0001558370-24-011369 | 10-Q | XBRL Viewer

ACCOUNTING PRONOUNCEMENTS	3 Months Ended
Jun. 30, 2024
ACCOUNTING PRONOUNCEMENTS
ACCOUNTING PRONOUNCEMENTS	NOTE 2. ACCOUNTING PRONOUNCEMENTS Recent Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The guidance should be applied retrospectively, effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which is intended to enhance the transparency and usefulness of income tax disclosures through improved reporting related to the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements.

ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Jun. 30, 2024

NOTE 2. ACCOUNTING PRONOUNCEMENTS

Recent Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The guidance should be applied retrospectively, effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which is intended to enhance the transparency and usefulness of income tax disclosures through improved reporting related to the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

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+ Details

COMMITMENTS AND CONTINGENCIES	3 Months Ended
Jun. 30, 2024
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	NOTE 11. COMMITMENTS AND CONTINGENCIES The Company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at June 30, 2024 and March 31, 2024 were not material. Additionally, the Company has contractual commitments that are noncancellable with certain software, hardware and cloud partners used in the delivery of services to customers. During the three months ended June 30, 2024, contractual commitments decreased due to satisfaction of existing commitments outpacing new additions. As a Fortune 500 company with customers and employees around the world, Kyndryl is subject to, or could become subject to, either as plaintiff or defendant, a variety of contingencies, including claims, demands and suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of its business. Given the rapidly evolving external landscape of cybersecurity, privacy and data protection laws, regulations and threat actors, the Company or its clients could become subject to actions or proceedings in various jurisdictions. Also, as is typical for companies of Kyndryl’s scope and scale, the Company is subject to, or could become subject to, actions and proceedings in various jurisdictions involving a wide range of labor and employment issues (including matters related to contested employment decisions, country-specific labor and employment laws, and the Company’s benefit plans), as well as actions with respect to contracts, securities, foreign operations, competition law and environmental matters. These actions may be commenced by a number of different parties, including competitors, clients, employees, government and regulatory agencies, stockholders and representatives of the locations in which the Company does business. Some of the actions to which the Company is, or may become, party may involve particularly complex technical issues, and some actions may raise novel questions under the laws of the various jurisdictions in which these matters arise. Additionally, the Company is, or may be, a party to agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters. The Company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In accordance with the relevant accounting guidance, the Company provides disclosures of matters for which the likelihood of material loss is at least reasonably possible. In addition, the Company may also disclose matters based on its consideration of other matters and qualitative factors. The Company reviews claims, suits, investigations and proceedings at least quarterly, and decisions are made with respect to recording or adjusting provisions and disclosing reasonably possible losses or range of losses (individually or in the aggregate) to reflect the impact and status of settlement discussions, discovery, procedural and substantive rulings, reviews by counsel and other information pertinent to a particular matter. Whether any losses, damages or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a material effect on the Company’s business, financial condition, results of operations or cash flows will depend on a number of variables, including the timing and amount of such losses or damages; the structure and type of any such remedies; the significance of the impact any such losses, damages or remedies may have in the consolidated financial statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. While the Company will continue to defend itself vigorously, it is possible that the Company’s business, financial condition, results of operations or cash flows could be affected in any particular period by the resolution of one or more of these matters. In July 2017, BMC Software, Inc. (“BMC”) filed suit against IBM in the U.S. Court for the Southern District of Texas in a dispute involving various aspects of IBM’s business, including its managed infrastructure business. BMC alleged IBM’s removal of BMC software from one of its client’s sites at the client’s request constituted breach of contract, fraudulent inducement and trade secret misappropriation. In May 2022, the trial court entered a judgment against IBM and awarded BMC $717 million in direct damages and $717 million in punitive damages, plus interest, for which IBM might have tried to seek an indemnity from the Company. However, IBM appealed the judgment, and in April 2024, the court of appeals overturned the judgment against IBM. Accordingly, we do not expect to have any liability related to this judgment. Separately, certain contractual disputes have arisen between Kyndryl and IBM following the Separation. IBM and Kyndryl have commenced arbitration proceedings related to certain of these matters. Certain of these matters have recently been concluded, resulting in a credit recorded in Cost of services in the three months ended June 30, 2024, while others are in preliminary stages. Kyndryl intends to vigorously pursue its interests and defenses in these matters, including asserting its own claims in arbitration if necessary.

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Jun. 30, 2024

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

NOTE 11. COMMITMENTS AND CONTINGENCIES

The Company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at June 30, 2024 and March 31, 2024 were not material. Additionally, the Company has contractual commitments that are noncancellable with certain software, hardware and cloud partners used in the delivery of services to customers. During the three months ended June 30, 2024, contractual commitments decreased due to satisfaction of existing commitments outpacing new additions.

As a Fortune 500 company with customers and employees around the world, Kyndryl is subject to, or could become subject to, either as plaintiff or defendant, a variety of contingencies, including claims, demands and suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of its business. Given the rapidly evolving external landscape of cybersecurity, privacy and data protection laws, regulations and threat actors, the Company or its clients could become subject to actions or proceedings in various jurisdictions. Also, as is typical for companies of Kyndryl’s scope and scale, the Company is subject to, or could become subject to, actions and proceedings in various jurisdictions involving a wide range of labor and employment issues (including matters related to contested employment decisions, country-specific labor and employment laws, and the Company’s benefit plans), as well as actions with respect to contracts, securities, foreign operations, competition law and environmental matters. These actions may be commenced by a number of different parties, including competitors, clients, employees, government and regulatory agencies, stockholders and representatives of the locations in which the Company does business. Some of the actions to which the Company is, or may become, party may involve particularly complex technical issues, and some actions may raise novel questions under the laws of the various jurisdictions in which these matters arise. Additionally, the Company is, or may be, a party to agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters.

The Company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In accordance with the relevant accounting guidance, the Company provides disclosures of matters for which the likelihood of material loss is at least reasonably possible. In addition, the Company may also disclose matters based on its consideration of other matters and qualitative factors.

The Company reviews claims, suits, investigations and proceedings at least quarterly, and decisions are made with respect to recording or adjusting provisions and disclosing reasonably possible losses or range of losses (individually or in the aggregate) to reflect the impact and status of settlement discussions, discovery, procedural and substantive rulings, reviews by counsel and other information pertinent to a particular matter.

Whether any losses, damages or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a material effect on the Company’s business, financial condition, results of operations or cash flows will depend on a number of variables, including the timing and amount of such losses or damages; the structure and type of any such remedies; the significance of the impact any such losses, damages or remedies may have in the consolidated financial statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. While the Company will continue to defend itself vigorously, it is possible that the Company’s business, financial condition, results of operations or cash flows could be affected in any particular period by the resolution of one or more of these matters.

In July 2017, BMC Software, Inc. (“BMC”) filed suit against IBM in the U.S. Court for the Southern District of Texas in a dispute involving various aspects of IBM’s business, including its managed infrastructure business. BMC alleged IBM’s removal of BMC software from one of its client’s sites at the client’s request constituted breach of contract, fraudulent inducement and trade secret misappropriation. In May 2022, the trial court entered a judgment against IBM and awarded BMC $717 million in direct damages and $717 million in punitive damages, plus interest, for which IBM might have tried to seek an indemnity from the Company. However, IBM appealed the judgment, and in

April 2024, the court of appeals overturned the judgment against IBM. Accordingly, we do not expect to have any liability related to this judgment.

Separately, certain contractual disputes have arisen between Kyndryl and IBM following the Separation. IBM and Kyndryl have commenced arbitration proceedings related to certain of these matters. Certain of these matters have recently been concluded, resulting in a credit recorded in Cost of services in the three months ended June 30, 2024, while others are in preliminary stages. Kyndryl intends to vigorously pursue its interests and defenses in these matters, including asserting its own claims in arbitration if necessary.

BORROWINGS - Debt (Details) - USD ($) $ in Millions	Jun. 30, 2024	Mar. 31, 2024
BORROWINGS
Financing lease and other obligations	$ 299	$ 291
Total	3,260	3,259
Less: Unamortized discount	5	5
Less: Unamortized debt issuance costs	16	16
Less: Current portion of debt	130	126
Total	$ 3,109	3,112
Finance lease obligations, interest rate (as a percent)	5.68%
Unsecured senior notes due 2034, including cross-currency swaps
BORROWINGS
Debt instrument, weighted-average interest rate (as a percent)	3.84%
Commercial loan agreement
BORROWINGS
Long-term debt	$ 61	68
Debt instrument, weighted-average interest rate (as a percent)	3.00%
Unsecured senior notes due 2026
BORROWINGS
Long-term debt	$ 700	700
Debt instrument, weighted-average interest rate (as a percent)	2.05%
Unsecured senior notes due 2028
BORROWINGS
Long-term debt	$ 500	500
Debt instrument, weighted-average interest rate (as a percent)	2.70%
Unsecured senior notes due 2031
BORROWINGS
Long-term debt	$ 650	650
Debt instrument, weighted-average interest rate (as a percent)	3.15%
Unsecured senior notes due 2034
BORROWINGS
Long-term debt	$ 500	500
Debt instrument, weighted-average interest rate (as a percent)	6.35%
Unsecured senior notes due 2041
BORROWINGS
Long-term debt	$ 550	$ 550
Debt instrument, weighted-average interest rate (as a percent)	4.10%

REVENUE RECOGNITION - Deferred Costs (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Mar. 31, 2024
Deferred Contract Costs
Deferred costs	$ 1,927		$ 2,000
Deferred costs, current	1,029		1,081
Deferred costs, noncurrent	898		920
Total deferred costs amortized	417	$ 463
Amortization of deferred costs	107	138
Deferred transition costs
Deferred Contract Costs
Deferred costs	726		753
Total deferred costs amortized	72	85
Prepaid software costs
Deferred Contract Costs
Deferred costs	730		770
Total deferred costs amortized	238	241
Capitalized contract costs
Deferred Contract Costs
Total deferred costs amortized	107	$ 138
Capitalized costs to fulfill contracts
Deferred Contract Costs
Deferred costs	213		212
Capitalized costs to obtain contracts
Deferred Contract Costs
Deferred costs	$ 258		$ 265
Minimum
Deferred Contract Costs
Term of contract with customer	3 years
Maximum
Deferred Contract Costs
Term of contract with customer	6 years

CONSOLIDATED INCOME STATEMENT - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
CONSOLIDATED INCOME STATEMENT
Revenues	$ 3,739	$ 4,193
Cost of services	2,934	3,449
Selling, general and administrative expenses	657	720
Workforce rebalancing charges	36	58
Transaction-related costs	20	42
Interest expense	28	29
Other expense		5
Total costs and expenses	3,675	4,302
Income (loss) before income taxes	64	(109)
Provision for income taxes	53	32
Net income (loss)	$ 11	$ (141)
EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share (in dollars per share)	$ 0.05	$ (0.62)
Diluted earnings (loss) per share (in dollars per share)	$ 0.05	$ (0.62)
Weighted-average basic shares outstanding (in shares)	230.5	227.9
Weighted-average diluted shares outstanding (in shares)	235.8	227.9

COMMITMENTS AND CONTINGENCIES (Details) - BMC v. IBM - IBM $ in Millions	1 Months Ended
	May 31, 2022 USD ($)
Loss Contingencies
Direct damages sought, value	$ 717
Punitive damages sought, value	$ 717

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

RETIREMENT-RELATED BENEFITS

3 Months Ended

Jun. 30, 2024

RETIREMENT-RELATED BENEFITS

RETIREMENT-RELATED BENEFITS

NOTE 13. RETIREMENT-RELATED BENEFITS

The following table presents the components of net periodic pension cost for the defined benefit pension plans recognized in the Consolidated Income Statement for the three months ended June 30, 2024 and 2023.


	Three Months Ended June 30,
(Dollars in millions)	2024		2023
Service cost	$	9	$	10
Interest cost*		13		14
Expected return on plan assets*		(15)		(15)
Recognized actuarial losses (gains)*		4		1
Net periodic pension cost	$	12	$	10

*	These components of net periodic pension cost are included in other expense in the Consolidated Income Statement.

