Kyndryl Holdings, Inc.

Previous wording

Most economists, including the International Monetary Fund, expect positive but subdued global macroeconomic growth in calendar year 2025 and calendar year 2026 amid ongoing trade tensions and heightened macroeconomic uncertainties. Global markets have experienced volatility from time to time in recent months, driven by geopolitical developments, concerns over changes in global trade policies and the imposition of import tariffs by the United States, reactions from other nations and proposed U.S. government spending reductions. Increased economic uncertainty can impact the level and composition of global macroeconomic activity.

Current wording

Most economists, including the International Monetary Fund, expect positive but subdued global macroeconomic growth in calendar year 2026 amid ongoing trade tensions and heightened macroeconomic uncertainties. Global markets have experienced volatility from time to time in recent months, driven by geopolitical developments, concerns over changes in global trade policies and the imposition of import tariffs by the United States, reactions from other nations and proposed U.S. government spending reductions. Increased economic uncertainty can impact the level and composition of global macroeconomic activity.

Previous wording

For the three months ended September 30, 2025, we reported $3.7 billion in revenue, a decrease of 1% compared to the prior-year period. The revenue performance included a favorable currency exchange rate impact of three points. United States revenue declined 6 percent, Japan revenue decreased 4 percent, Principal Markets revenue increased 1 percent and Strategic Markets revenue increased 2 percent, in each case compared to the three months ended September 30, 2024. Net income of $68 million increased by $111 million versus the prior-year period, reflecting progress on our key initiatives to drive operating efficiencies and higher margins on recent signings.

Current wording

For the nine months ended December 31, 2025, we reported $11.3 billion in revenue, an increase of 1 percent compared to the prior-year period. The revenue performance included a favorable currency exchange rate impact of three points. United States revenue declined 5 percent, Japan revenue declined 1 percent, Principal Markets revenue increased 5 percent and Strategic Markets revenue increased 2 percent, in each case compared to the nine months ended December 31, 2024. Net income of $181 million decreased by $2 million versus the prior-year period reflecting a $138 million after-tax gain from the sale of our SIS platform (classified as a transaction-related benefit) in the prior-year period, partially offset by progress on our key initiatives to drive operating efficiencies.

Previous wording

The following table presents our reportable segments’ revenue and adjusted EBITDA for the three and six months ended September 30, 2025 and 2024. Segment revenue and revenue growth in constant currency exclude any transactions between the segments.

Current wording

The following table presents our reportable segments’ revenue and adjusted EBITDA for the three and nine months ended December 31, 2025 and 2024. Segment revenue and revenue growth in constant currency exclude any transactions between the segments.

Previous wording

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. We believe that adjusted EBITDA is a helpful supplemental measure to assist investors in evaluating our operating results as it excludes certain items whose fluctuation from period to period does not necessarily correspond to changes in the operations of our business.

Current wording

Additionally, management uses adjusted EBITDA to evaluate our performance. Adjusted EBITDA is a non-GAAP measure and defined as net income 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/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. We believe that adjusted EBITDA is a helpful supplemental measure to assist investors in evaluating our operating results as it excludes certain items whose fluctuation from period to period does not necessarily correspond to changes in the operations of our business.

Previous wording

The following table provides a reconciliation of U.S. GAAP net income (loss) to adjusted EBITDA:

Current wording

The following table provides a reconciliation of U.S. GAAP net income to adjusted EBITDA:

Previous wording

For the six months ended September 30, 2025, United States revenue of $1.8 billion decreased 7 percent compared to the prior-year period, driven by the Company’s efforts to reduce certain low-margin revenues and the expiration of certain low- and negative-margin contracts entered into before the Spin-off. Adjusted EBITDA increased $99 million from the prior-year period, primarily driven by progress on our key initiatives to drive operating efficiencies, including lower sales, general and administrative expenses.

