A global delivery giant that moves packages, freight, and documents overnight to more than 220 countries. It began in 1971 when founder Frederick Smith, fresh from Yale and Vietnam, launched Federal Express with a hub-and-spoke plan he first sketched in a college paper. Customers soon shortened the mouthful name to FedEx and even turned it into a verb—"just FedEx it to me."
10-K · Fiscal year ended May 31, 2026 · SEC filing ↗
FedEx FY2026 revenue rose 8% to $94.7B as Freight spin-off costs cut into earnings
FedEx spun off on June 1, 2026, ending its LTL business as a reportable . rose 8% to $94.7B and rose 5% to $5.5B as package yield gains and cost cuts at offset $744M in costs and a 59% drop in Freight profit. The company now runs as two express segments with a leaner cost base and a 19.9% Freight stake.
Key takeaways
FedEx completed the tax-free of on June 1, 2026, retaining a 19.9% stake and realigning into Express U.S. Domestic and Express International segments, with moved into Express International.
Consolidated grew 8% to $94.7B, led by revenue up 9% on improved package base yields, higher U.S. domestic volumes, and fuel surcharges, while revenue dipped 1% on lower shipments.
increased 5% to $5.5B, with operating income up 21% to $5.9B, but operating income fell 59% to $616M due to costs and reduced demand.
Section summaries
Business
FedEx operates an integrated global express transportation network, realigned into Express U.S. Domestic and Express International segments following the FedEx Freight spin-off.
⌄
Effective June 1, 2026, FedEx realigned into two reportable segments: Express U.S. Domestic and Express International, with moved into Express International.
costs totaled $744M in FY2026 and business optimization costs were $366M, down from $756M in FY2025, reflecting progress on and international transformation programs.
rose to $8.9B and fell to $3.8B; the company expects calendar 2026 capex of $3.9B and $1.0B in structural cost reductions from optimization initiatives.
rose 16.9% to $22.8B at May 31, 2026 while cash and equivalents rose 55.9% to $8,008M, and rose 11.6% to $29.8B.
What changed
The flagged since FY2024 closed by the June 2026 target; separation costs totaled $744M in FY2026 versus $213M incurred in the first half, and FedEx retained a 19.9% stake.
rose 21% to $5.9B in FY2026, continuing the yield-and-cost-driven recovery seen after the September 2024 USPS contract expiration that earlier filings flagged as a margin risk.
fell 59% to $616M in FY2026 after an 18% FY2025 drop, confirming the weak industrial demand and charge trajectory earlier flagged as things to watch.
and delivered $1.0B in targeted structural cost reductions for FY2026, with business optimization costs down to $366M from $756M in FY2025 against the ~$2.0B through-2025 target carried from prior filings.
FY2026 rose 8% to $94.7B versus flat $87.9B in FY2025, reversing the prior-year stagnation as package yield gains offset the loss of USPS air volume.
What to watch
's final FY2026 operating results and the 19.9% retained stake value after the June 1, 2026 .
Express U.S. Domestic and Express International in Q1 FY2027 as deferred-service mix shift and wage rates persist without USPS air volume.
Realization of the $1.0B structural cost reductions and calendar 2026 of $3.9B against inflation and industrial demand.
Total and separation cost final tally beyond the $744M incurred in FY2026 and any ongoing indemnity exposure.
The less-than-truckload business was spun off on June 1, 2026, with FedEx retaining a 19.9% stake.
Express U.S. Domestic provides overnight, deferred, ground, and same-day delivery services across the U.S., supported by air hubs in Memphis and Indianapolis and a surface network of ~1,200 facilities.
Express International offers time-definite package and freight delivery to over 220 countries, plus and through .
is transforming U.S. surface operations by consolidating sortation facilities and optimizing , while redesigns the international air network for premium freight growth.
FedEx is pursuing by 2040, with fleet modernization, sustainable aviation fuel offtake agreements, and vehicle electrification as key initiatives.
Macroeconomic weakness, trade policy shifts, and transformation execution risks threaten FedEx's revenue, costs, and strategic goals.
⌄
Persistent declines in U.S. imports and global industrial production since late 2022, along with new tariffs and trade barriers, have reduced shipment volumes and may further weaken demand.
The multi-year and transformation initiatives face significant integration, labor, and cost risks that could delay or reduce expected savings and operational efficiencies.
FedEx's high fixed-cost air network and cyclical exposure make it difficult to adjust to volume shifts, while fuel price volatility and surcharge dependency could shift customers to lower-yield services.
