10-KPeriod: FY2025

UNITED PARCEL SERVICE INC Annual Report, Year Ended Dec 31, 2025

Filed February 17, 2026For Securities:UPS

Summary

United Parcel Service (UPS) reported significant strategic shifts and operational adjustments in its 2025 fiscal year. The company continued its 'Customer First, People Led, Innovation Driven' strategy, which included a deliberate focus on higher-yielding volume, leading to increased Small and Medium-sized Business (SMB) penetration. A key development was the planned reduction in volume from its largest customer, Amazon, which is expected to be more than 50% lower by June 2026 from 2024 levels. This strategic pivot, coupled with revenue quality initiatives, resulted in a reported 6.6% increase in consolidated revenue per piece, despite an overall revenue decline of 2.6% to $88.7 billion, impacted also by the divestiture of the Coyote truckload brokerage business. Financially, UPS saw a decrease in operating profit to $7.9 billion and net income to $5.6 billion, reflecting investments in transformation initiatives and increased operational costs associated with insourcing certain services like Ground Saver. The company generated $8.45 billion in net cash from operating activities. Significant capital expenditures continued, totaling $3.7 billion, with a planned $3.0 billion for 2026, focusing on network enhancements and technology. Shareholder returns remained a priority, with $6.4 billion returned through share repurchases and dividends in 2025.

Financial Highlights

51 data points
Beta

Revenue

$88.66B

Net Income

$5.57B

6.3% Net Margin

EPS (Diluted)

$6.56

Total Assets

$73.09B

Cash & Equivalents

$5.89B

Free Cash Flow

$4.76B

Financial Statements
Beta
Revenue$88.66B
Operating Expenses$80.79B
Operating Income$7.87B
Net Income$5.57B
EPS (Basic)$6.56
EPS (Diluted)$6.56
Shares Outstanding (Basic)849.00M
Shares Outstanding (Diluted)850.00M

Key Highlights

  • 1Revenue decreased by 2.6% to $88.7 billion in 2025, impacted by strategic volume reductions and the Coyote divestiture, partially offset by growth in International Package and healthcare logistics.
  • 2Consolidated revenue per piece increased by 6.6% to $14.50, driven by favorable customer and product mix and revenue quality actions.
  • 3Average daily package volume across global small package operations decreased by 7.0%, reflecting planned volume reductions from the largest customer and revenue quality initiatives.
  • 4Operating profit declined by 7.1% to $7.9 billion, and operating margin decreased to 8.9%, impacted by increased U.S. domestic delivery costs and international trade policy challenges.
  • 5Net income fell by 3.6% to $5.6 billion, with diluted EPS at $6.56.
  • 6The company continued its transformation strategy, delivering $3.5 billion in year-over-year cost savings in 2025 from Network Reconfiguration and Efficiency Reimagined initiatives.
  • 7UPS returned $6.4 billion to shareholders in 2025 through $1.0 billion in share repurchases and $5.4 billion in dividends.

Frequently Asked Questions

UPS is strategically reducing volume from its largest customer (Amazon.com, Inc.) by over 50% by June 2026 from 2024 levels. While this is impacting overall package volume, the company is focusing on higher-yielding business, which has contributed to an increase in revenue per piece. This strategic shift has also necessitated network and workforce adjustments.

The 'Customer First, People Led, Innovation Driven' strategy, including initiatives like Network Reconfiguration and Efficiency Reimagined, drove significant cost savings of approximately $3.5 billion in 2025. However, these initiatives also led to increased compensation and benefits costs and higher pickup and delivery expenses, contributing to a decrease in operating profit and margin compared to the prior year.

The 2.6% decrease in consolidated revenue was primarily driven by the divestiture of the Coyote truckload brokerage business, the planned reduction in volume from its largest customer, and decreased Mail Innovations volume. These factors were partially offset by growth in the International Package segment, driven by higher volumes and revenue quality efforts, as well as contributions from healthcare logistics businesses.

UPS employs a disciplined and balanced approach to capital allocation. In 2025, the company returned $6.4 billion to shareholders through $1.0 billion in share repurchases and $5.4 billion in dividends. UPS plans to invest approximately $3.0 billion in capital expenditures for 2026, primarily focused on network enhancements and technology initiatives.