Current wording

For the nine months ended December 31, 2025, United States revenue of $2.8 billion decreased 5 percent compared to the prior-year period, reflecting the Company’s efforts to reduce certain low-margin revenues and the expiration of certain low- and negative-margin contracts entered into before the Spin-off. Adjusted EBITDA increased $100 million from the prior-year period, primarily driven by progress on our key initiatives to drive operating efficiencies, including lower sales, general and administrative expenses.

Previous wording

For the six months ended September 30, 2025, Japan revenue of $1.2 billion decreased 1 percent, and decreased 5 percent in constant currency, compared to the prior-year period, driven by actions the Company has taken to reduce low-margin components of its customer relationships. Adjusted EBITDA increased $61 million from the prior-year period, driven by progress on our key initiatives to drive operating efficiencies.

Current wording

For the nine months ended December 31, 2025, Japan revenue of $1.7 billion decreased 1 percent, and decreased 4 percent in constant currency, compared to the prior-year period, driven by actions the Company has taken to reduce certain low-margin components of its customer relationships. Adjusted EBITDA increased $76 million from the prior-year period, driven by progress on our key initiatives to drive operating efficiencies.

Previous wording

For the three months ended September 30, 2025, Principal Markets revenue of $1.3 billion increased 1 percent compared to the prior-year quarter, driven by a favorable currency exchange rate impact of four points. Adjusted EBITDA increased $23 million from the prior-year quarter, primarily due to progress on our key initiatives to drive operating efficiencies and higher margins on recent signings.

Current wording

For the three months ended December 31, 2025, Principal Markets revenue of $1.4 billion increased 10 percent compared to the prior-year quarter, primarily driven by a favorable currency exchange rate impact of six points and signings from prior periods converting into revenue. Adjusted EBITDA decreased $5 million from the prior-year quarter, primarily due to increased expenses to support future growth.

Previous wording

For the six months ended September 30, 2025, Principal Markets revenue of $2.7 billion increased 2 percent compared to the prior-year period, driven by a favorable currency exchange rate impact of four points. Adjusted EBITDA decreased $21 million from the prior-year period, primarily due to a vendor credit in the prior year, partially offset by progress on our key initiatives to drive operating efficiencies and higher margins on recent signings.

Current wording

For the nine months ended December 31, 2025, Principal Markets revenue of $4.1 billion increased 5 percent compared to the prior-year period, primarily driven by a favorable currency exchange rate impact of five points. Adjusted EBITDA decreased $26 million from the prior-year period, primarily due to a vendor credit in the prior year, largely offset by progress on our key initiatives to drive operating efficiencies.

Previous wording

For the three months ended September 30, 2025, Japan revenue of $581 million decreased 4 percent, and decreased 5 percent in constant currency, compared to the prior-year quarter, driven by actions the Company has taken to reduce low-margin components of its customer relationships. Adjusted EBITDA increased $29 million from the prior-year quarter, driven by progress on our key initiatives to drive operating efficiencies.

Current wording

For the nine months ended December 31, 2025, Strategic Markets revenue of $2.7 billion increased 2 percent, and decreased 2 percent in constant currency, compared to the prior-year period, primarily driven by actions the Company has taken to reduce certain low-margin components of its customer relationships. Adjusted EBITDA increased $29 million from the prior-year period, primarily due to progress on our key initiatives to drive operating efficiencies.

Previous wording

Corporate and other had an adjusted EBITDA loss of $28 million in the three months ended September 30, 2025, compared to a loss of $22 million in the three months ended September 30, 2024. Corporate and other had an adjusted EBITDA loss of $53 million in the six months ended September 30, 2025, compared to a loss of $42 million in the six months ended September 30, 2024.

Current wording

Corporate and other had an adjusted EBITDA loss of $26 million in the three months ended December 31, 2025, compared to a loss of $24 million in the three months ended December 31, 2024. Corporate and other had an adjusted EBITDA loss of $79 million in the nine months ended December 31, 2025, compared to a loss of $66 million in the nine months ended December 31, 2024.

