Good morning, and welcome to the Kyndryl first quarter 2023 earnings conference call. Currently, all callers have been placed in a listen-only mode, and following management's prepared remarks, the call will be opened for your questions. If you would like to ask a question at that time, please press star one on your telephone keypad. If you need to remove yourself from the queue, press the pound key. At any time, if you should need operator assistance, press star zero. Please be advised that today's call is being recorded. I will now turn the call over to Lori Chaitman, Global Head of Investor Relations at Kyndryl. You may begin. Good morning, everyone, and welcome to Kyndryl's earnings call for the quarter ended June 30, 2022, the first quarter of our new fiscal year. Before we begin, I'd like to remind everyone that our remarks today will include forward-looking statements. These statements are subject to risk factors that may cause our actual results to differ materially from those expressed or implied, and these statements speak only to our expectations as of today. For more details on some of these risks, please see the Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2021. Kyndryl does not update forward-looking statements and disclaims any obligation to do so. In today's remarks, we will also refer to certain non-GAAP financial measures. Corresponding GAAP measures and a reconciliation of non-GAAP measures to GAAP measures for historical periods are provided in the presentation materials for today's events, which are available on our website at investors.kyndryl.com. With me here today are Kyndryl's Chairman and Chief Executive Officer, Martin Schroeter, and Kyndryl's Chief Financial Officer, David Wyshner. Following our prepared remarks, we will hold a Q&A session. I'd now like to turn it over to our Chairman and CEO, Martin Schroeter. Martin. Thank you, Lori, and thanks to each of you for joining us today. I am enthusiastic about our momentum and proud of what the team has accomplished over the last three months. On today's call, we'll share Kyndryl's quarterly results and update you on our progress. I'll discuss our strategy and how we're executing on our three A's initiatives, Alliances, Advanced Delivery, and Accounts, which are driving us toward profitable growth. Then David will provide more detail on our first quarter financial results, reaffirm our fiscal 2023 outlook, and link our recent progress to our financial goals. It's been nine months since Kyndryl became an independent, publicly traded company, and I am just as excited today about the opportunity ahead as I was on day one. As you can imagine, there's never a dull moment post-spin. There's plenty of work to do to transition internal processes, build a new culture and seize market opportunities. For those of you who are new to the Kyndryl story, prior to our spin-off last November, we operated largely as a captive services provider, focused on supporting the products and technologies that IBM offered to its customers. Today, we are the world's largest IT infrastructure services company, designing, managing, and modernizing complex mission-critical systems at scale for some of the world's largest organizations. I'm proud of how quickly we're charting a new course to better serve our customers through our new alliances with a range of top-tier technology providers and enhancements of our services delivery driven by upskilling and automation fueled by data, IP, and best practices. Our new freedom of action has given us the opportunity to be part of a much larger and growing ecosystem that really matters to our customers, expanding our addressable market from about $240 billion to $415 billion and growing. By 2024, this IT services market is expected to grow to about $510 billion. Our expanded collaborations with leading technology providers are making us more relevant to our customers and allowing us, as their long-standing trusted IT partner, to support and accelerate our customers' digital journeys in cloud, security, data, and intelligent automation with a multi-vendor strategy. Equally important, with our independence, we can now invest in our business to create new capabilities, deliver them at scale by gaining certifications and credentials for our already skilled technologists, and thereby grow our share of wallet with our existing customers. Through our six practices, we can now meet needs that our customers have been asking us to meet for years in areas that we were previously prevented from serving. We're solidifying our position as a leading global provider of IT infrastructure services. We continue to generate twice as much infrastructure services revenue as anyone else and are uniquely focused on this sector of the market. Our customers trust us to manage their most critical systems, and we do it with the highest level of quality. I am really proud of our delivery teams. They continue to produce top-tier Net Promoter Scores generally north of +50. We continue to meet more than 99.7% of our service level agreement thresholds, with the June quarter being another quarter of above target performance. We're pleased to have been named a leader in Gartner's Magic Quadrant for managed mobility services and to be recognized as one of only four industry engineering specialists and integrators in Gartner's recent report on 4G and 5G networking. Our NPS and SLA metrics, along with a growing list of external accolades, highlight the world-class nature of our offerings. There are significant