Revenue declined 2.5% year-over-year to $22.8B in Q2 2026, with gross margin compressing to 13.3% from 17.8% a year earlier, and operating income falling 48% to $930M.
United Parcel Service, Inc. (UPS) annual income statement — 28-year revenue, gross profit & net income history
| 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 |
|---|
| Sales/Revenue | 89.93B | 88.66B | 90.89B | 90.75B | 100.03B | 97.2B | 84.43B | 73.92B | 71.91B | 66.55B | 60.5B | 58.05B | 58.26B | 55.49B | 54.06B | 53.21B | 49.45B | 45.12B | 51.49B | 49.69B | 47.55B | 42.58B | 36.58B | 33.48B | 31.27B | 30.65B | 29.77B | 27.05B | 24.79B |
| Revenue Growth % | -0.33% | -2.46% | 0.16% | -9.29% | 2.91% | 15.13% | 14.23% | 2.79% | 8.06% | 10% | 4.22% | -0.35% | 4.98% | 2.64% | 1.61% | 7.6% | 9.6% | -12.37% | 3.61% | 4.51% | 11.66% | 16.4% | 9.25% | 7.08% | 2.04% | 2.94% | 10.05% | 9.13% | - |
| Cost of Goods Sold | 74.97B | 72.63B | 73.84B | 73.04B | 79.95B | 79.77B | 62.65B | 57.82B | 57.74B | 53.2B | 48.16B | 45.94B | 46.55B | 44.08B | 43.7B | 42.05B | 39.7B | 37.19B | 40.75B | 44.37B | 36.41B | 32.27B | 27.6B | 8.15B | 7.77B | 7.89B | 7.54B | 6.64B | 6.24B |
| COGS % of Revenue | - | 81.92% | 81.23% | 80.49% | 79.93% | 82.07% | 74.2% | 78.23% | 80.3% | 79.94% | 79.61% | 79.14% | 79.9% | 79.43% | 80.84% | 79.02% | 80.28% | 82.43% | 79.16% | 89.28% | 76.58% | 75.77% | 75.44% | 24.35% | 24.84% | 25.75% | 25.33% | 24.55% | 25.17% |
| Gross Profit | 14.96B | 16.03B | 17.06B | 17.71B | 20.08B | 17.43B | 21.78B | 16.09B | 14.17B | 13.35B | 12.34B | 12.11B | 11.71B | 11.41B | 10.36B | 11.16B | 9.75B | 7.93B | 10.73B | 5.33B | 11.13B | 10.32B | 8.98B | 25.33B | 23.5B | 22.75B | 22.23B | 20.41B | 18.55B |
| Gross Margin % | 16.63% | 18.08% | 18.77% | 19.51% | 20.07% | 17.93% | 25.8% | 21.77% | 19.7% | 20.06% | 20.39% | 20.86% | 20.1% | 20.57% | 19.16% | 20.98% | 19.72% | 17.57% | 20.84% | 10.72% | 23.42% | 24.23% | 24.56% | 75.65% | 75.16% | 74.25% | 74.67% | 75.45% | 74.83% |
| Gross Profit Growth % | - | -6.03% | -3.66% | -11.82% | 15.19% | -19.97% | 35.36% | 13.6% | 6.12% | 8.2% | 1.87% | 3.43% | 2.6% | 10.14% | -7.16% | 14.47% | 22.97% | -26.13% | 101.54% | -52.17% | 7.93% | 14.83% | -64.53% | 7.77% | 3.29% | 2.36% | 8.91% | 10.05% | - |
| Operating Expenses | 8.38B | 8.16B | 8.37B | 8.34B | 7.11B | 4.33B | 13.95B | 8.22B | 7.09B | 5.86B | 7.27B | 4.77B | 5.64B | 4.39B | 9.11B | 5.02B | 4.01B | 4.07B | 4.78B | 4.45B | 4.49B | 4.13B | 3.84B | 29.03B | 28.2B | 26.68B | 25.26B | 21.28B | 15.46B |
| OpEx % of Revenue | - | 9.21% | 9.21% | 9.19% | 7.11% | 4.45% | 16.52% | 11.12% | 9.86% | 8.8% | 12.01% | 8.21% | 9.68% | 7.9% | 16.85% | 9.44% | 8.1% | 9.01% | 9.28% | 8.96% | 9.43% | 9.69% | 10.5% | 86.7% | 90.17% | 87.07% | 84.84% | 78.66% | 62.36% |
