Free cash flow of $2.4B in Q3 2026 reflects strong conversion with OCF/NI of 2.50, yet dividends of roughly $1.4B per quarter consume most of operating cash, so payout coverage may be sensitive to cash troughs.
United Parcel Service, Inc. (UPS) cash flow statement — 28-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 |
|---|
| Cash from Operations | 9.32B | 8.45B | 10.12B | 10.24B | 14.1B | 15.01B | 10.46B | 8.64B | 12.71B | 1.48B | 6.47B | 7.43B | 5.73B | 7.3B | 7.22B | 7.07B | 3.83B | 5.29B | 8.43B | 1.12B | 5.59B | 5.79B | 5.33B | 4.65B | 5.63B | 3.9B | 2.74B | 2.22B | 2.87B |
| Operating CF Margin % | - | 9.53% | 11.14% | 11.28% | 14.1% | 15.44% | 12.39% | 11.69% | 17.68% | 2.22% | 10.7% | 12.8% | 9.83% | 13.16% | 13.35% | 13.29% | 7.76% | 11.71% | 16.37% | 2.26% | 11.75% | 13.6% | 14.57% | 13.87% | 17.99% | 12.73% | 9.21% | 8.22% | 11.57% |
| Operating CF Growth % | 167.4% | -16.52% | -1.13% | -27.41% | -6.02% | 43.48% | 21.07% | -32.04% | 759.43% | -77.15% | -12.88% | 29.76% | -21.6% | 1.22% | 2.02% | 84.43% | -27.44% | -37.28% | 650.31% | -79.91% | -3.52% | 8.67% | 14.74% | -17.43% | 44.28% | 42.23% | 23.35% | -22.49% | - |
| Net Income | 4.42B | 5.57B | 5.78B | 6.71B | 11.55B | 12.89B | 1.43B | 4.44B | 4.79B | 4.91B | 3.43B | 4.84B | 3.03B | 4.37B | 807M | 3.8B | 3.49B | 2.15B | 3B | 382M | 4.2B | 3.87B | 3.33B | 2.9B | 3.18B | 2.4B | 2.93B | 2.33B | 1.74B |
| Depreciation & Amortization | 3.9B | 3.75B | 3.61B | 3.37B | 3.19B | 2.95B | 2.7B | 2.36B | 2.21B | 2.28B | 2.22B | 2.08B | 1.92B | 1.87B | 1.86B | 1.78B | 1.79B | 1.75B | 1.81B | 1.75B | 1.75B | 1.64B | 1.54B | 1.55B | 1.46B | 1.4B | 1.17B | 1.14B | -1.11B |
| Stock-Based Compensation | 127M | 73M | 24M | 220M | 1.57B | 878M | 796M | 915M | 634M | 584M | 591M | 574M | 536M | 513M | 547M | 524M | 519M | 430M | 516M | 447M | 369M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 170M | -8M | -15M | 199M | 531M | 1.65B | -812M | 100M | 758M | 1.23B | 123M | 540M | 385M | -246M | -1.2B | 241M | 1B | 471M | 187M | -249M | 279M | 477M | 289M | 317M | 162M | 638M | -81M | 575M | 23M |
| Other Non-Cash Items | 401M | -3M | 466M | 117M | -2.31B | -2.69B | 5.27B | 688M | 2.28B | -6.07B | 813M | -358M | -438M | 832M | 5.07B | 498M | -2.31B | 377M | 1.75B | 245M | -929M | 377M | 889M | 732M | -172M | 576M | 333M | 464M | 2.22B |
| Working Capital Changes | 294M | -930M | 256M | -372M | -420M | -664M | 1.08B | 136M | 2.04B | -1.46B | -709M | -254M | 288M | -34M | 132M | 224M | -659M | 108M | 1.16B | -1.45B | -80M | -575M | -723M | -850M | 991M | -1.11B | -1.62B | -838M | -66M |
