Financial Performance - Second quarter revenue reached $483 million, exceeding expectations, with constant currency revenue growth of 1.0% year-over-year[7] - Sequential constant currency revenue growth was 8.5% for the total company and 6.5% in Ex-L&S revenue[7] - Gross margin was 26.9%, a decrease of 30 basis points year-over-year, while Ex-L&S gross margin was 17.6%, down 110 basis points year-over-year due to higher cost reduction charges[7] - The company is increasing non-GAAP operating margin guidance to 8.0% to 9.0% from a previous 6.5% to 8.5%[8] Sales Metrics - Total contract value (TCV) was $437 million, down 5% year-over-year, but up 5% year-to-date[8] - New business TCV was $122 million, down 43% year-over-year, but up 15% year-to-date[8] - Backlog increased to $2.9 billion, up 5% year-over-year[8] Capital Structure and Pension - The company issued $700 million in Senior Secured Notes[29] - A $250 million contribution was made to U.S Qualified Defined Benefit (QDB) Pension Plans[29] - Planning for $600 million of annuity purchases by year-end 2026[31]

Core Viewpoint - Unisys reported quarterly earnings of $0.19 per share, significantly beating the Zacks Consensus Estimate of a loss of $0.34 per share, marking an earnings surprise of +155.88% [1] Financial Performance - The company posted revenues of $483.3 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 9.22% and showing a slight increase from $478.2 million in the same quarter last year [2] - Over the last four quarters, Unisys has exceeded consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Unisys shares have declined approximately 34.4% since the beginning of the year, contrasting with the S&P 500's gain of 8.3% [3] - The current Zacks Rank for Unisys is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.21 on revenues of $498 million, while for the current fiscal year, the estimate is $0.58 on revenues of $1.99 billion [7] - The outlook for the Computers - IT Services industry, where Unisys operates, is currently in the bottom 38% of over 250 Zacks industries, which may impact the stock's performance [8]

[Executive Summary](index=1&type=section&id=Executive%20Summary) Unisys achieved strong sequential revenue and profitability growth in 2Q25, strategically addressing U.S. pension volatility and debt, while adjusting full-year guidance [Key Highlights](index=1&type=section&id=Key%20Highlights) Unisys reported strong sequential improvement in both revenue and profitability for 2Q25, with total revenue up 1.1% year-over-year and 11.8% quarter-over-quarter. The company also took strategic steps to mitigate U.S. pension volatility through a significant discretionary contribution and debt refinancing, while adjusting full-year revenue guidance to flat and raising non-GAAP operating profit margin guidance 2Q25 Key Financial Highlights | Metric | Value | YoY Change | QoQ Change | | :-------------------------------- | :---------- | :--------- | :--------- | | Total company revenue | $483.3 million | 1.1% | 11.8% | | Ex-L&S revenue | $395.7 million | (0.1)% | 9.6% | | Operating profit margin | 6.3% | +140 bps | | | Non-GAAP operating profit margin | 7.6% | +150 bps | | - The company significantly reduced future cash contribution volatility within its U.S. qualified defined benefit pension plans following changes to its pension asset investment strategy and a discretionary contribution of **$250 million**[5](index=5&type=chunk) - The discretionary contribution was funded using a combination of **$50 million** cash on hand and **$200 million** of proceeds from the company's issuance of **$700 million** senior secured notes due 2031, with the remaining proceeds used to refinance existing **$485 million** senior secured notes due 2027[5](index=5&type=chunk) - The company tempered the mid-point of full-year constant currency revenue guidance to **flat YoY** while raising full-year non-GAAP operating profit margin guidance to a range of **8.0% to 9.0%**[5](index=5&type=chunk) [CEO and CFO Commentary](index=1&type=section&id=CEO%20and%20CFO%20Commentary) CEO Michael Thomson expressed satisfaction with sequential growth, improved profitability, and strong License and Support solutions consumption, attributing progress to AI investments. CFO Deb McCann highlighted the successful capital structure transformation, which reduced U.S. pension volatility and enhanced liquidity by extending debt maturity and renewing the asset-backed revolver - CEO Michael Thomson noted pleasure with sequential growth and improved profitability, continued strong consumption in License and Support solutions, and the advancement of growth and efficiency priorities through investments in agentic and generative artificial intelligence capabilities[4](index=4&type=chunk) - CFO Deb McCann stated that the capital structure transformation removed substantially all volatility from U.S. pension contributions and established a clearer path to fully removing