Kyndryl Holdings, Inc. 10-K

Item 8. Financial Statements and Supplementary Data . ​ Index to Consolidated Financial Statements ​ ​ ​ Page ​ ​ Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 47 Consolidated Income Statement for the Years Ended March 31, 2026, 2025 and 2024 50 Consolidated Statement of Comprehensive Income (Loss) for the Years Ended March 31, 2026, 2025 and 2024 51 Consolidated Balance Sheet as of March 31, 2026 and 2025 52 Consolidated Statement of Cash Flows for the Years Ended March 31, 2026, 2025 and 2024 53 Consolidated Statement of Equity for the Years Ended March 31, 2026, 2025 and 2024 54 Notes to Consolidated Financial Statements 55 ​ ​ ​ ​ 46 Table of Contents Report of Independent Registered Public Accounting Firm ​ To the Board of Directors and Stockholders of Kyndryl Holdings, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheet of Kyndryl Holdings, Inc. and its subsidiaries (the “Company”) as of March 31, 2026 and 2025, and the related consolidated statements of income, of comprehensive income (loss), of equity and of cash flows for each of the three years in the period ended March 31, 2026, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2026 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of March 31, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date related to (i) the Company’s senior finance executives failing to set an appropriate tone at the top within the control environment component of the COSO framework, including a lack of transparency such that disclosure processes were impacted and lacked an appropriate complement of finance personnel with sufficient understanding of their responsibilities as disclosure committee members; (ii) the Company not designing and maintaining effective controls to ensure appropriate communication pertaining to the disclosure process between certain functions within the Company; and (iii) the Company not designing and maintaining effective controls regarding the internal investigation, escalation, and documentation of complaints made through the Company’s reporting hotline and certain other available reporting channels. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses referred to above are described in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2026 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in management’s report referred to above. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and 47 Table of Contents disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition for Certain Services As described in Notes 1 and 3 to the consolidated financial statements, the Company recorded total revenues of $15,092 million for the year ended March 31, 2026, of which a majority relates to services that are single performance obligations comprised of a series of distinct services. The Company offers services such as cloud managed services, application hosting and modernization, security and resiliency services, enterprise infrastructure services, digital workplace services, network services and distributed cloud services to support its customers through technological change. Revenue is recognized when, or as, control of a promised service transfers to a client, in an amount that reflects the consideration to which management expects to be entitled in exchange for transferring those services. If the consideration promised in a contract includes a variable amount, management estimates the amount to which it expects to be entitled using either the expected value or most likely amount method. The principal considerations for our determination that performing procedures relating to revenue recognition for certain services is a critical audit matter is a high degree of auditor effort in performing procedures and evaluating the various sources of audit evidence related to the Company’s revenue recognition. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process. These procedures also included, among others (i) evaluating the Company’s 48 Table of Contents accounting policies related to the recognition of revenue for services; (ii) testing revenue recognized for a sample of certain services revenue transactions by obtaining and inspecting source documents such as master services agreements, individual statements of work, invoices, and cash receipts; and (iii) confirming, on a sample basis, outstanding customer invoice balances as of year-end and, for confirmations not returned, obtaining and inspecting source documents, such as invoices and subsequent cash receipts. /s/ PricewaterhouseCoopers LLP New York, New York May 29, 2026 ​ We have served as the Company’s auditor since 2020. ​ ​ ​ ​ 49 Table of Contents KYNDRYL HOLDINGS, INC. CONSOLIDATED INCOME STATEMENT (In millions, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ ​ ​ Notes ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Revenues ​ 3 ​ $ 15,092 ​ $ 15,057 ​ $ 16,052 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of services ​ 3 ​ $ 11,803 ​ $ 11,914 ​ $ 13,189 Selling, general and administrative expenses ​ ​ ​ ​ 2,654 ​ ​ 2,591 ​ ​ 2,773 Workforce rebalancing charges ​ 18 ​ ​ 60 ​ ​ 114 ​ ​ 138 Transaction-related costs (benefits) ​ ​ ​ ​ 41 ​ ​ ( 125 ) ​ ​ ( 46 ) Interest expense ​ 12 ​ ​ 89 ​ ​ 100 ​ ​ 122 Other expense (income) ​ ​ ​ ​ 32 ​ ​ 27 ​ ​ 45 Total costs and expenses ​ ​ ​ $ 14,678 ​ $ 14,622 ​ $ 16,221 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before income taxes ​ ​ ​ $ 414 ​ $ 435 ​ $ ( 168 ) Provision for income taxes ​ 5 ​ $ 215 ​ $ 184 ​ $ 172 Net income (loss) ​ ​ ​ $ 198 ​ $ 252 ​ $ ( 340 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings (loss) per share ​ 6 ​ $ 0.87 ​ $ 1.09 ​ $ ( 1.48 ) Diluted earnings (loss) per share ​ ​ ​ ​ 0.85 ​ ​ 1.05 ​ ​ ( 1.48 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted-average basic shares outstanding ​ 6 ​ ​ 228.3 ​ ​ 231.5 ​ ​ 229.2 Weighted-average diluted shares outstanding ​ ​ ​ ​ 233.8 ​ ​ 239.1 ​ ​ 229.2 ​ The accompanying notes are an integral part of the financial statements. ​ ​ 50 Table of Contents KYNDRYL HOLDINGS, INC. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Dollars in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Net income (loss) ​ $ 198 ​ $ 252 ​ $ ( 340 ) Other comprehensive income (loss), before tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustments ​ ​ 127 ​ ​ ( 50 ) ​ ​ ( 36 ) Unrealized gains (losses) on net investment hedges ​ ​ ( 75 ) ​ ​ 4 ​ ​ ( 11 ) Total foreign currency translation adjustments ​ ​ 53 ​ ​ ( 46 ) ​ ​ ( 47 ) Unrealized gains (losses) on cash flow hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized gains (losses) arising during the period ​ ​ 2 ​ ​ ( 14 ) ​ ​ 22 Reclassification of (gains) losses to net income ​ ​ ( 8 ) ​ ​ 11 ​ ​ ( 21 ) Total unrealized gains (losses) on cash flow hedges ​ ​ ( 6 ) ​ ​ ( 2 ) ​ ​ 1 Retirement-related benefit plans: ​ ​ ​ ​ ​ ​ ​ ​ ​ Prior service (costs) credits ​ ​ ( 34 ) ​ ​ 2 ​ ​ ( 3 ) Net gains (losses) arising during the period ​ ​ 64 ​ ​ 17 ​ ​ ( 56 ) Curtailments and settlements ​ ​ 10 ​ ​ 7 ​ ​ 10 Amortization of prior service costs (credits) ​ ​ 2 ​ ​ — ​ ​ 1 Amortization of net (gains) losses ​ ​ 10 ​ ​ 16 ​ ​ 5 Total retirement-related benefit plans ​ ​ 53 ​ ​ 42 ​ ​ ( 42 ) Other comprehensive income (loss), before tax ​ ​ 100 ​ ​ ( 6 ) ​ ​ ( 88 ) Income tax (expense) benefit related to items of other comprehensive income (loss) ​ ​ ( 14 ) ​ ​ ( 10 ) ​ ​ 6 Other comprehensive income (loss), net of tax ​ ​ 86 ​ ​ ( 16 ) ​ ​ ( 82 ) Total comprehensive income (loss) ​ $ 284 ​ $ 236 ​ $ ( 423 ) ​ The accompanying notes are an integral part of the financial statements. ​ 51 Table of Contents KYNDRYL HOLDINGS, INC. CONSOLIDATED BALANCE SHEET (In millions, except per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ ​ ​ ​ Notes ​ ​ ​ 2026 ​ ​ ​ 2025 Assets: ​ ​ ​ ​ ​ ​ Current assets: ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ ​ ​ $ 2,623 ​ $ 1,786 Restricted cash ​ ​ ​ ​ 3 ​ ​ 3 Accounts receivable (net of allowances for credit losses of $ 7 at March 31, 2026 and $ 13 at March 31, 2025) ​ ​ ​ ​ 1,300 ​ ​ 1,345 Deferred costs (current portion) ​ 3 ​ 1,166 ​ 1,009 Prepaid expenses and other current assets ​ ​ ​ ​ 436 ​ ​ 446 Total current assets ​ ​ ​ $ 5,528 ​ $ 4,589 ​ ​ ​ ​ ​ ​ ​ ​ ​ Property and equipment, net ​ 8 ​ $ 2,517 ​ $ 2,570 Operating right-of-use assets, net ​ 9 ​ ​ 853 ​ ​ 731 Deferred costs (noncurrent portion) ​ 3 ​ ​ 1,880 ​ ​ 1,040 Deferred taxes ​ 5 ​ ​ 240 ​ ​ 204 Goodwill ​ 11 ​ ​ 786 ​ ​ 790 Intangible assets, net ​ 11 ​ ​ 165 ​ ​ 218 Pension assets ​ 17 ​ ​ 222 ​ ​ 148 Other noncurrent assets ​ ​ ​ ​ 360 ​ ​ 162 Total assets ​ ​ ​ $ 12,551 ​ $ 10,452 ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Current liabilities: ​ ​ ​ ​ ​ ​ ​ ​ Accounts payable ​ ​ ​ $ 1,346 ​ $ 1,351 Value-added tax and income tax liabilities ​ ​ ​ ​ 278 ​ ​ 256 Current portion of long-term debt and short-term debt ​ 12 ​ ​ 1,796 ​ ​ 129 Accrued compensation and benefits ​ ​ ​ 463 ​ 652 Deferred income (current portion) ​ 3 ​ 888 ​ 746 Operating lease liabilities (current portion) ​ 9 ​ 265 ​ 274 Accrued contract costs ​ ​ ​ ​ 369 ​ ​ 437 Other accrued expenses and liabilities ​ 13 ​ ​ 903 ​ ​ 454 Total current liabilities ​ ​ ​ $ 6,307 ​ $ 4,300 ​ ​ ​ ​ ​ ​ ​ ​ ​ Long-term debt ​ 12 ​ $ 2,293 ​ $ 3,042 Retirement and nonpension postretirement benefit obligations ​ 17 ​ ​ 490 ​ ​ 483 Deferred income (noncurrent portion) ​ 3 ​ ​ 390 ​ ​ 341 Operating lease liabilities (noncurrent portion) ​ 9 ​ ​ 602 ​ ​ 511 Other noncurrent liabilities ​ 13 ​ ​ 1,176 ​ ​ 443 Total liabilities ​ ​ ​ $ 11,259 ​ $ 9,121 Commitments and contingencies ​ 14 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity: ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ equity ​ 15 ​ ​ ​ ​ ​ ​ Common stock, par value $ 0.01 per share, and additional paid-in capital (shares authorized: 1,000.0 ; shares issued: March 31, 2026 – 244.4 , March 31, 2025 – 238.2 ) ​ ​ ​ $ 4,701 ​ $ 4,631 Accumulated deficit ​ ​ ​ ​ ( 1,869 ) ​ ​ ( 2,067 ) Treasury stock, at cost (shares: March 31, 2026 – 21.7 , March 31, 2025 – 7.5 ) ​ ​ ​ ​ ( 582 ) ​ ​ ( 184 ) Accumulated other comprehensive income (loss) ​ ​ ​ ​ ( 1,074 ) ​ ​ ( 1,160 ) Total stockholders’ equity before non-controlling interests ​ ​ ​ $ 1,175 ​ $ 1,219 Non-controlling interests ​ ​ ​ ​ 117 ​ ​ 113 Total equity ​ ​ ​ $ 1,293 ​ $ 1,331 Total liabilities and equity ​ ​ ​ $ 12,551 ​ $ 10,452 ​ The accompanying notes are an integral part of the financial statements. ​ 52 Table of Contents KYNDRYL HOLDINGS, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 198 ​ $ 252 ​ $ ( 340 ) Adjustments to reconcile net income to cash provided by operating activities: ​ ​ ​ ​ ​ ​ Depreciation and amortization: ​ ​ ​ ​ ​ ​ Depreciation of property, equipment and capitalized software ​ ​ 762 ​ ​ 660 ​ ​ 834 Depreciation of right-of-use assets ​ ​ 289 ​ ​ 327 ​ ​ 319 Amortization of transition costs and prepaid software ​ 1,239 ​ 1,278 ​ 1,256 Amortization of capitalized contract costs ​ ​ 458 ​ ​ 420 ​ ​ 531 Amortization of acquisition-related intangible assets ​ 27 ​ 30 ​ 30 Stock-based compensation ​ ​ 64 ​ ​ 100 ​ ​ 95 Deferred taxes ​ ​ ( 24 ) ​ ​ ( 1 ) ​ ​ ( 13 ) Net (gain) loss on asset sales and other ​ ​ 115 ​ ​ ( 152 ) ​ ​ 43 Change in operating assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ Right-of-use assets and liabilities (excluding depreciation) ​ ​ ( 330 ) ​ ​ ( 314 ) ​ ​ ( 335 ) Workforce rebalancing liabilities ​ ​ ( 19 ) ​ ​ ( 25 ) ​ ​ ( 38 ) Current accounts receivable ​ 84 ​ 284 ​ ( 105 ) Lease and other receivables ​ ​ ( 212 ) ​ ​ 5 ​ ​ 116 Accounts payable ​ ​ ( 93 ) ​ ​ ( 89 ) ​ ​ ( 305 ) Taxes ​ ​ 107 ​ ​ ( 1 ) ​ ​ ( 2 ) Deferred transition costs and prepaid software (excluding amortization) ​ ​ ( 2,189 ) ​ ​ ( 1,338 ) ​ ​ ( 1,154 ) Capitalized contract costs (excluding amortization) ​ ​ ( 444 ) ​ ​ ( 425 ) ​ ​ ( 415 ) Other assets and other liabilities ​ 916 ​ ( 71 ) ​ ( 63 ) Net cash provided by operating activities ​ $ 948 ​ $ 942 ​ $ 454 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ ​ ​ ​ Capital expenditures ​ $ ( 608 ) ​ $ ( 605 ) ​ $ ( 651 ) Proceeds from disposition of property and equipment ​ 65 ​ 83 ​ 138 Acquisitions and divestitures, net of cash acquired ​ ​ 1 ​ ​ 139 ​ ​ — Other investing activities, net ​ ​ ( 19 ) ​ ​ ( 20 ) ​ ​ ( 40 ) Net cash used in investing activities ​ $ ( 561 ) ​ $ ( 404 ) ​ $ ( 553 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ ​ ​ Debt repayments ​ $ ( 146 ) ​ $ ( 148 ) ​ $ ( 644 ) Proceeds from borrowings under the revolving credit facility ​ ​ 1,000 ​ ​ — ​ ​ — Proceeds from issuance of debt, net of debt issuance costs ​ ​ — ​ ​ — ​ ​ 494 Common stock repurchases ​ ​ ( 304 ) ​ ​ ( 93 ) ​ ​ — Common stock repurchases for tax withholdings ​ ​ ( 94 ) ​ ​ ( 45 ) ​ ​ ( 22 ) Other financing activities, net ​ ​ 1 ​ ​ — ​ ​ 2 Net cash provided by (used in) financing activities ​ $ 457 ​ $ ( 286 ) ​ $ ( 170 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Effect of exchange rate changes on cash, cash equivalents and restricted cash ​ $ ( 9 ) ​ $ ( 16 ) ​ $ ( 37 ) Net change in cash, cash equivalents and restricted cash ​ $ 836 ​ $ 235 ​ $ ( 306 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash, cash equivalents and restricted cash at beginning of period ​ $ 1,789 ​ $ 1,554 ​ $ 1,860 Cash, cash equivalents and restricted cash at end of period ​ $ 2,626 ​ $ 1,789 ​ $ 1,554 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Supplemental data: ​ ​ ​ ​ ​ ​ ​ ​ ​ Income taxes paid, net of refunds received ​ $ 151 ​ $ 149 ​ $ 191 Interest paid on debt ​ $ 115 ​ $ 119 ​ $ 118 ​ The accompanying notes are an integral part of the financial statements. 53 Table of Contents KYNDRYL HOLDINGS, INC. CONSOLIDATED STATEMENT OF EQUITY (In millions) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Stock and ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ ​ ​ Non- ​ ​ ​ ​ ​ Paid-In Capital ​ Comprehensive ​ Treasury ​ Accumulated ​ Controlling ​ Total ​ ​ Shares ​ Amount ​ Income (Loss) ​ Stock ​ Deficit ​ Interests ​ Equity Equity – March 31, 2023 ​ ​ 227.7 ​ $ 4,428 ​ $ ( 1,062 ) ​ $ ( 23 ) ​ $ ( 1,978 ) ​ $ 97 ​ $ 1,462 Net income (loss) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 340 ) ​ ​ ​ ​ ​ ( 340 ) Other comprehensive income (loss), net of tax ​ ​ ​ ​ ​ ​ ​ ​ ( 82 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 82 ) Activity related to employee stock plans ​ ​ 4.1 ​ ​ 95 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 95 Purchases of treasury stock ​ ​ ( 1.4 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 22 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 22 ) Changes in non-controlling interests ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 10 ​ ​ 10 Equity – March 31, 2024 ​ ​ 230.4 ​ $ 4,524 ​ $ ( 1,145 ) ​ $ ( 45 ) ​ $ ( 2,319 ) ​ $ 107 ​ $ 1,122 Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 252 ​ ​ ​ ​ ​ 252 Other comprehensive income (loss), net of tax ​ ​ ​ ​ ​ ​ ​ ​ ( 16 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ( 16 ) Activity related to employee stock plans ​ ​ 4.5 ​ ​ 107 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 107 Purchases of treasury stock ​ ​ ( 4.2 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 139 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 139 ) Changes in non-controlling interests ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 6 ​ ​ 6 Equity – March 31, 2025 ​ ​ 230.6 ​ $ 4,631 ​ $ ( 1,160 ) ​ $ ( 184 ) ​ $ ( 2,067 ) ​ $ 113 ​ $ 1,331 Net income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 198 ​ ​ ​ ​ ​ 198 Other comprehensive income (loss), net of tax ​ ​ ​ ​ ​ ​ ​ ​ 86 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 86 Activity related to employee stock plans ​ ​ 6.3 ​ ​ 70 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 70 Purchases of treasury stock ​ ​ ( 14.2 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 398 ) ​ ​ ​ ​ ​ ​ ​ ​ ( 398 ) Changes in non-controlling interests ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 5 ​ ​ 5 Equity – March 31, 2026 ​ ​ 222.7 ​ $ 4,701 ​ $ ( 1,074 ) ​ $ ( 582 ) ​ $ ( 1,869 ) ​ $ 117 ​ $ 1,293 ​ The accompanying notes are an integral part of the financial statements. ​ ​ 54 Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. SIGNIFICANT ACCOUNTING POLICIES Description of Business Kyndryl Holdings, Inc. (“we”, “the Company” or “Kyndryl”) is a leading provider of mission-critical enterprise technology services, offering advisory, implementation and managed service capabilities to thousands of customers in more than 60 countries. As the world’s largest IT infrastructure services provider, the Company designs, builds, manages and modernizes the complex information systems that the world depends on every day. Our purpose is to design, build and manage secure and responsive private, public and multi-cloud environments to serve our customers’ needs and accelerate their digital transformations. We offer services across a number of areas of expertise, such as cloud services, core enterprise services, applications, data and artificial intelligence services, digital workplace services, security and resiliency services and network and edge services as we continue to support our customers through technological change. Our services enable us to modernize and manage cloud, on-premises and hybrid IT environments as “one” for our customers, enabling them to scale seamlessly. To deliver these services, we rely on our global team of skilled practitioners. Kyndryl was formed in November 2021 from a spin-off (the “Separation,” the “Spin-off” or “spin”) from International Business Machines Corporation (“IBM” or “former Parent”) of the infrastructure services unit of IBM’s Global Technology Services segment. Basis of Presentation We prepare our consolidated financial statements in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”), which requires us to make estimates and assumptions that impact the amounts reported and disclosed in our consolidated financial statements and the accompanying notes. We prepared these estimates based on the most current and best available information, but actual results could differ materially from these estimates and assumptions. Principles of Consolidation All significant transactions and intercompany accounts between Kyndryl entities were eliminated. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain items have been recast to conform to current-period presentation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts that are reported in the consolidated financial statements and accompanying disclosures. Estimates are used in determining the following, among others: revenue, costs to complete service contracts, income taxes, pension assumptions, valuation of assets including goodwill and intangible assets, the depreciable and amortizable lives of long-lived assets, loss contingencies, allowance for credit losses and deferred transition costs. Actual results may be different from these estimates. Revenue The Company accounts for a contract with a client when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is recognized when, or as, control of a promised service or product transfers to a client, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or 55 Table of Contents services. If the consideration promised in a contract includes a variable amount, the Company estimates the amount to which it expects to be entitled using either the expected value or most likely amount method. The Company’s contracts may include terms that could cause variability in the transaction price, including, for example, rebates, volume discounts, service-level penalties and performance bonuses or other forms of variable consideration. In certain rare circumstances, if we grant the customer the right to return a product and receive a full or partial credit or refund of any consideration paid, the Company (i) recognizes revenue for the transferred products in the amount of consideration to which it expects to be entitled, (ii) records a refund liability and (iii) recognizes an asset for its right to recover products from customers on settling the refund liability. The Company only includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company may not be able to reliably estimate variable consideration in certain long-term arrangements due to uncertainties that are not expected to be resolved for a long period of time or when the Company’s experience with similar types of contracts is limited. Changes in estimates of variable consideration are included in Note 3 – Revenue Recognition. The Company’s standard billing terms are that payment is due upon receipt of invoice, payable within 30 days . Invoices are generally issued as services are rendered and/or as control transfers, either at monthly or quarterly intervals or upon achievement of contractual milestones. In some services contracts, the Company bills the client prior to recognizing revenue from performing the services. In these cases, deferred income is presented in the Consolidated Balance Sheet. In other services contracts, the Company performs the services prior to billing the client. When the Company performs services prior to billing the client, the right to consideration is typically subject to milestone completion or client acceptance, and the amount is recorded as a contract asset. Contract assets are generally classified as current and are recorded on a net basis with deferred income (i.e., contract liabilities) at the contract level. The Company’s rights to consideration are presented separately depending on whether those rights are conditional or unconditional. Conditional contract assets are included in Prepaid expenses and other current assets in the Consolidated Balance Sheet. Unconditional contract assets (“unbilled accounts receivable”) are included in Accounts receivable and Other noncurrent assets in the Consolidated Balance Sheet. Refer to Note 3 – Revenue Recognition for contract assets for the periods presented. Additionally, in determining the transaction price, the Company would adjust the promised amount of consideration for the effects of the time value of money if the billing terms are not standard and the timing of payments agreed to by the parties to the contract provide the client or the Company with a significant benefit of financing, in which case the contract contains a significant financing component. As a practical expedient, the Company does not account for significant financing components if the period between when the Company transfers the promised product or service to the client and when the client pays for that product or service will be one year or less. The Company may include subcontractor services or original equipment manufacturer (OEM) hardware and/or OEM software components in certain integrated services arrangements. In these types of arrangements, revenue from sales of OEM hardware and/or OEM software components or services is recorded net of costs when the Company is acting as an agent between the client and the vendor and gross when the Company is the principal for the transaction. To determine whether the Company is an agent or principal, the Company considers whether it obtains control of the products or services before they are transferred to the customer. In making this evaluation, several factors are considered, most notably whether the Company has primary responsibility for fulfillment to the client, as well as inventory risk and pricing discretion. The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. Performance Obligations The Company’s capabilities as an infrastructure services company include offerings that often encompass multiple types of services and may integrate various OEM hardware and/or OEM software components. When an arrangement contains multiple separate performance obligations, revenue follows the specific revenue recognition policies for each performance obligation, depending on the type of offering. The Company determines if the products or 56 Table of Contents services are distinct and allocates the consideration to each separate performance obligation on a relative standalone selling price basis. When products and services are not distinct, the Company determines an appropriate measure of progress based on the nature of its overall promise for the single performance obligation. The revenue policies below are applied to each performance obligation, as applicable. Standalone Selling Price The Company allocates the transaction price to each performance obligation on a relative standalone selling price basis. The standalone selling price (SSP) is the price at which the Company would sell a promised product or service separately to a client. The Company establishes SSP based on management’s estimated selling price or observable prices of products or services sold separately in comparable circumstances to similar clients. For OEM hardware and/or OEM software components, the Company is able to establish SSP based on the cost from the vendor. The Company reassesses SSP ranges on a periodic basis or when facts and circumstances change. In certain instances, the Company may not be able to establish an SSP range based on observable prices and the Company estimates SSP. The Company estimates SSP by considering multiple factors including, but not limited to, overall market conditions, including geographic or regional specific factors, competitive positioning, competitor actions, internal costs, profit objectives and pricing practices. Estimating SSP is a formal process that includes review and approval by the Company’s management. Lessor Revenue Our service contracts may contain embedded leases for assets used to fulfill our obligations. A contract contains an embedded lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Our embedded leases are recognized as either sales-type or operating leases. For sales-type leases, revenue and cost are recognized upon commencement of the lease in Revenue and Cost of services on the Consolidated Income Statement, respectively. Lease income from operating leases is recognized straight-line over the lease term and recorded as Revenue on the Consolidated Income Statement. Where a contract contains an embedded lease, the contract’s transaction price is allocated to the contract performance obligations and the lease component based upon the relative standalone selling price. Nature of Products and Services The Company delivers transformation and secure cloud services capabilities, insights and depth of expertise to modernize and manage IT environments based on its customers’ needs. The Company offers services such as cloud managed services, application hosting and modernization, security and resiliency services, enterprise infrastructure services, digital workplace services, network services and distributed cloud services to support its customers through technological change. Many of these services can be delivered entirely or partially through cloud or as-a-service delivery models. The Company’s services are provided on a time-and-material basis, as a fixed-price contract or as a fixed-price-per-measure-of-output contract, and the contract terms range from less than one year to over 10 years . The Company typically satisfies the performance obligation and recognizes revenue over time in services arrangements because the client simultaneously receives and consumes the benefits provided as the Company performs the services. In outsourcing, other managed services, application management and other cloud-based services arrangements, the Company determines whether the services performed during the initial phases of the arrangement, such as setup activities, are distinct. In most cases, the arrangement is a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). The Company applies a measure of progress (typically time-based) to any fixed consideration and allocates variable consideration to the distinct periods of service based on usage. As a result, revenue is generally recognized over the period the services are provided on a usage basis. This results in revenue recognition that corresponds with the value to the client of the services transferred to date relative to the remaining services promised. Revenue from time-and-material contracts is recognized on an output basis as labor hours are delivered and/or direct expenses are incurred. Revenue from as-a-service type contracts is recognized either on a straight-line basis or on a usage basis, depending on the terms of the arrangement (such as whether the Company is standing ready to perform or 57 Table of Contents whether the contract has usage-based metrics). If an as-a-service contract includes setup activities, those promises in the arrangement are evaluated to determine if they are distinct. In design and build arrangements, revenue is recognized based on progress toward completion of the performance obligation using a cost-to-cost measure of progress (e.g., labor costs incurred to date as a percentage of the total estimated labor costs to fulfill the contract). The estimation of cost at completion is complex, subject to many variables and requires significant judgment. Changes in original estimates are reflected in revenue on a cumulative catch-up basis in the period in which the circumstances that gave rise to the revision become known by the Company. Refer to Note 3 – Revenue Recognition for the amount of revenue recognized in the reporting period on a cumulative catch-up basis (i.e., from performance obligations satisfied, or partially satisfied, in previous periods). The Company performs ongoing profitability analyses of its design and build services contracts accounted for using a cost-to-cost measure of progress to determine whether the latest estimates of revenues, costs and profits require updating. If at any time these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately. For other types of services contracts, any losses are recorded as incurred. The Company’s services offerings may include the integration and/or sale of OEM hardware and/or software components. Contracts that include hardware and/or software components are evaluated to determine if they are separate performance obligations as discussed in “Performance Obligations” above. For distinct OEM hardware sales, revenue is recognized when control has transferred to the customer, which typically occurs when the hardware has been shipped to the client, risk of loss has transferred to the client and the Company has a present right to payment for the hardware. Cost of Services Recurring operating costs for services contracts are recognized as incurred. Certain eligible, nonrecurring costs (i.e., setup costs) incurred in the initial phases of outsourcing contracts and other cloud-based services contracts, are capitalized when the costs relate directly to the contract, the costs generate or enhance resources of the Company that will be used in satisfying the performance obligation in the future and the costs are expected to be recovered. These costs consist of transition and setup costs related to the installation of systems and processes and other deferred fulfillment costs, including deferred software cost (e.g., committed multi-year, on-premises software purchases). Deferred costs to fulfill contracts also include prepaid assets used in services contracts (e.g., prepaid hardware maintenance). Capitalized costs are amortized on a straight-line basis over the expected period of benefit, which approximates the pattern of transfer to the client of the services to which the asset relates and includes anticipated contract renewals or extensions. Additionally, fixed assets associated with these contracts are capitalized and depreciated on a straight-line basis over the expected useful life of the asset and recorded in cost of sales. If an asset is contract-specific and cannot be repurposed, then the depreciation period is the shorter of the useful life of the asset or the contract term. The Company performs periodic reviews to assess the recoverability of deferred contract transition and setup costs. If the carrying amount is deemed not recoverable, an impairment loss is recognized. Refer to Note 3 – Revenue Recognition for the deferred costs to fulfill contracts for the periods presented. In situations in which an outsourcing contract is terminated, the terms of the contract may require the client to reimburse the Company for the recovery of unbilled accounts receivable, unamortized deferred contract costs and additional costs incurred by the Company to transition the services. Incremental Costs of Obtaining a Contract Incremental costs of obtaining a contract (e.g., sales commissions) are capitalized and amortized on a straight-line basis, which approximates the pattern that the assets’ economic benefits are expected to be consumed, over the expected customer relationship period if the Company expects to recover those costs. The expected customer relationship period is determined based on the average customer relationship period, including expected renewals, for each offering type and ranges from three to six years . Expected renewal periods are only included in the expected customer relationship period if commission amounts paid upon renewal are not commensurate with amounts paid on the initial contract. Incremental costs of obtaining a contract include only those costs the Company incurs to obtain a contract that it would not have incurred if the contract had not been obtained. The Company has determined that certain 58 Table of Contents commissions programs meet the requirements to be capitalized. For contracts shorter than one year, the Company has elected the practical expedient to recognize sales commissions as incurred. Additionally, some commission programs are not subject to capitalization as the revenue for services is received over time and the commission expense is paid and recognized as the related revenue is recognized. Refer to Note 3 – Revenue Recognition for capitalized costs to obtain contracts for the periods presented. Expense and Other (Income) Selling, General and Administrative Expenses Selling, general and administrative expense (“SG&A”) is charged to income as incurred, except for certain sales commissions, which are capitalized and amortized. For further information regarding capitalizing sales commissions, see “Incremental Costs of Obtaining a Contract” above. Expenses of promoting and selling services are classified as selling expense and, in addition to sales commissions, include such items as compensation, advertising and travel. General and administrative expense includes such items as compensation, legal costs, office supplies, non-income taxes, insurance and office rental. In addition, general and administrative expense includes other operating items such as allowance for credit losses, amortization of certain intangible assets and research, development and engineering (“RD&E”) costs. Total RD&E costs were $ 57 million, $ 49 million, and $ 58 million for the years ended March 31, 2026, 2025 and 2024, respectively. Advertising and promotional costs are expensed as incurred. Advertising and promotional expense, which includes media, agency and promotional expense directly incurred by the Company was $ 69 million, $ 83 million, and $ 115 million for the years ended March 31, 2026, 2025 and 2024, respectively. Advertising and promotional costs are recorded in SG&A in the Consolidated Income Statement. Other Expense Other expense primarily consists of (income) and expense related to certain components of retirement-related costs, including interest costs, expected return on plan assets, amortization of prior service costs (credits), curtailments and settlements and other net periodic benefit costs. Also included are gains and losses from foreign currency transactions. Defined Benefit Pension and Nonpension Postretirement Benefit Plans For defined benefit pension plans, the benefit obligation is the projected benefit obligation (PBO), which represents the actuarial present value of benefits expected to be paid upon retirement based on employee services already rendered and estimated future compensation levels. For nonpension postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation (APBO), which represents the actuarial present value of postretirement benefits attributed to employee services already rendered. The fair value of plan assets represents the current market value of assets held for the benefit of participants. For co-sponsored plans, the fair value of plan assets based on Company contributions, distributions and market returns and the benefit obligation attributed to employees of the Company are allocated to Kyndryl. Overfunded plans, in which the fair value of plan assets exceeds the benefit obligation, are aggregated, and recorded in Pension assets in the Consolidated Balance Sheet. Underfunded plans, in which the benefit obligation exceeds the fair value of plan assets, are aggregated and the noncurrent portion of this excess is recorded in Retirement and nonpension postretirement benefit obligations in the Consolidated Balance Sheet. The current portion of the benefit obligation in excess of the fair value of plan assets represents the actuarial present value of benefits payable in the next twelve months, measured on a plan-by-plan basis. The current portion of this obligation is recorded in Accrued compensation and benefits in the Consolidated Balance Sheet. Net periodic benefit cost of defined benefit pension and nonpension postretirement benefit plans is recorded in the Consolidated Income Statement and includes service cost, interest cost, expected return on plan assets, amortization of prior service costs (credits) and actuarial (gains) losses previously recognized as a component of other comprehensive income (loss) (“OCI”). The service cost component of net benefit cost is recorded in Cost of services and SG&A in the Consolidated Income Statement (unless eligible for capitalization) based on the employees’ respective functions. The 59 Table of Contents other components of net benefit cost are presented separately from service cost within Other expense (income) in the Consolidated Income Statement. Actuarial (gains) losses and prior service costs (credits) are recognized as a component of OCI in the Consolidated Statement of Comprehensive Income (Loss) as they arise. Those actuarial (gains) losses and prior service costs (credits) are subsequently recognized as a component of net periodic benefit cost pursuant to the recognition and amortization provisions of applicable accounting guidance. Actuarial (gains) losses arise as a result of differences between actual experience and assumptions or as a result of changes in actuarial assumptions. Prior service costs (credits) represent the cost of benefit changes attributable to prior service granted in plan amendments. The measurement of benefit obligations and net periodic benefit cost is based on estimates and assumptions approved by the Company’s management. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain assumptions, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates. The Company participates in non-U.S. multi-employer pension plans and makes required contributions to those plans, which are recorded in Cost of services and SG&A in the Consolidated Income Statement based on the employees’ respective functions. Defined Contribution Plans Prior to the Separation, the former Parent offered various defined contribution plans for U.S. and non-U.S. employees. In September 2021, in preparation for the Separation, Kyndryl established standalone defined contribution plans, and employees identified as Kyndryl employees were enrolled into these plans. Contribution expense associated with employer matching benefits is recorded when the employee renders service to the Company. The charge is recorded in Cost of services and SG&A in the Consolidated Income Statement based on the employees’ respective functions. Stock-Based Compensation Stock-based compensation expense represents the cost related to stock-based awards granted to employees under Kyndryl’s stock-based compensation plan (the “Kyndryl Plan”). The Company establishes stock-based compensation values at the grant date, based on the estimated fair value of the award and recognizes the cost on a straight-line basis (net of actual forfeitures) over the requisite employee service period. Kyndryl grants the Company’s employees Restricted Stock Units (RSUs), market-conditioned stock units, performance-conditioned stock units and stock options. RSUs are stock units granted to employees that entitle the holder to shares of Kyndryl common stock as the award vests, typically over a one - to four-year period. Market-conditioned stock units are granted to employees with vesting conditions based on the Company’s achievement of a market condition and are cliff vested at the end of the three-year service period. Performance-conditioned stock units are granted to employees with vesting conditions based on the attainment of operational targets (e.g., signings and free cash flows) and are cliff vested at the end of the three-year performance period. Certain performance-conditioned stock units are also subject to a market condition such that the actual number of shares that vest at the end of the respective three-year performance period is determined based on the Company’s achievement of operational targets and market condition over the same three-year performance period. Stock options are vested over a one - to four-year period and have a ten-year contractual term. As of March 31, 2026, 47.9 million shares of common stock have been approved to be granted to employees under the Kyndryl Plan. Dividend equivalents are not paid on the stock-based awards described above. The fair value of the RSUs is determined on the grant date based on Kyndryl’s stock price, adjusted for the exclusion of dividend equivalents where applicable. The fair value of market-conditioned stock units is determined on the date of grant using a Monte Carlo simulation model which estimates the probability of satisfying market conditions. The fair value of the performance-conditioned stock units is determined on the grant date based on Kyndryl’s stock price and subsequently adjusted based upon the probability of attainment. For awards with both a performance and a market condition, the fair value of each stock unit is determined on the date of grant using a Monte-Carlo simulation model, and subsequently adjusted based upon the probability of attainment of operational targets. The fair value of stock options is determined on the grant date using a Black-Scholes model. Stock-based compensation cost is recorded in Cost of services and SG&A in the Consolidated Income Statement based upon the employees’ respective functions. 60 Table of Contents The Company records deferred tax assets for awards that result in tax deductions in the consolidated financial statements calculated based on the amount of compensation cost recognized and the relevant statutory tax rates. The differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the income tax return are recorded as a benefit or expense to the provision for income taxes in the Consolidated Income Statement. Derivative Financial Instruments Derivative financial instruments that qualify for hedge accounting are designated as either cash flow hedges or net investment hedges. The Company may enter into derivative contracts that economically hedge certain risks, even when hedge accounting does not apply, or the Company elects not to apply hedge accounting. The Company does not use derivative financial instruments for trading or speculative purposes. Derivatives are recognized in the Consolidated Balance Sheet at fair value on a gross basis as either assets or liabilities and classified as current or noncurrent based upon the timing of the instrument’s expected cash flows. Changes in the fair value of derivatives designated as cash flow hedges are recorded, net of applicable taxes, in OCI and subsequently reclassified into the same income statement line item as the hedged exposure when the underlying hedged item is recognized in earnings. Derivatives designated as net investment hedges are accounted for using the spot method, with changes in the fair value of the derivatives attributable to changes in spot rates recorded within foreign currency translation adjustments (“CTA”) as a component of other comprehensive income (loss) and remaining there until the hedged net investments are sold or substantially liquidated. The changes in the fair value of the derivatives that are attributable to changes in the difference between the forward rate and spot rate are excluded from the assessment of hedge effectiveness. The changes in fair value that are attributable to the excluded components are initially recorded in CTA and then recognized in interest expense on the Consolidated Income Statement over the life of the derivative instruments. Changes in fair value of derivatives not designated as hedges are reported in other expense in the Consolidated Income Statement. See Note 7 – Financial Assets and Liabilities for further information. The cash flows associated with derivatives designated as cash flow hedges are reported as cash flows from operating activities in the Consolidated Statement of Cash Flows. Cash flows from derivatives designated as net investment hedges are reported as cash flows from investing activities in the Consolidated Statement of Cash Flows, except for cash flows from the periodic interest settlements of cross-currency interest rate swaps designated as net investment hedges, which are reported as cash flows from operating activities in the Consolidated Statement of Cash Flows. Cash flows from derivatives not designated as hedges are reported as cash flows from investing activities in the Consolidated Statement of Cash Flows. Translation of Non-U.S. Currency Amounts Assets and liabilities of non-U.S. subsidiaries that have a local functional currency are translated to U.S. dollars at year-end exchange rates. Translation adjustments are recorded in OCI. Income and expense items are translated at weighted-average rates of exchange prevailing during the year. Property and equipment, deferred income and other non-monetary assets and liabilities of non-U.S. subsidiaries and branches that operate in U.S. dollars are translated at the approximate exchange rates prevailing when the Company acquired the assets or liabilities. All other assets and liabilities denominated in a currency other than U.S. dollars are translated at year-end exchange rates with the transaction gain or loss recognized in other expense. Income and expense items are translated at the weighted-average rates of exchange prevailing during the year. These translation gains and losses are included in net income for the period in which exchange rates change. Cash and Cash Equivalents All highly liquid investments with an original maturity of three months or less on the date of purchase are considered to be cash equivalents. 61 Table of Contents Accounts Receivable and Allowance for Current Expected Credit Losses The Company classifies the right to consideration in exchange for products or services transferred to a client as a receivable. Receivables are recorded concurrent with billing and delivery of a service to customers. An allowance for uncollectible receivables and contract assets, if needed, is estimated based on specific customer situations, current and future expected economic conditions and past experiences of losses, as well as an assessment of potential recoverability of the balance due. Receivable losses are charged against the allowance in the period in which the receivable is deemed uncollectible. Subsequent recoveries, if any, are credited to the allowance. Write-offs of receivables and associated reserves occur to the extent that the customer is no longer in operation and/or there is no reasonable expectation of additional collections or repossession. Transfers of Financial Assets The Company has entered into arrangements with third-party financial institutions to sell certain financial assets (primarily accounts 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 accounts 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. At this time, the agreement will expire in April 2027. 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. The net proceeds from these arrangements are reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows. Gross proceeds from receivables sold to third parties were $ 2.4 billion, $ 3.2 billion, and $ 3.6 billion for the years ended March 31, 2026, 2025 and 2024, respectively. Of the receivables sold and derecognized from the Consolidated Balance Sheet, $ 0.9 billion, $ 1.0 billion and $ 1.1 billion remained uncollected from customers at March 31, 2026, 2025 and 2024, respectively. The fees associated with the transfers of receivables were $ 18 million, $ 38 million, and $ 49 million for the years ended March 31, 2026, 2025 and 2024, respectively. Fair Value Measurement In determining the fair value of its financial instruments, the Company uses methods and assumptions that are based on market conditions and risks existing at each balance sheet date. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company classifies certain assets and liabilities based on the following fair value hierarchy: ● Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date; ● Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and ● Level 3 — Unobservable inputs for the asset or liability. The level of an asset or liability within the fair value hierarchy is determined based on the lowest level of any input that is significant to the fair value measurement. The determination of fair value considers various factors 62 Table of Contents including yield curves and time value underlying the financial instruments. For derivatives and debt securities, the Company uses a discounted cash flow analysis using discount rates commensurate with the duration of the instrument. In determining the fair value of financial instruments, the Company considers certain market valuation adjustments to the “base valuations” using the methodologies described below for several parameters that market participants would consider in determining fair value: ● Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument. ● Credit risk adjustments are applied to reflect the Company’s own credit risk when valuing liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company’s credit risk as observed in the credit default swap market. Certain non-financial assets such as property, plant and equipment, operating right-of-use assets, land, goodwill and intangible assets are recorded at fair value or at cost, as appropriate, in the period they are initially recognized, and such balances may be adjusted in subsequent periods if an event occurs or circumstances change that indicate that the asset may be impaired. The impairment models used for non-financial assets depend on the type of asset. The fair value measurements, in such instances, would be classified in Level 3 of the fair value hierarchy. Supplier Financing Program 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 at March 31, 2026 and March 31, 2025 were immaterial. Leases When entering into a procurement contract, the Company determines whether an arrangement contains a lease at its inception. As part of that evaluation, the Company considers whether there is an implicitly or explicitly identified asset in the arrangement and whether the Company, as the lessee, has the right to control the use of that asset. Leases are classified as either finance leases or operating leases. The Company recognized right-of-use (“ROU”) assets and associated lease liabilities in the Consolidated Balance Sheet for leases with a term of more than twelve months when a majority percentage of utilization was attributed to the Company. As an implicit rate of return is not readily determinable in transactions where the Company is the lessee, an incremental borrowing rate is used in determining the present value of lease payments, calculated based on information available at the lease commencement date. The ROU asset equals the lease liability adjusted for any initial direct costs, prepaid rent and lease incentives. The Company’s variable lease payments generally relate to payments tied to various indexes, non-lease components and payments above a contractual minimum fixed amount. Operating leases are included in Operating right-of-use assets net and Operating lease liabilities (current and noncurrent) in the Consolidated Balance Sheet. Finance leases are included in Property and equipment, Current portion of long-term debt and short-term debt, and Long-term debt in the Consolidated Balance Sheet. The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company made a policy election to not recognize leases with a lease term of twelve months or less in the Consolidated Balance Sheet. 63 Table of Contents For all asset classes, the Company has elected the lessee practical expedient to combine lease and non-lease components (e.g., maintenance services) and account for the combined unit as a single lease component. A significant portion of the Company’s lease portfolio is real estate leases, which are mainly accounted for as operating leases and are primarily used for corporate offices and data centers. The average term of the real estate leases is approximately five years . The Company also has equipment leases, such as for IT equipment and vehicles, which have lease terms that range from two to five years . For certain of these operating and finance leases, the Company applies a portfolio approach to account for the lease assets and lease liabilities. Intangible Assets Including Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets. The primary drivers that generate goodwill are the value of synergies between the acquired entities and the Company and the acquired assembled workforce, neither of which qualifies as a separately identifiable intangible asset. Goodwill recorded in an acquisition is assigned to applicable reporting units based on expected revenues or expected cash flows. Goodwill inherited from the former Parent pre-Separation represents the historical goodwill balances in the former Parent’s managed infrastructure services business arising from acquisitions specific to the Company. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their useful lives, which approximates the pattern that the assets’ economic benefits are expected to be consumed over time. Amortization of completed technology is recorded in cost of services, and amortization of all other intangible assets is recorded in SG&A in the Consolidated Income Statement. All costs related to internally developed computer software during the preliminary project stage and post-implementation operation stage are expensed as incurred. Costs incurred during application development stage are capitalized and included in intangibles and amortized over the estimated useful life of the software. Impairment Long-lived assets, other than goodwill, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The impairment test is based on undiscounted cash flows and, if impaired, the asset is written down to fair value based on either discounted cash flows or appraised values. Goodwill is tested for impairment at least annually and whenever changes in circumstances indicate an impairment may exist. The goodwill impairment test is performed at the reporting unit level, which aligns with our operating segments. Impairment charges related to long-lived assets, intangible assets and goodwill, if any, are recorded as impairment expense in the Consolidated Income Statement. Transaction-Related Costs 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. Workforce Rebalancing and Site-Rationalization Charges The Company has incurred workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets and charges related to lease terminations. We record a liability for employee termination benefits either when it is probable that an employee is entitled to it and the amount of the benefits can be reasonably estimated or when management has communicated the termination plan to employees. Workforce rebalancing charges are recorded as a separate line on the Consolidated Income Statement. Charges related to ceasing to use leased assets and owned fixed assets and charges related to lease terminations are recognized as cost of services or selling, general and administrative expenses based on our classification policy for each category. Refer to Note 18 – Workforce Rebalancing and Site-Rationalization Charges for details of this program. 64 Table of Contents Property and Equipment Property and equipment are recorded at cost, or in the case of acquired property and equipment, at fair value at the date of the acquisition. Expenditures for repairs and maintenance costs are expensed as incurred, whereas expenditures that extend the life or increase the functionality of the asset are capitalized as additions to property and equipment. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the determination of net income or loss. In March 2024, the Company completed its assessment of the useful lives of its information technology equipment. Based on our usage experience and data analysis, the Company determined it should increase the estimated useful lives of its information technology equipment from five to six years . This change in accounting estimate became effective on April 1, 2024. Based on the carrying amount of information technology equipment included in property and equipment, net as of March 31, 2024, the effect of this change in estimate was a reduction in depreciation expense and an improvement of income before income taxes of approximately $ 180 million, or $ 0.80 before income taxes per basic share and $ 0.77 before income taxes per diluted share, for the year ended March 31, 2025. We compute depreciation expense on a straight-line method over the estimated useful lives of the assets as follows: ​ ​ ​ ​ Classification ​ ​ ​ Estimated Useful Life Buildings ​ 30 to 50 years Land improvements ​ 20 years Leasehold improvements (1) ​ Estimated useful life or term of lease Office and other equipment ​ 2 to 20 years Information technology equipment (acquired as used) (2) ​ 3 to 4 years Information technology equipment (acquired as new) (3) ​ 6 years (1) Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease term, rarely exceeding 10 years . (2) Extended from one and a half to three years to three to four years effective April 1, 2025. The impact of this change was not material. (3) Extended from five to six years effective April 1, 2024. Environmental The costs of internal environmental protection programs that are preventative in nature are expensed as incurred. When a cleanup program becomes likely and it is probable that the Company will incur cleanup costs and those costs can be reasonably estimated, the Company accrues remediation costs for known environmental liabilities. Income Taxes Income tax provisions are calculated based on Kyndryl’s operating footprint, as well as tax return elections and assertions. Liabilities related to unrecognized tax benefits for which the Company is liable are reported within the Consolidated Balance Sheet based upon tax authorities’ ability to assert the Company may be the primary obligor for historical taxes, among other factors. Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the tax effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws. U.S. tax reform introduced Global Intangible Low-Taxed Income (“GILTI”), which subjects a U.S. shareholder to current tax on income earned by certain foreign subsidiaries. GAAP allows companies to either (i) recognize deferred taxes for temporary differences that are expected to reverse as GILTI in future years or (ii) account for taxes on GILTI as period costs in the year the tax is incurred. The Company has elected to recognize GILTI impact in the specific period in which it occurs. Valuation allowances are recognized to reduce deferred tax assets to the amount that will more likely than not be realized. 