| Selling, General & Admin | 0 | 0 | 8.68B | 8.34B | 7.11B | 4.33B | 13.95B | 8.22B | 7.09B | 5.86B | 7.27B | 4.77B | 5.64B | 4.39B | 9.11B | 5.02B | 4.01B | 4.07B | 4.78B | 4.45B | 4.49B | 4.13B | 3.84B | 19.33B | 17.94B | 17.4B | 16.55B | 15.29B | 14.35B |
| SG&A % of Revenue | - | - | 9.55% | 9.19% | 7.11% | 4.45% | 16.52% | 11.12% | 9.86% | 8.8% | 12.01% | 8.21% | 9.68% | 7.9% | 16.85% | 9.44% | 8.1% | 9.01% | 9.28% | 8.96% | 9.43% | 9.69% | 10.5% | 57.72% | 57.38% | 56.77% | 55.58% | 56.5% | 57.87% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 4M | 8.16B | -311M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1.47B | 10.26B | 1.07B | 900M | 1.22B | 1.11B |
| Operating Income | 6.58B | 7.87B | 8.69B | 9.37B | 12.97B | 13.11B | 7.84B | 7.88B | 7.07B | 7.49B | 5.07B | 7.34B | 6.07B | 7.03B | 1.25B | 6.14B | 5.74B | 3.86B | 5.95B | 873M | 6.65B | 6.19B | 5.14B | 4.45B | 4.1B | 3.96B | 4.51B | 3.99B | 3.09B |
| Operating Margin % | 7.31% | 8.87% | 9.56% | 10.33% | 12.96% | 13.48% | 9.28% | 10.66% | 9.84% | 11.26% | 8.38% | 12.65% | 10.42% | 12.66% | 2.31% | 11.54% | 11.61% | 8.56% | 11.56% | 1.76% | 13.98% | 14.54% | 14.06% | 13.27% | 13.1% | 12.93% | 15.16% | 14.74% | 12.47% |
| Operating Income Growth % | - | -9.42% | -7.32% | -27.74% | -1.06% | 67.27% | -0.51% | 11.34% | -5.6% | 47.78% | -30.96% | 21.04% | -13.64% | 461.63% | -79.62% | 6.9% | 48.68% | -35.13% | 581.9% | -86.87% | 7.4% | 20.38% | 15.7% | 8.52% | 3.38% | -12.19% | 13.14% | 29.06% | - |
| EBITDA | 10.44B | 11.61B | 12.29B | 12.74B | 16.16B | 16.06B | 10.53B | 10.24B | 9.28B | 9.78B | 7.29B | 9.43B | 7.99B | 8.89B | 3.11B | 7.92B | 7.53B | 5.61B | 7.77B | 2.62B | 8.4B | 7.83B | 6.69B | 5.99B | 5.56B | 5.36B | 5.68B | 5.13B | 1.98B |
| EBITDA Margin % | 11.61% | 13.1% | 13.53% | 14.04% | 16.15% | 16.52% | 12.48% | 13.85% | 12.91% | 14.69% | 12.06% | 16.24% | 13.72% | 16.03% | 5.75% | 14.89% | 15.24% | 12.43% | 15.09% | 5.27% | 17.66% | 18.4% | 18.28% | 17.9% | 17.78% | 17.48% | 19.1% | 18.95% | 7.98% |
| EBITDA Growth % | -14.78% | -5.54% | -3.48% | -21.16% | 0.6% | 52.46% | 2.91% | 10.29% | -5.06% | 34.01% | -22.63% | 18% | -10.14% | 186.04% | -60.74% | 5.12% | 34.32% | -27.78% | 196.68% | -68.82% | 7.17% | 17.19% | 11.54% | 7.81% | 3.77% | -5.75% | 10.88% | 159.2% | - |
| D&A (Non-Cash Add-back) | 3.87B | 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 |
| EBIT | 6.73B | 8.18B | 8.3B | 9.35B | 15.52B | 17.28B | 2.53B | 6.28B | 6.59B | 7.55B | 5.48B | 7.61B | 4.91B | 7.05B | 1.36B | 6.43B | 5.97B | 3.86B | 5.46B | 677M | 6.72B | 6.25B | 5.07B | -3.82B | 3.18B | 3.96B | -3.03B | -2.73B | -3.15B |
