Kyndryl Holdings, Inc.
For the period ended Jun 30, 2025. Filed Aug 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 5, 2025
KD$16.29+0.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-06.
0001558370-25-000688
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0001558370-25-010303
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 94 previous paragraphs and 87 current paragraphs.
46 unchanged; 27 reworded; 11 added; 17 removed; 4 previous and 3 current paragraphs rearranged.
Tables are not compared: 39 previous and 36 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Most economists, including the International Monetary Fund, expect positive global macroeconomic growth in calendar year 2025. Global markets have experienced increased volatility in recent months, driven by geopolitical developments, concerns over the imposition of import tariffs by the United States, reactions from other nations and proposed U.S. government spending reductions. Increased economic uncertainty may impact the level of global macroeconomic activity.
Current report
For the three months ended June 30, 2025, we reported $3.7 billion in revenue, a slight increase compared to the prior-year period. The revenue performance included a favorable currency exchange rate impact of three points. United States revenue declined 8 percent, Japan revenue increased 2 percent, Principal Markets revenue increased 3 percent and Strategic Markets revenue increased 3 percent, in each case compared to the three months ended June 30, 2024. Net income of $56 million increased by $45 million versus the prior-year period reflecting a $17 million decline in the provision for income taxes, an $11 million decline in workforce rebalancing charges and no current-period transaction-related costs.
Current report
For the three months ended June 30, 2025, Japan revenue of $578 million increased 2 percent compared to the prior-year quarter, driven by a favorable currency exchange rate impact of eight points. Adjusted EBITDA increased $32 million from the prior-year quarter, driven by progress on our key initiatives to drive operating efficiencies and favorable currency movements that impacted both non-yen-denominated costs and the translation of earnings into U.S. dollars.
Current report
For the three months ended June 30, 2025, Principal Markets revenue of $1.4 billion increased 3 percent compared to the prior-year quarter, driven by a favorable currency exchange rate impact of four points. Adjusted EBITDA decreased $44 million from the prior-year quarter, primarily due to a vendor credit in the prior year.
Current report
Cost of services was 78.7% of revenue in the three months ended June 30, 2025, compared to 78.5% in the three months ended June 30, 2024, driven by a vendor credit in the prior-year quarter, almost fully offset by progress on our key initiatives to drive operating efficiencies and higher margins on recent signings. Selling, general and administrative expenses were 17.3% of revenue in the three months ended June 30, 2025 compared to 17.6% in the prior-year quarter, driven bythe impact of currency on revenue compared to our U.S. dollar-denominated expenses.
Current report
Workforce rebalancing charges were 0.7% of revenue in the three months ended June 30, 2025 versus 1.0% of revenue in the prior-year quarter. Interest expense was 0.5% of revenue in the three months ended June 30, 2025 compared to 0.7% in the prior-year quarter.
Current report
Total assets of $11.5 billion increased by $1.0 billion (and increased by $628 million adjusted for currency) from March 31, 2025, primarily driven by an increase in deferred costs of $1.1 billion mainly due to an extended and amended multi-year, third-party software agreement and an increase of $134 million in prepaid expenses and other current assets mainly due to prepayment for software subscriptions, partially offset by a decrease in cash and cash equivalents of $324 million mainly due to payments for annual incentive compensation.
Current report
Total liabilities of $10.2 billion increased by $1.0 billion (and increased by $746 million adjusted for currency) from March 31, 2025, primarily as a result of an increase in other noncurrent liabilities of $893 million driven by the extended and amended multi-year, third-party software agreement, partially offset by a decrease in accrued compensation and benefits of $215 million due to payments of annual incentive compensation.
Current report
Total equity of $1.3 billion increased by $12 million from March 31, 2025, principally due to our net earnings of $56 million and other comprehensive income of $66 million in the period, and activity related to employee stock plans of $26 million, partially offset by $65 million of share repurchases under our Share Repurchase Program and $67 million of shares repurchased for tax withholdings.
Current report
Net cash used by operating activities was $124 million in the three months ended June 30, 2025, compared to net cash used of $48 million in the prior-year period, mainly due to a decline of $117 million in accounts receivables as a source of cash in the current quarter compared to the prior-year quarter when the collection of receivables outpaced revenues, partially offset by $45 million higher earnings in the current quarter.
Current report
Revolving Credit Agreement
Removed paragraphs (17)
Previous report
In fiscal year 2025, we have seen continuing demand for information technology services, despite concerns about economic growth and geopolitical tensions. Most economists, including the International Monetary Fund, expect positive macroeconomic growth to continue in calendar year 2025.
