Financial Data and Key Metrics Changes - Revenue increased by 2% year-over-year for the first time this fiscal year, reaching a total of $XX billion [7] - Adjusted operating income grew by 12% compared to last year, with $600 million in DRIVE savings achieved in the quarter [8][22] - Adjusted EPS growth was reported at 17% [41] Business Line Data and Key Metrics Changes - Federal Express saw a revenue increase of 3%, driven by higher volume in deferred services [27] - FedEx Freight experienced a 5% revenue decline due to lower volumes and fuel surcharges [27] - Overall volume trends improved, with a 5% growth in Federal Express package volume [28] Market Data and Key Metrics Changes - Nearly 75% of revenue comes from U.S. domestic services, with 10% from non-U.S. intra-country or intra-regional services [12] - International export package volumes increased by 8% due to growth in the international economy [29] - Average daily pounds for international priority freight increased by 3% [30] Company Strategy and Development Direction - The company is focused on creating a more flexible, efficient, and intelligent network, with plans to optimize 45 more U.S. stations in Q4 [14] - The DRIVE initiative aims for a total of $2.2 billion in savings for FY '25, with a total of $4 billion from the FY '23 baseline [13] - The acquisition of RouteSmart Technologies is expected to enhance route optimization and operational efficiency [20] Management's Comments on Operating Environment and Future Outlook - The current environment adds uncertainty to demand, particularly in the industrial economy, which continues to pressure higher-margin B2B volumes [9] - The company is lowering its FY '25 adjusted EPS outlook to $18 to $18.60 due to inflationary pressures and uncertain demand [18][48] - Management remains confident in the long-term value creation from transformation initiatives like DRIVE and Network 2.0% [23] Other Important Information - The company completed approximately $500 million in share repurchases in Q3, with a target of returning $3.8 billion to shareholders in FY '25 [55] - Capital expenditures for FY '25 are now projected at $4.9 billion, down from $5.2 billion last year [55] - The company is on track to fully separate FedEx Freight, with a separation management office established [58] Q&A Session Summary Question: Impact of inflation on guidance change - Management indicated that inflation has been a consistent factor affecting guidance, particularly regarding wages and operational costs [65] Question: FedEx's exposure to de minimis shipments - Management stated they are operationally prepared for changes related to de minimis shipments and are working closely with customers to adapt [70][72] Question: Outlook for fiscal '26 - Management refrained from providing specific guidance but emphasized a focus on profitable growth and the annualization of DRIVE benefits [76][78] Question: Update on dedicated sales force - The dedicated sales team is being built to enhance expertise in LTL and improve coverage for small and medium customers [90] Question: Network 2.0% productivity benefits - Management reported solid service levels and a goal of a 10% reduction in B&D costs with the rollout of Network 2.0% [96] Question: LTL margins outlook - Management expressed confidence in LTL margins rebounding once the B2B business improves, focusing on quality growth [100] Question: Pricing environment and customer feedback - Management noted that the pricing environment remains rational, with customers anticipating price increases due to inflation [115]

Financial Data and Key Metrics Changes - Revenue increased by 2% year-over-year for the first time this fiscal year, with adjusted operating income growth of 12% compared to last year [7][35] - DRIVE savings reached $600 million in the quarter, contributing to the overall financial performance [7][39] - Adjusted EPS growth was reported at 17% year-over-year [35] Business Line Data and Key Metrics Changes - At Federal Express, revenue increased by 3%, driven by higher volume in deferred services [22] - FedEx Freight experienced a 5% revenue decline due to lower volumes and fuel surcharges [21][26] - Ground volumes increased by 7%, supported by both B2B and B2C growth [24] Market Data and Key Metrics Changes - International export package volumes increased by 8% due to growth in the international economy [24] - Average daily pounds for international priority freight increased by 3% [25] - U.S. Domestic package yield remained flat year-over-year, with variations in different service segments [27] Company Strategy and Development Direction - The company is focused on creating a more flexible, efficient, and intelligent network, with ongoing initiatives like Network 2.0 and DRIVE [11][15] - The acquisition of RouteSmart Technologies aims to enhance route optimization capabilities [17] - The company is targeting profitable growth in healthcare and e-commerce segments, with significant new business expected in healthcare [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the uncertain demand environment and inflationary pressures, leading to a revised adjusted EPS outlook of $18 to $18.6 for FY 2025 [15][40] - The company remains confident in its transformation initiatives and their potential to create long-term value [18][41] - Management noted that the industrial economy continues to pressure B2B volumes, but they are well-positioned for recovery [8][39] Other Important Information - The company completed approximately $500 million in share repurchases in Q3, with a target of returning $3.8 billion to shareholders in FY 2025 [44] - Capital expenditures for FY 2025 are now projected at $4.9 billion, down from $5.2 billion last year [45] - The separation of FedEx Freight is progressing, with a focus on maintaining operational efficiency during the transition [47][48] Q&A Session Summary Question: Impact of inflation on guidance change - Management acknowledged that inflation has been a consistent factor affecting margins and will continue to monitor it closely [51] Question: FedEx's exposure to de minimis shipments - Management confirmed readiness to adapt to changes in de minimis regulations and is working closely with customers to prepare [53][56] Question: Thoughts on fiscal 2026 outlook - Management indicated that while the macro environment may not improve significantly in the first half of FY 2026, they expect to benefit from DRIVE initiatives and continued focus on profitable growth [62] Question: Update on dedicated sales force build-out - Management reported progress in establishing a dedicated sales team focused on profitable growth and improving coverage for small and medium customers [71][73] Question: Pricing environment and deferred volumes - Management noted that the pricing environment remains rational, with improvements in yield growth across various segments [102][105]