U.S. pension obligations, while solidifying liquidity by extending major debt maturity to 2031 and renewing the undrawn asset-backed revolver[4](index=4&type=chunk) [Financial Performance - Second Quarter 2025](index=2&type=section&id=Financial%20Performance%20-%20Second%20Quarter%202025) Unisys reported 2Q25 revenue growth and improved operating profit, with varied segment performance, significant pension funding, debt refinancing, and a decrease in TCV [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) Unisys reported a 1.1% YoY revenue increase to $483.3 million in 2Q25, with significant QoQ growth. Operating profit margin improved by 140 bps YoY to 6.3%, driven by cost reduction actions. The company recorded a net loss of $20.1 million, impacted by a $6.8 million loss on debt extinguishment [Revenue Analysis](index=2&type=section&id=Revenue%20Analysis) Total revenue for 2Q25 increased 1.1% YoY and 11.8% QoQ to $483.3 million. Ex-L&S revenue was relatively flat YoY, decreasing 0.1%, but grew 9.6% QoQ. License and Support (L&S) revenue saw a 6.7% YoY increase 2Q25 Revenue Performance | Metric | 2Q25 | 2Q24 | YoY Change | QoQ Change | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Revenue | $483.3M | $478.2M | 1.1% | 11.8% | | Revenue (constant currency) | | | 1.0% | | | Ex-L&S Revenue | $395.7M | $396.1M | (0.1)% | 9.6% | | Ex-L&S Revenue (constant currency) | | | (0.4)% | | | L&S Revenue | $87.6M | $82.1M | 6.7% | | | L&S Revenue (constant currency) | | | 7.7% | | [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) Operating profit margin improved to 6.3% (140 bps YoY), primarily due to cost reduction benefits and lower professional services expenses. Gross profit margin slightly declined by 30 bps YoY to 26.9%, with Ex-L&S gross profit margin decreasing 110 bps YoY due to higher cost reduction charges 2Q25 Profitability Metrics | Metric | 2Q25 | 2Q24 | YoY Change | | :-------------------------- | :----- | :----- | :--------- | | Gross profit | $130.0M | $129.9M | 0.1% | | Gross profit percent | 26.9% | 27.2% | (30) bps | | Ex-L&S gross profit percent | 17.6% | 18.7% | (110) bps | | Operating profit | $30.3M | $23.6M | 28.4% | | Operating profit percent | 6.3% | 4.9% | 140 bps | | Non-GAAP operating profit percent | 7.6% | 6.1% | 150 bps | - Operating profit margin improvement was primarily driven by lower expense due to realized benefits from the company's cost reduction actions and reduced professional services expense[9](index=9&type=chunk) [Net Loss](index=2&type=section&id=Net%20Loss) Unisys reported a net loss attributable to Unisys Corporation of $20.1 million in 2Q25, compared to a $12.0 million loss in 2Q24. This loss included a $6.8 million loss on debt extinguishment. Non-GAAP net income was $13.8 million 2Q25 Net Loss and Non-GAAP Net Income | Metric | 2Q25 | 2Q24 | | :------------------------------------ | :------ | :------ | | Net loss attributable to Unisys Corp. | ($20.1M) | ($12.0M) | | Non-GAAP net income attributable to Unisys Corp. | $13.8M | $11.0M | - The net loss attributable to Unisys Corporation included a loss on debt extinguishment of **$6.8 million** related to the repurchase, satisfaction and discharge of the 6.875% Senior Secured Notes due 2027[9](index=9&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) In 2Q25, Digital Workplace Solutions (DWS) and Enterprise Computing Solutions (ECS) segments showed revenue growth and improved gross profit margins, while Cloud, Applications & Infrastructure Solutions (CA&I) experienced a revenue decline [Digital Workplace Solutions (DWS)](index=3&type=section&id=Digital%20Workplace%20Solutions%20(DWS)) DWS revenue increased 4.5% YoY (4.6% in constant currency) to $138.1 million, primarily due to new business and higher hardware revenue. Gross profit margin improved by 70 bps YoY to 16.9% due to delivery improvements and labor cost savings DWS 2Q25 Performance | Metric | 2Q25 | 2Q24 | YoY Change | | :-------------------- | :----- | :----- | :--------- | | Revenue | $138.1M | $132.1M | 4.5% | | Revenue (constant currency) | | | 4.6% | | Gross profit percent | 16.9% | 16.2% | 70 bps | - DWS revenue increase was primarily driven by new business, including higher hardware revenue. Gross profit margin improvement was primarily driven by delivery improvement and labor cost savings initiatives[11](index=11&type=chunk) [Cloud, Applications & Infrastructure Solutions (CA&I)](index=3&type=section&id=Cloud,%20Applications%20%26%20Infrastructure%20Solutions%20(CA%26I)) CA&I revenue declined 4.5% YoY (4.9% in constant currency) to $185.2 million, mainly due to lower volume with public sector clients. Gross profit margin slightly increased by 10 bps YoY to 20.8% CA&I 2Q25 Performance | Metric | 2Q25 | 2Q24 | YoY Change | | :-------------------- | :----- | :----- | :--------- | | Revenue | $185.2M | $193.9M | (4.5)% | | Revenue (constant currency) | | | (4.9)% | | Gross profit percent | 20.8% | 20.7% | 10 bps | - CA&I revenue decline was primarily driven by lower volume with clients in the public sector[12](index=12&type=chunk) [Enterprise Computing Solutions (ECS)](index=3&type=section&id=Enterprise%20Computing%20Solutions%20(ECS)) ECS revenue increased 7.3% YoY (8.2% in constant currency) to $140.2 million, driven by the timing of software license renewals, integrated systems purchases, and higher volume in specialized managed services. Gross profit margin improved by 20 bps YoY to 53.5% ECS 2Q25 Performance | Metric | 2Q25 | 2Q24 | YoY Change | | :-------------------- | :----- | :----- | :--------- | | Revenue | $140.2M | $130.7M | 7.3% | | Revenue (constant currency) | | | 8.2% | | Gross profit percent | 53.5% | 53.3% | 20 bps | - The increase in ECS revenue was primarily driven by the timing of software license renewals and integrated systems purchases, as well as higher volume in specialized managed services[13](index=13&type=chunk) [Balance Sheet and Cash Flows](index=3&type=section&id=Balance%20Sheet%20and%20Cash%20Flows) Unisys's cash and cash equivalents decreased by $75.7 million, primarily due to a $50 million cash contribution to its U.S. pension plans. The company completed a $700 million senior secured notes offering to refinance existing debt and fund a significant pension contribution, extending its major debt maturity to 2031 and renewing its revolving credit facility [Cash Position and Pension Funding](index=3&type=section&id=Cash%20Position%20and%20Pension%20Funding) Cash and cash equivalents decreased by $75.7 million to $300.8 million as of June 30, 2025, largely due to a $50 million cash contribution to U.S. pension plans. Free cash flow decreased significantly YoY by $318.0 million, primarily due to pension contributions and working capital changes Cash and Cash Equivalents | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :------------------------ | :------------ | :----------- | :------- | | Cash and cash equivalents | $300.8M | $376.5M | ($75.7M) | Cash Flow Metrics | Metric | 2Q25 | 2Q24 | YoY Change | | :-------------------------- | :------- | :----- | :--------- | | Cash (used for) operations | ($316.2M) | $2.7M | ($318.9M) | | Free cash flow | ($336.5M) | ($18.5M) | ($318.0M) | - Cash and cash equivalents decreased primarily due to the **$50 million** in cash used to fund a portion of the discretionary contribution of **$250 million** to the company's U.S. defined benefit pension plans[14](index=14&type=chunk) - Free cash flow decreased by **$318.0 million YoY**, primarily due to cash contributions to the company's U.S. defined benefit pension plans and changes in working capital[15](index=15&type=chunk) - During 2Q25, the company made cash contributions of **$278.2 million** to its global defined benefit pension and postretirement plans, including the discretionary contribution of **$250 million** to its U.S. defined benefit pension plans, compared to **$4.7 million** in the prior-year period[17](index=17&type=chunk) [Debt and Liquidity Management](index=4&type=section&id=Debt%20and%20Liquidity%20Management) Unisys issued $700.0 million of 10.625% Senior Secured Notes due 2031, using proceeds to repurchase and satisfy existing 2027 Notes and contribute $200 million to pension plans. Concurrently, the company extended its secured revolving credit facility maturity from October 2027 to June 2030, enhancing its liquidity position - In June 2025, the company completed a private placement offering of **$700.0 million** aggregate principal amount of its **10.625% Senior Secured Notes due 2031**[16](index=16&type=chunk) - The net proceeds from the issuance of the 2031 Notes, together with cash on hand, were used to repurchase outstanding 2027 Notes, satisfy and discharge remaining 2027 Notes, and contribute **$250 million** to the company's U.S. defined benefit pension plans[16](index=16&type=chunk) - Concurrently with the issuance of 2031 Notes, the company amended its existing secured revolving credit facility to extend the maturity from October 2027 to June 2030 and modify certain other terms and covenants[18](index=18&type=chunk) [Other Business Metrics](index=4&type=section&id=Other%20Business%20Metrics) Total Contract Value (TCV) for 2Q25 decreased 5% YoY to $437 million, primarily due to a shift in timing of Ex-L&S New Business signings, partially offset by Ex-L&S renewals. Backlog increased YoY to $2.92 billion 2Q25 Total Contract Value (TCV) | Metric | 2Q25 | 2Q24 | YoY Change | QoQ Change | | :------------------ | :----- | :----- | :--------- | :--------- | | Ex-L&S New Business | $122M | $215M | (43)% | (64)% | | Ex-L&S Renewals | $266M | $144M | 85% | 250% | | L&S Renewals | $49M | $103M | (52)% | 133% | | Total company TCV | $437M | $462M | (5)% | 1% | - Total company TCV for 2Q25 decreased **5% YoY**, primarily driven by a shift in timing in Ex-L&S New Business signings, partially offset by Ex-L&S renewals[21](index=21&type=chunk) - Backlog increased