UNITED PARCEL SERVICE INC
For the period ended Mar 31, 2026. Filed May 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
Extracted filing text, with the paragraph anchors used by the comparison.
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Supply Chain Solutions Operations ("SCS")
SCS
| Three Months Ended March 31, · Change | |||||
|---|---|---|---|---|---|
| 2026 · 2025 · $ · % | |||||
| Revenue (in millions): | |||||
| Forwarding | $656 | $726 | $(70) | (9.6)% | |
| Logistics | 1,409 | 1,572 | (163) | (10.4)% | |
| Other SCS | 472 | 415 | 57 | 13.7% | |
| Total Revenue | $2,537 | $2,713 | $(176) | (6.5)% | |
| Operating Expenses (in millions): | |||||
| Operating Expenses | $2,332 | $2,667 | $(335) | (12.6)% | |
| Non-GAAP Adjustments to Operating Expenses | |||||
| Transformation Strategy Costs | (1) | (13) | 12 | (92.3)% | |
| Goodwill and Asset Impairment Charges | — | (39) | 39 | (100.0)% | |
| Non-GAAP Adjusted Operating Expenses | $2,331 | $2,615 | $(284) | (10.9)% | |
| Operating Profit (in millions) and Operating Margin: | |||||
| Operating Profit | $205 | $46 | $159 | 345.7% | |
| Non-GAAP Adjusted Operating Profit | $206 | $98 | $108 | 110.2% | |
| Operating Margin | 8.1% | 1.7% | |||
| Non-GAAP Adjusted Operating Margin | 8.1% | 3.6% | |||
| Currency Benefit / (Cost) – (in millions)(1): | |||||
| Revenue | $35 | ||||
| Operating Expenses | (34) | ||||
| Operating Profit | $1 | ||||
| (1) Amount represents the change in currency translation compared to the prior year. | |||||
Revenue
Total revenue decreased for the quarter primarily due to a decline in Forwarding and Logistics revenue, partially offset by increases in revenue from our other SCS businesses.
Within our Forwarding businesses, revenue decreased $70 million primarily driven by lower volumes from international airfreight and change in product mix that drove growth in volume but at lower rates from ocean freight.
Within our Logistics businesses, revenue decreased $163 million due to declines in our Mail Innovations business which decreased due to our 2025 initiatives to improve revenue quality. The declines in Mail Innovations revenue were partially offset by a $188 million increase in revenue from our healthcare logistics business primarily due to our fourth quarter 2025 acquisition of AHG.
Revenue from our other businesses within SCS increased $57 million for the quarter, primarily driven by volume growth in both Roadie and Happy Returns within our digital businesses.
Total operating expenses and non-GAAP adjusted operating expenses within SCS decreased for the quarter driven primarily by volume declines in our Mail Innovations business, partially offset by increases in our healthcare logistics business due to our fourth quarter 2025 acquisition of AHG.
Non-GAAP adjusted operating expenses exclude the impact of transformation strategy costs, which were $1 and 13 million in the first quarters of 2026 and 2025, respectively. First quarter 2025 non-GAAP adjusted operating expense also excludes $39 million related to impairment of certain assets within our digital businesses.
Transformation strategy costs in SCS during the periods presented related to our Transformation 2.0, Fit to Serve, and Network Reconfigurationand Efficiency Reimagined programs. Within Transformation 2.0, we incurred costs related to financial system investments in 2025. Within Fit to Serve, we incurred severance costs in 2025. Within Efficiency Reimagined, we incurred costs related to end-to-end process redesign in both the 2026 and 2025 periods. See Supplemental Information - Items Affecting Comparability for additional discussion of items excluded from our non-GAAP adjusted financial measures.
As a result of the factors described above, operating profit increased $159 million, with operating margin increasing to 8.1%. Non-GAAP adjusted operating profit increased $108 million and non-GAAP adjusted operating margin increased to 8.1%.
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