Free cash flow turned negative at -$775M in Q2 2025 and remained volatile, with Q2 2026 FCF of $194M insufficient to cover the $1.4B dividend, highlighting cash flow strain.
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 | 8.89B | 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 % | 216.13% | -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 | 4.57B | 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 | 3.86B | 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 | 110M | 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 | 220M | -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 | -1.17B | -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 | 1.3B | -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 | -592M | -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 | -50M | -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 | -3.97B | -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 | -3.41B | -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 | 3.79% | 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 | -1.58B | -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 | 935M | 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 | -6.35B | -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) | -3.18B | 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) | 117M | -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 | -5.41B | -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 | 2.12B | 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 | -1.48B | -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 | 5.49B | 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 % | 6.1% | 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 % | 54.99% | -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 | 6.45 | 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) | 1.20x | 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
Persistent revenue decline and margin compression
Metrics are mathematically derived from official filings.
Cash Conversion Quality Wavers
UPS's operating cash flow to net income ratio swung from 2.98 in Q1 2024 to 0.27 in Q2 2025, indicating volatile earnings quality, as per reported quarterly data.
The dramatic fluctuation in OCF/NI, particularly the 0.27 ratio in Q2 2025, suggests that net income was not backed by cash generation, likely due to working capital outflows. This volatility may indicate that reported earnings are not consistently translating into cash, warranting close monitoring of accruals and working capital management.
Free Cash Flow Recovery Uneven
Free cash flow margin improved to 10.6% in Q4 2025 but turned negative at -3.7% in Q2 2025, reflecting seasonal and operational volatility, based on financial statements.
The FCF trajectory shows a clear seasonal pattern with strong Q4 performance, but the negative FCF in Q2 2025 highlights the impact of elevated capex and working capital swings. This unevenness suggests that UPS's ability to generate consistent FCF is constrained by its capital-intensive model and volume fluctuations, which may limit flexibility for shareholder returns.
Capital Intensity Pressures Cash
Capital expenditures averaged 4.2% of revenue over the last ten quarters, with Q2 2026 at 3.0%, indicating sustained investment in network automation, as per reported figures.
UPS's capex remains a significant cash outflow, consistently above $700M per quarter, reflecting its commitment to automation and fleet modernization. While the capex-to-revenue ratio has moderated slightly, the absolute spend continues to absorb a large portion of operating cash flow, leaving limited room for discretionary cash generation.
Working Capital Swings Drive Cash Flow
Working capital changes ranged from +$1.4B in Q3 2025 to -$1.4B in Q2 2025, causing significant quarterly cash flow volatility, as per cash flow statements.
The large swings in working capital, particularly the $1.4B outflow in Q2 2025, appear to be a primary driver of the erratic operating cash flow. This volatility may indicate inefficiencies in collections or payables management, and investors should monitor whether these swings are seasonal or indicative of structural issues.
Dividends Absorb Most Free Cash Flow
Dividends paid consistently exceeded $1.3B per quarter, while buybacks were sporadic, with Q2 2026 FCF of $194M insufficient to cover the $1.4B dividend, per reported data.
The dividend payout appears to be a fixed priority, consuming nearly all of the free cash flow in most quarters, and in Q2 2026, it exceeded FCF, likely requiring cash reserves or debt. This suggests that UPS's capital deployment is heavily skewed toward returning cash to shareholders, which may limit flexibility for debt reduction or acquisitions.
Cumulative Earnings Outpace Cash
Over the last ten quarters, cumulative net income of $12.9B exceeded operating cash flow of $21.8B, but the gap narrowed in recent quarters, as per financial statements.
While cumulative operating cash flow has been strong, the recent quarters show a divergence where net income is not fully reflected in cash flow, particularly in Q2 2025 and Q2 2026. This may indicate that earnings quality is deteriorating, possibly due to aggressive revenue recognition or working capital buildup, and warrants further investigation.
What Could Invalidate the Base Case
The cash flow statement may obscure the impact of pension mark-to-market adjustments and fuel surcharge timing, which could distort reported operating cash flow, as per accounting nuances.
UPS's use of mark-to-market pension accounting can create large non-cash swings in net income, potentially decoupling reported earnings from cash generation. Additionally, fuel surcharges are recorded as revenue but function as cost recovery, which may inflate top-line growth during high fuel price periods. Investors should adjust for these factors when assessing the sustainability of cash flows.