted EBITDA, and we ended the quarter well within our target range at 0.6 times.

David Wyshner: Our target has been to keep net leverage below one time to just diva Togut, and we ended the quarter well within our target range at 0.6 times. We are rated investment grade by Moody's Fitch and FMP.

David: As we look ahead to fiscal 2026, our core financial goals are to continue to grow our revenues expand our margins increase our earnings and generate free cash flow.

David: Our outlook assumes that revenue will grow 1% in constant currency within that we expect hyper scaler related revenue to reach $1 $8 billion or more of 50% year over year increase.

We continue to monitor economic and geopolitical development.

David Wyshner: Our direct exposure to US federal government spending is extremely limited with less than half of 1% of our revenue coming from US government contracts.

David: We expect kindred consult revenue to again grow double digits, and we expect constant currency revenue growth each quarter to be about the full year rate.

David Wyshner: Our operations in China represent only about 1% of our revenue and our costs and our direct exposure to various tariffs that have been proposed is quite limited.

David: We estimate that our adjusted EBITDA margin in fiscal 2026 will be approximately 18%.

David Wyshner: On capital allocation or top priorities or to maintain strong liquidity, remain investment grade, reinvest in our business and regularly return capital to shareholders.

David: An increase of roughly 130 basis points versus fiscal 'twenty five.

David Wyshner: We are rated investment grade by Moody's, Fitch, and S&P. We continue to monitor economic and geopolitical development. Our direct exposure to U.S. federal government spending is extremely limited, with less than half of 1% of our revenue coming from U.S. government contracts. Our operations in China represent only about 1% of our revenue and our costs, and our direct exposure to various tariffs that have been proposed is quite limited. On capital allocation, our top priorities are to maintain strong liquidity, remain investment grade, reinvest in our business, and regularly return capital to shareholders. As we look ahead to fiscal 2026, our core financial goals are to continue to grow our revenues, expand our margins, increase our earnings, and generate free cash flow.

David: And our outlook for adjusted pre tax income is at least $725 million.

David Wyshner: As we look ahead to fiscal 2026, our core financial goals are to continue to grow our revenues, extend our margins, increase our earnings, and generate free cash flow.

David: It means growing our adjusted pre tax income by at least $243 million an increase.

David: Creasing, our adjusted pre tax margin by at least 150 basis points year over year.

David Wyshner: Our outlook assumes that revenue will grow 1% in constant currency.

David: That means we're calling for a third straight year of strong roughly two point margin expansion, we delivered in fiscal 2024 and fiscal 2025.

David Wyshner: Within that, we expect hyper-scaler-related revenue to reach $1.8 billion or more, a 50% year-over-year increase.

David: And it keeps us right on track to generate high single digit adjusted pre tax margins in fiscal 2027% in fiscal 2028.

David Wyshner: We expect Kinro console revenue to again grow double digits and we expect constant currency revenue growth each quarter to be about the full year rate.

David: Exchange rates are currently expected to have a minimal impact on adjusted EBITDA and adjusted pretax income in fiscal 2006 compared to fiscal 'twenty five.

David Wyshner: We estimate that our adjusted EBITDA margin in fiscal 2026 will be approximately 18% in an increase of roughly 130 basis points versus fiscal 25.

David: Also this should be the last year in which we're talking about IBM software cost increases our fiscal 2026 outlook includes the $150 million Kindred specific IBM software cost increase that we previously discussed.

David Wyshner: Our outlook assumes that revenue will grow 1% in constant currency. Within that, we expect hyperscaler related revenue to reach $1.8 billion or more, a 50% year over year increase. We expect Kyndryl Consult Revenue to again grow double digits and we expect constant currency revenue growth each quarter to be about the full year rate. We estimate that our adjusted EBITDA margin in fiscal 2026 will be approximately 18%, an increase of roughly 130 basis points versus fiscal 25. and our outlook for adjusted pre-tax income is at least $725 million. This means growing our adjusted pre-tax income by at least $243 million and increasing our adjusted pre-tax margin by at least 150 basis points year over year.

David: And going forward, we don't expect any outsized cost moves related to our former parent for two reasons.

David Wyshner: That means we're calling for a third straight year of the strong roughly two point margin expansion we delivered in fiscal 2024 and fiscal 2025.

David: First beginning in January it will be the annual inflationary increases that IBM poses on the entire market that determined our pricing and.

David Wyshner: And it keeps us right on track to generate high single-digit adjusted pre-tax margins in fiscal 2027 and fiscal 2028.

David: And second we increasingly have provisions in our customer contracts that protect us.

David: We're excited to be putting this behind us.

David: We continue to see opportunities to drive efficiencies in our operations, both through advanced delivery and in SG&A functions.

David Wyshner: Exchange rates are currently expected to have a minimal impact on adjusted EBITDA and adjusted to pre-tax income in fiscal 26 compared to fiscal 25.

David: Looking at the first quarter in particular, we're expecting our adjusted pre tax income to be 30% to 50% higher than the $92 million, we reported in last year's first quarter.

David Wyshner: Also, this should be the last year in which we're talking about IBM software cost increases.

David Wyshner: That means we're calling for a third straight year of the strong, roughly two-point margin expansion we delivered in fiscal 2024 and fiscal 2025. And it keeps us right on track to generate high single-digit adjusted pre-tax margins in fiscal 2027 and fiscal 2028. Exchange rates are currently expected to have a minimal impact on adjusted EBITDA and adjusted pre-tax income in fiscal 26 compared to fiscal 25. Also, this should be the last year in which we're talking about IBM software cost increases. Our fiscal 2026 outlook includes the $150 million Kyndryl-specific IBM software cost increase that we've previously discussed.

David Wyshner: Our fiscal 2026 outlook includes the $150 million Kindrell-specific IBM software cost increase that we previously discussed.

David: On the topic of cash flow for the year as a whole we project roughly $675 million of net capital expenditures in fiscal 2026, and about $675 million of depreciation expense.

David Wyshner: And going forward, we don't expect any outsized cost moves related to our former parent for two reasons.

David Wyshner: First, beginning in January , it will be the annual inflationary increases that IBM poses on the entire market that determine our pricing.

David: We expect to pay roughly $175 million in cash taxes.

David: And we're forecasting roughly 100% conversion of adjusted pre tax income less cash taxes into free cash flow, implying adjusted free cash flow of approximately $550 million.

David Wyshner: In second, we increasingly have provisions in our customer contracts that protect us. We're excited to be putting this behind us.

David Wyshner: We continue to see opportunities to drive efficiencies in our operations, both through advanced delivery

From a timing perspective, and similar to last year Q1 will be a significant user of cash due to annual software and incentive payments.

David Wyshner: Looking at the first quarter in particular, we're expecting our adjusted pre-tax income to be 30-50% higher than the 92 million dollars we reported in last year's first quarter.

David Wyshner: And going forward, we don't expect any outsized cost moves related to our former parent for two reasons. First, beginning in January, it will be the annual inflationary increases that IBM poses on the entire market that determine our pricing. And second, we increasingly have provisions in our customer contracts that protect us. We're excited to be putting this behind us. We continue to see opportunities to drive efficiencies in our operations, both through advanced delivery and in SG&A functions. Looking at the first quarter in particular, we're expecting our adjusted pre-tax income to be 30 to 50% higher than the $92 million we reported in last year's first quarter.

David: In subsequent quarters will be more favorable the.

David: The difference between our adjusted free cash flow and GAAP cash from operating activities less net capex was only $25 million in the last six months of fiscal 2025, and we expect the adjustments included in our calculation of cash flow to remain modest.

David Wyshner: On the topic of cash flow, for the years a whole would project roughly $675 million of net capital expenditures in fiscal 2026 and about $675 million of depreciation expense.

David: Over the medium term, we remain committed to delivering significant margin expansion and generating free cash flow growth.

We expect to pay roughly $175 million in cash taxes.

David Wyshner: And we're forecasting roughly 100% conversion of adjusted pre-tax income less cash taxes into free cash flow, implying adjusted free cash flow of approximately $550 million.

David: We have a solid game plan to drive our strategic progress and this game plan starts with the steps we've already taken to expand our technology alliances manage our costs and earn a return on all of our revenues.

David Wyshner: From a timing perspective, in similar to last year, Q1 will be a significant user of cash due to annual software and incentive payments.

David: So in fiscal 2025, we said, what we were going to do and we delivered that and more.

David Wyshner: On the topic of cash flow, for the year as a whole, we project roughly $675 million of net capital expenditures in fiscal 2026, and about $675 million of depreciation expense. We expect to pay roughly $175 million in cash tax. And we're forecasting roughly 100% conversion of adjusted pre-tax income less cash taxes into free cash flow, implying adjusted free cash flow of approximately $550 million. From a timing perspective, and similar to last year, Q1 will be a significant user of cash due to annual software and incentive payment. and subsequent quarters will be more favorable. The difference between our adjusted free cash flow and gap cash from operating activities less net CapEx is only $25 million in the last six months of fiscal 2025.

and subsequent quarters will be more favorable.

David: This gives us financial momentum as we move into our fiscal 2026.

David Wyshner: The difference between our adjusted pre-cash flow and gap cash from operating activities, and less net cat-backs is only $25 million in the last six months of fiscal 2025.

David: Even more important though is the momentum we have as a leading provider of mission critical technology services driving thought leadership in our space growing our kingdom consoled presence rapidly delivering modern hybrid it solutions to our customers and operating at the heart of <unk>.

David Wyshner: and we expect the adjustments included in our calculation of cash flow to remain modest.

David Wyshner: Over the medium term, we remain committed to delivering significant margin expansion and generating free cash flow growth.

