AI Takeaway
UPS reported a challenging FY2025 with revenue declining 2.6% to $88.7B and operating income falling 7.1% to $7.9B, reflecting ongoing volume pressures and margin compression, though the balance sheet remained solid with a current ratio above 1.2x.
Revenue
$88.66B
-2.65% YoY
EPS (Basic)
$6.56
-2.96% YoY
Operating Income
$7.87B
-7.10% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue fell 2.6% year-over-year to $88.7B in FY2025 (from $91.1B in the prior year), indicating continued softness in package volume demand and pricing pressure across UPS's domestic and international segments.
Source: Source: 10-K Income Statement
Operating margin contracted approximately 42 basis points to 8.87% in FY2025 from 9.30% in the prior year, as revenue declines outpaced cost reductions, squeezing profitability despite relatively stable D&A of $3.0B.
Source: Source: 10-K Income Statement & Key Ratios
Operating cash flow declined 16.5% to $8.45B from $10.12B in the prior year, a meaningful deterioration that reflects lower net income and potentially unfavorable working capital movements, reducing financial flexibility.
Source: Source: 10-K Cash Flow Statement
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Upgrade to unlockUPS experienced a 2.6% revenue decline in FY2025, reflecting weakening package volumes and competitive pricing dynamics. If macroeconomic conditions deteriorate further or e-commerce growth slows, revenue could decline more sharply, putting additional pressure on margins and cash generation.
Source: Source: 10-K Income Statement
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $2.38 versus the $2.22 analyst consensus — a +7.0% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $88.66B | $91.07B | -2.65% |
Operating Income | $7.87B | $8.47B | -7.10% |
Net Income | $5.57B | $5.78B | -3.63% |
EPS (Basic) | $6.56 | $6.76 | -2.96% |
EPS (Diluted) | $6.56 | $6.75 | -2.81% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $73.09B | $70.07B | +4.31% |
Current Assets | $19.05B | $19.31B | -1.37% |
Current Liabilities | $15.62B | $16.44B | -4.99% |
Stockholders' Equity | $16.23B | $16.72B | -2.94% |
Cash & Equivalents | $5.89B | $6.11B | -3.68% |
Long-Term Debt | $23.59B | $21.03B | +12.15% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $8.45B | $10.12B | -16.52% |
Investing Cash Flow | $-4.74B | $-217M | -2082.03% |
Financing Cash Flow | $-4.14B | $-6.85B | +39.55% |
Dividends Paid | $5.4B | $5.4B | -0.02% |
Share Buybacks | $1B | $500M | +100.00% |
D&A | $3B | $3B | 0.00% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 8.9% | 9.3% | -0.43% |
Net Margin | 6.3% | — | — |
ROE | 34.3% | — | — |
ROA | 7.6% | — | — |
Current Ratio | $1.219 | — | — |
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UPS had a difficult FY2025, with revenue declining 2.6% to $88.7B and net income falling 3.6% to $5.6B. Operating income dropped 7.1% to $7.9B, and operating cash flow fell sharply by 16.5% to $8.45B, reflecting broad-based pressure on the business.
No, UPS maintained its dividend in FY2025, paying $5.4B in dividends — essentially flat with the $5.4B paid in the prior year. However, the company also doubled share buybacks to $1.0B, even as earnings and cash flow declined, which was funded in part by increased long-term debt.
UPS's operating cash flow fell 16.5% to $8.45B in FY2025 from $10.12B in the prior year, driven by lower net income of $5.6B and likely unfavorable working capital changes. This decline is a key concern as the company simultaneously increased debt and maintained high shareholder payouts.
The key risks include continued revenue and volume deterioration (revenue fell 2.6% to $88.7B), rising leverage (long-term debt up 12.1% to $23.6B), and a dramatic increase in capital expenditures that compressed free cash flow. Margin compression is also a concern, with operating margin declining to 8.87% from 9.30%.
UPS remains financially stable with a current ratio of 1.22x, positive net income of $5.6B, and ROE of 34.3%, but several warning signs have emerged including rising long-term debt of $23.6B, a 16.5% drop in operating cash flow, and declining margins. The company's ability to sustain its $5.4B annual dividend while managing higher debt will be a key focus for investors going forward.