The U.S. Postal Service announced its financial results for the first quarter of fiscal year 2025 (Oct. 1, 2024 – Dec. 31, 2024). Controllable income, which excludes certain expenses that are not controllable by management, doubled to $968 million for the quarter, compared to $472 million for the same quarter last year.
Net income for the quarter was $144 million due in substantial part to the success of strategic initiatives under the Delivering for America plan, compared to a net loss of $2.1 billion for the same quarter last year. This increase in net income is attributed to an operating revenue increase of $885 million, transportation expense reductions of $326 million, and favorable non-cash workers’ compensation adjustments of nearly $1.8 billion, partially offset by increased compensation and benefits expense of $618 million.
USPS said that while significant progress has been made on the Delivering for America plan, the success of the plan still requires further administrative and legislative reform to remedy the financial and regulatory burdens that negatively impact the full achievement of our legislated business model. These include: change in retiree pension benefit funding rules for the Civil Service Retirement System (CSRS) benefits, reconsideration of withdrawal and mortality assumptions for retiree pension liability calculations, diversification of pension assets, raising the statutory debt ceiling, and workers’ compensation administration reform.
“We are encouraged by our strong revenue and cost control trajectory, as we continue to implement the Delivering for America transformation and modernization plan, which contributed to our net income during the quarter,” said Postmaster General Louis DeJoy. “By steadily improving our product portfolio, we are increasing our competitive position in the shipping marketplace. We are also expanding the capability and efficiency of our operations through our network modernization and by rebalancing our workforce through the recent retirement incentives offered to certain eligible employees. This combination of factors demonstrates that the Postal Service is making strides toward financial sustainability and that we are taking concrete actions to make further improvements.”
Total operating revenue was $22.5 billion for the quarter, an increase of $885 million, or 4.1 percent, compared to the same quarter last year.
Marketing Mail revenue increased $450 million, or 10.9 percent, on a volume increase of 1.1 billion pieces, or 7.0 percent, compared to the same quarter last year. The Marketing Mail increases were driven by the effects of higher revenue and volume associated with the 2024 general election and strategic price increases. Revenue and volume from political and election mail, a component of Marketing Mail, increased by over $360 million and nearly 1.5 billion pieces, respectively, compared to the same quarter last year. Absent the impact of these cyclical mailings, Marketing Mail’s adjusted results for the quarter would have increased revenue $90 million, or 2.2 percent, and decreased volume 357 million pieces, or 2.3 percent, compared to the same quarter last year.
First-Class Mail revenue increased $284 million, or 4.2 percent, on a volume decline of 464 million pieces, or 3.9 percent, compared to the same quarter last year. Shipping and Packages revenue increased $272 million, or 3.0 percent, on a volume decline of 19 million pieces, or 0.9 percent, compared to the same quarter last year. The revenue increase for mail was driven primarily by strategic price increases while the revenue increase for packages was driven by our strong performance in USPS Ground Advantage which has been met with strong acceptance in the marketplace.
Total GAAP operating expenses were $22.5 billion for the quarter, a decrease of $1.3 billion, or 5.7 percent, compared to the same quarter last year. The overall decrease in operating expenses was due to lower transportation costs and favorable non-cash workers’ compensation adjustments, partially offset by inflationary impacts on compensation costs and retirement costs.
“The financial results for the quarter benefit from our efforts to continue to control costs and reinforces our commitment to the full implementation of the Delivering for America plan,” said Chief Financial Officer Luke Grossmann. “Adherence to the tenets of the plan has allowed us to save $326 million in transportation costs in the first quarter, during a robust peak season. While full success of the plan still requires further administrative and legislative actions, the plan delivers the framework for us to better innovate to grow revenue, work more efficiently, and achieve financial sustainability to fulfill our universal service mission over an integrated network to deliver both mail and packages.”
First Quarter Fiscal Year 2025 Operating Revenue and Volume by Service Category Compared to Prior Year
The following table presents revenue and volume by service category for the three months ended December 31, 2024 and 2023:
Selected First Quarter Fiscal Year 2025 Results of Operations and Non-GAAP Measures
This includes controllable income which is not calculated and presented in accordance with GAAP. This non-GAAP measure is calculated as net income (loss) adjusted for costs outside of management’s control, including workers’ compensation expenses caused by actuarial revaluation and discount rate changes and the amortization of the CSRS and Federal Employee Retirement System (FERS) unfunded liabilities. These latter costs not only are largely outside of management’s control but also can fluctuate significantly based on actuarial assumptions and interest rates.
This non-GAAP measure provides meaningful information to assist users of the Postal Service’s financial statements to more fully understand the financial results and assess the Postal Service’s ongoing performance because it excludes items that may not be indicative of, or are unrelated to, underlying operations.
Non-GAAP financial measures should be considered in addition to, and not as an alternative for, the Postal Service’s reported results prepared in accordance with GAAP. This adjusted financial information does not represent a comprehensive basis of accounting.
The following table reconciles GAAP net income (loss) to the non-GAAP financial measure for three months ended December 31, 2024 and 2023:
Financial results in the Form 10-Q are available online.
