Kyndryl Holdings, Inc.

Good day and thank you for standing by. Welcome to the Kendrell 4th Fiscal Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during a session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lori Chapman, Global Head of Investor Relations.

Good morning, everyone, and welcome to Kindle's earnings call for the fourth fiscal quarter and year-end March 31, 2026. Before we begin, I'd like to remind you that our remarks today include forward-looking statements. These statements do not guarantee future performance and speak only as of today, and the company assumes no obligation to update its forward-looking statements, except as required by law. Actual outcomes or results may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties. For more information on some of these risks and uncertainties, please see the Risk Factors section of our annual report on Form 10-K, for the year ended March 31, 2025, and our quarterly report on Form 10-Q for the quarter ended December 31, 2025, as such factors may be updated from time to time in the company's subsequent filings with the SEC. Also, in today's remarks, we refer to certain non-GAAP financial metrics. Definitions and additional information about our calculation of non-GAAP financial metrics as well as 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.kindrel.com. Following our prepared remarks, we will hold a Q&A session. I'd now like to turn the call over to Kindrel's Chairman and Chief Executive Officer, Martin Schroeder.

Thank you, Laurie, and thanks to each of you for joining us. In our fiscal year 2026, we delivered adjusted pre-tax income growth and margin expansion and generated over $400 million in free cash flow. This performance comes against the backdrop of an environment that has continued to extend sales cycles and weigh on our revenue and signings performance. Customers are telling us that they are eager to embrace innovative solutions and modernization strategies, yet they are increasingly thoughtful and deliberate in their IT decision making driven by the dynamic of sovereignty, AI, and cyber preparedness, aiming to balance transformation with operational stability in today's complex environment. Considering these dynamics, we continue to invest in Kindrel Consult, our alliance partnerships, and our agentic AI capabilities, all while supporting and modernizing our customers' most complex, mission-critical IT environments. Our strategic focus remains unchanged. We're focused on growing our revenues and earnings and generating cash to reinvest in our business. The successful execution and continuation of our advanced delivery initiative, the increasing use of AI across our own operations, and the new workforce rebalancing actions gives us confidence that we're progressing toward our multi-year objectives. Both Harsh and I will discuss this in more detail. We will deliver sustainable, profitable growth by increasing high-value consultant engagements, deepening capabilities with our alliance partners, and delivering innovative AI-led modernization services. As more post-spin signings convert into revenue in fiscal 27 and 28, these growth investments, paired with our own use of innovation to drive productivity, position us to achieve higher profitability going forward. On today's call, I'll highlight the underlying growth drivers that are strengthening our operations and the targeted actions we're taking in fiscal 27 to advance us towards our fiscal 28 goals. Let me start with Kindrel Consult, In fiscal 26, Kindrel Consult again delivered double-digit revenue growth, our third consecutive year of strong performance. We've invested heavily in Kindrel Consult, including developing and hiring forward-deployed engineers and human systems architects, and our AI innovation labs, where we co-create agentic solutions at scale with customers. We exited the year with Kindrel Consult signings exceeding revenue, positioning us well for another year of strong consult revenue growth. This demonstrates how enterprises are turning to Kindrel for our high-value services across agentic AI, IT modernization, public and private cloud, and cybersecurity to help them modernize at scale, strengthen resilience, and unlock greater business value. Turning to our hyperscaler-related revenue streams, we exceeded our initial target and realized nearly $2 billion in revenue in fiscal 26. Keep in mind, this revenue source was essentially zero four years ago and has consistently grown year after year. This underscores the significant progress we've made in strengthening our core capabilities and establishing ourselves as a vital partner for our customers and alliances. We've been deepening our relationships with hyperscalers and, most recently, developing new capabilities in areas such as data sovereignty and agentic modernization. Across the broader alliance ecosystem, Kindrel continues to build strong momentum by translating innovation into secure, scalable, and repeatable outcomes for customers. Additionally, we have continued to strengthen our collaborations with other important alliance partners beyond hyperscalers as private cloud becomes an important growth factor, including the likes of Broadcom, Dell, HP Enterprise, and many others. For fiscal 27, we expect another year of strong growth from Kindrel Consult and hyperscaler-related revenue streams. Over the last few years, our success with Kindrel Consult and hyperscalers has helped offset the headwinds we've been facing from our own account initiative, and more recently from customers' decisions to procure hardware and software directly from IBM. You can also see from the chart on the right that 80% of our revenue in fiscal 27 is expected to be derived from post-spin higher margin signings, supporting our multi-year objective of expanding projected pre-tax