Cognizant vs IBM
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KIRA’s take AI analyst
I put Cognizant and IBM side by side, using each one’s latest annual report. Here is what stands out:
- IBM is the larger business, with $67.5B of revenue in fiscal 2025 against $21.1B for Cognizant, about 3.2 times as much.
- IBM grew revenue faster (7.6%, against 7.0%).
- IBM turned more of its sales into free cash flow (17.9% FCF margin, against 12.3%).
- Cognizant earned a higher return on the capital invested in it (16.2%, against 15.4%).
- Investors pay more for each dollar of IBM’s earnings: a P/E of 21.6x against 15.1x for Cognizant.
Who comes out ahead
Of the 9 measures where higher (or lower) is clearly better, how many each company leads.
Cognizant
CTSH
4/9
5-year growthReturn on capitalNet debt / EBITDAShare count change
IBM
IBM
4/9
Revenue growthNet marginFCF marginReturn on equity
Side by side
Best in the row
| Latest fiscal year | CTSH FY25 | IBM FY25 |
|---|---|---|
| Size | ||
| Market cap | $33.1B | $241.7B |
| Revenue | $21.1B | $67.5B |
| Free cash flow | $2.6B | $12.1B |
| Net income | $2.2B | $10.6B |
| Growth | ||
| Revenue growth | 7.0% | 7.6% |
| 5-year growth | 4.9% | 4.1% |
| Share count change | −1.6% | 1.2% |
| Profitability | ||
| Gross margin | — | 58.2% |
| Operating margin | 16.1% | — |
| Net margin | 10.6% | 15.7% |
| FCF margin | 12.3% | 17.9% |
| Return on capital | 16.2% | 15.4% |
| Return on equity | 15.2% | 35.3% |
| Balance sheet | ||
| Net debt | −$1.3B | $53.3B |
| Net debt / EBITDA | −0.3x | 3.1x |
| Dividends and buybacks | $2.0B | $6.3B |
| Valuation & quality | ||
| P/E | 15.1x | 21.6x |
| 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.