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 and the feasibility of ongoing tax 65 Table of Contents planning strategies and actions. When there is a change in the determination as to the amount of deferred tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to provision for income taxes in the period in which such determination is made. The Company recognizes additional tax liabilities when the Company believes that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. Unrecognized tax benefits are generally recorded as liabilities; however, to the extent they relate to tax attributes such as net operating loss or tax credit carryforwards, they are recorded as reductions to the related deferred tax assets. The noncurrent portion of tax liabilities is included in Other noncurrent liabilities in the Consolidated Balance Sheet. To the extent that new information becomes available which causes the Company to change its judgment regarding the adequacy of existing tax liabilities or reductions to deferred tax assets, such changes will impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. Earnings per Share Basic earnings (loss) per share is computed by dividing net income (loss) for the period by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average shares of common stock outstanding during the period and potentially dilutive securities, including restricted stock units, performance-conditioned awards, market-conditioned awards, and stock options using the treasury stock method. Refer to Note 6 – Earnings per Share for a reconciliation as well as Note 16 – Stock-based Compensation for further discussion on awards. ​ NOTE 2. ACCOUNTING PRONOUNCEMENTS Standards Implemented In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures , which is intended to enhance the transparency and usefulness of income tax disclosures through improved reporting related to the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted the guidance prospectively for the fiscal year ended March 31, 2026. For additional information, see Note 5 – Taxes. Recent Pronouncements In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which is intended to improve the usefulness of expense information contained in public entity income statements through the disaggregation of relevant expense captions in the notes to the financial statements. The guidance should be applied prospectively, effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements. In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity , which amends the guidance for determining the acquirer in certain transactions. The guidance should be applied prospectively, effective for the fiscal years beginning after December 15, 2026 and interim reporting periods within fiscal years beginning after December 15, 2026, with early adoption permitted. The Company has evaluated the impact of the guidance and does not expect it to have a material impact on the Company’s consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other (Topic 350): Targeted Improvements to the Accounting for Internal-Use Software , which amends the criteria for capitalization of internal-use software costs. The guidance is effective for the fiscal years beginning after December 15, 2027 and interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company has 66 Table of Contents evaluated the impact of the guidance and does not expect it to have a material impact on the Company’s consolidated financial statements. NOTE 3. REVENUE RECOGNITION Disaggregation of Revenue The Company views its segment results to be the best view of disaggregated revenue. Refer to Note 4 – Segments. Remaining Performance Obligations The remaining performance obligation (“RPO”) represents the aggregate amount of contractual deliverables yet to be recognized as revenue at the end of the reporting period. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed. The customer is not considered committed when it is able to terminate for convenience without payment of a substantive penalty. The RPO also includes estimates of variable consideration. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustments for revenue that has not materialized and adjustments for currency. At March 31, 2026, the aggregate amount of RPO related to customer contracts that are unsatisfied or partially unsatisfied was $ 32.8 billion. Approximately 59 percent of the amount is expected to be recognized as revenue in the next two years , approximately 37 percent in the subsequent three years , and the balance thereafter. Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods For the year ended March 31, 2026, revenue increased by $ 40 million for performance obligations satisfied (or partially satisfied) in previous periods, mainly due to changes in estimates. 67 Table of Contents Contract Balances The following table provides information about receivables, contract assets and deferred income balances: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 Assets ​ ​ ​ ​ ​ ​ Accounts receivable (net of allowances for credit losses of $ 7 at March 31, 2026 and $ 13 at March 31, 2025) (1) ​ $ 1,300 ​ $ 1,345 Long-term accounts receivable (2) ​ ​ 80 ​ ​ 15 Sales-type leases receivable ​ ​ 156 ​ ​ — Contract assets (3) ​ 44 ​ 50 Total ​ $ 1,580 ​ $ 1,410 Liabilities ​ ​ ​ ​ ​ ​ Deferred income (current) ​ $ 888 ​ $ 746 Deferred income (noncurrent) ​ 390 ​ 341 Total ​ $ 1,279 ​ $ 1,087 (1) Including unbilled receivable balances of $ 431 million at March 31, 2026 and $ 425 million at March 31, 2025. (2) Long-term accounts receivable included unbilled receivable balances of $ 46 million and immaterial at March 31, 2026 and 2025, respectively, and is included within Other noncurrent assets in the Consolidated Balance Sheet. (3) Contract assets represent services performed by the Company prior to billing the client, which give the Company the right to consideration that is typically subject to milestone completion or client acceptance. They are included within Prepaid expenses and other current assets in the Consolidated Balance Sheet. ​ The change in deferred income is primarily driven by the timing difference of invoice billing and revenue recognition. The amount of revenue recognized during the year ended March 31, 2026 that was included within the deferred income balance at March 31, 2025 was $ 714 million. The following table provides roll-forwards of the accounts receivable allowance for expected credit losses for the years ended March 31, 2026, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Beginning balance ​ $ 13 ​ $ 22 ​ $ 32 Additions (releases) ​ ​ 6 ​ ​ ( 7 ) ​ ​ 4 Write-offs ​ ​ ( 13 ) ​ ​ ( 1 ) ​ ​ ( 4 ) Other* ​ ​ 1 ​ ​ ( 1 ) ​ ​ ( 9 ) Ending balance ​ $ 7 ​ $ 13 ​ $ 22 * Primarily represents translation adjustments . The allowance for expected credit losses of long-term accounts receivable, sales-type leases receivable, and contract assets was not material in any of the periods presented. Major Clients No single client represented more than 10 percent of the Company’s total revenue during the years ended March 31, 2026, 2025 and 2024. No single client represented more than 10 percent of the Company’s total accounts receivable balance as of March 31, 2026 and 2025. 68 Table of Contents Deferred Costs The following table provides amounts of capitalized costs to acquire and fulfill customer contracts at March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 Deferred transition costs ​ $ 761 ​ $ 697 Prepaid software costs* ​ 1,809 ​ 876 Capitalized costs to fulfill contracts ​ 208 ​ 195 Capitalized costs to obtain contracts ​ 268 ​ 281 Total deferred costs† ​ $ 3,046 ​ $ 2,049 * Prepaid software costs include deferred costs for committed multi-year, on-premises software purchase contracts. † Of the total deferred costs, $ 1,166 million was current and $ 1,880 million was noncurrent at March 31, 2026, and $ 1,009 million was current and $ 1,040 million was noncurrent at March 31, 2025. ​ The amount of total deferred costs amortized during the year ended March 31, 2026 was $ 1.7 billion, composed of $ 238 million of amortization of deferred transition costs, $ 1,001 million of amortization of prepaid software costs and $ 458 million of amortization of capitalized contract costs. The amount of total deferred costs amortized during the year ended March 31, 2025 was $ 1.7 billion, composed of $ 291 million of amortization of deferred transition costs, $ 986 million of amortization of prepaid software costs and $ 420 million of amortization of capitalized contract costs. The amount of total deferred costs amortized during the year ended March 31, 2024 was $ 1.8 billion, composed of $ 335 million of amortization of deferred transition costs, $ 921 million of amortization of prepaid software costs and $ 531 million of amortization of capitalized contract costs. There were no material impairment losses incurred in any period. Refer to Note 1 – Significant Accounting Policies for additional information on deferred costs to fulfill a contract and capitalized costs of obtaining a contract. NOTE 4. SEGMENTS Our reportable segments correspond to how the chief operating decision maker (“CODM”), our chief executive officer, reviews performance and allocates resources. Our four reportable segments consist of the following: United States: This reportable segment is comprised of Kyndryl’s operations in the United States. Japan: This reportable segment is comprised of Kyndryl’s operations in Japan. Principal Markets: This reportable segment represents the aggregation of our operations in Canada, France, Germany, India, Italy, Spain / Portugal, and the United Kingdom / Ireland. Strategic Markets: This reportable segment is comprised of our operations in all other countries in which we operate, which includes countries in regions such as Latin America, Benelux, ASEAN, and Australia / New Zealand. The measure of segment operating performance used by Kyndryl’s CODM is adjusted EBITDA , which allows our CODM to evaluate operating results excluding certain items whose fluctuation from period to period do not necessarily correspond to changes in the operations of our business. Adjusted EBITDA is 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 and owned 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. The CODM reviews budget-to-actual variances of revenue and adjusted EBITDA to assess performance and allocate resources to the segments. Our geographic markets frequently work together to sell and implement certain contracts. The resulting revenues and costs from these contracts may be apportioned among the participating geographic markets. The economic 69 Table of Contents environment and its effects on the industries served by our geographic markets affect revenues and operating expenses within our geographic markets to differing degrees. Currency fluctuations also tend to affect our geographic markets differently, depending on the geographic concentrations and locations of their businesses. The following tables reflect the results of the Company’s segments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, 2026 ​ ​ United ​ ​ ​ ​ Principal ​ Strategic ​ Total (Dollars in millions) ​ ​ ​ States ​ ​ ​ Japan ​ ​ ​ Markets ​ ​ ​ Markets ​ ​ ​ Segments Revenue ​ $ 3,784 ​ $ 2,284 ​ $ 5,399 ​ $ 3,625 ​ $ 15,092 Cost of service, excluding depreciation and amortization (1) ​ ​ ( 2,349 ) ​ ​ ( 1,441 ) ​ ​ ( 3,659 ) ​ ​ ( 2,373 ) ​ ​ ( 9,822 ) Selling, general and administrative expenses, excluding depreciation and amortization (1) ​ ​ ( 581 ) ​ ​ ( 342 ) ​ ​ ( 888 ) ​ ​ ( 614 ) ​ ​ ( 2,425 ) Other items (2) ​ ​ ( 19 ) ​ ​ ( 15 ) ​ ​ ( 17 ) ​ ​ ( 16 ) ​ ​ ( 68 ) Segment adjusted EBITDA ​ $ 835 ​ $ 486 ​ $ 834 ​ $ 622 ​ $ 2,777 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, 2025 ​ ​ United ​ ​ ​ ​ Principal ​ Strategic ​ Total (Dollars in millions) ​ ​ ​ States ​ ​ ​ Japan ​ ​ ​ Markets ​ ​ ​ Markets ​ ​ ​ Segments Revenue ​ $ 3,876 ​ $ 2,358 ​ $ 5,206 ​ $ 3,617 ​ $ 15,057 Cost of service, excluding depreciation and amortization (1) ​ ​ ( 2,476 ) ​ ​ ( 1,613 ) ​ ​ ( 3,471 ) ​ ​ ( 2,405 ) ​ ​ ( 9,964 ) Selling, general and administrative expenses, excluding depreciation and amortization (1) ​ ​ ( 638 ) ​ ​ ( 343 ) ​ ​ ( 831 ) ​ ​ ( 561 ) ​ ​ ( 2,372 ) Other items (2) ​ ​ ( 37 ) ​ ​ ( 13 ) ​ ​ ( 19 ) ​ ​ ( 46 ) ​ ​ ( 115 ) Segment adjusted EBITDA ​ $ 725 ​ $ 390 ​ $ 886 ​ $ 606 ​ $ 2,606 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, 2024 ​ ​ United ​ ​ ​ ​ Principal ​ Strategic ​ Total (Dollars in millions) ​ ​ ​ States ​ ​ ​ Japan ​ ​ ​ Markets (3) ​ ​ ​ Markets (3) ​ ​ ​ Segments Revenue ​ $ 4,295 ​ $ 2,344 ​ $ 5,479 ​ $ 3,934 ​ $ 16,052 Cost of service, excluding depreciation and amortization (1) ​ ​ ( 2,778 ) ​ ​ ( 1,651 ) ​ ​ ( 3,957 ) ​ ​ ( 2,720 ) ​ ​ ( 11,106 ) Selling, general and administrative expenses, excluding depreciation and amortization (1) ​ ​ ( 735 ) ​ ​ ( 322 ) ​ ​ ( 847 ) ​ ​ ( 577 ) ​ ​ ( 2,480 ) Other items (2) ​ ​ ( 2 ) ​ ​ ( 9 ) ​ ​ 2 ​ ​ 4 ​ ​ ( 5 ) Segment adjusted EBITDA ​ $ 781 ​ $ 361 ​ $ 677 ​ $ 642 ​ $ 2,461 (1) Cost of service, excluding depreciation and amortization and selling, general and administrative expenses, excluding depreciation and amortization are both used in calculating segment adjusted EBITDA and exclude depreciation of property, equipment and capitalized software and amortization of transition costs and prepaid software. (2) Other items include workforce rebalancing charges incurred subsequent to March 31, 2024 and other expense (income). (3) Effective June 1, 2024, the Company made a minor change to its geographic reportable segments to reflect how it 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. Historical fiscal 2024 segment information was recast to reflect this change in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025. ​ 70 Table of Contents The following table reconciles segment adjusted EBITDA to consolidated pretax income (loss): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Segment adjusted EBITDA ​ $ 2,777 ​ $ 2,606 ​ $ 2,461 Workforce rebalancing charges incurred prior to March 31, 2024 ​ ​ — ​ ​ — ​ ​ ( 138 ) Charges related to ceasing to use leased/fixed assets and lease terminations ​ ​ — ​ ​ ( 48 ) ​ ​ ( 39 ) Transaction-related (costs) benefits ​ ​ ( 41 ) ​ ​ 125 ​ ​ 46 Stock-based compensation expense ​ ​ ( 64 ) ​ ​ ( 100 ) ​ ​ ( 95 ) Interest expense ​ ​ ( 89 ) ​ ​ ( 100 ) ​ ​ ( 122 ) Depreciation of property, equipment and capitalized software ​ ​ ( 762 ) ​ ​ ( 660 ) ​ ​ ( 834 ) Amortization expense ​ ​ ( 1,266 ) ​ ​ ( 1,308 ) ​ ​ ( 1,287 ) Corporate expense not allocated to the segments ​ ​ ( 105 ) ​ ​ ( 90 ) ​ ​ ( 95 ) Other adjustments* ​ ​ ( 36 ) ​ ​ 10 ​ ​ ( 68 ) Pretax income (loss) ​ $ 414 ​ $ 435 ​ $ ( 168 ) * Other adjustments represent pension expenses other than pension servicing costs and multi-employer plan costs, significant litigation costs and benefits, and currency impacts of highly inflationary countries. For the year ended March 31, 2024, other adjustments also included an adjustment to reduce amortization expense for the amount already included in transaction-related (costs) benefits above. Segment Assets and Other Items The Company does not allocate assets to the above reportable segments for our CODM’s review. Geographic Information The following tables provide information for those countries that represent 10 percent or more of the specific category. Refer to Note 8 – Property and Equipment and Note 9 – Leases for more information on allocation methodologies. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Revenue* ​ ​ ​ ​ ​ ​ ​ ​ ​ United States ​ $ 3,784 ​ $ 3,876 ​ $ 4,295 Japan ​ ​ 2,284 ​ ​ 2,358 ​ ​ 2,344 Other countries ​ ​ 9,024 ​ ​ 8,823 ​ ​ 9,413 Total revenue ​ $ 15,092 ​ $ 15,057 ​ $ 16,052 * Revenues are attributed to countries based on the location of the client and exclude certain allocations. ​ 71 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 Property and equipment, net ​ ​ ​ ​ ​ ​ United States* ​ $ 877 ​ $ 883 Other countries ​ ​ 1,640 ​ ​ 1,687 Total property and equipment, net ​ $ 2,517 ​ $ 2,570 ​ ​ ​ ​ ​ ​ ​ Operating right-of-use assets, net ​ ​ ​ ​ ​ ​ United States* ​ $ 179 ​ $ 134 Belgium ​ ​ 87 ​ ​ 92 France ​ ​ 84 ​ ​ 81 Italy ​ ​ 82 ​ ​ 76 Other countries ​ ​ 420 ​ ​ 349 Total operating right-of-use assets, net ​ $ 853 ​ $ 731 * Includes corporate and other. ​ NOTE 5. TAXES Income (loss) before income taxes by geography was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Income (loss) before income taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ U.S. operations ​ $ ( 54 ) ​ $ ( 158 ) ​ $ ( 678 ) Non-U.S. operations ​ ​ 468 ​ ​ 593 ​ ​ 510 Total income (loss) before income taxes ​ $ 414 ​ $ 435 ​ $ ( 168 ) ​ The components of the provision for income taxes by taxing jurisdiction were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 U.S. federal: ​ ​ ​ ​ ​ ​ ​ ​ ​ Current ​ $ — ​ $ 1 ​ $ 39 Deferred ​ ​ ( 2 ) ​ ​ ( 18 ) ​ ​ ( 10 ) ​ ​ $ ( 2 ) ​ $ ( 17 ) ​ $ 29 U.S. state and local: ​ ​ ​ ​ ​ ​ ​ ​ ​ Current ​ $ 1 ​ $ 4 ​ $ 2 Deferred ​ ​ — ​ ​ 2 ​ ​ 1 ​ ​ $ 1 ​ $ 6 ​ $ 3 Non-U.S.: ​ ​ ​ ​ ​ ​ ​ ​ ​ Current ​ $ 238 ​ $ 177 ​ $ 142 Deferred ​ ​ ( 22 ) ​ ​ 18 ​ ​ ( 2 ) ​ ​ $ 216 ​ $ 195 ​ $ 140 Total provision for income taxes ​ $ 215 ​ $ 184 ​ $ 172 ​ 72 Table of Contents A reconciliation of the statutory U.S. federal tax rate to the Company’s effective tax rate from continuing operations pursuant to the disclosure requirements of ASU 2023-09 for the year ended March 31, 2026 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ 2026 ​ ​ Adjusted ​ ​ (Dollars in millions) ​ ​ ​ Amount ​ Percent U.S. federal statutory tax rate ​ $ 87 ​ 21.0 % State and local income taxes, net of federal income tax effect* ​ ​ 1 ​ 0.2 % Foreign tax effects: ​ ​ ​ ​ ​ ​ Argentina ​ ​ ​ ​ ​ ​ Changes in valuation allowances ​ ​ 13 ​ 3.2 % Other ​ ​ ( 12 ) ​ ( 2.9 ) % Australia ​ ​ ​ ​ ​ ​ Changes in valuation allowances ​ ​ ( 21 ) ​ ( 5.0 ) % Other ​ ​ 2 ​ 0.5 % Brazil ​ ​ ​ ​ ​ ​ Changes in valuation allowances ​ ​ ( 18 ) ​ ( 4.3 ) % Other ​ ​ ( 4 ) ​ ( 1.0 ) % Colombia ​ ​ 10 ​ 2.4 % Denmark ​ ​ ​ ​ ​ ​ Changes in valuation allowances ​ ​ ( 11 ) ​ ( 2.7 ) % Other ​ ​ 1 ​ 0.2 % Germany ​ ​ ​ ​ ​ ​ Changes in valuation allowances ​ ​ ( 21 ) ​ ( 5.1 ) % Other ​ ​ ( 3 ) ​ ( 0.7 ) % India ​ ​ 17 ​ 4.1 % Japan ​ ​ 15 ​ 3.6 % Peru ​ ​ ​ ​ ​ ​ Withholding taxes ​ ​ 9 ​ 2.2 % Other ​ ​ 7 ​ 1.7 % Other foreign jurisdictions ​ ​ ( 1 ) ​ ( 0.2 ) % Effect of cross-border tax laws: ​ ​ ​ ​ ​ ​ Branch income ​ ​ 21 ​ 5.1 % Other ​ ​ 5 ​ 1.2 % Tax credits: ​ ​ ​ ​ ​ ​ Foreign tax credits ​ ​ ( 55 ) ​ ( 13.3 ) % Other ​ ​ ( 2 ) ​ ( 0.5 ) % Changes in valuation allowances ​ ​ 133 ​ 32.3 % Nontaxable or nondeductible items: ​ ​ ​ ​ ​ ​ Equity-based compensation ​ ​ ( 11 ) ​ ( 2.7 ) % Other ​ ​ 2 ​ 0.5 % Changes in unrecognized tax benefits ​ ​ 51 ​ 12.3 % Effective tax rate ​ $ 215 ​ 52.1 % * The states that contribute to the majority (greater than 50%) of the tax effect in this category include New York, California, New Jersey, Illinois, Georgia, and Texas. ​ 73 Table of Contents A reconciliation of the statutory U.S. federal tax rate to the Company’s effective tax rate from continuing operations for the years ended March 31, 2025 and 2024, prior to the adoption of ASU 2023-09 is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Statutory rate ​ 21.0 % ​ 21.0 % Tax differential on foreign income ​ 4.5 % ​ ( 17.4 ) % State and local taxes ​ 0.7 % ​ 17.8 % Valuation allowances ​ ( 4.1 ) % ​ ( 67.7 ) % Reserves for uncertain tax positions ​ 14.2 % ​ ( 7.8 ) % Global Intangible Low-Taxed Income (GILTI) ​ 1.5 % ​ — % Undistributed foreign earnings ​ ( 2.5 ) % ​ 2.2 % Impact of foreign operations ​ 20.9 % ​ ( 43.6 ) % Basis adjustment ​ — % ​ ( 6.2 ) % Tax credits ​ ( 13.1 ) % ​ 28.7 % Return to provision ​ ( 3.1 ) % ​ ( 19.3 ) % Nondeductible items ​ 1.9 % ​ ( 8.6 ) % Other ​ — % ​ ( 1.4 ) % Effective tax rate ​ 41.9 % ​ ( 102.2 ) % ​ The provision for income taxes for the year ended March 31, 2026 was $ 215 million as compared to $ 184 million for the year ended March 31, 2025. The increase in income tax expense was primarily driven by the increase in unrecognized tax benefits and foreign taxes, partially offset by the release of valuation allowances. The provision for income taxes for the year ended March 31, 2025 was $ 184 million as compared to $ 172 million for the year ended March 31, 2024. The increase in income tax expense between 2024 and 2025 was primarily driven by an increase in pretax income. The Company’s effective tax rate for the year ended March 31, 2026 was higher than the Company’s statutory tax rate primarily due to uncertain tax positions and taxes on foreign operations. The Company’s effective tax rate for the year ended March 31, 2025 was higher than the Company’s statutory tax rate primarily due to the Company’s pretax income in fiscal year 2025, compared to a pretax loss in fiscal year 2024. The Company’s effective tax rate for the year ended March 31, 2024 was lower (more negative) than the Company’s statutory tax rate primarily due to the Company’s pretax loss being significantly lower in fiscal year 2024 and current year losses not benefitted due to the existing valuation allowances. The Organization for Economic Cooperation and Development’s Pillar Two rules, effective beginning in fiscal year 2025, did not significantly affect the Company’s tax rate or cash flows for the years ending March 31, 2026 and 2025. In July 2025, the U.S. government enacted new tax legislation that, among other things, made permanent items such as 100% bonus depreciation on certain fixed assets, immediate expensing of domestic research costs and an increased business interest expense limitation. It also included modifications to several international tax provisions. The Company has recorded no material incremental tax expense or benefit related to the legislation. 