| Change in Receivables | -801M | -382M | -566M | 1.26B | -322M | -2.15B | -1.56B | -717M | -421M | -1.02B | -704M | -452M | -523M | -515M | -124M | -657M | -532M | -30M | 197M | -380M | -77M | -647M | -686M | -264M | 312M | -215M | -913M | -454M | -308M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -694M | -3.87B | -2.58B | -2.17B | -2.63B | -5.99B | -6.89B | -5.14B | -6.06B | -2.79B | -151M | -2.95B | -15M | -30M | -428M | -499M | 401M | -366M | -1.16B | -18M | 37M |
| Change in Payables | 309M | -190M | 262M | -1.38B | 34M | 1.26B | 904M | 419M | 1.03B | 592M | 461M | -147M | 276M | 218M | -58M | 249M | 265M | -107M | 87M | -37M | 24M | 158M | 318M | 66M | -56M | -470M | 317M | -27M | 115M |
| Cash from Investing | -3.78B | -4.74B | -217M | -7.13B | -7.47B | -3.82B | -5.28B | -6.06B | -6.33B | -4.97B | -2.57B | -5.31B | -2.8B | -2.11B | -1.33B | -2.54B | -654M | -1.25B | -3.18B | -2.2B | -2.34B | -975M | -3.64B | -1.94B | -2.13B | -2.38B | -875M | -3.13B | -1.66B |
| Capital Expenditures | -2.94B | -3.69B | -3.91B | -5.16B | -4.77B | -4.19B | -5.41B | -6.38B | -6.28B | -5.23B | -2.96B | -2.38B | -2.33B | -2.06B | -2.15B | -2B | -1.39B | -1.6B | -2.64B | -2.82B | -3.08B | -2.19B | -2.13B | -1.95B | -1.66B | -2.37B | -2.15B | -1.48B | -1.65B |
| CapEx % of Revenue | 3.21% | 4.16% | 4.3% | 5.68% | 4.77% | 4.31% | 6.41% | 8.63% | 8.74% | 7.85% | 4.9% | 4.1% | 4% | 3.72% | 3.98% | 3.77% | 2.81% | 3.55% | 5.12% | 5.67% | 6.49% | 5.14% | 5.81% | 5.81% | 5.3% | 7.74% | 7.21% | 5.46% | 6.64% |
| Acquisitions | -1.5B | -1.97B | 1.04B | -1.14B | -743M | -602M | -20M | -6M | -2M | -134M | -547M | -1.9B | -88M | -22M | -100M | -73M | 517M | 1.6B | 2.64B | -2M | -50M | -1.49B | -238M | 8M | -14M | -466M | -245M | 1.69B | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 595M | 715M | -24M | -19M | -309M | 924M | 43M | 3M | 42M | 30M | 38M | 1M | 34M | -36M | 290M | -230M | 188M | -1.54B | -2.49B | 85M | 313M | -52M | 325M | 162M | -385M | 126M | 299M | -1.65B | 380M |
| Cash from Financing | -5.37B | -4.14B | -6.85B | -5.53B | -11.19B | -6.82B | -4.52B | -1.73B | -5.69B | 3.29B | -3.14B | -1.56B | -5.16B | -7.81B | -1.82B | -4.86B | -1.35B | -3.04B | -6.7B | 2.3B | -3.85B | -4.17B | -2.01B | -2.18B | -2.09B | -1.49B | -5.16B | 3.9B | -433M |
| Debt Issued (Net) | -6.23B | 2.08B | -974M | 2.27B | -2.3B | -2.77B | -851M | 2.11B | -1.62B | 7.83B | 2.03B | 1.06B | -169M | -1.77B | 1.73B | -95M | 1.25B | -522M | -921M | 6.51B | 46M | -461M | 343M | -884M | -680M | 1.22B | 1.13B | -177M | -23M |
| Equity Issued (Net) | 86M | -841M | -268M | -2B | -3.24B | -249M | 61M | -1B | -1.01B | -1.57B | -2.68B | -2.7B | -2.42B | -3.35B | -1.32B | -2.38B | -599M | -412M | -3.4B | -2.46B | -2.3B | -2.31B | -1.12B | -244M | -488M | -1.79B | -5.38B | 4.72B | -38M |