David: <unk> trends that will fuel customer demand for our services for the foreseeable future.

David Wyshner: We have a solid game plan to drive our strategic progress, and this game plan starts with the steps we've already taken to expand our technology alliances, manage our costs, and earn a return on all of our revenues.

David: And over the medium term, we remain committed to delivering significant margin expansion and generating free cash flow growth.

David: So let me end by again thanking the tens of thousands of kindred around the world who are empowering our progress.

David Wyshner: So, in fiscal 2025, we said what we were going to do, and we delivered that and more. This gives us financial momentum as we move into our fiscal 2026.

David: With that Martin and I would be pleased to take your questions.

David Wyshner: And we expect the adjustments included in our calculation of cash flow to remain modest. Over the medium term, we remain committed to delivering significant margin expansion and generating free cash flow growth. We have a solid game plan to drive our strategic progress. And this game plan starts with the steps we've already taken to expand our technology alliances, manage our costs, and earn a return on all of our revenues.

David: Thank you.

David: At this time, we will conduct a question and answer session.

As a reminder to ask a question you will need to press star one on one of your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

David Wyshner: Even more important, though, is the momentum we have as a leading provider of mission-critical technology services.

Driving thought leadership in our space.

Martin: Martin are you ready for your first question, yes, Sir Thank you operator.

David Wyshner: Growing our Kyndryl Consult Presence rapidly, delivering modern hybrid IT solutions to our customers and operating at the heart of secular trends that will fuel customer demand for our services for the foreseeable future.

David: Alright.

While mommy floor.

David: Okay.

David: Okay.

Our first question comes from Jamie Friedman from Susquehanna. Please go ahead.

David Wyshner: So in fiscal 2025, we said what we were going to do, and we delivered that and more. This gives us financial momentum as we move into our fiscal 2026. Even more important, though, is the momentum we have as a leading provider of mission critical technology services. driving thought leadership in our space, growing our Kindle consult presence rapidly, delivering modern hybrid IT solutions to our customers, and operating at the heart of secular trends that will fuel customer demand for our services for the foreseeable future. And over the medium term, we remain committed to delivering significant margin expansion and generating free cash flow growth.

David: Hi, good morning, and congratulations on a.

David Wyshner: And over the medium term, we remain committed to delivering significant margin expansion in generating free cash flow growth.

David: Well done so Martin.

Speaker Change: First question is for you I was wondering.

David Wyshner: So let me end by again thanking the tens of thousands of Kyndrels around the world who are empowering our progress.

Speaker Change: How you think of the accomplishments and 25 in your preliminary view of the positioning of the company in mind share.

David Wyshner: With that, Martin and I would be pleased to take your questions.

Speaker Change: Technology in 26, how does that set you up for the mid term cadence that you shared at the analyst day.

Thank you.

David Wyshner: At this time, we'll conduct a question and answer session.

David Wyshner: As a reminder, to ask a question you need to press Star 111 on your telephone and wait for your name to be announced. To withdraw your question, please press Star 111 again.

Jamie: Yes, well thank you Jamie thanks for joining and thanks for the nice thanks for the nice comments on the year. We just finished.

Jamie: If I think back to $3 five years ago. When we laid out I think a very clear strategy that was unique to us.

Martin Schroeter: Martin, are you ready for your first question? Yes, Sarah, thank you operator.

All right.

My mommy for her.

Thank you. Thank you.

Jamie: With very clear sign posts on how to follow our progress I think last year was a was a reflection of another great.

Martin Schroeter: So let me end by again thanking the tens of thousands of Kyndryls around the world who are powering our progress.

Speaker Change: Our first question comes from Jamie Friedman, from Seth Gujana, please go ahead.

Jamie Freedman: Hi, good morning and congratulations on a year well done. So Martin, my first question is for you, I was wondering...

Lori Chaitman: With that, Martin and I would be pleased to take your questions. Thank you.

Jamie: Another.

Jamie: Great.

Jamie: Example of execution on our strategy that that will continue to carry us into into the into the medium term look the medium term goals that we laid out I think are.

Operator: At this time, we will conduct the question and answer session. As a reminder, to ask a question, you need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again.

Jamie Freedman: How do you think of the accomplishments in 25th and your preliminary view of the positioning of the company, Mindshare?

Speaker Change: and Technology in 26. How does that set you up for the mid-term cadence that you shared at the analyst day?

Jamie: What we're all focused on and this year. This fiscal year that we just guided tours is another good step toward toward that but over the long term what we've all been working on and what we've been talking about for three and a half years and I think again, it's really becoming evident now is is one the power of this business model given the.

Operator: Martin, are you ready for your first question? Yes, sir. Thank you, operator. All right.

Unknown Speaker: Unknown Speaker.

Jamie Friedman: I'm only for Our first question comes from Jamie Friedman from Susquehanna, please go ahead. Hi, good morning and congratulations on a year well done. So Martin, my first question is for you. I was wondering how you think of the accomplishments in 25 and your preliminary view of the positioning of the company MindShare. and technology in 26. How does that set you up for the midterm cadence that you shared at the analyst day? Yeah, good. Well, thank you, Jamie. Thanks for joining. And thanks for the nice. Thanks for the nice comments on the year we just finished.

Speaker Change: Yeah, good. Well, thank you, Jamie. Thanks for joining and thanks for the nice comments on

Jamie: The role we play in our customers' environments. The visibility we have to the future is is starting to become evident too.

Speaker Change: with very clear signposts on how to follow our progress. I think last year was a reflection

Jamie: Three and half years ago, obviously, the world has changed in three five years that will be different again, but but we have been.

Speaker Change: of another great example of execution on a strategy.

Jamie: Executing and delivering in pretty much exactly what we said we would get done and I think the read through is that we do.

Speaker Change: that will continue to carry us into the medium term. Look, the medium term goals that we laid out, I think, are what we're all focused on. And this year, this fiscal year that we just guided towards is another good step toward that.

Jamie: Kind of control our own destiny here not that were not affected by the outside world, but as long as we continue to invest.

Jamie: In innovation as long as we continue to invest in capabilities.

Martin Schroeter: You know, if I if I think back to three and a half years ago, when we laid out, I think, a very clear strategy that was unique to us, with very clear signposts on how to follow our progress. I think last year was a was a reflection of another great step, another great example of execution on a strategy that that will continue to carry us into, into the into the medium term. Look, the medium term goals that we laid out, I think are what we're all focused on. And this year, this fiscal year that we just guided tourism is another good step toward toward that.

Jamie: Our ability to not only see the future, but to deliver that future to our investors.

Jamie: Should be quite evident as well over the last few years and then I'd point to this team's strong execution. So we're in a great space with a great business model.

Jamie: Have control will continue to invest this is another big year of investment for us, which which means we control our own destiny through the midterm again and this team has demonstrated an ability to execute so I think we're very well positioned to deliver everything that we've talked about back in November in last year in the last quarter were evidence of how we've continued to do that.

Speaker Change: The visibility we have to the future is starting to become evident too. Three and a half years ago obviously the world has changed and three and a half years the world will be different again but but we have been

Speaker Change: Executing and Delivering, and pretty much exactly what we said we would get done. And I think the read through is that we do kind of control our own destiny here, not that we're not affected by the outside world, but as long as we continue to invest.

Speaker Change: And then for my follow up I'd be interested in your perspective, we are with the journey with the focus accounts are you closer to the middle or the end at this point and what have you learned.

Martin Schroeter: But over the long term, what we've all been working on what we've been talking about for three and a half years, and I think, again, it's it's really becoming evident now is is one, the power of this business model, given the role we play in our customers environments, the visibility we have to the future is is starting to become evident to us. And three and a half years ago, obviously, the world has changed in three and a half years, the world will be different again, but but we have been executing and delivering and in pretty much exactly what we said we would get done.

Speaker Change: In innovation, as long as they continue investing capabilities

Jamie: From the.

Speaker Change: that our ability to not only see the future, but to deliver that future.

Jamie: Kind of restructuring or the conversations at least.

Speaker Change: to our investors should be quite evident as well over the last few years and then I point to this team's drawing execution.

Jamie: From those accounts that debt.

Jamie: At you here.

Jamie: Since the separation three three and half years ago, Yes, yes, thanks, Jamie So so look.

Speaker Change: We're in a great space with a great business model. We have control. We'll continue to invest. This is another big year of investment for us, which means we control our own destiny through the midterm again.

Jamie: <unk>.

Jamie: The.

Speaker Change: The view we had when we started this was that the work. We do is really important that we're really good at it and if we could engage with our customer base, we could re imagine these relationships and quite frankly, an accelerated pace than what we were faced with if we just looked at.

Martin Schroeter: And I think the read through is that we do kind of control our own destiny here. Not that we're not affected by the outside world, but as long as we continue to invest. in innovation, as long as we continue to invest in capabilities, that our ability to not only see the future, but to deliver that future to our investors is, should be quite evident as well over the last few years. And then I point to this team's strong execution. So we're in a great space with a great business model. We have control, we'll continue to invest.

Speaker Change: and this team has demonstrated an ability to execute. So I think we're very well positioned to deliver everything that we've talked about back in November and the last year and the last quarter were evidence of how we've continued to do that.

Speaker Change: The backlog had and I think thats, what we what we've proven now because of the quality of what we bring.

Speaker Change: And then from my follow-up, I'd be interested in your perspective on where you are with the journey with the focus accounts. Are you closer to the middle or at the end at this point? And what have you learned?

