01—Abstract
Summary
Summary of the 10-K filed February 17, 2026. Cited figures are marked; the original filing is the authoritative source.
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 billiona, 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 billionb, 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 billionc, 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.
02—Key points
Key Highlights
- Revenue 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.
- Consolidated revenue per piece increased by 6.6% to $14.50, driven by favorable customer and product mix and revenue quality actions.
- Average daily package volume across global small package operations decreased by 7.0%, reflecting planned volume reductions from the largest customer and revenue quality initiatives.
- Operating 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.
- Net income fell by 3.6% to $5.6 billion, with diluted EPS at $6.56.
- The company continued its transformation strategy, delivering $3.5 billion in year-over-year cost savings in 2025 from Network Reconfiguration and Efficiency Reimagined initiatives.
- UPS returned $6.4 billion to shareholders in 2025 through $1.0 billion in share repurchases and $5.4 billion in dividends.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2025filed February 17, 2026Financial Statements
FY2025 against FY2024
| Line item | FY2025FY2024 | Change |
|---|---|---|
| Revenue | $88.66B$91.07B | −2.6% |
| Operating Expenses | $80.79B$82.60B | −2.2% |
| Operating Income | $7.87B$8.47B | −7.1% |
| Net Income | $5.57B$5.78B | −3.6% |
| EPS (Basic) | $6.56$6.76 | −3.0% |
| EPS (Diluted) | $6.56$6.75 | −2.8% |
| Shares Outstanding (Basic) | 849.00M855.00M | −0.7% |
| Shares Outstanding (Diluted) | 850.00M856.00M | −0.7% |
05—Questions
Frequently Asked Questions
What is the impact of the planned reduction in volume from UPS's largest customer?
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.
How did the company's strategic initiatives affect financial performance?
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.
What are the key drivers for the decline in revenue?
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.
What is the company's capital allocation strategy?
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.
06—Continue