The components of net periodic benefit cost for the nonpension postretirement benefit plans and multi-employer plans recognized in the Consolidated Income Statement were not material for any period presented.

- Definition

The entire disclosure for retirement benefits.

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-URI https://asc.fasb.org/1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480266/715-60-50-3

+ Details

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES - Rollforward (Details) - USD ($) $ in Millions	3 Months Ended		15 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024
RESTRUCTURING
Charges	$ 45	$ 68
Fiscal 2025 Program
RESTRUCTURING
Charges	48		$ 48
Cash payments	(5)
Non-cash adjustments	(10)
Balance at end of period	32		32
Fiscal 2024 Program
RESTRUCTURING
Balance at beginning of period	28
Charges			307
Cash payments	(21)
Non-cash adjustments	(3)
Balance at end of period	4		4
Workforce Rebalancing Charges \| Fiscal 2025 Program
RESTRUCTURING
Charges	38
Cash payments	(5)
Non-cash adjustments	(1)
Balance at end of period	32		32
Workforce Rebalancing Charges \| Fiscal 2024 Program
RESTRUCTURING
Balance at beginning of period	28
Cash payments	(21)
Non-cash adjustments	(3)
Balance at end of period	4		4
Liabilities Related to Ceasing to Use Leased Assets \| Fiscal 2025 Program
RESTRUCTURING
Charges	9
Non-cash adjustments	(9)
Workforce Rebalancing Liabilities Inherited from Former Parent \| Fiscal 2024 Program
RESTRUCTURING
Balance at beginning of period	29
Cash payments	(3)
Balance at end of period	$ 26		$ 26

REVENUE RECOGNITION

3 Months Ended

Jun. 30, 2024

REVENUE RECOGNITION

REVENUE RECOGNITION

NOTE 3. REVENUE RECOGNITION

Disaggregation of Revenue

The Company views its segment results to be the best view of disaggregated revenue. Refer to Note 4 – Segments.

Remaining Performance Obligations

The remaining performance obligation (“RPO”) represents the aggregate amount of contractual deliverables yet to be recognized as revenue at the end of the reporting period. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts for which the customer is not committed. The customer is not considered committed when it is able to terminate for convenience without payment of a substantive penalty. The RPO also includes estimates of variable consideration. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustments for revenue that has not materialized and adjustments for currency.

At June 30, 2024, the aggregate amount of RPO related to customer contracts that are unsatisfied or partially unsatisfied was $31.6 billion. Approximately 59 percent of the amount is expected to be recognized as revenue in the subsequent two years, approximately 34 percent in the subsequent three through five years, and the balance thereafter.

During the three months ended June 30, 2024 and June 30, 2023, revenue increased by $11 million and $11 million, respectively from performance obligations satisfied (or partially satisfied) in previous periods, mainly due to changes in estimates on contracts with cost-to-cost measures of progress.

Contract Balances

The following table provides information about accounts receivable, contract assets and deferred income balances:


	June 30,		March 31,
(Dollars in millions)	2024		2024
Accounts receivable (net of allowances for credit losses of $21 at June 30, 2024 and $22 at March 31, 2024) *	$	1,440	$	1,599
Contract assets **		40		30
Deferred income (current)		805		825
Deferred income (noncurrent)		325		314

*	Included unbilled receivable balances of $343 million at June 30, 2024 and $377 million at March 31, 2024.

**	Contract assets represent goods or services delivered by the Company which give the Company the right to consideration that is typically subject to milestone completion or client acceptance and are included within prepaid expenses and other current assets in the Consolidated Balance Sheet.

The amount of revenue recognized during the three months ended June 30, 2024 and June 30, 2023 that was included within the deferred income balance at March 31, 2024 and March 31, 2023 was $321 million and $188 million, respectively.

The following table provides roll-forwards of the accounts receivable allowance for expected credit losses for the three months ended June 30, 2024 and 2023:


	Three Months Ended June 30,
(Dollars in millions)	2024		2023
Beginning balance	$	22	$	32
Additions (releases)		(3)		(1)
Write-offs		2		(3)
Other *		—		1
Ending balance	$	21	$	29

*	Primarily represents currency translation adjustments.

The contract assets allowance for expected credit losses was not material in any of the periods presented.

Major Clients

No single client represented more than 10 percent of the Company’s total revenue during the three months ended June 30, 2024 and 2023. Other than receivables due from our former Parent, no single client represented more than 10 percent of the Company’s total accounts receivable balance as of June 30, 2024 and March 31, 2024, respectively.

Deferred Costs

Costs to acquire and fulfill customer contracts are deferred and amortized over the contract period or expected customer relationship life. The expected customer relationship period is determined based on the average customer relationship period, including expected renewals, for each offering type and ranges from three to six years. For contracts with an estimated amortization period of less than one year, we elected the practical expedient to expense incremental costs immediately.

The following table provides amounts of capitalized costs to acquire and fulfill customer contracts at June 30, 2024 and March 31, 2024:


	June 30,		March 31,
(Dollars in millions)	2024		2024
Deferred transition costs	$	726	$	753
Prepaid software costs		730		770
Capitalized costs to fulfill contracts		213		212
Capitalized costs to obtain contracts		258		265
Total deferred costs *	$	1,927	$	2,000

*	Of the total deferred costs, $1,029 million was current and $898 million was noncurrent at June 30, 2024, and $1,081 million was current and $920 million was noncurrent at March 31, 2024.

The amount of total deferred costs amortized for the three months ended June 30, 2024 was $417 million, composed of $238 million of amortization of prepaid software, $72 million of amortization of deferred transition costs and $107 million of amortization of capitalized contract costs. The amount of total deferred costs amortized for the three months ended June 30, 2023 was $463 million, composed of $241 million of amortization of prepaid software, $85 million of amortization of deferred transition costs and $138 million of amortization of capitalized contract costs.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
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-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Jun. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES - Classification of restructuring activity (Details) - USD ($) $ in Millions	3 Months Ended		15 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024
RESTRUCTURING
Charges	$ 45	$ 68
Fiscal 2025 Program
RESTRUCTURING
Charges	48		$ 48
Fiscal 2024 Program
RESTRUCTURING
Charges			307
Cost of service
RESTRUCTURING
Charges	8	1
Cost of service \| Fiscal 2025 Program
RESTRUCTURING
Charges			8
Cost of service \| Fiscal 2024 Program
RESTRUCTURING
Charges			94
Selling, general and administrative expense
RESTRUCTURING
Charges	1	10
Selling, general and administrative expense \| Fiscal 2025 Program
RESTRUCTURING
Charges			1
Selling, general and administrative expense \| Fiscal 2024 Program
RESTRUCTURING
Charges			25
Workforce rebalancing charges
RESTRUCTURING
Charges	$ 36	$ 58
Workforce rebalancing charges \| Fiscal 2025 Program
RESTRUCTURING
Charges			38
Workforce rebalancing charges \| Fiscal 2024 Program
RESTRUCTURING
Charges			$ 187

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

CONSOLIDATED STATEMENT OF EQUITY - USD ($) shares in Millions, $ in Millions	Common Stock and Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Accumulated Deficit	Common Stock	Non-Controlling Interests	Total
Balance at the beginning of the period at Mar. 31, 2023	$ 4,428	$ (1,062)	$ (23)	$ (1,978)		$ 97	$ 1,462
Balance at the beginning of the period (in shares) at Mar. 31, 2023					227.7
Equity
Net income (loss)				(141)			(141)
Common stock issued under employee plans	22						22
Common stock issued under employee plans (in shares)					1.4
Purchases of treasury stock			(7)				(7)
Purchases of treasury stock (in shares)					(0.5)
Changes in non-controlling interests						2	2
Balance at the end of the period at Jun. 30, 2023	4,451	(1,062)	(30)	(2,119)		99	1,338
Balance at the end of the period (in shares) at Jun. 30, 2023					228.6
Balance at the beginning of the period at Mar. 31, 2024	$ 4,524	(1,145)	(45)	(2,319)		107	1,122
Balance at the beginning of the period (in shares) at Mar. 31, 2024	230.4
Equity
Net income (loss)				11			11
Other comprehensive income (loss), net of tax		(48)					(48)
Common stock issued under employee plans	$ 25						25
Common stock issued under employee plans (in shares)	0.9
Purchases of treasury stock			(7)				(7)
Purchases of treasury stock (in shares)	0.3
Changes in non-controlling interests						(2)	(2)
Balance at the end of the period at Jun. 30, 2024	$ 4,549	$ (1,192)	$ (53)	$ (2,308)		$ 105	$ 1,101
Balance at the end of the period (in shares) at Jun. 30, 2024	231.0

Disclosure - ACQUISITIONS AND DIVESTITURES - Disposal of the SIS Business (Details) $ in Millions	Jun. 30, 2024 USD ($)
Disposal group, held-for-sale, not discontinued operations \| Securities Industry Services
ACQUISITIONS
Definitive agreement	$ 200

TAXES

3 Months Ended

Jun. 30, 2024

TAXES.

TAXES

NOTE 5. TAXES

For the three months ended June 30, 2024, the Company’s effective tax rate was 82.7%, compared to (29.6%) for the three months ended June 30, 2023. The Company’s negative effective tax rate in 2023 reflects a tax expense on a pretax book loss.

The Company’s effective tax rate for the three months ended June 30, 2024 was higher than the Company’s statutory rate, and its negative effective tax rate for the three months ended June 30, 2023 was lower than the Company’s statutory tax rate primarily due to taxes on foreign operations and valuation allowances recorded in certain jurisdictions against deferred tax assets that are not more likely than not to be realized.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 231
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482663/740-10-55-231

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12C
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480990/946-20-50-13

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/740/tableOfContent

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-14

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-21

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

BORROWINGS - Additional Information (Details) $ in Millions	Jun. 30, 2024 USD ($)
Revolving Credit Agreement
BORROWINGS
Borrowing credit facility	$ 0

FINANCIAL ASSETS AND LIABILITIES - Not Measured at Fair Value (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Mar. 31, 2024
Financial assets and financial liabilities:
Derivative assets	$ 29		$ 5
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other Assets, Prepaid Expense and Other Assets, Current		Other Assets, Prepaid Expense and Other Assets, Current
Derivative liabilities	$ 32		$ 18
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Noncurrent, Accrued Liabilities and Other Liabilities, Current		Other Liabilities, Noncurrent, Accrued Liabilities and Other Liabilities, Current
Derivative assets impacted by netting arrangements	$ 0		$ 0
Impairments of non-financial assets	0	$ 0
Long-term debt	2,900		2,900
Long-term debt, fair value	2,600		2,600
Gross proceeds from third parties	800	1,200
Fees associated with the transfers of receivables	10	$ 16
Time deposits
Financial assets and financial liabilities:
Impairments of non-financial assets	0		0
Cash and cash equivalents \| Time deposits
Financial assets and financial liabilities:
Time deposits, carrying value	$ 590		$ 828

EQUITY - Reclassifications and Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Other comprehensive income (loss)	$ (48)
Accumulated Other Comprehensive Income (Loss)
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Other comprehensive income (loss), before tax amount	(46)	$ 1
Other comprehensive income (loss), tax (expense) benefit	(2)	(1)
Other comprehensive income (loss)	(48)
Foreign Currency Translation Adjustments
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Other comprehensive income (loss), before tax amount	(49)	(15)
Other comprehensive income (loss)	(49)	(15)
Foreign Currency Translation Adjustments Excluding Net Investment Hedges
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Unrealized gains (losses) arising during the period, before tax amount	(63)
Unrealized gains (losses) arising during the period, net of tax amount	(63)
Unrealized Gains on Net Investment Hedges
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Unrealized gains (losses) arising during the period, before tax amount	14
Unrealized gains (losses) arising during the period, net of tax amount	14
Unrealized Gains (Losses) on Cash Flow Hedges
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Unrealized gains (losses) arising during the period, before tax amount	(1)	15
Unrealized gains (losses) arising during the period, tax (expense) benefit	(1)	(1)
Unrealized gains (losses) arising during the period, net of tax amount	(2)	13
Reclassification/amortization, before tax amount		(1)
Other comprehensive income (loss), before tax amount	(1)	14
Other comprehensive income (loss), tax (expense) benefit	(1)	(1)
Other comprehensive income (loss)	(2)	13
Net Change Retirement-Related Benefit Plans
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Other comprehensive income (loss), before tax amount	4	2
Other comprehensive income (loss), tax (expense) benefit	(1)
Other comprehensive income (loss)	$ 3	$ 2

FINANCIAL ASSETS AND LIABILITIES

3 Months Ended

Jun. 30, 2024

FINANCIAL ASSETS AND LIABILITIES

FINANCIAL ASSETS AND LIABILITIES

NOTE 7. FINANCIAL ASSETS AND LIABILITIES

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company classifies certain assets and liabilities based on the following fair value hierarchy:

●

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date,

●

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and

●

Level 3 – Unobservable inputs for the asset or liability.