Previous report
For the three months ended December 31, 2024, we reported $3.7 billion in revenue, a decline of 5 percent compared to the prior-year period. Roughly half of the decline was due to currency movements, and the remainder was largely attributable to actions the Company has taken to reduce low-margin components of its customer relationships, as well as the divestiture of the Company’s SIS platform in Canada, which was completed during the three months ended December 31, 2024. United States revenue declined 7 percent, Japan revenue was unchanged (but increased in constant currency), Principal Markets revenue declined 4 percent and Strategic Markets revenue declined 6 percent, in each case compared to the three months ended December 31, 2023. Net income of $215 million improved by $227 million versus the prior-year period driven by a $138 million after-tax gain from the sale of our SIS business (classified as a transaction-related benefit) and progress on our key initiatives to drive operating efficiencies and increased margins,
Previous report
partially offset by increased software costs and the impact in the prior year of an agreement that allowed us to collect previously reserved receivables from our former Parent (classified as a transaction-related benefit).
Previous report
For the nine months ended December 31, 2024, we reported $11.3 billion in revenue, a decline of 8 percent compared to the prior-year period. The revenue decline was largely attributable to actions the Company has taken to reduce low-margin components of its customer relationships, as well as currency effects. United States revenue declined 12 percent, Japan revenue was unchanged (but increased in constant currency), Principal Markets revenue declined 5 percent and Strategic Markets revenue decreased 11 percent, in each case compared to the nine months ended December 31, 2023. Net income of $183 million improved by $478 million versus the prior-year period driven by a combination of lower depreciation expenses resulting from the change of useful life ofinformation technology equipment effective April 1, 2024 (a year-over-year benefit of $150 million, before taxes), a $138 million after-tax gain from the sale of our SIS business, progress on our key initiatives to drive operating efficiencies and increased margins, and a vendor credit, partially offset by increased software costs.
Previous report
For the three months ended December 31, 2024, Japan revenue of $579 million was unchanged compared to the prior-year quarter and increased 3 percent in constant currency, primarily driven by expanding the scope of services we provide to our customers. Adjusted EBITDA increased $17 million from the prior-year quarter, primarily driven by progress on our key initiatives.
Previous report
For the nine months ended December 31, 2024, Japan revenue of $1.8 billion was unchanged compared to the prior-year period, and increased 6 percent in constant currency, primarily driven by expanding the scope of services we provide to our customers. Adjusted EBITDA increased $10 million from the prior-year period, primarily driven by progress on our key initiatives.
Previous report
For the three months ended December 31, 2024, Principal Markets revenue of $1.3 billion decreased 4 percent compared to the prior-year quarter, driven by actions the Company has taken to reduce equipment sales and other low-
Previous report
margin components of its customer relationships, as well as the divestiture of its SIS platform in Canada. Adjusted EBITDA increased $35 million from the prior-year quarter, primarily due to increased operating efficiencies and higher margins on recent signings.
Previous report
For the nine months ended December 31, 2024, Principal Markets revenue of $3.9 billion decreased 5 percent compared to the prior-year period, driven by actions the Company has taken to reduce equipment sales and other low-margin components of its customer relationships. Adjusted EBITDA increased $144 million from the prior-year period, primarily due to increased operating efficiencies and higher margins on recent signings, as well as a vendor credit.
Previous report
For the nine months ended December 31, 2024, Strategic Markets revenue of $2.7 billion decreased 11 percent compared to the prior-year period. The revenue decline was largely attributable to actions the Company has taken to reduce equipment sales and other low-margin components of its customer relationships. Adjusted EBITDA decreased $31 million from the prior-year period, primarily driven by the impact of the inclusion of workforce rebalancing charges in adjusted EBITDA in fiscal 2025.
Previous report
NM – not meaningful
Previous report
Cost of services was 79.6% of revenue in the three months ended December 31, 2024, compared to 80.9% in the three months ended December 31, 2023, driven by increased operating efficiencies and higher margins on recent signings. Selling, general and administrative expenses were 17.3% of revenue in the three months ended December 31, 2024, compared to 17.9% of revenue in the prior-year quarter, primarily due to lower enterprise services expenses. Transaction-related costs (benefits) were (4.0)% of revenue in the three months ended December 31, 2024, due to a $145 million pretax gain from the sale of the SIS business, compared to transaction-related costs (benefits) of (2.0)% of revenue in the prior-year quarter, which reflected an agreement that allowed us to collect previously reserved receivables from our former Parent. Interest expense was 0.6% of revenue in the three months ended December 31, 2024 compared to 0.8% in the prior-year quarter. Other expense (income) was (0.9)% of revenue in the three months ended December 31, 2024 compared to 0.5% in the prior-year quarter, driven by currency-related hedging gains recorded this year.