74 Table of Contents The following table summarizes the income taxes paid by jurisdiction, prepared in accordance with the disclosure requirements of ASU 2023-09, for the year ended March 31, 2026. ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 Cash paid during the period for income taxes, net of refunds: ​ ​ ​ Federal ​ $ 1 State and local ​ ​ 4 Foreign: ​ ​ ​ Colombia ​ ​ 11 Germany ​ ​ 8 India ​ ​ 35 Japan ​ ​ 23 Netherlands ​ ​ 8 Peru ​ ​ 15 Spain ​ ​ 10 All other foreign ​ ​ 36 Total cash paid for taxes ​ $ 151 ​ The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 Deferred tax assets ​ ​ ​ ​ ​ ​ Retirement benefits ​ $ 103 ​ $ 106 Leases ​ ​ 253 ​ ​ 253 Stock-based and other compensation ​ ​ 45 ​ ​ 75 U.S. tax loss/credit carryforwards ​ ​ 676 ​ ​ 520 Deferred income ​ ​ 58 ​ ​ 38 Foreign tax loss/credit carryforwards ​ ​ 29 ​ ​ 75 Allowance for credit losses ​ ​ 4 ​ ​ 9 Goodwill and intangible assets ​ ​ 49 ​ ​ 61 Workforce rebalancing charges ​ ​ 2 ​ ​ 8 Limitation on deductibility of interest ​ ​ 106 ​ ​ 88 Accruals ​ ​ 109 ​ ​ 99 Other ​ ​ 24 ​ ​ 52 Gross deferred tax assets ​ $ 1,458 ​ $ 1,384 Less: valuation allowance ​ ​ ( 782 ) ​ ​ ( 749 ) Net deferred tax assets ​ $ 676 ​ $ 634 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities ​ ​ ​ ​ ​ ​ Fixed assets and depreciation ​ $ 125 ​ $ 97 Leases and right-of-use assets ​ ​ 255 ​ ​ 242 Undistributed foreign earnings ​ ​ 7 ​ ​ 5 Deferred transition costs ​ ​ 127 ​ ​ 121 Prepaids ​ ​ 3 ​ ​ 2 Other ​ ​ 3 ​ ​ 15 Gross deferred tax liabilities ​ $ 520 ​ $ 482 ​ As of March 31, 2026, the Company had tax-effected U.S. and foreign net operating loss/credit carryforwards deferred tax assets of $ 676 million and $ 29 million, respectively. As of March 31, 2025, the Company had tax-effected U.S. and foreign net operating loss/credit carryforwards deferred tax assets of $ 520 million and $ 75 million, respectively. If not utilized, the U.S. state and foreign net operating loss carryforwards will begin to expire in 2027. The 75 Table of Contents U.S. federal net operating losses incurred post 2017 can be carried forward indefinitely. Certain of our acquired U.S. net operating losses and general business credits are subject to limitations under IRC Section 382 and will begin to expire in 2029. The valuation allowances as of March 31, 2026 and 2025 were $ 782 million and $ 749 million, respectively. The increase in valuation allowances from March 31, 2025 to March 31, 2026 was $ 33 million. The change in valuation allowances primarily reflects an increase in the U.S. due to net operating losses and current-year tax credit carryforwards generated, which are not more likely than not to be realized, offset by the release and reduction in the valuation allowance for certain foreign jurisdictions resulting from the refinement of certain tax positions. Estimates of future taxable income could change, perhaps materially, which may require us to revise our assessment of the recoverability of the deferred tax asset at that time. A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Balance at beginning of period ​ $ 168 ​ $ 108 ​ $ 104 Additions based on tax positions related to the current year ​ ​ 64 ​ ​ 35 ​ ​ 36 Additions for tax positions of prior years ​ ​ 71 ​ ​ 28 ​ ​ — Reductions for tax positions of prior years (including impacts due to a lapse of statute) ​ ​ ( 9 ) ​ ​ ( 3 ) ​ ​ ( 32 ) Balance at end of period ​ $ 294 ​ $ 168 ​ $ 108 ​ Liabilities related to unrecognized tax benefits for which the Company is liable are reported within the Consolidated Balance Sheet based upon tax authorities’ ability to assert the Company may be the primary obligor for historical taxes, among other factors. ​ With limited exceptions, the Company is generally subject to income tax audits for tax years subsequent to Separation, including in the U.S., Germany, Japan and Spain. Pursuant to the terms of the Separation, any tax liabilities attributable to the tax period (or portion thereof) ending on or before November 3, 2021, are generally not the Company’s liability. During the year ended March 31, 2026, the Company recorded refinements to certain tax reserves related to prior periods based on new information obtained and updated analyses performed during the year, including evolving interpretations and assessments of technical tax matters. These adjustments reflect refinements to management’s prior estimates using information that was not reasonably knowable or readily accessible at the time the original amounts were recorded. While the Company does not expect material changes in unrecognized tax benefits within the next twelve months, this assessment could change subject to future developments such as the result of audit developments and settlement discussions. Interest and penalties related to income tax liabilities are included in income tax expense. During the year ended March 31, 2026, the Company recognized $ 7 million in interest expense and penalties. The Company had $ 24 million for interest and penalties accrued at March 31, 2026. Pursuant to the terms of the Separation, there were certain tax refunds related to estimated tax payments and refundable value-added taxes for which we would have been required to reimburse our former Parent as the refunds were received, as well as certain tax benefits related to net operating losses that were transferred to the Company for which we would have been required to pay to our former Parent as the tax benefits were realized. In addition, our former Parent had obligations to indemnify the Company for tax liabilities attributable to tax periods (or portions thereof) ending on or before November 3, 2021. During fiscal year 2025, an agreement was executed with our former Parent that resolved, with limited exceptions, both parties’ obligations related to the Separation. The agreement did not have a material impact on the Company’s financial statements. As of March 31, 2026, with the exception of a certain subsidiary’s earnings, the Company’s undistributed earnings were not indefinitely reinvested. Accordingly, the Company recorded a deferred tax liability of $ 7 million for the estimated taxes associated with the repatriation of these earnings. The Company intends to repatriate certain foreign earnings that have been taxed in the U.S. and undistributed earnings to the extent the foreign earnings are not restricted by local laws and can be accessed in a cost-effective manner. With respect to the undistributed earnings of a certain foreign subsidiary which are permanently reinvested, the Company estimates that the amount of the deferred tax liability 76 Table of Contents related to these earnings is approximately $ 22 million, although this amount could vary due to the complexity and variability of the assumptions required to assess the amount and timing of future repatriations. ​ NOTE 6. EARNINGS PER SHARE We did no t declare any stock dividends in the periods presented. The following table provides the computation of basic and diluted earnings per share of common stock for the years ended March 31, 2026, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (In millions, except per share amounts) ​ 2026 ​ 2025 ​ 2024 Net income (loss) on which basic and diluted earnings per share is calculated ​ $ 198 ​ $ 252 ​ $ ( 340 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of shares on which basic earnings (loss) per share is calculated ​ ​ 228.3 ​ ​ 231.5 ​ ​ 229.2 Dilutive effect of stock options and equity awards ​ ​ 5.5 ​ ​ 7.7 ​ ​ — Number of shares on which diluted earnings (loss) per share is calculated ​ ​ 233.8 ​ ​ 239.1 ​ ​ 229.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings (loss) per share ​ $ 0.87 ​ $ 1.09 ​ $ ( 1.48 ) Diluted earnings (loss) per share ​ 0.85 ​ 1.05 ​ ( 1.48 ) ​ For the year ended March 31, 2024, the number of shares on which basic and diluted earnings (loss) per share is calculated was the same as a result of the net loss incurred in the period. The following securities were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (In millions) ​ 2026 ​ 2025 ​ 2024 Nonvested restricted stock units ​ 2.4 ​ 0.6 ​ 8.8 Nonvested performance-conditioned stock units ​ 2.9 ​ 4.2 ​ 3.0 Nonvested market-conditioned stock units ​ 0.2 ​ 0.7 ​ 2.7 Stock options issued and outstanding ​ 0.7 ​ — ​ 3.6 Total ​ 6.2 ​ 5.5 ​ 18.1 ​ ​ ​ NOTE 7. FINANCIAL ASSETS AND LIABILITIES Financial Assets and Liabilities Measured at Fair Value The following table presents the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis at March 31, 2026 and 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Hierarchy ​ At March 31, 2026 ​ At March 31, 2025 (Dollars in millions) ​ ​ ​ Level ​ ​ ​ Assets ​ ​ ​ Liabilities ​ ​ ​ Fair Value ​ ​ ​ Assets ​ ​ ​ Liabilities ​ ​ ​ Fair Value Derivatives designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts ​ 2 ​ $ 8 ​ $ 68 ​ $ ( 60 ) ​ $ 6 ​ $ 29 ​ $ ( 23 ) Cross-currency swap contracts ​ 2 ​ ​ 41 ​ ​ 13 ​ ​ 28 ​ ​ 12 ​ ​ 11 ​ ​ — Derivatives not designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts ​ 2 ​ ​ 3 ​ ​ 4 ​ ​ ( 1 ) ​ ​ 27 ​ ​ 2 ​ ​ 25 Total ​ ​ ​ $ 53 ​ $ 85 ​ $ ( 32 ) ​ $ 45 ​ $ 43 ​ $ 2 ​ The gross balances of derivative assets, including accrued interest, are contained within Prepaid expenses and other current assets and Other noncurrent assets, and the gross balances of derivative liabilities are contained within 77 Table of Contents Other accrued expenses and liabilities, or Other noncurrent liabilities in the Consolidated Balance Sheet. The Company may enter into master netting agreements with certain counterparties that allow for netting of exposures. There was no netting of derivative assets against liabilities in the Consolidated Balance Sheet at March 31, 2026 and 2025. The Company manages counterparty risk by seeking counterparties of high credit quality and by monitoring credit ratings, credit spreads and other relevant public information about its counterparties. The Company does not anticipate nonperformance by any of the counterparties. Financial Assets and Liabilities Not Measured at Fair Value Accounts receivable are financial assets with carrying values that approximate fair value. Accounts payable, other accrued expenses and short-term debt are financial liabilities with carrying values that approximate fair value. If measured at fair value in the consolidated financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy, except for short-term debt, which would be classified as Level 2. The Company also has time deposits that have maturities of 90 days or less, and their carrying values approximate fair value. They are measured for impairment on a recurring basis by comparing their fair value with their amortized cost basis. There were no impairments of financial assets recognized for any of the periods presented. The balance of these time deposits with maturities of 90 days or less contained within Cash and cash equivalents in the Consolidated Balance Sheet at March 31, 2026 and 2025 was $ 1.7 billion and $ 765 million, respectively. If measured at fair value in the consolidated financial statements, time deposits with maturities of 90 days or less would be categorized as Level 2 in the fair value hierarchy. The fair value of our outstanding debt (excluding finance lease obligations) is based on various methodologies, including quoted prices in active markets for identical debt instruments, which is a Level 1 measurement, or calculated fair value using an expected present value technique that uses rates currently available to the Company for debt in active markets with similar terms and remaining maturities, which is a Level 2 measurement. See Note 12 – Borrowings for additional information. Our outstanding debt (excluding finance lease obligations) had a carrying value of $ 3.9 billion and $ 2.9 billion as of March 31, 2026 and 2025, respectively. The debt had an estimated fair value of $ 3.6 billion and $ 2.7 billion as of March 31, 2026 and 2025, respectively. Derivative Financial Instruments The following table summarizes the notional amounts of the Company’s outstanding derivatives: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, 2026 ​ At March 31, 2025 (Dollars in millions) ​ Foreign Exchange Contracts ​ ​ ​ Cross-currency Swap Contracts ​ ​ ​ Total Notional Amount ​ Foreign Exchange Contracts ​ ​ ​ Cross-currency Swap Contracts ​ ​ ​ Total Notional Amount Derivatives designated as hedging instruments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flow hedges ​ $ 402 ​ $ — ​ $ 402 ​ $ 357 ​ $ — ​ $ 357 Net investment hedges ​ ​ 749 ​ ​ 500 ​ ​ 1,249 ​ ​ 1,485 ​ ​ 500 ​ ​ 1,985 Derivatives not designated as hedging instruments ​ $ 620 ​ $ — ​ $ 620 ​ $ 1,148 ​ $ — ​ $ 1,148 ​ The notional amounts of derivative instruments do not necessarily represent the amounts exchanged by the Company with third parties and are not necessarily a direct measure of the financial exposure. Derivatives Designated as Hedging Instruments Cash Flow Hedges The Company has foreign exchange derivative financial instruments designated as cash flow hedges to manage the volatility of cash flows that relate to operating expenses and intercompany payments for royalties denominated in certain currencies. At March 31, 2026, the maximum remaining length of time over which the Company has hedged its 78 Table of Contents exposure is approximately one year . At March 31, 2026 and 2025, the weighted-average remaining maturity of these instruments was approximately 0.5 years. At March 31, 2026 and 2025, in connection with cash flow hedges of foreign currency transactions, the Company had unrealized losses of $ 7 million and unrealized losses of $ 1 million (each before taxes), respectively, in AOCI. The Company estimates that $ 7 million (before taxes) of deferred net losses on derivatives in AOCI at March 31, 2026 will be reclassified to net income within the next twelve months, providing an offsetting economic impact against the underlying anticipated transactions. Net Investment Hedges The Company has entered into and designated cross-currency interest rate swap contracts and currency forward contracts as net investment hedges to mitigate foreign exchange exposure related to net investments. Under the terms of the cross-currency swaps, the Company makes fixed-rate payments in foreign currencies and receives fixed-rate amounts in U.S. dollars, with the exchange of the underlying notional amounts at maturity whereby the Company will receive U.S. dollars and pay foreign currencies at exchange rates which are determined at contract inception. Under the terms of the currency forward contracts, the Company commits to sell the local currency of certain subsidiaries in exchange for U.S. dollars at specified forward rates. At March 31, 2026, the maximum remaining length of time over which the Company has hedged its exposure is approximately eight years . At March 31, 2026 and 2025, the weighted-average remaining maturity of these instruments was approximately three years. At March 31, 2026 and 2025, the Company had unrealized losses of $ 81 million and unrealized losses of $ 6 million (each before taxes), respectively, in AOCI related to net investment hedges. As of March 31, 2026, $ 39 million of these unrealized losses relate to settled instruments. Derivatives Not Designated as Hedging Instruments The Company enters into currency forward and swap contracts to hedge exposures related to assets, liabilities and earnings across its subsidiaries. The terms of these contracts are generally less than one year . The Effect of Derivative Instruments in the Consolidated Income Statement The effects of derivatives designated as hedging instruments on the Consolidated Income Statement and Other Comprehensive Income are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (Loss) Recognized in Consolidated Income Statement ​ ​ and Other Comprehensive Income ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Derivative instruments in cash flow hedges: ​ Recognized in OCI Foreign exchange contracts ​ $ 2 ​ $ ( 14 ) ​ $ 22 Derivative instruments in net investment hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ Cross-currency swaps ​ $ 28 ​ $ 10 ​ $ ( 11 ) Foreign exchange contracts ​ ​ ( 103 ) ​ ​ ( 5 ) ​ ​ — Total ​ $ ( 73 ) ​ $ ( 9 ) ​ $ 11 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (Loss) Recognized in Consolidated Income Statement ​ ​ ​ ​ and Other Comprehensive Income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts Excluded from ​ ​ Consolidated ​ Reclassified from AOCI ​ Effectiveness Testing ​ ​ Income Statement ​ Year Ended March 31, ​ Year Ended March 31, (Dollars in millions) ​ Line Item ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Derivative instruments in cash flow hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign exchange contracts ​ Cost of services ​ $ ( 2 ) ​ $ ( 11 ) ​ $ 21 ​ $ — ​ $ — ​ $ — ​ ​ Other expense ​ ​ 11 ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — Derivative instruments in net investment hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cross-currency swaps ​ Interest expenses ​ ​ — ​ ​ — ​ ​ — ​ ​ 12 ​ ​ 12 ​ ​ 1 Foreign exchange contracts ​ Interest expenses ​ ​ — ​ ​ — ​ ​ — ​ ​ 26 ​ ​ 10 ​ ​ — Total ​ Total ​ $ 8 ​ $ ( 11 ) ​ $ 21 ​ $ 37 ​ $ 22 ​ $ 1 ​ 79 Table of Contents For the years ended March 31, 2026, 2025 and 2024, there were no gains or losses excluded from the assessment of hedge effectiveness for cash flow hedges. For the year ended March 31, 2026, the gains or losses due to underlying exposure that did not occur or was not expected to occur were immaterial. For years ended March 31, 2025 and 2024, there were no such gains or losses. The effects of derivatives not designated as hedging instruments on the Consolidated Income Statement are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain (Loss) Recognized in Consolidated Income Statement ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ Income Statement ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ Line Item ​ 2026 ​ 2025 ​ 2024 Derivative instruments not designated as hedging instruments: ​ ​ Foreign exchange contracts ​ Other expense (income) ​ $ 5 ​ $ ( 15 ) ​ $ ( 48 ) Total ​ ​ ​ $ 5 ​ $ ( 15 ) ​ $ ( 48 ) ​ ​ ​ For the years ended March 31, 2026, 2025 and 2024, our net expense (income) included losses of $ 37 million, $ 1 million, and $ 14 million (each before taxes), respectively, from foreign currency transactions. ​ ​ N OTE 8. PROPERTY AND EQUIPMENT ​ The following table presents the balances of property and equipment by type: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 Information technology equipment ​ $ 5,472 ​ $ 5,858 Buildings and leasehold improvements ​ ​ 2,315 ​ ​ 2,402 Office and other equipment ​ ​ 266 ​ ​ 268 Land and land improvements ​ ​ 70 ​ ​ 68 Property and equipment, gross ​ $ 8,124 ​ $ 8,597 Accumulated depreciation ​ ​ ( 5,606 ) ​ ​ ( 6,026 ) Property and equipment, net ​ $ 2,517 ​ $ 2,570 ​ The unpaid property and equipment balance included in accounts payable and accrued expenses was $ 118 million and $ 45 million at March 31, 2026 and 2025, respectively. Depreciation of property and equipment was $ 733 million, $ 618 million, and $ 801 million for the years ended March 31, 2026, 2025 and 2024, respectively. The balance of information technology equipment includes $ 80 million of fiscal year 2026 purchases that were settled using previously issued vendor credits. Additionally, as part of the site-rationalization program, the Company recognized $ 8 million, and $ 21 million of accelerated depreciation related to ceasing to use certain owned fixed assets for the years ended March 31, 2025 and 2024, respectively. Refer to Note 18 – Workforce Rebalancing and Site-Rationalization Charges for additional details. ​ ​ 80 Table of Contents NOTE 9. LEASES The Company as a Lessee The following table presents the various components of lease costs: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Finance lease costs $ 94 ​ $ 95 ​ $ 112 Operating lease costs ​ 338 ​ ​ 331 ​ ​ 388 Short-term lease costs ​ 3 ​ ​ 1 ​ ​ 4 Variable lease costs ​ 152 ​ ​ 154 ​ ​ 135 Sublease income ​ ( 17 ) ​ ​ ( 6 ) ​ ​ ( 11 ) Total lease costs $ 569 ​ $ 576 ​ $ 629 ​ During the fiscal years of 2025 and 2024, we identified and ceased use of certain operating right-of-use assets that were inherited from the former Parent at Separation. We determined that we will no longer receive economic benefits from these leased properties and do not have the intent or practical ability to sublease or sell them. Accordingly, we recorded accelerated depreciation in the amount of $ 39 million and $ 14 million (representing the remaining carrying value of the identified right-of-use assets, not included in the operating lease costs in the table above) for the years ended March 31, 2025 and 2024, respectively. Refer to Note 18 – Workforce Rebalancing and Site-Rationalization Charges for details of this program. The Company had no sale and leaseback transactions for the years ended March 31, 2026, 2025 and 2024. The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities and, as such, are excluded from the amounts below. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Cash paid for amounts included in the measurement of lease liabilities: ​ ​ ​ ​ ​ ​ Operating cash outflows for finance leases ​ $ 12 ​ $ 17 ​ $ 14 Financing cash outflows for finance leases ​ ​ 100 ​ ​ 117 ​ ​ 116 Operating cash outflows for operating leases ​ ​ 368 ​ ​ 404 ​ ​ 387 Right-of-use assets obtained in exchange for new finance lease liabilities ​ ​ 74 ​ ​ 70 ​ ​ 212 Right-of-use assets obtained in exchange for new operating lease liabilities ​ ​ 140 ​ ​ 204 ​ ​ 291 ​ The following table presents the weighted-average lease term and discount rate for finance and operating leases: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, ​ ​ ​ ​ 2026 ​ 2025 Finance leases ​ ​ ​ ​ ​ ​ Weighted-average remaining lease term 3.8 years ​ 4.1 years Weighted-average discount rate 5.6 % ​ 5.74 % Operating leases ​ ​ ​ ​ ​ Weighted-average remaining lease term 4.5 years ​ 4.4 years Weighted-average discount rate 4.9 % ​ 5.07 % ​ 81 Table of Contents The following table presents a maturity analysis of expected undiscounted cash flows for operating and finance leases on an annual basis for the next five years and thereafter. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ending March 31, ​ ​ ​ ​ Imputed ​ ​ ​ (Dollars in millions) ​ ​ ​ 2027 ​ ​ ​ 2028 ​ ​ ​ 2029 ​ ​ ​ 2030 ​ ​ ​ 2031 ​ ​ ​ Thereafter ​ ​ ​ Interest* ​ ​ ​ Total Finance leases $ 103 ​ $ 73 ​ $ 36 ​ $ 9 ​ $ 3 ​ $ — ​ $ 30 ​ $ 194 Operating leases $ 324 ​ $ 235 ​ $ 187 ​ $ 117 ​ $ 60 ​ $ 109 ​ $ 166 ​ $ 867 * Imputed interest represents the difference between undiscounted cash flows and discounted cash flows. ​ The following table presents the total amount of finance leases recognized in the Consolidated Balance Sheet: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 Right-of-use assets – Property and equipment, net ​ $ 265 ​ $ 297 Lease liabilities: ​ ​ ​ ​ Current – Current portion of long-term debt and short-term debt ​ ​ 86 ​ ​ 100 Noncurrent – Long-term debt ​ ​ 108 ​ ​ 150 ​ ​ The Company as a Lessor During the year ended March 31, 2026, the Company entered into arrangements where the Company acts as lessor in certain sales-type leases. Revenue and cost for these sales-type leases was recorded in the amount of $ 175 million and $ 149 million, respectively, for the year ended March 31, 2026. Revenue and costs for sales-type leases were not material for the years ended March 31, 2025 and 2024. The related interest income arising from these leases was not material for any of the periods presented. Income from operating leases was not material for any of the periods presented. At March 31, 2026 the Company had $ 156 million in leases receivable from sales-type leases, of which $ 25 million was current and $ 131 million was noncurrent, which are included within Prepaid expenses and other current assets and Other noncurrent assets in the Consolidated Balance Sheet, respectively. The balance of leases receivable from sales-type leases was not material at March 31, 2025. The allowance for expected credit losses for these leases receivable was not material in any of the periods presented. There were no material uncollectable or past due leases receivable in any of the periods presented. The Company’s sales-type leases receivable have terms ranging from five to six years and are usually collateralized by a security interest in the underlying assets, culminating with a sale of the asset at the end of the term. The Company assigns an internal risk ratings to each lease based on the creditworthiness of the obligor at inception, and monitors credit quality over the term of the arrangement. The Company’s internal risk ratings are based on a variety of sources including agency and market implied ratings, performing a current financial analysis, internal data such as payment history, relevant news and country and industry risk. Accounts rated low risk typically have the equivalent of a Moody's rating of Baa3 or better. Based on the Company’s internal risk ratings assigned as of March 31, 2026, the credit risk profile of the Company’s gross sales-type leases receivable balance of $ 156 million was low, and was all originated during the current fiscal year. 82 Table of Contents The following table provides the scheduled maturities of the Company’s minimum lease payments receivable from sales-type leases and minimum future rentals on non-cancelable operating leases from contracts with customers as of March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales-Type Lease ​ Operating Lease (Dollars in millions) ​ ​ ​ Payments Receivable ​ ​ ​ Minimum Future Rentals* Year ending March 31: ​ ​ ​ ​ ​ ​ 2027 ​ $ 29 ​ $ 26 2028 ​ ​ 33 ​ ​ 27 2029 ​ ​ 35 ​ ​ 27 2030 ​ ​ 33 ​ ​ 26 2031 ​ ​ 38 ​ ​ 23 Thereafter ​ ​ 10 ​ ​ 38 Total undiscounted cash flows (minimum lease payments) ​ $ 177 ​ $ 167 Less: unearned income ​ $ 22 ​ ​ ​ Present value of lease payments (leases receivable) ​ $ 156 ​ ​ ​ ​ ​ ​ * Excludes $ 18 million in minimum future rentals on non-customer operating subleases as of March 31, 2026 . ​ NOTE 10. ACQUISITIONS AND DIVESTITURES Pending Acquisition of Solvinity Group B.V. In November 2025, the Company entered into an agreement to acquire all outstanding equity interests of Solvinity Group B.V. (“Solvinity”), a provider of managed cloud platforms and services in the Netherlands, for cash consideration of approximately € 100 million. As previously disclosed, the transaction was subject to customary closing conditions, including regulatory approval. On May 25, 2026, the State Secretary for Economic Affairs and Climate Policy in the Netherlands issued a decision prohibiting the transaction pursuant to relevant legislation. Costs associated with this pending acquisition for the year ended March 31, 2026 were immaterial. Acquisition of Skytap In April 2024, the Company completed the acquisition of Skytap, Inc. (“Skytap”), a leading specialized workload services provider, by acquiring all outstanding equity interests of Skytap in exchange for cash consideration. The acquisition of Skytap was accounted for as a business combination in accordance with ASC 805, Business Combinations. The Company acquired Skytap for cash consideration of approximately $ 45 million, net of cash acquired of $ 4 million. Costs associated with this acquisition were immaterial. The acquisition of Skytap expands the Company’s hybrid cloud services portfolio. The final purchase price allocation resulted in approximately $ 43 million in intangible assets, primarily consisting of $ 13 million in completed technologies and $ 30 million in customer relationships with estimated useful lives of five and eight years , respectively, assets transferred of $ 24 million (inclusive of cash acquired of $ 4 million), liabilities assumed of $ 29 million, and goodwill of $ 11 million, primarily attributable to synergies expected to arise from this acquisition. Goodwill is not deductible for income tax purposes. Disposal of the Securities Industry Services (“SIS”) Platform in Canada In November 2024, the Company completed the sale of its transaction processing platform for securities brokerage industry services in Canada (which is a component of the Company’s Principal Markets segment), for approximately $ 185 million in cash. In connection with the sale, the Company recognized a $ 145 million pretax gain, which was recorded within Transaction-related costs (benefits) on the Consolidated Income Statement during the year ended March 31, 2025. This disposition was not accounted for as discontinued operations as it did not meet the relevant criteria. The carrying value of the net assets sold was not material. 83 Table of Contents Other Disposal Activity In April 2026, the Company entered into a definitive agreement to sell a digital solutions business within the Company's Principal Markets segment. The closing of the transaction is subject to customary closing conditions, including regulatory approval, and is expected to occur in the quarter ended June 30, 2026. The Company expects to record a pre-tax gain on the transaction of approximately $ 35 million. NOTE 11. INTANGIBLE ASSETS INCLUDING GOODWILL Intangible Assets The following table presents the Company’s intangible asset balances by major asset class: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, 2026 ​ At March 31, 2025 ​ ​ ​ ​ Gross Carrying ​ ​ ​ Accumulated ​ ​ ​ Net Carrying Gross Carrying ​ ​ ​ Accumulated ​ ​ ​ Net Carrying (Dollars in millions) ​ ​ ​ Amount ​ ​ ​ Amortization ​ ​ ​ Amount Amount ​ ​ ​ Amortization ​ ​ ​ Amount Capitalized software ​ $ 175 ​ $ ( 59 ) ​ $ 116 ​ $ 216 ​ $ ( 76 ) ​ $ 141 Customer relationships* ​ 116 ​ ( 77 ) ​ 39 ​ 121 ​ ( 60 ) ​ 61 Completed technology ​ 13 ​ ( 5 ) ​ 8 ​ 13 ​ ( 2 ) ​ 11 Patents and trademarks* ​ 14 ​ ( 12 ) ​ 2 ​ 15 ​ ( 10 ) ​ 5 Total ​ $ 318 ​ $ ( 153 ) ​ $ 165 ​ $ 365 ​ $ ( 148 ) ​ $ 218 * Amounts include effects from foreign currency translation. ​ There was no impairment of identifiable intangible assets recorded in the periods reported. The net carrying amount of intangible assets decreased by $ 53 million during the year ended March 31, 2026, primarily due to the reclassification of certain capitalized software intangibles to prepaid assets and other noncurrent assets resulting from the migration of on-premises software to a cloud-based solution. The aggregate intangible asset amortization expense was $ 57 million, $ 72 million, and $ 63 million for the years ended March 31, 2026, 2025 and 2024, respectively. Aggregate amortization expense in fiscal year 2026 included amortization of capitalized software of $ 30 million, which was reported in Depreciation of property, equipment and capitalized software on the Consolidated Statement of Cash Flows. The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet was estimated to be the following at March 31, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Capitalized ​ Customer ​ Completed ​ Patents and ​ ​ (Dollars in millions) ​ Software ​ ​ ​ Relationships ​ Technology ​ Trademarks ​ Total Year ending March 31: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2027 ​ $ 34 ​ $ 18 ​ $ 3 ​ $ 2 ​ $ 57 2028 ​ ​ 33 ​ ​ 5 ​ ​ 3 ​ ​ — ​ 40 2029 ​ ​ 27 ​ ​ 5 ​ ​ 3 ​ ​ — ​ 35 2030 ​ ​ 16 ​ ​ 4 ​ ​ — ​ ​ — ​ 20 2031 ​ ​ 6 ​ ​ 4 ​ ​ — ​ ​ — ​ 10 Thereafter ​ ​ — ​ ​ 4 ​ ​ — ​ ​ — ​ 4 ​ 84 Table of Contents Goodwill ​ The following table presents a roll-forward of goodwill balances by segment for the years ended March 31, 2026 and 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ United ​ ​ ​ Principal ​ Strategic ​ ​ (Dollars in millions) ​ States ​ ​ ​ Japan ​ ​ ​ Markets ​ Markets ​ ​ ​ Total Balance as of March 31, 2024 ​ $ — ​ $ 488 ​ $ 141 ​ $ 176 ​ $ 805 Acquisitions and (Divestitures)* ​ $ 11 ​ $ — ​ $ ( 27 ) ​ $ — ​ $ ( 15 ) Translation Adjustments ​ ​ — ​ ​ 1 ​ ​ — ​ ​ — ​ ​ 1 Reallocation ​ ​ — ​ ​ — ​ ​ ( 23 ) ​ ​ 23 ​ ​ — Balance as of March 31, 2025 ​ $ 11 ​ $ 489 ​ $ 92 ​ $ 198 ​ $ 790 Translation Adjustments ​ $ — ​ $ ( 4 ) ​ $ — ​ $ — ​ $ ( 4 ) Balance as of March 31, 2026 ​ $ 11 ​ $ 484 ​ $ 92 ​ $ 198 ​ $ 786 * Represents the goodwill acquired as part of the purchase of Skytap and the removal of goodwill related to the divestiture of the SIS platform using the relative fair value approach. See Note 10 – Acquisitions and Divestitures for additional details. As discussed in Note 4 – Segments, Kyndryl’s operations in Australia/New Zealand transitioned from the Principal Markets segment to the Strategic Markets segment in the quarter ended June 30, 2024. As a result, the Company reallocated the goodwill associated with Australia/New Zealand from the Principal Markets segment to the Strategic Markets segment. The Company also performed a qualitative impairment test immediately before and after the change in reporting units and determined that it is not more likely than not that the fair value of the reporting units is less than their carrying amounts, including goodwill. Accordingly, the Company concluded that the goodwill related to those reporting units was not impaired. Management reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable by first assessing qualitative factors to determine if it is more likely than not that fair value is less than carrying value. We conducted an impairment assessment as of January 1, 2026. After evaluating and weighing all relevant qualitative factors, the Company concluded that it is unlikely that the fair value of any of its reporting units is less than its carrying amount as of the date of the assessment. Accordingly, there were no goodwill impairment losses recorded for the year ended March 31, 2026. Cumulatively, the Company has recorded $ 469 million in goodwill impairment charges within its former EMEA ($ 293 million) and current United States ($ 176 million) reporting units, all of which occurred immediately following the Separation. 85 Table of Contents NOTE 12. BORROWINGS Debt The Company’s total current portion of long-term debt and short‑term debt as of March 31, 2026 and 2025 was $ 1.8 billion and $ 129 million, respectively. As of March 31, 2026, this balance primarily consisted of $ 796 million of current portion of long‑term debt, as detailed in the long‑term debt table below, and $ 1 billion outstanding under the Company’s revolving credit facility issued in February 2026. As of March 31, 2025, the Company’s current portion of long‑term debt and short‑term debt consisted of the current portion of long‑term debt. The following table presents the components of our long-term debt: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, ​ March 31, (Dollars in millions) ​ Interest Rate ​ Maturity ​ 2026 ​ 2025 Unsecured senior notes due 2026 ​ ​ ​ 2.05 % ​ October 2026 ​ $ 700 ​ $ 700 Unsecured senior notes due 2028 ​ 2.70 % ​ October 2028 ​ ​ 500 ​ ​ 500 Unsecured senior notes due 2031 ​ 3.15 % ​ October 2031 ​ ​ 650 ​ ​ 650 Unsecured senior notes due 2034 ​ 6.35 %* ​ February 2034 ​ ​ 500 ​ ​ 500 Unsecured senior notes due 2041 ​ 4.10 % ​ October 2041 ​ ​ 550 ​ ​ 550 Finance lease and other obligations ​ 5.39 %† ​ 2027-2032 ​ ​ 204 ​ ​ 290 ​ ​ ​ ​ ​ ​ $ 3,104 ​ $ 3,190 Less: Unamortized discount ​ ​ ​ ​ ​ ​ 4 ​ ​ 4 Less: Unamortized debt issuance costs ​ ​ ​ ​ ​ ​ 12 ​ ​ 14 Less: Current portion of long-term debt ​ ​ ​ ​ ​ ​ 796 ​ ​ 129 Total long-term debt ​ ​ ​ ​ ​ $ 2,293 ​ $ 3,042 * Including the cross-currency swaps that the Company entered into subsequent to the issuance of the unsecured senior notes due 2034, the effective interest rate on such notes was approximately 3.84 % at the time of issuance. For more information, see Note 7 – Financial Assets and Liabilities. † Weighted-average discount rate Contractual obligations of long-term debt outstanding at March 31, 2026, exclusive of finance lease obligations, were as follows: ​ ​ ​ ​ ​ (Dollars in millions)* ​ ​ ​ Principal Year ending March 31: ​ ​ ​ 2027 ​ $ 710 2028 ​ — 2029 ​ 500 2030 ​ — 2031 ​ ​ — Thereafter ​ 1,700 Total ​ $ 2,910 * Contractual obligations approximate scheduled repayments. ​ Senior Unsecured Notes In October 2021, in preparation for our Spin-off, we completed the offering of $ 2.4 billion in aggregate principal amount of senior unsecured fixed-rate notes as follows: $ 700 million aggregate principal amount of 2.05 % Senior Notes due 2026, $ 500 million aggregate principal amount of 2.70 % Senior Notes due 2028, $ 650 million aggregate principal amount of 3.15 % Senior Notes due 2031 and $ 550 million aggregate principal amount of 4.10 % Senior Notes due 2041 (the “Initial Notes”). The Initial Notes were offered and sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to non-U.S. persons in reliance on Regulation S of the Securities Act. In connection with the issuance of the Initial Notes, we entered into a registration rights agreement with the 86 Table of Contents purchasers of the Initial Notes, pursuant to which we completed a registered offering to exchange each series of Initial Notes for new notes with substantially identical terms during the quarter ended September 30, 2022. In February 2024, we completed a registered offering of $ 500 million in aggregate principal amount of 6.35 % senior unsecured notes due 2034 (the “2034 Notes”). We received proceeds of $ 494 million, net of debt issuance costs and discounts. The 2034 Notes are the Company’s senior unsecured obligations and rank equally in right of payment with all of the Company’s other existing and future senior unsecured indebtedness. If measured at fair value in the consolidated financial statements, all of the Company’s senior unsecured notes would be classified as Level 1 in the fair value hierarchy. The Initial Notes and the 2034 Notes are subject to customary affirmative covenants, negative covenants and events of default for financings of this type and are redeemable at our option in a customary manner. We have outstanding $ 700 million of fixed-rate notes that mature in October 2026. We intend to refinance these notes at a future date, subject to market conditions. Revolving Credit Agreement 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. The total facility fees recorded by the Company for the Revolving Credit Agreement were $ 5 million and $ 5 million for the years ended March 31, 2026 and 2025, respectively. In February 2026, the Company borrowed $ 1 billion under the Revolving Credit Agreement, bearing an interest rate of 4.97 %. The borrowing matures in August 2026 and may be refinanced utilizing the facility. The Company had approximately $ 2.2 billion of additional borrowing capacity remaining at March 31, 2026. Proceeds are intended to be used for working capital and other general corporate purposes, which may include repayment of indebtedness and acquisitions. 