UPS (UPS) Q2 2026 earnings summary

Executive summary

• Q2 2026 consolidated revenue grew 7.6% year-over-year to $22.8B, driven by network automation, premium segment focus, and the AHG acquisition, despite lower average daily volume from planned reductions and trade policy changes.

• Non-GAAP adjusted operating profit rose to $2.1B (up 12% YoY), while GAAP operating profit was $930M, reflecting $1.1B in separation costs from the Driver Choice Program.

• Transformation initiatives, including workforce reductions and network reconfiguration, delivered $1.2B in benefits in H1 2026, targeting $3B for the full year and expected to conclude by 2027.

• Deployed RFID and AI technologies across U.S. operations, enhancing efficiency, visibility, and customer experience.

• Integration of AHG expanded healthcare logistics, with international operations seeing network investments in Asia and Europe.

Financial highlights

• Q2 2026 consolidated revenue was $22.8B (+7.6% YoY); non-GAAP adjusted operating profit $2.1B; GAAP operating profit $930M.

• Non-GAAP adjusted diluted EPS was $1.76; GAAP diluted EPS was $0.71, reflecting transformation charges.

• Net income for Q2 2026 was $604M (GAAP) and $1.5B (non-GAAP adjusted).

• Free cash flow for H1 2026 was $1.57B, up from $742M in the prior year period.

• Cash and equivalents at June 30, 2026, were $4.7B, with no outstanding commercial paper.

Outlook and guidance

• Raised full-year 2026 consolidated revenue outlook to ~$91.2B and non-GAAP adjusted operating profit to ~$8.65B.

• Non-GAAP adjusted diluted EPS guidance lifted to ~$7.22.

• Capital expenditures expected at ~$3.0B, with free cash flow guidance at ~$5.5B and dividends of ~$5.4B.

• U.S. Domestic full-year revenue expected at ~$60B, operating margin ~7.5%; International and SCS segments forecast mid- to high-single digit revenue growth and margins of 10–14%.

• Transformation initiatives expected to deliver $3B in benefits for full year 2026 and conclude by 2027.