| Net Interest Income | -1.63B | -1.01B | -861M | -775M | -694M | -683M | -684M | -629M | -572M | -409M | -128M | -262M | -217M | -299M | -283M | -560M | -358M | -407M | -315M | -147M | -125M | -68M | -67M | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 8M | 219M | 9M | 60M | 73M | 100M | 94M | 85M | 87M | 127M | 99M | 86M | 104M | 82M | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 1.63B | 1.01B | 861M | 775M | 694M | 683M | 684M | 629M | 572M | 417M | 347M | 271M | 277M | 372M | 383M | 654M | 443M | 494M | 442M | 246M | 211M | 172M | 149M | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -712M | -703M | -1.24B | -798M | 1.86B | 3.49B | -5.99B | -2.22B | -1.05B | -357M | 65M | -3M | -1.43B | -352M | -277M | -362M | -219M | -496M | -938M | -442M | -139M | -116M | -221M | -75M | 913M | -25M | 322M | -1.82B | -188M |
| Pretax Income | 5.86B | 7.16B | 7.44B | 8.57B | 14.82B | 16.59B | 1.84B | 5.65B | 6.02B | 7.14B | 5.14B | 7.34B | 4.64B | 6.67B | 974M | 5.78B | 5.52B | 3.37B | 5.01B | 431M | 6.51B | 6.08B | 4.92B | 4.37B | 5.01B | 3.94B | 4.83B | 2.09B | 2.9B |
| Pretax Margin % | 6.52% | 8.08% | 8.19% | 9.45% | 14.82% | 17.07% | 2.18% | 7.65% | 8.37% | 10.72% | 8.49% | 12.65% | 7.96% | 12.03% | 1.8% | 10.86% | 11.17% | 7.46% | 9.74% | 0.87% | 13.69% | 14.27% | 13.45% | 13.05% | 16.02% | 12.85% | 16.24% | 7.72% | 11.71% |
| Income Tax | 1.29B | 1.59B | 1.66B | 1.86B | 3.28B | 3.71B | 501M | 1.21B | 1.23B | 2.23B | 1.71B | 2.5B | 1.6B | 2.3B | 167M | 1.97B | 2.04B | 1.21B | 2.01B | 49M | 2.31B | 2.21B | 1.59B | 1.47B | 1.75B | 1.51B | 1.9B | 1.21B | 1.16B |
| Effective Tax Rate % | 22.07% | 22.22% | 22.31% | 21.75% | 22.1% | 22.33% | 27.17% | 21.44% | 20.4% | 31.27% | 33.2% | 34.02% | 34.61% | 34.49% | 17.15% | 34.14% | 36.85% | 36.07% | 40.12% | 11.37% | 35.45% | 36.3% | 32.28% | 33.68% | 35.04% | 38.4% | 39.3% | 57.71% | 40.01% |
| Net Income | 4.57B | 5.57B | 5.78B | 6.71B | 11.55B | 12.89B | 1.34B | 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 | 883M | 1.74B |
| Net Margin % | 5.08% | 6.28% | 6.36% | 7.39% | 11.54% | 13.26% | 1.59% | 6.01% | 6.66% | 7.37% | 5.67% | 8.34% | 5.2% | 7.88% | 1.49% | 7.15% | 7.05% | 4.77% | 5.83% | 0.77% | 8.84% | 9.09% | 9.11% | 8.65% | 10.18% | 7.83% | 9.86% | 3.26% | 7.02% |
| Net Income Growth % | -20.24% | -3.63% | -13.8% | -41.91% | -10.41% | 859.79% | -69.75% | -7.33% | -2.32% | 42.96% | -29.17% | 59.76% | -30.65% | 441.76% | -78.79% | 9.06% | 62.08% | -28.34% | 686.13% | -90.91% | 8.58% | 16.11% | 15.01% | -8.93% | 32.64% | -18.23% | 232.28% | -49.28% | - |
