New York, February 9, 2026, 13:33 EST — Regular session
- Kyndryl shares tumbled roughly 54% after the company revealed its audit committee review and announced a delay in its quarterly filing.
- The company, in a late-filing notice, told investors not to rely on previous internal-control assessments connected with its fiscal 2025 annual report.
- The company cut its fiscal 2026 forecast, projecting revenue to fall 2% to 3% on a constant-currency basis.
Kyndryl Holdings shares tumbled roughly 54% to $10.71 by midday Monday. The IT services company held back its quarterly filing and raised new red flags regarding its cash disclosures and internal controls.
The decline is significant; late filings and control lapses don’t just hit the current quarter—they spark broader doubts. For any firm promising a multi-year turnaround, selling credibility is as crucial as the plan itself.
The SPDR S&P 500 ETF tacked on roughly 0.6% in the afternoon, as risk appetite showed up elsewhere. This one just happened to hit on a day buyers were stepping in.
Kyndryl flagged in a Form 12b-25—basically, a heads-up that its report will be late—that it’s unable to file its Form 10-Q for the quarter ending Dec. 31, 2025, as scheduled. The company’s audit committee is digging into its cash-management approaches, the way it discloses those details (including what explains its adjusted free cash flow number), and internal controls over financial reporting. All of that follows voluntary document requests from the SEC’s enforcement division. Still, the company said its financial statements aren’t expected to change. Even so, Kyndryl is preparing to disclose “material weaknesses” in its controls, and told investors not to lean on its previous internal-control evaluation or PricewaterhouseCoopers’ opinion that appeared in the fiscal 2025 annual report.
Kyndryl revealed a series of leadership exits. According to an SEC filing, Chief Financial Officer David Wyshner and General Counsel Edward Sebold have left. Vineet Khurana is out as global controller, taking a different position at the company. The board tapped Harsh Chugh as interim CFO, Mark Ringes for interim general counsel, and Bhavna Doegar steps in as interim corporate controller.
Kyndryl’s latest earnings release brought more complexity to the mix. For its third quarter of fiscal 2026, the company posted $3.9 billion in revenue and adjusted earnings of $0.52 per share. Its forecast now calls for a 2% to 3% drop in constant-currency revenue for the year, with free cash flow projected between $325 million and $375 million. “In the third quarter, we drove growth in Kyndryl Consult and through our alliances with hyperscalers,” CEO Martin Schroeter said. 1
“Constant currency” takes the noise out of FX moves, highlighting the core sales picture. Free cash flow? That’s the cash remaining once capital expenditures are accounted for — a crucial metric for services companies, though it’s prone to fluctuate depending on working-capital timing.
Wall Street took a distinctly more defensive stance. J.P. Morgan dropped its rating on the stock to underweight, referencing both the revised guidance and what analysts termed a “stunning” CFO shakeup. The firm flagged this as a blow to Kyndryl’s turnaround story, after the company trimmed its constant-currency revenue outlook—no longer expecting the previous 1% growth. 2
Kyndryl, carved out from IBM’s infrastructure services in 2021, operates in the fiercely competitive enterprise IT management sector, jostling with names like Accenture and DXC Technology. Shares in those firms slipped as well, yet Kyndryl’s drop outpaced both by a wide margin.
Time looms as the real trouble spot. A prolonged review, or any red flags that demand fixes, might derail talks with customers—and the stock could stay stuck, no matter how steady the business itself proves.
Right now, it’s the cash that’s got traders’ attention. Kyndryl’s been relying on cloud “hyperscaler” deals—big contracts with the major cloud players—to land new business. Investors want to see if that kind of growth actually delivers more consistent, straightforward cash flow.
Paperwork is the next hurdle. Investors are looking for Kyndryl to finally file its overdue 10-Q for the Dec. 31 quarter, lay out its plan to fix internal controls, and address anything new about those SEC document requests.
