WASHINGTON, DC – The U.S. Postal Service announced its financial results for the first quarter of fiscal year 2026 (Oct. 1, 2025 – Dec. 31, 2025). Controllable income, which excludes certain expenses that are not controllable by management, was $350 million for the quarter, compared to $968 million for the same quarter last year.
Total operating revenue was $22.2 billion for the quarter, a decrease of $264 million, or 1.2 percent, compared to the same quarter last year. The decrease was due largely due to declining volumes in our First-Class Mail, Shipping and Packages, and Marketing Mail categories, partially offset by price increases for these same categories.
First-Class Mail revenue increased $68 million, or 1.0 percent, on a volume decline of 702 million pieces, or 6.1 percent, compared to the same quarter last year. Shipping and Packages revenue decreased $23 million, or 0.2 percent, on a volume decline of 243 million pieces, or 12.1 percent, compared to the same quarter last year. Marketing Mail revenue decreased $126 million, or 2.7 percent, on a volume decline of 1.8 billion pieces, or 10.9 percent, compared to the same quarter last year.
Total operating expenses increased $1.0 billion, or 4.6 percent, to $23.5 billion for the quarter, compared to the same quarter last year. The overall increase in operating expenses was primarily due to the impact of discount rates on workers’ compensation costs, and increases in retiree health benefits costs, other operating costs, and transportation costs. Compensation and benefits, our largest expense component, was relatively flat compared to the same quarter last year.
“While we are pleased that the holiday quarter was quite strong with regard to service improvement as measured by our on-time delivery scores and other important service performance metrics, we continue to face difficult systemic financial and business model headwinds,” said Postmaster General David Steiner. “To right our financial ship, we are aggressively pursuing growth strategies – which include creating new opportunities for businesses to leverage our vast last-mile delivery network – and driving greater efficiencies throughout our operations. We are convinced that these efforts, if combined with needed regulatory, administrative, and legislative changes, can meet the needs of the American public and return the Postal Service to long-term financial stability and strength.”
Net loss for the quarter under generally accepted accounting principles (GAAP) totaled nearly $1.3 billion, compared to net income of $144 million for the same quarter last year. This change to net loss is attributed to an increase in workers’ compensation expense of $634 million, operating revenue decrease of $264 million, an increase in retiree health benefits expense of $175 million, higher other operating expenses of $169 million, and higher transportation expenses of $43 million.
The following table reconciles GAAP net (loss) income to our non-GAAP financial measure for the years ended December 31, 2025 and 2024:
“The financial results for the quarter continue to reflect the realities of our mandated cost structure and the ongoing decline in volume. We were able to offset these constraints to some degree by aggressively managing the costs under our control, including a 9 million work hour decrease during a successful peak season, which kept our largest expense component relatively flat,” said Chief Financial Officer Luke Grossmann. “But for our strategy to truly succeed, further reforms and regulatory changes will be required on top of organizational efforts to find additional operational efficiencies and to develop revenue strategies and innovative products and offerings that generate growth.”