YoY and was **$2.92 billion** for the second quarter of 2025 compared to **$2.79 billion** for the second quarter of 2024[21](index=21&type=chunk) [Financial Outlook](index=5&type=section&id=Financial%20Outlook) Unisys updated its full-year 2025 guidance, tempering revenue growth expectations while raising non-GAAP operating profit margin targets [2025 Financial Guidance](index=5&type=section&id=2025%20Financial%20Guidance) Unisys updated its full-year 2025 guidance, tempering constant currency revenue growth to a range of (1.0)% to 1.0% YoY (mid-point flat) while raising non-GAAP operating profit margin guidance to 8.0% to 9.0% Full-Year 2025 Financial Guidance | Metric | Revised Guidance | Prior Issued Guidance | | :-------------------------------- | :--------------- | :-------------------- | | Revenue growth in constant currency | (1.0)% to 1.0% | 0.5% to 2.5% | | Non-GAAP operating profit margin | 8.0% to 9.0% | 6.5% to 8.5% | - The revised guidance assumes L&S revenue of approximately **$430 million** and relatively flat Ex-L&S constant currency revenue growth[22](index=22&type=chunk) [Supplemental Information](index=6&type=section&id=Supplemental%20Information) This section provides conference call details, definitions of non-GAAP financial measures, forward-looking statements, and an overview of Unisys's global technology solutions [Conference Call Details](index=6&type=section&id=Conference%20Call%20Details) Unisys will host a conference call on Thursday, July 31, 2025, at 8 a.m. Eastern Time to discuss the second quarter 2025 results, with live webcast and replay options available - Unisys will hold a conference call with the financial community on Thursday, July 31, 2025, at 8 a.m. Eastern Time to discuss the results of the second quarter of 2025[23](index=23&type=chunk) - The live, listen-only webcast, as well as the accompanying presentation materials, can be accessed on the Unisys Investor Website at www.unisys.com/investor[23](index=23&type=chunk) - A webcast replay will be available on the Unisys Investor Website shortly following the conference call, and a phone replay will be available until August 14, 2025[24](index=24&type=chunk) [Non-GAAP Financial Measures and Definitions](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Definitions) This section provides definitions for various non-GAAP financial measures used in the report, such as constant currency, backlog, TCV, non-GAAP operating profit, EBITDA, adjusted EBITDA, non-GAAP net income/EPS, free cash flow, pre-pension and postretirement free cash flow, adjusted free cash flow, L&S, and Ex-L&S. These measures are used to provide supplemental information and enhance comparability by excluding certain unusual or non-recurring items - Constant currency is used to view business results without the impact of fluctuations in foreign currency exchange rates, facilitating comparisons of business performance from one period to another[25](index=25&type=chunk) - Backlog represents the estimated amount of future revenue to be recognized under contracted work, serving as a useful metric and indicator of contracted revenue to be realized in the future[25](index=25&type=chunk) - Total Contract Value (TCV) represents the initial estimated revenue related to contracts signed in the period, serving as a useful leading indicator of the company's ability to generate future revenue over time[25](index=25&type=chunk) - Non-GAAP operating profit, EBITDA, adjusted EBITDA, non-GAAP net income (loss), non-GAAP diluted earnings (loss) per share, free cash flow, pre-pension and postretirement free cash flow, and adjusted free cash flow are non-GAAP measures that exclude certain items not indicative of ongoing operations, such as pension expense, debt extinguishment, legal matters, and cost-reduction activities, to enhance comparability and transparency[26](index=26&type=chunk)[29](index=29&type=chunk) - Excluding License and Support (Ex-L&S) measures exclude revenue, gross profit, and gross profit margin related to software license and support services to isolate the impact of these areas, which can be significant and timing-impactful[26](index=26&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) The release contains forward-looking statements based on management's current expectations and assumptions, which are subject to various risks and uncertainties beyond Unisys's ability to control or estimate precisely. These statements include projections for revenue growth, margin expansion, AI investments, TCV, backlog, and full-year financial guidance - This release contains forward-looking statements regarding future developments and their potential effect upon Unisys, including projections or expectations of revenue growth, margin expansion, achievement of operational efficiencies, investments in solutions and artificial intelligence, TCV, backlog, and full-year 2025 financial guidance[27](index=27&type=chunk) - Unisys cautions