| Net Income (Continuing) | 4.57B | 5.57B | 5.78B | 6.71B | 11.55B | 12.89B | 1.34B | 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 | 3.25B | 2.42B | 2.93B | 2.33B | 1.74B |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 32M | 28M | 25M | 8M | 17M | 16M | 12M | 16M | 16M | 30M | 24M | 21M | 17M | 14M | 80M | 73M | 68M | 66M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 5.37 | 6.56 | 6.76 | 7.80 | 13.20 | 14.68 | 1.54 | 5.11 | 5.51 | 5.61 | 3.87 | 5.35 | 3.28 | 4.61 | 0.83 | 3.84 | 3.48 | 2.14 | 2.94 | 0.36 | 3.86 | 3.47 | 2.93 | 2.55 | 2.81 | 2.10 | 2.50 | 0.77 | 1.57 |
| EPS Growth % | -20.06% | -2.96% | -13.33% | -40.91% | -10.08% | 853.25% | -69.86% | -7.26% | -1.78% | 44.96% | -27.66% | 63.11% | -28.85% | 455.42% | -78.39% | 10.34% | 62.62% | -27.21% | 716.67% | -90.67% | 11.24% | 18.43% | 14.9% | -9.25% | 33.81% | -16% | 224.68% | -50.96% | - |
| EPS (Basic) | - | 6.56 | 6.76 | 7.81 | 13.26 | 14.75 | 1.55 | 5.14 | 5.53 | 5.63 | 3.89 | 5.38 | 3.31 | 4.65 | 0.84 | 3.88 | 3.51 | 2.16 | 2.96 | 0.36 | 3.87 | 3.48 | 2.95 | 2.57 | 2.84 | 2.13 | 2.54 | 0.79 | 1.59 |
| Diluted Shares Outstanding | 851M | 850M | 856M | 860M | 871M | 878M | 871M | 869M | 870M | 875M | 887M | 906M | 924M | 948M | 969M | 991M | 1B | 1B | 1.02B | 1.06B | 1.09B | 1.12B | 1.14B | 1.14B | 1.13B | 1.14B | 1.17B | 1.15B | 1.11B |
| Basic Shares Outstanding | 850M | 849M | 855M | 859M | 871M | 874M | 867M | 864M | 866M | 871M | 883M | 901M | 916M | 940M | 960M | 981M | 994M | 998M | 1.02B | 1.06B | 1.08B | 1.11B | 1.13B | 1.13B | 1.12B | 1.13B | 1.16B | 1.12B | 1.09B |
| Dividend Payout Ratio | - | 96.88% | 93.38% | 80.08% | 44.28% | 26.66% | 251.23% | 71.94% | 62.85% | 56.49% | 77.03% | 52.13% | 78.03% | 51.69% | 263.94% | 52.5% | 52.12% | 81.37% | 73.89% | 445.81% | 37.53% | 35.94% | 36.24% | 2.42% | 26.68% | 35.68% | 26.79% | 76.1% | 26.77% |
Quick answers to the most common questions about buying UPS stock.
For fiscal year 2025, United Parcel Service, Inc. (UPS) reported total revenue of $88.66B. This represents a 257.7% increase compared to $24.79B in 1998.
United Parcel Service, Inc. (UPS) is profitable, generating $5.57B in net income for the fiscal year ending 2025 with a net profit margin of 6.3%.
United Parcel Service, Inc. (UPS) reported an operating income of $7.87B, resulting in an operating profit margin of 8.9%. This margin reflects the operational efficiency of the business before interest and taxes.
United Parcel Service, Inc. (UPS) generated $16.03B in gross profit for the year, representing a gross profit margin of 18.1%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Persistent revenue decline and margin compression
Metrics are mathematically derived from official filings.
Top-Line Contraction Persists
UPS revenue declined 2.5% year-over-year in Q2 2026 to $22.8B, marking the fourth consecutive quarterly drop, according to recent financial statements. The sequential uptick from Q1 suggests stabilization, but the trend remains negative.
