The company's top-line performance remains under pressure with a 14.1% year-over-year revenue decline and a compressed gross margin of 36.0% as of 2025Q4.
Universe Pharmaceuticals Inc. (UPC) annual income statement — 8-year revenue, gross profit & net income history
| Metric | Sep'25 | Sep'24 | Sep'23 | Sep'22 | Sep'21 | Sep'20 | Sep'19 | Sep'18 |
|---|
| Sales/Revenue | 17.86M | 23.02M | 32.31M | 40.14M | 47.98M | 30.7M | 33.23M | 28.51M |
| Revenue Growth % | -22.44% | -28.74% | -19.52% | -16.34% | 56.27% | -7.6% | 16.54% | - |
| Cost of Goods Sold | 11.56M | 16.95M | 21.99M | 18.25M | 22.66M | 16.61M | 19.82M | 15.11M |
| COGS % of Revenue | 64.72% | 73.63% | 68.07% | 45.47% | 47.22% | 54.1% | 59.65% | 52.97% |
| Gross Profit | 6.3M | 6.07M | 10.32M | 21.89M | 25.33M | 14.09M | 13.41M | 13.41M |
| Gross Margin % | 35.28% | 26.37% | 31.93% | 54.53% | 52.78% | 45.9% | 40.35% | 47.03% |
| Gross Profit Growth % | 3.78% | -41.14% | -52.88% | -13.56% | 79.7% | 5.12% | -0.01% | - |
| Operating Expenses | 9.22M | 14.09M | 13.84M | 28.91M | 11.74M | 3.74M | 3.36M | 3.65M |
| OpEx % of Revenue | 51.61% | 61.2% | 42.84% | 72.02% | 24.46% | 12.19% | 10.1% | 12.8% |
| Selling, General & Admin | 8M | 10.44M | 9M | 21.3M | 6.27M | 2.8M | 2.29M | 2.39M |
| SG&A % of Revenue | 44.81% | 45.36% | 27.86% | 53.05% | 13.07% | 9.1% | 6.9% | 8.36% |
| Research & Development | 671.76K | 3.03M | 4.86M | 7.62M | 5.47M | 583.13K | 618.44K | 789.38K |
| R&D % of Revenue | 3.76% | 13.16% | 15.04% | 18.99% | 11.39% | 1.9% | 1.86% | 2.77% |
| Other Operating Expenses | 542.97K | 616.27K | -17.53K | -7.53K | 0 | 365.77K | 445.77K | 474.63K |
| Operating Income | -2.92M | -8.02M | -3.53M | -7.02M | 13.59M | 10.25M | 9.75M | 9.66M |
| Operating Margin % | -16.33% | -34.83% | -10.92% | -17.49% | 28.32% | 33.39% | 29.35% | 33.87% |
| Operating Income Growth % | 63.64% | -127.4% | 49.76% | -151.65% | 32.56% | 5.12% | 1% | - |
| EBITDA | -2.4M | -7.53M | -3.02M | -6.49M | 14.04M | 10.66M | 10.17M | 10.11M |
| EBITDA Margin % | -13.43% | -32.72% | -9.34% | -16.16% | 29.25% | 34.72% | 30.61% | 35.45% |
| EBITDA Growth % | 68.16% | -149.64% | 53.47% | -146.2% | 31.66% | 4.82% | 0.62% | - |
| D&A (Non-Cash Add-back) | 517.43K | 485.73K | 508.79K | 533.95K | 446.88K | 410.08K | 418.43K | 452.73K |
| EBIT | -3.44M | -7.84M | -3.69M | -6.93M | 13.78M | 10.22M | 9.78M | 9.68M |
| Net Interest Income | -232.04K | -278.17K | -156.79K | -162.4K | -101.6K | -123.76K | -129.27K | -164.92K |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 232.04K | 278.17K | 156.79K | 162.4K | 101.6K | 123.76K | 129.27K | 164.92K |
| Other Income/Expense | -756.14K | -100.75K | -413.77K | -545.35K | 57.51K | -151.29K | -99.77K | -138.28K |
| Pretax Income | -3.67M | -8.12M | -3.94M | -7.98M | 13.65M | 10.1M | 9.65M | 9.52M |
| Pretax Margin % | -20.56% | -35.27% | -12.2% | -19.89% | 28.44% | 32.9% | 29.05% | 33.38% |
| Income Tax | 0 | 606.7K | 2.25M | 752.42K | 2.36M | 2.54M | 2.1M | 1.92M |
| Effective Tax Rate % | 0% | -7.47% | -57.19% | -9.42% | 17.28% | 25.17% | 21.77% | 20.12% |
| Net Income | -3.67M | -8.73M | -6.16M | -8.74M | 11.32M | 7.56M | 7.55M | 7.6M |
| Net Margin % | -20.56% | -37.9% | -19.08% | -21.76% | 23.59% | 24.62% | 22.73% | 26.66% |
| Net Income Growth % | 57.92% | -41.61% | 29.46% | -177.18% | 49.77% | 0.09% | -0.68% | - |
| Net Income (Continuing) | -3.67M | -8.73M | -6.19M | -8.74M | 11.29M | 7.56M | 7.55M | 7.6M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -1055.75 | -1436.12 | -1040.53 | -1475.02 | 2147.18 | 1295.70 | 1294.54 | 1303.36 |
| EPS Growth % | 26.49% | -38.02% | 29.46% | -168.7% | 65.72% | 0.09% | -0.68% | - |
| EPS (Basic) | -1055.75 | -1436.12 | -1040.53 | -1475.02 | 2147.18 | 1295.70 | 1294.54 | 1303.36 |
| Diluted Shares Outstanding | 3.48K | 6.08K | 5.92K | 5.92K | 5.27K | 5.83K | 5.83K | 5.83K |
