Kyndryl CFO Steps Down Ahead of Accounting Review

Why It Matters

The leadership turnover and accounting review raise concerns about Kyndryl’s financial governance, potentially affecting investor confidence and access to capital. Continued cash‑flow targets highlight the company’s effort to reassure stakeholders while addressing control deficiencies.

Key Takeaways

• CFO and general counsel resign amid SEC review
• 10‑Q filing delayed; material weaknesses expected
• Stock fell ~55% after announcement
• Interim leaders appointed; no compensation changes
• Projects $325‑$375M free cash flow FY2026

Pulse Analysis

Kyndryl’s abrupt executive departures signal a critical juncture for the former IBM spin‑off. David Wyshner’s exit as CFO, alongside General Counsel Edward Sebold, follows a voluntary SEC request for deeper scrutiny of the firm’s cash‑management disclosures. By installing Harsh Chugh, Bhavna Doega, and Mark Ringe on an interim basis, Kyndryl aims to stabilize its finance and legal functions while the audit committee conducts a thorough review of internal controls, a move that underscores heightened regulatory vigilance in the tech services sector.

The delayed 10‑Q filing highlights the seriousness of the identified material weaknesses. The audit committee’s focus on adjusted free‑cash‑flow drivers and the efficacy of internal reporting mechanisms suggests potential gaps in information flow and tone‑at‑the‑top. Such deficiencies can erode stakeholder trust and may trigger stricter oversight from the SEC’s Division of Enforcement. For investors, the prospect of a remediation plan without a restatement offers some reassurance, yet the acknowledgment of weaknesses across multiple reporting periods raises questions about the robustness of Kyndryl’s financial governance framework.

Market reaction was swift, with Kyndryl’s stock tumbling about 55% after the announcement, reflecting investor anxiety over governance risks. Despite the turbulence, CEO Martin Schroeter reaffirmed the company’s 2028 earnings and cash‑flow objectives, projecting fiscal 2026 free cash flow in the $325‑$375 million range. This forward‑looking guidance aims to balance short‑term concerns with long‑term growth narratives, positioning Kyndryl to maintain its competitive edge in the IT‑infrastructure market while it implements corrective controls. The episode serves as a cautionary tale for other tech firms navigating post‑spin‑off financial integrity and regulatory compliance.

Kyndryl CFO steps down ahead of accounting review

Grace Noto, Editor · Published Feb. 9, 2026

Dive Brief

• Enterprise technology provider Kyndryl announced Monday that its CFO, David Wyshner, and general counsel, Edward Sebold, have stepped down from their roles effective immediately. The company appointed Harsh Chugh as interim finance chief, Bhavna Doega as interim corporate controller, and Mark Ringe as interim general counsel, according to a filing with the Securities and Exchange Commission.

• The New York‑based company separately announced that its 10‑Q filing for the quarter ended Dec. 31 will be delayed as its audit committee undertakes a review of its cash‑management practices.

• Kyndryl is unable to file its report for the third quarter of fiscal 2026 because additional time is needed for the audit committee to complete its review. The review includes examining disclosures related to the drivers of its adjusted free‑cash‑flow metric and “the efficacy of the Company’s internal control over financial reporting, and certain other matters” following voluntary document requests from the SEC’s Division of Enforcement.

Dive Insight

• Kyndryl’s stock dropped by about 55 % at the close of market trading following the earnings report and CFO departure.

• The company expects to report material weaknesses in its internal control over finance reporting for the period covered by the delayed 10‑Q, as well as for the full fiscal year ended March 31 2025 and the first two quarters of fiscal 2026.

• The 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,” Kyndryl said.

• Kyndryl, a provider of IT‑infrastructure solutions that spun off from IBM in 2021, announced the review of its accounting practices as part of the release of its Q3 fiscal 2026 earnings results.

• The company is cooperating with the SEC and does not expect a restatement of its financial statements, CEO and Chairman Martin Schroeter said during the call. Kyndryl is also developing a “remediation plan” that will be outlined in its 10‑Q once filed.

• Schroeter declined to comment further on the accounting review but noted that the business’s goals for 2028 remain unchanged. He said the company continues to see a “strong conversion of earnings to free cash flow” and is well‑positioned to deliver more than $1.2 billion in adjusted pretax income for fiscal 2028 and to convert such earnings to over $1 billion in adjusted free cash flow.

• Generating free cash flow remains a top priority. Chugh said the company expects fiscal 2026 free cash flow in a range of $325 million to $375 million.

• Harsh Chugh joined Kyndryl in September 2021 as chief operating officer, later becoming global head of practices, corporate development, and administration. Before Kyndryl, he served as CFO of Plansource and held numerous executive and financial positions during a 17‑year tenure at IBM. No changes to Chugh’s or Doega’s existing compensation agreements were made in connection with the appointments.

• David Wyshner began his tenure at Kyndryl in September 2021, shortly before the company completed its spin‑off from IBM and began trading independently in November 2021. Prior to Kyndryl, he was CFO of XPO Logistics and held senior roles at Wyndham Hotels & Resorts and Avis Budget Group.