FedEx Corp. revenue continued its upward trend in its fiscal Q3 2026, which ended Feb. 28.
The carrier also increased its net income in the quarter. FedEx net income increased year over year to $1.35 billion in Q3 2026, from $1.29 billion the prior-year period. On an earnings call with analysts, CEO Rajesh Subramaniam called FedEx’s quarter the carrier’s “most profitable yet.” It was also FedEx’s sixth straight quarter of increasing its margins, he said.
The carrier said its plan for FedEx Freight to become a new publicly traded company is on track for June 1, 2026.
Additionally, it announced during the quarter that it “reached a conditional agreement on a recommended all-cash offer to take InPost private at €15.60 per share.” It reached the agreement with Advent International, A&R Investments, and PPF Group. InPost is a Polish parcel locker operator.
“Importantly, FedEx and InPost will not integrate operations, and we will remain competitors, each operating in their respective markets and segments,” Subramaniam told investors.
Close to half of the Top 2000 retailers in North America use FedEx as a shipping carrier, according to Digital Commerce 360 data. The Top 2000 refers to North America’s largest online retailers by annual ecommerce sales. In 2025, 927 online retailers in the Top 2000 Database used FedEx as a shipping carrier.
Impact of Iran war on FedEx operations
Chief financial officer John Dietrich said FedEx’s outlook factors in “a modest headwind tied to business impact” in West Asia as a result of the U.S. and Israel’s war with Iran. Other headwinds include the continued challenges related to global trade policy changes, he said. However, transformation-related savings “more than offset” those headwinds, according to Dietrich.
Regarding the war, Subramaniam said “the situation remains fluid.”
He said the FedEx team in the Middle East “has done just an absolutely remarkable job of managing our network in a very quick fashion to accommodate the conflict zone and moving the traffic around that. And at this point, we are assuming that the broader global demand from Q3 continues into Q4. And our first two weeks of March essentially are in line with that trend.”
Subramaniam said the Middle East represented “a relatively small part” of FedEx total revenue in Q3. Addressing fuel prices specifically, he said “fuel is part of our pricing strategy and our net fuel impact.” FedEx expects that to be “relatively muted” in Q4.
Additionally, chief customer officer Brie Carere said FedEx does not expect “material impact” from the war in Q4. She said the company adjusts its fuel surcharge index weekly and that it’s “doing its job.”
“It will cover and ensure that we maintain profitability,” Carere said. “At the beginning of March, obviously, significant capacity came out of the market. Actually, I think at the peak, it was close to 20% of air cargo capacity came out. That has now leveled off, and it’s closer to 10%.”
She added that FedEx has demand surcharges in place.
How FedEx grew revenue in Q3
In its fiscal Q3 2026, FedEx revenue reached $24.0 billion. That’s 8.1% year-over-year growth from FedEx revenue in its fiscal Q3 2025, when it was $22.2 billion.
Carere said FedEx had its “best monthly revenue performance” in its history in December, which supported growth for the quarter.
“We served our customers with excellence during this critical period and delivered on our targeted growth strategy, while, of course, remaining disciplined on pricing,” Carere said.
FedEx fulfilled more than 95% of its holiday-season deliveries on time, according to third-party analysis from ShipMatrix. That was its second-best on-time delivery rate since 2019, behind its 98.3% performance in 2023. During the 2025 holiday season, that fell short of the United Parcel Service (UPS), whose on-time delivery rate was 97.2%, according to ShipMatrix data.
That was FedEx’s first peak season with “meaningful volume flowing through our Network 2.0” facilities, he said. Subramaniam was referring to about 400 facilities that FedEx said it has optimized for better efficiency in terms of both operational capacity and profit margins.
“Data-driven solutions continue to support the Network 2.0 rollout and played a crucial role in enhancing service during peak,” he said.
In a holiday-season quarter with “significant package volume growth,” FedEx reduced net capacity, jet fuel usage and vehicle fuel usage, he added.
Higher weight and revenue per shipment at FedEx Freight helped mitigate lower shipment volumes in Q3, Subramaniam said. He also noted that revenue share gains from the B2B segment of FedEx’s business helped drive Q3 growth.
Q3 also marked the 11th consecutive quarter that FedEx international revenue increased. Subramaniam said FedEx’s acquisition of InPost will complement that segment’s strategy for delivery growth.
FedEx package volume in Q3
Carere said FedEx package volume in the U.S. increased 10% year over year in Q3. That drove its revenue growth and marked the company’s highest quarterly U.S. domestic revenue since its fiscal 2022.
International export package revenue grew 8% year over year, she said. FedEx saw 14% growth in its international priority and economy freight revenue in Q3.
At the same time, lower shipments at FedEx Freight led to a 5% revenue decline for the segment. In line with “continued challenging LTL [less-than-truckload] industry trends,” FedEx Freight shipments declined 6%, Carere said.
FedEx average daily volume (ADV) in the U.S. increased 5% year over year in Q3. International export volumes increased 2% year over year in Q3, its first positive inflection of the fiscal year.
Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports. Here’s our previous article on FedEx revenue.
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