| Basic Shares Outstanding | 3.48K | 6.08K | 5.92K | 5.92K | 5.27K | 5.83K | 5.83K | 5.83K |
| Dividend Payout Ratio | - | - | - | - | - | - | 211.95% | 40.25% |
Quick answers to the most common questions about buying UPC stock.
For fiscal year 2025, Universe Pharmaceuticals Inc. (UPC) reported total revenue of $17.9M. This represents a 37.4% decline compared to $28.5M in 2018.
Universe Pharmaceuticals Inc. (UPC) reported a net loss of $3.7M for the fiscal year ending 2025.
Universe Pharmaceuticals Inc. (UPC) reported an operating income of $-2.9M, resulting in an operating profit margin of -16.3%. This margin reflects the operational efficiency of the business before interest and taxes.
Universe Pharmaceuticals Inc. (UPC) generated $6.3M in gross profit for the year, representing a gross profit margin of 35.3%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Sustained Revenue Contraction
Persistent Revenue Contraction Trends
As indicated by the most recent financial data, Universe Pharmaceuticals has experienced a sustained revenue decline, with the latest quarterly figures showing a 14.1% year-over-year contraction, extending a multi-period trend of top-line erosion that suggests a significant loss of market share within its core regional distribution network.
The consistent downward trajectory in revenue suggests that the company's reliance on localized distribution in Jiangxi Province is failing to capture growth in a competitive landscape. Investors should monitor whether this decline reflects a structural shift in consumer demand for TCM products or an inability to maintain competitive pricing against larger, more efficient national distributors.
Margin Compression Amid Scale Loss
Based on reported income statements, the company's gross margin has compressed to 36.0% in the most recent quarter, reflecting the dilutive impact of third-party distribution and an inability to maintain the premium pricing power previously observed when gross margins exceeded 50% in earlier fiscal periods.
The erosion of gross margins appears to be a direct consequence of the company's shift toward lower-margin third-party distribution as its proprietary manufacturing segment loses volume. This trend suggests that the company is struggling to maintain its value-added proposition, potentially forcing it to compete on price rather than product differentiation.
Operating Leverage Remains Critically Negative
According to the latest quarterly filings, the company's operating margin has fallen to -6.8%, demonstrating a lack of operating leverage as fixed costs remain disproportionately high relative to the shrinking revenue base, which has failed to scale effectively since the 2021 fiscal year.
The inability to align SG&A expenses with declining revenue suggests that the company's current operating structure is unsustainable. Without a significant reduction in fixed overhead or a reversal in top-line trends, the company appears to be trapped in a cycle of operating losses that will continue to erode its cash reserves.
Sustainability of Current Business Model
While the company maintains a clean balance sheet with minimal debt, the persistent negative operating income, as evidenced by the -16.33% operating margin over recent periods, raises significant questions regarding the long-term viability of its current regional distribution-heavy business model in a competitive Chinese healthcare market.
Short-sellers may focus on the disconnect between the company's high cash position and its inability to generate positive operating cash flow. The risk remains that the company is essentially a 'cash-box' with a declining core business, and without a clear pivot, the current cash runway may be the only factor preventing a more severe valuation adjustment.