Financial Performance - For the three months ended September 30, 2025, the company reported a net loss of $308.9 million, or $4.33 per diluted share, compared to a net loss of $61.9 million, or $0.89 per diluted share for the same period in 2024, primarily due to a U.S. pension plan settlement loss of $227.7 million [124][144]. - Revenue for the three months ended September 30, 2025 was $460.2 million, a decrease of 7.4% from $497.0 million in the same period of 2024, driven by the timing of software license renewals [127]. - License and Support (L&S) revenue decreased by 20.6% to $83.0 million for the three months ended September 30, 2025, compared to $104.5 million for the same period in 2024, also due to the timing of software license renewals [128]. - Excluding License and Support (Ex-L&S) revenue for the three months ended September 30, 2025 was $377.2 million, down 3.9% from $392.5 million in the same period of 2024, primarily due to lower volume with clients in the DWS and CA&I segments [129]. - Gross profit for the three months ended September 30, 2025 was $117.2 million, with a gross profit margin of 25.5%, compared to $145.0 million and 29.2% for the same period in 2024 [133]. - For the nine months ended September 30, 2025, revenue was $1,375.6 million, a decrease of 6.0% from $1,463.0 million in the same period of 2024, mainly due to the timing of software license renewals [145]. - L&S revenue for the nine months ended September 30, 2025 was $241.7 million, down 13.6% from $279.8 million in the same period of 2024 [146]. - Gross profit for the nine months ended September 30, 2025 was $354.7 million, with a gross profit margin of 25.8%, compared to $410.9 million and 28.1% for the same period in 2024 [151]. - For the nine months ended September 30, 2025, the company reported a net loss of $358.5 million, or $5.06 per diluted share, compared to a net loss of $223.4 million, or $3.23 per diluted share for the same period in 2024 [159][160]. - Total revenue for the nine months ended September 30, 2025 was $1,375.6 million, a decrease of 6.0% from $1,463.0 million in the prior year [161]. - The company's gross profit for the nine months ended September 30, 2025 was $354.7 million, representing a gross profit margin of 25.8%, down from 28.1% in the prior year [161]. Expenses and Costs - The company recognized net cost-reduction charges of $1.0 million related to workforce reductions during the three months ended September 30, 2025 [131]. - Interest expense increased to $18.2 million for the three months ended September 30, 2025, compared to $7.9 million for the same period in 2024, primarily due to increased long-term debt and higher interest rates [137]. - Research and development expenses for the nine months ended September 30, 2025 were $16.5 million, slightly down from $17.5 million in the prior year [153]. - The operating profit for the nine months ended September 30, 2025 was $1.9 million, significantly lower than the $48.8 million reported in the prior year, impacted by goodwill impairment charges [154]. - Interest expense increased to $34.6 million for the nine months ended September 30, 2025, compared to $23.7 million in the prior year, primarily due to higher long-term debt and interest rates [155]. - The company experienced a loss before income taxes of $312.9 million for the nine months ended September 30, 2025, compared to a loss of $134.6 million in the prior year [157]. Revenue Breakdown - Digital Workplace Solutions (DWS) revenue decreased by 3.4% to $382.0 million for the nine months ended September 30, 2025, compared to $395.3 million in the prior year [167]. - Cloud, Applications & Infrastructure Solutions (CA&I) revenue decreased by 5.2% to $542.2 million for the nine months ended September 30, 2025, compared to $571.7 million in the prior year [168]. - Enterprise Computing Solutions (ECS) revenue decreased by 7.5% to $392.1 million for the nine months ended September 30, 2025, compared to $424.0 million in the prior year [169]. Cash Flow and Debt - Cash and cash equivalents at September 30, 2025, were $321.9 million, down from $376.5 million at December 31, 2024 [177]. - Cash used for operations during the nine months ended September 30, 2025, was $244.9 million, compared to cash provided by operations of $58.5 million in the same period of 2024 [180]. - Total debt increased to $734.9 million as of September 30, 2025, from $493.2 million at December 31, 2024, primarily due to the issuance of the 2031 Notes [183]. - The company completed a private placement offering of $700 million aggregate principal amount of the 2031 Notes in June 2025 [184]. - Cash provided by financing activities during the nine months ended September 30, 2025, was $188.1 million, compared to cash used for financing activities of $13.7 million in the prior year [182]. - The company had no borrowings under its Amended and Restated ABL Credit Facility as of September 30, 2025, with $90.6 million available under the facility [196]. - The company expects to meet all covenants and conditions under its various lending and funding agreements for at least the next 12 months [201]. - The company incurred a loss on debt extinguishment of $7.0 million related to the satisfaction and discharge of the 2027 Notes [194]. Pension and Contributions - In September 2025, the company purchased a group annuity contract for approximately $316 million, resulting in a pre-tax settlement loss of $227.7 million for the three and nine months ended September 30, 2025 [202]. - For the nine months ended September 30, 2025, the company made cash contributions totaling $317.2 million, including a discretionary contribution of $250 million to its U.S. defined benefit pension plans [204]. - The company expects to make cash contributions of approximately $24 million for the remainder of 2025, leading to total expected contributions of approximately $342 million for the year [205]. - Future total cash contributions to global defined benefit pension plans are estimated at approximately $78 million in 2026 [206]. - The company made cash contributions of $17.6 million primarily to international defined benefit pension plans for the nine months ended September 30, 2024 [207]. - The company may need additional funding if it cannot generate sufficient cash flows from operations to meet pension contributions [208]. - The company will evaluate opportunities for further reduction of its global defined benefit pension obligations depending on market conditions [209]. - The company may explore additional debt and equity sources to fund its liquidity and capital needs [210]. Accounting and Risk Assessment - There have been no significant changes to the company's critical accounting policies and estimates since the last annual report [211]. - There has been no material change in the company's assessment of its sensitivity to market risk since the last annual report [212].

