Fourth quarter 2025 earnings results issued today by Atlanta-based global freight transportation and logistics services provider UPS finished the year with a decline, the company reported today.
Total quarterly revenue, at $24.5 billion, was down 3.2% annually, and basic earnings per share at $2.38, beating Wall Street estimates of $2.20. Total operating profit, at $2.6 billion, was off 12.0% annually.
Segment results for Q4 2025:
- U.S. Domestic Package revenue, at $16.7 billion, was off 3.2% annually, due to an expected volume decline, with revenue per piece up 8.3%, to $13.27;
- International Package revenue, at $5.0 billion, rose 2.5% annually, paced by a 7.1% increase in revenue per piece, to $22.06; and
- Supply Chain Solutions revenue, at $2.4 billion, was down 15.0% annually, which UPS said was mostly due to it Mail Innovations business volume decline
UPS said that its GAAP results include $238 million in total charges, or $0.28 per diluted share made up of a non-cash, after-tax charge of $37 million related to a write off of its MD-11 aircraft fleet and also $101 million in after-tax transformation charges. And the company added it has accelerated its fleet modernization plans, in finishing its retirement of its MD-11 fleet in thr fourth quarter.
“I want to thank UPSers across the globe for their tireless commitment to serving our customers as we delivered best-in-class service during peak for the eighth year in a row and outperformed our financial expectations in the fourth quarter,” said Carol Tomé, UPS chief executive officer. “2025 was a year of considerable progress for UPS as we took action to strengthen our revenue quality and build a more agile network. Looking ahead, upon completion of the Amazon glide-down, 2026 will be an inflection point in the execution of our strategy to deliver growth and sustained margin expansion.”
On the company’s earnings call earlier today, Tomé said that fourth quarter results exceeded expectations, paced by strong revenue quality, solid cost management, and overall great execution.
“In 2025, we operated through a very dynamic macro environment, including significant change in global trade policies and increasing geopolitical concerns,” she explained. “But at the same time, 2025 was a year of considerable progress for United Parcel Service, Inc., as we took action to strengthen our revenue quality and build a network that’s designed to deliver differentiated logistics capabilities. By the end of the year, we reached our volume reduction target and reduced Amazon’s volume in our network by approximately 1 million pieces per day. As planned, we delivered $3.5 billion in savings from our network reconfiguration and efficiency reimagined initiatives. We closed 93 buildings in the U.S. and deployed automation in 57 buildings while maintaining the high level of service our customers expect. We were disciplined on revenue quality and product mix and grew U.S. Revenue per piece by 7.1% year over year. We increased small and medium-sized business or SMB penetration to 31.8% of total U.S. volume.”
The top UPS executive also observed that as a percentage of total U.S. volume, the company grew its B2B business to 42.3%, making a 0.25% improvement, while expanding its 2025 U.S. operating margin on an average daily volume (ADV) of 8.6% for the year.
Addressing UPS’s glide down of its Amazon business, which kicked off a year ago at this time, with the stated goal of driving future operating margin expansion and greater operational agility, she noted UPS is now in the final six months of that plan.
“For the full year 2026 we intend to glide down another million pieces per day while continuing to reconfigure our network,” she said. “Given the success of our glide down and cost out efforts in 2025, we are confident that we will be able to complete our network reconfiguration plans without impeding our ability to grow in targeted markets. [The plan] remains anchored on reducing hours, labor and fixed costs in line with new volume levels. Deliberately shrinking a network is a daunting task, and our success was driven by discipline planning and effective execution, as well as the added flexibility and efficiency that’s coming from deploying state of the art technology and automation across a smaller and nimbler network.”
Looking at the company’s GroundSaver offering, formerly known as SurePost through a partnership with the United States Postal Service (USPS) that ended in January 2025 and subsequently renewed that partnership late last year, Tomé said that this new agreement “improves the economics” associated with this product while ensuring service expectations are met. The ramp-up has commenced and over the next several weeks and months she said UPS will continue to increase the flow of Ground Saver volume to USPS as in the past.
For UPS’s 2026 outlook, Tomé observed that U.S. small package growth, excluding Amazon, is expected to be up in the low-to-single digits, with export volume growth expected to be subdued, due in part to the difficult comparisons coming from tariff-driven front loading in 2025
“For the first six months of the year, we will be working through the revenue and operating margin impacts of completing the Amazon glide down, the outsourcing of Ground Saver to the USPS and adjustments to our international business in response to trade policy changes,” she said. “For the back half of the year, we will be operating a more efficient U.S. network and lapping trade lane disruptions. For the full year 2026, we expect to generate consolidated revenue of approximately $89.7 billion and a consolidated operating margin of approximately 9.6%.
In the U.S., we expect revenue to be flattish year-over-year, with revenue declining in the first half of the year due to the Amazon glide down plan, and then sequentially increasing in the second half as the Amazon glide down efforts will have concluded,” she said. “While we expect overall U.S. domestic revenue to be flat, we are planning to grow SMB and enterprise revenue in the low-single digits in the first half of the year and then accelerate that growth to mid-single digits in the second half of the year.”
Paul Yaussy, Head of Parcel Contract Intelligence, at Loop, noted in a LinkedIn post that UPS grew revenue-per-package despite a large ADV decline due to cost discipline, including closing 93 buildings, eliminating tens of thousands of positions, and executing it’s dramatic Amazon glide down of over 1M packages per day.
“A few things shippers should pay attention to coming out of UPS’s earnings call: Margin>Volume (still); UPS remains comfortable walking away from unprofitable volume. This is no longer a cycle—it’s a strategy. Shippers without scale or clean profiles should not expect flexibility by default. Efficiency gains reduce carrier urgency. Automation and productivity improvements mean UPS doesn’t need incremental volume to protect margins. Less incentive to “buy” business with discounts. Pricing discipline is holding. No signal of broad pricing relief. Surcharges and accessorials remain a key lever, specifically calling out fuel driving 1.7 bps increase in RPP growth.
Net cost matters more than headline rates. SMB and B2B, along with Healthcare, remain primary areas of quality revenue protection. SMBs represent 32% of UPS domestic volume and B2B represents 42.3% of domestic volume because they are the most profitable segments for UPS. E-commerce and retailers may struggle with leverage in negotiations.
UPS has been clear about how they intend to operate heading into 2026. Primary focus will be on cost containment and revenue quality. The leverage gap between prepared and unprepared shippers will continue to widen.”
