The companies on the Global 500 employ 70.2 million people, and their revenue represents more than one-third of the world’s GDP.

Fortune Global 500

With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

This ranking evaluates how Fortune 500 companies are deploying AI, and how technology leaders value those investments relative to industry peers.

Fortune AIQ 50

The corporations on our annual list of the world's 500 largest companies combined to generate $41.7 trillion in revenue over the past year.

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

The corporations on our annual list posted aggregate revenues of $41 trillion for the second year in a row.

Industries included in the sector are airlines, transportation equipment, logistics, mail and freight delivery, railroads, shipping, and trucking.

Fortune Sector Leaders: Transportation

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 200 companies on this list are transforming industries from the inside out.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

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The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

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The corporations on our annual list of the world’s largest companies delivered a record $41 trillion in aggregate revenues.

The 300 companies on this list are transforming industries from the inside out.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

F500-2023-041-FedEx

The parcel delivery giant reported revenue of $93.5 billion (up 11.4%) and profits of $3.8 billion (down 26.9%). Rajesh Subramaniam succeeded founder Frederick Smith as CEO on June 1, 2022. 
<ul> 
 	<li>In February 2023, FedEx cut 10% of global officer and director jobs, a cost-cutting move prompted in part by diminishing revenue from e-commerce.</li> 
 	<li>Subramaniam announced in April 2023 that FedEx would combine its express and ground businesses. Smith had long defended keeping the units separate, even as analysts and investors urged their merger to simplify operations. Subramaniam says the move will help consumers understand pricing and shipping options more easily.</li> 
 	<li>FedEx is the fourth largest employer on the Fortune 500.</li> 
</ul>

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

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When it comes to supporting employees, flexibility, diversity, and a few extra paid days off go a long way.

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As one of the largest delivery services companies in the U.S., FedEx has employed thousands of workers on the front lines of the pandemic. To support them, the company debuted a new health care advocate program called Choose Well Care Connect, which provides those workers with a single point of contact whenever they have a health care need, helping them navigate a complex system of vendors. It’s also made 24/7 confidential counseling available to all employees, eligible dependents, and household members, even if they aren’t actively participating in the plan. The company facilitates career advancement through the FedEx Learning Center, which offers over 25,000 online courses; Aspire, which provides hourly employees access to experiential learning, coaching, and development opportunities; and direct tuition assistance for higher education. “I greatly appreciate the mentoring and guidance the managers at FedEx offer to everyone,” says one staffer. “I feel there is a sense of caring from management to their employees.”

Fortune 100 Best Companies to Work For

Aggregate sales hit $37.8 trillion last year—an increase of 19%, the highest annual growth rate in the list’s history.

Organizations on this annual list positively impact people and communities across multiple countries.

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World’s 25 Best Workplaces

This year’s Fortune 500 marks the 68th running of the list.

F500 2022-FedEx

The delivery services giant climbed six spots to No. 39 on this year’s Fortune 500. Thanks to an increase in e-commerce during the pandemic; the company predicts its deliveries could exceed 100 million a day in calendar 2022. FedEx will experience an epochal change in leadership on June 1, 2022, when founder and CEO Frederick W. Smith will step down after more than 50 years at the helm. Raj Subramaniam will succeed Smith, who remained the largest shareholder in FedEx as of March 2022, with a stake of about 7.3%.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

WMAC 2021-16-FedEx

Total revenue for the world’s biggest companies fell 4.8% to $31.7 trillion this year—the first decline in half a decade.

G500 135 Fedex

Second only to United Parcel Service in the U.S. package-shipping business, FedEx said COVID-19 affected “virtually all revenue and expense line items” during the final quarter of its latest fiscal year, which ended May 31, 2020, dinging revenues 0.7% to $69.2 billion versus the year prior. Despite the disruption, profits surged an eye-popping 138% to $1.29 billion, nearly rivaling much bigger UPS’s $1.34 billion in profits. The jump is mostly due to earlier costly investments FedEx made to revamp its historically business-centric delivery network so it can better cater to residential customers.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-45-FedEx

Second only to United Parcel Service in the package-shipping business, FedEx inched up two spots to No. 45 on this year’s Fortune 500 list. The company said COVID-19 affected “virtually all revenue and expense line items” during the final quarter of its latest fiscal year, which ended May 31, 2020, dinging revenues 0.7% to $69.2 billion versus the year prior. Despite the disruption, profits surged an eye-popping 138% to $1.29 billion, nearly rivaling much bigger UPS’s $1.34 billion in profits. The jump is mostly due to earlier costly investments FedEx made to revamp its historically business-centric delivery network so it can better cater to residential customers.