readers that the assumptions forming the basis for forward-looking statements include many factors that are beyond Unisys' ability to control or estimate precisely, such as estimates of future market conditions and the behavior of other market participants[27](index=27&type=chunk) - Unisys does not assume any obligation to review or revise any particular forward-looking statement referenced herein in light of future events, except as required by applicable law[27](index=27&type=chunk) [Company Information](index=10&type=section&id=Company%20Information) Unisys is a global technology solutions company that provides cloud, AI, digital workplace, logistics, and enterprise computing solutions, helping clients for over 150 years - Unisys is a global technology solutions company that powers breakthroughs for the world's leading organizations[32](index=32&type=chunk) - Its solutions include cloud, AI, digital workplace, logistics, and enterprise computing, helping clients challenge the status quo and unlock their full potential[32](index=32&type=chunk) - Unisys has been helping clients for more than 150 years[32](index=32&type=chunk) [Unaudited Financial Statements](index=11&type=section&id=Unaudited%20Financial%20Statements) This section presents unaudited consolidated statements of income, balance sheets, cash flows, segment results, and GAAP to non-GAAP reconciliations for 2Q25 [Consolidated Statements of Income (Loss)](index=11&type=section&id=Consolidated%20Statements%20of%20Income%20(Loss)) The consolidated statement of income (loss) for 2Q25 shows total revenue of $483.3 million, operating income of $30.3 million, and a net loss attributable to Unisys Corporation of $20.1 million Consolidated Statements of Income (Loss) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $483.3 | $478.2 | $915.4 | $966.0 | | Operating income | $30.3 | $23.6 | $35.4 | $41.3 | | Net loss attributable to Unisys Corporation | ($20.1) | ($12.0) | ($49.6) | ($161.5) | | Basic loss per share | ($0.28) | ($0.17) | ($0.70) | ($2.34) | | Diluted loss per share | ($0.28) | ($0.17) | ($0.70) | ($2.34) | [Segment Results & Ex-L&S Breakdown](index=12&type=section&id=Segment%20Results%20%26%20Ex-L%26S%20Breakdown) This section provides detailed revenue and gross profit percentages for DWS, CA&I, and ECS segments, as well as a breakdown of License and Support (L&S) and Excluding License and Support (Ex-L&S) revenue and gross profit for 2Q25 and YTD25 Segment Revenue and Gross Profit Percentages | Segment | 2Q25 Revenue | 2Q25 Gross Profit % | 2Q24 Revenue | 2Q24 Gross Profit % | | :------------------------------------ | :----------- | :------------------ | :----------- | :------------------ | | Digital Workplace Solutions (DWS) | $138.1M | 16.9% | $132.1M | 16.2% | | Cloud, Applications & Infrastructure Solutions (CA&I) | $185.2M | 20.8% | $193.9M | 20.7% | | Enterprise Computing Solutions (ECS) | $140.2M | 53.5% | $130.7M | 53.3% | License and Support (L&S) vs. Excluding License and Support (Ex-L&S) Breakdown | Metric | 2Q25 | 2Q24 | YTD25 | YTD24 | | :------------------------ | :----- | :----- | :------ | :------ | | L&S revenue | $87.6M | $82.1M | $158.7M | $175.3M | | Ex-L&S revenue | $395.7M | $396.1M | $756.7M | $790.7M | | L&S gross profit | $60.3M | $55.7M | $103.6M | $120.5M | | Ex-L&S gross profit | $69.7M | $74.2M | $133.9M | $145.4M | | L&S gross profit percent | 68.8% | 67.8% | 65.3% | 68.7% | | Ex-L&S gross profit percent | 17.6% | 18.7% | 17.7% | 18.4% | [Consolidated Balance Sheets](index=13&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet shows total assets of $1,796.6 million and total liabilities and deficit of $1,796.6 million as of June 30, 2025. Key changes include a decrease in cash and cash equivalents and an increase in long-term debt, offset by a decrease in long-term pension and postretirement liabilities Consolidated Balance Sheet Highlights | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :------------------ | | Cash and cash equivalents | $300.8M | $376.5M | | Total current assets | $895.7M | $979.3M | | Total assets | $1,796.6M | $1,872.3M | | Total current liabilities | $539.8M | $628.0M | | Long-term debt | $692.7M | $488.2M | | Long-term pension and postretirement liabilities | $551.9M | $816.4M | | Total Unisys Corporation stockholders' deficit | ($221.5M) | ($283.4M) | | Total liabilities and deficit | $1,796.6M | $1,872.3M | [Consolidated Statements of Cash Flows](index=14&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used for operating activities was ($282.9) million, net cash used for investing activities was ($10.0) million, and net cash provided by financing activities was $190.3 million. This resulted in an overall decrease in cash, cash equivalents, and restricted cash of ($81.6) million Consolidated Statements of Cash Flows Highlights | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash (used for) provided by operating activities | ($282.9M) | $26.5M | | Net cash used for investing activities | ($10.0M) | ($46.8M) | | Net cash provided by (used for) financing activities | $190.3M | ($11.9M) | | Decrease in cash, cash equivalents and restricted cash | ($81.6M) | ($44.0M) | | Cash, cash equivalents and restricted cash, end of period | $309.0M | $352.7M | [GAAP to Non-GAAP Reconciliations](index=15&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations from GAAP to non-GAAP measures for net income/loss, diluted EPS, free cash flow, EBITDA, and operating profit, highlighting adjustments for items like pension expense, debt extinguishment, legal matters, and cost reduction activities [Net Income (Loss) and EPS Reconciliation](index=15&type=section&id=Net%20Income%20(Loss)%20and%20EPS%20Reconciliation) Reconciliation shows adjustments from GAAP net loss to non-GAAP net income, primarily by adding back pension and postretirement expense, loss on debt extinguishment, and other non-recurring items. This resulted in a non-GAAP net income of $13.8 million and non-GAAP diluted EPS of $0.19 for 2Q25 2Q25 Net Income (Loss) and EPS Reconciliation | Metric | 2Q25 (GAAP) | Adjustments | 2Q25 (Non-GAAP) | | :------------------------------------ | :---------- | :---------- | :-------------- | | Net loss attributable to Unisys Corp. | ($20.1M) | | | | Pension and postretirement expense (net of tax) | | $21.4M | | | Loss on debt extinguishment (net of tax) | | $6.8M | | | Certain legal matters, net (net of tax) | | $0.7M | | | Environmental matters (net of tax) | | $0.9M | | | Cost reduction and other expenses (net of tax) | | $4.1M | | | Non-GAAP net income attributable to Unisys Corp. | | | $13.8M | | Diluted loss per share (GAAP) | ($0.28) | | | | Non-GAAP diluted earnings per share | | | $0.19 | [Free Cash Flow Reconciliation](index=16&type=section&id=Free%20Cash%20Flow%20Reconciliation) Reconciliation from cash used for operations to free cash flow and adjusted free cash flow, showing significant impact from pension and postretirement funding. For 2Q25, free cash flow was ($336.5) million, and adjusted free cash flow was ($49.4) million 2Q25 Free Cash Flow Reconciliation | Metric | 2Q25 | 2Q24 | YTD25 | YTD24 | | :------------------------------------ | :------- | :----- | :------- | :----- | | Cash (used for) provided by operations | ($316.2M) | $2.7M | ($282.9M) | $26.5M | | Free cash flow | ($336.5M) | ($18.5M) | ($323.3M) | ($14.6M) | | Pension and postretirement funding | $278.2M | $4.7M | $287.6M | $12.4M | | Pre-pension and postretirement free cash flow | ($58.3M) | ($13.8M) | ($35.7M) | ($2.2M) | | Adjusted free cash flow | ($49.4M) | ($8.0M) | ($21.1M) | $9.3M | [EBITDA Reconciliation](index=17&type=section&id=EBITDA%20Reconciliation) Reconciliation from GAAP net loss to EBITDA and Adjusted EBITDA. For 2Q25, EBITDA was $28.6 million, and Adjusted EBITDA was $61.4 million, with adjustments primarily for pension expense, debt extinguishment, and other non-operating items 2Q25 EBITDA Reconciliation | Metric | 2Q25 | 2Q24 | YTD25 | YTD24 | | :------------------------------------ | :----- | :----- | :------ | :------ | | Net loss attributable to Unisys Corp. | ($20.1M) | ($12.0M) | ($49.6M) | ($161.5M) | | EBITDA | $28.6M | $35.6M | $33.6M | ($68.6M) | | Pension and postretirement expense | $22.0M | $12.4M | $43.9M | $159.0M | | Loss on debt extinguishment | $6.8M | — | $6.8M | — | | Adjusted EBITDA | $61.4M | $58.4M | $101.6M | $123.7M | | Adjusted EBITDA as a percentage of revenue | 12.7% | 12.2% | 11.1% | 12.8% | [Operating Profit Reconciliation](index=18&type=section&id=Operating%20Profit%20Reconciliation) Reconciliation from GAAP operating profit to non-GAAP operating profit, adjusting for certain legal matters, cost reduction and other expenses, and pension and postretirement expense. For 2Q25, non-GAAP operating profit was $36.8 million, resulting in a non-GAAP operating profit percent of 7.6% 2Q25 Operating Profit Reconciliation | Metric | 2Q25 | 2Q24 | YTD25 | YTD24 | | :-------------------------- | :----- | :----- | :------ | :------ | | Operating profit | $30.3M | $23.6M | $35.4M | $41.3M | | Certain legal matters | $0.1M | $3.1M | $0.6M | $10.4M | | Cost reduction and other expenses | $6.0M | $2.3M | $11.9M | $11.3M | | Pension and postretirement expense | $0.4M | $0.3M | $0.8M | $0.7M | | Non-GAAP operating profit | $36.8M | $29.3M | $48.7M | $63.7M | | Non-GAAP operating profit percent | 7.6% | 6.1% | 5.3% | 6.6% |

Please refer to the accompanying financial tables for a reconciliation of the GAAP to non-GAAP measures presented, except for financial guidance since such a reconciliation is not practicable without unreasonable effort. | (In millions, except numbers presented as percentages) | 2Q25 2Q24 YTD25 YTD24 | | --- | --- | | Revenue | $483.3 $478.2 $915.4 $966.0 | | YoY revenue change | 1.1 % (5.2) % | | YoY revenue change in constant currency | 1.0 % (3.8) % | | Ex-L&S revenue | $395.7 $396.1 $756.7 $790.7 | | Yo ...

