Free cash flow margin volatility remains a concern, swinging from a negative 3.7% in 2025Q2 to a peak of 10.6% in 2025Q4, despite consistent dividend distributions of approximately $1.3B to $1.4B per quarter.
| 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 | 8.36B | 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 % | -21.3% | -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 | 5.25B | 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 | 3.82B | 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 | 76M | 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 | 77M | -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 | -784M | -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 | -81M | -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 | -257M | -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 | 221M | -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 | -4.32B | -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 | -3.84B | -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 | 4.35% | 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 | -1.55B | -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 | 812M | 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 | -3.16B | -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) | -39M | 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) | 132M | -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 | -5.4B | -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 | 2.15B | 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 | 1B | -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 | 4.52B | 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 % | 5.11% | 5.38% | 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 % | -15.97% | -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 | 5.31 | 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) | 0.86x | 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 |
Labor cost structure rigidity
As reported in recent financial statements, the OCF/NI ratio has fluctuated significantly, reaching 2.57 in 2026Q1, which suggests that reported net income is currently being bolstered by non-cash items or accounting adjustments rather than pure operational cash generation, warranting further investigation into earnings quality.
The wide variance between net income and operating cash flow indicates that accounting accruals are playing a disproportionate role in the bottom-line figure. Investors should monitor whether this divergence persists, as it may imply that the company's reported profitability is less durable than the headline numbers suggest.
Based on the provided cash flow data, FCF margins have shown extreme instability, ranging from a negative 3.7% in 2025Q2 to a peak of 10.6% in 2025Q4, reflecting the company's difficulty in maintaining consistent cash generation amidst a challenging and contracting volume environment.
The inability to sustain positive free cash flow margins consistently suggests that the capital-intensive nature of the business is currently outpacing the company's ability to extract cash from its core operations. This volatility may indicate that the 'Better, Not Bigger' strategy has yet to translate into a stable cash-generative profile.
According to recent SEC filings, UPS maintains a consistent capital expenditure profile, with CapEx/Rev ratios hovering between 2.9% and 5.3% over the last ten quarters, suggesting that the company is prioritizing essential network maintenance and automation investments despite the ongoing revenue contraction.
The persistent level of capital spending, even during periods of volume decline, implies that the company is locked into a high-fixed-cost maintenance cycle. This capital intensity may limit the company's flexibility to pivot toward more asset-light models without incurring significant impairment risks.
As evidenced by the quarterly cash flow statements, working capital changes have been highly erratic, swinging from a $1.4B inflow in 2025Q3 to a $1.4B outflow in 2025Q2, which suggests significant friction in the company's cash conversion cycle and inventory management processes.
These sharp swings in working capital suggest that the company is struggling to align its cash inflows with the timing of its operational obligations. Such instability in working capital management may indicate underlying inefficiencies in the logistics network that could be masking deeper operational challenges.
Based on reported figures, UPS continues to prioritize dividend payments, consistently distributing approximately $1.3B to $1.4B per quarter, even as free cash flow has turned negative in certain periods, which may indicate a commitment to shareholder returns that is increasingly disconnected from current cash generation.
The decision to maintain high dividend payouts while free cash flow remains volatile suggests a management focus on capital return that may be straining the balance sheet. Investors should monitor whether this dividend policy remains sustainable if the current volume diversion and margin compression trends continue.
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.