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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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

UPS

UPS fundamentals

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