margins on post-spin signings into the high single digits. In fact, in fiscal 26, we signed 38 deals in excess of 50 million, of which more than 30% consisted of new scope or were new logos. Given the multi-year nature of our customer relationships, I'm encouraged that we've signed more than 125 large deals over the last three years. Importantly, the investments we've made in consult, alliances, and agentic AI capabilities have well positioned us in today's market where enterprises are turning to Kindle for their modernization needs. This reflects our ability to win large, complex deals despite a more challenging environment, including longer sales cycles. With our heritage and mission-critical expertise and IP combined with AI-powered Kindrel Bridge platform and our differentiated solutions centered around the Kindrel Agentech AI framework, Agentech service management, and digital trust, we are seeing results in modernizing our own operations and in helping our customers continuously modernize their IT infrastructure and applications. to scale AI, to unlock business value, and to enhance resiliency and address AI-enabled cyber threats. Every customer conversation right now is focused on agentic AI and what it means in the context of their business, returns on investment, implications for cybersecurity, their workforce and efficiency, and in regulated environments, compliance. As customers embrace the agentic era, expectations of IT organizations to reinvent themselves have changed. And when you consider additional factors such as increasing tech debt and operational costs, modernization is no longer optional. It is a requirement. And at the same time, customers need a different approach to modernization, as most traditional approaches are labor-intensive, slow, often encounter business disruptions, and miss the expected ROI, which is why most customers lack confidence in their ability to execute modernization effectively. Our Kindrel readiness report found that nearly half of organizations struggled to generate meaningful returns on AI because their IT environments, their infrastructure applications, and business processes simply were not built for it. It's like trying to run a shiny new 200 mile an hour bullet train on tracks built for 30 miles an hour. Our customers are challenged in moving from AI experiments to industrialized scale. In this rapidly evolving technological environment, Kindrel becomes even more essential to our customers, helping them to prepare, navigate complexities, and scale. Within our own delivery operations, we're using AI agents embedded in the Kindle Bridge platform to drive greater productivity and outcomes. For example, we're seeing incidents being resolved 70% to 90% faster, which means less disruption and more consistent service. We're seeing root cause analysis cycles approximately 75% faster, helping prevent the same issue from happening again. And we're seeing that the dependency on people's time reduced by 50% to 70% freeing up our people and their expertise for higher-value work that delivers transformation for customers and growth for Kindle. So let's now turn to how we're working with customers to deliver business outcomes across the modernization continuum using an agentic AI approach. Importantly, these aren't one-off engagements. They create clear paths for us to further develop and expand our long-term strategic partnerships with customers from infrastructure and applications into higher-value transformation work. We're working with a large European bank to build a joint competency center to establish a vendor agnostic hybrid cloud design while complying with data sovereignty requirements and providing control over their AI adoption. They need flexibility and control across public and private cloud with a single simple view across their entire estate. We're leveraging our deep platform engineering expertise and agentic modernization capabilities to rapidly deploy their shared cloud platform. By co-creating this future state together, we're also expanding our scope into the application layer. Next, with a global insurance company, the starting point was a decades-old mainframe environment running millions of lines of mission-critical code supported by a shrinking pool of in-house expertise. Such products have traditionally failed because of system complexity, limited documentation, and skill shortages. We used AI agents to rapidly understand the current functionality and rewrite the system to a modern cloud-native architecture. The business outcomes we're delivering include an agentic digital twin to retain institutional knowledge and a 50% faster data center exit. This has positioned us to replicate and apply our modernization approach to other mission-critical systems in other countries where they operate. And then with U.S. state government agencies, in this case the DMV, we have a repeatable solution underpinned by agentic AI to rapidly implement scalable and resilient digital platform services. The benefits of our approach include self-service for government employees and enhanced citizen experiences by reducing wait times and improving self-service. Importantly, we're deploying the solution across multiple states and countries as a standardized repeatable offering. In all three examples, we rewarded new scope and now expect to expand into new areas. Customers are selecting Kindrel for our decades of mission-critical engineering expertise and our unique approach to AI-led modernization services. We're a trusted advisor and long-term partner for our customers with differentiated solutions that center on achieving tangible business results. With that, I'd like to pass the call over to Harsh to discuss our fiscal year results and outlook, and then I'll close with a more detailed discussion on our multi-year objectives. Harsh?