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May 31, 2025
FedEx Q4 2025 Earnings Report
FedEx delivered strong Q4 results with higher earnings and operating margin, concluding FY25 with improved profitability and lower structural costs.
Key Takeaways
FedEx closed Q4 FY25 with solid financials, achieving $2.2B in DRIVE cost reductions and higher adjusted EPS, despite persistent operational challenges.
Adjusted EPS reached $6.07 and GAAP EPS was $6.88.
FedEx achieved $2.2 billion in structural cost reductions for FY25.
Q4 operating income rose to $2.02 billion on an adjusted basis.
10.9 million shares were repurchased during FY25, worth $3.0 billion.
Forward Guidance
FedEx expects modest revenue growth and continued cost discipline in FY26 while targeting $1B in permanent cost reductions.
Positive Outlook
- Targeting $1 billion in cost savings from DRIVE and Network 2.0.
- Capital spending for FY26 planned at $4.5 billion.
- Dividend raised 5% to $5.80 per share for FY26.
- Non-GAAP EPS guidance for Q1 FY26 between $3.40 and $4.00.
- Disciplined capital management and continued transformation focus.
Challenges Ahead
- Revenue expected to grow only flat to 2% YoY in FY26.
- Lower pension contributions planned ($600M vs. $800M in FY25).
- Challenges persist with USPS contract expiration.
- Headwinds from higher transportation and wage costs.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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