For an astounding 13th straight year, Apple claims the top spot in Fortune’s annual ranking of corporate reputation, based on a survey of almost 3,800 executives, directors, and analysts.

This year's Fortune Global 500 generated $33.3 trillion in revenues and $2.1 trillion in profits.

G500-2020-148-FedEx

Second only to United Parcel Service in the package-shipping business, FedEx grew faster than its rival in 2019. The delivery dynamo brought in nearly $69.7 billion in its most recent fiscal year, up 6.5% from FY 2018. Still, FedEx investors despaired over a once marquee customer, Amazon, turning to a competitor. Readying itself for the fight of its life, FedEx spent big sums to revamp its delivery network, known primarily for catering to businesses, to go the “last mile” and drop off boxes on residential doorsteps. Costly investments, in part, caused profits to plummet more than 88%, to $540 million. On a December earnings call, FedEx’s chief financial officer described the hit as “horrific.” But instead of slashing costs, FedEx has swelled its ranks, adding nearly 30,000 more employees over the past year.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-047-FedEx

Second only to United Parcel Service in the package-shipping business, FedEx grew faster than its rival in 2019. The delivery dynamo brought in nearly $69.7 billion in its most recent year fiscal year, up 6.5% from fiscal year 2018—thereby maintaining the No. 47 spot on this year’s list. But FedEx investors despaired over a former marquee customer, Amazon, flipping into a competitor. Readying itself for the fight of its life, FedEx spent big sums to revamp its delivery network, known primarily for catering to businesses, to go the “last mile” and drop off boxes on residential doorsteps. Costly investments, in part, caused profits to plummet 88.2% to $540 million. On a December earnings call, FedEx’s chief financial officer described the hit as “horrific.” But instead of slashing costs, FedEx has swelled its ranks, adding nearly 30,000 more employees over the past year.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

Our 2019 list of the 100 best companies as ranked by their employees. See which companies made the list.

This year's Fortune Global 500 generated $27.7 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

Our 2018 list of the 100 best companies as ranked by their employees. See which companies made the list.

This year's Fortune 500 marks the 64th running of the list.

We surveyed tens of thousands of young employees to create this list of millennials’ favorite workplaces.

best-workplaces-millennials-2018-FedEx

Employees say: 
 
&nbsp; 
 
"It is quite unique how well FedEx takes cares of its employees. I have never worked somewhere where I have been paid so well and been given so many benefits, even as a part-time employee. I feel taken care of and that the company respects what I do." 
 
&nbsp; 
 
"Since I started working for FedEx Freight as a part-time dock worker over four years ago. I have received nothing but great advice, as well as great opportunities to move up. I climbed my way to management with the support of my uppers. The co-workers I have met along the way have been the friendliest with my best interests in mind. I have never worked for a company that I've been so proud of." 
 
&nbsp;

100 Best Large Workplaces for Millennials

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

Our 2017 list of the 100 best companies as ranked by their employees. See which companies made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune Global 500 generated $27.6 trillion in revenues and $1.5 trillion in profits.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014. Together, this year's Fortune Global 500 employ 65 million people worldwide and are represented by 36 countries.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Best Companies

Years on list

U.S. employees

U.S. job openings

Year founded

Perks

100% health coverage

Unlimited sick days

Telecommuting

Job sharing

Subsidized childcare

Compressed work weeks

Fully-paid sabbaticals

On-site fitness/subsidized gym

On-site medical care facility

Non-discrimination policy includes sexual orientation

Sick days for part-timers

College tuition reimbursement

Student loan debt repayment

Paid Time Off: Full-time Employees

# Sick days

Hiring/staffing (past 12 Months)

# of job applicants

Company Info

Industry

Founded

City

Sites

Web Address

Millennials In The Organization

# of millennial employees

Millennials as % of total workforce

Sector

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Strongest Dimension

Previous rank

State

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

FedEx, founded in 1971, is a multinational delivery services company known for its overnight shipping and pioneering tracking systems. Headquartered in Memphis, FedEx operates in more than 220 countries and territories, providing an array of services including express transportation, freight, e-commerce, and business solutions.

