A：The highlights of FedEx Corporation's fourth quarter earnings include strong financial results, exceeding the $1 billion transformation related savings target, and continuing the momentum from the business strategy. Results were supported by revenue growth in premium segments, network adjustments for better efficiency, and structural cost reduction. There was a focus on data and technology advantage for winning new business and improving the customer experience. Additionally, the spinoff of FedEx Freight was completed successfully, allowing both companies to operate as separate focused industry leaders.

A：The spinoff of FedEx Freight was completed successfully on June 1, positioning both FedEx and FedEx Freight for success as independent companies. The spinoff allowed FedEx Freight to operate as a separate focused industry leader, and it is led by John Smith and his team. Raj Subramanium expressed confidence in the future success of FedEx Freight and gratitude to the teams who executed the spin-related work.

A：For the full year, FedEx achieved 8% growth in both revenue and adjusted operating income, with significant adjusted operating income growth at FedEx Express Corporation (FEC) partially offset by a decline at FedEx Freight. At FEC, full year revenue grew by 9%, adjusted operating income by 17%, and the adjusted operating margin expanded by 60 basis points to 7.7%. Q4 adjusted operating income at FPC increased by 13%, supported by revenue strength which offset the impact of higher fuel costs and variable compensation.

A：The expected adjusted earnings from continuing operations for calendar year 2026 are between $16.90 to $18.10 per diluted share, which implies 20% adjusted EPS growth in the June through December transition year.

A：The implementation of Network 2.0 is on track, with about 45% of eligible volume expected to flow through nearly 490 network optimized stations by the end of this month, rising to 65% before peak season. FedEx is aiming to achieve nearly $1 billion of Network 2.0 and associated savings by the end of this calendar year and the full $2 billion by the end of the next calendar year.

A：Strategic investments in Europe include a plan to expand the technologically advanced and strategically located road hub in Dova, Netherlands. This is in line with the strategy to grow in the premium international parcel and freight market and represents an opportunity for profit improvement. FedEx is seeing strong international air freight growth and is further increasing its share in the $90 billion global market.

A：The new contract with the pilots is a pivotal step forward, unifying the team behind a shared strategy for success. It signifies progress in modernizing global operations and transforming the business. The FY 26 results underscore the effectiveness of the global industrial network, value proposition, and profitable growth strategy.

A：In response to global trade policy changes, FedEx began filing claims with CBP on behalf of its customers in April and planned to pass the resulting refunds to its customers beginning in August. This demonstrated FedEx's proactive approach to supporting its customers through complex and dynamic market conditions.

A：The projected Q4 revenue growth was 14%, driven by yield strength across all services and a five percentage point benefit from fuel price-driven surcharge revenue. The commercial strategy effectively addressed the challenges posed by global trade policy changes and geopolitical unrest, allowing for a 3% year-over-year growth in U.S. domestic volume.

A：FedEx has made progress in key high-value B2B and specialized B2C verticals with small and medium businesses, demonstrating strength across its customer base and retaining high rates. The company has leveraged seamless, digitally enabled experiences and loyalty programs along with a physical network. Approximately 40% of U.S. micro and small business volume is generated at retail, providing a frictionless touchpoint, and the majority of small and medium revenue comes from direct shippers on FedEx contracts.

A：The purpose of the newly launched FedEx Life Sciences organization is to support the complex movement of healthcare shipments and to strengthen the end-to-end pharma solution for the healthcare transportation market. This organization is backed by years of strategic investment in healthcare and life sciences, including specialized life science centers, dedicated quality resources, and the development of global healthcare corridors.

A：The AI and Data Center Space is serving as a rapidly scaling growth engine for FedEx, delivering double-digit revenue growth. It represents a horizontal ecosystem with demand captured across the entire value chain from traditional hyperscalers to supporting infrastructure. FedEx's strength in this space is attributed to its unmatched responsiveness and premium capabilities, including network priority, near real-time monitoring, and white-glove handling.

A：For fiscal year 26 (Cy 26), FedEx's revenue outlook includes a revenue baseline of approximately $82 billion from the prior year (Cy 25). It anticipates revenue growth of about 11%, with an additional 3 percentage points attributed to assumed fuel price-driven surcharge benefits. The revenue growth is expected to be 10% during the June through December transition year. The growth is expected to be broad-based across services with deceleration in U.S. domestic growth due to lapping prior year strength and a focus on higher-yield parts of the market.

