To our FedEx stockholders,
Frederick W. Smith meant a great deal to this company, the business community, his beloved family, and me personally. Fred was
more than a business leader. He was a visionary who helped revolutionize the delivery industry and global commerce. He was a
man who led with integrity and inspired others. His belief in people, his relentless pursuit of excellence, and his commitment to
connect people with possibilities built one of the world’s most successful companies over the last five decades, and his legacy will
be felt for decades to come.
It is difficult to put into words the tremendous loss felt by all who knew Fred Smith, but he was a man grounded by a mission. He
would tell us to stay focused on the business and keep marching forward, and so we will do just that.
Throughout our history, the FedEx team has delivered many things. The most extraordinary is change. We define value by
progress, considering not only our daily contributions but also how we advance the world. As the company that pioneered express
delivery and built the network that connects the globe, we understand that progress is only possible through change. That is
why we continuously innovate and pursue what’s next to deliver greater value and a brighter future for the people and communities
we serve.
Delivering in FY25
FY25 was our first year operating as one FedEx. I am incredibly proud of how the team collectively responded to a very rapidly
evolving market and was determined to make a difference each and every day. In our new structure, we overcame headwinds —
including the expiration of our U.S. Postal Service contract, two fewer operating days, and volatility and uncertainty related to
global trade policy — to deliver year-over-year growth in revenue and adjusted earnings per share.
We significantly reduced our CapEx in FY25 by approximately $1.1 billion, for a total of $4.1 billion, compared to $5.2 billion in
FY24. This marks our lowest capital spending over the past 10 years. Our CapEx as a percentage of revenue was 4.6%, the lowest
level since FedEx Corporation was established in 1998.
Reducing CapEx was an important factor in returning approximately $4.3 billion back to our stockholders, exceeding our
$3.8 billion commitment. These results come as we continue to make progress on the previously announced spin-off for FedEx
Freight.
In FY26, we will continue building momentum to deliver a brighter future for FedEx and our customers.
Hitting our stride with DRIVE
Nearly three years ago, we announced DRIVE to support our ongoing transformation. This was a major step in adopting a new
framework and way of working to generate greater rigor in execution and enhance our ability to adapt to rapidly changing market
conditions.
As a part of this announcement, we committed to delivering $4 billion in structural cost reduction by FY25, over the FY23 base.
In the last two years we achieved our targets of $1.8 billion in FY24 and $2.2 billion in FY25 — reaching our overall objective. With
the proven success of this new way of working, we will continue to use and expand this framework to achieve additional value
in the years to come.
Winning with technology and advancing transformation
FedEx connects 99% of the world’s commerce, and technology is the enabler to revolutionizing supply chains for the future.
Technology unlocks new ways to find growth, to improve the experience for our customers, and to continue optimizing our own
operations.
Through our transformation, we made tremendous progress with Network 2.0 in FY25, as we began optimizing larger and more
densely populated markets. We exited the year having implemented Network 2.0 optimization in approximately 290 locations and
completed the implementation in Canada.
In addition to optimizing our own physical network, the team has done an incredible job working closely with our customers and
helping them navigate an increasingly complex trade landscape. We leveraged the flexibility of our network, optimized by Tricolor,
to rapidly align our global capacity to match demand shifts in a very dynamic market. FedEx has always innovated to solve
customer problems, and today, we are using data, artificial intelligence, and machine learning in bold, new ways to deliver
outstanding experiences.
At the same time, our biggest game changer remains every FedEx team member. Their commitment to delivering the Purple
Promise to make every FedEx experience outstanding allows us to exceed customer expectations, expand into new markets, and
differentiate FedEx.
A vision with value
For over 50 years, FedEx has helped move the world forward. We remain dedicated to making it better and brighter for all. Our
vision to make supply chains smarter for everyone amplifies our fundamental strengths — our unmatched global network, our
legacy of innovation, and our renowned culture — to advance growth and progress now and in the future.
Throughout our history, FedEx has never waited for change; we create it. This spirit drives us to usher in a new era of global
commerce — one enhanced by technology, defined through collaboration, and shaped with a steadfast commitment to delivering
greater value in the world.
Sincerely,
RAJ SUBRAMANIAM
President & CEO, FedEx Corporation
See “Forward-Looking Statements” and “Risk Factors” on pages 21-34 in the FY25 FedEx Corporation Annual Report on Form 10-K for a discussion of potential risks and uncertainties that could materially affect our future performance.