United Parcel Service, Inc. is a global package delivery and logistics provider operating in over 200 countries and territories ¹. The company offers a broad range of industry-leading products and services including transportation and delivery through its integrated air and ground network, distribution, contract logistics, ocean freight, airfreight, customs brokerage and insurance ². In 2025, UPS delivered an average of 20.8 million packages per day, totaling 5.2 billion packages during the year ³⁴. The industry continues to rapidly evolve, with demands for faster deliveries, increased visibility into shipments and development of other services, and UPS expects to continue to face significant local, regional, national and international competition ⁵.

UPS competes with many local, regional, national and international logistics providers as well as national postal services ⁶. Competitors include the U.S. and international postal services, various motor carriers, express companies, freight forwarders, air couriers, large transportation companies, e-commerce companies and other retailers that continue to make significant investments in their own technology and logistics capabilities, some of whom are currently UPS customers ⁷. The company also faces competition from start-ups and other smaller companies that combine technologies with flexible labor solutions such as crowdsourcing ⁸. UPS believes its strategy, network and competitive strengths position it well to compete in the marketplace ⁹. One customer, Amazon.com, Inc. and its affiliates, represented approximately 10.6% of consolidated revenues in 2025, substantially all of which was within the U.S. Domestic Package segment ¹⁰.

UPS generates revenue primarily through its global small package operations, which provide time-definite delivery services for express letters, documents, packages and palletized freight via air and ground services, supported by numerous shipping, visibility and billing technologies including the Digital Access Program (DAP) ¹¹. The company also generates revenue through its Supply Chain Solutions (SCS) segment, which consists of Forwarding, Logistics, digital and other businesses ¹². Revenue is generally recognized over time as services are performed, using the cost-to-cost measure of progress for package delivery contracts ¹³. The vast majority of contracts with customers are for transportation services that include only one performance obligation ¹⁴.

UPS has two reporting segments: U.S. Domestic Package and International Package, which together are referred to as global small package operations, with remaining businesses reported as Supply Chain Solutions (SCS) ¹⁵. U.S. Domestic Package offers a full spectrum of air and ground package transportation services, with a ground fleet serving substantially all business and residential zip codes in the contiguous U.S. and delivering approximately 15 million ground packages per day, most within one to three business days ¹⁶¹⁷. International Package consists of small package operations in Europe, Middle East and Africa (EMEA), Canada and Latin America (Americas) and Asia, offering guaranteed day and time-definite international transportation services supported by brokerage capabilities ¹⁸. SCS consists of Forwarding, Logistics, digital and other businesses, including being one of the largest U.S. domestic airfreight carriers and airfreight forwarders globally, and a leading non-vessel operating common carrier providing ocean freight services ¹⁹²⁰.

In 2025, UPS completed the acquisitions of Frigo-Trans and Biotech & Pharma Logistics (Frigo-Trans) and Andlauer Healthcare Group (AHG), further expanding healthcare cold chain capabilities ²¹. The company extended its RFID labeling solution to 5,500 UPS store locations and completed the installation of RFID readers across U.S. package cars ²². In December 2025, UPS entered into an agreement with the United States Postal Service (USPS) to support final-mile delivery for a portion of Ground Saver and Mail Innovations volumes starting in 2026 ²³. During 2025, UPS repurchased 8.6 million shares of class B common stock for $1.0 billion under its share repurchase authorization ²⁴²⁵. As of December 31, 2025, the company had $1.3 billion available under its share repurchase authorization ²⁶. The company also returned $5.4 billion in dividends to shareholders during 2025 ²⁷.

Total revenue in 2025 was $88.7 billion ²⁸, compared to $91.070 billion in 2024 ²⁹, a decrease of 2.6% ³⁰. Operating profit was $7.867 billion in 2025 ³¹, compared to $8.468 billion in 2024 ³², a decrease of 7.1% ³³. Operating margin was 8.9% in 2025 ³⁴, compared to 9.3% in 2024 ³⁵. Net income was $5.572 billion in 2025 ³⁶, compared to $5.782 billion in 2024 ³⁷, a decrease of 3.6% ³⁸. Diluted earnings per share was $6.56 in 2025 ³⁹, compared to $6.75 in 2024 ⁴⁰, a decrease of 2.8% ⁴¹. Average daily package volume decreased 7.0% in 2025 ⁴², while average revenue per piece increased 6.6% to $14.50 ⁴³⁴⁴.