A：The financial highlights for Q4 include adjusted earnings per share growth of seven consecutive quarters, despite facing global trade environment headwinds, variable compensation, fleet grounding, and lower FedEx Freight results. FedEx reported an adjusted operating income improvement of $491 million or 8% for the full year, with adjusted operating income up $940 million on nearly $7 billion in revenue growth.

A：The spin-off of FedEx Freight led to a non-cash impairment charge of $23 million in the fourth quarter due to the retirement of additional 10 jet aircraft. Over the last four years, a net reduction of 34 jet aircraft, representing an 8% reduction compared to FY 22, was achieved to improve efficiency and density of the global air network and North American surface operations.

A：For fiscal year 26 (Cy 26), the expected capital expenditure (CapEx) is approximately $3.9 billion, with a pension plan contribution of $475 million. The company is fully committed to realizing a targeted $6 billion in adjusted free cash flow for the year and aims to maintain capital intensity at around 4% of revenue. This is a durable trend as the company continues to leverage a modernized network and plans to balance capital allocation across dividends, share repurchases, pension contributions, and strategic growth investments.

A：Capital allocation and free cash flow are crucial components of FedEx's financial strategy. The company aims to maintain capital intensity at approximately 4% of revenue, and in fiscal year 26, achieved $4.7 billion in adjusted free cash flow. This is a focus for unlocking stockholder value and supports capital returns, dividend adjustments, and share repurchases. The dividend was increased by 5%, and there are plans to repurchase up to $1 billion worth of shares in the remaining period of fiscal year 26.

A：The detailed revenue forecast for the remainder of fiscal year 26 includes an expectation of approximately 11% revenue growth, factoring in assumed fuel price-driven surcharge benefits. This growth is expected to be driven by continued momentum in base pricing and increased demand for premium B2B and high-value B2C services. The adjusted EPS range for the remainder of the year is expected to be between $16.90 and $18.10, with a midpoint at $17.50.

A：The expected revenue trends for the transition year from June through December are to continue the growth pattern seen in Q4 FY 26. Revenue is expected to decelerate as the US domestic growth rate laps strong trends from last year. The next earnings release on October 28 will cover the results for this period, with a resegmentation of results based on a calendar year reporting cycle. Adjusted operating income is expected to be $3.8 billion, a 19% year-over-year increase.

A：The anticipated performance in the transition year is expected to show a year-over-year improvement in both US domestic and international profit due to the new pilot contract effective June 29. This is expected to translate to an estimated $11.30 of adjusted EPS for the June through December period, a 20% increase from the prior year. The underlying strength of the base business, with momentum in revenue growth and ongoing cost management, contributes to the projected profit and EPS growth.

A：Variable compensation headwinds seen in the fourth quarter of FY 26 are expected to dissipate significantly in the transition year, resulting in a much smaller headwind of only $100 million. This reduction in headwinds, combined with the absence of the pilot contract and a more robust base business, contributes to the projected year-over-year profit growth and 20% EPS growth in the transition year.

A：The anticipated improvement in the margin during the transition year is a year-over-year increase, which is slightly more pronounced in the calendar year due to variable compensation headwinds in the first five months. Confidently, $250 million of the stranded costs have already been conveyed in the form of employee and vendor costs. Of the remaining $350 million stranded cost base point for the current fiscal year (Cy 26), it is expected that $100 million will be mitigated during Cy 26. By the exit rate of Cy 27, the company is confident that the remaining stranded costs will be fully mitigated.

A：The company is committed to a balanced approach to capital allocation. The strong cash position provides flexibility, as evidenced by a 5% increase in the dividend post-spin and plans to repurchase up to a billion shares in the remainder of the current fiscal year (Cy 26). Discussions regarding more aggressive cash management strategies, such as reduced balance in the board, are not mentioned in the transcript.

A：The underlying momentum of the business is strong, supported by confidence on both the revenue and expense sides. June, with its strong operating days and absence of the pilot contract, is expected to show very strong performance. Q3 will be traditionally the weakest from an absolute basis due to seasonality, but there is confidence in the year-over-year growth momentum driven by continued revenue strength and expense management. Q4 is considered the strongest seasonal quarter and will reflect these trends.