Speaker Change: The role we play in our customers' environments. They have been our customers have been really willing provided we showed up with some innovation with some new ideas with some some ways to address their challenges of the future that they would be keen to and willing to re imagine how these relationships worked and I think thats what.

from the...

Martin Schroeter: This is another big year of investment for us, which means we control our own destiny through the midterm again. And this team has demonstrated an ability to execute. So I think we're very well positioned to deliver everything that we've talked about back in November and the last year and the last quarter were evidence of how we've continued to do that.

Speaker Change: kind of restructuring or the conversations at least from those accounts that got you here since the separation three and a half years ago. Yeah, yeah, thanks, Jamie. So, so what do you know, the, the, um,

Speaker Change: My observation of the last three years that the teams have done an amazing job.

Speaker Change: Doing that and says a lot about the quality of the talent and the skills. We have it says a lot about our ability to to discern the future for our customers.

The

Speaker Change: The view we had when we started this was that the work we do was really important that we're really good at it and if we could

Martin Schroeter: And then for my follow up, I'd be interested in your perspective on where you are with the journey with the focus accounts. Are you closer to the middle or the end at this point? And what have you learned from the kind of restructuring or the conversations at least from those accounts that that, you know, got you here since the separation three, three and a half years ago. Yeah, yeah.

Engaged with our customer base, we could reimagine these relationships.

Speaker Change: And bring them on this journey with us and it says a lot about us as an organization and our focus on the bottom line and capturing the value were creating so when we started this three years ago. We said it would be worth $800 million over the medium term, we have obviously exceeded that.

Speaker Change: At, quite frankly, an accelerated pace than what we were faced with if we just looked at what the backlog had, and I think that's what we've proven now because of the quality of what we bring

The role we play in our customers' environments.

Speaker Change: They have been, our customers have been really willing, provided we showed up with some innovation, with some new ideas, with some ways to address their challenges of the future.

Speaker Change: But we are getting towards the end of this now from a focus account perspective, we're not through 100% of them. There is a long tail to this but in terms of driving.

Martin Schroeter: Thanks, Jamie. So So look, you know, the, the, the The view we had when we started this was that the work we do is really important, that we're really good at it. And if we could engage with our customer base, we could reimagine these relationships at, quite frankly, an accelerated pace than what we were faced with if we just looked at what the backlog had. And I think that's what we've proven now. Because of the quality of what we bring, the role we play in our customers' environments, they have been – our customers have been really willing, provided we showed up with some innovation, with some new ideas, with some ways to address their challenges of the future, that they would be keen to and willing to reimagine how these relationships worked.

Speaker Change: that they would be keen to and willing to reimagine how these relationships worked.

Speaker Change: Take to getting us here.

Speaker Change: There is we are we are well through the.

Speaker Change: And I think that's what my observation will have for him here is that the teams have done an amazing job of doing that and says a lot about

Speaker Change: I call. It the substantial majority maybe David has a more specific way to identify substantial majority, but we.

Speaker Change: We're probably three quarters of the way through.

Speaker Change: The quality of the talent and the skills we have, it says a lot about our ability to...

Speaker Change: Through this from a from a.

Speaker Change: Revenue perspective, but again I would go back to what does it prove it proves that the work. We do is valuable the investments. We've made are paying off that our customers love what we do and we are very much now part of their future and not just not just part of their past yet and we are about 75% of the way through three quarters away through on revenue.

Speaker Change: to discern the future for our customers and bring them on this journey with us.

Speaker Change: And it says a lot about us as an organization and our focus on the bottom line and capturing the value we're creating so when we started this three and a half years ago we said it would be worth 800 million over the medium term we've obviously exceeded that so

Speaker Change: But we have already achieved 90% of our targeted savings.

Martin Schroeter: And I think that's what my observation over the last three and a half years, that the teams have done an amazing job of doing that. And it says a lot about the quality of the talent and the skills we have. It says a lot about our ability to discern the future for our customers and bring them on this journey with us. And it says a lot about us as an organization and our focus on the bottom line and capturing the value we're creating. So, when we started this three and a half years ago, we said it would be worth $800 million over the medium term.

Speaker Change: But we are getting toward the end of this now from a focus account perspective. We're not through 100% of them. There is a long tail to this, but in terms of driving

Speaker Change: With $900 million of annualized benefits on the focus accounts.

Speaker Change: Our target that started out at 800 million is now $1 billion and I think we're well positioned to exceed that as we work through the remainder of the accounts and drive not only margin improvement there, but also growth in the.

Speaker Change: to getting us here, we are well through the substantial majority. Maybe David has a more specific way to identify substantial majority, but...

Speaker Change: In the top line.

Speaker Change: Thanks.

Speaker Change: Operator next question please.

Speaker Change: We're probably three quarters of the way through this from a revenue perspective, but again I would go back to what is it prove, it proves that the work we do is valuable, the investments we've made are paying off, that our customers love what we do and we are very much now part of their future not just not just part of their past.

Speaker Change: Thank you.

Speaker Change: Our next question comes from <unk> Singh <unk> from J P. Morgan. Please go ahead.

Martin Schroeter: We've obviously exceeded that.

Speaker Change: Hi, Thanks, Congrats on the positive perfect growth milestone.

Martin Schroeter: But we are getting toward the end of this now from a focus account perspective. We're not through 100% of them. There is a long tail to this. But in terms of driving – to getting us here, there is – we are well through the – I call it the substantial majority. Maybe David has a more specific way to identify substantial majority. But we're probably three-quarters of the way through this from a revenue perspective. But again, I would go back to what does it prove? It proves that the work we do is valuable, the investments we've made are paying off, that our customers love what we do, and we are very much now part of their future and not just part of their past.

Speaker Change: I also like Martin to mix.

Speaker Change: Yep, and we are about, I'd say, 75% of the way through, three quarters of way through on revenue, but we've already achieved 90% of our targeted savings, so we're with $900 million of annualized benefits on the focus accounts.

Speaker Change: Discussions are going through some of the larger deals. So you guys won which brings into my question around.

Speaker Change: Book to Bill do you think book to Bill given some of the wins that you've had in the in.

Speaker Change: And the pipeline that you can still maintain this book to bill above one for the better part of.

Speaker Change: The target that started out at 800 million is now a billion and I think we're well positioned to exceed that as we work through the remainder of the accounts and drive not only margin improvement there but also growth in the top line.

Speaker Change: Our fiscal 2006, and I'm curious given some of the larger deals maybe whats the duration of the backlog looks like is that changing just to think about HCV, maybe improving underneath it. Thank you yeah. Thanks, Tien tsin and thanks for the nice also thanks for the nice comments on the.

Great, thank you. Operator, can we move to the next question please?

Speaker Change: A quarter look a couple of things and you were you were.

Thank you.

Speaker Change: Manav.

Speaker Change: The people and you know this business well. So you were on this early and three and half years ago, we were talking about.

Speaker Change: Our next question comes from Tin-Sing, Helang, from JP Morgan, please go ahead.

Speaker Change: Does <unk> get back to growth.

Thanks, congrats on the positive revenue growth milestone. Good to see that. I also liked Martin

Speaker Change: You need a book to Bill North of one et cetera et cetera, you know this because you were at the at the heart of the.

Speaker Change: Questions and doing the work.

Speaker Change: Discussions, or going through some of the larger deals you guys want which brings me to my question around Book to Bill. Do you think Book to Bill given some of the wins that you've had and

Speaker Change: As you said well.

Speaker Change: If we're going to continue growth, which is what we see now and what we certainly put on the table back in November over the medium term. We do have to continue to have a book to bill North of one and that's what we see over the medium term in order to drive that continued growth now one year, a book to bill doesn't get us ever.

Martin Schroeter: but also growth in the top line.

Speaker Change: and the pipeline that you can still maintain this book to build above one for the better part of.

Unknown Speaker: Great. Thanks.

Operator: Operator, can we move to the next question, please? Thank you.

Speaker Change: of the backlog looks like is that changing just to think about ACV maybe improving underneath it?

Tin Sing Hoang: Our next question comes from Tin Sing Hoang from J.P. Morgan. Please go ahead. Thanks, congrats on the positive revenue growth milestone. Good to see that.

Speaker Change: We need them. So we have we have to execute again, but.

Speaker Change: Thank you. Yeah, thanks, Tianjin, and thanks for the nice, also thanks for the nice comments on the quarter. Look a couple things and and you were you were one of the people and you know this business well so you were on this early and three and a few years ago we were talking about, you know, how, how does Kintral get back to growth? Thank you.

Speaker Change: The capabilities, we built the innovation we've built.

Speaker Change: Is showing up really well and its driving the kind of performance that we saw for instance, in our consult business, where 50% signings growth in the year is driving 29% revenue growth, where we're for instance from a standing start from essentially nothing we built last year.

Martin Schroeter: I also like Martin's from the discussions or going through some of the larger deals you guys won, which brings me to my question around book-to-bill. Do you think book-to-bill, given some of the wins that you've had in the pipeline, that you can still maintain this book-to-bill above one for the better part of fiscal 26? And I'm curious, given some of the larger deals, maybe what the duration of the backlog looks like. Is that changing, just to think about ACV maybe improving underneath it? Thank you. Yeah. Thanks, Tingen. And thanks for the nice, also, thanks for the nice comments on the quarter.

Speaker Change: You need a book to build north of one, et cetera, et cetera. You know this because you were at the heart of the questions and doing the work. And we're going to have a book to build north of one, et cetera.

Speaker Change: Services around our alliance activity around our Hyperscale or alliance activity that turned into more than $1 billion of business per year and those will keep growing. So so yes. The short answer is yes, we recognize and expect that we will continue to deliver a book to bill North of one we would as we've always said encourage everybody to look at this over a 12 month trailing.