Q4 2026

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Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

FedEx (FDX): Company Profile, Stock Price, News, Rankings

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FedEx

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Good day, welcome to the FedEx fourth quarter and fiscal 2026 earnings call. All participants are in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to FedEx Vice President of Investor Relations, Jeni Hollander.

Good afternoon, welcome to FedEx Corporation's fourth quarter earnings conference call. The fourth quarter earnings release and stat book are on our website at investors.fedex.com. This call and the accompanying slides are being streamed from our website. Today's earnings release includes segment results for FedEx Freight given the separation occurred on June 1, after Q4 FY 2026 ended. Additionally, as a result of the spinoff, we will not cover FedEx Freight results in detail in our prepared remarks or Q&A session. FedEx Freight will host a separate earnings call on June 25. During our Q&A session, callers will be limited to one question to allow us to accommodate all those who would like to participate. Certain statements in this conference call may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For additional information on these factors, please refer to our press releases and filings with the SEC. Today's presentation also includes certain non-GAAP financial measures. Please refer to investors.fedex.com for a reconciliation of the non-GAAP financial measures discussed on this call to the most directly comparable GAAP measures. Joining us for prepared remarks on the call today are Raj Subramaniam, President and CEO; Brie Carere, Executive Vice President and Chief Customer Officer; and Claude Russ, Enterprise Vice President and Interim CFO. I will turn the call over to Raj.

Thank you, Jeni. A heartfelt thank you to Team FedEx for a very strong finish to FY 2026, a year of tremendous value creation. Each quarter of this fiscal year, we delivered on our financial commitments while supporting our customers with excellence. Our results demonstrate that we are growing revenue in the most premium segments of the global economy. As trade patterns evolved, we flexed our network to keep supply chains moving. Our network transformation, via Network 2.0, Tricolor, and opportunities in Europe, is driving better density and efficiency. This progress, combined with a sharp focus on structural cost reduction, enabled us to exceed the $1 billion transformation-related savings target that we shared at the start of the fiscal year. Our data and technology advantage is helping us win new business, improve the customer experience, and create new value.

The momentum you're seeing across our business is proof that our strategy is working. It's translating to favorable financial outcomes, including very strong free cash flow and FY 2026 results that far exceeded our initial FY 2026 outlook. Our results also surpassed the high end of the revised outlook range we provided in March. Additionally, we completed the spinoff of FedEx Freight on June 1st, positioning both companies for success as separate, focused industry leaders. I want to thank the teams that executed the spin-related work to achieve this milestone, especially given how well they also maintained focus on our day-to-day core operations. I'm confident FedEx Freight is extremely well-positioned as an independent company, and I wish John Smith and the Freight team the very best. Now turning to our full-year consolidated results on a year-over-year basis.

We grew both revenue and adjusted operating income by 8%, with significant adjusted operating income growth at Federal Express Corporation or FEC, partially offset by a decline at FedEx Freight. At FEC, we grew full-year revenue by 9% and adjusted operating income by 17%. With 60 basis points of year-over-year adjusted margin expansion, we delivered a 7.7% adjusted operating margin, the highest margin rate in four years, reflecting the structural improvements we have made to the business. What also stands out is that we achieved these results despite several significant headwinds, particularly global trade policy changes and the grounding of our MD-11 aircraft fleet. We began safely returning the MD-11s to service last month, working in lockstep with Boeing, the FAA, and the NTSB. I appreciate the efforts of our flight operations, technical operations, and airline safety teams, whose work enabled four MD-11s to resume flight to date.

We expect to have the full fleet back in service before peak. In Q4, on a consolidated basis, we grew revenue 13% and adjusted operating income 3%, led by FEC and partially offset as expected by a decline in adjusted operating income at Freight. At FEC, revenue increased 14%, driven by yield and volume strength across almost all of our services. This demonstrates our deliberate strategy to grow in the higher-yielding segments of the market. Q4 adjusted operating income at FEC increased 13%. The revenue strength I just mentioned offset the impact of higher fuel costs and variable compensation. Against this backdrop, today we are initiating an outlook for calendar year 2026 as we transition to a December 31 fiscal year end. Based on our current assumptions, we expect calendar year 2026 adjusted earnings from continuing operations to be $16.90-$18.10 per diluted share.