A：The B2B business momentum was driven by profitable market share, with the commercial team focusing on core B2B and recovering to its industrial roots. This resulted in B2B being the majority of revenue growth and the strongest quarter within the fiscal year. There was improvement across all four key verticals with AI and data center spending having an impact, particularly from the APAC team. Some inventory buildup and restocking were also factors in the momentum observed.

A：The fuel surcharge was very effective in offsetting the increased fuel expenses. The company feels good about the overall impact as the increased revenue from higher prices was able to materially offset the increased fuel expense in both the fuel expense line item and the purchase transportation line item.

A：High fuel prices have not led to any impact on demand. The company is growing around the world and has seen no negative impact to demand due to the elevated fuel prices.

A：The growth outlook for the AI data center market is positive, with broad-based industrial growth supporting the build-out of these data centers. The growth rates in this sector are the highest across all four of the verticals mentioned. The market is changing rapidly, presenting significant opportunities for FedEx in the short and long term.

A：The company plans to monetize its stake in Freight in a tax-efficient manner within 24 months from the spin, as required by the Rrs. The guidance does not include earnings from FedEx Freight as it is a separate reportable segment and the timing of realizing value from the stake sale is not reflected in the provided guidance.

A：Utilization across the network has remained high, with the U.S. market running at very high utilization levels. Despite a small decline in FedEx Ground Economy, total volume is up, and the company continues to optimize its network. In Europe, they have a disciplined growth strategy, gaining market share for 12 quarters in a row, and will continue to optimize the network there as well.

A：The company has a positive view on competition and renewal rates, citing a renewal rate in the mid-90s and confidence in the value proposition they offer to customers. These factors, along with the long-term nature of account wins and renewal periods, contribute to the company's competitive position.

A：The impact of the fuel surcharge on margins was not directly quantified in the transcript, but it was mentioned that a portion of the revenue growth is related to fuel and that the company's margins would have been up year-over-year without the fuel dynamic. While variable comp was the biggest impact on margins, the fuel surcharge does play a role, and future expansion could be affected by the continued performance of the business and how well it can manage costs related to fuel.

A：The APAC team has had a significant impact by generating the largest wind from the tariffs environment and has now achieved two consecutive quarters of international volume growth. They have built incredible momentum in the data center, AI space, and have also leveraged their industrial base out of APAC.

A：The company is experiencing strong momentum worldwide, from Asia to Europe, with a particular 12 consecutive quarters of international market share growth in Europe. There have also been strong results from the US export team and trade diversification around the world. It is expected that these trends will continue into the next year without slowing down from an international volume perspective or from an airfreight perspective.

A：The outlook is positive for continued growth in international volume and airfreight. The airfreight market is large, valued at about $80 billion, and there has been a tremendous response to the tricolor strategy. This momentum is expected to persist.

A：The guidance provided indicates that both operating profit and margin are expected to improve during the transition year, with an even split between international and domestic contributions. The improvement is expected to be important from a seasonality perspective, although the absolute numbers for Q3, particularly for international, will be lower due to the summer slowdown.

A：June's strong performance was due to a combination of seasonal factors, such as a higher number of operating days, and a pilot contract that did not take effect until July, which had a subsequent impact on the third quarter. Additionally, the $100 million of variable compensation for the transition year was fully recognized in the third quarter due to its timing.

A：The strategic focus of the company without the freight segment is to be the 'heartbeat of the industrial economy,' with a focus on premium B2B and high-value B2C services. The company aims to achieve this by driving transformation through network, organizational, and digital initiatives.

A：The company's S and D team performed strongly throughout the fiscal year, particularly in Q4 with digit growth. The company has a stellar relationship with its loyal customer base, especially in the S and B sector. While acknowledging the presence of competitors like Amazon, the company's focus remains on its strategic B2B business with a global network and leading market position. It offers advanced visibility into the supply chain, which is crucial to B2B customers, and has the best value proposition in the United States for B2C services. The company aims to support its customers' growth, evidenced by its most profitable peak during the holiday season, and has a goal congruency with customers, meaning when they grow profitably, so does the company.