Speaker Change: as you said, well, if we're going to continue growth, which is what we see now and what we certainly put on the table back in November over the medium term.

Speaker Change: that we do have to continue to have a book to build north of one, and that's what we see over the medium term, right, in order to drive that continued growth. Now...

Speaker Change: Basis, because in any given quarter, we could be it could be phenomenal it could be for whatever reason.

Martin Schroeter: Look, a couple of things. And you were one of the people, and you know this business well, so you were on this early and three and a half years ago, we were talking about how does Kyndryl get back to growth? You need a book-to-bill north of one, et cetera, et cetera. You know this because you were at the heart of the questions and doing the work. And as you said well, if we're going to continue growth, which is what we see now and what we certainly put on the table back in November over the medium term, then we do have to continue to have a book-to-bill north of one.

Speaker Change: One year of book to Bill doesn't get us everything we need him, so we have to execute again, but the capabilities we've built, the innovation we've built.

Speaker Change: It's just too short a period, but we feel good about the momentum we're seeing the vectors of growth that we've been pointing to and our ability to continue to drive a book to bill North of one.

Speaker Change: is showing up really well and it's driving the kind of performance that we saw for instance in our consult business where...

Speaker Change: Perfect and just my follow up within that was the HCV question, because I think you got it too.

Speaker Change: <unk> growing in the double digit I know it was running very hot and 25, so I think that will.

Speaker Change: Give you some short term.

Speaker Change: <unk> and conversion, but then you have a lot of longer duration deals as well can you just talk about <unk>.

Martin Schroeter: And that's what we see over the medium term, right, in order to drive that continued growth. Now, one year of book-to-bill doesn't get us everything we need, and so we have to execute again, but the capabilities we've built, the innovation we've built is showing up really well, and it's driving the kind of performance that we saw, for instance, in our consult business, where 50% signings growth in the year is driving 29% revenue growth, where, for instance, you know, from a standing start, from essentially nothing, we built last year services around our alliance activity, around our hyperscaler alliance activity that turned into more than a billion of business per year, and those will keep growing.

Speaker Change: <unk> and how the year will play out with consult presumably growing a little bit slower and.

Speaker Change: Backlog conversion, making up for it to get to that positive revenue growth for the year sure.

Speaker Change: Everybody to look at this over a 12 month trailing basis, because in any given quarter, we could be phenomenal it could be for for whatever reason.

Speaker Change: We do expect consoles to continue to grow top line double digits in fiscal 2006. So it will continue to be a significant contributor.

Speaker Change: Just too short a period, but we feel good about the momentum we're seeing the vectors of growth that we've been pointing to and our ability to continue to drive a book to bill North of one.

Speaker Change: To our to our growth.

Speaker Change: When we look at it signings last year, a couple of points worth mentioning first overall signings grew about 46%.

Speaker Change: Perfect and just my follow up to within that was the a C. V question 'cause I think you got it to consult growing the double digit I know was running very hot in 25. So I think that'll give you some short term.

Speaker Change: Consult grew 47% and that means managed services growth was right there.

Speaker Change: As well with very strong growth and so we're seeing quite a good.

Martin Schroeter: So yes, the short answer is yes, we recognize and expect that we will continue to deliver a book-to-bill north of one. We would, as we've always said, encourage everybody to look at this over a 12-month trailing basis, because in any given quarter, we could be, you know, it could be phenomenal, it could be for whatever reason, it's just too short a period, but we feel good about the momentum we're seeing, the vectors of growth that we've been pointing to, and our ability to continue to drive a book-to-bill north of one.

Speaker Change: Balance in our growth between the two.

Speaker Change: And but then you have a lot of longer duration deals as well can can you just talk about ACV and how the year will play out with consult presumably going a little bit slower and and backlog conversion, making up for it to get to that positive reference growth for the year sure.

Speaker Change: Consult signings will tend to turn into revenue a little bit faster.

Speaker Change: Managed services contracts tend to be longer and we really like.

Speaker Change: Due for our backlog because it's really committed revenue.

Speaker Change: Three we do expect consult to continue to grow top line double digits in fiscal 26, so it'll continue to be a significant contributor to our to our growth. When we look at signings last year, a couple points worth mentioned.

Speaker Change: And committed profitability that we're adding.

Speaker Change: Two are.

Speaker Change: Unrecorded balance sheet.

Speaker Change: And in terms of ACD, what we saw.

Martin Schroeter: Perfect. And just my follow-up to that was the ACV question, because I think you got it to consults growing in the double-digit. I know it's running very hot in 2025, so I think that'll give you some short-term lift in conversion, but then you have a lot of longer-duration deals as well. Can you just talk about ACV and how the year will play out with consults presumably growing a little bit slower and backlog conversion making up for it to get to that positive revenue growth for the year? Sure. We do expect consult to continue to grow top-line double-digits in fiscal 26, so it'll continue to be a significant contributor to our growth.

Speaker Change: We see our average signing was probably a few months longer last year.

Speaker Change: So.

Speaker Change: Overall, signing screw by 46% consult grew 47% and that means managed services growth was right there as well with with very strong growth and so we're seeing a quote a good balance in our growth between the two consult.

Speaker Change: About 75% to 80% of our growth, which was due to <unk>.

Speaker Change: Additional activity.

Speaker Change: And then 20% to 25% of our of our 46% growth.

Speaker Change: It was driven by having a longer.

Speaker Change: Longer duration on average and.

Speaker Change: And we really see example that you mentioned highlights we're very focused on growing growing ACD in individual accounts growing our revenue there.

Speaker Change: And the opportunities that we have to expand scope in our relationships.

Martin Schroeter: When we look at signings last year, a couple points worth mentioning. First, overall, signings grew about 46%. Consult grew 47%, and that means managed services growth was right there as well with very strong growth. We're seeing a good balance in our growth between the two. Consult signings will tend to turn into revenue a little bit faster. Managed services contracts tend to be longer, and we really like what they do for our backlog because it's really committed revenue and committed profitability that we're adding to our unrecorded balance sheet. In terms of ACV, what we saw was our average signing was probably a few months longer last year, so about 75% to 80% of our growth was due to just additional activity.

Speaker Change: It really ends up being a big driver.

Speaker Change: Yeah, I'm unrecorded balance sheet and and in terms of of a C. V. What we saw you know was the you know our average signing was probably a few months longer last year, so about 75% to 80% of our growth was.

Speaker Change: That ACB growth. Thanks.

Speaker Change: Thanks.

Speaker Change: Operator next question please.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Ian Zaffino.

Speaker Change: From Oppenheimer. Please go ahead.

Ian Zaffino: Okay, great. Thank you very much very good quarter.

Ian Zaffino: Wanted to ask on the guide and the revenue growth that youre expecting for the year.

Speaker Change: Additional activity and then 20% to 25% of our you know of our 46% growth was driven by having a longer longer duration on average and we really you know the example that you mentioned.

Ian Zaffino: I would've expected.

Ian Zaffino: Signings growth, 46% or so that might seem very conservative so maybe kind of walk us through how you are kind of getting there and I know that there are some legacy signings that are starting to fall off and maybe the better question is how do we think about revenues maybe not just this current year, but.

Speaker Change: An individual accounts growing our our revenue there and the opportunities that we have to expand scope in our relationships really end up being a big driver of of that a C V growth.

Ian Zaffino: Subsequent years as some of those might see signings roll off and I would imagine revenues within accelerate but.

Speaker Change: Operator next question please.

Speaker Change: Help me understand all of it yes sure. Thank you and thanks for the nice also thanks for the nice comments on the on the.

Ian Zippino: Thank you. Our next question comes from Ian Zippino from Oppenheimer. Please go ahead I agree. Thank you very much.

Ian Zaffino: Year in the quarter, we just.

Ian Zaffino: Finished.

Ian Zaffino: I think theres, a few things worth pointing out.

Ian Zippino: Wanted to ask on the guide and you know the revenue growth that you're expecting for the year.

Ian Zaffino: One is as I as I.

Ian Zaffino: I talked about earlier, three and half years ago. We were we were trying to prove to everybody.

Ian Zippino: I would have expected you know with signings growth, 46% or so that might seem very conservative. So maybe kind of walk us through you know, how you're kind of getting there and I know that there are some legacy signings that are starting to fall off and maybe the better.

Ian Zaffino: That we could grow in what is what is really nice about your question, what's really nice about the position. We're in now is now we're talking about.

Martin Schroeter: The opportunities that we have to expand scope in our relationships really end up being a big driver of that ACV growth.

Ian Zaffino: Why can't you be growing faster, which.

Ian Zaffino: Quite frankly.

Ian Zaffino: It's fabulous team has done a nice job of repositioning this business and executing a plan that that got us to this point. So we're delighted.

Operator: Operator, next question, please. Thank you.

Ian Zippino: Revenues, maybe not just this current year, but subsequent years as some of those legacy signings roll off and and I would imagine revenues would then accelerate but help me understand a little bit. Thanks, Yeah sure. Thank you and thanks for the nice also thanks for the nice comments on the.

Ian Zaffino: Our next question comes from Ian Zaffino from Oppenheimer. Please go ahead. I agree. Thank you very much. Very good quarter.

Ian Zaffino: As you said well look we have we have a really good book to bill from last year, but the two prior years with our with our work on focus accounts and our intent to improve profitability first.