This range implies 20% adjusted EPS growth in the June through December transition year, highlighting the momentum in our business. We remain firmly on track to achieve our Investor Day commitments for 2029 with clear proof points in the quarter. B2B services drove the majority of our quarterly revenue growth, supporting high profit flow-through. I'm especially encouraged by our progress and pipelines in the key healthcare, automotive, aerospace, and data center verticals. Brie will share highlights shortly. We successfully advanced Network 2.0 in Q4. By the end of this month, about 45% of eligible volume will flow through nearly 490 Network 2.0 optimized stations, rising to 65% before peak. At that point, as we have done in the past two years, we will pause implementation until early 2027, helping us set up for a very strong peak.

We remain on track to achieve $1 billion of Network 2.0 and associated One FedEx savings by the end of this calendar year, and the full $2 billion by the end of CY 2027. In Europe, we achieved our 12th consecutive quarter of international revenue share gains, driven by our strong value proposition and improving service levels. Leveraging our U.S. surface playbook in Europe, we recently announced a strategic investment to expand our technologically advanced and strategically located road hub in Duiven, Netherlands, supporting continued growth in the premium international parcel and freight markets. We believe Europe remains our largest international profit improvement opportunity, and our transformation plans remain on track. Across the globe, supported by our Tricolor strategy, we continue to see strong international air freight growth as we further increase our share in this $90 billion global market.

You've heard me speak about the strength of our data when transporting more than $2 trillion worth of goods each year and delivering nearly 18 million packages each business day. We have embedded AI into our drive process, enhancing the rigor with which we work. Our data and how we deploy it is helping to drive significant innovation across the company, driving differentiation and improving the customer experience. Our ability to leverage this data has earned us the distinction of being named to Fast Company's Most Innovative Companies list for 2026 for our efforts to reshape global trade, simplify the cross-border experience, and strengthen economic resilience for businesses and consumers worldwide. Before I close, I want to acknowledge the agreement we recently reached with our pilots on a new contract.

This agreement marks a pivotal step forward, uniting our team behind a shared strategy for success as we continue to modernize our global operations and transform the business. Overall, our FY 2026 results demonstrate the power of our unique global industrial network, strong value proposition, and an outstanding execution of our profitable growth strategy, which is translating to strong free cash flow and value creation. I have never been more confident on our path ahead, and I'm excited to build on this momentum in the weeks and months ahead. Now, over to Brie.

Thank you, Raj. I want to commend Team FedEx for a year of outstanding execution on our commercial strategy, including a very strong finish to fiscal year 2026. With a focus on premium B2B vertical and high-value B2C, we grew volume and yield every quarter of fiscal year 2026. As a result, we profitably increased revenue by $7 billion compared to last year. A truly impressive achievement. We have continued to help our customers navigate a very dynamic and complex environment. The implementation of global trade policy changes, geopolitical unrest in the Middle East, and the IEEPA refund process. In April, we began to file claims with CBP on behalf of our customers, and beginning in August, we will be passing these refunds through to our customers. Turning now to our Q4 results.

FEC revenue was up 14%, supported by yield strength across all services and volume growth aligned with our commercial strategy. This growth includes a 5 percentage point benefit from fuel price-driven surcharge revenue. As a reminder, fuel was not a material driver of our adjusted operating income, given the higher expense. In Q4, we grew U.S. domestic volume by 3% year-over-year, led by Ground Commercial and Home Delivery strength. Aligned with our deliberate strategy to focus on parts of the market that value our competitive differentiation, FedEx Ground Economy volume declined about 5%, a trend we expect to continue for the remainder of FY 2026. As anticipated, U.S. priority volume continued to grow, with a sequential deceleration in the growth rate as we lap the onboarding of new healthcare business in Q4 of fiscal year 2025.

