Kyndryl’s first-quarter profit soars as renegotiated contracts aid margins

Kyndryl Holdings’ first-quarter profit soared more than five-fold, the company said on Monday, as the former IBM unit’s renegotiation of contracts helped improve margins on its services.

The company, formerly IBM’s infrastructure services business, has been restructuring multiple no-margin contracts it inherited from the Big Blue to generate higher profits, but at the cost of revenue growth.

Kyndryl’s net income soared to $56 million for the June quarter from a profit of $11 million in the year-ago-period, while revenue was flat at $3.74 billion.