Martin Schroeter: I wanted to ask on the guide and the revenue growth that you're expecting for the year. I would have expected with signings growth, 46% or so, that might seem very conservative. So maybe kind of walk us through how you're kind of getting there. And I know that there are some legacy signings that are starting to fall off, and maybe the better question is, how do we think about revenues, maybe not just this current year, but subsequent years as some of those legacy signings roll off, and I would imagine revenues would then accelerate. But help me understand that a little bit, thanks.

Ian Zippino: I think there's a few things worth pointing out one is as I as I.

Ian Zaffino: We also have to we have to.

Ian Zaffino: That's all in the backlog as well so so what we wanted to make sure.

Ian Zippino: Talked about earlier, three and a half years ago. We were we were trying to prove to everybody that we could grow and what is what is really nice about your question was really nice about the position. We're in now is now we're talking about you know why why can't you be growing faster.

Ian Zaffino: That everybody understood is that in this very strong profit improvement year again, this very strong cash flow growth again, all consistent with what we laid out over the medium term back in November that we're not relying on substantial revenue growth to get there, even though last year when we.

Ian Zaffino: We're still working on focused accounts, we had a two point.

Ian Zaffino: Year to year improvement in revenue growth rate from down 6% down four and now we're saying, we're only really relying on one.

Martin Schroeter: Yeah, sure. Thank you. And thanks for the nice comments on the year and the quarter we just finished. I think there's a few things worth pointing out. One is, as I talked about earlier, three and a half years ago, we were trying to prove to everybody. that we could grow. And what is what is really nice about your question, what's really nice about the position we're in now is now we're talking about, you know, why, why can't you be growing faster, which is, quite frankly, it's it's just, it's fabulous teams done a nice job of repositioning this business and executing a plan that that got us to this point.

Ian Zaffino: It's a big step up obviously in the improvement, but with now more and more of our P&L determined by what we've put in the backlog, what we've been able to shape and what and where.

Ian Zippino: Last year, but the two prior years with our with their work on focused accounts and our intent to improve profitability. First we also have to you know we have to we have to that's all in the backlog as well. So so what we wanted to make sure that everybody understood.

Ian Zaffino: Because coming out into our P&L. This year it says that we have.

Speaker Change: The things we relied on to deliver growth in the fourth we are as David said, he talked a little bit about consult earlier those those those vectors of growth will continue. So so so yes, we said it in a specific way, yes that we control more of our own P&L from what we've put in.

Ian Zippino: It's very strong profit improvement year again, this very strong cash flow growth again, all consistent with what we laid out over the medium term back in November that we're not relying on substantial revenue growth to get there even though.

Martin Schroeter: So we're, we're delighted. As you said, well, look, we have, we have a really good book to bill from last year. But the two prior years with our with our work on focus accounts and our intent to improve profitability first, we also have to, you know, we have to, we have to, that's all in the backlog as well. So, so what we wanted to make sure that everybody understood is that in this very strong profit improvement year, again, this very strong cash flow growth, again, all consistent with what we laid out over the medium term back in November, that we're not relying on substantial revenue growth to get there, even though, you know, last year, when we were still working on focused accounts, we had a two point year to year improvement in revenue growth, right from down six to down four.

Speaker Change: But this year this fiscal year and the guide is.

Ian Zippino: Last year, when we were still working on focused accounts, we had a two point.

Speaker Change: What we're relying on to deliver and and we only we only I mean, the only keep coming back to only we told everybody that in fiscal 'twenty eight we'd get to kind of a mid single digit level and we're still well on track and this is consistent with that.

Ian Zippino: Year to year improvement in revenue growth right from down six to down four and now we're saying we're only really relying on on one that's a big step up obviously in the improvement, but with now more and more of our P. N L determined by what we put in the backlog.

Speaker Change: But again with with this year's P&L being more than now have two thirds of our P&L being determined by what we've put in that's certainly it's accurate it's factual.

Speaker Change: Our year is also determined not just by fiscal 'twenty five signings, it's determined by fiscal 'twenty four signings. When we were still going through the account focused work in great. Ernest is determined by fiscal 'twenty, three signings, which again still going through account focus and great Ernest and obviously, even though two thirds or so is determined by our <unk>.

Ian Zippino: Those vectors of growth will continue so so so yes, we set it in a specific way, yes that we control more of our own P. N L from what we've put in but this year. This fiscal year and the guide is you know is what we're.

Martin Schroeter: And now we're saying we're only really relying on on one. That's a big step up, obviously, in the improvement, but with now more and more of our P&L determined by what we've put in the backlog, what we've been able to shape, and what and what is coming out into our P&L this year, it says that we have a we have, you know, the things we relied on to to deliver growth in the fourth, whereas David said, well, he talked a little bit about consult earlier, those, those, those vectors of growth will continue. So, so, so, yes, we said it in a specific way.

Speaker Change: That means a third is what we inherited so theres a lot of dynamics here that I think we wanted to make sure that our investors understood that another great year for profit improvement, even as we invest another great year for cash flow generation.

Ian Zippino: And we only we only I mean, only like keep coming back only we we told everybody that in fiscal 28, we'd get to kind of a mid single digit level and we're still well on track and this is consistent with that.

Speaker Change: But we're not relying on a big swing back to revenue growth in order to deliver that.

Ian Zippino: But again with with this year's PL being more than now half two thirds of our PL being determined by what we've put in that's certainly it's accurate it's fractual, but our year is also determined not just by fiscal 25 signings it's determined.

Speaker Change: Okay understood and then as a follow up.

Speaker Change: It seemed to have incredible amount of visibility.

Speaker Change: Just in the business and the latest state of the contracts work and like I said earlier, you are coming off this massive acceleration in the business.

Martin Schroeter: Yes, that, you know, we control more of our own P&L from what we've put in. But this year, this fiscal year, and the guide is, you know, is what we're relying on to deliver. And, and we only, we only I mean, only keep coming back to only we we told everybody that in fiscal 28, we'd get to a mid single digit level. And we're still well on track. And this is consistent with that. But again, with with this year's P&L being more than now have two thirds of our P&L being determined by what we've put in.

Ian Zippino: So we're still going through the account focus work in in great earnest, it's determined by fiscal 23 signings, which again still going through account focus and great earnest and obviously, even though two thirds or so is determined by our stuff that means a third is what we in.

Speaker Change: So how are you thinking about capital allocation.

Speaker Change: And maybe you are.

Speaker Change: Tolerance or your appetite to get.

Speaker Change: A little bit more aggressive on that side. Thanks.

Speaker Change: Yes. Thanks so.

Once again relative to where we started it's great to be talking about how we're going to be allocating capital and I think.

Ian Zippino: Next year that I think we wanted to make sure that our investors understood that another great year for profit improvement, even as we invest another great year for cash flow generation, but we're not relying on a big swing back to revenue growth in order to deliver that.

Speaker Change: We've we've continued.

Speaker Change: Two to do two things we've continued to look for opportunities to invest in our own business. We've done one acquisition, which is working out really really well and I would say that we continue to look for tuck in acquisitions that can accelerate.

Martin Schroeter: That's certainly it's accurate. It's factual. But our year is also determined not just by fiscal 25 signings, it's determined by fiscal 24 signings. When we were still going through the account focus work in great earnest, it's determined by fiscal 23 signings, which again, still going through account focus in great earnest. And obviously, even though two-thirds or so is determined by our stuff, that means a third is what we inherited. So there's a lot of dynamics here that I think we wanted to make sure that our investors understood that another great year for profit improvement, even as we invest, another great year for cash flow generation, but we're not relying on a big swing back to revenue growth in order to deliver.

Speaker Change: Okay understood and then is a follow up you know it seems like you have incredible amount of visibility you know just in the business and the way the state of the contracts work and like I said earlier, you're coming off this massive acceleration in the business.

Speaker Change: Our position in the marketplace that can maybe expand capabilities within within things. We're already doing so so first and foremost we will look to invest.

Speaker Change: <unk>.

Speaker Change: In the business, because we see so much opportunity in.

Speaker Change: So how are you then thinking about I guess capital allocation and maybe you know your tolerance or your appetite to get a little bit more aggressive on that side. Thanks. Yeah. Thanks. So it's once again relative to where we started it's great to be talking about.

Speaker Change: The other thing I'm really pleased that probably a little bit ahead of what everyone expected last November we the board approved the initiation of a share repurchase program, which we've been doing and and we see we see great value in the stock here. So, we'll obviously continue to allocate capital to our shareholders as well to return.

Speaker Change: To return them their money. So so we see opportunities in both.

Unknown Speaker: Okay, understood.

Martin Schroeter: And then as a follow up, um, you know, it seems to give incredible amount of visibility, um, you know, just in the business and the way the state of the contracts work. And like I said earlier, you're coming off this massive acceleration in the business. So, how are you then thinking about, I guess, capital allocation and maybe, you know, your tolerance or your appetite to get a little bit more aggressive? Yeah, thanks. So, you know, it's, it's, once again, you know, relative to where we started, it's great to be talking about how we're going to be allocating capital.

Speaker Change: Continue to invest this is a business model that has great visibility to the future. So we have an ability to not only invest but we have an ability to return capital.

Speaker Change: I think we'll continue to do both of those things I think we have an opportunity to do bolt anything.

Speaker Change: Anything you would add.

Speaker Change: Okay. There you go.

Speaker Change: Alright, great. Thanks for the color. Thank you great. Operator next question. Please.

Speaker Change: In in the business, because we see so much opportunity and the other thing I'm really pleased that probably a little bit ahead of what everyone expected last November we the board approved the initiation of a share repurchase program, which we've been doing and and we see great value.

Speaker Change: Thank you.

Davita Guizhou: Our next question comes from Davita Guizhou.

Speaker Change: From Scotiabank. Please go ahead.

