UPS Reports Fourth-Quarter 2025 Results and Provides 2026 Outlook
UPS (NYSE: UPS) today reported its financial results for the fourth quarter of 2025, highlighting continued strong performance despite ongoing operational challenges and a dynamic global shipping environment. The company posted consolidated revenues of $24.5 billion for the quarter, with consolidated operating profit of $2.6 billion. On a non-GAAP adjusted basis, operating profit was $2.9 billion. Diluted earnings per share (EPS) were $2.10, while non-GAAP adjusted diluted EPS reached $2.38, reflecting operational efficiency and disciplined cost management.
These results cap a year of substantial growth and operational progress for UPS, which continues to prioritize network optimization, revenue quality, and fleet modernization, positioning the company for long-term sustainable growth.
Fourth-Quarter Highlights
UPS’s fourth-quarter 2025 GAAP results included total charges of $238 million, or $0.28 per diluted share, comprised of a non-cash after-tax charge of $137 million related to the retirement of its MD-11 aircraft fleet and after-tax transformation charges of $101 million.
The accelerated retirement of the MD-11 fleet reflects UPS’s ongoing fleet modernization strategy, aimed at increasing operational efficiency, reducing maintenance costs, and improving environmental performance across the air cargo network. The completion of this fleet retirement in Q4 2025 marks the end of a major chapter in UPS’s aircraft renewal program.
UPS CEO Carol Tomé commented on the results:
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. 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.
Segment Performance
UPS’s business is divided into three primary segments: U.S. Domestic, International, and Supply Chain Solutions. Each segment experienced unique market conditions in the fourth quarter, driven by volume shifts, pricing dynamics, and operational investments.
U.S. Domestic
- Revenue: $16.76 billion (non-GAAP adjusted: $17.31 billion)
- Operating Profit: $1.43 billion (non-GAAP adjusted: $1.71 billion)
- Operating Margin: 8.5% (non-GAAP adjusted: 10.2%)
The U.S. Domestic segment saw a 3.2% decline in revenue compared with the prior year, primarily due to expected declines in shipping volume. However, revenue per piece grew by 8.3%, reflecting pricing discipline and targeted cost management strategies. Despite the slight revenue drop, operational efficiency improvements helped sustain solid margins.
International
- Revenue: $5.05 billion (non-GAAP adjusted: $4.92 billion)
- Operating Profit: $884 million (non-GAAP adjusted: $908 million)
- Operating Margin: 17.5% (non-GAAP adjusted: 18.0%)
The International segment posted a 2.5% increase in revenue, driven by a 7.1% rise in revenue per piece, reflecting continued pricing strength in global shipping markets. Operating margins remained robust, supported by disciplined cost controls and strategic network investments.
Supply Chain Solutions
- Revenue: $2.68 billion (non-GAAP adjusted: $3.07 billion)
- Operating Profit: $263 million (non-GAAP adjusted: $276 million)
- Operating Margin: 9.8% (non-GAAP adjusted: 10.3%)
The Supply Chain Solutions segment experienced a 12.7% decline in revenue, largely due to lower volume in the Mail Innovations business. Despite this, the segment maintained a healthy operating margin, reflecting operational efficiency and focused management of logistics resources.
Full-Year 2025 Results
For the full year 2025, UPS reported consolidated revenue of $88.7 billion, with an operating profit of $7.9 billion. Non-GAAP adjusted operating profit reached $8.7 billion, reflecting improvements across the network and disciplined management of costs.
- Operating Margin: 8.9% (non-GAAP adjusted: 9.8%)
- Diluted EPS: $6.56 (non-GAAP adjusted: $7.16)
- Cash from Operations: $8.5 billion
- Non-GAAP Free Cash Flow: $5.5 billion
UPS returned $6.4 billion to shareholders through dividends and share repurchases during the year, underscoring its commitment to delivering shareholder value.
Fleet Modernization and Strategic Investments
The accelerated retirement of the MD-11 fleet highlights UPS’s focus on modernizing its air cargo fleet to improve fuel efficiency, reduce maintenance costs, and align with environmental sustainability targets. This move is part of a broader multi-year investment strategy, which includes technology enhancements, automation in sorting facilities, and network agility improvements to handle peak volume periods more efficiently.
UPS continues to invest in digital transformation initiatives, including advanced data analytics for route optimization, AI-powered forecasting, and enhanced package visibility for customers, strengthening the company’s competitive position in an increasingly digital logistics environment.
Dividend Declaration
The UPS Board of Directors has approved a first-quarter 2026 dividend of $1.64 per share on all outstanding Class A and Class B shares. This dividend is payable March 5, 2026, to shareholders of record as of February 17, 2026, reflecting the company’s consistent commitment to returning capital to shareholders.
2026 Outlook
UPS provided guidance for the full year 2026 on a non-GAAP adjusted basis, highlighting anticipated revenue growth, margin improvement, and continued capital investment.
- Expected Revenue: ~$89.7 billion
- Non-GAAP Adjusted Operating Margin: ~9.6%
- Planned Capital Expenditures: ~$3.0 billion
- Expected Dividend Payments: ~$5.4 billion, subject to board approval
- Expected Effective Tax Rate: ~23%
UPS noted that non-GAAP guidance is used because GAAP results could be materially affected by pension adjustments, strategic initiatives, or unforeseen events. By providing adjusted metrics, UPS gives investors a clearer view of ongoing operational performance while acknowledging potential variability in future GAAP results.
Strategic Priorities and Growth Drivers
Looking ahead, UPS is focused on several key strategic priorities to drive growth and improve financial performance in 2026 and beyond:
- Network Agility: Continued investments in air and ground network flexibility to handle fluctuating volumes, especially as Amazon gradually reduces its reliance on UPS logistics services.
- Revenue Quality: Emphasis on higher-yield packages, pricing discipline, and diversification of revenue streams across domestic, international, and supply chain solutions.
- Fleet Modernization: Completing aircraft and vehicle upgrades to enhance efficiency, reduce environmental impact, and support growth in high-density, supply-constrained markets.
- Technology Integration: Expanding AI, automation, and data analytics capabilities to optimize package sorting, routing, and last-mile delivery performance.
- Customer Experience: Investing in solutions that enhance tracking, delivery predictability, and e-commerce capabilities to maintain competitive advantage in B2B and B2C segments.
Market Implications
UPS’s fourth-quarter results reflect broader trends in the logistics and transportation industry:
- E-commerce Growth: Sustained online shopping and global shipping demand are key drivers of revenue per package growth.
- Operational Efficiency: Margin resilience despite volume fluctuations demonstrates the value of network optimization and cost management.
- Fleet and Sustainability Investments: Modernization of aircraft and delivery vehicles supports long-term operational efficiency and environmental targets, crucial for regulatory compliance and ESG commitments.
- Shareholder Returns: Consistent dividend and share repurchase programs reinforce confidence among investors even amid market volatility.
UPS closed 2025 with a strong fourth quarter, demonstrating operational discipline, network agility, and financial resilience. The company’s fleet modernization, targeted investments, and strategic planning position it for sustainable growth in 2026, with projected revenue of approximately $89.7 billion and an improved operating margin of 9.6% on a non-GAAP adjusted basis.
UPS continues to balance investments in technology and infrastructure with shareholder returns, underlining a long-term strategy to maintain its leadership position in global logistics while adapting to evolving market dynamics. As the company executes its plans in 2026, it expects to capitalize on operational efficiencies, margin expansion, and ongoing innovation to drive both financial performance and customer satisfaction.
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