International export package volumes were up for the second consecutive quarter, growing 5% year-over-year. We supported changing trade patterns by flexing our network, enabling double-digit international export revenue growth on the Asia-Europe lane, within Asia and U.S. outbound lanes in Q4. Strength in Asia was a key driver of our international priority volume. A 9% decline in international domestic volume is part of our European improvement strategy, where we are intentionally focused on growing higher-yielding cross-border volume. We continue to win share in the international export freight market enabled by Tricolor, with average daily pounds up 12% year-over-year. FEC package yield increased 11% in Q4. While fuel was a meaningful driver, base yield supported by our value proposition and service remained very healthy.

In fact, the significant majority of our incremental profit from yield was due to base price increases, demonstrating our disciplined approach to revenue quality. Within our U.S. domestic services, we grew yield 10%, driven by fuel surcharges, higher base rates, and favorable service mix. International export package yields increased 10%, driven by fuel surcharges, higher weight per shipment due to mix shift, and favorable currency movements. We are very encouraged by our progress and retention rates across key high-value B2B and specialized B2C verticals. With our small and medium business customers, fiscal year 2026 was a year of remarkable strength. Our seamless digitally-enabled experiences complement our loyalty program and physical network well. About 40% of our U.S. micro and small business volume is tendered at retail, providing a frictionless touch point.

The vast majority of our small and medium revenue comes from direct shipper relationships on FedEx contracts, not through digital resellers. So we can truly demonstrate our differentiation. This approach supports both revenue quality and customer retention. As part of our continued focus on the $80+ billion healthcare transportation market, earlier this month, we launched FedEx Life Sciences, a dedicated organization supporting the increasingly complex movement of healthcare shipments and strengthening our end-to-end pharma solution. While the formal launch of this organization is new, our capabilities are backed by years of strategic investment in healthcare and life sciences. This includes specialized Life Science Centers across Europe and APAC, dedicated quality resources, and the development of global healthcare corridors connecting key markets. Our value proposition continues to expand, anchored by the recent launch of a temperature-controlled corridor connecting Ireland to our U.S. network.

Exiting fiscal year 2026 with nearly $10 billion in healthcare transportation revenue, I am confident our new suite of life sciences services will further strengthen our ability to support complex, time-critical, and highly regulated healthcare supply chains. The AI and data center space is an emerging and rapidly scaling growth engine for us, delivering double-digit revenue growth. Rather than a narrow vertical, this space represents a horizontal ecosystem. We are capturing demand across the entire value chain, from traditional hyperscalers to the industrial and power infrastructure that support these massive build-outs. What differentiates FedEx here is our unmatched responsiveness and our premium capabilities Leveraging network priority, near real-time monitoring, and white glove handling. We are getting very positive feedback from our customers on our agility. As a recent example, a major global technology customer had a last-minute critical need to move multiple pallets of tech infrastructure to the U.S.

Through seamless cross-regional collaboration, we executed flawlessly. This example is not a one-off. We are seeing these initial time-critical shipments convert quickly into larger, repeatable revenue streams. Looking ahead, we believe continued enhancements to our value proposition and our global air freight portfolio will strengthen our competitive positioning across all our high-value B2B-centered verticals. Let's now turn to our revenue outlook for CY 2026 and using a CY 2025 revenue baseline of approximately $82 billion. We assume current volume and yield trends continue, supporting revenue growth of approximately 11%, including approximately three percentage points for assumed fuel price-driven surcharge benefit. This equates to revenue growth of 10% in the June through December transition year. During that period, we expect broad-based growth across services with deceleration in the U.S. domestic growth rate as we lap last year's strength from new business onboarding.

We also expect a low single-digit volume decline within FedEx Ground Economy and high single-digit decline within international domestic services, given our focus on higher yielding parts of the market where customers deeply value the solutions that FedEx can deliver. We expect trends across our international export services to largely be in line with Q4. Our fiscal year 2026 results demonstrate the strength and durability of our commercial strategy. Congratulations again to our Team FedEx for delivering outstanding results across the entire globe, supporting our customers with innovation and reliability, growing in key high-value verticals and delivering profitable revenue growth. We believe our value proposition is industry-leading, and it will enable us to sustain this momentum as we continue supporting critical supply chains globally. Now over to Claude.

