Kyndryl, the spin-off of IBM’s managed infrastructure business that began operations as a public company on November 4, reported quarter-ended revenue of US $ 4.6 billion on September 30, down 5% from a year earlier, in a new regulatory filing with the U.S. Securities and Exchange Commission.
Kyndryl, now listed on the New York Stock Exchange as an independent company from IBM, also reported a net loss of US $ 692 million for the fiscal third quarter, according to Form 8-K.
That net loss is almost triple the loss of US $ 238 million for the same period in 2020. The quarterly results include charges of US $ 273 million related to the demerger of the company from IBM, according to the documents. The company also reported pro forma adjusted earnings of US $ 714 million before interest, taxes, depreciation and amortization for the quarter, compared to US $ 710 million a year earlier.
Kyndryl had previously reported on business issues over the past few years while at IBM. Kyndryl executives said the new company envisions a potential market of $ 510 billion by 2024, more than doubling its market to $ 240 billion while part of IBM. The way forward to capture this market includes new and expanded partnerships with competitors of IBM that were not possible when the company was part of the tech giant.
After becoming a separate company, Kyndryl announced expanded partnerships with Microsoft and VMware.
A representative for Kyndryl was not immediately available to comment on the financial results prior to their release.
As of September 30, the company had total assets of about $ 12 billion, including 1.7 billion in accounts receivable and $ 735 million in cash, according to the filing. The company had approximately $ 12 billion in liabilities and equity, including $ 823 million in operating lease liabilities and $ 995 million in pension obligations and post-retirement benefits.
Kyndryl’s remaining performance obligation, defined as “an aggregate statement of work under contract that has not yet been performed and does not include contracts in which the client is not engaged”, stood at 51 , $ 1 billion as of Sept. 30, according to the documents.
“About 53% of the amount is expected to be recorded as revenue over the next two years, about 36% over the next three to five years, and the balance thereafter,” according to the filing.
During the third quarter, the company recorded US $ 2.8 billion in contract signatures. All signatures over US $ 100 million for the quarter were from existing customers.
Company expects pro forma fourth quarter revenue of US $ 4.5 billion to US $ 4.7 billion, revenue of US $ 18.5 billion to US $ 18.7 billion for 2021 , according to Kyndryl.
The file also mentions a pending court case that could affect Kyndryl. The case between BMC Software and IBM in which BMC alleges that the withdrawal by IBM of the BMC software from a client’s sites at the client’s request constituted a breach of contract and a misappropriation of trade secrets. The complaint was filed in 2017.
Kyndryl shares were trading at just under $ 18 a share on Tuesday morning, down more than 4%. The company traded around $ 26 when the market opened on November 4.
This article originally appeared on crn.com