In determining the fair value of financial instruments, the Company considers certain market valuation adjustments to the “base valuations” using the methodologies described below for several parameters that market participants would consider in determining fair value:

●

Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument.

●

Credit risk adjustments are applied to reflect the Company’s own credit risk when valuing liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company’s credit risk as observed in the credit default swap market.

Certain non-financial assets such as property, plant and equipment, operating right-of-use assets, land, goodwill and intangible assets are recorded at fair value or at cost, as appropriate, in the period they are initially recognized, and such balances may be adjusted in subsequent periods if an event occurs or circumstances change that indicate that the asset may be impaired. The impairment models used for non-financial assets depend on the type of asset. The fair value measurements, in such instances, would be classified in Level 3 of the fair value hierarchy. We perform a qualitative assessment of asset impairments on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value is less than carrying value. There were no impairments of non-financial assets recognized for the three months ended June 30, 2024 and 2023.

Financial Assets and Liabilities Measured at Fair Value

The following table presents the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis at June 30, 2024 and March 31, 2024.


	Fair Value
	Hierarchy	At June 30, 2024						At March 31, 2024
(Dollars in millions)	Level	Assets		Liabilities		Fair Value		Assets		Liabilities		Fair Value
Derivatives designated as hedging instruments:
Foreign exchange contracts	2	$	7	$	7	$	—	$	2	$	1	$	1
Cross-currency swap contracts	2		13		6		7		1		11		(9)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	2		9		19		(10)		2		6		(4)
Total		$	29	$	32	$	(3)	$	5	$	18	$	(13)

The gross balances of derivative assets, including accrued interest, are contained within prepaid expenses and other current assets and other noncurrent assets in the Consolidated Balance Sheet. The gross balances of derivative liabilities are contained within other accrued expenses and liabilities and other noncurrent liabilities in the Consolidated Balance Sheet. The Company may enter into master netting agreements with certain counterparties that allow for netting of exposures. There was no netting of derivative assets against liabilities in the Consolidated Balance Sheet at June 30, 2024 and March 31, 2024. The Company manages counterparty risk by seeking counterparties of high credit quality and by monitoring credit ratings, credit spreads and other relevant public information about its counterparties. The Company does not anticipate nonperformance by any of the counterparties.

Financial Assets and Liabilities Not Measured at Fair Value

Accounts receivable are financial assets with carrying values that approximate fair value. Accounts payable, other accrued expenses and short-term debt are financial liabilities with carrying values that approximate fair value. If measured at fair value in the consolidated financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy, except for short-term debt, which would be classified as Level 2.

The Company also has time deposits that have maturities of 90 days or less, and their carrying values approximate fair value. They are measured for impairment on a recurring basis by comparing their fair value with their amortized cost basis. There were no impairments of financial assets recognized for any of the periods presented. The balances of these time deposits with maturities of 90 days or less contained within cash and cash equivalents in the Consolidated Balance Sheet at June 30, 2024 and March 31, 2024 were $590 million and $828 million, respectively. If

measured at fair value in the consolidated financial statements, time deposits with maturities of 90 days or less would be categorized as Level 2 in the fair value hierarchy.

The fair value of our outstanding debt (excluding finance lease obligations) is based on various methodologies, including quoted prices in active markets for identical debt instruments, which is a Level 1 measurement, or calculated fair value using an expected present value technique that uses rates currently available to the Company for debt in active markets with similar terms and remaining maturities, which is a Level 2 measurement. See Note 10 – Borrowings for additional information. Our outstanding debt (excluding finance lease obligations) had a carrying value of $2.9 billion as of June 30, 2024 and March 31, 2024, with an estimated fair value of $2.6 billion as of June 30, 2024 and March 31, 2024.

Transfers of Financial Assets

The Company has entered into agreements with third-party financial institutions to sell certain financial assets (primarily trade receivables) without recourse. The Company has determined these are true sales. The carrying value of the financial asset sold is derecognized, and a net gain or loss on the sale is recognized, at the time of the transfer.

The net proceeds from these arrangements are reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows. Gross proceeds from receivables sold to third parties under this program were $0.8 billion for the three months ended June 30, 2024 and $1.2 billion for the three months ended June 30, 2023. The fees associated with the transfers of receivables were $10 million for the three months ended June 30, 2024 and $16 million for the three months ended June 30, 2023.

Derivative Financial Instruments

The following table summarizes the notional amounts of the Company’s outstanding derivatives:


	At June 30, 2024						At March 31, 2024
(Dollars in millions)	Foreign Exchange Contracts		Cross-currency Swap Contracts		Total Notional Amount		Foreign Exchange Contracts		Cross-currency Swap Contracts		Total Notional Amount
Derivatives designated as hedging instruments
Cash flow hedges	$	456	$	—	$	456	$	281	$	—	$	281
Net investment hedges		500		500		1,000		—		500		500
Derivatives not designated as hedging instruments	$	2,546	$	—	$	2,546	$	1,624	$	—	$	1,624

The notional amounts of derivative instruments do not necessarily represent the amounts exchanged by the Company with third parties and are not necessarily a direct measure of the financial exposure.

Derivatives Designated as Hedging Instruments

Cash Flow Hedges

The Company has foreign exchange derivative financial instruments designated as cash flow hedges to manage the volatility of cash flows that relate to operating expenses denominated in certain currencies. Changes in fair value of derivatives designated as cash flow hedges are recorded, net of applicable taxes, in other comprehensive income (“OCI”) and subsequently reclassified into the same income statement line item as the hedged exposure when the underlying hedged item is recognized in earnings. The cash flows associated with derivatives designated as cash flow hedges are reported in cash flows from operating activities in the Consolidated Statement of Cash Flows.

The maximum remaining length of time over which the Company has hedged its exposure is approximately one year. At June 30, 2024 and March 31, 2024, the weighted-average remaining maturity of these instruments was approximately 0.5 years. At June 30, 2024 and March 31, 2024, in connection with cash flow hedges of foreign currency cost transactions, the Company had unrealized gains of $1 million and $2 million (each before taxes), respectively, in accumulated other comprehensive income (“AOCI”). The Company estimates that $1 million (before taxes) of deferred net gains on derivatives in AOCI at June 30, 2024 will be reclassified to net income within the next twelve months, providing an offsetting economic impact against the underlying anticipated transactions.

Net Investment Hedges

The Company has entered into and designated cross-currency interest rate swap contracts and currency forward contracts as net investment hedges to mitigate foreign exchange exposure related to net investments. Under the terms of the cross-currency swaps, the Company makes fixed-rate payments in foreign currencies and receives fixed-rate amounts in U.S. dollars, with the exchange of the underlying notional amounts at maturity whereby the Company will receive U.S. dollars and pay foreign currencies at exchange rates which are determined at contract inception. Under the terms of the currency forward contracts, the Company commits to sell the local currency of certain subsidiaries in exchange for U.S. dollars at specified forward rates. Derivatives designated as net investment hedges are accounted for using the spot method, with changes in the fair value of the derivatives attributable to changes in spot rates recorded within foreign currency translation (“CTA”) as a component of other comprehensive income (loss) and remaining there until the hedged net investments are sold or substantially liquidated. The changes in the fair value of the derivatives that are attributable to changes in the difference between the forward rate and spot rate are excluded from the assessment of hedge effectiveness. The changes in fair value that are attributable to the excluded components are initially recorded in CTA and then recognized in interest expense on the Consolidated Income Statement over the life of the derivative instruments. Cash flows from derivatives designated as net investment hedges are reported as cash flows from investing activities in the Consolidated Statement of Cash Flows, except for cash flows from the periodic interest settlements of cross-currency interest rate swaps designated as net investment hedges, which are reported as cash flows from operating activities in the Consolidated Statement of Cash Flows.

The maximum remaining length of time over which the Company has hedged its exposure is approximately ten years. At June 30, 2024 and March 31, 2024, the weighted-average remaining maturity of the Company’s net investment hedge instruments was approximately five years and ten years, respectively. At June 30, 2024 and March 31, 2024, the Company had unrealized gains of $3 million and unrealized losses of $11 million (each before taxes), respectively, in AOCI related to net investment hedges.

Derivatives Not Designated as Hedging Instruments

The Company enters into currency forward and swap contracts to hedge exposures related to assets, liabilities and earnings across its subsidiaries. These contracts are not designated as hedging instruments, and therefore changes in fair value of these contracts are reported in earnings in other expense in the Consolidated Income Statement. The gains and losses on these contracts generally offset the gains and losses in the underlying hedged exposures, which are also reported in other expense in the Consolidated Income Statement. Cash flows from derivatives not designated as hedges are reported in cash flows from investing activities in the Consolidated Statement of Cash Flows. The terms of these swap contracts are generally less than one year.

The Effect of Derivative Instruments in the Consolidated Income Statement

The effects of derivatives designated as hedging instruments on the Consolidated Income Statement and Other Comprehensive Income are as follows:


	Unrealized Gain (Loss)				Consolidated	Gain (Loss) Reclassified
(Dollars in millions)	Recognized in OCI				Income Statement	from AOCI to Income
Three months ended June 30:	2024		2023		Line Item	2024		2023
Derivative instruments in cash flow hedges:
Foreign exchange contracts	$	(1)	$	15	Cost of services	$	—	$	1
*Derivative instruments in net investment hedges:**
Cross-currency swaps		16		—	Interest expense		3		—
Foreign exchange contracts		2		—	Interest expense		1		—
Total	$	17	$	15		$	4	$	1

*	For the three months ended June 30, 2024, the Company recognized a gain of $4 million in interest expense on components excluded from the assessment of the hedge effectiveness for net investment hedges. There were no net investment hedges in the three months ended June 30, 2023.

For the three months ended June 30, 2024 and 2023, there were no gains or losses excluded from the assessment of hedge effectiveness for cash flow hedges, or associated with an underlying exposure that did not or was not expected to occur, nor are there any anticipated in the normal course of business.