Thanks, Brie. Our Q4 results reflect the consistent execution we have demonstrated all year. We took bold actions to manage capital spending. We executed our business plan to deliver strong adjusted operating income growth. As a result, we delivered historic levels of adjusted free cash flow. These results demonstrate our momentum toward our calendar year 2029 targets. We continue to unlock significant stockholder value. On consolidated basis in FY 2026, we delivered $20.24 in adjusted earnings per share, growing adjusted earnings for seven consecutive quarters. We achieved this while successfully navigating significant headwinds from the global trade environment, variable compensation, the grounding of our MD-11 fleet, and lower FedEx Freight results. Consolidated adjusted operating income improved $491 million or 8% for the full year, despite a nearly $400 million headwind from FedEx Freight results.

FEC posted higher FY 2026 results year-over-year, with adjusted operating income up $940 million on almost $7 billion in revenue growth. The strong flow-through to the bottom line demonstrates the powerful operating leverage in our business. In Q4, on a consolidated basis, we delivered $6.31 in adjusted EPS above the high end of our outlook range driven by FEC. The strong commercial execution in premium verticals that Brie mentioned, paired with transformation-related savings, enabled these results. At FEC in Q4, adjusted operating income increased by $214 million or 13%. Our adjusted operating income performance was driven by base yield momentum across most services, increased U.S. and international export volume, and continued structural cost reductions. These drivers were partially offset by operating expense increases, which included increased variable incentive compensation accruals and direct trade-related costs.

Our base yield growth was robust, which combined with sustained volume growth, shows the underlying health of our financial results. While a price-driven increase in fuel surcharges drove higher revenue, it was not a material driver of our adjusted operating income for the quarter. FedEx Freight Q4 adjusted operating income fell by $114 million and adjusted operating margin declined 570 basis points. As we mentioned earlier, due to the June 1 spinoff, the FedEx Freight leadership team will provide additional commentary around their Q4 results during their earnings call on June 25th. Our fourth quarter results include a non-cash impairment charge of $23 million related to our decision to permanently retire an additional 10 jet aircraft, including 5 MD-11s. Over the last four years, we have removed a net 34 jet aircraft from our fleet, which is an 8% reduction versus FY 2022.

These actions are aligned with our Tricolor Network 2.0 strategies to drive improved efficiency and density across both our global air network and North American surface operations. Moving to capital allocation. In FY 2026, CapEx was $3.8 billion, $300 million below the outlook we provided in March. CapEx as a percentage of revenue is 4%, the lowest level since FedEx Corporation was formed. As a reminder, we target CY 2029 capital intensity to remain at approximately 4% of revenue. This is a durable trend as we anticipate continuing to leverage our modernized network. Additionally, FY 2026 was only the third fiscal year in our history where CapEx was lower than depreciation and amortization, a result of our continued capital discipline and network optimization. In FY 2026, we achieved $4.7 billion in adjusted free cash flow. This is up $800 million versus FY 2025.

This year's free cash flow represents nearly 100% conversion from adjusted net income, another monumental achievement. We are laser-focused on unlocking stockholder value through strong free cash flow generation. Our free cash flow growth supports our capital returns framework. We recently increased our dividend by 5% after adjusting for the FedEx Freight spin-off, making this the sixth consecutive annual dividend increase. During the remainder of CY 2026, we plan to repurchase up to $1 billion worth of shares opportunistically as we leverage continued balance sheet flexibility and free cash flow generation to offset dilution from equity compensation, as discussed at our Investor Day. As a reminder, we are now transitioning to a calendar year reporting cycle. Today, we will orient our forward-looking commentary to align with this new framework. In CY 2026, we expect CapEx to be approximately $3.9 billion.

We anticipate contributing $475 million to our pension plan, which was 105% funded as of May 31. We expect robust levels of free cash flow for CY 2026, are fully committed to realizing our targeted $6 billion in adjusted free cash flow in CY 2029. Going forward, we will continue a balanced approach to capital allocation across dividends, share repurchases, pension contributions, and strategic growth investments. Now I'll walk you through our expectations for CY 2026, which includes the five months we've already reported, as well as the June through December transition year. As Brie shared, we are currently planning for consolidated CY 2026 revenue growth to be approximately 11%, including about three percentage points assumed fuel price-driven surcharge benefit. We expect this outlook to be supported by continued momentum within base pricing and increased demand for premium B2B and high-value B2C services.

