- Operating revenue was $22.2 billion, a 1.2 percent decrease compared to same quarter last year
- Controllable income was $350 million, down $618 million from same quarter last year
- Net loss increased nearly $1.4 billion compared to same quarter last year
- Postal Service has petitioned regulator to modify the Market Dominant ratemaking system to provide additional pricing authority and to repeal requirement for minimum remittance payments
WASHINGTON – The U.S. Postal Service today 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.
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.
“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.”
The Postal Service is in pursuit of further administrative and legislative reforms to remedy outdated and unwarranted financial and regulatory burdens that negatively impact our liquidity as we continue to strive to serve our customers in a fiscally responsible manner. These reforms include: changes in retiree pension benefit funding rules for the Civil Service Retirement System (CSRS) benefits, diversification of pension asset investments, raising the statutory debt ceiling, and workers’ compensation administration reform.
The Postal Service also recently petitioned the Postal Regulatory Commission (PRC) for certain regulatory changes, including: modification of the Market Dominant ratemaking system through the elimination of the price cap and adoption of a regulatory monitoring ratemaking system in order to achieve the objectives of forging a sustainable path; alternatively, if the price cap is maintained, re-baselining the rates to ensure they are compensable while also maintaining adjustment factors to ensure that the system is flexible enough to deal with external circumstances that may arise; and repeal of the minimum remittance payment associated with retiree pension benefit amortization payments required by our regulator with regard to our retirement-based rate authority. Overall, we continue to urge the PRC to undertake a holistic review of our rate setting systems and make our financial sustainability a priority moving forward, as required by law.
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.
“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.”
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