The effects of derivatives not designated as hedging instruments on the Consolidated Income Statement are as follows:


	Consolidated	Gain (Loss)
(Dollars in millions)	Income Statement	Recognized on Derivatives
Three months ended June 30:	Line Item	2024		2023
Foreign exchange contracts	Other expense	$	(28)	$	(17)
Total		$	(28)	$	(17)

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Jul. 31, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2024
Entity File Number	001-40853
Entity Registrant Name	Kyndryl Holdings, Inc
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	86-1185492
Entity Address, Address Line One	One Vanderbilt Avenue, 15th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10017
City Area Code	212
Local Phone Number	896-2098
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	KD
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		231,207,484
Entity Central Index Key	0001867072
Current Fiscal Year End Date	--03-31
Document Fiscal Year Focus	2025
Document Fiscal Period Focus	Q1
Amendment Flag	false

EARNINGS (LOSS) PER SHARE - Computation of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
EARNINGS (LOSS) PER SHARE
Stock dividends declared	$ 0	$ 0
Net income (loss) on which basic and diluted earnings per share is calculated	$ 11	$ (141)
Number of shares on which basic earnings (loss) per share is calculated	230.5	227.9
Dilutive effect of stock options and equity awards	5.3
Number of shares on which diluted earnings (loss) per share is calculated	235.8	227.9
Basic earnings (loss) per share	$ 0.05	$ (0.62)
Diluted earnings (loss) per share	$ 0.05	$ (0.62)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

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+ Details

FINANCIAL ASSETS AND LIABILITIES - Gains and Losses (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing	$ 0	$ 0
Designated as hedging instruments
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	17	15
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	4	1
Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (loss) from derivatives	$ (28)	$ (17)
Foreign exchange contracts \| Designated as hedging instruments \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Cost of Revenue	Cost of Revenue
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	$ (1)	$ 15
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI		1
Foreign exchange contracts \| Designated as hedging instruments \| Net investment hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	2
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	1
Foreign exchange contracts \| Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (loss) from derivatives	$ (28)	$ (17)
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Income and Expense	Other Income and Expense
Cross-currency swap contracts \| Designated as hedging instruments \| Net investment hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	$ 16
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	3
Interest expense \| Designated as hedging instruments \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	$ 4	$ 0

CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) shares in Millions, $ in Millions	Jun. 30, 2024	Mar. 31, 2024
CONSOLIDATED BALANCE SHEET
Notes and accounts receivable - trade, allowances	$ 21	$ 22
Common Stock, Par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares authorized (in shares)	1,000.0	1,000.0
Common Stock, Shares issued (in shares)	234.6	233.7
Treasury Stock (in shares)	3.6	3.3

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES (Details) - USD ($) $ in Millions	3 Months Ended		15 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Mar. 31, 2024
RESTRUCTURING
Charges	$ 45	$ 68
Operating Segments
RESTRUCTURING
Charges	45	65
Corporate, Non-Segment
RESTRUCTURING
Charges		3
Fiscal 2025 Program
RESTRUCTURING
Charges	48		$ 48
Restructuring and related expected costs	140		140
Fiscal 2025 Program \| Workforce Rebalancing Charges
RESTRUCTURING
Charges	38
Restructuring and related expected costs	100		100
Fiscal 2025 Program \| Liabilities Related to Ceasing to Use Leased Assets
RESTRUCTURING
Charges	9
Restructuring and related expected costs	40		40
Fiscal 2025 Program \| Operating Segments
RESTRUCTURING
Charges			48
Fiscal 2024 Program
RESTRUCTURING
Charges			307
Restructuring and related expected costs				$ 310
Fiscal 2024 Program \| Workforce Rebalancing Charges
RESTRUCTURING
Restructuring and related expected costs				190
Fiscal 2024 Program \| Liabilities Related to Ceasing to Use Leased Assets
RESTRUCTURING
Restructuring and related expected costs				$ 120
Fiscal 2024 Program \| Operating Segments
RESTRUCTURING
Charges			294
Fiscal 2024 Program \| Corporate, Non-Segment
RESTRUCTURING
Charges			13
United States. \| Operating Segments
RESTRUCTURING
Charges	20	12
United States. \| Fiscal 2025 Program \| Operating Segments
RESTRUCTURING
Charges			21
United States. \| Fiscal 2024 Program \| Operating Segments
RESTRUCTURING
Charges			41
Japan. \| Operating Segments
RESTRUCTURING
Charges	1	1
Japan. \| Fiscal 2025 Program \| Operating Segments
RESTRUCTURING
Charges			1
Japan. \| Fiscal 2024 Program \| Operating Segments
RESTRUCTURING
Charges			4
Principal Markets \| Operating Segments
RESTRUCTURING
Charges	5	20
Principal Markets \| Fiscal 2025 Program \| Operating Segments
RESTRUCTURING
Charges			3
Principal Markets \| Fiscal 2024 Program \| Operating Segments
RESTRUCTURING
Charges			141
Strategic Markets \| Operating Segments
RESTRUCTURING
Charges	$ 20	$ 32
Strategic Markets \| Fiscal 2025 Program \| Operating Segments
RESTRUCTURING
Charges			22
Strategic Markets \| Fiscal 2024 Program \| Operating Segments
RESTRUCTURING
Charges			$ 109

EARNINGS (LOSS) PER SHARE (Tables)

3 Months Ended

Jun. 30, 2024

EARNINGS (LOSS) PER SHARE

Schedule of computation of basic and diluted earnings per share of common stock


	Three Months Ended June 30,
(In millions, except per share amounts)	2024		2023
Net income (loss) on which basic and diluted earnings per share is calculated	$	11	$	(141)
Number of shares on which basic earnings (loss) per share is calculated		230.5		227.9
Dilutive effect of stock options and equity awards		5.3		—
Number of shares on which diluted earnings (loss) per share is calculated		235.8		227.9

Basic earnings (loss) per share	$	0.05	$	(0.62)
Diluted earnings (loss) per share		0.05		(0.62)

Schedule of anti dilutive securities were not included in the computation of diluted net loss per share


	Three Months Ended June 30,
(In millions)	2024	2023
Nonvested restricted stock units	0.7	8.9
Nonvested performance-conditioned stock units	3.9	1.5
Nonvested market-conditioned stock units	3.1	2.3
Stock options issued and outstanding	—	3.7
Total	7.7	16.4

EQUITY

3 Months Ended

Jun. 30, 2024

EQUITY

EQUITY

NOTE 12. EQUITY

The following table presents reclassifications and taxes related to items of other comprehensive income (loss) for the three months ended June 30, 2024 and 2023:


	Pretax		Tax (Expense)		Net-of-Tax
(Dollars in millions)	Amount		Benefit		Amount
For the three months ended June 30, 2024:
Foreign currency translation adjustments:
Foreign currency translation adjustments	$	(63)	$	—	$	(63)
Unrealized gains on net investment hedges		14		—		14
Total foreign currency translation adjustments	$	(49)	$	—	$	(49)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period	$	(1)	$	(1)	$	(2)
Reclassification of (gains) losses to net income		—		—		—
Total unrealized gains (losses) on cash flow hedges	$	(1)	$	(1)	$	(2)
Retirement-related benefit plans – amortization of net (gains) losses*	$	4	$	(1)	$	3
Other comprehensive income (loss)	$	(46)	$	(2)	$	(48)

For the three months ended June 30, 2023:
Foreign currency translation adjustments	$	(15)	$	—	$	(15)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period	$	15	$	(1)	$	13
Reclassification of (gains) losses to net income		(1)		—		—
Total unrealized gains (losses) on cash flow hedges	$	14	$	(1)	$	13
Retirement-related benefit plans – amortization of net (gains) losses*	$	2	$	—	$	2
Other comprehensive income (loss)	$	1	$	(1)	$	—

*	These AOCI components are included in the computation of net periodic benefit cost. Refer to Note 13 – Retirement-Related Benefits for additional information.

The following table presents the components of accumulated other comprehensive income (loss), net of taxes:


	Net Unrealized		Foreign		Net Change		Accumulated
	Gain (Losses)		Currency		Retirement-		Other
	on Cash		Translation		Related		Comprehensive
(Dollars in millions)	Flow Hedges		Adjustments*		Benefit Plans		Income (Loss)
April 1, 2024	$	—	$	(967)	$	(178)	$	(1,145)
Other comprehensive income (loss)		(2)		(49)		3		(48)
June 30, 2024	$	(1)	$	(1,016)	$	(175)	$	(1,192)

April 1, 2023	$	—	$	(921)	$	(142)	$	(1,062)
Other comprehensive income (loss)		13		(15)		2		—
June 30, 2023	$	13	$	(936)	$	(140)	$	(1,062)

*	Foreign currency translation adjustments are presented gross.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477968/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478448/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480237/815-40-50-6

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-14

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 16
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-16

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481112/505-10-50-18

+ Details

EQUITY (Tables)

3 Months Ended

Jun. 30, 2024

EQUITY

Reclassifications and taxes related to items of other comprehensive income (loss)


	Pretax		Tax (Expense)		Net-of-Tax
(Dollars in millions)	Amount		Benefit		Amount
For the three months ended June 30, 2024:
Foreign currency translation adjustments:
Foreign currency translation adjustments	$	(63)	$	—	$	(63)
Unrealized gains on net investment hedges		14		—		14
Total foreign currency translation adjustments	$	(49)	$	—	$	(49)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period	$	(1)	$	(1)	$	(2)
Reclassification of (gains) losses to net income		—		—		—
Total unrealized gains (losses) on cash flow hedges	$	(1)	$	(1)	$	(2)
Retirement-related benefit plans – amortization of net (gains) losses*	$	4	$	(1)	$	3
Other comprehensive income (loss)	$	(46)	$	(2)	$	(48)

For the three months ended June 30, 2023:
Foreign currency translation adjustments	$	(15)	$	—	$	(15)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period	$	15	$	(1)	$	13
Reclassification of (gains) losses to net income		(1)		—		—
Total unrealized gains (losses) on cash flow hedges	$	14	$	(1)	$	13
Retirement-related benefit plans – amortization of net (gains) losses*	$	2	$	—	$	2
Other comprehensive income (loss)	$	1	$	(1)	$	—

*	These AOCI components are included in the computation of net periodic benefit cost. Refer to Note 13 – Retirement-Related Benefits for additional information.

Accumulated other comprehensive income (loss), net of taxes


	Net Unrealized		Foreign		Net Change		Accumulated
	Gain (Losses)		Currency		Retirement-		Other
	on Cash		Translation		Related		Comprehensive
(Dollars in millions)	Flow Hedges		Adjustments*		Benefit Plans		Income (Loss)
April 1, 2024	$	—	$	(967)	$	(178)	$	(1,145)
Other comprehensive income (loss)		(2)		(49)		3		(48)
June 30, 2024	$	(1)	$	(1,016)	$	(175)	$	(1,192)

April 1, 2023	$	—	$	(921)	$	(142)	$	(1,062)
Other comprehensive income (loss)		13		(15)		2		—
June 30, 2023	$	13	$	(936)	$	(140)	$	(1,062)

*	Foreign currency translation adjustments are presented gross.

FINANCIAL ASSETS AND LIABILITIES (Tables)

3 Months Ended

Jun. 30, 2024

FINANCIAL ASSETS AND LIABILITIES

Financial assets and financial liabilities measured at fair value on a recurring basis


	Fair Value
	Hierarchy	At June 30, 2024						At March 31, 2024
(Dollars in millions)	Level	Assets		Liabilities		Fair Value		Assets		Liabilities		Fair Value
Derivatives designated as hedging instruments:
Foreign exchange contracts	2	$	7	$	7	$	—	$	2	$	1	$	1
Cross-currency swap contracts	2		13		6		7		1		11		(9)
Derivatives not designated as hedging instruments:
Foreign exchange contracts	2		9		19		(10)		2		6		(4)
Total		$	29	$	32	$	(3)	$	5	$	18	$	(13)

Summary of notional amounts of outstanding derivatives


	At June 30, 2024						At March 31, 2024
(Dollars in millions)	Foreign Exchange Contracts		Cross-currency Swap Contracts		Total Notional Amount		Foreign Exchange Contracts		Cross-currency Swap Contracts		Total Notional Amount
Derivatives designated as hedging instruments
Cash flow hedges	$	456	$	—	$	456	$	281	$	—	$	281
Net investment hedges		500		500		1,000		—		500		500
Derivatives not designated as hedging instruments	$	2,546	$	—	$	2,546	$	1,624	$	—	$	1,624

Effect of derivative instruments in the Consolidated Income Statement - designated


	Unrealized Gain (Loss)				Consolidated	Gain (Loss) Reclassified
(Dollars in millions)	Recognized in OCI				Income Statement	from AOCI to Income
Three months ended June 30:	2024		2023		Line Item	2024		2023
Derivative instruments in cash flow hedges:
Foreign exchange contracts	$	(1)	$	15	Cost of services	$	—	$	1
*Derivative instruments in net investment hedges:**
Cross-currency swaps		16		—	Interest expense		3		—
Foreign exchange contracts		2		—	Interest expense		1		—
Total	$	17	$	15		$	4	$	1

*	For the three months ended June 30, 2024, the Company recognized a gain of $4 million in interest expense on components excluded from the assessment of the hedge effectiveness for net investment hedges. There were no net investment hedges in the three months ended June 30, 2023.