| Dividends Paid | -5.42B | -5.4B | -5.4B | -5.37B | -5.11B | -3.44B | -3.37B | -3.19B | -3.01B | -2.77B | -2.64B | -2.52B | -2.37B | -2.26B | -2.13B | -2B | -1.82B | -1.75B | -2.22B | -1.7B | -1.58B | -1.39B | -1.21B | -1.03B | -849M | -856M | -786M | -672M | -466M |
| Share Repurchases | 0 | -1B | -500M | -2.25B | -3.5B | -500M | -224M | -1B | -1.01B | -1.81B | -2.68B | -2.7B | -2.69B | -3.84B | -1.62B | -2.67B | -817M | -561M | -3.57B | -2.64B | -2.46B | -2.48B | -1.31B | -398M | -604M | -2.02B | -5.46B | -1.23B | -823M |
| Other Financing | 6.2B | 14M | -209M | -432M | -529M | -364M | -353M | 362M | -48M | -203M | 147M | 2.6B | -205M | -425M | -96M | -395M | -175M | -360M | -161M | -44M | -24M | -8M | -32M | -982M | -73M | -69M | -127M | -1M | 94M |
| Net Change in Cash | 133M | -225M | 2.91B | -2.4B | -4.65B | 4.34B | 672M | 871M | 598M | -156M | 746M | 439M | -2.37B | -2.66B | 4.29B | -336M | 1.83B | 1.03B | -1.52B | 1.23B | -575M | 630M | -325M | 740M | 1.35B | -21M | -3.33B | 2.96B | 780M |
| Free Cash Flow | 6.38B | 4.76B | 6.21B | 5.08B | 9.34B | 10.81B | 5.05B | 2.26B | 6.43B | -3.75B | 3.51B | 5.05B | 3.4B | 5.24B | 5.06B | 5.07B | 2.45B | 3.68B | 5.79B | -1.7B | 2.5B | 3.61B | 3.2B | 2.7B | 3.97B | 1.53B | 595M | 747M | 1.22B |
| FCF Margin % | 6.98% | 5.37% | 6.84% | 5.6% | 9.33% | 11.12% | 5.98% | 3.06% | 8.94% | -5.63% | 5.8% | 8.7% | 5.83% | 9.44% | 9.36% | 9.53% | 4.95% | 8.16% | 11.25% | -3.42% | 5.27% | 8.47% | 8.76% | 8.06% | 12.69% | 4.99% | 2% | 2.76% | 4.93% |
| FCF Growth % | 45.11% | -23.31% | 22.3% | -45.58% | -13.67% | 114.25% | 123.42% | -64.86% | 271.5% | -206.84% | -30.55% | 48.65% | -35.14% | 3.48% | -0.1% | 107.2% | -33.59% | -36.39% | 441.19% | -167.77% | -30.56% | 12.55% | 18.71% | -32% | 159.75% | 156.81% | -20.35% | -38.92% | - |
| FCF per Share | 7.49 | 5.61 | 7.26 | 5.91 | 10.72 | 12.32 | 5.79 | 2.60 | 7.39 | -4.28 | 3.95 | 5.58 | 3.68 | 5.53 | 5.22 | 5.11 | 2.44 | 3.67 | 5.67 | -1.60 | 2.30 | 3.23 | 2.82 | 2.37 | 3.50 | 1.34 | 0.51 | 0.65 | 1.10 |
| FCF Conversion (FCF/Net Income) | 1.44x | 1.52x | 1.75x | 1.53x | 1.22x | 1.16x | 7.79x | 1.95x | 2.65x | 0.30x | 1.89x | 1.53x | 1.89x | 1.67x | 8.94x | 1.86x | 1.10x | 2.46x | 2.81x | 2.94x | 1.33x | 1.50x | 1.60x | 1.60x | 1.77x | 1.63x | 0.93x | 2.52x | 1.65x |
| Interest Paid | 0 | 0 | 854M | 762M | 721M | 697M | 691M | 628M | 595M | 428M | 373M | 345M | 366M | 409M | 381M | 248M | 340M | 390M | 359M | 248M | 210M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 1.35B | 1.98B | 2.57B | 1.87B | 1.14B | 514M | 2M | 1.56B | 2.06B | 1.91B | 1.52B | 2.71B | 1.99B | 1.53B | 1.31B | 443M | 760M | 1.35B | 2.06B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Quick answers to the most common questions about buying UPS stock.