The revenue trajectory shows a clear deceleration from the 5.7% growth in Q3 2024 to consistent negative growth over the last four quarters. The Q2 2026 sequential increase of 7.6% from Q1 is likely seasonal, not indicative of a fundamental turnaround. The persistent decline suggests volume erosion, possibly due to market share shifts or softer demand, which management's 'Better, Not Bigger' strategy has not yet reversed.
Gross Margin Under Pressure
Gross margin fell to 13.3% in Q2 2026, down from 17.8% a year earlier, as reported in the latest income statement. This 450 basis point contraction signals significant cost pressures or pricing weakness.
The gross margin decline is steep and broad-based, with Q2 2026 marking the lowest level in the provided data. This suggests that the company is unable to pass on cost increases, possibly due to competitive pressures or a shift in mix toward lower-margin services. The sequential improvement from Q1 2026 (13.3% vs 15.8%) is modest and may reflect seasonal factors, but the year-over-year deterioration is concerning and warrants close monitoring.
Operating Leverage Turns Negative
Operating income fell to $930M in Q2 2026, down from $1.8B in Q2 2025, a 48% decline, based on reported figures. This indicates that fixed costs are not being covered by revenue, amplifying the impact of top-line contraction.
The operating margin compressed to 4.1% in Q2 2026 from 8.6% in the prior year, reflecting negative operating leverage. As revenue declines, the high fixed-cost structure of UPS's network leads to disproportionate drops in operating income. The sequential improvement from Q1 2026 (4.1% vs 6.0%) is encouraging but still leaves margins well below historical levels. This suggests that cost-cutting measures have not yet offset the volume decline.
EPS Volatility Masks Underlying Trends
Diluted EPS swung from $1.51 in Q2 2025 to $0.71 in Q2 2026, a 53% decline, as per the latest quarterly report. Stock-based compensation of $34M in Q2 2026 adds a modest drag, but the primary driver is operational.
The EPS decline is consistent with the drop in net income, which fell from $1.3B to $604M. The negative SBC in some quarters (e.g., Q2 2025 and Q3 2024) suggests reversals or adjustments that may distort reported earnings. Investors should focus on operating income trends rather than EPS, which is subject to non-operating items and tax effects. The lack of formal guidance adds uncertainty to forward earnings estimates.
Cost Structure Remains Rigid
COGS as a percentage of revenue rose to 86.7% in Q2 2026, up from 82.2% in Q2 2025, according to the income statement. This indicates that variable costs are not flexing down with revenue, pressuring margins.
The increase in COGS ratio suggests that UPS's cost base, particularly labor and fuel, is not adjusting quickly to lower volumes. The absence of R&D and SG&A line items in recent quarters (reported as zero) may indicate a change in reporting or a data gap, but the gross margin compression is clear. The company's ability to manage costs will be critical to margin recovery, but the rigid labor contract and network fixed costs pose challenges.
Q4 2025 Marks a Margin Peak
Q4 2025 delivered the highest operating margin (10.5%) and net income ($1.8B) in the provided data, as per financial statements. This appears to be a seasonal peak, with subsequent quarters showing significant deterioration.
The Q4 2025 results likely benefited from peak holiday volumes and possibly lower fuel costs or one-time gains. The sharp decline in Q1 and Q2 2026 suggests that the company is facing structural headwinds beyond seasonality. The inability to sustain Q4-level margins indicates that the underlying cost structure is not improving, and the 'Better, Not Bigger' strategy has not yet delivered durable margin expansion.
What Could Invalidate the Base Case
The persistent revenue decline and margin compression could be more than cyclical, as the 2023 Teamsters contract may have permanently raised the cost floor, according to industry analysis. If volume does not recover, UPS may face a structural profitability challenge.
Short-sellers might argue that the revenue decline is not just a temporary demand issue but a loss of share to Amazon and regional carriers, which could be permanent. The elevated leverage (D/E of 1.99) and the need for continued capital expenditure on automation could strain cash flows if margins remain depressed. The lack of formal guidance suggests management's uncertainty, and if the 'Better, Not Bigger' strategy fails to stabilize yields, the stock could re-rate lower.