Effect of derivative instruments in the Consolidated Income Statement- Not designated


	Consolidated	Gain (Loss)
(Dollars in millions)	Income Statement	Recognized on Derivatives
Three months ended June 30:	Line Item	2024		2023
Foreign exchange contracts	Other expense	$	(28)	$	(17)
Total		$	(28)	$	(17)

REVENUE RECOGNITION - Performance Obligations Satisfied or Partially Satisfied in Prior Periods (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
REVENUE RECOGNITION
Impact to revenue from performance obligations satisfied (or partially satisfied) in previous periods	$ 11	$ 11

REVENUE RECOGNITION - Allowance for Credit Losses (Details) - USD ($)
$ in Millions

3 Months Ended

Jun. 30, 2024

Jun. 30, 2023

Roll forward of accounts receivable - allowance for credit losses

Beginning balance

$ 22

$ 32

Additions (releases)

(3)

(1)

Write-offs

(3)

Other

^[1]

Ending balance

$ 21

$ 29

[1]	Primarily represents currency translation adjustments.

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES (Tables)

3 Months Ended

Jun. 30, 2024

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES.

Schedule of segment breakout of charges


	Three Months Ended June 30,				Costs Incurred to Date
(Dollars in millions)	2024		2023		Fiscal 2025 Program		Fiscal 2024 Program
United States	$	20	$	12	$	21	$	41
Japan		1		1		1		4
Principal Markets⁽¹⁾		5		20		3		141
Strategic Markets⁽¹⁾		20		32		22		109
Total charges by segment	$	45	$	65	$	48	$	294
Corporate and other		—		3		—		13
Total charges	$	45	$	68	$	48	$	307

(1)	Kyndryl’s operations in Australia/New Zealand transitioned from Principal Markets to Strategic Markets in the quarter ended June 30, 2024; historical segment information has been recast to reflect this change.

Summary of classification of workforce rebalancing and site-rationalization activities


	Three Months Ended June 30,				Costs Incurred to Date
(Dollars in millions)	2024		2023		Fiscal 2025 Program		Fiscal 2024 Program
Cost of services	$	8	$	1	$	8	$	94
Selling, general and administrative expenses		1		10		1		25
Workforce rebalancing charges		36		58		38		187
Total charges	$	45	$	68	$	48	$	307

Schedule of components of and changes in workforce rebalancing and site-rationalization charges


			Liabilities
	Workforce		Related to
	Rebalancing		Ceasing to Use
(Dollars in millions)	Liabilities*		Leased Assets		Total
Fiscal 2024 Program
Balance at March 31, 2024	$	28	$	—	$	28
Charges (benefits)		—		—		—
Cash payments		(21)		—		(21)
Non-cash adjustments		(3)		—		(3)
Balance at June 30, 2024	$	4	$	—	$	4

Fiscal 2025 Program
Balance at March 31, 2024	$	—	$	—	$	—
Charges (benefits)		38		9		48
Cash payments		(5)		—		(5)
Non-cash adjustments		(1)		(9)		(10)
Balance at June 30, 2024	$	32	$	—	$	32

The Fiscal 2024 Program excludes workforce rebalancing liabilities inherited from our former Parent of $29 million as of March 31, 2024. Current-year movement excludes cash payments of $3 million and ending balance of $26 million related to actions initiated by our former Parent. Workforce rebalancing liabilities are recorded within other liabilities in the Consolidated Balance Sheet.

INTANGIBLE ASSETS INCLUDING GOODWILL

3 Months Ended

Jun. 30, 2024

INTANGIBLE ASSETS INCLUDING GOODWILL

INTANGIBLE ASSETS INCLUDING GOODWILL

NOTE 9. INTANGIBLE ASSETS INCLUDING GOODWILL

Intangible Assets

The following table presents the Company’s intangible asset balances by major asset class.


	At June 30, 2024						At March 31, 2024
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
(Dollars in millions)	Amount		Amortization		Amount		Amount		Amortization		Amount
Capitalized software	$	185	$	(60)	$	125	$	172	$	(48)	$	125
Customer relationships*		177		(101)		76		152		(96)		56
Completed technology		13		—		13		—		—		—
Patents and trademarks*		14		(7)		7		14		(6)		8
Total	$	389	$	(167)	$	222	$	339	$	(150)	$	188

*	Amounts include effects from foreign currency translation.

The net carrying amount of intangible assets increased by $34 million during the three months ended June 30, 2024, primarily due to intangible assets acquired as part of the acquisition of Skytap and capitalized software added

during the period, partially offset by amortization and currency translation. The aggregate intangible asset amortization expense was $19 million and $11 million for the three months ended June 30, 2024 and 2023, respectively. This included amortization of capitalized software of $12 million and $4 million for the three months ended June 30, 2024, and 2023, respectively, which was reported in “Depreciation of property, equipment and capitalized software” on the Consolidated Statement of Cash Flows.

The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet was estimated to be the following at June 30, 2024:


	Capitalized		Customer		Completed		Patents and
(Dollars in millions)	Software		Relationships		Technology		Trademarks		Total
Year ending March 31:
2025 (remaining nine months)	$	40	$	17	$	2	$	2	$	61
2026		51		20		3		3		77
2027		35		18		3		2		57
2028		—		5		3		—		8
2029		—		5		3		—		7
Thereafter		—		12		1		—		13

Goodwill

The changes in the goodwill balances by segment for the three months ended June 30, 2024 were as follows:



					Foreign Currency
(Dollars in millions)	Balance at		Acquisitions and		Translation				Balance at
Segment	March 31, 2024		(Divestitures)*		Adjustments		Reallocation		June 30, 2024
United States	$	—	$	12	$	—	$	—	$	12
Japan		488		—		(3)		—		485
Principal Markets		141		(28)				(23)		91
Strategic Markets		176		—		—		23		198
Total	$	805	$	(16)	$	(3)	$	—	$	786

These amounts represent the goodwill acquired as part of the purchase of Skytap, in addition to the allocation of goodwill to assets held for sale related to the divestiture of the SIS business using the relative fair value approach. See Note 8 – Acquisitions and Divestitures for additional details.

As disclosed in Note 4 – Segments, Kyndryl’s operations in Australia/New Zealand transitioned from the Principal Markets segment to the Strategic Markets segment in the quarter ended June 30, 2024. As a result, the Company reallocated the goodwill associated with Australia/New Zealand from the Principal Markets segment to the Strategic Markets segment. The Company also performed a qualitative impairment test immediately before and after the change in reporting units and determined that it is not more likely than not that the fair value of the reporting units is less than their carrying amounts, including goodwill. Accordingly, the Company concluded that the goodwill related to those reporting units was not impaired.

There were no goodwill impairment losses recorded for the three months ended June 30, 2024 and 2023. Management reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable by first assessing qualitative factors to determine if it is more likely than not that fair value is less than carrying value.

INTANGIBLE ASSETS INCLUDING GOODWILL - Intangible Assets by Class (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Apr. 30, 2024	Mar. 31, 2024
Intangible asset balances by major asset class
Gross Carrying Amount	$ 389			$ 339
Accumulated Amortization	(167)			(150)
Net Carrying Amount	222			188
Intangible asset amortization expense	19	$ 11
Net carrying amount of intangible assets increased	34
Capitalized software
Intangible asset balances by major asset class
Gross Carrying Amount	185			172
Accumulated Amortization	(60)			(48)
Net Carrying Amount	125			125
Intangible asset amortization expense	12	$ 4
Customer relationships
Intangible asset balances by major asset class
Gross Carrying Amount	177			152
Accumulated Amortization	(101)			(96)
Net Carrying Amount	76			56
Useful life			8 years
Completed technology
Intangible asset balances by major asset class
Gross Carrying Amount	13
Net Carrying Amount	13
Useful life			5 years
Patents and trademarks
Intangible asset balances by major asset class
Gross Carrying Amount	14			14
Accumulated Amortization	(7)			(6)
Net Carrying Amount	$ 7			$ 8

SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Jun. 30, 2024
SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation	Basis of Presentation The accompanying Consolidated Financial Statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes the accompanying financial statements include all adjustments necessary to present fairly the Company’s financial position and its results of operations for all the periods presented. The information included in this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain items have been recast to conform to current-period presentation.
Principles of Consolidation	Principles of Consolidation The accompanying financial statements are presented on a consolidated basis. All significant transactions and intercompany accounts between Kyndryl entities were eliminated.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts that are reported in the consolidated financial statements and accompanying disclosures. Estimates are used in determining the following, among others: revenue, costs to complete service contracts, income taxes, pension assumptions, valuation of assets including goodwill and intangible assets, the depreciable and amortizable lives of long-lived assets, loss contingencies, allowance for credit losses and deferred transition costs. Future results may be different from these estimates. The Company uses the estimated annual effective tax rate method in computing its interim tax provision in accordance with U.S. GAAP. The estimated annual effective tax rate is applied to the year-to-date ordinary income, exclusive of discrete items, to arrive at the reported interim tax provision.
Change in Accounting Estimate	Change in Accounting Estimate In March 2024, the Company completed its assessment of the useful lives of its information technology equipment. Based on our usage experience and data analysis, the Company determined it should increase the estimated useful lives of its information technology equipment from five to six years. This change in accounting estimate became effective on April 1, 2024. Based on the carrying amount of information technology equipment included in property and equipment, net as of March 31, 2024, the effect of this change in estimate was a reduction in depreciation expense and an improvement of income before income taxes of approximately $60 million, or $0.27 before income taxes per basic share and $0.26 before income taxes per diluted share, for the three months ended June 30, 2024.
Recent Pronouncements	Recent Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The guidance should be applied retrospectively, effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which is intended to enhance the transparency and usefulness of income tax disclosures through improved reporting related to the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements.
Segments	Our reportable segments correspond to how the chief operating decision maker (“CODM”) 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. The Company made a minor change to its geographic reportable segments effective June 1, 2024 to reflect how the Company manages its operations and measures business performance, transitioning the reporting and management of its operations in Australia/New Zealand from the Principal Markets segment to the Strategic Markets segment. All historical segment information has been recast to reflect this change. The measure of segment operating performance used by Kyndryl’s CODM is adjusted EBITDA. 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, 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 use of revenue and adjusted EBITDA aligns with how the CODM assesses performance and allocates resources for the Company’s 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.

- Definition

Disclosure of accounting policy for segment reporting.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-41

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
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-Name Accounting Standards Codification
-Section 55
-Paragraph 47
-Subparagraph (bb)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482785/280-10-55-47

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 29
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-29

Reference 4: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
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-Name Accounting Standards Codification
-Section 55
-Paragraph 54
-Subparagraph (b)
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-URI https://asc.fasb.org/1943274/2147482785/280-10-55-54

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 36
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-URI https://asc.fasb.org/1943274/2147482810/280-10-50-36

Reference 6: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
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-Subparagraph (b)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 29
-Subparagraph (d)
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 29
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-29

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 29
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-29

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 29
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-29

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 29
-Subparagraph (c)
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-URI https://asc.fasb.org/1943274/2147482810/280-10-50-29

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 29
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482810/280-10-50-29

+ Details

SEGMENTS - Reconciliation of segment adjusted EBITDA to consolidated pretax income (loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
SEGMENTS
Segment adjusted EBITDA	$ 577	$ 636
Workforce rebalancing charges	(36)	(58)
Charges related to ceasing to use leased / fixed assets and lease terminations	(9)	(10)
Transaction-related costs	(20)	(42)
Stock-based compensation expense	(24)	(22)
Interest expense	(28)	(29)
Depreciation of property, equipment and capitalized software	(127)	(210)
Amortization expense	(317)	(333)
Corporate expense not allocated to the segments	(21)	(24)
Other adjustments	32	(16)
Income (loss) before income taxes	$ 64	$ (109)

REVENUE RECOGNITION (Tables)

3 Months Ended

Jun. 30, 2024

REVENUE RECOGNITION

Schedule of reconciliation of contract balances


	June 30,		March 31,
(Dollars in millions)	2024		2024
Accounts receivable (net of allowances for credit losses of $21 at June 30, 2024 and $22 at March 31, 2024) *	$	1,440	$	1,599
Contract assets **		40		30
Deferred income (current)		805		825
Deferred income (noncurrent)		325		314

*	Included unbilled receivable balances of $343 million at June 30, 2024 and $377 million at March 31, 2024.