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. ​ 87 Table of Contents NOTE 13. OTHER LIABILITIES ​ The following table provides the components of other liabilities at March 31, 2026 and 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 Workforce rebalancing (current) ​ $ 13 ​ $ 29 Vendor software accruals (current) ​ ​ 551 ​ ​ 129 Other current accruals* ​ ​ 339 ​ ​ 296 Other accrued expenses and liabilities ​ $ 903 ​ $ 454 Workforce rebalancing (noncurrent) ​ $ 1 ​ $ 3 Deferred taxes ​ ​ 83 ​ ​ 51 Income tax reserve ​ ​ 229 ​ ​ 136 Vendor software accruals (noncurrent) ​ ​ 747 ​ ​ 137 Other* ​ ​ 115 ​ ​ 116 Other noncurrent liabilities ​ $ 1,176 ​ $ 443 * Balances of “Vendor software accruals (current)” at March 31, 2025 were included in “Other current accruals”. Balances of “Vendor software accruals (noncurrent)” at March 31, 2025 were included in “Other”. ​ In response to changing business needs, the Company has taken workforce rebalancing actions to increase productivity, enhance cost-competitiveness and rebalance skills. The workforce rebalancing liabilities at March 31, 2026 and 2025 include liabilities inherited from our former Parent plus new actions taken by Kyndryl during the fiscal year. Refer to Note 18 – Workforce Rebalancing and Site-Rationalization Charges for details. Pursuant to the terms of the Separation, the Company may be required to reimburse our former Parent for certain tax refunds received and to indemnify our former Parent for certain tax liabilities, although substantially all known matters have been resolved. For more information, see Note 5 – Taxes. NOTE 14. COMMITMENTS AND CONTINGENCIES The Company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at March 31, 2026 and 2025 were not material. Additionally, the Company has contractual commitments that are noncancellable with certain software, hardware and cloud partners used in the delivery of services to customers. The Company has determined that these commitments may exceed the Company’s needs over the next two to three years . If the Company is unable to satisfy, reduce or amend these contractual commitments, it will record the future charges for any payments related to excess commitments as cost of services. At March 31, 2026, we had short-term (April 2026 through March 2027), mid-term (April 2027 through March 2029) and long-term (April 2029 onward) purchase commitments in the amount of $ 0.2 billion, $ 0.4 billion and $ 0.3 billion, respectively. Purchase commitments year-over-year have remained relatively consistent. Purchases under these commitments were $ 0.5 billion for the year ended March 31, 2026. ​ As a Fortune 500 company with customers and employees around the world, Kyndryl is subject to, and could become subject to, either as plaintiff or defendant, a variety of contingencies, including claims, demands and suits, investigations, tax matters and other legal proceedings that arise from time to time, including in the ordinary course of its business. In addition, given the rapidly evolving external landscape of cybersecurity, privacy and data protection laws, regulations and threat actors, the Company or its clients have and could become subject to actions or proceedings in various jurisdictions. The Company is also subject to, and could become subject to, actions and proceedings in various jurisdictions involving a wide range of labor and employment issues (including matters related to contested employment decisions, country-specific labor and employment laws, and the Company’s benefit plans), as well as actions with respect to commercial matters, contracts, securities, foreign operations, competition law, environmental matters and regulatory compliance matters, among others. These actions have been and may be commenced by a number of different parties, including competitors, clients, suppliers, service providers, licensees, employees, government and regulatory agencies, stockholders and representatives of the locations in which the Company does business. Some of the actions to 88 Table of Contents which the Company is, or may become, party involve particularly complex technical issues, and some actions raise novel questions under the laws of the various jurisdictions in which these matters arise. Additionally, the Company is, and may become, a party to agreements pursuant to which it may be obligated to indemnify the other party with respect to certain disputed matters. The Company cannot predict the final outcome in any type of legal proceeding described above and there can be no assurance that the Company will be successful or obtain any requested relief or outcome in any matter. Matters often develop over a long period of time and expectations can change as a result of new findings, rulings, appeals, settlements, legal or regulatory changes or other factors. From time to time, the Company may discontinue or settle and compromise matters as appropriate in the Company’s best interest. The Company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. If the Company is unable to assess the outcome of a matter or estimate the possible loss or range of losses that could potentially result from such matter, a liability is not recorded. The Company reviews claims, suits, investigations and proceedings, and decisions are made with respect to recording or adjusting provisions and relevant disclosures to reflect the impact and status of settlement discussions, discovery, procedural and substantive rulings, reviews by counsel and other information pertinent to a particular matter. In the year ended March 31, 2026, the Company recorded a reserve related to an interim arbitration decision on a pre-spin customer contract dispute that was recorded as transaction-related costs. Whether any losses, damages or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a material effect on the Company’s business, financial condition, results of operations or cash flows will depend on a number of variables, including the timing and amount of such losses or damages; the structure and type of any such remedies; the significance of the impact any such losses, damages or remedies may have in the consolidated financial statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. While the Company will continue to prosecute or defend itself vigorously, as appropriate, it is possible that the Company’s business, financial condition, results of operations or cash flows could be affected overall or in any particular fiscal period by any of these matters or any claims or legal proceedings that arise as a result of these matters. In addition, the legal costs associated with the foregoing could be substantial, regardless of their outcome. SEC Matter The Company continues to cooperate with the Division of Enforcement of the Securities and Exchange Commission (the “SEC”) in its investigation relating to the Company’s cash management practices, related disclosures, the efficacy of the Company’s internal control over financial reporting, and certain other matters. The matter is ongoing and the Company cannot currently predict its final outcome. Securities Litigation In February and March 2026, two purported Company stockholders filed putative class actions in the U.S. District Court for the Eastern District of New York and in the U.S. District Court for the Southern District of New York against the Company and certain current and former officers, alleging false and misleading statements in the Company’s disclosures. The plaintiffs in both actions seek monetary damages and costs and expenses. The matters are ongoing and the Company cannot currently predict their final outcome. 89 Table of Contents NOTE 15. EQUITY ​ The following tables present reclassifications and taxes related to items of other comprehensive income (loss) for the years ended March 31, 2026, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ ​ Pretax ​ ​ ​ Tax (Expense) ​ ​ ​ Net-of-Tax For the year ended March 31, 2026 ​ ​ ​ Amount ​ ​ ​ Benefit ​ ​ ​ Amount Foreign currency translation adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustments ​ $ 127 ​ $ — ​ $ 127 Unrealized gains (losses) on net investment hedges ​ ​ ( 75 ) ​ ​ 2 ​ ​ ( 73 ) Total foreign currency translation adjustments ​ $ 53 ​ $ 2 ​ $ 55 Unrealized gains (losses) on cash flow hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized gains (losses) arising during the period ​ $ 2 ​ $ — ​ $ 2 Reclassification of (gains) losses to net income ​ ​ ( 8 ) ​ ​ ( 1 ) ​ ​ ( 9 ) Total unrealized gains (losses) on cash flow hedges ​ $ ( 6 ) ​ $ ( 1 ) ​ $ ( 7 ) Retirement-related benefit plans: ​ ​ ​ ​ ​ ​ Prior service (costs) credits ​ $ ( 34 ) ​ $ 9 ​ $ ( 25 ) Net gains (losses) arising during the period ​ ​ 64 ​ ​ ( 18 ) ​ ​ 46 Curtailments and settlements ​ ​ 10 ​ ​ ( 3 ) ​ ​ 8 Amortization of prior service costs (credits) ​ ​ 2 ​ ​ ( 1 ) ​ ​ 2 Amortization of net (gains) losses ​ ​ 10 ​ ​ ( 3 ) ​ ​ 7 Total retirement-related benefit plans ​ $ 53 ​ $ ( 16 ) ​ $ 38 Other comprehensive income (loss) ​ $ 100 ​ $ ( 14 ) ​ $ 86 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ ​ Pretax ​ ​ ​ Tax (Expense) ​ ​ ​ Net-of-Tax For the year ended March 31, 2025 ​ ​ ​ Amount ​ ​ ​ Benefit ​ ​ ​ Amount Foreign currency translation adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustments ​ $ ( 50 ) ​ $ — ​ $ ( 50 ) Unrealized gains (losses) on net investment hedges ​ ​ 4 ​ ​ ( 2 ) ​ ​ 2 Total foreign currency translation adjustments ​ $ ( 46 ) ​ $ ( 2 ) ​ $ ( 48 ) Unrealized gains (losses) on cash flow hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized gains (losses) arising during the period ​ $ ( 14 ) ​ $ 3 ​ $ ( 11 ) Reclassification of (gains) losses to net income ​ ​ 11 ​ ​ — ​ ​ 11 Total unrealized gains (losses) on cash flow hedges ​ $ ( 2 ) ​ $ 3 ​ $ — Retirement-related benefit plans: ​ ​ ​ ​ ​ ​ Prior service (costs) credits ​ $ 2 ​ $ ( 1 ) ​ $ 1 Net gains (losses) arising during the period ​ ​ 17 ​ ​ ( 4 ) ​ ​ 13 Curtailments and settlements ​ ​ 7 ​ ​ ( 2 ) ​ ​ 5 Amortization of net (gains) losses ​ ​ 16 ​ ​ ( 4 ) ​ ​ 12 Total retirement-related benefit plans ​ $ 42 ​ $ ( 10 ) ​ $ 32 Other comprehensive income (loss) ​ $ ( 6 ) ​ $ ( 10 ) ​ $ ( 16 ) ​ 90 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Dollars in millions) ​ ​ ​ Pretax ​ ​ ​ Tax (Expense) ​ ​ ​ Net-of-Tax For the year ended March 31, 2024 ​ ​ ​ Amount ​ ​ ​ Benefit ​ ​ ​ Amount Foreign currency translation adjustments: ​ ​ ​ ​ ​ ​ ​ ​ ​ Foreign currency translation adjustments ​ $ ( 36 ) ​ $ — ​ $ ( 36 ) Unrealized losses on net investment hedges ​ ​ ( 11 ) ​ ​ — ​ ​ ( 11 ) Total foreign currency translation adjustments ​ $ ( 47 ) ​ $ — ​ $ ( 47 ) Unrealized gains (losses) on cash flow hedges: ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized gains (losses) arising during the period ​ $ 22 ​ $ ( 1 ) ​ $ 21 Reclassification of (gains) losses to net income ​ ​ ( 21 ) ​ ​ — ​ ​ ( 21 ) Total unrealized gains (losses) on cash flow hedges ​ $ 1 ​ $ ( 1 ) ​ $ — Retirement-related benefit plans: ​ ​ ​ ​ ​ ​ Prior service (costs) credits ​ $ ( 3 ) ​ $ 1 ​ $ ( 2 ) Net gains (losses) arising during the period ​ ​ ( 56 ) ​ ​ 10 ​ ​ ( 45 ) Curtailments and settlements ​ ​ 10 ​ ​ ( 2 ) ​ ​ 8 Amortization of prior service (credits) costs ​ ​ 1 ​ ​ — ​ ​ 1 Amortization of net (gains) losses ​ ​ 5 ​ ​ ( 2 ) ​ ​ 3 Total retirement-related benefit plans ​ $ ( 42 ) ​ $ 7 ​ $ ( 36 ) Other comprehensive income (loss) ​ $ ( 88 ) ​ $ 6 ​ $ ( 82 ) ​ The following table presents the components of accumulated other comprehensive income (loss), net of taxes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Unrealized ​ Foreign Currency ​ Net Change in ​ Accumulated Other ​ ​ Gains (Losses) ​ Translation ​ Retirement-Related ​ Comprehensive (Dollars in millions) ​ ​ ​ on Cash Flow Hedges ​ Adjustments* ​ ​ ​ Benefit Plans ​ ​ ​ Income (Loss) March 31, 2023 ​ $ — ​ $ ( 921 ) ​ $ ( 142 ) ​ $ ( 1,062 ) Other comprehensive income (loss) ​ ​ — ​ ​ ( 47 ) ​ ​ ( 36 ) ​ ​ ( 82 ) March 31, 2024 ​ $ — ​ $ ( 967 ) ​ $ ( 178 ) ​ $ ( 1,145 ) Other comprehensive income (loss) ​ ​ — ​ ​ ( 48 ) ​ ​ 32 ​ ​ ( 16 ) March 31, 2025 ​ $ 1 ​ $ ( 1,016 ) ​ $ ( 145 ) ​ $ ( 1,160 ) Other comprehensive income (loss) ​ ​ ( 7 ) ​ ​ 55 ​ ​ 38 ​ ​ 86 March 31, 2026 ​ $ ( 6 ) ​ $ ( 961 ) ​ $ ( 108 ) ​ $ ( 1,074 ) ​ * Foreign currency translation adjustments are presented gross except for any associated hedges, which are presented net of tax. Share Repurchase Program ​ 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, and in November 2025, the Company announced that the Board of Directors authorized an additional $ 400 million of repurchase capacity under this program (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. ​ During the years ended March 31, 2026 and March 31, 2025, the Company repurchased 11.6 million and 2.6 million shares of its common stock, respectively, at an aggregate cost of $ 304 million and $ 94 million under the Share Repurchase Program, respectively. As of March 31, 2026, approximately $ 302 million of capacity remained available under the Share Repurchase Program. ​ 91 Table of Contents NOTE 16. STOCK-BASED COMPENSATION ​ Stock-based incentive awards are granted to employees under the terms of Kyndryl’s employment and the Kyndryl Plan (see Note 1 – Significant Accounting Policies). Awards under the Kyndryl Plan principally include Restricted Stock Units (RSUs), market-conditioned and performance-conditioned stock units and stock options. RSUs and stock options generally vest based on continued passage of time. Market-conditioned and performance-conditioned stock units are cliff-vested at the end of the performance period if the market or performance conditions have been satisfied. The following table summarizes stock-based compensation cost, which is included in net income (loss). ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Cost of services ​ $ 9 ​ $ 12 ​ $ 16 Selling, general and administrative expense ​ ​ 55 ​ ​ 89 ​ ​ 78 Pretax stock-based compensation expense ​ $ 64 ​ $ 100 ​ $ 95 Income tax benefits ​ ​ ( 2 ) ​ ​ ( 7 ) ​ ​ ( 5 ) Stock-based compensation cost, net of tax ​ $ 62 ​ $ 93 ​ $ 90 ​ The Company’s total unrecognized compensation cost related to non-vested awards at March 31, 2026 was $ 125 million and is expected to be recognized over a weighted-average period of approximately 2.6 years. Capitalized stock-based compensation cost was not material during any period presented. Stock Units The following table summarizes the activity related to Kyndryl’s RSUs, market-conditioned stock units and performance-conditioned stock units: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Market-Conditioned ​ Performance-Conditioned ​ ​ RSUs ​ Stock Units ​ Stock Units ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ Average ​ ​ ​ ​ Average ​ ​ ​ ​ Average ​ ​ ​ ​ Number ​ Grant-Date ​ Number ​ Grant-Date ​ ​ ​ Number ​ Grant-Date ​ ​ of Units ​ Fair Value ​ of Units ​ Fair Value ​ of Units ​ Fair Value ​ ​ ​ ​ (in millions) ​ ​ ​ (per share) ​ ​ ​ (in millions) ​ ​ ​ (per share) ​ ​ ​ (in millions) ​ ​ ​ (per share) Nonvested balance at March 31, 2023 ​ ​ 9.4 ​ $ 18.43 ​ ​ 2.3 ​ $ 14.40 ​ ​ 2.3 ​ $ 10.62 Awards granted ​ ​ 3.1 ​ $ 13.52 ​ ​ 0.6 ​ $ 14.10 ​ ​ 2.0 ​ $ 13.37 Awards vested ​ ​ ( 4.0 ) ​ ​ 21.92 ​ ​ — ​ ​ — ​ ​ — ​ ​ — Awards canceled/forfeited ​ ​ ( 0.4 ) ​ ​ 17.43 ​ ​ ( 0.1 ) ​ ​ 14.43 ​ ​ ( 0.1 ) ​ ​ 11.85 Nonvested balance at March 31, 2024 ​ ​ 8.0 ​ $ 15.33 ​ ​ 2.9 ​ $ 14.32 ​ ​ 4.3 ​ $ 12.28 Awards granted ​ ​ 1.7 ​ $ 26.65 ​ ​ 0.4 ​ $ 26.23 ​ ​ 1.2 ​ $ 26.47 Awards vested ​ ​ ( 3.3 ) ​ ​ 17.14 ​ ​ ( 0.8 ) ​ ​ 15.14 ​ ​ — ​ ​ — Awards canceled/forfeited ​ ​ ( 0.3 ) ​ ​ 16.58 ​ ​ ( 0.8 ) ​ ​ 15.12 ​ ​ ( 0.1 ) ​ ​ 12.13 Nonvested balance at March 31, 2025 ​ ​ 6.1 ​ $ 17.49 ​ ​ 1.6 ​ $ 16.33 ​ ​ 5.4 ​ $ 15.01 Awards granted ​ ​ 3.6 ​ $ 32.86 ​ ​ — ​ $ — ​ ​ 1.2 ​ $ 39.47 Adjustment for performance achievement ​ ​ ​ ​ ​ ​ ​ ​ 0.6 ​ ​ 12.51 ​ ​ ( 0.4 ) ​ ​ 10.62 Awards vested ​ ​ ( 2.7 ) ​ ​ 17.74 ​ ​ ( 1.3 ) ​ ​ 12.51 ​ ​ ( 1.9 ) ​ ​ 10.61 Awards canceled/forfeited ​ ​ ( 0.6 ) ​ ​ 24.45 ​ ​ ( 0.1 ) ​ ​ 19.22 ​ ​ ( 0.5 ) ​ ​ 23.98 Nonvested balance at March 31, 2026 ​ ​ 6.4 ​ $ 25.36 ​ ​ 0.9 ​ $ 18.70 ​ ​ 3.8 ​ $ 24.24 ​ 92 Table of Contents The Company used the following assumptions in the Monte-Carlo simulation pricing model to estimate the grant-date fair values of stock units granted with both a performance and a market condition for the year ended March 31, 2026, and market-conditioned stock units granted during the years ended March 31, 2025 and March 31, 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, ​ ​ 2026 ​ 2025 ​ 2024 Share price ​ $ 39.18 ​ $ 26.51 ​ $ 13.55 Expected volatility ​ 48 % ​ 43 % ​ 39 %* Risk-free interest rate ​ 3.88 % ​ 4.60 % ​ 4.57 % - 5.38 % Dividend yield ​ 0 % ​ 0 % ​ 0 % * Based on the average three-year historic volatility across a group of peer companies. Stock Options ​ The following table summarizes the activity related to Kyndryl’s stock options: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock Options ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ ​ ​ ​ Weighted- ​ Average ​ Aggregate ​ ​ Remaining ​ ​ Number ​ Average ​ Grant Date ​ Intrinsic ​ ​ Contractual ​ ​ ​ ​ of Units ​ ​ ​ Exercise Price ​ Fair Value ​ Value ​ ​ Term ​ ​ ​ ​ (in millions) ​ ​ ​ (per share) ​ (per share) ​ (in millions) ​ ​ (in years) Outstanding balance at March 31, 2023 ​ ​ 3.7 ​ $ 17.76 ​ $ 6.54 ​ $ — ​ ​ 8.7 Awards exercised ​ ​ ( 0.0 ) ​ ​ 17.30 ​ ​ 6.61 ​ ​ — ​ ​ ​ Awards canceled/forfeited ​ ​ ( 0.1 ) ​ ​ 17.78 ​ ​ 6.54 ​ ​ ​ ​ ​ ​ Outstanding balance at March 31, 2024 ​ ​ 3.5 ​ $ 17.77 ​ $ 6.54 ​ $ — ​ ​ 7.3 Awards exercised ​ ​ ( 0.4 ) ​ ​ 17.69 ​ ​ 6.56 ​ ​ 4.7 ​ ​ ​ Awards canceled/forfeited ​ ​ ( 0.0 ) ​ ​ 17.78 ​ ​ 6.54 ​ ​ ​ ​ ​ ​ Outstanding balance at March 31, 2025 ​ ​ 3.1 ​ $ 17.78 ​ $ 6.54 ​ $ 42.7 ​ ​ 6.4 Awards exercised ​ ​ ( 0.4 ) ​ ​ 17.77 ​ ​ 6.54 ​ ​ 6.4 ​ ​ ​ Awards canceled/forfeited ​ ​ ( 0.0 ) ​ ​ 17.78 ​ ​ 6.54 ​ ​ ​ ​ ​ ​ Outstanding balance at March 31, 2026 ​ ​ 2.7 ​ $ 17.78 ​ $ 6.54 ​ $ — ​ ​ 5.0 Options vested and exercisable at March 31, 2026 ​ ​ 2.7 ​ $ 17.78 ​ $ 6.54 ​ $ — ​ ​ 5.0 ​ ​ ​ NOTE 17. RETIREMENT-RELATED BENEFITS Defined Benefit Pension Plans The Company sponsors and co-sponsors defined benefit pension plans that cover certain non-U.S. employees and retirees. The defined benefit pension plan benefits are based principally on employees’ years of service and/or compensation levels at or near retirement. These plans are accounted for as defined benefit pension plans for purposes of the consolidated financial statements. Accordingly, the net benefit obligations, plan assets and the related benefit plan expenses of those plans have been recorded in the Company’s consolidated financial statements. 93 Table of Contents The following tables present the components of net periodic pension cost for the defined benefit pension plans recognized in the Consolidated Income Statement. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 ​ ​ ​ 2024 Service cost $ 32 ​ $ 34 ​ $ 38 Interest cost* ​ ​ 62 ​ ​ 52 ​ ​ 55 Expected return on plan assets* ​ ​ ( 63 ) ​ ​ ( 59 ) ​ ​ ( 60 ) Amortization of prior service costs (credits)* ​ ​ 3 ​ ​ 1 ​ ​ 1 Recognized actuarial losses* ​ ​ 10 ​ ​ 16 ​ ​ 4 Curtailments and settlements* ​ ​ 10 ​ ​ 8 ​ ​ 13 Total net periodic pension cost $ 54 ​ $ 53 ​ $ 51 * These components of net periodic pension cost are included in Other expense (income) in the Consolidated Income Statement. The following table presents the changes in net benefit obligation and plan assets for the defined benefit pension plans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 Change in benefit obligation ​ Benefit obligation at beginning of period $ 1,563 $ 1,670 Service cost 32 34 Interest cost 62 52 Plan participants’ contributions 3 3 Actuarial losses (gains)* ( 91 ) ( 53 ) Benefits paid from trust ( 24 ) ( 22 ) Direct benefit payments ( 43 ) ( 39 ) Foreign exchange impact 81 ( 2 ) Plan amendments ​ ​ 36 ​ ​ — Curtailments, settlements and other ( 45 ) ( 80 ) Benefit obligation at end of period $ 1,575 $ 1,563 Accumulated benefit obligation $ 1,492 $ 1,484 Change in plan assets ​ ​ Fair value of plan assets at beginning of period $ 1,199 $ 1,248 Actual return on plan assets 37 15 Employer contributions 12 17 Plan participants’ contributions 3 3 Benefits paid from trust ( 24 ) ( 22 ) Foreign exchange impact 76 3 Settlements ( 40 ) ( 65 ) Fair value of plan assets at end of period $ 1,264 $ 1,199 Funded status at end of period $ ( 311 ) $ ( 364 ) * The year-over-year change was primarily driven by higher discount rates. 94 Table of Contents The following table presents the amounts recorded in the Consolidated Balance Sheet for the defined benefit pension plans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 Noncurrent assets – pension assets ​ $ 222 ​ $ 148 Current liabilities – accrued compensation and benefits ​ ( 54 ) ​ ( 40 ) Noncurrent liabilities – retirement and nonpension postretirement benefit obligations ​ ( 480 ) ​ ( 471 ) Funded status, net ​ $ ( 311 ) ​ $ ( 364 ) ​ The following table presents information for defined benefit pension plans with accumulated benefit obligations (ABO) or projected benefit obligations (PBO) in excess of plan assets. