Kyndryl Holdings Inc (KD)

Debt-to-equity ratio

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Dec 31, 2021	Sep 30, 2021
Long-term debt	US$ in thousands	2,900,000	3,000,000	3,000,000	3,000,000	3,000,000	3,000,000	3,000,000	3,000,000	3,000,000	280,000
Total stockholders’ equity	US$ in thousands	1,015,000	1,189,000	1,013,000	1,240,000	1,365,000	1,832,000	1,650,000	2,117,000	2,765,000	5,430,000
Debt-to-equity ratio		2.86	2.52	2.96	2.42	2.20	1.64	1.82	1.42	1.08	0.05

March 31, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $2,900,000K ÷ $1,015,000K
= 2.86

Kyndryl Holdings Inc's debt-to-equity ratio has exhibited fluctuations over the past several quarters. The ratio increased from 0.05 as of September 30, 2021, to 2.86 as of March 31, 2024, indicating a substantial rise in indebtedness relative to equity during this period. The trend shows a progressive increase from 2021 to 2024, suggesting a growing reliance on debt financing in relation to shareholder equity.

The company's debt-to-equity ratio surpassed 2 in the later quarters of 2023 and throughout 2024, reaching its peak at 2.96 on September 30, 2023. This implies that the company's debt level was almost three times higher than its equity during that period. While the ratio declined slightly in some quarters, it remained above 2, indicating a significant debt burden relative to equity.

The substantial increase in the debt-to-equity ratio raises concerns about Kyndryl's financial leverage and solvency. A higher ratio signifies higher financial risk, as the company may face challenges in meeting its debt obligations and may be more vulnerable to economic downturns or interest rate fluctuations. Investors and creditors typically monitor this ratio closely to assess the company's ability to manage its debt levels effectively.

Kyndryl may need to carefully manage its debt levels and potentially explore strategies to improve its capital structure, such as reducing debt, increasing equity through retained earnings or additional capital contributions, or optimizing its financing mix to achieve a more balanced and sustainable financial position.