**	Contract assets represent goods or services delivered by the Company which give the Company the right to consideration that is typically subject to milestone completion or client acceptance and are included within prepaid expenses and other current assets in the Consolidated Balance Sheet.

Schedule of notes and accounts receivable allowance for expected credit losses


	Three Months Ended June 30,
(Dollars in millions)	2024		2023
Beginning balance	$	22	$	32
Additions (releases)		(3)		(1)
Write-offs		2		(3)
Other *		—		1
Ending balance	$	21	$	29

*	Primarily represents currency translation adjustments.

Schedule of capitalized costs to acquire and fulfill customer contracts


	June 30,		March 31,
(Dollars in millions)	2024		2024
Deferred transition costs	$	726	$	753
Prepaid software costs		730		770
Capitalized costs to fulfill contracts		213		212
Capitalized costs to obtain contracts		258		265
Total deferred costs *	$	1,927	$	2,000

*	Of the total deferred costs, $1,029 million was current and $898 million was noncurrent at June 30, 2024, and $1,081 million was current and $920 million was noncurrent at March 31, 2024.

INTANGIBLE ASSETS INCLUDING GOODWILL - Future Amortization Expense (Details) $ in Millions	Jun. 30, 2024 USD ($)
Future amortization expense, by year
2025 (remaining nine months)	$ 61
2026	77
2027	57
2028	8
2029	7
Thereafter	13
Capitalized software
Future amortization expense, by year
2025 (remaining nine months)	40
2026	51
2027	35
Customer relationships
Future amortization expense, by year
2025 (remaining nine months)	17
2026	20
2027	18
2028	5
2029	5
Thereafter	12
Completed technology
Future amortization expense, by year
2025 (remaining nine months)	2
2026	3
2027	3
2028	3
2029	3
Thereafter	1
Patents and trademarks
Future amortization expense, by year
2025 (remaining nine months)	2
2026	3
2027	$ 2

REVENUE RECOGNITION - Reconciliation of Contract Balances (Details) - USD ($)
$ in Millions

3 Months Ended

Jun. 30, 2024

Jun. 30, 2023

Mar. 31, 2024

Reconciliation of Contract Balances

Accounts receivable (net of allowances for credit losses of $21 at June 30, 2024 and $22 at March 31, 2024) *

$ 1,440

$ 1,599

Contract assets

^[1]

Deferred income (current)

805

825

Deferred income (noncurrent)

325

314

Accounts receivable, allowances

Unbilled receivable

343

$ 377

Revenue recognized that was included in deferred income at the beginning of the period

$ 321

$ 188

[1]	Contract assets represent goods or services delivered by the Company which give the Company the right to consideration that is typically subject to milestone completion or client acceptance and are included within prepaid expenses and other current assets in the Consolidated Balance Sheet.

EARNINGS (LOSS) PER SHARE

3 Months Ended

Jun. 30, 2024

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE

NOTE 6. EARNINGS (LOSS) PER SHARE

We did not declare any dividends in the periods presented. The following table provides the computation of basic and diluted earnings per share of common stock for the three months ended June 30, 2024 and 2023.


	Three Months Ended June 30,
(In millions, except per share amounts)	2024		2023
Net income (loss) on which basic and diluted earnings per share is calculated	$	11	$	(141)
Number of shares on which basic earnings (loss) per share is calculated		230.5		227.9
Dilutive effect of stock options and equity awards		5.3		—
Number of shares on which diluted earnings (loss) per share is calculated		235.8		227.9

Basic earnings (loss) per share	$	0.05	$	(0.62)
Diluted earnings (loss) per share		0.05		(0.62)

For the three months ended June 30, 2023, the number of shares of which basic and diluted earnings (loss) per share is calculated was the same as a result of the net loss incurred in the period. The following securities were not included in the computation of diluted earnings per share:


	Three Months Ended June 30,
(In millions)	2024	2023
Nonvested restricted stock units	0.7	8.9
Nonvested performance-conditioned stock units	3.9	1.5
Nonvested market-conditioned stock units	3.1	2.3
Stock options issued and outstanding	—	3.7
Total	7.7	16.4

REVENUE RECOGNITION - Remaining Performance Obligations, Expected Timing of Satisfaction (Details)	Jun. 30, 2024
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01
Remaining Performance Obligations
Percentage of remaining performance obligation expected to be recognized	59.00%
Duration of expected recognition period for remaining performance obligation	2 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-07-01
Remaining Performance Obligations
Percentage of remaining performance obligation expected to be recognized	34.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-07-01 \| Minimum
Remaining Performance Obligations
Duration of expected recognition period for remaining performance obligation	3 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-07-01 \| Maximum
Remaining Performance Obligations
Duration of expected recognition period for remaining performance obligation	5 years

REVENUE RECOGNITION - Remaining Performance Obligations (Details) $ in Billions	Jun. 30, 2024 USD ($)
REVENUE RECOGNITION
Remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied	$ 31.6

EARNINGS (LOSS) PER SHARE - Anti dilutive securities (Details) - shares shares in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Securities not included in the computation of diluted earnings (loss) per share
Anti dilutive securities	7.7	16.4
Restricted stock units
Securities not included in the computation of diluted earnings (loss) per share
Anti dilutive securities	0.7	8.9
Performance-conditioned stock units
Securities not included in the computation of diluted earnings (loss) per share
Anti dilutive securities	3.9	1.5
Market-conditioned stock units
Securities not included in the computation of diluted earnings (loss) per share
Anti dilutive securities	3.1	2.3
Employee Stock Option
Securities not included in the computation of diluted earnings (loss) per share
Anti dilutive securities		3.7

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$ 11	$ (141)
Foreign currency translation adjustments:
Foreign currency translation adjustments	(63)	(15)
Unrealized losses on net investment hedges	14
Total foreign currency translation adjustments	(49)	(15)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period	(1)	15
Reclassification of (gains) losses to net income		(1)
Total unrealized gains (losses) on cash flow hedges	(1)	14
Retirement-related benefit plans:
Retirement-related benefit plans - amortization of net (gains) losses	4	2
Other comprehensive income (loss), before tax	(46)	1
Income tax (expense) benefit related to items of other comprehensive income (loss)	(2)	(1)
Other comprehensive income (loss), net of tax	(48)
Total comprehensive income (loss)	$ (37)	$ (141)

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cash flows from operating activities:
Net income (loss)	$ 11	$ (141)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation of property, equipment and capitalized software	127	210
Depreciation of right-of-use assets	70	91
Amortization of transition costs and prepaid software	310	325
Amortization of capitalized contract costs	107	138
Amortization of acquisition-related intangible assets	7	8
Stock-based compensation	24	22
Deferred taxes	17	26
Net (gain) loss on asset sales and other	27	29
Change in operating assets and liabilities:
Deferred costs (excluding amortization)	(363)	(418)
Right-of-use assets and liabilities (excluding depreciation)	(65)	(103)
Workforce rebalancing liabilities	7	(23)
Receivables	163	53
Accounts payable	(122)	(143)
Taxes	(9)	(25)
Other assets and other liabilities	(358)	(222)
Net cash provided by (used in) operating activities	(48)	(173)
Cash flows from investing activities:
Capital expenditures	(122)	(100)
Proceeds from disposition of property and equipment	24	6
Cash paid for acquisition, net of cash acquired	(46)
Other investing activities, net	(22)	(19)
Net cash used in investing activities	(166)	(113)
Cash flows from financing activities:
Debt repayments	(38)	(30)
Common stock repurchases for tax withholdings	(7)	(7)
Other financing activities, net	(6)	(1)
Net cash provided by (used in) financing activities	(51)	(38)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(17)	(15)
Net change in cash, cash equivalents and restricted cash	(281)	(339)
Cash, cash equivalents and restricted cash at beginning of period	1,554	1,860
Cash, cash equivalents and restricted cash at end of period	1,273	1,521
Supplemental data
Income taxes paid, net of refunds received	54	65
Interest paid on debt	$ 40	$ 46

SEGMENTS

3 Months Ended

Jun. 30, 2024

SEGMENTS

SEGMENTS

NOTE 4. SEGMENTS

Our reportable segments correspond to how the chief operating decision maker (“CODM”) 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.

The Company made a minor change to its geographic reportable segments effective June 1, 2024 to reflect how the Company manages its operations and measures business performance, transitioning the reporting and management of its operations in Australia/New Zealand from the Principal Markets segment to the Strategic Markets segment. All historical segment information has been recast to reflect this change.

The measure of segment operating performance used by Kyndryl’s CODM is adjusted EBITDA. 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, 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 use of revenue and adjusted EBITDA aligns with how the CODM assesses performance and allocates resources for the Company’s 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 table reflects the results of the Company’s segments:


	Three Months Ended June 30,
(Dollars in millions)	2024		2023
Revenue
United States	$	986	$	1,164
Japan		569		610
Principal Markets		1,315		1,391
Strategic Markets		869		1,027
Total revenue	$	3,739	$	4,193
Segment adjusted EBITDA
United States	$	133	$	236
Japan		83		100
Principal Markets		241		151
Strategic Markets		120		149
Total segment adjusted EBITDA	$	577	$	636

The following table reconciles segment adjusted EBITDA to consolidated pretax income (loss):


	Three Months Ended June 30,
(Dollars in millions)	2024		2023
Segment adjusted EBITDA	$	577	$	636
Workforce rebalancing charges incurred prior to March 31, 2024		—		(58)
Charges related to ceasing to use leased/fixed assets and lease terminations		(9)		(10)
Transaction-related costs		(20)		(42)
Stock-based compensation expense		(24)		(22)
Interest expense		(28)		(29)
Depreciation of property, equipment and capitalized software		(127)		(210)
Amortization expense		(317)		(333)
Corporate expense not allocated to the segments		(21)		(24)
Other adjustments*		32		(16)
Pretax income (loss)	$	64	$	(109)

*	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.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 48
-Publisher FASB
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+ Details

SEGMENTS (Tables)

3 Months Ended

Jun. 30, 2024

SEGMENTS

Summary of results of segments


	Three Months Ended June 30,
(Dollars in millions)	2024		2023
Revenue
United States	$	986	$	1,164
Japan		569		610
Principal Markets		1,315		1,391
Strategic Markets		869		1,027
Total revenue	$	3,739	$	4,193
Segment adjusted EBITDA
United States	$	133	$	236
Japan		83		100
Principal Markets		241		151
Strategic Markets		120		149
Total segment adjusted EBITDA	$	577	$	636

Summary of reconciliation of adjusted EBITDA to consolidated pretax income (loss)


	Three Months Ended June 30,
(Dollars in millions)	2024		2023
Segment adjusted EBITDA	$	577	$	636
Workforce rebalancing charges incurred prior to March 31, 2024		—		(58)
Charges related to ceasing to use leased/fixed assets and lease terminations		(9)		(10)
Transaction-related costs		(20)		(42)
Stock-based compensation expense		(24)		(22)
Interest expense		(28)		(29)
Depreciation of property, equipment and capitalized software		(127)		(210)
Amortization expense		(317)		(333)
Corporate expense not allocated to the segments		(21)		(24)
Other adjustments*		32		(16)
Pretax income (loss)	$	64	$	(109)

*	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.

SIGNIFICANT ACCOUNTING POLICIES - Description of Business (Details)	Jun. 30, 2024 country
Minimum
Number of countries	100

SEGMENTS (Details)	3 Months Ended
SEGMENTS (Details)	Jun. 30, 2024 segment
SEGMENTS
Number of reportable segments	4

ACQUISITIONS AND DIVESTITURES

3 Months Ended

Jun. 30, 2024

ACQUISITIONS AND DIVESTITURES

ACQUISITIONS AND DIVESTITURES

NOTE 8. ACQUISITIONS AND DIVESTITURES

Acquisition of Skytap

In April 2024, the Company completed the acquisition of Skytap, Inc. (“Skytap”), a leading specialized workload services provider, by acquiring all outstanding equity interests of Skytap in exchange for cash consideration. The acquisition of Skytap was accounted for as a business combination in accordance with ASC 805, Business Combinations. Our financial statements for the three months ended June 30, 2024 reflect the assets, liabilities, operating results and cash flows of Skytap, commencing from the acquisition date. The Company acquired Skytap for cash consideration of approximately $46 million, net of cash acquired of $4 million. Costs associated with this acquisition were approximately $2 million and are expensed as incurred within transaction-related costs within the accompanying Consolidated Income Statement. Pro forma financial information has not been presented, as revenue and expenses related to the acquisition do not have a material impact on the Company’s Consolidated Financial Statements.