Key Takeaways Unisys Corporation (UIS) is scheduled to release second-quarter 2025 results on July 30. The Zacks Consensus Estimate for UIS' second-quarter bottom line is pegged at a loss of 34 cents, indicating a decline of 312.5% from earnings per share (EPS) of 16 cents reported in the prior-year quarter. The consensus mark has remained unchanged over the past 30 days. | Magnitude Consensus Estimate Trend (60 Days) | | | | | | --- | --- | --- | --- | --- | | | Q1 | 02 | F1 | F2 | | Current | -0.34 | 0.21 ...

Core Insights - Unisys Corporation (UIS) and DXC Technology Company (DXC) are legacy players in the global IT services sector, both undergoing transformations to remain relevant amid digital modernization, cloud migration, and AI-driven solutions [1][2] Case for Unisys (UIS) - Unisys has shown significant business development momentum, with total contract value increasing by 50% sequentially and over 80% year-over-year in Q1 2025, driven by new client acquisitions and demand for device subscription services (DSS) [3][4] - The company secured a major contract to manage 380,000 devices for a global tech firm, which is expected to enhance revenue over time [4] - Demand for cybersecurity and application modernization is boosting the Cloud, Applications & Infrastructure segment, with the launch of a post-quantum cryptography solution and a notable security services deal in Latin America [5][6] - Unisys is advancing AI adoption through agentic AI and a service experience accelerator, enhancing its position as a solution-oriented partner for enterprise and government clients [6] - The "Clear Path Forward 2050" strategy focuses on expanding software capabilities, modernizing infrastructure, and delivering specialized consulting services, resulting in a growing backlog of $2.9 billion [7] - Despite positive long-term prospects, Unisys faces short-term revenue challenges due to delays in its license and support business and reduced discretionary spending [8] Case for DXC Technology (DXC) - DXC Technology is experiencing a turnaround under CEO Raul Fernandez, with a strong book-to-bill ratio of 1.2 in Q4 fiscal 2025 and a 20% year-over-year increase in bookings [9][10] - The company is integrating GenAI into its modernization, testing, and automation offerings, providing tangible value to clients and enhancing its competitive position [10] - Financially, DXC ended fiscal 2025 with $1.8 billion in cash and $687 million in free cash flow, with plans for share repurchases indicating confidence in its strategic direction [11] - DXC's disciplined financial management and commitment to shareholder returns reflect growing internal confidence, making it an attractive option for investors seeking stability and long-term growth potential [21] Earnings Estimates - The Zacks Consensus Estimate for Unisys' 2025 EPS indicates a year-over-year increase of 28.9%, with estimates unchanged over the past 60 days [12] - In contrast, DXC's fiscal 2026 EPS estimate suggests an 11.1% year-over-year decline, although 2025 estimates have seen upward revisions of 0.7% in the past 60 days [13] Price Performance & Valuation - UIS stock has declined by 30% year-to-date, while DXC shares have dropped by 27% [14] - UIS is trading at a forward P/E ratio of 4.54X, below its one-year median of 10.29X, while DXC's forward sales multiple is at 4.79X, below its median of 6.27X [17] Conclusion - DXC Technology is currently viewed as the more compelling investment choice due to its clearer trajectory toward operational stabilization and strategic execution, particularly in high-value segments [20] - While Unisys has promising growth drivers, its near-term revenue headwinds make DXC's improving fundamentals more attractive for investors [21] - DXC currently holds a Zacks Rank 2 (Buy), whereas UIS has a Zacks Rank 3 (Hold) [22]

Unisys (UIS) Conference Call Summary - July 24, 2025 Company Overview - **Company**: Unisys Corporation (UIS) - **Event**: Capital Structure and Pension Strategy Discussion Conference Call Key Points Industry and Company Context - The call focused on Unisys's capital structure and pension strategy, particularly the management of its U.S. Qualified defined benefit pension plans [2][7][20]. Core Insights and Arguments 1. **Pension Volatility Management**: Unisys has taken significant steps to reduce pension volatility, aiming to remove the pension from its balance sheet entirely [7][20]. 2. **Debt Issuance**: The company issued $700 million of debt maturing in January 2031, primarily to refinance existing notes and contribute $250 million to its pension plans [13][14]. 3. **Pension Liability Reduction**: Since the inception of its pension strategy, Unisys has reduced pension liabilities by approximately $1.5 billion through various risk transfer transactions [11][40]. 4. **Future Contributions**: The recent changes are expected to stabilize future cash contributions to the pension plans, reducing volatility to about 3% [9][41]. 5. **Annuity Purchases**: Unisys plans to remove an additional $600 million in liabilities through annuity purchases by 2026, which will eliminate about one-third of the remaining U.S. plan liabilities [17][20]. 6. **Financial Flexibility**: The company aims to maintain a solid liquidity profile and reduce net leverage to improve credit ratings and access to capital [12][20]. 7. **Capital Return Program**: Following the resolution of pension obligations, Unisys plans to implement a capital return program, potentially through stock buybacks or dividends [52][53]. Important but Overlooked Details 1. **Investment Strategy Changes**: Unisys has shifted its pension plan investment strategy to reduce volatility, moving from a 65% allocation to growth assets to a more stable asset allocation that hedges liability movements [25][26]. 2. **Cash Flow Projections**: The company anticipates generating approximately $100 million in free cash flow this year, with growth expected in subsequent years [81]. 3. **Market Conditions**: The timing of the debt issuance and pension contributions was strategically aligned with favorable market conditions to minimize costs [62][89]. 4. **Risk Factors**: While the company is confident in its ability to execute its pension strategy, there are inherent risks related to business performance and market conditions that could affect the timeline for full pension removal [78][80]. Conclusion Unisys is actively working to simplify its financial profile by managing pension liabilities and enhancing cash flow stability. The strategic steps taken are expected to position the company favorably for future growth and investor interest while maintaining financial flexibility.