opportunities in front of us, and we understand that the macroeconomic environment is on many people's minds right now. At Kyndryl, we run mission-critical IT systems, the hearts and lungs of our customers' operations, including global banking organizations, airline reservation systems, mobile networks, and industrial supply chains. The essential nature of our business provides us some natural insulation to macro factors. In addition, our three A's initiatives gives us a substantial opportunity that are specific to us and independent of the broader economy. Executing on these initiatives will deliver the benefits we need to strengthen our overall business performance and unlock substantial value for our customers, our employees, and our stockholders alike. A key enabler of our strategy has been the rapid build-out of our technology alliances and capabilities. Between November and March, we signed new collaborations with all three cloud hyperscalers, Amazon Web Services, Google Cloud, and Microsoft Azure, as well as many other leading technology companies. Since year-end, we've increased our cloud-related certifications by 36%, bringing our total to nearly 22,000 and giving us more capabilities to deliver cloud services. This quarter, we've expanded or established new partnerships with Cisco, Five9, NetApp, Oracle, Red Hat, SAP, and Veritas, continuing the theme of Kyndryl aligning with other top-tier technology providers now that we're independent. Customers are seeing how quickly we're leveraging these relationships, and they're now asking us to help them migrate a portion of their workloads to the cloud, manage their explosive growth in data, integrate legacy and new technologies from multiple partners, and address their urgent need for cybersecurity and resiliency. It is remarkable to see how fast our relationships are expanding. One example of this is a global bank where we have a nearly 20-year business relationship. We run mission-critical systems and the infrastructure behind their systems of record. Our relationship began in the early 2000s with traditional data center outsourcing for one of their divisions, including mainframe services work. The scope of our work has expanded over time across geographies and divisions. Most recently, though, we not only extended our contract tied to legacy systems, we also added hyperscaler cloud work, and beyond that, the integration required to make sure the bank is running the right workload on the right platform. We're now supporting our customer across their architecture, data and application security, resiliency, and systems innovation. We're adding value as a trusted strategic partner that has the technology expertise to meet their complex, evolving, multifaceted needs. At the same time, we're driving profitable revenue growth for our business as we increase our services revenue from this customer. This example is just one of the many that have been either executed already or are in the works across a range of industries, geographies, and customer needs. Back in February, we committed to sharing our progress on our three A's initiatives. As a reminder, we provided targets of at least $1 billion in signings tied to hyperscaler alliances this fiscal year, $200 million in annualized cost savings from advanced delivery by year-end, and $200 million of annualized pre-tax benefit from our accounts initiative. I am pleased with the progress we've made in such a short period of time on our three A's, and we're on track to deliver on our fiscal 2023 milestones for each of these initiatives. In our alliance initiative, we generated $235 million of hyperscale-related signings in the quarter, putting us on track to achieve our $1 billion annual target. We're increasingly going to market with hyperscalers to seamlessly meet customers' needs. As a Microsoft Azure expert, managed service provider, and premier partner with both AWS and Google, we have immediate credibility as well as unique knowledge of our customers' existing infrastructure and workloads. The pace at which we've built our team certifications, credentials, and capabilities puts us in a position to provide the top-tier levels of service that customers have come to expect from Kyndryl. This is demonstrated by another strong quarter of signings growth in advisory and implementation services, which were up 27% in constant currency compared to last year. We are using our new technology partners to grow our share of wallet with existing customers. In our advanced delivery initiative, we're investing in heightened intelligent automation and new ways of working, which frees up our people to be re-skilled and redeployed to in-demand opportunities. This quarter, we expanded our proprietary delivery automation tooling to run more than 24 million automation events a month, more than double where we were a year ago. This significantly increases the level of service and resiliency we provide to our customers. In the process, we freed up more than 1,900 of our people to serve new revenue streams and backfill attrition. When we free up people, we're increasing our productivity, and the associated cost savings are running at an annualized rate of $100 million as of quarter end, equal to half our fiscal 2023 year-end objective. At the same time, we're creating new opportunities for our people and reducing the extent to which we need to hire external talent. In our accounts initiative, we're directly engaging with our customers where we're not generating an adequate return on the