The acquisition of Skytap expands the Company’s hybrid cloud services portfolio. The purchase price allocation resulted in approximately $43 million in intangible assets, primarily consisting of $13 million in completed technologies and $30 million in customer relationships with estimated useful lives of five and eight years, respectively, assets transferred of $25 million (inclusive of cash acquired of $4 million), liabilities assumed of $29 million, and goodwill of $12 million, primarily attributable to synergies expected to arise from this acquisition. We do not expect the goodwill to be deductible for income tax purposes. The purchase price allocation for this acquisition is preliminary, and there may be changes in the allocation of consideration to assets acquired and liabilities assumed, including intangible assets and goodwill, for up to twelve months from the acquisition date.

Disposal of the Securities Industry Services (“SIS”) Business

In the three months ended June 30, 2024, the Company entered into a definitive agreement to sell its transaction processing platform for the securities brokerage industry services in Canada (which is a component of the Company’s Principal Markets segment), known as “SIS”, for approximately $200 million in cash. The closing of the transaction is subject to customary closing conditions, including regulatory approval, and is expected to occur prior to November 30, 2024.

The Company classifies assets and liabilities as held for sale in the period when all the relevant classification criteria have been met. Assets and liabilities held for sale are measured at the lower of carrying value or fair value less costs to sell. Losses (if any) resulting from the measurement are recognized in the period in which the held for sale criteria are met. Conversely, gains from a disposal group are not recognized until the date of sale. The fair value of a disposal group, less any costs to sell, will be reassessed during each subsequent reporting period it remains classified as held for sale, and any subsequent changes will be reported as an adjustment to the carrying value of the disposal group until it is no longer classified as held for sale. Upon determining that a disposal group meets the criteria as held for sale, the Company discontinues depreciation and amortization of the related assets and liabilities.

The Company classified the assets and liabilities related to SIS as held for sale in the three months ended June 30, 2024. As such, the assets and liabilities are included as held for sale within “Prepaid expenses and other current assets” and “Other accrued expenses and liabilities” on the accompanying Consolidated Balance Sheet as of June 30, 2024. This disposition is not accounted for as discontinued operations as it does not meet the relevant criteria. The carrying value of the net assets being sold is not material. The Company expects that the sale proceeds less costs to sell will exceed the carrying value of the net assets being sold.

INTANGIBLE ASSETS INCLUDING GOODWILL - Goodwill by Segment (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Changes in Goodwill Balances
Beginning Balance	$ 805
Acquisitions and (Divestitures)	(16)
Foreign Currency Translation Adjustments	(3)
Impairment	0	$ 0
Ending Balance	786
Japan
Changes in Goodwill Balances
Beginning Balance	488
Foreign Currency Translation Adjustments	(3)
Ending Balance	485
United States
Changes in Goodwill Balances
Acquisitions and (Divestitures)	12
Ending Balance	12
Principal Markets
Changes in Goodwill Balances
Beginning Balance	141
Acquisitions and (Divestitures)	(28)
Reallocation	(23)
Ending Balance	91
Strategic Markets
Changes in Goodwill Balances
Beginning Balance	176
Reallocation	23
Ending Balance	$ 198

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

3 Months Ended

Jun. 30, 2024

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES.

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

NOTE 14. WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

During the three months ended June 30, 2024, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency which we expect to continue through the end of the 2025 fiscal year. These actions resulted in workforce rebalancing charges, and charges related to ceasing to use leased and owned fixed assets (collectively, the “Fiscal 2025 Program”). We expect the total charges to be incurred related to the Fiscal 2025 Program to be approximately $140 million, consisting of $100 million in workforce rebalancing charges and $40 million in charges related to ceasing to use leased and owned fixed assets. The Company expects that these actions will reduce future payroll costs, rent expenses and depreciation of property and equipment.

During the year ended March 31, 2023, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency, which continued through the year ended March 31, 2024. These actions resulted in workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets, and lease termination charges (collectively, the “Fiscal 2024 Program”). The total charges incurred related to the Fiscal 2024 Program were approximately $310 million, consisting of $190 million in workforce rebalancing charges and $120 million in charges related to ceasing to use leased and owned fixed assets and lease termination charges. The Company expects that these actions will reduce future payroll costs, rent expenses and depreciation of property and equipment.

The following table presents the segment breakout of charges incurred during the three months ended June 30, 2024 and 2023.


	Three Months Ended June 30,				Costs Incurred to Date
(Dollars in millions)	2024		2023		Fiscal 2025 Program		Fiscal 2024 Program
United States	$	20	$	12	$	21	$	41
Japan		1		1		1		4
Principal Markets⁽¹⁾		5		20		3		141
Strategic Markets⁽¹⁾		20		32		22		109
Total charges by segment	$	45	$	65	$	48	$	294
Corporate and other		—		3		—		13
Total charges	$	45	$	68	$	48	$	307

(1)	Kyndryl’s operations in Australia/New Zealand transitioned from Principal Markets to Strategic Markets in the quarter ended June 30, 2024; historical segment information has been recast to reflect this change.

The following table presents the classification of workforce rebalancing and site-rationalization activities in the Consolidated Income Statement during the three months ended June 30, 2024 and 2023.


	Three Months Ended June 30,				Costs Incurred to Date
(Dollars in millions)	2024		2023		Fiscal 2025 Program		Fiscal 2024 Program
Cost of services	$	8	$	1	$	8	$	94
Selling, general and administrative expenses		1		10		1		25
Workforce rebalancing charges		36		58		38		187
Total charges	$	45	$	68	$	48	$	307

The following table presents the components of and changes in our workforce rebalancing and site-rationalization charges liabilities during the three months ended June 30, 2024.


			Liabilities
	Workforce		Related to
	Rebalancing		Ceasing to Use
(Dollars in millions)	Liabilities*		Leased Assets		Total
Fiscal 2024 Program
Balance at March 31, 2024	$	28	$	—	$	28
Charges (benefits)		—		—		—
Cash payments		(21)		—		(21)
Non-cash adjustments		(3)		—		(3)
Balance at June 30, 2024	$	4	$	—	$	4

Fiscal 2025 Program
Balance at March 31, 2024	$	—	$	—	$	—
Charges (benefits)		38		9		48
Cash payments		(5)		—		(5)
Non-cash adjustments		(1)		(9)		(10)
Balance at June 30, 2024	$	32	$	—	$	32

FINANCIAL ASSETS AND LIABILITIES - Foreign Exchange Risk (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Mar. 31, 2024
Not designated as hedging instruments - economic hedges \| Currency swaps \| Maximum
Derivatives, Fair Value [Line Items]
Term of contract	1 year
Derivative instruments in cash flow hedges
Derivatives, Fair Value [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing	$ 0	$ 0
Derivative instruments in cash flow hedges \| Designated as hedging instruments \| Foreign exchange contracts
Derivatives, Fair Value [Line Items]
Net gains from derivatives	1		$ 2
Deferred net gains on derivatives reclassified to net income	$ 1
Derivative instruments in cash flow hedges \| Designated as hedging instruments \| Foreign exchange forward contracts
Derivatives, Fair Value [Line Items]
Maximum length of time hedged	1 year
Weighted average remaining maturity	6 months		6 months
Net investment hedges \| Designated as hedging instruments
Derivatives, Fair Value [Line Items]
Maximum length of time hedged			10 years
Weighted average remaining maturity	5 years		10 years
Net investment hedges \| Designated as hedging instruments \| Cross-currency swap contracts
Derivatives, Fair Value [Line Items]
Net gains from derivatives	$ 3
Net loss from derivatives			$ 11

RETIREMENT-RELATED BENEFITS (Tables)

3 Months Ended

Jun. 30, 2024

RETIREMENT-RELATED BENEFITS

Components of net periodic pension cost for the defined benefit pension plans


	Three Months Ended June 30,
(Dollars in millions)	2024		2023
Service cost	$	9	$	10
Interest cost*		13		14
Expected return on plan assets*		(15)		(15)
Recognized actuarial losses (gains)*		4		1
Net periodic pension cost	$	12	$	10

*	These components of net periodic pension cost are included in other expense in the Consolidated Income Statement.

SEGMENTS - Results of segments (Details) - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Segment Information
Revenues	$ 3,739	$ 4,193
Segment adjusted EBITDA	577	636
United States
Segment Information
Revenues	986	1,164
Segment adjusted EBITDA	133	236
Japan
Segment Information
Revenues	569	610
Segment adjusted EBITDA	83	100
Principal Markets
Segment Information
Revenues	1,315	1,391
Segment adjusted EBITDA	241	151
Strategic Markets
Segment Information
Revenues	869	1,027
Segment adjusted EBITDA	$ 120	$ 149

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

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+ Details

BORROWINGS (Tables)

3 Months Ended

Jun. 30, 2024

BORROWINGS

Summary of components of debt


			June 30,		March 31,
(Dollars in millions)	Interest Rate	Maturity	2024		2024
Commercial loan agreement	3.00%	July 2026	$	61	$	68
Unsecured senior notes due 2026	2.05%	October 2026		700		700
Unsecured senior notes due 2028	2.70%	October 2028		500		500
Unsecured senior notes due 2031	3.15%	October 2031		650		650
Unsecured senior notes due 2034	6.35% *	February 2034		500		500
Unsecured senior notes due 2041	4.10%	October 2041		550		550
Finance lease obligations	5.68% **	2024-2029		299		291
			$	3,260	$	3,259
Less: Unamortized discount				5		5
Less: Unamortized debt issuance costs				16		16
Less: Current portion of long-term debt				130		126
Total long-term debt			$	3,109	$	3,112

* Including the cross-currency swaps that the Company entered into subsequent to the issuance of the unsecured senior notes due 2034, the effective interest rate on such notes was approximately 3.84% at the time of issuance. For more information, see Note 7 – Financial Assets and Liabilities.

** Weighted-average discount rate.

Schedule of contractual obligations of long-term debt outstanding


(Dollars in millions)*	Principal
Year ending March 31:
2025 (remaining nine months)	$	21
2026		29
2027		710
2028		—
2029		500
Thereafter		1,700
Total	$	2,961

* Contractual obligations approximate scheduled repayments.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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+ Details

SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Jun. 30, 2024

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Kyndryl Holdings, Inc. (“we”, “the Company” or “Kyndryl”) is a leading technology services company and the largest IT infrastructure services provider in the world, serving thousands of enterprise customers whose operations span over 100 countries. Prior to November 3, 2021, the Company was wholly owned by International Business Machines Corporation (“IBM” or “former Parent”).

In November 2021, our former Parent effected the spin-off (the “Separation” or the “Spin-off”) of the infrastructure services unit of its Global Technology Services segment through the distribution of shares of Kyndryl’s common stock to IBM stockholders. In connection with the Separation, the Company entered into several agreements with IBM governing the relationship of the parties following the Separation. Kyndryl’s stock began trading as an independent company on November 4, 2021.

Basis of Presentation

The accompanying Consolidated Financial Statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes the accompanying financial statements include all adjustments necessary to present fairly the Company’s financial position and its results of operations for all the periods presented. The information included in this Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain items have been recast to conform to current-period presentation.

Principles of Consolidation

The accompanying financial statements are presented on a consolidated basis. All significant transactions and intercompany accounts between Kyndryl entities were eliminated.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts that are reported in the consolidated financial statements and accompanying disclosures. Estimates are used in determining the following, among others: revenue, costs to complete service contracts, income taxes, pension assumptions, valuation of assets including goodwill and intangible assets, the depreciable and amortizable lives of long-lived assets, loss contingencies, allowance for credit losses and deferred transition costs. Future results may be different from these estimates.