Previous wording

Cost of services was 78.5% of revenue in the three months ended September 30, 2025, compared to 80.1% in the three months ended September 30, 2024, driven by progress on our key initiatives to drive operating efficiencies and higher margins on recent signings. Selling, general and administrative expenses were 17.7% of revenue in the three months ended September 30, 2025 compared to 17.1% in the prior-year quarter, driven by lower revenue. Workforce rebalancing charges were 0.5% of revenue in the three months ended September 30, 2025 versus 1.0% of revenue in the prior-year quarter. Interest expense was 0.5% of revenue in the three months ended September 30, 2025 compared to 0.7% in the prior-year quarter. Other expense was 0.1% of revenue in the three months ended September 30, 2025, compared to 1.2% of revenue in the prior-year quarter, driven by currency-related hedging losses recorded last year.

Current wording

Cost of services was 78.1% of revenue in the three months ended December 31, 2025, compared to 79.6% in the three months ended December 31, 2024, driven by progress on our key initiatives to drive operating efficiencies. Selling, general and administrative expenses were 17.4% of revenue in the three months ended December 31, 2025 compared to 17.3% in the prior-year quarter, driven by increased expenses to support future growth and lower attrition rates. Workforce rebalancing charges were 0.4% of revenue in the three months ended December 31, 2025 versus 0.5% of revenue in the prior-year quarter. Transaction-related costs (benefits) were 1.0% of revenue in the three months ended December 31, 2025, compared to (4.0)% of revenue in the three months ended December 31, 2024, due to a current-quarter reserve for an interim arbitration decision on a pre-spin matter compared to a $145 million pretax gain from the sale of the SIS platform in the prior year. Interest expense was 0.5% of revenue in the three months ended December 31, 2025 compared to 0.6% in the prior-year quarter. Other expense (income) was 0.2% of revenue in the three months ended December 31, 2025, compared to (0.9)% of revenue in the prior-year quarter, driven by currency-related hedging gains in the prior period.

Previous wording

Cost of services was 78.6% of revenue in the six months ended September 30, 2025, compared to 79.3% in the six months ended September 30, 2024, driven by progress on our key initiatives to drive operating efficiencies and higher margins on recent signings. Selling, general and administrative expenses were 17.5% of revenue in the six months ended September 30, 2025 compared to 17.4% in the prior-year period. Workforce rebalancing charges were 0.6% of revenue in the six months ended September 30, 2025 versus 1.0% of revenue in the prior-year period. Interest expense was 0.5% of revenue in the six months ended September 30, 2025 compared to 0.7% in the prior-year period. Other expense was 0.2% of revenue in the six months ended September 30, 2025 compared to 0.6% in the prior-year period, driven by currency-related hedging losses recorded last year.

Current wording

Cost of services was 78.4% of revenue in the nine months ended December 31, 2025, compared to 79.4% in the nine months ended December 31, 2024, driven by progress on our key initiatives to drive operating efficiencies. Selling, general and administrative expenses were 17.5% of revenue in the nine months ended December 31, 2025 compared to 17.3% in the prior-year period, driven by increased expenses to support future growth. Workforce rebalancing charges were 0.5% of revenue in the nine months ended December 31, 2025 versus 0.8% of revenue in the prior-year period. Transaction-related costs (benefits) were 0.3% of revenue in the nine months ended December 31, 2025, compared to (1.1)% of revenue in the nine months ended December 31, 2024, due to a current-quarter reserve for an interim arbitration decision on a pre-spin matter compared to a $145 million pretax gain from the sale of the SIS platform in the prior year. Interest expense was 0.5% of revenue in the nine months ended December 31, 2025 compared to 0.7% in the prior-year period. Other expense (income) was 0.2% of revenue in the nine months ended December 31, 2025 compared to 0.1% in the prior-year period.

