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- **Revenue Resilience**: U.S. Domestic revenue down 2.6% YoY despite 12.3% ADV decline, driven by 9.8% RPP growth.
- **Cost Efficiency**: $3.5 billion in annualized cost savings on track, with 34,000 positions reduced and 93 buildings closed.
- **Strategic Partnerships**: USPS collaboration to reduce leased vehicles by 50% in Q4, supporting 2026 margin expansion.
- **Health Care Growth**: Health care logistics revenue up, with Andlauer acquisition closing in November.
- **Peak Readiness**: 66% of U.S. volume processed through automation in Q4, targeting 11-11.5% operating margin.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 revenue of $21.4 billion with U.S. Domestic revenue down 2.6% YoY despite a 12.3% decline in average daily volume (ADV). U.S. revenue per piece (RPP) grew 9.8%, driven by base rate and mix improvements.
- **Amazon Glide-Down Progress**: Amazon volume down 21.2% YoY, with 93 buildings closed and 34,000 operational positions reduced. Network reconfiguration on track to achieve $3.5 billion in cost savings by year-end.
- **International Expansion**: International ADV up 4.8% YoY, with export ADV growth in Europe and Canada. Health care logistics revenue grew, and DAP (Digital Access Program) revenue up 20% YoY.
- **Peak Season Readiness**: Deploying 42 new automation projects, expecting 66% of U.S. volume to be processed through automation in Q4. Targeting 11-11.5% consolidated operating margin for Q4.

**【CFO Financial Commentary】**
- **Financial Results**: GAAP net income $1.74 billion, Non-GAAP EPS $1.74. U.S. Domestic operating margin improved to 6.4% vs. 5.8% YoY. Free cash flow $2.7 billion year-to-date.
- **Cost Management**: Variable costs reduced by 16 million hours YoY, semi-variable costs down 34,000 positions. Driver buyout program saved $179 million annually.
- **Capital Allocation**: $3.5 billion in capex, $5.5 billion in dividends, and $1 billion in share buybacks planned for 2025.

**【Q&A Highlights】**
- **Amazon Glide-Down Outlook**: 3 quarters into 6-quarter plan, with 2026 margin improvements expected from strategic volume exits and USPS partnership.
- **USPS Collaboration**: Preliminary agreement to leverage USPS final-mile delivery, reducing leased vehicles and trailers by 50% in Q4.
- **International Challenges**: U.S.-China trade lane ADV down 27.1% YoY, but diversification into Europe and Canada offsetting losses. Targeting high-teens international margin with automation investments.
- **SMB Resilience**: SMB volume down 2.2% YoY, but 32% of U.S. volume from SMBs, up 340 bps YoY. Health care and DAP driving growth.
- **Free Cash Flow Sustainability**: Expecting $2.7 billion+ annual free cash flow post-cost restructuring, with focus on high-margin B2B and health care segments.

United Parcel Service, Inc. (UPS) Q3 2025 Earnings Call Transcript

United States Domestic Package

International Package

Supply Chain & Freight

UPS

UPS fundamentals

You can ask Aime