Davita Guizhou: Good morning, everyone. Thanks, a lot for all the color you provided.

Martin Schroeter: And I think, you know, we've, we've continued to, to do two things. We've continued to look for opportunities to invest in our own business. We've done one acquisition, which is working out really, really well. And I would say that we continue to look for, you know, tuck-in acquisitions that can accelerate our position in the marketplace, that can maybe expand capabilities within, within things we're already doing. So, so first and foremost, we'll look to invest in the business because we see so much opportunity. The other thing, you know, I'm really pleased that probably a little bit ahead of what everyone expected last November, we, the board approved the initiation of a share repurchase program, which we've been doing.

Davita Guizhou: So you wanted to go back and circle back on the Collins discussion that we had and maybe just get a little bit more clarity on the impact of macro on similar CR.

Speaker Change: In the stock here. So, we'll obviously continue to allocate capital to our shareholders as well to return to return them their money. So so we see opportunities in both continue to invest this is a business model that has great visibility to the future. So we have.

Davita Guizhou: Strategic global accounts and trying to understand what are the key priorities and could they be impacted given all the global uncertainty out there and.

David Wyshner: Ability to return capital and I think we'll we'll continue to do both of those things I think we have an opportunity to do both anything you would add David Okay. There you go greater next question. Please.

Davita Guizhou: I'm also in line trying to understand what <unk>.

Davita Guizhou: What is your question page of revenue that could be potentially exposed to macro uncertainties. If at all thank you.

Speaker Change: Yes, Thanks, David.

Speaker Change: So a couple of things uncertainty seems to be the sort of the most commonly used word in the in the business press. These days.

Speaker Change: Thank you.

Speaker Change: Next question comes from Davia Goyo from Scotia Bank. Please go ahead.

David Wyshner: And, and we see, you know, we see great value in, in, in the stock here. So we'll obviously continue to allocate capital to our shareholders as well, to return, to return them their money. So, so we see opportunities in, in both, continue to invest. This is a business model that has great visibility to the future. So we have an ability to not only invest, but we have an ability to return capital. And I, I think we'll, we'll continue to do both of those things. I think we have an opportunity to do Anything you would add, David?

Speaker Change: I would say that that for us.

Speaker Change: The the good news is we're in the we're in the productivity business we help.

Speaker Change: Drive productivity create opportunities optimize consolidate deconsolidation, that's what our customers are trying to do.

Speaker Change: So this this environment tends to be a tailwind for us because our customers need help in in preparing their infrastructure for whatever macro environment, they're envisioning and and that's true not only of macro which as you know well are we in this.

Speaker Change: I keep priorities and could they be impacted given all the global uncertainties out there and on I'm also in line trying to understand what is what is the percentage of revenue that could be potentially exposed to macro uncertain.

Unknown Speaker: Okay. There you go. All right, great. Thanks for the call. Thank you. Great.

Operator: Operator, next question, please.

Divya Goyal: Thank you. Our next question comes from Divya Goyal. from Scotiabank, please go ahead. Good morning, everyone. Thanks a lot for all the color you provided.

Speaker Change: Period of uncertainty for two months three months or a year, we don't know, but we know that there are always going to be preparing for the future. They see it's also true in regard with regard to.

Speaker Change: Thank you yeah. Thanks, Thanks, Divia. So a couple of things uncertainty seems to be the sort of the most commonly used word in the in the business press. These days I would say that that for us.

Divya Goyal: I actually wanted to go back and circle back on the accounts discussion that we had, and maybe just get a little bit more clarity on the impact of macro on some of your strategic global accounts and trying to understand what are their key priorities and could they be impacted given all the global uncertainties out there? And I'm also in line trying to understand what is the percentage of revenue that could be potentially exposed to macro uncertainties, if at all? Thank you. Yeah, thanks, Divya. So a couple things. Uncertainty seems to be the sort of the most commonly used word in the business press these days.

Speaker Change: With regard to technology and over the last 20 plus years I think the world has observed that that no matter what the business problem is technology as part of that answer so if you're if you're.

Speaker Change: The T.

Speaker Change: If you're trying to find new customers, if you're trying to create a better employee experience if you're trying to get yourself ready for a new regulatory environment or if youre trying to prepare for a new view of your own macro environment technology as a part of that and that's that's why it tends to be a tailwind for us because they needed they needed.

Speaker Change: A win for us because our customers need help in in preparing their infrastructure for whatever macro environment, they're in Visioning and and that's true not only of macro which as you know well you know are we in this period.

Speaker Change: Infrastructure to execute that strategy whatever it is that is that is secure and resilient and fit for purpose. So so for us.

Speaker Change: I don't know, but but we know that they're always going to be preparing for the future. They see is also true in regard with regard to regard to technology and and over the last 20 plus years I think the world is observed that that no matter what the business problem is.

Martin Schroeter: I would say that for us, the good news is we're in the productivity business. We help drive productivity, create opportunities, optimize, consolidate, deconsolidate, if that's what our customers are trying to do. And so this environment tends to be a tailwind for us because our customers need help in preparing their infrastructure for whatever macro environment they're envisioning. And that's true not only of macro, which, as you know well, you know, are we in this period of uncertainty for two months, three months or a year, we don't know, but we know that they're always going to be preparing for the future they see.

Speaker Change: I'd say uncertainty tends to translate but in all its forms tends to translate to.

Speaker Change: Bit of a tailwind.

Speaker Change: Then your second question.

Speaker Change: Look how much of how much of our business is subject to it.

Speaker Change: We enter a year as is typical we enter a year with 70% 75% of our of our year under contract right. So the revenue that we already have for the year that that represented in the guide is somewhere between.

Speaker Change: That answers so if you're if you're.

Speaker Change: If you're trying to find new customers, if you're trying to create a better employee experience if you're trying to get yourself ready for a new regulatory environment or if you're trying to prepare for a new view of your own macro environment technology is a part of that and and that's that's why.

Speaker Change: 70% to 75% booked and so yes, we have to continue to.

Speaker Change: Execute on signing deals and converting those to revenue.

Speaker Change: Off throughout the whole year.

Speaker Change: Because they needed they need an infrastructure to execute that strategy whatever it is that is that a secure and resilient and fit for purpose. So so for us I would say uncertainty tends to translate in all its forms tends to translate to a.

Speaker Change: In order to deliver the year, but we're very comfortable we're very confident with the trends we're seeing the role we play in our customers' environments and the capabilities and innovation, we're bringing there.

Martin Schroeter: And uncertainty is also true with regard to technology. And over the last 20 plus years, I think the world has observed that no matter what the business problem is, technology is part of that answer. if you're trying to find new customers, if you're trying to create a better employee experience, if you're trying to get yourself ready for a new regulatory environment, or if you're trying to prepare for a new view of your own macro environment, technology is a part of that. And that's why it tends to be a tailwind for us, because they need an infrastructure to execute that strategy, whatever it is, that is secure and resilient and fit for purpose.

Speaker Change: We will continue to be able to execute that and again I would go to the momentum we see in consult is a good data point the momentum we see in our hyper Scaler Alliance activity is a good data point with other things now picking up the work that we're doing with SAP and rises as an important addition, this year so.

Speaker Change: And then your second question you know look how much of how much of our business is subject to it.

Speaker Change: We enter a year as is typical we enter a year with 70, 75% of our of our year under contract right. So the revenue that that we already have for the year that that was represented in the guide is somewhere between 75%.

Speaker Change: Most of the substantial majority of our year is is this year is under backlog and we see really good demand trends given what we do and the role we play in the capabilities, we have to deliver the year.

Speaker Change: Continue to to execute on signing deals and converting those to revenue.

Speaker Change: That's great.

Speaker Change: Follow up on this discussion.

Martin Schroeter: So for us, I would say uncertainty in all its forms tends to translate to a bit of a tailwind.

Speaker Change: Walk throughout the whole year to deliver the year, but we're very comfortable we're very confident with the trends we're seeing the role we play in our customers environments and the capabilities and innovation, we're bringing that we that will continue to be able to execute that and.

Ian Zaffino: Martin I wanted to get a little bit more color quickly on Kindle bridge is it fair to assume that Kinder bridge chemical license additional leverage and such.

Martin Schroeter: And then your second question, look, how much of our business is subject to it? We enter a year, as is typical, we enter a year with 70%, 75% of our year under contract, right? So the revenue that we already have for the year that was represented in the guide is somewhere between 70 and 75% booked. And so yes, we have to continue to execute on signing deals and converting those to revenue throughout the whole year and in order to deliver the year. But we're very comfortable, we're very confident with the trends we're seeing, the role we play in our customers environments and the capabilities and innovation we're bringing that will continue to be able to execute that.

Ian Zaffino: Macro conditions, when global clients potentially pulling back on new implementations are enhancement and could kindred bridge actually helped the company.

Speaker Change: Momentum, we see in consultant as a good data point the momentum we see in our Hyperscaler Alliance activity is a good data point with other things now picking up the work that we're doing with SAP and rise is is an important addition, this year. So so most of.

Ian Zaffino: <unk> new opportunities.

Ian Zaffino: Yes. Thank you yes. Thanks, Dave you. The short answer is yes, so among the many capabilities that bridge has.

Ian Zaffino: A round observe ability and keeping your keeping your systems.

Speaker Change: Year is is this year is under backlog and we see really good demand trends given what we do in the role we play and the capabilities, we have to to deliver the year.

Ian Zaffino: Optimized and resilient et cetera, et cetera, one of the things. They can do is help uncover unused resources and you can imagine in us in a big sprawling Corporation.

