Cloudflare vs IBM: Revenue, Profit and Business Model
Cloudflare reported $2.2B of revenue in FY2025 and — of net income. IBM reported $67.5B of revenue in FY2025 and $10.6B of net income.
Latest financial snapshot
Cloudflare
- Latest revenue
- $2.2B (FY2025)
- Net income
- —
- Net margin
- 0.0%
- Revenue growth
- +41.5% a year, FY2017–FY2025
IBM
- Latest revenue
- $67.5B (FY2025)
- Net income
- $10.6B
- Net margin
- 15.7%
- Revenue growth
- -1.9% a year, FY2016–FY2025
Financial summary
Cloudflare
Cloudflare's revenue has compounded from $431.1 million in 2020 to $2.17 billion in 2025. In 2025 it posted 29.8% growth, 75.8% non-GAAP gross margin, $303.9 million of non-GAAP operating income (14.0% of revenue), $603.1 million of operating cash flow, and $260.6 million of free cash flow, while still reporting a $102.3 million GAAP net loss driven by stock-based compensation. Growth accelerated in 2026: Q2 2026 revenue was $696.1 million (+36% year over year), with a $170.0 million GAAP net loss and $107.8 million of non-GAAP net income. Cash and securities stood at $4.16 billion on June 30, 2026. Management raised full-year 2026 revenue guidance to $2.864-$2.870 billion in August 2026.
IBM
IBM's reported revenue fell from about $80 billion in 2016-2018 to $57.4 billion in 2021, mostly because the Kyndryl spin-off and earlier divestitures removed low-margin services. Since then the slimmer company has grown each year: $60.5 billion in 2022, $61.9 billion in 2023, $62.8 billion in 2024, and $67.5 billion in 2025 (up 7.6%). FY2025 net income from continuing operations was $10.6 billion and free cash flow was $14.7 billion. In Q2 2026, revenue rose 1% to $17.16 billion: software grew 5% to $7.76 billion, consulting was flat at $5.33 billion, and infrastructure fell 7% to $3.84 billion as IBM Z sales lapped the z17 launch. Some large software deals slipped out of the quarter, so IBM cut its 2026 constant-currency revenue growth forecast to 4-5% while keeping its target of about $1 billion more free cash flow than in 2025.
Revenue and profit by year
Cloudflare
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $2.2B | — | 0.0% | +29.8% | Source |
| FY2024 | $1.7B | — | 0.0% | +28.8% | Source |
| FY2023 | $1.3B | — | 0.0% | +33.0% | Source |
| FY2022 | $975.2M | — | 0.0% | +48.6% | Source |
| FY2021 | $656.4M | — | 0.0% | +52.3% | Source |
| FY2020 | $431.1M | — | 0.0% | +50.2% | Source |
| FY2019 | $287M | -$105.8M | -36.9% | +49.0% | Source |
| FY2018 | $192.7M | -$87.2M | -45.2% | +42.8% | Source |
| FY2017 | $134.9M | -$10.7M | -8.0% | — | Source |
IBM
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $67.5B | $10.6B | 15.7% | +7.6% | Source |
| FY2024 | $62.8B | $6B | 9.6% | +1.4% | Source |
| FY2023 | $61.9B | $7.5B | 12.1% | +2.2% | Source |
| FY2022 | $60.5B | $1.6B | 2.7% | +5.5% | Source |
| FY2021 | $57.4B | $5.7B | 10.0% | +3.9% | Source |
| FY2020 | $55.2B | $5.6B | 10.1% | -4.4% | Source |
| FY2019 | $57.7B | $9.4B | 16.3% | -27.5% | Source |
| FY2018 | $79.6B | $8.7B | 11.0% | +0.6% | Source |
| FY2017 | $79.1B | $5.8B | 7.3% | -1.0% | Source |
| FY2016 | $79.9B | $11.9B | 14.9% | — | Source |
Where the revenue comes from
Cloudflare
- Enterprise and large-customer contracts
Majority of revenue (exact split not stated here)
Annual and multi-year contracts with large organizations covering application security, Cloudflare One Zero Trust, email security, and network services.