UPS is continuing to execute its Customer First, People Led, Innovation Driven strategy, which focuses on growing in the parts of the market that value end-to-end solutions, including healthcare, business-to-business (B2B), small- and medium-sized businesses (SMBs), and international ⁴⁵. In 2025, the global healthcare portfolio generated more than $11 billion in revenue, furthering progress towards the goal to become the number one complex healthcare logistics provider in the world ⁴⁶. The company completed the acquisitions of Frigo-Trans and Biotech & Pharma Logistics (Frigo-Trans) and Andlauer Healthcare Group (AHG), further expanding healthcare cold chain capabilities ⁴⁷. In the International market, during 2025 UPS implemented weekend delivery within Europe, and a new air hub in the Philippines is slated to open towards the end of 2026, with an expansion in Hong Kong planned to open in 2028, both expected to give broader access and faster time in transit on growing trade lanes in Asia ⁴⁸⁴⁹⁵⁰.

UPS is executing a deliberate strategy to shift its business to increase focus on higher yielding volume, which allowed the company to increase SMB penetration to over 30% of total U.S. volume from 2024 ⁵¹. The strategy includes planned volume declines from the largest customer, Amazon.com, Inc., with a targeted reduction of 50% by June 2026 from 2024 levels ⁵². By the end of 2026, UPS expects that planned volume declines from its largest customer will reduce volume by approximately one million additional pieces per day ⁵³. Continued strategic actions are expected to result in lower total average daily volume in 2026 as compared to 2025 as the company transitions to a more efficient network designed to support higher-quality revenue and margin expansion ⁵⁴. In December 2025, UPS entered into an agreement with the USPS to support final-mile delivery for a portion of Ground Saver and Mail Innovations volumes starting in 2026, expected to allow more cost efficient service while maintaining service levels ⁵⁵.

From the Network Reconfiguration and Efficiency Reimagined initiatives, UPS delivered year-over-year cost savings of approximately $3.5 billion in 2025 ⁵⁶. In connection with these initiatives, the company expects savings of approximately $3 billion in 2026 ⁵⁷. These initiatives are expected to conclude by 2027 ⁵⁸. UPS also expects to exclude from non-GAAP adjusted expenses certain costs related to strategic initiatives, including separation programs, although those expenses cannot be reasonably estimated at this time ⁵⁹. The company expects to incur additional other expenses under its Network Reconfiguration and Efficiency Reimagined initiatives during 2026 ⁶⁰.

UPS has identified 24 buildings for closure in the first half of 2026 and continues to review expected changes in volume in its integrated air and ground network to identify additional buildings for closure ⁶¹. The company expects that costs associated with these actions may increase should it determine to close additional buildings ⁶². UPS anticipates that certain aircraft may be temporarily idled during part of 2026 as part of normal operations and will return to service ⁶³. The company expects to continue to incur other costs and benefits associated with its Network Reconfiguration initiative and anticipated lower volumes, including early asset retirement, lease-related costs and gains from the sale of properties ⁶⁴.

UPS currently expects capital expenditures will be approximately $3.0 billion for all of 2026, of which approximately 80% will be allocated to network enhancement projects and other technology initiatives ⁶⁵. The company does not anticipate further share repurchases in 2026 ⁶⁶. On January 27, 2026, the Board approved a $1.64 per share dividend, payable on March 5, 2026 to shareowners of record on February 17, 2026 ⁶⁷⁶⁸⁶⁹. UPS anticipates making contributions to its company-sponsored U.S. defined benefit pension and postretirement medical benefit plans of approximately $1.3 billion in 2026 ⁷⁰. The company expects contributions to the UPS 401(k) Savings Plan to be approximately $574 million in 2026 ⁷¹.

Global trade policy changes during 2025, including pending and enacted tariffs and de minimis exclusions, resulted in shifting trade lane volumes, particularly reducing volumes on the China to U.S. lane, pressuring International Package segment margins during the year ⁷². UPS is subject to complex and stringent aviation, transportation, environmental, security, labor, employment, safety, privacy, disclosure and data protection and other governmental laws, regulations and policies, both in the U.S. and internationally, and compliance with any new laws, regulations or policies may increase operating costs or require significant capital expenditures ⁷³. The company is also subject to regulations related to climate change, including the ReFuelEU Aviation initiative which mandates jet fuel suppliers in Europe supply a target percentage of sustainable aviation fuel (SAF) starting at 2% in 2025 and increasing to 70% by 2050, and the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) with mandatory participation scheduled to begin in 2027, both of which could increase operating costs ⁷⁴⁷⁵⁷⁶.

UPS faces the risk that changes or continued uncertainty in general economic conditions, in the U.S. and internationally, may adversely affect the company, as operations are subject to national and international economic factors including industrial production, inflation, unemployment, consumer spending, retail activity levels and international trade policies ⁷⁷. The company has been and may in the future be materially affected by adverse developments or uncertainty in these and other aspects of the economy, including geopolitical uncertainty, tensions and/or conflicts in or arising from various countries and regions, including the European Union, Ukraine, the Russian Federation, the Middle East and the Trans-Pacific region ⁷⁸.

