Why did UPS revenue decline in Q4 2025?

The decline was primarily driven by an expected drop in U.S. Domestic volume, which fell 10.8% in average daily pieces as UPS executed planned volume reductions from its largest customer. Supply Chain Solutions revenue also fell 12.7%, mainly due to lower volume in the Mail Innovations business. Revenue per piece increases partly offset these declines.

What were the one-time charges in the fourth quarter?

GAAP results included total charges of $238 million, or $0.28 per diluted share. This comprised a $137 million after-tax non-cash charge from writing off the MD-11 aircraft fleet, which was fully retired in Q4 2025, and $101 million of after-tax transformation charges. Non-GAAP adjusted results exclude these items.

What does UPS expect for 2026?

UPS guided to 2026 consolidated revenue of about $89.7 billion, a non-GAAP adjusted operating margin of about 9.6%, capital expenditures of about $3.0 billion, dividend payments of about $5.4 billion, and an effective tax rate of about 23.0%. Management also expects about $3 billion of savings from network reconfiguration. Note that the guided margin is below the 9.8% adjusted margin reported for full-year 2025.

How is UPS returning cash to shareholders?

In 2025, UPS returned $6.4 billion to shareowners through dividends and share repurchases. The Board approved a Q1 2026 dividend of $1.64 per share, consistent with the prior quarterly rate. Dividend payments are guided to about $5.4 billion for 2026, subject to board approval.

Are the non-GAAP adjusted figures a reliable view of performance?

Non-GAAP adjusted measures exclude transformation strategy costs, goodwill and asset impairments, divestiture gains and losses, pension mark-to-market adjustments, and similar items. Management argues these better reflect underlying performance, but the exclusions are recurring in nature. Transformation costs have been excluded in multiple years, so investors should weigh GAAP results alongside the adjusted figures. The company also expects to exclude future strategic-initiative expenses that it cannot yet estimate.

UPS 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed January 27, 2026. Cited figures are marked; the original filing is the authoritative source.

UPS reported fourth-quarter 2025 consolidated revenue of $24.5 billion^a, down 3.2% year over year, as the company continued to shed volume tied to its largest customer's planned glide-down.

GAAP diluted EPS was $2.10^b and non-GAAP adjusted diluted EPS was $2.38, down from $2.75 a year earlier. GAAP operating margin was 10.5% and non-GAAP adjusted operating margin was 11.8%, versus 12.3% adjusted in the prior-year quarter. GAAP results include $238 million (about $0.28 per share) of charges, including a $137 million after-tax non-cash write-off tied to the retirement of the MD-11 fleet, which was completed in the quarter.

Full-year 2025 results showed revenue of $88.7 billion^c (down 2.6%), GAAP operating margin of 8.9% and non-GAAP adjusted operating margin of 9.8%. Diluted EPS was $6.56 GAAP and $7.16 non-GAAP adjusted, with free cash flow of $5.5 billion and $6.4 billion returned to shareowners. U.S. Domestic revenue fell 3.2% on a 10.8% decline in average daily volume, partly offset by an 8.3% rise in revenue per piece, while International revenue grew 2.5% and Supply Chain Solutions revenue fell 12.7%.

For 2026, management guided to revenue of about $89.7 billion^d and a non-GAAP adjusted operating margin of about 9.6%, and expects roughly $3 billion of savings from network reconfiguration. The company also declared a first-quarter dividend of $1.64 per share, payable March 5, 2026.

CEO Carol Tomé described 2026 as an inflection point once the Amazon glide-down is complete. Investors will want to watch whether the guided margin expansion and savings translate into earnings growth, given that the guided 2026 margin is below the 2025 adjusted level of 9.8%.

02—Key points

Key Highlights

Q4 2025 revenue of $24.5B fell 3.2% YoY, driven by an expected U.S. Domestic volume decline of 10.8% partly offset by revenue per piece growth of 8.3%.
Q4 non-GAAP adjusted operating margin of 11.8% compared with 12.3% in Q4 2024; GAAP operating margin was 10.5%.
Q4 GAAP diluted EPS of $2.10 (up 4.5% YoY) and non-GAAP adjusted diluted EPS of $2.38 (down 13.5% YoY from $2.75).
FY2025 non-GAAP adjusted diluted EPS of $7.16 versus GAAP $6.56; FY2025 free cash flow of $5.5B.
2026 guidance: revenue of about $89.7B, non-GAAP adjusted operating margin of about 9.6%, capex of about $3.0B, and dividend payments of about $5.4B.
Network Reconfiguration and Efficiency Reimagined programs delivered about $3.5B of year-over-year savings in 2025, with roughly $3B more expected in 2026.
Board declared a Q1 2026 dividend of $1.64 per share, payable March 5, 2026, to shareowners of record on February 17, 2026.

03—Questions

Frequently Asked Questions

Why did UPS revenue decline in Q4 2025?
The decline was primarily driven by an expected drop in U.S. Domestic volume, which fell 10.8% in average daily pieces as UPS executed planned volume reductions from its largest customer. Supply Chain Solutions revenue also fell 12.7%, mainly due to lower volume in the Mail Innovations business. Revenue per piece increases partly offset these declines.
What were the one-time charges in the fourth quarter?
GAAP results included total charges of $238 million, or $0.28 per diluted share. This comprised a $137 million after-tax non-cash charge from writing off the MD-11 aircraft fleet, which was fully retired in Q4 2025, and $101 million of after-tax transformation charges. Non-GAAP adjusted results exclude these items.
What does UPS expect for 2026?
UPS guided to 2026 consolidated revenue of about $89.7 billion, a non-GAAP adjusted operating margin of about 9.6%, capital expenditures of about $3.0 billion, dividend payments of about $5.4 billion, and an effective tax rate of about 23.0%. Management also expects about $3 billion of savings from network reconfiguration. Note that the guided margin is below the 9.8% adjusted margin reported for full-year 2025.
How is UPS returning cash to shareholders?
In 2025, UPS returned $6.4 billion to shareowners through dividends and share repurchases. The Board approved a Q1 2026 dividend of $1.64 per share, consistent with the prior quarterly rate. Dividend payments are guided to about $5.4 billion for 2026, subject to board approval.
Are the non-GAAP adjusted figures a reliable view of performance?
Non-GAAP adjusted measures exclude transformation strategy costs, goodwill and asset impairments, divestiture gains and losses, pension mark-to-market adjustments, and similar items. Management argues these better reflect underlying performance, but the exclusions are recurring in nature. Transformation costs have been excluded in multiple years, so investors should weigh GAAP results alongside the adjusted figures. The company also expects to exclude future strategic-initiative expenses that it cannot yet estimate.

04—Continue

← View all 8-K filings