UPS Reports $24.5B Q4 Revenue, Guides $89.7B 2026 Sales
UPS reported fourth-quarter 2025 adjusted EPS of $2.38 on consolidated revenue of $24.5B, with $2.9B non-GAAP operating profit despite $238M GAAP fleet-retirement charges. The company guided 2026 revenue at $89.7B with a 9.6% non-GAAP operating margin and approved a $1.64 per-share dividend.
1. Q4 2025 Results Exceed Expectations
United Parcel Service reported fourth-quarter consolidated revenues of $24.5 billion, surpassing consensus estimates by roughly $500 million. GAAP operating profit was $2.6 billion, while non-GAAP adjusted operating profit reached $2.9 billion after excluding $238 million of charges related to the retirement of the MD-11 aircraft fleet and transformation initiatives. GAAP diluted earnings per share stood at $2.10, with non-GAAP adjusted diluted EPS of $2.38, beating analyst forecasts of $2.22. The company achieved these results despite accelerated fleet modernization costs and a planned reduction in low-margin volume.
2. Segment Performance Drives Mixed Volume Trends
In the U.S. Domestic segment, revenue declined 3.2% to $16.8 billion, driven by a modest drop in package volume, while revenue per piece grew 8.3%. Operating margin in this unit was 8.5%, improving to 10.2% on a non-GAAP basis. The International segment saw a 2.5% revenue increase to $5.0 billion, led by a 7.1% rise in revenue per piece, yielding a 17.5% operating margin (18.0% adjusted). Supply Chain Solutions revenues fell 12.7% to $2.7 billion due to lower Mail Innovations volumes, yet non-GAAP operating margin held at 10.3%.
3. Full-Year 2025 Financial Highlights
For the full year, UPS generated $88.7 billion in revenue and reported GAAP operating profit of $7.9 billion, with a non-GAAP adjusted operating profit of $8.7 billion. GAAP diluted EPS totaled $6.56, and non-GAAP adjusted diluted EPS was $7.16. Operating margin expanded to 8.9% (9.8% on an adjusted basis). The company produced $8.5 billion in cash from operations and $5.5 billion in non-GAAP free cash flow, returning $6.4 billion to shareholders through dividends and share repurchases.
4. 2026 Outlook and Capital Allocation
UPS expects 2026 consolidated revenues of approximately $89.7 billion and targets a non-GAAP adjusted operating margin near 9.6%. Capital expenditures are planned at about $3.0 billion, with dividend payments of roughly $5.4 billion pending board approval. The effective tax rate is projected at 23.0%. Management highlighted that 2026 will mark an inflection point following completion of the Amazon volume glide-down, focusing on revenue quality improvements and sustained margin expansion.