Capital Structure and Debt Transaction - The company issued $700 million of senior secured notes due January 15, 2031, with a coupon of 10625%[20] - The company refinanced $485 million of existing notes and extended the asset-backed revolver[10] - A $250 million contribution was made to the U S Qualified Defined Benefit (QDB) plan, including $50 million from balance sheet cash[11, 20] Pension Plan Management - The company reallocated U S QDB plan assets to reduce volatility[12, 23] - The company is planning for $600 million of annuity purchases by year-end 2026 to reduce the cost of full removal of U S QDB plans[34] - The company expects approximately $35 million average annual reduction in required contributions in 2026-2029 to U S QDB Pension Plans[35] Financial Impact - The transaction swaps $200 million of pension deficit with funded debt[22] - The company anticipates approximately $70 million aggregate cash flow benefit (~$14M average annual benefit) for the 5-year period of 2025-2029[35] - The company's target asset allocation is 90% in the Liability Hedging Portfolio and 10% in the Growth Portfolio[24]

Core Insights - Unisys Corporation is introducing its first Post-Quantum Cryptography solution to address vulnerabilities in encryption frameworks as quantum computing advances [1][9] - The company's strategy aligns with its "Clear Path Forward 2050" roadmap, focusing on modernizing client infrastructure with quantum-resilient security and AI-enabled services [2] - Despite an 11.4% year-over-year revenue decline in Q1, Unisys reported an 80% increase in new business total contract value (TCV), indicating strong future growth potential [3][9] Financial Performance - Unisys' balance sheet remains strong with $393 million in cash and improving free cash flow, while management maintains full-year guidance with expectations of tailwinds in high-margin segments [3] - Earnings estimates for 2025 and 2026 suggest significant year-over-year growth of 28.9% and 120.7%, respectively, indicating positive future earnings potential [14] Competitive Landscape - Unisys faces competition from DXC Technology and Leidos Holdings, both of which are also investing in post-quantum security and AI-driven solutions [5][6] - DXC Technology focuses on modernizing IT infrastructure and securing hybrid environments, while Leidos expands its cybersecurity capabilities through government contracts that include quantum threat mitigation [5][6] Stock Performance - Unisys shares have increased by 9.6% over the past three months, outperforming the Zacks Computers - IT Services industry but underperforming the broader Zacks Computer and Technology sector and the S&P 500 index [7] - The stock is currently trading at a discounted valuation compared to industry peers, with a forward 12-month price-to-sales (P/S) ratio of 0.16 [11]

Financial Results Announcement - Unisys will release its second-quarter 2025 financial results on July 30, 2025, after the close of trading on the New York Stock Exchange [1] - A conference call to discuss the results will be held on July 31, 2025, at 8 a.m. EDT [1] Conference Call Details - The conference call will be available via a live, listen-only webcast on the Unisys Investor Website [2] - Domestic callers can dial 1-844-695-5518, while international callers can dial 1-412-902-6749, using the passcode "Unisys Corporation Call" [2] Replay Information - A replay of the conference call will be available on the Unisys Investor Website shortly after the call [3] - Domestic callers can access the replay by dialing 1-877-344-7529, and international callers can dial 1-412-317-0088, entering access code 4992919 [3] Upcoming Investor Conferences - Unisys management will host one-on-one and group meetings at various upcoming investor conferences [4] - Specific events include virtual meetings at the Needham FinTech & Digital Transformation Conference on August 13, 2025, and presentations at the Midwest IDEAS Conference in Chicago, IL, on August 26, 2025 [6] Company Overview - Unisys is a global technology solutions company that provides services in cloud, AI, digital workplace, logistics, and enterprise computing [5] - The company has been assisting clients in pushing boundaries for over 150 years [5]