UPS reports $21.2 Bn Q2 2025 revenue, led by global efficiency push

United Parcel Service (UPS), the 1907-founded US-based parcel delivery and supply chain company, reported consolidated revenue of $21.2 billion for the second quarter of 2025. The company posted consolidated operating profit of $1.8 billion, and $1.9 billion on a non-GAAP adjusted basis. Diluted earnings per share (EPS) stood at $1.51, while non-GAAP adjusted diluted EPS was $1.55.

GAAP (Generally Accepted Accounting Principles) results for the quarter included a net charge of $29 million, or $0.04 per diluted share. This included after-tax transformation strategy costs of $57 million, partially offset by a $15 million gain from the divestiture of a business within Supply Chain Solutions and a $13 million benefit from the partial reversal of an income tax valuation allowance.

“Our second quarter results reflect both the complexity of the landscape and the strength of our execution. We are making meaningful progress on our strategic initiatives, and we’re confident these actions are positioning the company for stronger long-term financial performance and enhanced competitive advantage,” said Carol Tomé, chief executive officer, UPS. “I want to thank all UPSers for their dedication and hard work in what continues to be a dynamic and evolving trade environment.”

In June 2025, UPS announced it had nearly doubled its air freight capacity between Delhi and Cologne with the addition of a Boeing 747-8 freighter. The expansion enhances connectivity between India and Europe and supports sectors such as automotive, healthcare, and retail. According to the company, the increased capacity is aimed at improving service reliability and delivery time for Indian exporters accessing markets in Europe and the US.

For the second quarter, UPS’s US Domestic segment recorded revenue of $14.1 billion, a 0.8% decline year-over-year. This was primarily driven by a reduction in volume, partially offset by a 5.5% year-over-year increase in revenue per piece (RPP). The RPP improvement was attributed to base rate changes, customer and product mix, and fuel surcharge impacts. The segment reported non-GAAP adjusted operating profit of $982 million, with a flat adjusted operating margin of 7.0%.

UPS reported that average daily volume (ADV) in the US Domestic segment declined 7.3% year-over-year. Ground Saver ADV declined 23.3% due to pricing actions taken to manage lower-margin e-commerce volume. The company stated that Ground Saver now represents the smallest portion of total Ground volume in two years. Business-to-business (B2B) volume made up 43.7% of total US ADV in Q2 2025, a 220 basis point increase from the same quarter last year.

The International segment generated $4.5 billion in revenue, up 2.6% year-over-year, supported by a 3.9% increase in average daily volume and a 6.1% increase in export volume. Non-GAAP adjusted operating profit for the segment was $682 million, down from $824 million in Q2 2024, and the non-GAAP adjusted operating margin fell to 15.2% from 18.9%. UPS attributed the margin decline to trade lane shifts, product trade-down, lower demand-related surcharges, and investments made to expand weekend services in Europe.

In the Supply Chain Solutions segment, revenue declined 18.3% to $2.7 billion, mainly due to the Q3 2024 divestiture of Coyote, which accounted for 90% of the decline. Within the segment, healthcare logistics revenue grew 5.7%, while UPS Digital—which includes Roadie and Happy Returns—grew 26.4% year-over-year. The segment reported a non-GAAP adjusted operating profit of $212 million and an adjusted operating margin of 8.0%, which was up from 7.5% in the same quarter last year.

UPS stated it remains on track to deliver approximately $3.5 billion in expected cost savings in 2025. These savings are being realised through its network reconfiguration and Efficiency Reimagined initiatives. As part of these efforts, the company closed 74 buildings year-to-date and plans to close additional sorts and facilities in the second half of the year. It also announced a voluntary separation programme for all full-time US drivers.

The company noted it is accelerating the glide down of Amazon volume and reconfiguring its US network to improve efficiency. The decline in Amazon volume in the first half of 2025 was estimated at 13%, with a full-year projected decline of 25%.

UPS generated $2.7 billion in cash from operations and $742 million in free cash flow year-to-date. The company completed $1.0 billion in share repurchases in the first quarter and paid $2.7 billion in dividends. Capital expenditures for 2025 are expected to be approximately $3.5 billion, with pension contributions estimated at $1.4 billion (including $921 million already made). The company also projects an effective tax rate of approximately 23.5%.

UPS is not providing forward-looking revenue or operating profit guidance for the full year due to ongoing macroeconomic uncertainty. The company cited variability in small and medium business (SMB) and enterprise volumes, the timing of implementing Ground Saver solutions, and the final impact of the voluntary driver separation programme as factors affecting forecasts.

In the Earnings Call report, UPS stated that the US economy demonstrated continued resilience in Q2 2025, though the small package market was unfavourably impacted by consumer buying behaviour and soft manufacturing activity. Outside the US, changes in policies and increases in tariffs impacted trade flows.

With 2024 revenue of $91.1 billion, UPS operates in over 200 countries and territories and employs approximately 490,000 people. The company continues to execute its strategy across global markets, including growing its international air network, such as the recently expanded Delhi-Cologne route.

This story was originally published on The STAT Trade Times.