Kyndryl Holdings, Inc. Segments Disclosure
NOTE 4. SEGMENTS
Our reportable segments correspond to how the chief operating decision maker (“CODM”), our chief executive officer, reviews performance and allocates resources. Our four reportable segments consist of the following:
United States: This reportable segment is comprised of Kyndryl’s operations in the United States.
Japan: This reportable segment is comprised of Kyndryl’s operations in Japan.
Principal Markets: This reportable segment represents the aggregation of our operations in Canada, France, Germany, India, Italy, Spain / Portugal, and the United Kingdom / Ireland.
Strategic Markets: This reportable segment is comprised of our operations in all other countries in which we operate, which includes countries in regions such as Latin America, Benelux, ASEAN, and Australia / New Zealand.
The measure of segment operating performance used by Kyndryl’s CODM is adjusted EBITDA, which allows our CODM to evaluate operating results excluding certain items whose fluctuation from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA is defined as net income (loss) excluding income taxes, interest expense, depreciation and amortization (excluding depreciation of right-of-use assets and amortization of capitalized contract costs), charges related to ceasing to use leased and owned fixed assets, charges related to lease terminations, transaction-related costs and benefits, pension expenses other than pension servicing costs and multi-employer plan costs, stock-based compensation expense, workforce rebalancing charges incurred prior to March 31, 2024, impairment expense, significant litigation costs and benefits, and currency impacts of highly inflationary countries. The CODM reviews budget-to-actual variances of revenue and adjusted EBITDA to assess performance and allocate resources to the segments.
Our geographic markets frequently work together to sell and implement certain contracts. The resulting revenues and costs from these contracts may be apportioned among the participating geographic markets. The economic
environment and its effects on the industries served by our geographic markets affect revenues and operating expenses within our geographic markets to differing degrees. Currency fluctuations also tend to affect our geographic markets differently, depending on the geographic concentrations and locations of their businesses.
The following tables reflect the results of the Company’s segments:
Year Ended March 31, 2026 | |||||||||||||||
United | Principal | Strategic | Total | ||||||||||||
(Dollars in millions) | | States | | Japan | | Markets | | Markets | | Segments | |||||
Revenue | $ | 3,784 | $ | 2,284 | $ | 5,399 | $ | 3,625 | $ | 15,092 | |||||
Cost of service, excluding depreciation and amortization(1) | (2,349) | (1,441) | (3,659) | (2,373) | (9,822) | ||||||||||
Selling, general and administrative expenses, excluding depreciation and amortization(1) | (581) | (342) | (888) | (614) | (2,425) | ||||||||||
Other items(2) | (19) | (15) | (17) | (16) | (68) | ||||||||||
Segment adjusted EBITDA | $ | 835 | $ | 486 | $ | 834 | $ | 622 | $ | 2,777 | |||||
Year Ended March 31, 2025 | |||||||||||||||
United | Principal | Strategic | Total | ||||||||||||
(Dollars in millions) | | States | | Japan | | Markets | | Markets | | Segments | |||||
Revenue | $ | 3,876 | $ | 2,358 | $ | 5,206 | $ | 3,617 | $ | 15,057 | |||||
Cost of service, excluding depreciation and amortization(1) | (2,476) | (1,613) | (3,471) | (2,405) | (9,964) | ||||||||||
Selling, general and administrative expenses, excluding depreciation and amortization(1) | (638) | (343) | (831) | (561) | (2,372) | ||||||||||
Other items(2) | (37) | (13) | (19) | (46) | (115) | ||||||||||
Segment adjusted EBITDA | $ | 725 | $ | 390 | $ | 886 | $ | 606 | $ | 2,606 | |||||
Year Ended March 31, 2024 | |||||||||||||||
United | Principal | Strategic | Total | ||||||||||||
(Dollars in millions) | | States | | Japan | | Markets(3) | | Markets(3) | | Segments | |||||
Revenue | $ | 4,295 | $ | 2,344 | $ | 5,479 | $ | 3,934 | $ | 16,052 | |||||
Cost of service, excluding depreciation and amortization(1) | (2,778) | (1,651) | (3,957) | (2,720) | (11,106) | ||||||||||