efforts and capital we're expending. The response from customers has been positive, and a number of them have already expanded our scope of delivery services, capitalizing on our broader ecosystem and new capabilities. In some cases, we're optimizing our cost basis through automation and greater standardization, while in other cases where we are near contract expiration, we have the opportunity to discuss pricing or agree that Kyndryl will exit elements of work that are unprofitable for us. Our engagement efforts so far have resulted in a meaningful increase in the projected margins associated with these accounts, reflecting our focus on signing profitable business. In the June quarter, we're already realizing pre-tax benefits at a rate of roughly $52 million a year, putting us on track to achieve our $200 million year-end run rate goal. The momentum we're demonstrating in our Three A's initiatives is driving us toward the strategic objectives we laid out last year, transforming Kyndryl to operate across a broader technology ecosystem, evolving our business mix, returning to revenue growth, and expanding our margins. We're operating differently with a new mission and value proposition. As we execute on our Three A's initiatives, we move forcefully to strengthen the margin profile of our business and progress toward our goal to return to profitable revenue growth in calendar year 2025. We will unlock substantial value. We'll continue building a culture that is flat, fast, and focused on customer success, and we'll continue positioning Kyndryl to be the employer of choice and the partner of choice for customers and technology partners alike. Now, with that, I'll hand over to David to take you through our results and our outlook. Thanks, Martin, and hello, everyone. Today, I'd like to discuss our quarterly results, our balance sheet and liquidity, and our outlook. Our financial results for the quarter ended June 30, our fiscal first quarter, were in line with our expectations and position us to achieve the full year targets we laid out in May. In the quarter, we generated revenue of $4.3 billion, which represents only a 2% decline in constant currency from our pro forma results a year ago. This includes 2 points of revenue growth we picked up from pass-through revenues related to our former parent. Because most of our revenue in any given quarter is the product of contracts signed over the prior several years, our revenue decline reflects the continuing effects of having been operated as a captive subsidiary of IBM prior to our spin-off, not the future potential of our business. Adjusted EBITDA in the quarter was $491 million. This represents an adjusted EBITDA margin of 11.4%. On a year-over-year basis, our adjusted EBITDA margin was down primarily due to the decline in revenue, a currency headwind of 60 basis points, and a 50 basis point impact from some of our software licenses being treated as a subscription rather than a prepaid and amortized expense. Notably, our gross margin increased 60 basis points sequentially from our March quarter to our June quarter. This is a better reflection of the operational progress we're making. Adjusted pre-tax loss was $50 million, which is sequentially consistent with our March quarter results and down year-over-year primarily due to lower revenue and $48 million in currency headwinds. Among our geographic segments, we delivered year-over-year constant currency revenue growth in our Japan and strategic market segments, and our strongest margins were in Japan and the United States. Changes in how various IBM-related costs are hitting each of our segments under our new commercial agreement with IBM complicate year-over-year margin comparisons by segment. We address our customers' needs not only through our geographic operating segments, but also through our six global practices, cloud, applications, data and AI, security and resiliency, network and edge, digital workplace, and core enterprise. Our business mix is evolving to reflect demand, with nearly 80% of our signings coming from cloud, apps, data and AI, security and other growth areas, and only 20% from core enterprise and zCloud. More importantly, our adjusted quarterly results were very much in line with our expectations. Turning to our cash flow and balance sheet, our adjusted free cash flow was -$32 million in the quarter. We've provided a bridge from our Q1 adjusted pre-tax loss of $50 million to our free cash flow. Our gross capital expenditures in the quarter, including some CapEx due to our separation, were $213 million, and we received $7 million of proceeds from asset dispositions. Working capital and other didn't contribute to cash flow in the quarter, but this is an opportunity for us for the year as a whole. Our financial position remains strong. Our cash balance at June 30 was $1.9 billion, which reflects both a decline in the dollar value of our international cash and our use of $65 million for transaction-related payments. Our cash balance, combined with available debt capacity under committed borrowing facilities, gave us $5 billion of liquidity at quarter end. Our debt maturities are well-laddered from late 2024 to 2041. We had no borrowings outstanding under our revolving credit facility, and our net debt at quarter end was $1.3 billion. As a result, our net leverage sits well within our target range. We are rated investment grade by both Moody's and S&P. To add to that, on Tuesday, Fitch announced that they rate us as investment grade as well. As we think