IBM vs McDonald's: Revenue, Profit and Business Model
IBM reported $67.5B of revenue in FY2025 and $10.6B of net income. McDonald's reported $26.9B of revenue in FY2025 and $8.6B of net income.
Latest financial snapshot
IBM
- Latest revenue
- $67.5B (FY2025)
- Net income
- $10.6B
- Net margin
- 15.7%
- Revenue growth
- -1.9% a year, FY2016–FY2025
McDonald's
- Latest revenue
- $26.9B (FY2025)
- Net income
- $8.6B
- Net margin
- 31.9%
- Revenue growth
- +1.0% a year, FY2016–FY2025
Financial summary
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.
McDonald's
McDonald's corporate revenue ($26.885 billion in 2025, up 3.7%) is a fraction of the roughly $139 billion that customers spend across the system, because franchised restaurant sales are not booked as company revenue. What the company does book is mostly franchise rent and royalties, which explains net income of $8.563 billion in 2025 and operating margins well above typical restaurant operators. In Q2 2026, revenue rose 4% (2% in constant currency) to about $7.1 billion, diluted EPS was $3.32 ($3.38 adjusted), and systemwide sales grew 5% to $37 billion. The company returns most free cash flow through dividends, which it has raised every year since 1976, and share buybacks.
Revenue and profit by year
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 |
McDonald's
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $26.9B | $8.6B | 31.9% | +3.7% | Source |
| FY2024 | $25.9B | $8.2B | 31.7% | +1.7% | Source |
| FY2023 | $25.5B | $8.5B | 33.2% | +10.0% | Source |
| FY2022 | $23.2B | $6.2B | 26.6% | -0.2% | Source |
| FY2021 | $23.2B | $7.5B | 32.5% | +20.9% | Source |
| FY2020 | $19.2B | $4.7B | 24.6% | -10.1% | Source |
| FY2019 | $21.4B | $6B | 28.2% | +0.5% | Source |
| FY2018 | $21.3B | $5.9B | 27.9% | -6.8% | Source |
| FY2017 | $22.8B | $5.2B | 22.8% | -7.3% | Source |
| FY2016 | $24.6B | $4.7B | 19.0% | — | Source |
Where the revenue comes from
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.
McDonald's
- Franchise rent and royalties~45%
Franchise rent and royalties
- Company-operated restaurants~25%
Company-operated restaurants
- Licensing and delivery economics~15%
Licensing and delivery economics
Business model and strategy
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.
McDonald's
How it makes money
About 95% of McDonald's restaurants are owned and operated by franchisees or developmental licensees. The corporation makes money in three main ways: (1) rent, because it owns or leases the land and buildings at many franchised sites and charges franchisees rent, often tied to a percentage of sales; (2) royalties, a percentage of each restaurant's monthly sales;
Growth strategy
McDonald's growth plan, branded Accelerating the Arches, rests on marketing, core menu (burgers, chicken, coffee), and the 3 D's: digital, delivery, and drive-thru. The company targets roughly 50,000 restaurants worldwide by the end of 2027, with China, other developmental licensed markets, and the U.S. contributing the largest number of openings.
Competitive advantage
McDonald's advantage is scale that rivals cannot easily copy: more than 45,000 restaurants, control of prime real estate at many franchised sites, a long-tenured franchisee base that funds most store capital, and a supply chain that buys beef, potatoes, chicken, and packaging at volumes few chains match.
Questions about IBM vs McDonald's
Which company has higher revenue — International Business Machines Corporation or McDonald's Corporation?
International Business Machines Corporation reported $67.5B (FY2025), while McDonald's Corporation reported $26.9B (FY2025). By last reported revenue, International Business Machines Corporation is the larger business, with McDonald's Corporation reporting a smaller revenue base.
What is the market cap of International Business Machines Corporation vs McDonald's Corporation?
International Business Machines Corporation's market capitalisation stands at $216.3B, while McDonald's Corporation's is $175.7B. International Business Machines Corporation carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to McDonald's Corporation.
Which is more financially efficient — International Business Machines Corporation or McDonald's Corporation?
International Business Machines Corporation generates $256k / employee in revenue per employee, while McDonald's Corporation generates $179k / employee. International Business Machines Corporation 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 International Business Machines Corporation and McDonald's Corporation make money?
International Business Machines Corporation and McDonald's Corporation generate revenue in fundamentally different ways. International Business Machines Corporation: IBM makes money from four segments. McDonald's Corporation: About 95% of McDonald's restaurants are owned and operated by franchisees or developmental licensees.
Which company is valued higher relative to revenue — International Business Machines Corporation or McDonald's Corporation?
On a price-to-sales (P/S) basis, International Business Machines Corporation trades at 3.2x P/S and McDonald's Corporation at 6.5x P/S. McDonald's Corporation 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 International Business Machines Corporation bigger than McDonald's Corporation?
By last reported revenue, International Business Machines Corporation ($67.5B (FY2025)) is the larger company compared to McDonald's Corporation ($26.9B (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 IBM vs McDonald's overview