Management's message emphasizes the continued execution of the Customer First, People Led, Innovation Driven strategy, focusing on growing in parts of the market that value end-to-end solutions including healthcare, B2B, SMBs, and international ⁸⁸. Key themes include driving a reduction in volume from the largest customer with a targeted reduction of 50% by June 2026 from 2024 levels ⁸⁹, increasing SMB penetration to over 30% of total U.S. volume from 2024 ⁹⁰, and delivering year-over-year cost savings of approximately $3.5 billion in 2025 from Network Reconfiguration and Efficiency Reimagined initiatives ⁹¹. Management also highlights the completion of acquisitions of Frigo-Trans and AHG to expand healthcare cold chain capabilities, with the global healthcare portfolio generating more than $11 billion in revenue in 2025 ⁹²⁹³. The December 2025 agreement with the USPS to support final-mile delivery for a portion of Ground Saver and Mail Innovations volumes starting in 2026 is noted as expected to allow more cost efficient service while maintaining service levels ⁹⁴. Management states that the company returned $6.4 billion in cash to shareholders during 2025 through $1.0 billion of share repurchases and $5.4 billion in dividends ⁹⁵⁹⁶⁹⁷.

Total revenue was $88.661 billion in 2025 ⁹⁸ compared to $91.070 billion in 2024 ⁹⁹. Net income was $5.572 billion in 2025 ¹⁰⁰ compared to $5.782 billion in 2024 ¹⁰¹. Diluted earnings per share was $6.56 in 2025 ¹⁰² compared to $6.75 in 2024 ¹⁰³. Operating profit was $7.867 billion in 2025 ¹⁰⁴ compared to $8.468 billion in 2024 ¹⁰⁵, with operating margin of 8.9% in 2025 ¹⁰⁶ versus 9.3% in 2024 ¹⁰⁷. Free cash flow, defined as net cash from operating activities of $8.450 billion in 2025 ¹⁰⁸ less capital expenditures of $3.685 billion ¹⁰⁹, was $4.765 billion. Cash, cash equivalents, and marketable securities totaled $5.9 billion as of December 31, 2025 ¹¹⁰. Total debt outstanding at year end 2025 was $24.127 billion ¹¹¹ compared to $21.284 billion in 2024 ¹¹². Non-GAAP adjusted diluted earnings per share in 2025 was $7.16 after adjusting for after-tax impacts including Transformation Strategy Costs of $452 million or $0.53 per diluted share ¹¹³¹¹⁴, Goodwill and Asset Impairment Charges of $156 million or $0.18 per diluted share ¹¹⁵¹¹⁶, a Net Loss on Divestiture of $15 million or $0.02 per diluted share ¹¹⁷¹¹⁸, and the Reversal of an Income Tax Valuation Allowance of ($109) million or ($0.13) per diluted share ¹¹⁹¹²⁰. The U.S. Domestic Package segment reported operating profit of $3.926 billion in 2025 ¹²¹ compared to $4.345 billion in 2024 ¹²². The International Package segment reported operating profit of $2.873 billion in 2025 ¹²³ compared to $3.191 billion in 2024 ¹²⁴. Supply Chain Solutions reported operating profit of $1.068 billion in 2025 ¹²⁵ compared to $932 million in 2024 ¹²⁶.

UPS faces material risks from its strategy to reduce volume from its largest customer, Amazon.com, Inc., which accounted for 10.6% of consolidated revenues in 2025 ⁷⁹; the company has made reductions in facilities, vehicles, aircraft, and workforce to align with planned operations, and if unable to successfully make adjustments or control related costs, profitability could be materially impacted ⁸⁰. The company is subject to significant competition from U.S. and international postal services, motor carriers, express companies, freight forwarders, air couriers, large transportation companies, e-commerce companies, and start-ups using crowdsourcing, and if UPS does not appropriately respond to competitive pressures, it could be materially adversely affected ⁸¹. Strikes, work stoppages or slowdowns by employees could materially adversely affect UPS, as the national master agreement with the Teamsters expires on July 31, 2028, and the agreement with the Independent Pilots Association became amendable September 1, 2025 ⁸²⁸³⁸⁴. Changes in foreign currency exchange rates, particularly the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar, may have a material adverse effect on UPS, as the company conducts business in many countries with a significant portion of revenue derived from operations outside the United States ⁸⁵. The company recorded $182 million in asset impairment charges during the fourth quarter of 2025, primarily related to the retirement of the MD-11 fleet, and changes in business plans including network changes that began in 2025 have led to and may in the future lead to revisions in estimates of useful lives or salvage values of assets, potentially reducing net income materially ⁸⁶⁸⁷.