Previous wording

The Company classifies certain expenses and benefits related to the Separation, acquisitions and divestitures as “transaction-related costs” in the Consolidated Income Statement. Transaction-related costs include gains or losses, employee retention expenses, information technology costs, marketing expenses to establish the Kyndryl brand, legal, accounting, consulting and other professional service costs, costs and benefits resulting from settlements with our former Parent associated with pre-Separation and Separation-related matters, and other costs related to contract and supplier novation and integration, associated with acquisitions, divestitures or the Separation.

Current wording

The Company classifies certain expenses and benefits related to the Separation, acquisitions and divestitures as “transaction-related costs (benefits)” in the Consolidated Income Statement. Transaction-related costs include gains or losses, employee retention expenses, information technology costs, marketing expenses to establish the Kyndryl brand, legal, accounting, consulting and other professional service costs, costs and benefits resulting from settlements with our former Parent associated with pre-Separation and Separation-related matters, and other costs related to contract and supplier novation and integration, associated with acquisitions, divestitures or the Separation.

Previous wording

During the three and six months ended September 30, 2025, management initiated actions to reduce the Company’s overall cost structure and enhance operating efficiency. As a result of these actions, the Company recorded workforce rebalancing charges of $19 million and $44 million for the three and six months ended September 30, 2025, respectively.

Current wording

During the three and nine months ended December 31, 2025, management initiated actions to reduce the Company’s overall cost structure and enhance operating efficiency. As a result of these actions, the Company recorded workforce rebalancing charges of $16 million and $61 million for the three and nine months ended December 31, 2025, respectively.

Previous wording

Total cash outlays for this program are expected to be approximately $80 million, of which approximately $28 million has been paid through September 30, 2025, and the remainder is expected to be paid thereafter. Management expects that these workforce rebalancing activities will reduce annual payroll costs and related expenses by more than $100 million. There can be no guarantee that we will achieve our expected cost savings.

Current wording

Total cash outlays for this program are expected to be approximately $60 million, of which approximately $47 million has been paid through December 31, 2025, and the remainder is expected to be paid thereafter. Management expects that these workforce rebalancing activities will reduce annual payroll costs and related expenses by more than $100 million. There can be no guarantee that we will achieve our expected cost savings.

Previous wording

During the year ended March 31, 2025, management implemented actions to reduce the Company’s overall cost structure and increase our operating efficiency. During the year ended March 31, 2025, the Company recorded $114 million in workforce rebalancing charges and $48 million in charges related to ceasing to use leased and owned fixed assets.

Current wording

During fiscal year 2025, management implemented actions to reduce the Company’s overall cost structure and increase our operating efficiency. During the year ended March 31, 2025, the Company recorded $114 million in workforce rebalancing charges and $48 million in charges related to ceasing to use leased and owned fixed assets.

Previous wording

Total cash outlays for this program are expected to be approximately $150 million, of which approximately $132 million has been paid through September 30, 2025, and the remainder is expected to be paid thereafter. Management expects that these workforce rebalancing and site-rationalization activities will reduce payroll costs, rent expenses and depreciation of property and equipment by more than $200 million in fiscal year 2026. There can be no guarantee that we will achieve our expected cost savings.

Current wording

Total cash outlays for this program are expected to be approximately $150 million, of which approximately $138 million has been paid through December 31, 2025, and the remainder is expected to be paid thereafter. Management expects that these workforce rebalancing and site-rationalization activities will reduce payroll costs, rent expenses and depreciation of property and equipment by more than $200 million in fiscal year 2026. There can be no guarantee that we will achieve our expected cost savings.

Previous wording

The provision for income taxes for the three months ended September 30, 2025 was $30 million, compared to $38 million for the three months ended September 30, 2024. Our income tax expense for the three months ended September 30, 2025 and 2024 was primarily related 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.

Current wording

The provision for income taxes for the three months ended December 31, 2025 was $34 million, compared to $43 million for the three months ended December 31, 2024. Our income tax expense for the three months ended December 31, 2025 and 2024 was primarily related 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.