Speaker Change: That's great just as a follow up for doing this discussion here Morgan I wanted to get a little bit more color quickly on Kindergrid is it fair to assume that kindred bridge can provide an additional leverage in such uncertain.

Ian Zaffino: How many for instance, unused public cloud instances are out there because they were used for something and then and then and then they needed they needed anymore, but somebody needs to find that and identify it and then get it turned off so so among the many capabilities that <unk> brings to customers is a.

Martin Schroeter: And again, I'd go to the momentum we see in consult as a good data point, the momentum we see in our hyperscaler alliance activity is a good data point with other things now picking up, the work that we're doing with SAP and RISE is an important addition this year. So the substantial majority of our year this year is under backlog and we see really good demand trends given what we do and the role we play and the capabilities we have to deliver the year. That's great.

Speaker Change: Global clines potentially pull back on new implementations or enhancements and could kindergarten help the company uncover new opportunities here. Thanks give you. The short answer is yes. So you know among the many cable.

Ian Zaffino: A very direct example is an ability to uncover unused resources.

Ian Zaffino: But theres also a whole host of Av.

Ian Zaffino: What we call actionable insights that we're delivering to our customers every month to help them optimize to help them get ahead of problems each of which is tied to one of their business outcomes. So yes bridge it becomes not only.

Speaker Change: Has around Observability in keeping your keeping your systems optimized and resilient et cetera et cetera, one of the things. It can do is is help uncover unused resources and you can imagine in a in a big.

Martin Schroeter: Just as a follow up for doing this discussion here, Martin, I wanted to get a little bit more color quickly on Kyndryl Bridge. Is it fair to assume that Kyndryl Bridge can provide some additional leverage in such uncertain macro conditions when global clients potentially pull back on new implementations or enhancements? And could Kyndryl Bridge actually help the company uncover new opportunities here? Yeah, thanks, Divya. The short answer is yes. So, you know, among the many capabilities that Bridge has around observability and keeping your systems optimized and resilient, etc., etc., one of the things it can do is help uncover unused resources.

Ian Zaffino: Only the way we do our work. It's also providing some that's also probably a lot of actionable insights to our customers to help them optimize to help them find savings in this case to help them get ahead of the challenges that they may have so that they can.

Speaker Change: How many for instance, unused public cloud instances are out there because they were used for something and then and then and then they needed anymore, but somebody needs to find that an identified and then get it turned off so so among the many.

Ian Zaffino: They can save money, but what.

Speaker Change: A not only but the real cost in anybody's infrastructure is both the planned downtime and quite frankly, the unplanned downtime and we've been very public that we believe we saved customers across our portfolio.

Speaker Change: Is a you know as a very direct example is an ability to uncover unused resources, but there's also a whole host of of what we call actionable insights that were delivering to our customers every month to help them optimize to help them get ahead of problems.

Speaker Change: Billions of dollars just from the use of bridge in in managing better planned downtime and also avoiding unplanned downtime. So there's real benefits here.

Speaker Change: And I just wanted to add on the.

Speaker Change: Macro uncertainty point that that in the fourth quarter, our consult signings grew 37%.

Martin Schroeter: And you can imagine in a big, sprawling corporation how many, for instance, unused public cloud instances are out there because they were used for something and then didn't need it anymore. But somebody needs to find that and identify it and then get it turned off. So, among the many capabilities that Bridge brings to customers is, you know, as a very direct example, is an ability to uncover unused resources. But there's also a whole host of what we call actionable insights that we're delivering to our customers every month to help them optimize, to help them get ahead of problems, each of which is tied to one of their business outcomes.

Speaker Change: This outcome, so yes bridges becomes not only it's only the way we do our work. It's also providing some it's also probably a lot of actionable insights to our customers to help them optimize to help them find savings in this case to help them get ahead of.

Speaker Change: And that was obviously a period of time, where there is a little bit more uncertainty and I think the growth we delivered in consult signings.

Speaker Change: Sort of a highlight as a proof point, how we're insulated to the macro environment and really executing on a series of opportunities that are unique and specific to us, allowing us to perform really quite quite differently than the call. It the overall market.

Speaker Change: They can they can save money, what what a not only but the a real cost in in anybody's infrastructure is both the planned downtime and quite frankly, the unplanned downtime and and we've been very public that we we believe we saved customers across airport.

Speaker Change: With growth in the 37% range last quarter.

Speaker Change: Billions of dollars just from the use of bridge in in in managing better planned downtime and also avoiding unplanned downtime. So there's real benefits here and I just wanted to add on on the you know call. It macro uncertainty point that that in the fourth quarter are.

Speaker Change: Great. Thank you operator, I think we have one more question. Thank you.

Speaker Change: Thank you.

Martin Schroeter: So, yes, Bridge becomes not only – it's not only the way we do our work, it's also providing some – it's also providing a lot of actionable insights to our customers to help them optimize, to help them find savings in this case, to help them get ahead of the challenges that they may have so that they can save money. What – A, not only, but the A real cost in anybody's infrastructure is both the planned downtime and, quite frankly, the unplanned downtime. And we've been very public that we believe we've saved customers across our portfolio billions of dollars just from the use of Bridge in managing better planned downtime and also avoiding unplanned downtime.

Speaker Change: Our next question comes from Tyler Dupont.

Speaker Change: From Bank of America. Please go ahead.

Tyler Dupont: Good morning, Martin and David Thanks for taking the question.

Speaker Change: Screw, 37% and and that was obviously a period of time, where there's a little bit more uncertainty and and I think the growth we delivered in consult signings sort of a highlights as a proof point, how we're insulated to the the macro environment.

Tyler Dupont: I wanted to start just by echoing congratulations on the quarter practically returns positive constant constant growth definitely move in the right direction.

Tyler Dupont: But I wanted to FERC asked about growth trends and the consult business.

Tyler Dupont: Maybe just discuss the go to market and consultant if that's changed at all in recent quarters, given the solid growth that we've seen in the fact that this component keeps increasing as a percent of total I think it is now around 25% of the <unk>.

Speaker Change: How should we be anticipating the growth there and any margin dynamics among those contracts compared to the company average worth mentioning.

Martin Schroeter: So, there's real benefits here.

David Wyshner: Yeah, and I just wanted to add on on the, you know, macro uncertainty point that that in the fourth quarter, our consult signings grew 37%. And that was obviously a period of time where there's a little bit more uncertainty. And I think the growth we delivered in consult signings, sort of highlights as a proof point how we're insulated to the macro environment, and really executing on a series of opportunities that are unique and specific to us. Allowing us to perform really quite, quite differently than the, you know, call it the overall market, you know, with with growth in the 37% range at last quarter.

Speaker Change: Thank you operator, I think we have one more question in the queue.

Speaker Change: Yes, thanks Sterling. Thanks for the nice comments, so two things first on the revenue trajectory and let me start with the mix because.

Speaker Change: Thank you.

Speaker Change: Alright. Our next question comes from Tyler Dupont from Bank of America. Please go ahead, good morning, Martin and David Thanks for taking the question want to start to sight echoing to congratulations on the quarter you know, it's nice to see a return sponsor growth.

Speaker Change: Because while it is certainly what you said is right at 25% of our revenue now remember that while the numerator has been growing very very well and we've been executing well numerator being the consult the total we've been engineering, a decline and because of the focus account activity so that that.

Tyler Dupont: But I wanted to first ask about gross trends in the consult business first if maybe just discuss you know the go to market in consultant if that's changed at all in recent quarters, given the solid growth that we've seen and the fact that this component keeps increasing as a percent of total I think.

Speaker Change: That product has obviously grown faster and now that we're back to growth in total I would expect that while the numerator will continue to grow quite well it won't be making the sort of the progress that we've seen when we started three and a half years ago with it under 10% of our overall mix now improving dramatically too.

Unknown Speaker: Thank you.

Tyler Dupont: Operator, I think we have one more question in the queue. Thank you. All right, our next question comes from Tyler DuPont. from Bank of America, please go ahead. Good, good morning, Martin and David. Thanks for taking the question. I want to start just by echoing the congratulations on the quarter. You know, it's nice to see a return to positive constant currency growth, you know, definitely moved in the right direction there. But I wanted to first ask about growth trends in the consult business. First, maybe just discuss, you know, the go-to-market in consults and if that's changed at all in recent quarters.

Tyler Dupont: Is it four two how should be anticipate the growth there and and any margin dynamics among those contracts compared to the company average worth mentioning yeah. Thanks, Tony Thanks for the nice comment so two two things first on the revenue trajectory and let me start with the.

Speaker Change: <unk> to 'twenty, five but that progress will slow notwithstanding that we continue to see great momentum in in our consult signings and obviously that will convert to revenue as David said, well it really tends to be a bit faster than our managed service business and then on margin profile, what we what we see is that the.

Tyler Dupont: Because while it is certainly what you said is right at 25% of our revenue now remember that that while the numerator has been growing very very well and we've been executing well the numerator being the consult the total we've been engineering a.

Speaker Change: The margins in consult tend to be a little bit higher not dramatically, but they are accretive to the overall margin profile.

Martin Schroeter: You know, given the solid growth that we've seen and the fact that, you know, this component keeps increasing as a percent of total, I think it's now around 25% as of 4Q. How should we anticipate the growth there and any margin dynamics among those contracts compared to the company average worth mentioning? Yeah, thanks, Tyler. Thanks for the nice comment. So two things. First, on the revenue trajectory, and let me start with the mix, because, because while it is certainly, you know, what you said is right at 25% of our revenue now, remember that while the numerator has been growing very, very well, and we've been executing well, the numerator being the consult, the total we've been engineering a decline in because of the focus account activity.