Previous report
Cost of services was 79.4% of revenue in the nine months ended December 31, 2024, compared to 82.4% in the nine months ended December 31, 2023, driven by lower depreciation expenses, increased operating efficiencies, higher margins on recent signings, and a vendor credit. Selling, general and administrative expenses were 17.3% of revenue in the nine months ended December 31, 2024 compared to 16.9% in the prior-year period, driven by lower revenue. Transaction-related costs (benefits) were (1.1)% of revenue in the nine months ended December 31, 2024, due to a $145 million pretax gain from the sale of the SIS business, compared to transaction-related costs (benefits) of 0.1% of revenue in the nine months ended December 31, 2023. Interest expense was 0.7% of revenue in the nine months ended December 31, 2024 compared to 0.8% in the prior-year period.
Previous report
Total assets of $9.9 billion decreased by $665 million (and decreased by $372 million adjusted for currency) from March 31, 2024, primarily driven by: a decrease of $225 million in accounts receivable mainly due to lower revenue; a decrease in property and equipment, net, of $185 million due to asset dispositions and effects from currency; and a reduction in operating right-of-use assets, net, of $162 million due to amortization outpacing additions.
Previous report
Total liabilities of $8.7 billion decreased by $747 million (and decreased by $553 million adjusted for currency) from March 31, 2024, primarily as a result of: a decrease in accounts payable of $262 million due to lower costs; a decrease in operating lease liabilities of $155 million due to a reduction in right-of-use assets; a decrease in accrued contract costs of $126 million due to lower volumes; and a decrease in accrued compensation and benefits of $116 million due to payments of annual incentives. Total equity of $1.2 billion increased by $82 million from March 31, 2024, principally due to our net income in the period.
Previous report
Net cash provided by operating activities was $361 million in the nine months ended December 31, 2024, compared net cash provided by operating activities of $309 million in the prior-year period, mainly due to higher margins.
Previous report
Revolving Credit Facility
Reworded paragraphs (27)
Previous wording
FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2024
Current wording
FOR THE THREE MONTHS ENDED JUNE 30, 2025
Previous wording
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 following table presents our reportable segments’ revenue and adjusted EBITDA for the three and nine months ended December 31, 2024 and 2023. 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 months ended June 30, 2025 and 2024. Segment revenue and revenue growth in constant currency exclude any transactions between the segments.
Previous wording
We report our financial results in accordance with U.S. GAAP. We also present certain non-GAAP financial measures to provide useful supplemental information to investors. We provide these non-GAAP financial measures as we believe it enhances visibility to underlying results and the impact of management decisions on operational performance, enables better comparison to peer companies and allows us to provide a long-term strategic view of the business going forward.
Current wording
We report our financial results in accordance with U.S. GAAP. We also present certain non-GAAP financial measures to provide useful supplemental information to investors. We provide these non-GAAP financial measures as we believe they enhance visibility to underlying results and the impact of management decisions on operational performance, enable better comparison to peer companies and allow us to provide a long-term strategic view of the business going forward.
Previous wording
Additionally, management uses adjusted EBITDA to evaluate our performance. Adjusted EBITDA is a non-GAAP measure and 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/fixed assets, charges related to lease terminations, transaction-related costs and benefits, pension expenses other than pension servicing costs and multi-employer plan costs, stock-based compensation expense, workforce rebalancing charges incurred prior to March 31, 2024, impairment expense, significant litigation costs and benefits, and currency impacts of highly inflationary countries. 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 (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/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 three months ended December 31, 2024, United States revenue of $961 million decreased 7 percent compared to the prior-year quarter, 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 $10 million from the prior-year quarter, primarily driven by progress on our key initiatives.
Current wording
For the three months ended June 30, 2025, United States revenue of $911 million decreased 8 percent compared to the prior-year quarter, 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 $63 million from the prior-year quarter, primarily driven by progress on our key initiatives to drive operating efficiencies, including lower sales, general and administrative expenses.
Previous wording
For the three months ended December 31, 2024, Strategic Markets revenue of $904 million decreased 6 percent compared to the prior-year quarter driven by an unfavorable currency exchange rate impact of three points and actions the Company has taken to reduce low-margin components of its customer relationships. Adjusted EBITDA increased $26 million from the prior-year quarter primarily due to progress on our key initiatives.