This translates to an adjusted EPS range of $16.90-$18.10, with a midpoint of $17.50. We will finalize the CY 2025 adjusted EPS baseline by mid-August when we release an 8-K filing with our recasted and resegmented financials for CY 2024 and CY 2025. For preliminary comparison purposes, we assume a $15 CY 2025 adjusted EPS baseline, which excludes FedEx Freight results. Our recasted financials, including the CY 2025 baseline, reflect continuing operations only and are burdened with stranded costs previously allocated from FEC to FedEx Freight through intercompany charges. Our CY 2026 adjusted operating income bridge shows the key year-over-year elements embedded in our outlook for continuing operations. This bridge reflects adjusted operating income of $5.8 billion, equivalent to $17.50 of adjusted EPS, the midpoint of our range. Our assumed CY 2025 adjusted operating income starting point was $5 billion, which includes approximately $350 million of stranded costs.

In this scenario, FEC volume-related revenue, net of variable costs, is expected to be a $600 million tailwind in CY 2026. This is driven by a continuation of strong trends we have seen in the first five months of the year as our commercial team continues to capture increased demand from the most premium verticals of the global economy. With respect to FEC yield, we expect a $3.7 billion tailwind. This demonstrates our ongoing commitment to revenue quality and improved base pricing. Consistent with prior practice, the yield bar does not factor in revenue from the fuel price-driven surcharge benefit, which we assume will be neutral to full-year adjusted operating income results. It also does not factor in revenue from currency exchange rate effects. Moving to anticipated headwinds.

For base expense increase, we assume $2.6 billion at a higher cost year-over-year related to higher wage and purchase transportation rates and other inflationary factors. This also incorporates ongoing structural cost reduction efforts, including savings from our Network 2.0 transformation. Additionally, we expect variable compensation to be an $800 million headwind, reflecting our commitment to rewarding employees for their outstanding performance. Context, we have already incurred most of this expected CY 2026 headwind in the first five months of the year. Only $100 million of this headwind is incremental to the remaining seven months of CY 2026. We are also assuming a $200 million headwind from the ratification of our new pilot agreement and a $100 million benefit from the removal of stranded costs related to the spin-off of FedEx Freight.

Against the $600 million base of costs that we previously allocated to Freight, we have conveyed approximately $250 million directly to FedEx Freight. As noted on the CY 2026 bridge slide, we expect to remove about 30% of the remaining stranded costs this calendar year through transition services agreements and cost management. Regarding the near term, we expect the revenue trends we saw in Q4 FY 2026 to continue into the first four months of our June through December transition year, with U.S. domestic growth rate decelerating as we continue to lap last year's strong trends. Given the reporting calendar change, our next earnings release on October 28th will cover our June through September 2026 results. In addition to shifting to a calendar year reporting cycle, we are also re-segmenting our results to cover Express U.S. Domestic, Express International, Corporate and others.

At the midpoint of our CY 2026 outlook range, we expect our seven-month transition year consolidated adjusted operating income to be $3.8 billion, up 19% year-over-year. We expect the majority of this adjusted operating income to fall in Q4, in line with our recent higher peak profitability trends. We also anticipate strong performance in June based on current trends, and note the June 29th effective date of the new pilot contract. We expect both U.S. domestic and international profits to improve year-over-year in the transition period. Transition year assumptions translate to an estimated $11.30 of adjusted EPS for the June through December 2026 period, representing 20% year-over-year growth. We forecast our CY 2026 average share count to approximate our Q4 FY 2026 average share count. In closing, our FY 2026 results indicate that our strategy is working. We are on track to achieve our CY 2029 targets.

We plan to continue driving profitable growth through our superior value proposition while simultaneously lowering our cost to serve. With that, let's open it up for questions.

We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Please limit yourself to one question. At this time, we will pause momentarily to assemble our roster. Our first question today comes from Chris Wetherbee with Wells Fargo. Please go ahead.

