Kyndryl posted mixed earnings for the third quarter of its 2026 fiscal year, but postponed filing of those official results with the Securities and Exchange Commission (SEC) due to a review of past cash management practices that saw the former IBM subsidiary abruptly replace its CFO and general counsel.

In an SEC filing, Kyndryl stated that it anticipates a review of those past practices will show “material weaknesses in the company’s internal control over financial reporting” for its full 2025 fiscal year that ended on March 31, 2025, and the first three quarters of its current 2026 fiscal year up to the end of its third fiscal quarter, which ended on December 31, 2025.

These “weaknesses” are “expected to include, but may not be limited to, the effectiveness and strength of certain functions at the company, including with respect to controls related to information and communication and tone at the top.”

“As a result, the company notes that its assessment of internal control over financial reporting and the related opinion of PricewaterhouseCoopers LLP only with respect to the effectiveness of the company’s internal control over” the time periods listed “should no longer be relied upon.”

Kyndryl CEO Martin Schroeter told investors during the latest earnings call that the delay followed an SEC document request that led to Kyndryl’s audit committee to “review our cash management practices related disclosures, the effectiveness of internal control over financial reporting, and certain other matters.”

“We are cooperating with the SEC,” Schroeter added. “We do not expect a restatement or other impact to our financial statements due to the ongoing nature of these matters.”

Kyndryl interim CFO Harsh Chugh did not provide any specific details as to what was being reviewed but did point to three “factors” that fed what turned out to be incorrect guidance given during the previous fiscal quarter about the just completed quarter.

These included greater assumed growth of its consulting business that failed to materialize, an extension of the hyperscale sales cycles during the most recent quarter, and what were termed continued headwinds from lingering sales through a long-standing IBM-based go-to-market arrangement.

“We just didn’t accelerate as we expected,” Schroeter bluntly added.

Schroeter did note that despite the review, Kyndryl was not changing the operating goals for its fiscal 2028.

“We still see fiscal ‘28 coming together in the in the timeframes we talked about and, as we also said in the disclosures, we don't expect to have a restatement here,” Schroeter added. “Until the work is finished, we can't comment more, but our fiscal ‘28 goals are something we remain confident in, and we don't expect a restatement.”

CFO, general counsel ousted

Chugh will be part of that review process, having today been named to replace previous CFO David Wyshner, a role Wyshner initially stepped into in mid-2021. That appointment came shortly after IBM provided a name for its managed infrastructure spinoff.

Wyshner had previously served as CFO at XPO Logistics, and various financial leadership positions at Wyndham Hotels and Resorts and the Avis Budget Group.

Kyndryl also reported that Edward Sebold had left the company as its general counsel, and that Vineet Khurana had left his position as SVP and global controller to assume “a different role at the company.”