Current wording
For the three months ended June 30, 2025, Strategic Markets revenue of $898 million increased 3 percent compared to the prior-year quarter, driven by higher signings in fiscal year 2025. Adjusted EBITDA increased $43 million from the prior-year quarter, primarily due to progress on our key initiatives to drive operating efficiencies and higher margins on recent signings.
Previous wording
Corporate and other had an adjusted EBITDA loss of $24 million in the three months ended December 31, 2024, compared to a loss of $25 million in the three months ended December 31, 2023. Corporate and other had an adjusted EBITDA loss of $66 million in the nine months ended December 31, 2024, compared to a loss of $71 million in the nine months ended December 31, 2023.
Current wording
Corporate and other had an adjusted EBITDA loss of $26 million in the three months ended June 30, 2025, compared to a loss of $21 million in the three months ended June 30, 2024.
Previous 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 associated with divestitures, employee retention expenses, information technology costs, marketing expenses to establish the Kyndryl brand, legal, accounting, consulting and other professional service costs required, pre-Separation
Current 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.
Previous wording
During the nine months ended December 31, 2024, management initiated actions to reduce the Company’s overall cost structure and increase our operating efficiency. These actions will result in workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets, and charges related to lease terminations. During the three months ended December 31, 2024, the Company recorded $17 million in workforce rebalancing charges and $9 million in charges related to ceasing to use leased and owned fixed assets, including lease termination charges. During the nine months ended December 31, 2024, the Company recorded $92 million in workforce rebalancing charges and $29 million in charges related to ceasing to use leased and owned fixed assets, including lease termination charges.
Current wording
During the three months ended June 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 $25 million in the period.
Previous wording
Total cash outlays for this program are expected to be $300 million, of which approximately $260 million has been paid through December 31, 2024 (including approximately $60 million of contractual payments toward leased assets we have ceased to use) and approximately $10 million is expected to be paid in fiscal year 2025. Management estimated that these workforce rebalancing and site-rationalization activities will reduce payroll costs, rent expenses and depreciation of property and equipment by approximately $400 million in fiscal year 2025. 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 $80 million, of which approximately $11 million has been paid through June 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.
Previous wording
The Company will continue to seek opportunities to improve operational efficiency and reduce costs, which may result in additional charges in future periods. For additional information, see Note 14 – Workforce Rebalancing and Site-Rationalization Charges in the accompanying Consolidated Financial Statements.
Current wording
The Company will continue to seek opportunities to improve operational efficiency and reduce costs, which may result in additional charges in future periods. For additional information, see Note 13 – Workforce Rebalancing Charges in the accompanying Consolidated Financial Statements.
Previous wording
During the year ended March 31, 2023, management initiated certain actions to reduce the Company’s 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 charges related to lease terminations. Workforce rebalancing charges arise from cost-reduction actions to enhance productivity and cost-competitiveness and to rebalance skills that result in payments to the terminated employees. In addition, we identified certain leased and owned assets that were inherited from IBM as a result of the Separation that we determined will no longer provide any economic benefit to Kyndryl. During the three months ended December 31, 2023, the Company recognized $19 million in workforce rebalancing charges and $14 million in charges related to ceasing to use leased and owned fixed assets, including lease termination charges. During the nine months ended December 31, 2023, the Company recognized $115 million in workforce rebalancing charges and $24 million in charges related to ceasing to use leased and owned fixed assets, including lease termination charges.
Current 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, including lease termination charges.
Previous wording
Total cash outlays for this program are expected to be $140 million, of which approximately $80 million has been paid through December 31, 2024 and approximately $20 million is expected to be paid through the end of fiscal year 2025, and the remainder 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 $125 million has been paid through June 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.
Previous wording
The provision for income taxes for the nine months ended December 31, 2024 was $134 million of expense, compared to $131 million of expense for the nine months ended December 31, 2023. Our income tax expense for the nine months ended December 31, 2024 and 2023 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 June 30, 2025 was $36 million of expense, compared to $53 million of expense for the three months ended June 30, 2024. Our income tax expense for each of the three months ended June 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.
Previous wording
In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction, including past operating results, estimates of future taxable income, the reversal of existing temporary differences, and the feasibility of ongoing tax planning strategies and actions. Estimates of future taxable income and loss could change, perhaps materially, which may require us to revise our assessment of the recoverability of the deferred tax asset at that time.