- Self-serve and developer usage
Not separately disclosed
Monthly Pro and Business subscriptions plus usage-based billing for Workers, R2, D1, and Workers AI.
IBM
- Software~44%
Red Hat, automation, data and AI, transaction processing, security, and related software services.
- Consulting~31%
Technology consulting, business transformation, hybrid cloud implementation, and AI-enabled workflows.
- Infrastructure~23%
IBM Z, distributed infrastructure, storage, infrastructure software, maintenance, and related services.
- Financing~1%
Client financing and used equipment sales supporting enterprise technology deployments.
Business model and strategy
Cloudflare
How it makes money
Cloudflare makes money by selling subscriptions and usage-based services that run on a single global network. Millions of websites use a free plan; paying customers move up to Pro, Business, and Enterprise plans for advanced DDoS mitigation, web application firewall, bot management, and support.
Growth strategy
Cloudflare grows by landing customers with free or low-cost plans and expanding into more products per account. Its main growth vectors are larger enterprise contracts (it signed its largest-ever deal in Q4 2025, averaging $42.5 million per year in annual contract value), Cloudflare One Zero Trust, and the developer platform.
Competitive advantage
Cloudflare's advantage is its network: data centers in more than 330 cities that run every product on every server, combined with a free tier that brings an enormous volume of diverse traffic onto the platform. That traffic gives Cloudflare broad visibility into attacks, and the shared architecture lets it launch new security, AI, and developer products to its whole customer base at low marginal cost.
IBM
How it makes money
IBM makes money from four segments. Software ($29.96 billion in FY2025, about 44% of revenue) includes Red Hat Enterprise Linux and OpenShift, HashiCorp Terraform and Vault, Confluent data streaming (from March 2026), watsonx AI, automation, security, and mainframe transaction-processing software, sold mostly as subscriptions and recurring licenses.
Growth strategy
IBM does not try to beat AWS, Microsoft Azure, or Google Cloud at selling public cloud capacity. It sells the software layer that runs across all of them and across on-premises data centers.
Competitive advantage
IBM's main advantage is how deeply it is built into the core systems of large regulated organizations. Banks, card networks, insurers, and governments run high-volume transaction processing on IBM Z, and moving those workloads is slow, risky, and expensive.
Questions about Cloudflare vs IBM
Which company has higher revenue — Cloudflare, Inc. or International Business Machines Corporation?
Cloudflare, Inc. reported $2.2B (FY2025), while International Business Machines Corporation reported $67.5B (FY2025). By last reported revenue, International Business Machines Corporation is the larger business, with Cloudflare, Inc. reporting a smaller revenue base.
What is the market cap of Cloudflare, Inc. vs International Business Machines Corporation?
Cloudflare, Inc.'s market capitalisation stands at $122.5B, while International Business Machines Corporation's is $216.3B. International Business Machines Corporation carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to Cloudflare, Inc..
Which is more financially efficient — Cloudflare, Inc. or International Business Machines Corporation?
Cloudflare, Inc. generates $420k / employee in revenue per employee, while International Business Machines Corporation generates $256k / employee. Cloudflare, Inc. shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do Cloudflare, Inc. and International Business Machines Corporation make money?
Cloudflare, Inc. and International Business Machines Corporation generate revenue in fundamentally different ways. Cloudflare, Inc.: Cloudflare makes money by selling subscriptions and usage-based services that run on a single global network. International Business Machines Corporation: IBM makes money from four segments.
Which company is valued higher relative to revenue — Cloudflare, Inc. or International Business Machines Corporation?
On a price-to-sales (P/S) basis, Cloudflare, Inc. trades at 56.5x P/S and International Business Machines Corporation at 3.2x P/S. Cloudflare, Inc. commands a higher revenue multiple, typically indicating that investors expect faster growth or higher future margins compared to International Business Machines Corporation. A higher multiple is not inherently better — it may also signal that the stock is priced for perfection.
Is Cloudflare, Inc. bigger than International Business Machines Corporation?
By last reported revenue, International Business Machines Corporation ($67.5B (FY2025)) is the larger company compared to Cloudflare, Inc. ($2.2B (FY2025)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Cloudflare vs IBM overview