IBM Kyndryl Spin-Out: Two Dates for MSPs, Investors to Watch -

Kyndryl will hold a virtual investor day on October 19. And IBM is expected to announce quarterly results on October 20. Put those two events together, and more details about the Kyndryl business strategy should emerge.

Kyndryl is a managed infrastructure business that IBM expects to spin off before the end of 2021. The anticipated stock symbol is $KD.

The financial reality to track: While the overall MSP market is growing, Kyndryl's business has been flat in recent quarters, and shrinking in recent years, according according to an SEC filing (see page 61).

In terms of quarterly performance...

Kyndryl Revenues: Kyndryl generated $4.751 billion in revenue for the three months ended June 30, 2021, compared to $4.737 billion for the corresponding quarterly in 2020.
Kyndryl Net Loss: Kyndryl's net loss was $393 million for the three months ended June 30, 2021, compared to a net loss of $373 million in the corresponding quarter the previous year.

In terms of annual performance...

Kyndryl Annual Revenues: Kyndryl generated annual revenue of $19.352 billion in 2020, down from $20.279 billion in 2019 and $21.796 billion in 2018.
Kyndryl Annual Net Loss: Kyndryl had a net loss of $2.011 billion in 2020, $943 million in 2019 and $980 million in 2018.

Kyndryl: MSP Business Opportunities and Challenges

Kyndryl has multiple business opportunities for growth, but the company will also face new challenges as a standalone business. Indeed, Kyndryl plans to focus on six global managed services practices:

Cloud
Applications, Data & AI
Security & Resiliency
Core Enterprise & zCloud
Network & Edge
Digital Workplace

All of those six areas are growth opportunities. The challenge? IBM has been buying cloud consulting companies that also focus on several of those areas. And it's a safe bet IBM plans to hold onto those acquired businesses for its own growth plans -- rather than bundle acquired assets into the Kyndryl spin-off.