about capital allocation, our top priorities are to maintain strong liquidity, remain investment grade, and reinvest in our business. As we've said before, we view being investment grade as a commercial imperative given the importance of this to our customers. Because of the spin-related cash outlays we have in front of us, most of the free cash flow we'll generate this year is, in many ways, already spoken for. As Martin mentioned, we're making rapid progress on our Three A's initiatives. Our momentum supports our expectation that over the medium term, our alliances initiative will drive signings, revenue, and over time, roughly $200 million in annual pre-tax income. Our advanced delivery initiative will drive cost savings equating over time to roughly $600 million in annual pre-tax income. Our accounts initiative will drive annual pre-tax income of $800 million. We're also pursuing growth in Advisory and Implementation Services and among our global practices, which is incremental to the benefits coming from our three A's initiatives, and we see opportunities to control expenses throughout our business. We expect that these efforts over time will contribute roughly $400 million in annual pre-tax income. Sometimes investors ask us what the market doesn't fully appreciate about the Kyndryl story. Here's one item I like to highlight from a financial perspective. We're a company that generated $134 million in pro forma adjusted pre-tax income last year, which has tangible plans to drive $2 billion of contributions to our annual pre-tax income over the medium term. The magnitude of the earnings growth opportunity we're tackling is a big deal and will be a foundational source of value creation for Kyndryl. I hope that Martin's update on our progress on these initiatives gives you confidence in our eagerness and ability to seize this enormous opportunity. In light of the progress we're making on our key initiatives and in our business generally, we're reaffirming the fiscal 2023 earnings guidance we provided in May and are updating our revenue forecast solely to reflect movements in exchange rates. In particular, we continue to expect to drive double-digit constant currency growth in signings in fiscal 2023 compared to calendar year 2021. Consistent with the outlook we shared in May, we continue to expect our revenue to decline 3%-4% in constant currency compared to the twelve months ended March 2022, and 4%-6% in constant currency compared to fiscal 2021. With the dollar having continued to strengthen, this guidance now implies revenue of $16.3 billion-$16.5 billion this fiscal year. Our outlook continues to be for our adjusted pre-tax margin to be in the range of 0%-1%. This is consistent with our 2020 and 2021 pro forma results, despite 120 basis points of expected currency headwinds this year. We continue to expect our adjusted EBITDA margin to be 13%-14% in fiscal 2023. As Martin mentioned, we believe demand for IT infrastructure services is largely insulated from broader macroeconomic trends. To date, we have not seen any significant changes in our customers' approach. Digital transformation and procuring talent, best practices, and global scale continue to be important to large organizations. Let me comment on a few other macro factors that investors often ask about. First, while services demand feels solid, general price inflation is driving wage inflation. We've been doing well in terms of attracting and retaining the people we need, but higher prices and big headline inflation figures are impacting the salaries that existing employees and new hires expect. We're also seeing inflationary pressures in other areas, especially in energy costs, but our contracts typically contain inflation protection mechanisms that mitigate the effects of rising costs. Second, currency movements are having an unusually pronounced impact this year, affecting not only the value of our foreign earnings, but also the dollar value of international cash and our margins, since the composition of our costs often differs from the currencies in which we source our revenues. Our hedging strategies and mitigating actions are helping us offset inflation and currency pressure. Currency alone is having a $200 million negative impact on our projected pre-tax earnings growth this year. From a cash flow perspective, we continue to target about $750 million of gross capital expenditures and $700 million of net capital expenditures compared to about $900 million of depreciation expense. As a reminder, there's some seasonality in our revenues and margins, with the October to December quarter typically being the strongest. While our results in our September quarter should be broadly similar to our June quarter, we see our full year margins being higher than our Q1 margins because of the favorable December quarter seasonality and the ramping of benefits from our three A's initiative. Over the medium term, we remain committed to returning to revenue growth by calendar 2025, delivering margin expansion and driving free cash flow growth. We have a solid game plan to drive our progress, and this game plan starts with the steps we've already taken to expand our technology partnerships and with the meaningful initiatives we're implementing this year. Separately, we've gotten a number of questions, comments, and wows from investors about one particular slide we published in May, the slide that provides a breakdown between our margin-challenged focus accounts and the rest of our business. As this slide highlighted, our