At a Glance

  • Enterprise technology provider Kyndryl announced on Monday that its Chief Financial Officer David Wyshner and General Counsel Edward Sebold have stepped down effective immediately. According to a filing with the U.S. Securities and Exchange Commission (SEC), the company appointed Harsh Chugh as interim head of finance, Bhavna Doegar as interim corporate controller, and Mark Ringes as interim general counsel.
  • The New York-based company separately announced that its Form 10-Q for the quarter ended December 31 will be delayed because the audit committee is reviewing the company'scash management practices.
  • In the notice of late filing, the company said it could not file its report for the third quarter of fiscal 2026 because the audit committee needed more time to complete its review. The review includes disclosures related to the drivers of its adjusted free cash flow metric, as well as "the effectiveness of the company's internal control over financial reporting, and certain other matters following the company's receipt of a voluntary document request from the SEC's enforcement division regarding related matters," the company said in the filing.

Deep Dive

Kyndryl shares fell about 55% at the close following the earnings release and news of the CFO's departure.

According to the filing, Kyndryl expects to disclose material weaknesses in internal control over financial reporting in its Form 10-Q, covering the reporting period, the entire fiscal year ending March 31, 2025, and the first two quarters of fiscal 2026.

Kyndryl said these weaknesses "are expected to include, but not be limited to, the effectiveness and strength of certain functions of the company related to controls over information and communication and the tone at the top."

Kyndryl, an IT infrastructure solutions provider spun off from IBM in 2021, announced the accounting practice reviewalongside its fiscal third-quarter 2026 results。

According to a conference call transcript, Chairman and CEO Martin Schroeter said on the call that the company is cooperating with the SEC's investigation and does not expect to restate financial statements. In a statement emailed to CFO Dive, the company said it is developing a "remediation plan," which will be outlined after the 10-Q is filed.

Schroeter declined to comment further on the accounting review in response to an analyst's question, but noted the company's 2028 targets remain unchanged. He said the company continues to see "strong conversion of earnings to free cash flow" and is on track to achieve more than $1.2 billion in adjusted pre-tax income in fiscal 2028 and convert those earnings into more than $1 billion in adjusted free cash flow.

Chugh said on Monday's earnings call that generating free cash flow remains the company's top priority. The company expects free cash flow for fiscal 2026 to be between $325 million and $375 million.

Chugh joined the company as Chief Operating Officer in September 2021 and was appointed to his current role—head of global practices, corporate development, and administration—last month. Before joining Kyndryl, Chugh served as CFO at Plansource and spent 17 years at IBM in various executive and finance roles.

The company said in its Form 8-K on Monday that, as of the filing date, the existing compensation agreements for Chugh and Doegar had not changed as a result of their appointments.

According to a press release at the time, Wyshner began his role at Kyndryl in September 2021, shortly before the infrastructure providercompleted its spinoff from IBMand began trading as a standalone entity in November of that year. Before joining Kyndryl, he served as CFO of XPO Logistics and held various positions at Wyndham Hotels & Resorts and Avis Budget Group.