The company reported on Tuesday revenue growth of 7.6% year over year in Q2 2026, alongside operating profit growth and margin expansion across all segments. For CFO Brian Dykes, the quarter marked a turning point.

“We finished the drawdown of that Amazon volume at the end of the second quarter,” Dykes told me, referring to UPS’s plan to scale down Amazon delivery volume. “You’re starting to see that show up in the results,” he said.

The strategy marked a major shift for UPS  (No. 48 on the Fortune 500), which set out to move away from low-return, capital-intensive volume and double down on higher-margin areas like small and midsized businesses, health care logistics, and B2B delivery. That included the decision to halve its Amazon delivery volume after nearly 30 years of partnership, Dykes first told me last October.

The scale-down unfolded over six quarters and was paired with a broader effort to rightsize the company’s capital and capacity. Together, those moves helped drive both efficiency and profitability. UPS has achieved approximately $4.5 billion in cost savings over 18 months, largely tied to the Amazon pullback and network reconfiguration, with more to come in the remainder of the year, according to the company. UPS eliminated approximately 2 million pieces per day of lower-quality Amazon volume.

Lessons learned

With the transition largely complete, Dykes reflected on several lessons from leading one of the company’s biggest network transformations.

The first: speed matters.

“However fast you think you’re going, you’re not going fast enough,” he said. Just as important was maintaining complete alignment across the leadership team.

“Carol obviously is a very strong leader,” Dykes said of CEO Carol Tomé. With just seven executives reporting directly to Tomé, Dykes said there was no room for ambiguity about the company’s direction.

Perhaps the biggest lesson was planning for the unexpected.

“Whatever bumps in the road you think you anticipate, you’re not going to get them all,” he said.

Over the six-quarter transition, UPS navigated multiple wars, tariff changes, and other external disruptions while simultaneously overhauling its network.

“All of that impacts our business,” he said. “We had to adapt to it in the midst of what was a pretty major network reconfiguration.”

His takeaway: “You have to anticipate the unknown—and leave yourself capacity in order to manage that.”

UPS views Q2 as a “pivot quarter,” signaling that the bulk of its network transition is complete and the focus is shifting to growth in higher-value segments.

Health care is central to that strategy. UPS has expanded its end-to-end cold chain capabilities, allowing it to manage everything from international pharmaceutical shipments to last-mile deliveries for hospitals and pharmacies. The company is also gaining traction in industrial markets, including automotive, manufacturing, and AI- and data center-related infrastructure.

Technology investments are supporting the shift. UPS now routes more than two-thirds of its volume through automated facilities, Dykes said.

Looking ahead, UPS raised its full-year outlook, citing strong first-half results and continued momentum. Dykes said a streamlined network, disciplined execution, and targeted investments position the company for its next phase of growth.

Sheryl Estrada
Sheryl.Estrada@fortune.com

Leaderboard

Birgit Kretschmer was appointed CFO of Adidas. She will join the company’s executive board on Sept. 1 and officially assume the CFO role at the end of 2026. Kretschmer will succeed Harm Ohlmeyer, who decided not to extend his current term. Ohlmeyer has been with Adidas for nearly 30 years and has served as CFO since May 2017. Kretschmer brings more than 30 years of experience. She returns to Adidas, where she spent 25 years in various leadership roles across the organization, including CFO of Adidas International BV, CFO of Western Europe, and SVP of corporate and operations finance. For the past six years, Kretschmer has served as CFO of C&A, one of Europe’s fashion retailers.

Alpana Wegner was appointed CFO of Waystar (Nasdaq: WAY), a health care payment software provider, effective Aug. 1. Wegner succeeds Steve Oreskovich, who has served as Waystar's CFO for the past eight years and will be transitioning from the role for personal reasons. He will remain as an advisor through June 15, 2027. Wegner brings more than 25 years of finance and operational leadership experience. Most recently, she served as CFO of Integral Ad Science. Previously, she served as CFO of Secureworks and Benefitfocus.

Big Deal

The Federal Reserve left interest rates in a target range of 3.5% to 3.75% on Wednesday. Fed Chair Kevin Warsh has held rates steady at both meetings he has chaired. PCE inflation stands at 4.1% and has been above the Fed’s 2% target for five years. During a press conference, responding to a question, Warsh referred to the FOMC statement: “Economic output is solid. Capex and productivity are strong. Labor markets are solid and steady.”

“The Fed’s hold this month is appropriately cautious,” Julius Bendikas, head of U.S. economics and dynamic asset allocation at Mercer, said in an email to CFO Daily. “Energy-driven price swings tend to be short-term headwinds that don't significantly change the road ahead. Unless the labor market heats up—and it doesn't seem likely to—the bar for extended rate hikes is high.” 

Going deeper

Microsoft’s cloud just hit a new milestone. "Microsoft said its Azure cloud business surpassed $100 billion in annual revenue in its recently ended fiscal year, cheering investors in the company even as the broader market plunged on worries over AI spending and U.S. inflation," Fortune's Amanda Gerut reports. Cloud growth in Microsoft’s fiscal fourth quarter increased 43% percent year over year, providing a boost to overall quarterly revenue of $90 billion, above analyst estimates of $87.7 billion." Read more here.

Overheard

"There’s a significant gap between how fast companies are moving on AI and how ready consumers are."

—Layne Haaksma, senior research analyst at Metrigy, told Fortune. The company's research has found that companies often overestimate consumers’ ability to accept AI system implementation.