INTANGIBLE ASSETS INCLUDING GOODWILL

12 Months Ended

Mar. 31, 2026

INTANGIBLE ASSETS INCLUDING GOODWILL

NOTE 11. INTANGIBLE ASSETS INCLUDING GOODWILL

Intangible Assets

The following table presents the Company’s intangible asset balances by major asset class:


		At March 31, 2026								At March 31, 2025
		Gross Carrying			Accumulated			Net Carrying		Gross Carrying			Accumulated			Net Carrying
(Dollars in millions)		Amount			Amortization			Amount		Amount			Amortization			Amount
Capitalized software		$	175		$	(59)		$	116	$	216		$	(76)		$	141
Customer relationships*			116			(77)			39		121			(60)			61
Completed technology			13			(5)			8		13			(2)			11
Patents and trademarks*			14			(12)			2		15			(10)			5
Total		$	318		$	(153)		$	165	$	365		$	(148)		$	218

* Amounts include effects from foreign currency translation.

There was no impairment of identifiable intangible assets recorded in the periods reported. The net carrying amount of intangible assets decreased by $53 million during the year ended March 31, 2026, primarily due to the reclassification of certain capitalized software intangibles to prepaid assets and other noncurrent assets resulting from the migration of on-premises software to a cloud-based solution. The aggregate intangible asset amortization expense was $57 million, $72 million, and $63 million for the years ended March 31, 2026, 2025 and 2024, respectively. Aggregate amortization expense in fiscal year 2026 included amortization of capitalized software of $30 million, which was reported in Depreciation of property, equipment and capitalized software on the Consolidated Statement of Cash Flows.

The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet was estimated to be the following at March 31, 2026:


	Capitalized			Customer		Completed		Patents and
(Dollars in millions)	Software			Relationships		Technology		Trademarks		Total
Year ending March 31:
2027	$	34		$	18	$	3	$	2	$	57
2028		33			5		3		—		40
2029		27			5		3		—		35
2030		16			4		—		—		20
2031		6			4		—		—		10
Thereafter		—			4		—		—		4

Goodwill

The following table presents a roll-forward of goodwill balances by segment for the years ended March 31, 2026 and 2025:


	United						Principal		Strategic
(Dollars in millions)	States			Japan			Markets		Markets			Total
Balance as of March 31, 2024	$	—		$	488		$	141	$	176		$	805
Acquisitions and (Divestitures)*	$	11		$	—		$	(27)	$	—		$	(15)
Translation Adjustments		—			1			—		—			1
Reallocation		—			—			(23)		23			—
Balance as of March 31, 2025	$	11		$	489		$	92	$	198		$	790
Translation Adjustments	$	—		$	(4)		$	—	$	—		$	(4)
Balance as of March 31, 2026	$	11		$	484		$	92	$	198		$	786

*	Represents the goodwill acquired as part of the purchase of Skytap and the removal of goodwill related to the divestiture of the SIS platform using the relative fair value approach. See Note 10 – Acquisitions and Divestitures for additional details.

As discussed in Note 4 – Segments, Kyndryl’s operations in Australia/New Zealand transitioned from the Principal Markets segment to the Strategic Markets segment in the quarter ended June 30, 2024. As a result, the Company reallocated the goodwill associated with Australia/New Zealand from the Principal Markets segment to the Strategic Markets segment. The Company also performed a qualitative impairment test immediately before and after the change in reporting units and determined that it is not more likely than not that the fair value of the reporting units is less than their carrying amounts, including goodwill. Accordingly, the Company concluded that the goodwill related to those reporting units was not impaired.

Management reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable by first assessing qualitative factors to determine if it is more likely than not that fair value is less than carrying value.

We conducted an impairment assessment as of January 1, 2026. After evaluating and weighing all relevant qualitative factors, the Company concluded that it is unlikely that the fair value of any of its reporting units is less than its carrying amount as of the date of the assessment. Accordingly, there were no goodwill impairment losses recorded for the year ended March 31, 2026. Cumulatively, the Company has recorded $469 million in goodwill impairment charges within its former EMEA ($293 million) and current United States ($176 million) reporting units, all of which occurred immediately following the Separation.