UNITED PARCEL SERVICE INC
For the period ended Dec 31, 2025. Filed Feb 17, 2026.
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FY2025 · Filed Feb 17, 2026
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Supply Chain Solutions ("SCS") Operations
Supply Chain Solutions Operations
| 2025 · 2024 · $ Change · % Change | |||||
|---|---|---|---|---|---|
| Revenue (in millions): | |||||
| Forwarding | $2,916 | $4,728 | $(1,812) | (38.3)% | |
| Logistics | 5,855 | 6,437 | (582) | (9.0)% | |
| Other SCS | 1,795 | 1,569 | 226 | 14.4% | |
| Total Revenue | $10,566 | $12,734 | $(2,168) | (17.0)% | |
| Operating Expenses (in millions): | |||||
| Operating Expenses | $9,498 | $11,802 | $(2,304) | (19.5)% | |
| Non-GAAP Adjustments to Operating Expenses | |||||
| Transformation Strategy Costs | (35) | (96) | 61 | (63.5)% | |
| Net (Loss) Gain on Divestiture | (19) | 156 | (175) | N/A | |
| Goodwill and Asset Impairment Charges | — | (101) | 101 | (100.0)% | |
| Expense for Regulatory Matter | — | (45) | 45 | (100.0)% | |
| Non-GAAP Adjusted Operating Expenses | $9,444 | $11,716 | $(2,272) | (19.4)% | |
| Operating Profit (in millions) and Operating Margin: | |||||
| Operating Profit | $1,068 | $932 | $136 | 14.6% | |
| Non-GAAP Adjusted Operating Profit | 1,122 | 1,018 | 104 | 10.2% | |
| Operating Margin | 10.1% | 7.3% | |||
| Non-GAAP Adjusted Operating Margin | 10.6% | 8.0% | |||
| Currency Benefit / (Cost)—(in millions)1: | |||||
| Revenue | 55 | ||||
| Operating Expenses | (49) | ||||
| Operating Profit | 6 | ||||
| (1) Amount represents the change in currency translation compared to the prior year. | |||||
| 2025 | 2024 | $ Change | |
|---|---|---|---|
| Non-GAAP Adjustments to Operating Expenses (in millions): | |||
| Transformation Strategy Costs | |||
| Forwarding | $31 | $39 | $(8) |
| Logistics | 4 | 57 | (53) |
| Total Transformation Strategy Costs | 35 | 96 | (61) |
| Net Loss (Gain) on Divestiture | |||
| Forwarding | — | (156) | 156 |
| Other SCS | 19 | — | 19 |
| Total Loss (Gain) on Divestiture | 19 | (156) | 175 |
| Goodwill and Asset Impairment Charges | |||
| Logistics | — | 101 | (101) |
| Total Goodwill and Asset Impairment Charges | — | 101 | (101) |
| Expense for Regulatory Matter | |||
| Other SCS | — | 45 | (45) |
| Total Expense for Regulatory Matter | — | 45 | (45) |
| Total Non-GAAP Adjustments to Operating Expenses | $54 | $86 | $(32) |
Revenue
Total revenue within SCS decreased in 2025 primarily due to a decline in our Forwarding and Logistics businesses, partially offset by revenue growth within certain of our other businesses.
Revenue in our Forwarding businesses decreased $1.8 billion. The decline was primarily driven by the impact of the 2024 Coyote divestiture, which contributed $1.6 billion of revenue in 2024. Revenue within our remaining Forwarding businesses declined $245 million, primarily from demand softness in air and ocean markets and from the effects of changing trade policies and tariff uncertainty, particularly on the China-to-U.S. trade lane, which also negatively impacted both volume and rates.
Within our Logistics businesses, revenue decreased $582 million. Revenue in our Mail Innovations business decreased $904 million, driven by volume declines resulting from our initiatives to improve revenue quality. These declines were partially offset by $303 million of revenue growth in our healthcare logistics businesses, due to our 2025 acquisitions of Frigo-Trans and AHG in addition to year-over-year growth in our other healthcare businesses.
Revenue from our other businesses within SCS increased $226 million in 2025, primarily driven by volume growth in both Roadie and UPS Capital within our digital businesses.
Total operating expenses within SCS decreased in 2025 driven primarily by the impacts of the Coyote divestiture of $1.6 billion, gain on sale-leaseback transactions involving real estate properties of $330 million and volume declines and lower purchased transportation costs in our Mail Innovations business as a result of lower volumes.
Non-GAAP adjusted operating expenses exclude the impact of $35 and $96 million in Transformation Strategy Costs in 2025 and 2024, respectively. 2025 results also exclude a $19 million Net Loss on Divestiture of an SCS business. 2024 results exclude a $156 million Gain on Divestiture related to Coyote, $101 million in Goodwill and Asset Impairment Charges and a $45 million Expense for a Regulatory Matter.
Transformation Strategy Costs during both 2025 and 2024 related to our Transformation 2.0, Fit to Serve and Network Reconfigurationand Efficiency Reimagined initiatives. Within these initiatives, we incurred primarily severance costs and fees paid to outside professional service providers. See Supplemental Information - Items Affecting Comparability for additional discussion of Transformation Strategy Costs excluded from our non-GAAP adjusted financial measures.
As a result of the factors described above, operating profit increased $136 million, with operating margin increasing 280 basis points to 10.1%. On a non-GAAP adjusted basis, operating profit increased $104 million, with non-GAAP adjusted operating margin increasing 260 basis points to 10.6%.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.