The agency’s total operating revenues fell by $264 million, largely due to declining mail and package volumes.
The United States Postal Service (USPS) saw its net loss for the first quarter of fiscal year 2026 widen by almost $1.4 billion from the same quarter last year, the agency said in a Feb. 5 statement.
USPS suffered a net loss of around $1.26 billion for the quarter of Oct. 1–Dec. 31, 2025, compared to a gain of $144 million during the same period in the previous fiscal year.
“This change to net loss is attributed to an increase in workers’ compensation expense of $634 million, operating revenue decrease of $264 million, an increase in retiree health benefits expense of $175 million, higher other operating expenses of $169 million, and higher transportation expenses of $43 million,” the statement said.
Total operating revenues came in at $22.2 billion for the first quarter of 2026, down $264 million, or 1.2 percent, from the first quarter of 2025, according to USPS.
The postal service attributed the decline in revenues largely to falling volumes in its First-Class Mail, Shipping and Packages, and Marketing Mail categories.
The USPS handled 28.35 billion pieces of mail and packages in the recent quarter, down from 31.28 billion a year earlier.
The roughly $1.26 billion loss continues the trend of large losses suffered by USPS over recent years.
In fiscal year 2023, the agency incurred a net loss of $6.5 billion, which jumped to $9.5 billion in 2024 and then to $9 billion in 2025.
A December 2025 Government Accountability Office (GAO) report warned that action was needed to address the USPS’s “unsustainable” business model.
The postal service has taken several actions to boost revenue and reduce expenses since a 10-year strategy was introduced in 2021, GAO said. This includes raising prices and redesigning the service’s transportation network. Congress also chipped in through the Postal Service Reform Act of 2022, which canceled $57 billion in USPS’s outstanding debt.
Despite all these measures, “USPS’s financial condition remains poor,” GAO said. “While USPS has increased revenue, its total expenses continue to outpace total revenue leading to further losses.”
In addition, the postal agency’s unfunded liabilities and debts have “steadily increased” since fiscal year 2022. If USPS were to make all required payments towards its unfunded liabilities in full, the agency estimates it would run out of cash in fiscal year 2026.
Commenting on recent results, Postmaster General David Steiner said USPS was facing difficult systemic financial and business headwinds.
