UPS(UPS) - 2025 Q2 - Quarterly Results

Revenue Performance - Total revenue for Q2 2025 was $21,221 million, a decrease of $597 million or 2.7% compared to Q2 2024[2] - Total revenue decreased by 1.7% to $42,767 million compared to $43,524 million in the previous year[9] - U.S. Domestic Package revenue decreased by $118 million or 0.8% to $14,083 million, while International Package revenue increased by $115 million or 2.6% to $4,485 million[2] - U.S. Domestic Package revenue increased by 0.3% to $28,543 million, while International Package revenue rose by 2.7% to $8,858 million[9] Profitability Metrics - Operating profit for Q2 2025 was $1,822 million, down $122 million or 6.3% from Q2 2024[2] - Net income for Q2 2025 was $1,283 million, a decline of $126 million or 8.9% compared to $1,409 million in Q2 2024[2] - Basic earnings per share decreased by $0.14 or 8.5% to $1.51 in Q2 2025 from $1.65 in Q2 2024[2] - Total operating profit decreased by 1.9% to $3,488 million, with U.S. Domestic Package operating profit increasing by 4.1% to $1,895 million[9] - Net income declined by 2.1% to $2,470 million, with net income as a percentage of revenue remaining at 5.8%[9] Operating Expenses - Total operating expenses for Q2 2025 were $19,399 million, down $475 million or 2.4% from Q2 2024[2] - Total operating expenses decreased by 1.7% to $39,279 million, compared to $39,967 million in the prior year[14] - U.S. Domestic Package Operating Expenses for Q2 2025 were $13,167 million, a slight decrease of 0.3% from $13,213 million in Q2 2024[34] - International Package Operating Expenses increased by 4.4% to $3,813 million in Q2 2025, up from $3,652 million in Q2 2024[34] - Supply Chain Solutions Operating Expenses decreased significantly by 19.6% to $2,419 million in Q2 2025, down from $3,009 million in Q2 2024[34] Volume Metrics - Average Daily Package Volume decreased by 1,311 thousand packages or 7.3% to 16,553 thousand in Q2 2025[5] - Consolidated volume decreased by 76 million packages or 5.7% to 1,263 million in Q2 2025[5] - Average Daily U.S. Domestic Package Volume decreased to 16,553 thousand in Q2 2025 from 17,864 thousand in Q2 2024[36] - Average Daily U.S. Domestic Package Volume decreased to 16,991 thousand in H1 2025 from 17,969 thousand in H1 2024, reflecting a decline in volume[56] Cash Flow and Assets - Cash flows from operating activities decreased to $2,666 million for the first half of 2025, down 49.8% from $5,309 million in 2024[20] - Free cash flow for the six months ended June 30, 2025, was $742 million, a significant decline of 78.0% compared to $3,365 million in 2024[20] - Total assets increased to $70,923 million as of June 30, 2025, compared to $70,070 million at the end of 2024, reflecting a growth of 1.2%[16] Debt and Liabilities - Long-term debt and finance leases increased to $23,820 million as of June 30, 2025, compared to $19,446 million at the end of 2024, marking a rise of 22.3%[16] - Total current liabilities decreased to $14,240 million as of June 30, 2025, down 13.4% from $16,441 million at the end of 2024[16] Transformation Strategy Costs - The company incurred transformation strategy costs totaling $74 million in Q2 2025, compared to $27 million in Q2 2024, indicating increased investment in strategic initiatives[22] - Total Transformation Strategy Costs for Q2 2025 were $57 million, up from $21 million in Q2 2024[30] - Total Transformation Strategy Costs increased to $101 million in Q2 2025 from $56 million in Q2 2024, impacting earnings by $0.12 per share[49] Other Income and Expenses - Total other income (expense) was $(160) million, an increase in expense of $85 million or 113.3% compared to Q2 2024[2] - Other income (expense) showed a significant decline, with total other income (expense) at $(303) million, compared to $(152) million in the previous year[9] - The company reported a pre-tax gain of $20 million on the divestiture of a business within Supply Chain Solutions[49] Non-GAAP Metrics - Non-GAAP Adjusted Net Income for Q2 2025 was $1,312 million, compared to $1,529 million in Q2 2024, a decline of 14.3%[30] - Non-GAAP Adjusted Operating Profit for the first half of 2025 was $3,639 million, down from $3,811 million in the same period of 2024[39] - Non-GAAP Adjusted Net Income for Q2 2025 was $2,582 million, down from $2,752 million in Q2 2024, with adjusted diluted earnings per share at $3.04 compared to $3.21[49]