UPS (UPS) Q4 2025 earnings summary

Executive summary

• Fourth quarter 2025 results exceeded expectations, driven by strong revenue quality, disciplined cost management, and effective execution across all business segments, despite year-over-year revenue and profit declines.

• Strategic actions included network reconfiguration, automation, targeted volume reductions (notably with Amazon), and investments in healthcare logistics and digital solutions.

• All three business segments contributed to outperformance, with U.S. Domestic and Supply Chain Solutions expanding operating margins and International Small Package achieving record revenue.

• U.S. revenue per piece grew 8.3% year-over-year, with improved customer and product mix.

• The company navigated a dynamic macro environment, including global trade policy changes and geopolitical concerns, while making significant progress in network reconfiguration and automation.

Financial highlights

• Q4 2025 consolidated revenue: $24.5B; operating profit: $2.9B; operating margin: 11.8% (adjusted); diluted EPS: $2.38 (adjusted).

• Full-year 2025 consolidated revenue: $88.7B; operating profit: $8.7B (adjusted); operating margin: 9.8% (adjusted); adjusted EPS: $7.16.

• Cash from operations: $8.5B; free cash flow: $5.47B; CapEx: $3.7B; dividends: $5.4B; share repurchases: $1B.

• $6.4B was returned to shareholders via dividends and share repurchases in 2025.

• Q4 2025 net income was $1.79B; adjusted net income was $2.03B.

Outlook and guidance

• 2026 consolidated revenue expected at $89.7B; adjusted operating margin at 9.6%; diluted EPS projected flat to 2025; free cash flow expected at $6.5B.

• U.S. Domestic revenue expected to be flat year-over-year; first half down due to Amazon glide-down, second half up as restructuring concludes.

• International segment revenue to grow low-single digits; operating margin in mid-teens.

• Supply Chain Solutions revenue to rise high-single digits, with low-double digit operating margin.

• Planned capital expenditures for 2026 are $3.0B; dividend payments projected at $5.4B.