aggregate results mask the fact that within Kyndryl, we have a strong $10 billion business, which we refer to as a blueprint for how we want to operate. This blueprint consists of accounts that represent about 60% of our revenue, generate average gross margins north of 20%, and reflect our ability to get paid appropriately for the mission-critical services we provide. This blueprint is most of what we do and a source of stockholder value hiding in plain sight. The reason that this value is underappreciated is our other roughly $8 billion of focus accounts revenue. This revenue stream generates virtually no gross margin, and after SG&A expenses is losing money. Our accounts initiative is all about the opportunity to make our focus accounts look more like the majority blueprint of our business over time by addressing elements of our customer relationships that generate substandard margins. Over time, if we close even half of the gross margin gap between our focus accounts and our blueprint accounts, we'll generate the $800 million in incremental earnings that we've targeted from these accounts. That's why our accounts initiative is a major priority for us. As Martin highlighted, in the June quarter, pre-tax margins associated with new signings tied to our focus accounts were up meaningfully. Since the beginning of the year, the overall pre-tax margin of our signings has been in the mid- to high-single-digit%. What that means is that if our P&L for the next few quarters reflected only our recently signed deals, we'd be operating at mid- to high-single-digit adjusted pre-tax margins, not the 0%-1% margin generated largely by our pre-spin legacy signings. In fact, even though our signings were down year-over-year in the June quarter when measured based on revenue, the gross profit we expect to generate over the next year from our June quarter signings is up year-over-year, and it's gross profit and then pre-tax profit that we're most focused on. In closing, as an independent company, we're solidifying our position as a cost-effective gold standard provider of essential IT services. We're advancing toward the fiscal 2023 earnings targets we laid out in May. We're also executing on the strategies and initiatives that will drive longer-term progress, future growth, and stronger earnings in our business. I'm particularly enthusiastic about our strong progress on our three A's initiatives and the margins our recent signings will generate. Compared to our P&L, our tangible progress in these areas better exemplifies our potential, our zeal to transform our business, and our drive to create stockholder value. With that, let me turn things back to Martin. Thanks, David. Before we turn to Q&A, let me remind you why we're so enthusiastic about Kyndryl's future. As an independent company, we are seizing our now larger market opportunity, bringing incremental and differentiated value to customers, and focusing on driving profitable growth. We're committed to investing in our business and will continue extending relationships with our ecosystem partners and customers. We are a trusted partner with tremendous expertise, experience, and scale. As technology continues to evolve, our customers look to Kyndryl to keep them operating efficiently and ahead of the technology curve. Our three A's initiatives will deliver substantial benefits. We have the financial flexibility to execute our growth strategy, to invest in our people, and to create a winning culture, a culture that will create significant value for our employees, our customers, and our stockholders. With that, David and I look forward to your questions. At this time, if you wish to ask a question, please press star and one on your telephone keypad. You may remove yourself from the queue by pressing the pound key. We will take our first question from Tien-Tsin Huang from JPMorgan. Okay, great. Thanks. I appreciate the enthusiasm. Definitely came through on the call. I wanted to ask. I suppose on signings, if that's okay. I'm curious about sort of visibility there and timing of revenue conversion, et cetera. Have you observed any changes? I know you talked about double-digit signings growth looking ahead, so hence the visibility question. Yeah. Thanks, Tien-Tsin, and thanks for joining the call. Look, a few things I'd say. First, obviously our confidence in growing signings double digit this year stems from the pipeline that we're looking at, and we've got a terrific pipeline. We see it in the parts of our business where we're really focused, such as our A&IS business, which grew quite well this quarter as it did the prior quarter, such as the progress we're making with our hyperscale alliance partners. We feel great about the pipeline. As you also know, you know, we're really focused on the margin profile of these. As David noted, you know, the gross profit dollars, for instance, in the signings from just this most recent quarter, the gross profit dollars in the next year also grow within it within that signings pool. While the overall signings for that short period, the 90 days, were down, the gross profit dollars still provide us growth for the next 12 months, which again is our focus. We feel really good about the pipeline. We feel really good about the teams executing in the areas that are of our biggest focus. We feel really good about the profit profile of what we're signing. Now, having said all that, look, when you're focused on the quality of what you're signing and when one is really focused on making sure we