IBM vs Kyndryl
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KIRAβs take AI analyst
I put IBM and Kyndryl side by side, using each oneβs latest annual report. Here is what stands out:
- IBM is the larger business, with $67.5B of revenue in fiscal 2025 against $15.1B for Kyndryl, about 4.5 times as much.
- IBM grew revenue faster (7.6%, against 0.2%).
- IBM turned more of its sales into free cash flow (17.9% FCF margin, against 2.3%).
- IBM earned a higher return on the capital invested in it (15.4%, against 7.8%).
- Investors pay more for each dollar of Kyndrylβs earnings: a P/E of 38.3x against 21.3x for IBM.
Who comes out ahead
Of the 10 measures where higher (or lower) is clearly better, how many each company leads.
IBM
IBM
7/10
Revenue growth5-year growthGross marginNet marginFCF marginReturn on capitalReturn on equity
Kyndryl
KD
2/10
Net debt / EBITDAShare count change
Side by side
Best in the row
| Latest fiscal year | IBM FY25 | KD FY26 |
|---|---|---|
| Size | ||
| Market cap | $238.6B | $3.1B |
| Revenue | $67.5B | $15.1B |
| Free cash flow | $12.1B | $340M |
| Net income | $10.6B | $198M |
| Growth | ||
| Revenue growth | 7.6% | 0.2% |
| 5-year growth | 4.1% | β4.9% |
| Share count change | 1.2% | β2.2% |
| Profitability | ||
| Gross margin | 58.2% | 21.8% |
| Operating margin | β | β |
| Net margin | 15.7% | 1.3% |
| FCF margin | 17.9% | 2.3% |
| Return on capital | 15.4% | 7.8% |
| Return on equity | 35.3% | 16.5% |
| Balance sheet | ||
| Net debt | $53.3B | $2.3B |
| Net debt / EBITDA | 3.1x | 1.8x |
| Dividends and buybacks | $6.3B | $304M |
| Valuation & quality | ||
| P/E | 21.3x | 38.3x |
| Piotroski F-score | 6 | 6 |
Ten years
Revenue
Operating margin
Free cash flow
Return on capital
Each company's latest fiscal year; fiscal years end in different months. The best value in each row is highlighted where higher (or lower) is clearly better. Not investment advice.