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, 2026 ​ At March 31, 2025 ​ ​ Benefit ​ Plan ​ Benefit ​ Plan (Dollars in millions) ​ ​ ​ Obligation ​ ​ ​ Assets ​ ​ ​ Obligation ​ ​ ​ Assets Plans with PBO in excess of plan assets ​ $ 753 ​ $ 220 ​ $ 745 ​ $ 233 Plans with ABO in excess of plan assets ​ 637 ​ 167 ​ 605 ​ 157 Plans with plan assets in excess of PBO ​ 822 ​ 1,044 ​ 818 ​ 966 ​ The following table presents the pretax net loss and prior service costs (credits) recognized in OCI and the changes in pretax net loss and prior service costs (credits) recognized in AOCI for the defined benefit pension plans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended March 31, (Dollars in millions) ​ ​ ​ 2026 ​ ​ ​ 2025 Net loss (gain) at beginning of period $ 256 $ 296 Current period loss (gain) ​ ​ ( 63 ) ​ ​ ( 17 ) Curtailments and settlements ​ ​ ( 10 ) ​ ​ ( 8 ) Amortization of net loss included in net periodic benefit cost ​ ​ ( 10 ) ​ ​ ( 16 ) Net loss (gain) at end of period ​ $ 173 ​ $ 256 Prior service costs (credits) at beginning of period ​ ​ 1 ​ ​ 4 Current period prior service costs (credits) ​ ​ 35 ​ ​ ( 2 ) Amortization for prior service costs (credits) included in net periodic benefit cost ​ ​ ( 3 ) ​ ​ ( 1 ) Prior service costs (credits) at end of period ​ $ 34 ​ $ 1 Total amounts recognized in accumulated other comprehensive loss (income)* $ 207 $ 257 * See Note 15 – Equity for the total change in AOCI and the Consolidated Statement of Comprehensive Income for the components of net periodic benefit cost, which includes components related to nonpension postretirement benefit plans as well as the related tax effects, recognized in OCI for the retirement-related benefit plans. The following table presents the weighted-average assumptions used to measure the net periodic pension cost and the year-end benefit obligations for the defined benefit pension plans. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, Weighted-average assumptions used to measure: ​ ​ ​ 2026 ​ 2025 ​ 2024 Net periodic pension cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate 3.68 % ​ 3.30 % ​ 3.57 % Expected long-term returns on plan assets 4.77 % ​ 4.63 % ​ 4.69 % Rate of compensation increase 2.80 % ​ 2.84 % ​ 2.85 % Benefit obligations ​ ​ ​ ​ ​ ​ ​ ​ ​ Discount rate ​ 4.31 % ​ 3.68 % ​ 3.30 % Rate of compensation increase ​ 2.95 % ​ 2.80 % ​ 2.84 % Interest crediting rate – cash balance plans ​ 1.90 % ​ 1.83 % ​ 1.65 % ​ 95 Table of Contents In certain countries, a hypothetical portfolio of high-quality corporate bonds is used to construct a yield curve. Projected cash flows from the Company’s expected benefit obligation payments are matched to the yield curve to derive discounts. In other countries where the markets for high-quality long-term bonds are not as well developed, a portfolio of long-term government bonds is used as a base and a credit spread is added to simulate corporate bond yields at these maturities in the jurisdiction of each plan. This is the benchmark for developing the respective discount rates. In developing the expected long-term rate of return on assets, the Company considers the long-term expectations for future returns. The use of expected returns may result in pension income that is greater or less than the actual return of those plan assets in a given year. Over time, however, the expected rate of return is expected to approximate the actual long-term results, leading to a pattern of income or loss recognition that more closely matches the pattern of services provided by the employees. The investment objective of the defined benefit plans is to generate returns that will enable the plan to meet its future obligations. The weighted-average target allocation for the defined benefit plans is 29 % equity securities, 45 % fixed-income securities, 6 % real estate, 14 % insurance contracts and 6 % other investments. Typically the responsibility for determining the target allocation and managing the investments lies with a plan governing board that may include up to 50 percent of members elected by employees and retirees. Generally, these defined benefit plans do not invest in illiquid assets, and their use of derivatives is mainly for currency hedging, interest rate risk management, credit exposure and alternative investment strategies. The following table presents the Company’s defined benefit pension plans’ asset classes and their associated fair value at March 31, 2026 and 2025. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At March 31, 2026 ​ At March 31, 2025 (Dollars in millions) ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total ​ ​ ​ Level 1 ​ ​ ​ Level 2 ​ ​ ​ Level 3 ​ ​ ​ Total Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity securities ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Fixed income ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Government and related (1) ​ ​ — ​ ​ 109 ​ ​ — ​ ​ 109 ​ ​ — ​ ​ 104 ​ ​ — ​ ​ 104 Corporate bonds ​ — ​ ​ 22 ​ ​ — ​ ​ 22 ​ — ​ ​ 21 ​ ​ — ​ ​ 21 Insurance contracts ​ ​ — ​ ​ 179 ​ ​ — ​ ​ 179 ​ ​ — ​ ​ 169 ​ ​ — ​ ​ 169 Cash and short-term investments (2) ​ 4 ​ ​ — ​ ​ — ​ ​ 5 ​ 3 ​ ​ — ​ ​ — ​ ​ 3 Derivative assets (3) ​ ​ — ​ ​ 4 ​ ​ — ​ ​ 4 ​ ​ — ​ ​ 4 ​ ​ — ​ ​ 4 Subtotal ​ $ 4 ​ $ 314 ​ $ — ​ $ 318 ​ $ 3 ​ $ 297 ​ $ — ​ $ 301 Investments measured at net asset value using NAV as a practical expedient (4) ​ — ​ — ​ ​ — ​ 946 ​ — ​ — ​ ​ — ​ 898 Fair value of plan assets ​ $ 4 ​ $ 314 ​ $ — ​ $ 1,264 ​ $ 3 ​ $ 297 ​ $ — ​ $ 1,199 (1) Includes debt issued by national, state and local governments and agencies. (2) Includes cash, cash equivalents and short-term marketable securities. (3) Includes forward contracts, interest rate swaps, exchange traded and other over-the-counter derivatives. (4) Investments measured at fair value using the net asset value (NAV) per share (or its equivalent), as a practical expedient. These investments include commingled funds, hedge funds, common collective trusts, private equity partnerships and real estate partnerships. ​ Approximately 58 percent of plan assets are held in plans which are co-sponsored by the Company and the former Parent. The allocation of the fair value of co-sponsored plan assets is based on the initial pension assets assumed in connection with establishment of certain Kyndryl legal entities, Company contributions, distributions and market returns. Defined benefit pension plan assets are recognized and measured at fair value. Because of the inherent uncertainty of valuations, these fair value measurements may not necessarily reflect the amounts the Company could realize in current market transactions. The following is a description of the valuation techniques used to measure plan assets at fair value. There were no changes in valuation techniques during the periods presented. 96 Table of Contents Equity securities and mutual funds: Equity securities are valued at the closing price reported on the stock exchange on which the individual securities are traded. Mutual funds are typically valued based on quoted market prices. These assets are generally classified as Level 1. Fixed income: Fixed-income securities, other than insurance contracts, are typically valued using the closing price reported on the major market on which the individual securities are traded, if available. Assets fair-valued using this methodology are generally classified as Level 2. If market prices are unavailable, the fair value is estimated using pricing models or quoted prices of securities with similar characteristics. Insurance contracts: Fair value is based on the expected value of the insurance benefits of the insurance contracts. The insurance benefits are assessed using the same interest rate and mortality table used to determine the liability. These assets are generally classified as Level 2. Cash and short-term investments: Cash includes money market accounts that are valued at their cost plus interest on a daily basis, which approximates fair value. Short-term investments represent securities with original maturities of one year or less. These assets are generally classified as Level 1. Derivatives assets: Exchange-traded derivatives are valued at the closing price reported on the exchange on which the individual securities are traded. Forward contracts are valued using a mid-close price. Over-the-counter derivatives are valued using pricing models. These models require a variety of inputs, yield curves, credit curves, measures of volatility and foreign exchange rates. Derivative assets are classified as Level 1 or Level 2 depending on availability of quoted market prices. Investments measured at net asset value: Certain investments are measured at fair value using the net asset value (“NAV”) per share (or its equivalent) as a practical expedient. These investments, which may include commingled funds, hedge funds, common collective trusts, private equity partnerships and real estate partnerships, are typically valued using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus liabilities multiplied by the plan’s ownership of the investment. It is the Company’s general practice to fund amounts for pensions sufficient to meet the minimum requirements set forth in applicable employee benefits laws and local tax laws. From time to time, the Company contributes additional amounts as it deems appropriate. The Company contributed $ 12 million, $ 17 million, and $ 14 million to the defined benefit pension plans during the years ended March 31, 2026, 2025 and 2024, respectively. Additionally, the Company made direct payments of $ 49 million, $ 44 million, and $ 46 million to participants of the defined benefit pension plans during the years ended March 31, 2026, 2025 and 2024, respectively. The Company estimates contributions to its defined benefit pension plans in fiscal year 2027 to be approximately $ 13 million. This amount generally represents legally mandated minimum contributions. Financial market performance in fiscal year 2027 could increase or decrease the legally mandated minimum contribution in certain countries that require monthly or daily remeasurement of the funded status. The Company could also elect to contribute more than the legally mandated amount based on market conditions or other factors. The following table presents the total expected benefit payments to participants of the defined benefit pension plans. ​ ​ ​ ​ ​ ​ ​ Expected (Dollars in millions) ​ ​ ​ Benefit Payments Fiscal year ending March 31, ​ ​ ​ 2027 ​ $ 140 2028 ​ 116 2029 ​ 122 2030 ​ 118 2031 ​ 126 2032-2036 ​ 650 ​ 97 Table of Contents The fiscal year 2027 expected benefit payments not covered by the respective plan assets represent a component of accrued compensation and benefits, within current liabilities, in the Consolidated Balance Sheet. Defined Contribution Retirement Plans The Company sponsors defined contribution retirement plans for certain eligible employees. The Company’s contribution expense associated with employer matching benefits was $ 137 million, $ 131 million, and $ 140 million, for the years ended March 31, 2026, 2025 and 2024, respectively. Nonpension Postretirement Benefit Plans and Multi-Employer Plans Certain Company employees participate in multi-employer defined benefit pension plans and post-retirement health plans which are sponsored by third parties and include other participants as well as other nonpension postretirement benefit plans that are sponsored by the Company. Accordingly, the Company does not record an asset or liability to recognize the funded status of the multi-employer plans. However, the Company records service cost attributable to its employees who participate in the multi-employer plans, as well as expense allocated for certain corporate and shared functional employees. These amounts are included in the Consolidated Income Statement, and were not material for any of the periods presented. The nonpension postretirement benefit plans provide a fixed monthly dollar credit for retiree health care expense. The related expenses for these plans are included in the consolidated financial statements, and were not material for any period presented. Contributions to the nonpension postretirement benefit plans and the multi-employer plans and components of net periodic benefit cost related to these plans and were not material for any period presented. Additionally, the components resulting in a change in benefit obligation and the activity recognized in AOCI related to the nonpension postretirement benefit plans were not material for the periods presented. The nonpension postretirement benefit plans had a noncurrent liability recorded in Retirement and nonpension postretirement benefit obligations in the Consolidated Balance Sheet of $ 8 million at March 31, 2026 and $ 9 million at March 31, 2025. The weighted-average discount rate used to measure the nonpension postretirement benefit plan obligation was 3.97 %, 3.16 %, and 2.89 %, for the years ended March 31, 2026, 2025 and 2024, respectively. There were no plan assets in the nonpension postretirement benefit plans for any period presented. As a result, the noncurrent liability related to these plans represented the accumulated postretirement benefit obligation in excess of plan assets for each period presented. Future expected benefit payments to participants of the nonpension postretirement benefit plans are not expected to be material, and the Company expects contributions to the multi-employer and nonpension postretirement benefits plans to be immaterial in fiscal year 2027. ​ ​ NOTE 18. WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES On May 5, 2026, the Company approved, as part of its ongoing efforts to further streamline operations, workforce rebalancing actions to optimize and support the Company’s financial and operational efficiency in fiscal year 2027. As a result of these actions, the Company expects to incur workforce rebalancing charges of approximately $ 200 million, primarily consisting of future cash expenditures for severance and related benefits. Management expects that such workforce rebalancing efforts, once completed, will reduce operating expense in fiscal year 2028. There can be no guarantee that the Company will achieve its expected costs savings. ​ The Company will continue to seek opportunities to improve operational efficiency and reduce costs, which may result in additional charges in future periods. ​ During the year ended March 31, 2026, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency which continued through the end of the fiscal year 2026. These actions resulted in workforce rebalancing charges (the “Fiscal 2026 Program”) of approximately $ 60 million. During the year ended March 31, 2025, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency which continued through the end of the 2025 fiscal year. These actions resulted in workforce rebalancing charges and charges related to ceasing to use leased and owned fixed assets (collectively, the “Fiscal 2025 Program”). The total charges incurred related to the Fiscal 2025 Program were $ 162 million, consisting of $ 114 million in workforce rebalancing charges and $ 48 million in charges related to ceasing to use leased and owned 98 Table of Contents fixed assets. The Company expects that these actions will reduce future payroll costs, rent expenses and depreciation of property and equipment. During the year ended March 31, 2023, the Company initiated actions to reduce our 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 lease termination charges (collectively, the “Fiscal 2024 Program”). The total charges incurred related to the Fiscal 2024 Program were $ 310 million, consisting of approximately 60 % for workforce rebalancing charges and approximately 40 % for charges related to ceasing to use leased and owned fixed assets and lease termination charges. The Company expects that these actions will reduce future payroll costs, rent expenses and depreciation of property and equipment. The following table presents the segment breakout of charges incurred during the years ended March 31, 2026, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs Incurred to Date ​ ​ Year Ended March 31, ​ Fiscal 2026 ​ Fiscal 2025 ​ Fiscal 2024 (Dollars in millions) ​ ​ ​ 2026 ​ 2025 ​ 2024* ​ Program ​ ​ ​ Program ​ ​ ​ Program United States ​ $ 20 ​ $ 62 ​ $ 29 ​ $ 20 ​ $ 62 ​ $ 43 Japan ​ ​ 5 ​ ​ 12 ​ ​ 2 ​ ​ 5 ​ ​ 12 ​ ​ 4 Principal Markets ​ ​ 15 ​ ​ 30 ​ ​ 69 ​ ​ 15 ​ ​ 30 ​ ​ 128 Strategic Markets ​ ​ 20 ​ ​ 58 ​ ​ 71 ​ ​ 20 ​ ​ 58 ​ ​ 122 Sub-total ​ $ 60 ​ $ 162 ​ $ 171 ​ $ 60 ​ $ 162 ​ $ 297 Corporate and other ​ ​ — ​ ​ — ​ ​ 3 ​ ​ — ​ ​ — ​ ​ 13 Total charges ​ $ 60 ​ $ 162 ​ $ 174 ​ $ 60 ​ $ 162 ​ $ 310 * Effective June 1, 2024, the Company made a minor change to its geographic reportable segments to reflect how it 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. Historical fiscal 2024 segment information was recast to reflect this change in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2025. The following table presents the classification of workforce rebalancing and site-rationalization activities in the Consolidated Income Statement during the years ended March 31, 2026, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Costs Incurred to Date ​ ​ Year Ended March 31, ​ ​ Fiscal 2026 ​ Fiscal 2025 ​ Fiscal 2024 (Dollars in millions) ​ ​ ​ 2026 ​ 2025 ​ 2024 ​ ​ ​ ​ Program ​ ​ ​ Program ​ ​ ​ Program Cost of services ​ $ — ​ $ 45 ​ $ 23 ​ ​ $ — ​ $ 45 ​ $ 94 Selling, general and administrative expenses ​ ​ — ​ ​ 3 ​ ​ 16 ​ ​ ​ — ​ ​ 3 ​ ​ 25 Workforce rebalancing charges ​ ​ 60 ​ ​ 114 ​ ​ 135 * ​ ​ 60 ​ ​ 114 ​ ​ 190 Total charges ​ $ 60 ​ $ 162 ​ $ 174 ​ ​ $ 60 ​ $ 162 ​ $ 310 * Excludes $ 4 million liability adjustment related to workforce rebalancing actions taken by the former Parent prior to Separation. 99 Table of Contents The following table presents the components of and changes in our liabilities related to workforce rebalancing and site-rationalization activities during the years ended March 31, 2026, 2025 and 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities ​ Liabilities ​ Liabilities ​ ​ ​ ​ ​ Workforce ​ Related to ​ Related to ​ Related to ​ ​ ​ ​ Rebalancing ​ Ceasing to Use ​ Lease ​ Ceasing to Use ​ ​ (Dollars in millions) ​ ​ ​ Liabilities* ​ Leased Assets ​ Terminations ​ Fixed Assets ​ Total Fiscal 2024 Program ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2023 ​ $ 55 ​ $ — ​ $ 3 ​ $ — ​ $ 58 Charges (benefits) ​ ​ 135 ​ ​ 14 ​ ​ ( 1 ) ​ ​ 26 ​ ​ 174 Cash payments ​ ​ ( 161 ) ​ ​ — ​ ​ ( 2 ) ​ ​ ( 5 ) ​ ​ ( 168 ) Non-cash adjustments ​ ​ ( 1 ) ​ ​ ( 14 ) ​ ​ — ​ ​ ( 21 ) ​ ​ ( 36 ) Balance at March 31, 2024 ​ $ 28 ​ $ — ​ $ — ​ $ — ​ $ 28 Cash payments ​ ​ ( 25 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 25 ) Non-cash adjustments ​ ​ ( 3 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 3 ) Balance at March 31, 2025 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2025 Program ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2024 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Charges ​ ​ 114 ​ ​ 39 ​ ​ — ​ ​ 8 ​ ​ 162 Cash payments ​ ​ ( 100 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 100 ) Non-cash adjustments ​ ​ 2 ​ ​ ( 39 ) ​ ​ — ​ ​ ( 8 ) ​ ​ ( 46 ) Balance at March 31, 2025 ​ $ 16 ​ $ — ​ $ — ​ $ — ​ $ 16 Cash payments ​ ​ ( 16 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 16 ) Balance at March 31, 2026 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal 2026 Program ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at March 31, 2025 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — Charges ​ ​ 60 ​ ​ — ​ ​ — ​ ​ — ​ ​ 60 Cash payments ​ ​ ( 56 ) ​ ​ — ​ ​ — ​ ​ — ​ ​ ( 56 ) Non-cash adjustments ​ ​ 1 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1 Balance at March 31, 2026 ​ $ 4 ​ $ — ​ $ — ​ $ — ​ $ 4 * Balance as of March 31, 2023 excludes workforce rebalancing liabilities inherited from the former Parent of $ 42 million, charges of $ 4 million related to one-off terminations, cash payments of $ 15 million and ending balance of $ 29 million as of March 31, 2024. The Fiscal 2025 Program balance excludes cash payments of $ 14 million, non-cash adjustments of $ 1 million and ending balance of $ 16 million as of March 31, 2025 related to actions initiated by the former Parent, and current-year movement excludes cash payments of $ 7 million, non-cash adjustment of ($ 1 ) million and ending balance of $ 10 million related to actions initiated by our former Parent. Workforce rebalancing liabilities are recorded within Other Liabilities; refer to Note 13 – Other Liabilities for further details. ​ ​ 100 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . None. ​