get the right things into the backlog, that can elongate deal cycles. It can elongate the discussions with our customers. Look, we're okay 'cause we wanna get to the right signings, the right signings profile, which we did in the most recent quarter, we did in the quarter prior to that. We see a great pipeline of the kinds of quality deals and the kinds of quality revenue streams to go into the backlog as evidenced again by the gross profit over the next year, or as evidenced again by the margin profile. David commented, I did as well in the prepared remarks, we both commented on the pre-tax margin profile of what's going into the backlog. We feel good about the growth we see, and probably more importantly, we feel really good about the quality and the profit profile of what's going in. Two things I'd just add related to the signings number. The June quarter was a tough comp for us. We knew that going in because both of our two largest deals in calendar year 2021 fell in the June quarter, and those totaled more than $900 million. That created a tough comp for us. Obviously we don't have that issue going forward. The second issue is that the December quarter is traditionally our biggest signings quarter. As a result, you know, how the second half of this calendar year plays out, particularly the December quarter, ends up being a big driver of how we're gonna get to double-digit signings growth for fiscal 2023. Tien-Tsin Huang, do you have a follow-up? I did have one, if you don't mind. I just wanted to ask on the gross margin, since you mentioned it, and we always like to look at gross margin as a, you know, proxy for contract execution, pricing, labor costs, et cetera. You know, obviously it sounds like that's doing well. There wasn't any unusual items there, but what about on the capital intensity side as well? Any change to consider there, especially as we think about cash flow conversion for the rest of the year? Thank you. Yeah. I think we continue to see the business becoming less capital intensive. We're, you know, our CapEx is underrunning depreciation, and we expect that to be the case, probably even a bit more so than it was in the June quarter as we look out over the remainder of the year. In addition, I think the amount of cash we end up outlaying for capitalized software and transition costs, startup costs, is probably going to underrun our amortization as well this year, which should be helpful to free cash flow. Again, as we move to more advisory work and strengthen the margin profile of the business that we're signing, we see less capital intensity as part of that, and that should be helpful to free cash flow, not only in fiscal 2023, but also over the longer term. Great. Thanks for taking my questions. Operator, can we go to the next question, please? We'll go next to Jamie Friedman from Susquehanna International Group. Thank you. This is Spencer on for Jamie. Congratulations on the results. It seems the year is already tracking ahead of plan in some key metrics. Is the guidance just conservative or are there other considerations we should be looking at? Thanks. I think you know, I think we feel very good about the progress that we're making on a number of fronts, particularly the strategic fronts, the three A's, and the margin at which we're signing up business. When you look at something like Advanced Delivery, where we've already achieved half of our full year target for the benefits that we expect to generate, you know, it's a sign that we're making good progress. I'm hesitant to characterize you know, the guidance in one direction or another, but I would point out that while we're making really good progress on the strategic front and with the three A's and with the partnerships that we have, we have also been facing currency headwinds. The amount of currency impact on our EBITDA on our pre-tax margin, you know, we currently estimate is a bit more than we would've estimated three months ago because of the way exchange rates have moved over this period of time. When we, you know, we're seeing progress on, you know, on the strategic front in areas that we control, some of the areas that are outside of our control, such as exchange rates are, you know, have been a little bit more of a challenge. I really don't wanna characterize the, you know, the guidance one way or another. Thank you. I'll jump back into queue. Go ahead. Spencer, do you have another question? No, that's helpful. I'll jump back in the queue. Okay, great. Operator? Looks like you're the queue, Spencer. We'll go back to Spencer. All right. Spencer, are you still there? Yeah. I think I just took myself off the queue, actually. That's all right. Okay, great. Oh, you took yourself off queue? Okay. All right, Martin, you want to close out? All right. Look, again, thanks, everyone, for joining us today. We're delighted with the significant progress we made this quarter, obviously in our three A's and on getting our business back to profitable growth. We remain very excited about the opportunity ahead. You know, we do serve our customers' mission-critical needs with more capabilities than ever before. Quite frankly, the idiosyncratic nature of a lot of the opportunities we have to turn this business around and the progress we're making in those keep us energized and motivated to deliver. Thanks again for joining, and we'll talk to you after the next quarter. This concludes today's Kyndryl quarterly earnings call and webcast. You may disconnect your line at this time. Have a wonderful day.