Previous wording

The provision for income taxes for the six months ended September 30, 2025 was $66 million, compared to $91 million for the six months ended September 30, 2024. Our income tax expense for the six months ended September 30, 2025 and 2024 was primarily related 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.

Current wording

The provision for income taxes for the nine months ended December 31, 2025 was $100 million, compared to $134 million for the nine months ended December 31, 2024. Our income tax expense for the nine months ended December 31, 2025 and 2024 was primarily related 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.

Previous wording

Total assets of $11.2 billion increased by $792 million (and increased by $372 million adjusted for currency) from March 31, 2025, primarily driven by an increase in deferred costs of $942 million mainly due to an extended and amended multi-year, third-party software agreement and an increase in operating right-of-use assets, net, of $138 million due to additions outpacing amortization, partially offset by a decrease in cash and cash equivalents of $455 million mainly due to share repurchases and payments for annual incentive compensation.

Current wording

Total assets of $11.3 billion increased by $824 million (and increased by $447 million adjusted for currency) from March 31, 2025, primarily driven by an increase in deferred costs of $879 million mainly due to an extended and amended multi-year, third-party software agreement and an increase in operating right-of-use assets, net, of $124 million due to additions outpacing amortization, partially offset by a decrease in cash and cash equivalents of $438 million mainly due to share repurchases.

Previous wording

Total liabilities of $9.9 billion increased by $784 million (and increased by $526 million adjusted for currency) from March 31, 2025, primarily as a result of an increase in other noncurrent liabilities of $748 million driven by the extended and amended multi-year, third-party software agreement.

Current wording

Total liabilities of $10.0 billion increased by $846 million (and increased by $630 million adjusted for currency) from March 31, 2025, primarily as a result of an increase in other noncurrent liabilities of $675 million driven by the extended and amended multi-year, third-party software agreement.

Previous wording

Total equity of $1.3 billion increased by $8 million from March 31, 2025, principally due to our net earnings of $124 million and other comprehensive income of $72 million in the period, as well as activity related to employee stock plans of $55 million, partially offset by $154 million of share repurchases under our Share Repurchase Program and $89 million of shares repurchased for tax withholdings.

Current wording

Total equity of $1.3 billion decreased by $22 million from March 31, 2025, principally due to $254 million of share repurchases under our Share Repurchase Program and $93 million of shares repurchased to settle tax withholdings related to the vesting of stock-based awards, partially offset by our nine-month earnings of $181 million and other comprehensive income of $62 million in the period, as well as activity related to employee stock plans of $80 million.

Previous wording

Net cash used in investing activities was $196 million in the six months ended September 30, 2025, compared to a net cash use of $241 million in the prior-year period due to an acquisition in the prior-year period.

Current wording

Net cash used in investing activities was $436 million in the nine months ended December 31, 2025, compared to a net cash use of $199 million in the prior-year period due to cash provided by the sale of the SIS platform in the prior-year period.

Previous wording

Net cash used in financing activities totaled $310 million in the six months ended September 30, 2025, compared to net cash used by financing activities of $101 million in the prior-year period, mainly due to share repurchases of $154 million under the Company’s Share Repurchase Program and $89 million of shares repurchased to settle tax withholdings related to the vesting of stock-based awards.

Current wording

Net cash used in financing activities totaled $448 million in the nine months ended December 31, 2025, compared to net cash used by financing activities of $172 million in the prior-year period, mainly due to share repurchases of $254 million under the Company’s Share Repurchase Program.

Previous wording

The following table presents the Company’s signings for the three and six months ended September 30, 2025 and 2024.

Current wording

The following table presents the Company’s signings for the three and nine months ended December 31, 2025 and 2024.

