UPS (UPS) Q1 2025 earnings summary

Executive summary

• Q1 2025 consolidated revenue was $21.5B, down 0.7% year-over-year, with adjusted operating profit of $1.76B, up 0.9% year-over-year.

• Adjusted diluted EPS rose 4.2% to $1.49, slightly ahead of expectations; net income was $1.2B, up 6.6%.

• Strategic actions included Amazon volume glide-down, network reconfiguration, and efficiency initiatives targeting $3.5B in 2025 cost savings.

• Acquisition of Andlauer Healthcare Group announced to strengthen healthcare logistics; Frigo-Trans acquisition completed in January 2025.

• $1.0B in share repurchases and $1.3B in dividends returned to shareholders in Q1 2025.

Financial highlights

• Adjusted operating margin improved to 8.2% from 8.0% year-over-year; GAAP margin was 7.7%.

• Adjusted net income for Q1 2025 was $1.27B; free cash flow was $1.5B.

• U.S. Domestic segment operating profit grew by $164M, margin up 110 bps year-over-year.

• Supply Chain Solutions revenue was $2.7B, down 14.8% due to Coyote divestiture; operating profit down 62.9% to $46M.

• Dividends paid totaled $1.3B; share repurchases reached $1.0B, completing the 2025 target.

Outlook and guidance

• No update to full-year outlook due to macro uncertainty; Q2 revenue expected at ~$21B, operating margin ~9.3%.

• U.S. ADV expected down ~9% in Q2, with low single-digit revenue decline.

• International Q2 revenue expected down ~2%, margin in mid-teens; SCS revenue to decline ~$500M.

• Network Reconfiguration and Efficiency Reimagined expected to deliver $3.5B in cost savings in 2025, with $500M realized in Q1.

• 2025 expenses of $400–$600M anticipated for early asset retirements, lease costs, consulting, and separation benefits.