Dafinchi AI

DMRC

Technology

Cash and short-term investments ended at $16.1 million.
Ending ARR for Q2 2025 was $15.9 million, down from $23.9 million in Q2 2024, impacted by lapses of $5.8 million and $3.5 million contracts.
Excluding contract lapses, ARR grew $1.3 million year-over-year, though muted by higher churn and strategic pricing outside focus areas.
Free cash flow usage improved to $5 million from $6.9 million, with adjusted usage at $3.8 million excluding severance and legal costs.
Net loss per share improved to $0.38 from $0.43; non-GAAP net loss per share improved to $0.11 from $0.23.
Non-GAAP operating expenses were $8.9 million, down 37% from prior year, driven by reorganization and cost streamlining.
Operating expenses decreased 22% to $13.1 million, with $600,000 legal expenses included; excluding legal, expenses fell 26%.
Service revenue decreased 15% to $3.4 million, mainly due to lower government service revenue from Central Banks.
Subscription gross profit margin was 85%, down 4 points from last year; service gross margin remained flat at 59%.
Subscription revenue declined 28% to $4.6 million, reflecting expired contracts.
Total revenue was $8 million, a 23% decrease from $10.4 million in Q2 2024.

Technology

Adjusted EBITDA was $647 million with a margin of 17.3%, up 240 basis points year-over-year.
Adjusted pretax income grew 39% year-over-year to $128 million, with a 100 basis point increase in adjusted pretax margin.
Hyperscaler-related revenue nearly doubled to $400 million in Q1, on track for a $1.8 billion target in fiscal 2026.
Kyndryl Consult revenue grew 30% year-over-year, now running at an annual pace of over $3 billion.
Kyndryl reported Q1 fiscal 2026 revenue of $3.7 billion, slightly up year-over-year on a reported basis but down 2.6% in constant currency due to the focus accounts initiative.
Net capital expenditures were $97 million, and free cash flow was a $222 million outflow due to seasonal factors.
Net leverage ended the quarter at 0.6x adjusted EBITDA, well within the target range, and the company maintains investment grade ratings.
The company repurchased 1.8 million shares for $65 million in the quarter, with $141 million remaining under the current authorization.

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