Previous wording

Signings decreased by $2.8 billion, or 49% in the three months ended September 30, 2025, compared to the prior-year quarter, and signings decreased by $2.7 billion, or 31%, in the six months ended September 30, 2025, compared to the six months ended September 30, 2024, primarily because the quarter ended September 30, 2024 included a $1.8 billion signing, the largest signing in Kyndryl’s history as an independent company. Management uses signings to monitor the performance of the business, as a measure of customer engagement and our ability to drive growth. There are no third-party standards or requirements governing the calculation of signings. We define signings as an initial estimate of the value of a customer’s commitment under a contract. The calculation involves estimates and judgments to gauge the extent of a customer’s commitment, including the type and duration of the agreement and the presence of termination charges or wind-down costs. Contract extensions and increases in scope are treated as signings only to the extent of the incremental new value. Signings can vary over time due to a variety of factors including, but not limited to, the timing of signing a small number of larger outsourcing contracts as well as the length of those contracts. The conversion of signings into revenue may vary based on the types of services and solutions, customer decisions and other factors, which may include, but are not limited to, the macroeconomic environment or external events.

Current wording

billion signing, the largest signing in Kyndryl’s history as an independent company. Management uses signings to monitor the performance of the business, as a measure of customer engagement and our ability to drive growth. There are no third-party standards or requirements governing the calculation of signings. We define signings as an initial estimate of the value of a customer’s commitment under a contract. The calculation involves estimates and judgments to gauge the extent of a customer’s commitment, including the type and duration of the agreement and the presence of termination charges or wind-down costs. Contract extensions and increases in scope are treated as signings only to the extent of the incremental new value. Signings can vary over time due to a variety of factors including, but not limited to, the timing of signing a small number of larger outsourcing contracts as well as the length of those contracts. The conversion of signings into revenue may vary based on the types of services and solutions, customer decisions and other factors, which may include, but are not limited to, the macroeconomic environment or external events.

Previous wording

We believe that our existing cash and cash equivalents and our revolving credit agreement will be sufficient to meet our anticipated operating cash needs and to fund our planned capital investments, debt maturities and stock repurchases for at least the next twelve months.

Current wording

We believe that our existing cash and cash equivalents and our revolving credit agreement will be sufficient to meet our anticipated operating cash needs and to fund our planned capital investments, debt maturities, stock repurchases and acquisitions for at least the next twelve months.

Previous wording

In October 2021, we entered into a $3.15 billion multi-currency revolving credit agreement (the “Revolving Credit Agreement”), which expires, unless extended, in October 2026. The Revolving Credit Agreement was amended in June 2023, replacing the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”). In March 2025, we further amended the agreement, extending the maturity to March 2030. Interest rates on borrowings under the Revolving Credit Agreement will be based on prevailing market interest rates, plus a margin, as further described in the Revolving Credit Agreement. As of September 30, 2025, there has been no drawdown on the Revolving Credit Agreement.

Current wording

In October 2021, we entered into a $3.15 billion multi-currency revolving credit agreement (the “Revolving Credit Agreement”), which expires, unless extended, in October 2026. The Revolving Credit Agreement was amended in June 2023, replacing the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”). In March 2025, we further amended the agreement, extending the maturity to March 2030. Interest rates on borrowings under the Revolving Credit Agreement will be based on prevailing market interest rates, plus a margin, as further described in the Revolving Credit Agreement. As of December 31, 2025, no amounts were drawn under the Revolving Credit Agreement. In February 2026, the Company borrowed $1 billion under the Revolving Credit Agreement. Proceeds are intended to be used for working capital and other general corporate purposes, which may include repayment of indebtedness and acquisitions.

Previous wording

The Revolving Credit Agreement includes certain customary mandatory prepayment provisions. In addition, it includes customary events of default and affirmative and negative covenants as well as a maintenance covenant that will require that the ratio of our indebtedness for borrowed money to consolidated EBITDA (as defined in the Revolving Credit Agreement) for any period of four consecutive fiscal quarters be no greater than 3.50 to 1.00. The Company is in compliance with its debt covenants.