Hey, thanks. Good afternoon, guys. Appreciate that outlook for EPS so we can level set the numbers on a calendar basis. I guess maybe the question is around the relative profitability. Obviously expecting a pretty decent acceleration in the stubbed seven-month period for the rest of the calendar year. Can you talk a little bit about sort of the cost that maybe were lingering in the last year, I guess, fiscal fourth quarter, and maybe how you see those sort of working their way out as we see that growth re-accelerate over the course of the next several months. Kind of just getting a sense of why the relative growth in fiscal fourth quarter was a bit lower than what we're expecting to see over the coming several months.

Thanks, Chris, for that question. There are two things to think about here. It's really from an overall perspective, the variable compensation headwind we see in the fourth quarter of FY 2026, that really dissipates. That becomes only a headwind of $100 million in the transition year. You also have to really rethink about the seasonality. Overall, going forward from a calendar year basis, that Q4 will be our strongest seasonal quarter. In addition to that, just from an overall headwind perspective, we'll have fewer headwinds in that transition year. The key to remember here is the ongoing base business, the momentum we have in that. That base business, both from a revenue growth and our ongoing cost management, we feel strong about that, and that's reflected in our 19% at the midpoint of the range, op profit growth and 20% EPS growth.

The next question is from Tom Wadewitz with UBS. Please go ahead.

Good afternoon. Thanks for the perspective on things. I wanted to, I guess, get a sense of how much FEC margin improvement are you looking at in kind of calendar year 2026, what's the base look like? What's the improvement look like? I don't know if you have a thought on stranded costs. You said that's coming out partially in the calendar 2026. Does that come out fully in 2027, or how do we think about kind of the remaining piece of the $600 million? Appreciating any thoughts on those two. Thank you.

Appreciate the question. First, from a margin perspective, we are confident that the margin in the transition period, both the calendar year and the transition period, will improve year-over-year. It'll improve a little bit more year-over-year in the transition year than it does in the calendar year because of the variable comp headwinds in the first five months of the year. We're confident in margin improvement during that period. On the stranded cost piece, yes, we're confident that we will, going from that starting point of $600 million, we've already conveyed $250 million of that in form of employees and vendor costs from a starting point perspective. The $350 million starting point in that CY 2025 starting point, we're confident we'll get $100 million of that out during CY 2026.

I don't expect to be talking about stranded costs past CY 2027. From an exit rate perspective of CY 2027 is when we're confident we'll mitigate the remaining stranded costs.

The next question is from David Vernon with Bernstein. Please go ahead.

Claude, I just wanted to come back and make sure I understood the cadence here. 1,130 from June to December. As we think about that exit rate accelerating, is that just a function of the timing of the variable incentive comp, or are we seeing an actual acceleration in the underlying results of the business? That's kind of the first part of the question. The second part of the question around a balanced approach to capital allocation, just given the size of the cash balance right now, are you and the board or is the management of the board having any conversations with the board about maybe doing something a little bit less balanced to kind of work some of that cash off?

I appreciate the question. I'll go first back to the question about the underlying momentum of business is strong. We're confident both on the revenue side and the expense side. Like I said originally on a seasonality perspective, we've got some nuances here. We're actually, when you think about it, June and when we report our results in October, it'll include the month of June, which is the last month of the second quarter. It's very strong. It's got 22 operating days. It's got five Mondays. The pilot contract will not have started yet. We expect very strong absolute performance in June. Q3 will traditionally be our weakest quarter from an absolute basis, just from a seasonality perspective.

From an underlying year-over-year growth perspective, we're confident in the momentum of the business driven by both the continued revenue momentum as well as the expense management. To your question on capital allocation, it's a nice issue to have. We are committed to a balanced approach on capital allocation. This strong cash position does give us flexibility. As I said in my prepared remarks, I increased our dividend by 5% post-spin, and we do plan to repurchase up to 1 billion shares in the remainder of CY 2026. A reminder, we will also use a portion of this cash to fund our investment in InPost, which we expect to close during TY 2026. As we've said previously, we're committed to using the dividend from the Freight spin-off in a manner consistent with preserving the tax-free nature of the transaction and maintaining a leverage-neutral balance sheet position.

I'm not going to give you kind of the detailed playbook beyond CY 2026, I am excited about the balanced approach, as well as bringing the same level of discipline and rigor to the balance sheet and shareholder returns that we've been delivering operationally and on our P&L. Our goal will be to deploy cash to enhance shareholder returns.

FedEx (FDX) Q4 2026 Earnings Call Transcript

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