United Parcel Service, Inc. (UPS) generated $8.45B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
United Parcel Service, Inc. (UPS) generated $4.76B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
United Parcel Service, Inc. (UPS) spent $3.69B on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, United Parcel Service, Inc. (UPS) returned $5.40B to shareholders via cash dividends and spent $1.00B on share repurchases. This shows the company's commitment to returning capital to its equity investors.
Key Metrics
Top Statement Risk
Labor cost and volume erosion
Metrics are mathematically derived from official filings.
Operating Cash Flow Far Exceeds Reported Earnings
According to recent SEC filings, UPS generated operating cash flow of $2.9B against net income of $1.2B in the latest quarter, an OCF/NI ratio of 2.50 that is elevated relative to the 0.27 to 2.57 range seen across recent quarters.
The ratio swings widely, with the second quarter of 2025 at 0.27 and the first quarter of 2026 at 2.57, which suggests that working capital timing and non-cash charges such as depreciation of roughly $965M per quarter drive much of the variability. Because D&A alone is a large share of net income in most periods, the persistently high conversion appears to reflect the capital-intensive nature of the network rather than unusually aggressive accruals. Investors should monitor whether this conversion holds once working capital normalizes, since the quarterly pattern indicates earnings quality is not uniform.
Free Cash Flow Margins Remain Volatile
As reported in financial statements, UPS free cash flow margin ranged from -3.7% to 10.6% across the last ten quarters, with the latest quarter at 10.5%, indicating that cash generation depends heavily on the timing of working capital and capital spending.
Free cash flow has been positive in most quarters but turned negative in the second quarter of 2025 when operating cash flow fell to $348M, which points to sensitivity to working capital swings rather than a steady earnings-driven stream. The 10.5% margin in the latest quarter appears strong, yet the 0.8% margin in the second quarter of 2026 shows how thin the cushion can become. The trajectory suggests that cash generation is real but cyclical within the year, warranting caution in extrapolating any single quarter.
Capital Spending Moderating as Revenue Softens
Based on EDBL-style reporting conventions applied to these figures, UPS capital expenditures fell from $1.1B in the second quarter of 2025 to $497M in the latest quarter, lowering capex intensity to 2.2% of revenue from above 5% at its peak.
The decline in capex coincides with a contraction in revenue and may reflect a deliberate pullback in fleet and automation investment rather than a structural reduction in needs. Because the capex/revenue ratio of 2.2% is well below the 3-5% range seen in earlier quarters, the lower spend could flatter near-term free cash flow while leaving automation commitments to offset labor cost inflation at risk. Investors should monitor whether reduced reinvestment is temporary or signals constrained network modernization.
Shareholder Returns Consume Most Operating Cash
According to recent SEC filings, UPS paid roughly $1.4B in dividends in most recent quarters while generating free cash flow of $2.4B in the latest quarter, indicating a payout that is largely covered but sensitive to cash troughs.
Dividend payments have been steady near $1.3B to $1.4B per quarter, and in the second quarter of 2026 free cash flow of $194M fell short of that outlay, which suggests the dividend was funded partly from balance sheet resources during that period. No buybacks were recorded in the latest quarters apart from a $1.0B repurchase in the first quarter of 2025 and a $500M repurchase in the third quarter of 2024, which points to a capital return policy that prioritizes the dividend. The sustainability of the payout appears to depend on whether free cash flow can stay consistently above the quarterly dividend level.
Cash Strength May Mask Earnings Pressure
Based on reported figures, the strong latest-quarter cash flow of $2.4B free cash flow coincides with a 2026 revenue decline and operating margins near 4-8%, a combination that may overstate the durability of current cash generation.
Elevated OCF/NI conversion and high depreciation add-backs can make cash flow look healthier than the underlying margin trend, which the prior income statement findings place well below late-2024 and 2025 levels. Working capital releases and a pullback in capex may have contributed meaningfully to the latest-quarter result, and these effects typically reverse. Analysts should treat the strong latest quarter as one data point and examine whether cash generation holds as volume and yield evolve.