Selling, general and administrative expenses, excluding depreciation and amortization(1) | (735) | (322) | (847) | (577) | (2,480) | ||||||||||
Other items(2) | (2) | (9) | 2 | 4 | (5) | ||||||||||
Segment adjusted EBITDA | $ | 781 | $ | 361 | $ | 677 | $ | 642 | $ | 2,461 | |||||
| (1) | Cost of service, excluding depreciation and amortization and selling, general and administrative expenses, excluding depreciation and amortization are both used in calculating segment adjusted EBITDA and exclude depreciation of property, equipment and capitalized software and amortization of transition costs and prepaid software. |
| (2) | Other items include workforce rebalancing charges incurred subsequent to March 31, 2024 and other expense (income). |
| (3) | Effective June 1, 2024, the Company made a minor change to its geographic reportable segments to reflect how it manages its operations and measures business performance, transitioning the reporting and management of its operations in Australia/New Zealand from the Principal Markets segment to the Strategic Markets segment. Historical fiscal 2024 segment information was recast to reflect this change in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025. |
The following table reconciles segment adjusted EBITDA to consolidated pretax income (loss):
Year Ended March 31, | |||||||||
(Dollars in millions) | | 2026 | | 2025 | | 2024 | |||
Segment adjusted EBITDA | $ | 2,777 | $ | 2,606 | $ | 2,461 | |||
Workforce rebalancing charges incurred prior to March 31, 2024 | — | — | (138) | ||||||
Charges related to ceasing to use leased/fixed assets and lease terminations | — | (48) | (39) | ||||||
Transaction-related (costs) benefits | (41) | 125 | 46 | ||||||
Stock-based compensation expense | (64) | (100) | (95) | ||||||
Interest expense | (89) | (100) | (122) | ||||||
Depreciation of property, equipment and capitalized software | (762) | (660) | (834) | ||||||
Amortization expense | (1,266) | (1,308) | (1,287) | ||||||
Corporate expense not allocated to the segments | (105) | (90) | (95) | ||||||
Other adjustments* | (36) | 10 | (68) | ||||||
Pretax income (loss) | $ | 414 | $ | 435 | $ | (168) | |||
* Other adjustments represent pension expenses other than pension servicing costs and multi-employer plan costs, significant litigation costs and benefits, and currency impacts of highly inflationary countries. For the year ended March 31, 2024, other adjustments also included an adjustment to reduce amortization expense for the amount already included in transaction-related (costs) benefits above.
Segment Assets and Other Items
The Company does not allocate assets to the above reportable segments for our CODM’s review.
Geographic Information
The following tables provide information for those countries that represent 10 percent or more of the specific category. Refer to Note 8 – Property and Equipment and Note 9 – Leases for more information on allocation methodologies.
Year Ended March 31, | |||||||||
(Dollars in millions) | | 2026 | | 2025 | | 2024 | |||
Revenue* | |||||||||
United States | $ | 3,784 | $ | 3,876 | $ | 4,295 | |||
Japan | 2,284 | 2,358 | 2,344 | ||||||
Other countries | 9,024 | 8,823 | 9,413 | ||||||
Total revenue | $ | 15,092 | $ | 15,057 | $ | 16,052 | |||
| * | Revenues are attributed to countries based on the location of the client and exclude certain allocations. |
At March 31, | ||||||
(Dollars in millions) | | 2026 | | 2025 | ||
Property and equipment, net | ||||||
United States* | $ | 877 | $ | 883 | ||
Other countries | 1,640 | 1,687 | ||||
Total property and equipment, net | $ | 2,517 | $ | 2,570 | ||
Operating right-of-use assets, net | ||||||
United States* | $ | 179 | $ | 134 | ||
Belgium | 87 | 92 | ||||
France | 84 | 81 | ||||
Italy | 82 | 76 | ||||
Other countries | 420 | 349 | ||||
Total operating right-of-use assets, net | $ | 853 | $ | 731 | ||
* Includes corporate and other.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | May 29, 2026 | Showing above |
| 2025 | May 30, 2025 | |
| 2024 | May 30, 2024 | |
| 2023 | May 26, 2023 | |
| 2021 | Mar 10, 2022 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.