Tyler Dupont: The focus account activity so that that product is obviously grown faster and now that we're back to growth in total I would expect that while the numerator will continue to grow quite well it won't be making the sort of the progress that we've seen when we started.

Speaker Change: And Thats part of why with faster growth plus accretive to margins is part of why we're investing so heavily this year in our consult business and Thats all part of what we guided to profit. So while again, we have another big step up in profit year to year, which were which were delighted and excited about that includes.

Tyler Dupont: So with it under 10% of our overall mix now improving dramatically you know two and a half ex to 25, but that progress will slow notwithstanding that we continue to see great momentum in our consult signings and obviously that will.

Speaker Change: An acceleration if you will of our investments and our consult business that includes a continuation of our investments in <unk> and includes the continuation of our investments and our partnerships et cetera, et cetera, et cetera, but an acceleration and consult so so yes, it's growing faster it will continue to grow faster than the overall.

Tyler Dupont: Be a bit faster than our our managed service business and then on margin profile. What we what we see is that the margins in consult tend to be a little bit higher not dramatically, but they're accretive to the overall margin profile.

Speaker Change: The mix won't move up as much because the total is now growing and it is accretive at the bottom line.

Martin Schroeter: So that, that, that product is obviously grown faster. And now that we're back to growth in total, I would expect that while the numerator will continue to grow quite well, it won't be making the sort of the progress that we've seen when we started three and a half years ago with it under 10% of our overall mix. Now improving dramatically, you know, two and a half x to 25. But that progress will slow, notwithstanding that we continue to see great momentum in, in our consult signings. And obviously, that will convert to revenue, as David said, well, early tends to be a bit faster than our managed service business.

Speaker Change: Understood.

Speaker Change: That's helpful. Martin and then just on margins.

Tyler Dupont: And and and that's part of why with faster growth plus accretive to margins part of why we're investing so heavily this year in our consult business and that's it's all part of what we guided to profit. So while again, we have another big step up in profit year to year, which.

Speaker Change: Particularly from a bookings land and nice to see.

Speaker Change: Signings maintain that nine ish percent as adjusted <unk> margin profile, but given the strength in bookings that you've seen over the past several quarters have you given any thought to maybe flexing that pricing muscle a bit harder.

Tyler Dupont: An excited about that includes an acceleration if you will of our investments in our consult business. It includes a continuation of our investments in Kindro bridge. It includes continuation of our investments in our partnerships et cetera, et cetera, et cetera, but in acceleration.

Speaker Change: Have we given it thought look we want to get paid for the great work, we do and the teams have done a really nice job of of <unk>.

Speaker Change: Creating and quite frankly, capturing the value that we're helping our customers create so I think it is.

Martin Schroeter: And then on margin profile, what we what we see is that the margins in consult tend to be a little bit higher, not dramatically, but they're accretive to the overall margin profile. And, and that's part of why with faster growth, plus accretive to margins, part of why we're investing so heavily this year in our consult business. And that's, it's all part of what we guided to profit. So while, again, we have another big step up in profit year to year, which we're, which we're delighted and excited about, that includes an acceleration, if you will, of our investments in our consult business, it includes a continuation of our investments in Kindle Bridge, it includes a continuation of our investments in our partnerships, etc, etc, etc.

Speaker Change: It is a testament and the data shows.

Speaker Change: The value of what we do our customers desire for us to to continue to be a big part and invest in their accounts and this is like a this is a good spot for US. This is a good spot for us to land. This is a number that we've been talking about for three and a half years, we always said that within the.

Tyler Dupont: Helpful. Martin and then just on margins you know, particularly from a bookings lens you know nice to see signings maintain that nine ish percent adjusted PTI margin profile, no, but given the strength in bookings that you've seen over the past several quarters have you given any thought maybe.

Speaker Change: <unk>, we have and the investments, we're making that we can capture a high single digit PCI margins.

Speaker Change: And this is this is the right place for us to be so I feel great about I feel great about the margin profile of what we're putting in I feel great about what it says about how our customers think about us.

Tyler Dupont: Have we given a thought look we we want to get paid for the great work, we do and teams have done a really nice job of of of creating and quite frankly, capturing the value that we're helping our customers create so I think.

Martin Schroeter: But an acceleration and in consult.

And as long as we continue to invest in <unk> laid out.

Martin Schroeter: So, so yes, it's growing faster, it will continue to grow faster than the overall, the mix won't move up as much because the totals now growing and it is accretive at the bottom line. understood that that's helpful, Martin. And then just on margins, you know, particularly from a bookings lens, you know, again, nice to see signings maintain that nine-ish percent suggested PTI margin profile, you know, but given the strength in bookings that you've seen over the past several quarters, have you given any thought to maybe flexing that pricing muscle a bit harder? Have we given it thought?

Speaker Change: <unk> gave you a bit more color on investment as long as we continue to invest to bring new capabilities and to innovate I think this is this is a good reflection of how we can get paid for what we're doing.

Tyler Dupont: Testamen and the data shows the the value of what we do our customers desire for us to to continue to be a big card in invest in their accounts and this is like a this is a good spot for US. This is a good spot for us.

David: David you want to.

Speaker Change: Okay.

Speaker Change: Alright.

Speaker Change: Operator, I think that's the end of the question. So let me just let me just wrap up quickly first thanks, everybody for joining and thanks for the questions when I think about.

Tyler Dupont: We've been talking about for three and a half years, we always said that within the capabilities, we have and the investments we're making that we can capture high single digit PTI margins and and this is you know this is the right place for us to be so I feel great about I feel great about the margin profile of.

Speaker Change: The year ahead as you could hear from our from our commentary from the data, it's all about profitable profitable growth for us.

Martin Schroeter: Look, we want to get paid for the great work we do, and teams have done a really nice job of creating and, quite frankly, capturing the value that we're helping our customers create. So I think it's a testament, and the data shows the value of what we do, our customers' desire for us to continue to be a big part and invest in their accounts. And this is a good spot for us to land. This is a number that we've been talking about for three and a half years. We always said that within the capabilities we have and the investments we're making, that we can capture high single-digit PTI margins.

Speaker Change: Our first three five years, we had to fix the business and.

Speaker Change: And we had to do that while we continue to support our existing customers with the best services in the World and Thats exactly what this team has done.

Tyler Dupont: Feel great about what it says about how our customers think about us and as long as we continue to invest and I laid out you know gave you a bit more color on investment as long as we continue to invest to bring new capabilities and to innovate I think this is this is.

Speaker Change: We've invested in innovation, we invested in their capabilities, we invested in our partnerships all of which will continue to do in fact accelerate and as a result.

Speaker Change: We're able now to engage differently with our customers.

David Wyshner: David you want to.

Speaker Change: <unk> focused on meeting them, where they are and what we can do for them today, but helping them achieve their business outcomes, capturing new opportunities and obviously supporting their objectives. So that we're part of their future as well.

David Wyshner: Alright.

Speaker Change: Operator, I think that's the end of the question. So let me just let me just wrap up quickly first thanks, everybody for joining and thanks the for the for the questions. When I think about the year ahead as as you could hear from our from our commentary from the data it's all about profitable.

Unknown Speaker: And this is the right place for us to be. So I feel great about the margin profile of what we're putting in. I feel great about what it says about how our customers think about us. And as long as we continue to invest, and I laid out, gave you a bit more color on investment, as long as we continue to invest, to bring new capabilities and to innovate, I think this is a good reflection of how we can get paid for what we're doing. David, do you want to? Yes. All right. Operator, I think that's the end of the question.

Speaker Change: All of that happens because of the tens of thousands of <unk> around the world.

Speaker Change: Working together every day as a flat and fast and focused teams.

Speaker Change: Growth for us our first three and a half years, we had to fix the business and we had to do that while we continue to support our existing customers with the best services in the world and and that's exactly what this team has done we've invested innovation, we invested in our partnerships.

Speaker Change: And then <unk>.

Speaker Change: Really earned the right to win and they earn the right to keep winning and Thats thats, what youll see from US. So thanks again, everybody for joining the call.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Speaker Change: Two in fact accelerate and as a result, you know we're able now to engage differently with our customers not just focused on meeting them, where they are and what we can do for them today, but helping them achieve their business outcomes, capturing new opportunity.

Martin Schroeter: So let me just let me just wrap up quickly. First, thanks, everybody for joining. And thanks for the for the questions. When I think about the year ahead, as, as you could hear from our from our commentary from the data, it's all about profitable, profitable growth for us. Our first three and a half years, we had to fix the business. And we had to do that while we continue to support our existing customers with the best services in the world. And that's exactly what this team has done. We've invested in innovation, we invested in their capabilities, we invested in our partnerships, all of which will continue to do in fact, accelerate.

Speaker Change: We see supporting their objectives, so that we're part of their future as well and all of that happens because of the tens of thousands of kindles around the world working together every day as a flat and fast and focused teams and and they've you know they earn the right.

Speaker Change: Keep winning and that's that's what you'll see from US. So thanks again, everybody for joining the call. Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Martin Schroeter: And as a result, you know, we're able now to engage differently with our customers, not just focused on meeting them where they are, and what we can do for them today, but helping them achieve their business outcomes, capturing new opportunities, and obviously supporting their objectives so that we're part of their future. As well. And all of that happens because of the 10s of 1000s of kindles around the world, working together every day as a flat and fast and focused teams. And and they've, you know, they've really earned the right to win, and they've earned the right to keep winning.

Unknown Speaker: And and that's, that's what you'll see from us. So thanks again, everybody for joining the call. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Speaker Change: [music].