Current wording
differences, and the feasibility of ongoing tax planning strategies and actions. Estimates of future taxable income and loss could change, perhaps materially, which may require us to revise our assessment of the recoverability of the deferred tax asset at that time.
Previous wording
Net cash used in investing activities was $199 million in the nine months ended December 31, 2024, compared to a net cash use of $350 million in the prior-year period, due to the sale of the SIS business partially offset by the acquisition of Skytap.
Current wording
Net cash used in investing activities was $74 million in the three months ended June 30, 2025, compared to a net cash use of $166 million in the prior-year period due to an acquisition in the prior-year period.
Previous wording
Net cash used in financing activities totaled $172 million in the nine months ended December 31, 2024, compared to net cash used in financing activities of $123 million in the prior-year period, mainly due to share repurchases of $30 million under the Company’s Share Repurchase Program.
Current wording
Net cash used in financing activities totaled $170 million in the three months ended June 30, 2025, compared to net cash used by financing activities of $51 million in the prior-year period, mainly due to share repurchases of $65 million under the Company’s Share Repurchase Program and $67 million of shares repurchased to settle tax withholdings related to the vesting of stock-based awards.
Previous wording
The following table presents the Company’s signings for the three and nine months ended December 31, 2024 and 2023.
Current wording
The following table presents the Company’s signings for the three months ended June 30, 2025 and 2024.
Previous wording
Signings increased by $362 million in the three months ended December 31, 2024, or 10%, compared to the prior-year quarter, and signings increased by $3.8 billion in the nine months ended December 31, 2024, or 43%, compared to the nine months ended December 31, 2023, driven by growth in our United States, Japan and Strategic Markets operating segments. Management uses signings as a tool to monitor the performance of the business including the business’ ability to attract new customers and sell additional scope into our existing customer base. 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
Signings increased by $72 million in the three months ended June 30, 2025, or 2%, compared to the prior-year quarter. 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 the Company’s revolving credit agreement entered into in October 2021 will be sufficient to meet our anticipated cash needs 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 cash needs 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”). 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, 2024, there has been no drawdown on the Revolving Credit Agreement.
Current wording
(“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 June 30, 2025, there has been no drawdown on the Revolving Credit Agreement.
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. The first 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 amount. The second agreement was executed in June 2022 with a separate third-party financial institution and renews automatically on its anniversary date, unless either party elects not to extend.
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 contingent on the approval of the counterparty. These agreements were first executed in June 2022 and renew automatically on their anniversary date, unless either party elects not to extend.
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 $760 million and $2.6 billion for the three and nine months ended December 31, 2024, respectively, and $846 million and $2.9 billion for the three and nine months ended December 31, 2023, respectively. The fees associated with the transfers of receivables were $8 million and $28 million for the three and nine months ended December 31, 2024, respectively, and $11 million and $39 million for the three and nine months ended December 31, 2023, 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 $0.6 billion and $0.8 billion for the three months ended June 30, 2025 and June 30, 2024, respectively. The fees associated with the transfers of receivables were $5 million and $10 million for the three months ended June 30, 2025 and June 30, 2024, respectively.
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 (the “Share Repurchase Program”). 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
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.
Previous wording
During the three months ended December 31, 2024, the Company repurchased 0.9 million shares of its common stock at an aggregate cost of $30 million under the Share Repurchase Program.
Current wording
During the three months ended June 30, 2025, the Company repurchased 1.8 million shares of its common stock at an aggregate cost of $65 million under the Share Repurchase Program. As of June 30, 2025, $141 million remained of our $300 million Share Repurchase Program authorization.
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,” “contemplate,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “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 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:
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction, including past operating results, estimates of future taxable income, the reversal of existing temporary
Current report — wording carried from elsewhere
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
Current report — wording carried from elsewhere
The program does not have a set expiration date and may be suspended, modified or discontinued at any time without prior notice.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
For the nine months ended December 31, 2024, United States revenue of $2.9 billion decreased 12 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 decreased $111 million from the prior-year period, primarily driven by lower revenue and the impact of the inclusion of workforce rebalancing charges in adjusted EBITDA in fiscal 2025.
Previous report — wording carried elsewhere
and post-Separation, to prepare for and execute the Separation, 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.
Previous report — wording carried elsewhere
The provision for income taxes for the three months ended December 31, 2024 was $43 million of expense, compared to $65 million of expense for the three months ended December 31, 2023. Our income tax expense for the
Previous report — wording carried elsewhere
three months ended December 31, 2024 and 2023 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.