The Company uses the estimated annual effective tax rate method in computing its interim tax provision in accordance with U.S. GAAP. The estimated annual effective tax rate is applied to the year-to-date ordinary income, exclusive of discrete items, to arrive at the reported interim tax provision.

Change in Accounting Estimate

In March 2024, the Company completed its assessment of the useful lives of its information technology equipment. Based on our usage experience and data analysis, the Company determined it should increase the estimated useful lives of its information technology equipment from five to six years. This change in accounting estimate became effective on April 1, 2024. Based on the carrying amount of information technology equipment included in property and equipment, net as of March 31, 2024, the effect of this change in estimate was a reduction in depreciation expense and

an improvement of income before income taxes of approximately $60 million, or $0.27 before income taxes per basic share and $0.26 before income taxes per diluted share, for the three months ended June 30, 2024.

SIGNIFICANT ACCOUNTING POLICIES - Change in Accounting Estimate (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Apr. 01, 2024	Mar. 31, 2024
Property and Equipment
Depreciation	$ 127	$ 210
Cumulative Effect, Period of Adoption, Adjustment [Member]
Property and Equipment
Depreciation	$ (60)
Per share impact of change in accounting estimate, basic	$ 0.27
Per share impact of change in accounting estimate, diluted	$ 0.26
Information technology equipment
Property and Equipment
Estimated useful lives (in years)			6 years	5 years

BORROWINGS

3 Months Ended

Jun. 30, 2024

BORROWINGS

BORROWINGS

NOTE 10. BORROWINGS

Debt

The following table presents the components of our debt:


			June 30,		March 31,
(Dollars in millions)	Interest Rate	Maturity	2024		2024
Commercial loan agreement	3.00%	July 2026	$	61	$	68
Unsecured senior notes due 2026	2.05%	October 2026		700		700
Unsecured senior notes due 2028	2.70%	October 2028		500		500
Unsecured senior notes due 2031	3.15%	October 2031		650		650
Unsecured senior notes due 2034	6.35% *	February 2034		500		500
Unsecured senior notes due 2041	4.10%	October 2041		550		550
Finance lease obligations	5.68% **	2024-2029		299		291
			$	3,260	$	3,259
Less: Unamortized discount				5		5
Less: Unamortized debt issuance costs				16		16
Less: Current portion of long-term debt				130		126
Total long-term debt			$	3,109	$	3,112

** Weighted-average discount rate.

Contractual obligations of long-term debt outstanding at June 30, 2024, exclusive of finance lease obligations, are as follows:


(Dollars in millions)*	Principal
Year ending March 31:
2025 (remaining nine months)	$	21
2026		29
2027		710
2028		—
2029		500
Thereafter		1,700
Total	$	2,961

* Contractual obligations approximate scheduled repayments.

As of June 30, 2024, there were no borrowings under the Company’s revolving credit agreement. The Company is in compliance with its debt covenants in all periods presented.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

RETIREMENT-RELATED BENEFITS - Net Periodic Pension Cost for Defined Benefit Pension Plans (Details) - Defined Benefit Pension Plans - USD ($) $ in Millions	3 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
Cost/(Income) of Pension Plans
Service cost	$ 9.0	$ 10.0
Interest cost	$ 13.0	$ 14.0
Interest cost - income statement location	Other expense	Other expense
Expected return on plan assets	$ (15.0)	$ (15.0)
Expected return on plan assets - income statement location	Other expense	Other expense
Recognized actuarial losses (gains)	$ 4.0	$ 1.0
Recognized actuarial losses (gains) - income statement location	Other expense	Other expense
Total net periodic pension cost	$ 12.0	$ 10.0

BORROWINGS - Contractual obligations of long-term debt outstanding (Details) $ in Millions	Jun. 30, 2024 USD ($)
Pre-swap annual contractual obligations of long-term debt outstanding
2025 (remaining nine months)	$ 21
2026	29
2027	710
2029	500
Thereafter	1,700
Total	$ 2,961

FINANCIAL ASSETS AND LIABILITIES - Fair Value (Details) - USD ($) $ in Millions	Jun. 30, 2024	Mar. 31, 2024
Derivative Instruments, Gain (Loss) [Line Items]
Derivative assets	$ 29	$ 5
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other Assets, Prepaid Expense and Other Assets, Current	Other Assets, Prepaid Expense and Other Assets, Current
Derivative liabilities	$ 32	$ 18
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Noncurrent, Accrued Liabilities and Other Liabilities, Current	Other Liabilities, Noncurrent, Accrued Liabilities and Other Liabilities, Current
Fair value, net	$ (3)	$ (13)
Designated as hedging instruments \| Foreign exchange contracts \| Level 2
Derivative Instruments, Gain (Loss) [Line Items]
Derivative assets	7	2
Derivative liabilities	7	1
Fair value, net		1
Designated as hedging instruments \| Cross-currency swap contracts \| Level 2
Derivative Instruments, Gain (Loss) [Line Items]
Derivative assets	13	1
Derivative liabilities	6	11
Fair value, net	7	(9)
Not designated as hedging instruments - economic hedges \| Foreign exchange contracts \| Level 2
Derivative Instruments, Gain (Loss) [Line Items]
Derivative assets	9	2
Derivative liabilities	19	6
Fair value, net	$ (10)	$ (4)

REVENUE RECOGNITION - Major Clients (Details) - client	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023
Revenue
Concentration Risk [Line Items]
Concentration risk, major clients	0		0
Accounts Receivable
Concentration Risk [Line Items]
Concentration risk, major clients	0	0

INTANGIBLE ASSETS INCLUDING GOODWILL (Tables)

3 Months Ended

Jun. 30, 2024

INTANGIBLE ASSETS INCLUDING GOODWILL

Intangible asset balances by major asset class


	At June 30, 2024						At March 31, 2024
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
(Dollars in millions)	Amount		Amortization		Amount		Amount		Amortization		Amount
Capitalized software	$	185	$	(60)	$	125	$	172	$	(48)	$	125
Customer relationships*		177		(101)		76		152		(96)		56
Completed technology		13		—		13		—		—		—
Patents and trademarks*		14		(7)		7		14		(6)		8
Total	$	389	$	(167)	$	222	$	339	$	(150)	$	188

*	Amounts include effects from foreign currency translation.

Intangible assets, future amortization expense


	Capitalized		Customer		Completed		Patents and
(Dollars in millions)	Software		Relationships		Technology		Trademarks		Total
Year ending March 31:
2025 (remaining nine months)	$	40	$	17	$	2	$	2	$	61
2026		51		20		3		3		77
2027		35		18		3		2		57
2028		—		5		3		—		8
2029		—		5		3		—		7
Thereafter		—		12		1		—		13

Changes in goodwill balances by reportable segment



					Foreign Currency
(Dollars in millions)	Balance at		Acquisitions and		Translation				Balance at
Segment	March 31, 2024		(Divestitures)*		Adjustments		Reallocation		June 30, 2024
United States	$	—	$	12	$	—	$	—	$	12
Japan		488		—		(3)		—		485
Principal Markets		141		(28)				(23)		91
Strategic Markets		176		—		—		23		198
Total	$	805	$	(16)	$	(3)	$	—	$	786

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482548/350-20-55-24

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
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+ Details

CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Jun. 30, 2024	Mar. 31, 2024
Current assets:
Cash and cash equivalents	$ 1,269	$ 1,553
Restricted cash	5	1
Accounts receivable (net of allowances for credit losses of $21 at June 30, 2024 and $22 at March 31, 2024)	1,440	1,599
Deferred costs (current portion)	1,029	1,081
Prepaid expenses and other current assets	613	514
Total current assets	4,355	4,747
Property and equipment, net	2,690	2,674
Operating right-of-use assets, net	829	864
Deferred costs (noncurrent portion)	898	920
Deferred taxes	207	220
Goodwill	786	805
Intangible assets, net	222	188
Pension assets	109	105
Other noncurrent assets	66	67
Total assets	10,163	10,590
Current liabilities:
Accounts payable	1,337	1,408
Value-added tax and income tax liabilities	304	327
Current portion of long-term debt	130	126
Accrued compensation and benefits	414	609
Deferred income (current portion)	805	825
Operating lease liabilities (current portion)	271	285
Accrued contract costs	446	487
Other accrued expenses and liabilities	523	521
Total current liabilities	4,231	4,589
Long-term debt	3,109	3,112
Retirement and nonpension postretirement benefit obligations	492	500
Deferred income (noncurrent portion)	325	314
Operating lease liabilities (noncurrent portion)	606	622
Other noncurrent liabilities	298	332
Total liabilities	9,062	9,468
Commitments and contingencies
Stockholders' equity
Common stock, par value $0.01 per share, and additional paid-in capital (shares authorized: 1,000.0; shares issued: June 30, 2024 - 234.6, March 31, 2024 - 233.7)	4,549	4,524
Accumulated deficit	(2,308)	(2,319)
Treasury stock, at cost (shares: June 30, 2024 - 3.6, March 31, 2024 - 3.3)	(53)	(45)
Accumulated other comprehensive income (loss)	(1,192)	(1,145)
Total stockholders' equity before non-controlling interests	996	1,015
Non-controlling interests	105	107
Total equity	1,101	1,122
Total liabilities and equity	$ 10,163	$ 10,590

TAXES (Details)	3 Months Ended
TAXES (Details)	Jun. 30, 2024	Jun. 30, 2023
TAXES.
Effective tax rate (as a percent)	82.70%	(29.60%)

EQUITY - AOCI Rollforward (Details) - USD ($) $ in Millions	3 Months Ended
EQUITY - AOCI Rollforward (Details) - USD ($) $ in Millions	Jun. 30, 2024	Jun. 30, 2023
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the beginning of the period	$ 1,122	$ 1,462
Other comprehensive income (loss)	(48)
Balance at the end of the period	1,101	1,338
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the beginning of the period	(1,145)	(1,062)
Other comprehensive income (loss)	(48)
Balance at the end of the period	(1,192)	(1,062)
Unrealized Gains (Losses) on Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) (net of tax)
Other comprehensive income (loss)	(2)	13
Balance at the end of the period	(1)	13
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the beginning of the period	(967)	(921)
Other comprehensive income (loss)	(49)	(15)
Balance at the end of the period	(1,016)	(936)
Net Change Retirement-Related Benefit Plans
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the beginning of the period	(178)	(142)
Other comprehensive income (loss)	3	2
Balance at the end of the period	$ (175)	$ (140)

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-SubTopic 10
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+ Details

- Definition

Amount of equity (deficit) attributable to parent and noncontrolling interest. Excludes temporary equity.

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+ Details

ACQUISITIONS AND DIVESTITURES (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Apr. 30, 2024	Jun. 30, 2024	Jun. 30, 2023	Mar. 31, 2024
ACQUISITIONS
Cash consideration		$ 46
Acquisition costs		20	$ 42
Goodwill		$ 786		$ 805
Completed technology
ACQUISITIONS
Useful life	5 years
Customer relationships
ACQUISITIONS
Useful life	8 years
Skytap, Inc
ACQUISITIONS
Cash consideration	$ 46
Cash acquired in acquisition	4
Acquisition costs	2
Intangible assets	43
Goodwill	12
Assets transferred	25
Cash and cash equivalents acquired	4
Liabilities assumed	29
Skytap, Inc \| Completed technology
ACQUISITIONS
Intangible assets	13
Skytap, Inc \| Customer relationships
ACQUISITIONS
Intangible assets	$ 30

FINANCIAL ASSETS AND LIABILITIES - Derivative Financial Instruments (Details) - USD ($) $ in Millions	Jun. 30, 2024	Mar. 31, 2024
Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	$ 456	$ 281
Net investment hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	1,000	500
Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	2,546	1,624
Foreign exchange contracts \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	456	281
Foreign exchange contracts \| Net investment hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	500
Foreign exchange contracts \| Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	2,546	1,624
Cross-currency swap contracts \| Net investment hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	$ 500	$ 500