Cybersecurity threats, including ransomware and AI-enabled attacks, pose growing risks to operations and sensitive data, compounded by complex global compliance obligations.
Labor challenges include potential unionization of non-pilot U.S. employees, joint-employer litigation over contractor drivers, and rising costs for benefits and purchased transportation.
The recent Spin-Off of introduces tax, indemnity, and brand-reputation risks, and the company may not achieve its 2029 financial targets or carbon-neutrality goal.
FedEx's global network includes 700 aircraft, 82,000 vehicles, and major hubs like Memphis, with 36 aircraft on order.
⌄
As of May 31, 2026, 's aircraft fleet totals 700, with 697 owned and 3 leased, including 56 Boeing B777Fs and 152 Boeing 767Fs.
In 2026, FedEx retired 10 aircraft (four Boeing 757-200s, one Airbus A300-600, five Boeing MD-11s) as part of fleet modernization.
FedEx has commitments to purchase 36 aircraft through 2030, including 11 Cessna SkyCourier 408s, 15 ATR 72-600Fs, and 10 Boeing B777Fs, with $727 million in deposits.
The primary Memphis hub spans 967 acres with 5.1 million square feet and sorts 484,000 documents/packages per hour, under lease until 2036.
FedEx operates about 1,085 U.S. facilities and 96 Canadian centers for Surface operations, plus over 1,000 international city stations.
runs approximately 2,000 stores and 16 manufacturing plants, while operates over 150 facilities.
FedEx and its subsidiaries are subject to legal proceedings and claims that arise in the ordinary course of their business. See Note 19 of the accompanying consolidated financial statements, which is incorporated herein by reference, for a description of certain pending legal pr…
⌄
FedEx and its subsidiaries are subject to legal proceedings and claims that arise in the ordinary course of their business. See Note 19 of the accompanying consolidated financial statements, which is incorporated herein by reference, for a description of certain pending legal proceedings.
FedEx FY2026 revenue rose 8% to $94.7B, operating income up 5% to $5.5B, driven by package yield gains and cost cuts, partly offset by Spin-Off costs and Freight weakness.
⌄
Consolidated grew 8% to $94.7B, led by revenue up 9% on improved package base yields, higher U.S. domestic volumes, and fuel surcharges, while revenue dipped 1% on lower shipments.
Consolidated increased 5% to $5.5B, with operating income up 21% to $5.9B, but operating income fell 59% to $616M due to Spin-Off costs and reduced demand.
at improved 70 to 7.2%, while margin contracted 970 bps to 7.0%, and consolidated margin edged down 10 bps to 5.8%.
Salaries and benefits rose 8% on higher wages and variable compensation; purchased transportation increased 9% on volume and contracted rates; fuel expense up 7% on higher prices.
Spin-Off costs totaled $744M in FY2026, and were $366M, down from $756M in FY2025, reflecting ongoing and international transformation programs.
rose to $8.9B; fell to $3.8B; the company expects calendar 2026 capex of $3.9B and $1.0B in structural cost reductions from optimization initiatives.
Quantitative and Qualitative Disclosures About Market Risk
Interest-rate risk is limited to fixed-rate debt fair value and pension obligations; foreign-currency risk is managed with derivatives and a 10% dollar strengthening would reduce operating income by ~$541M.
⌄
A hypothetical 10% increase in interest rates would decrease the of fixed-rate by approximately $694 million as of May 31, 2026.
Interest rate changes also affect pension and postretirement benefit obligations, potentially impacting funded status and required contributions.
A uniform 10% strengthening of the U.S. dollar against key currencies would reduce by about $541 million, based on prior-year operations.
Foreign currency fluctuations had a slightly positive impact on in both 2026 and 2025, but may have offsetting effects on demand or pricing.
The company uses derivative financial instruments, including cross-currency swaps and net investment hedges, to manage foreign currency exposure; gains and losses were immaterial in 2026.
Commodity price risk for jet and vehicle fuel is largely mitigated by .
Management and auditor confirm effective internal control over financial reporting as of May 31, 2026.
⌄
Management assessed internal control using COSO 2013 framework and concluded it was effective.
Ernst & Young LLP audited and issued an on the effectiveness of internal control.
The auditor also issued an on the consolidated financial statements for fiscal years 2024–2026.
included the U.S. pension ($27.1B) and ($6.4B).
The audit of pension obligation focused on the discount rate; self-insurance audit focused on actuarial methods for vehicle and workers' compensation claims.