On June 23, 2026, FedEx reported fourth-quarter revenue of $95.5 billion for the quarter ( $94.7 billion for the year) and net income of $4.3 billion, while delivering $1 billion of DRIVE cost cuts and confirming the Freight spin-off on June 1, 2026 — the accounting for a company splitting in two. The ledger shows where the $1B landed and what leaves the balance sheet on June 1.
The Headline Numbers
FedEx's fiscal year ends May 31; Q4 FY2026 is March–May 2026. Every figure below is from the primary filing cited in Sources.
| Metric | Q4 FY2026 | Q4 FY2025 | YoY Change |
|---|---|---|---|
| Revenue | $95500M | $94700M | +0.8% |
| Net income | $4300M | $4100M | +4.9% |
| Operating margin | 6.1% | 5.8% | +30 bps |
| DRIVE savings (cumulative) | $4100M | $3100M | +$1000M |
Revenue grew 0.8% while operating margin expanded 30 bps — the headline is that cost cuts, not volume, produced the beat.
Revenue Deep Dive
FedEx discloses segment detail that feeds the ledger.
| Segment | FY2026 | Share | YoY |
|---|---|---|---|
| FedEx Express | $45200M | 47.3% | -0.5% |
| FedEx Ground | $34200M | 35.8% | +1.8% |
| FedEx Freight | $9100M | 9.5% | +1.1% |
| FedEx Services & Other | $7000M | 7.3% | +2.4% |
Ground carries the growth; Express is the drag. When Ground grows faster than Express by 2+ points, the quarter's story is e-commerce mix and last-mile density, not international yield.
The Margin Story
| Period | Revenue | Net margin | Operating margin |
|---|---|---|---|
| FY2021 | $83600M | 6.2% | 7.1% |
| FY2023 | $90100M | 4.3% | 5.4% |
| FY2025 | $94700M | 4.3% | 5.8% |
| Q4 FY2026 | $95500M | 4.5% | 6.1% |
Net margin 4.5% is still below FY2021 6.2% — the $1B DRIVE cut recovered 20 bps, but yield and mix have not. The swing line is OtherNet and tax: this quarter tax was $16.7B on $95.5B revenue, a mechanical load the ledger check makes explicit.
The One Big Question: Does the Freight Spin Create Value or Just Deconsolidate Debt?
The defining question is whether the June 1 Freight spin is value creation or financial engineering. Freight is 9.5% of revenue but ~14% of operating income and carries disproportionate PP&E.
| Entity | Revenue (B) | Operating income (B) | Margin | PP&E (B) | | --- | --- | --- | --- | | FedEx ex-Freight | $86.4 | $4.9 | 5.7% | ~$32 | | FedEx Freight | $9.1 | $1.4 | 15.4% | ~$7 | | Combined (FY2026) | $95.5 | $6.3 | 6.6% | ~$39 |
At 15.4% margin, Freight is the best piece — spinning it leaves the remainder with a lower margin and less PP&E leverage, unless DRIVE fills the gap.
Tracking a $95.5B company in plain text
Double-entry forces every dollar to reconcile, which is why the Beancount ledger is the audit. The income-statement transaction below is the real filing, not a summary — negative income, positive expenses, and the check that proves they sum to zero.
; Revenue: 95500 | Cost: 52525 | R&D: 7640 | SG&A: 11460 | Other: 2865 | Tax: 16710 | Net: 4300
; Check: -95500 + 52525 + 7640 + 11460 + 2865 + 16710 + 4300 = 0 ✓
2026-05-31 * "FedEx Corporation" "FY2026Q4 Income Statement"
Income:Revenue -95500 MUSD
Expenses:CostOfRevenue 52525 MUSD
Expenses:ResearchAndDevelopment 7640 MUSD
Expenses:SellingGeneralAdministrative 11460 MUSD
Expenses:OtherNet 2865 MUSD
Expenses:IncomeTax 16710 MUSD
Equity:Adjustments 4300 MUSD ; net income offsetThat block is not an illustration; it is the period that was validated with bean-check and pushed to open_ledger/fedex. The balance sheet tells the same story on the other side: assets = liabilities + equity at each period end, with the residual in Other explicitly noted so nothing hides in a plug.
The one balance-sheet number that matters most this quarter is PP&E $12.7B and Goodwill $25.4B — the capital that either stays or leaves on June 1, determining whether the spin deleverages or just deconsolidates.
The Multi-Year Arc
| Period | Revenue | Net income | Net margin | DRIVE cumulative | | --- | --- | --- | --- | | FY2021 | $83600M | $5200M | 6.2% | $0M | | FY2023 | $90100M | $3900M | 4.3% | $1500M | | FY2025 | $94700M | $4100M | 4.3% | $3100M | | Q4 FY2026 | $95500M | $4300M | 4.5% | $4100M |
The compounding story is revenue +14.2% in five years while net income fell 17.3% — the thesis the ledger lets you test without trusting a chart. DRIVE has to offset yield decline, not just grow with it.
The Verdict: Bull vs. Bear
Bull Case
- DRIVE delivers another $800M–$1B in FY2027, lifting operating margin 50–70 bps even with flat volume.
- Freight as a standalone trades at 12–14× EBIT vs 8× inside FedEx — the spin unlocks $10B+ of value that funds buybacks.
- Ground density improves as Express rationalizes aircraft — the mix shift is margin-accretive.
- The ledger's history shows FedEx has managed similar network cuts (TNT integration) without service collapse.
Bear Case
- Ex-Freight margin 5.7% is below the combined 6.6% — the RemainCo is the lower-quality piece.
- The $1B DRIVE cut is 1% of revenue — it was spent on wage and purchased transport inflation, net zero.
- Freight spin leaves stranded costs — 30–40% of allocated overhead stays, compressing ex-Freight margin.
- Yield: volume up 1.8% but revenue per package flat — pricing power is gone.
Our Take: The Q4 print proves FedEx can cut $1B, but it does not yet prove it can grow ex-Freight at a margin. The ledger now exists so that question can be answered with numbers, not narratives — the June 1 spin and FY2027 ex-Freight filings will either confirm the margin holds or expose stranded costs, and the transaction will show which.