Current wording

The Revolving Credit Agreement includes certain customary mandatory prepayment provisions. In addition, it includes customary events of default and affirmative and negative covenants as well as a maintenance covenant that will require that the ratio of our indebtedness for borrowed money to consolidated EBITDA (as defined in the Revolving Credit Agreement) for any period of four consecutive fiscal quarters be no greater than 3.50 to 1.00. As of December 31, 2025, the Company is in compliance with its debt covenants.

Previous wording

The Company has entered into arrangements 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. An agreement, which was executed in November 2021 and subsequently amended, enabled us to sell certain of our trade receivables to the counterparty. The initial term of this agreement was 18 months, and the agreement automatically resets to a term of 18 months after every six months, unless either party elects not to extend. This agreement was further amended during the quarter ended September 30, 2024 to reduce the committed facility limit from $1 billion to $600 million and to add an incremental uncommitted facility limit of $200 million that is subject to the counterparty’s sole

Current wording

The Company has entered into arrangements 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. An agreement, which was executed in November 2021 and subsequently amended, enabled us to sell certain of our trade receivables to the counterparty. The initial term of this agreement was 18 months, and the agreement automatically resets to a term of 18 months after every six months, unless either party elects not to extend. This agreement was further amended during the quarter ended September 30, 2024 to reduce the committed facility limit from $1 billion to $600 million and to add an incremental uncommitted facility limit of $200 million that is subject to the counterparty’s sole discretion to purchase such incremental amounts. We have also entered into additional agreements with a separate third-party financial institution that enable us to sell receivables. These agreements were first executed in June 2022 and subsequently amended to renew automatically every 18 months, unless either party elects not to extend. These facilities are committed for approximately $250 million in the aggregate.

Previous wording

The net proceeds from these agreements are reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows. Gross proceeds from receivables sold to third parties under the aforementioned programs were $563 million and $1.2 billion for the three and six months ended September 30, 2025, respectively, and $1.1 billion and $1.9 billion for the three and six months ended September 30, 2024, respectively. The fees associated with the transfers of receivables were $5 million and $10 million for the three and six months ended September 30, 2025, and were $10 million and $20 million for the three and six months ended September 30, 2024, respectively.

Current wording

The net proceeds from these agreements are reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows. Gross proceeds from receivables sold to third parties under the aforementioned programs were $629 million and $1.8 billion for the three and nine months ended December 31, 2025, respectively, and $760 million and $2.6 billion for the three and nine months ended December 31, 2024, respectively. The fees associated with the transfers of receivables were $2 million and $12 million for the three and nine months ended December 31, 2025, and were $8 million and $28 million for the three and nine months ended December 31, 2024, respectively. The year-to-year decline in the gross proceeds from sales of receivables was primarily due to a higher volume of intra-period factoring transactions in the prior period.

Previous wording

In the year ended March 31, 2024, the Company initiated a supplier financing program with a third-party financial institution under which the Company agrees to pay the financial institution the stated amounts of invoices from participating suppliers on the originally invoiced due date, which have an average term of 90 to 120 days. The financial institution offers earlier payment of the invoices at the sole discretion of the supplier for a discounted amount. The Company does not provide secured legal assets or other forms of guarantees under the arrangements. The Company is not a party to the arrangement between its suppliers and the financial institution. The Company or the financial institution may terminate the agreement upon at least 180 days’ notice. The Company’s obligations under this program continue to be recognized as accounts payable in the Consolidated Balance Sheet. The obligations outstanding under this program were immaterial at September 30, 2025 and March 31, 2025.

Current wording

In the year ended March 31, 2024, the Company initiated a supplier financing program with a third-party financial institution under which the Company agrees to pay the financial institution the stated amounts of invoices from participating suppliers on the originally invoiced due date, which have an average term of 90 to 120 days. The financial institution offers earlier payment of the invoices at the sole discretion of the supplier for a discounted amount. The Company does not provide secured legal assets or other forms of guarantees under the arrangements. The Company or the financial institution may terminate the agreement upon at least 180 days’ notice. The Company’s obligations under this program continue to be recognized as accounts payable in the Consolidated Balance Sheet. The obligations outstanding under this program were immaterial at December 31, 2025 and March 31, 2025.

Previous wording

In November 2024, the Company’s Board of Directors authorized a share repurchase program of up to $300 million of the Company’s common stock. Under the Share Repurchase Program, the Company may repurchase shares of its common stock from time to time in open market transactions and may also repurchase shares in accelerated share buyback programs, tender offers, privately negotiated transactions or by other means. Repurchases may also be made under a Rule 10b5-1 trading plan. The timing and amount of repurchase transactions will be determined by the Company’s management based on its evaluation of market conditions, share price, legal requirements and other factors. The program does not have a set expiration date and may be suspended, modified or discontinued at any time without prior notice.

Current wording

repurchase shares in accelerated share buyback programs, tender offers, privately negotiated transactions or by other means. Repurchases may also be made under a Rule 10b5-1 trading plan. The timing and amount of repurchase transactions will be determined by the Company’s management based on its evaluation of market conditions, share price, legal requirements and other factors. The program does not have a set expiration date and may be suspended, modified or discontinued at any time without prior notice.

Previous wording

During the three and six months ended September 30, 2025, the Company repurchased 2.9 and 4.6 million shares of its common stock at an aggregate cost of $89 and $154 million, respectively, under the Share Repurchase Program.

Current wording

During the three and nine months ended December 31, 2025, the Company repurchased 3.7 and 8.4 million shares of its common stock at an aggregate cost of $100 and $254 million, respectively, under the Share Repurchase Program. As of December 31, 2025, approximately $351 million of capacity remained available under the Share Repurchase Program.

Previous wording

This report contains “forward-looking statements” within the meaning ofthe Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this report, including statements concerning the Company’s plans, objectives, goals, beliefs, business strategies, future events, business condition, results of operations, financial position, business outlook and business trends and other non-historical statements in this report are forward-looking statements. Such forward-looking statements often contain words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “objectives,” “opportunity,” “plan,” “position,” “predict,” “project,” “should,” “seek,” “target,” “will,” “would,” and other similar words or expressions or the negative thereof or other variations thereon. Forward-looking statements are based on the Company’s current assumptions and beliefs regarding future business and financial performance. The Company’s actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others:

Current wording

This report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this report, including statements concerning the Company’s plans, objectives, goals, beliefs, business strategies, future events, business condition, results of operations, financial position, business outlook, business trends, the outcome of legal and regulatory claims, suits, investigations and other matters, the remediation of material weaknesses and other non-historical statements in this report are forward-looking statements. Such forward-looking statements often contain words such as “aim,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “objectives,” “opportunity,” “plan,” “position,” “predict,” “project,” “should,” “seek,” “target,” “will,” “would,” and other similar words or expressions or the negative thereof or other variations thereon. Forward-looking statements are based on the Company’s current assumptions and beliefs. The Company’s actual business, financial condition, results of operations, liquidity, cash flows, internal controls, reputation, stock price and key relationships may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others:

Previous wording

Additional risks and uncertainties include, among others, those risks and uncertainties described in the “Risk Factors” section of our Form 10-K for the fiscal year ended March 31, 2025, as such factors may be updated from time to time in the Company’s subsequent filings with the SEC. Any forward-looking statement in this report speaks only as of the date on which it is made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Current wording

Additional risks and uncertainties include, among others, those risks and uncertainties described in the “Risk Factors” section of our Form 10-K for the fiscal year ended March 31, 2025 (as amended) and our Form 10-Qs for the fiscal quarters ended June 30, 2025 and September 30, 2025 (each, as amended), as such factors may be updated from time to time in the Company’s subsequent filings with the SEC. In addition, other risks and uncertainties that are not currently known to the Company or that the Company currently deems immaterial may also impact actual results and outcomes. Any forward-looking statement in this report speaks only as of the date on which it is made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.