Financial Data and Key Metrics Changes - Third quarter revenue was $460 million, a decline of 7.4% year over year or 9% in constant currency [26] - Non-GAAP operating profit was $25 million, with a non-GAAP operating margin of 5.4% [32] - The company generated $20 million of free cash flow in the third quarter, an improvement from $14 million in the prior year period [34] Business Line Data and Key Metrics Changes - Digital Workplace Solutions (DWS) revenue was $125 million, down 5.8% year over year [27] - Cloud Applications and Infrastructure (CA&I) revenue was $180 million, a 6.8% decline compared to the prior year [28] - Enterprise Computing Solutions (ECS) revenue was $133 million, a 13.9% year-over-year decline [29] Market Data and Key Metrics Changes - The total contract value (TCV) for new business in the third quarter was $124 million, in line with solid levels from the second quarter [9] - The pricing environment remains competitive, with clients seeking to share in AI cost savings [10] Company Strategy and Development Direction - The company is focused on improving delivery and operational efficiency to navigate macroeconomic uncertainties [4] - There is a commitment to executing a pension strategy aimed at removing U.S. pension liabilities [5] - The company is investing in AI-driven productivity solutions and workforce optimization to enhance delivery efficiency [8][17] Management's Comments on Operating Environment and Future Outlook - Management noted that revenue was impacted by timing issues, including a shift of a large license and support renewal to the fourth quarter [6] - Concerns about federal funding and the ongoing U.S. government shutdown have affected client project initiation [6][57] - The company expects to generate approximately $110 million of pre-pension free cash flow for the full year [39] Other Important Information - The company received recognition as a leader in cloud services for mid-market enterprises and was named to Time Magazine's 2025 list of the world's best companies [23][24] - The trailing 12-month signings amounted to approximately $2 billion, translating to a book-to-bill ratio of 1.1x [29] Q&A Session Summary Question: How is AI impacting overall P&L? - Management indicated that AI is helping reduce delivery costs, improving margin profiles, and increasing consumption rates in the L&S business [41][42] Question: What is enabling margin performance despite revenue shortfall? - The increase in L&S revenue and successful renewal activity with higher margin profiles are contributing to margin performance [44][45] Question: What is the demand for cloud spending, particularly on AI? - Demand for AI applications is strong, but the adoption is sensitive due to security and other factors [51][52] Question: Update on public sector demand amid government shutdown? - There has been a pause in project work in the U.S. public sector, with some areas showing constant demand [56][57] Question: Is pricing pressure a new development? - Pricing pressure has been ongoing, with competitors undercutting prices, but the company remains disciplined in contract negotiations [58][59]

Financial Performance - 3Q25 revenue was $460 million, a 90% year-over-year decline in constant currency, primarily due to the timing of License & Support ("L&S") software renewals[7] - Ex-L&S revenue was $377 million, down 58% year-over-year in constant currency, mainly due to delayed hardware revenue, field services volumes in Digital Workplace Solutions, and public sector volumes in Cloud, Applications & Infrastructure Solutions[7] - 3Q25 gross profit was $117 million, with a 255% gross margin, down from 292% in the prior year, due to L&S renewal timing[7] - The company reported a 3Q operating loss of ($335 million) and a non-GAAP operating profit of $248 million, representing a 54% margin[8] Sales Metrics - Total contract value (TCV) reached $415 million, a 15% year-over-year increase, with $129 billion of TCV year-to-date, up 8% year-over-year[8] - New business TCV was $124 million, down (29%) year-over-year but up +2% sequentially; New Business TCV +2% year-to-date[8] - Trailing twelve months (TTM) book-to-bill for total company and ex-L&S solutions was approximately 11x, with a backlog of $28 billion, flat year-over-year[8] Updated Financial Guidance - Full-year 2025 constant currency revenue growth is projected to be (40%) to (30%), previously (10%) to 10%[24] - Non-GAAP operating profit margin is expected to be 80% to 90%[24] - The company anticipates approximately $430 million in reported L&S revenue, compared to the original expectation of $390 million at the beginning of the year[26]

Core Insights - Unisys reported a quarterly loss of $0.08 per share, outperforming the Zacks Consensus Estimate of a loss of $0.27, marking an earnings surprise of +70.37% [1] - The company generated revenues of $460.2 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 5.11% and down from $497 million year-over-year [2] - Unisys shares have declined approximately 46.8% year-to-date, contrasting with the S&P 500's gain of 15.1% [3] Financial Performance - Over the last four quarters, Unisys has exceeded consensus EPS estimates four times [2] - The current consensus EPS estimate for the upcoming quarter is $0.57 on revenues of $593 million, and for the current fiscal year, it is $0.45 on revenues of $1.99 billion [7] Market Outlook - The earnings outlook for Unisys is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] - The Computers - IT Services industry, to which Unisys belongs, is ranked in the top 30% of over 250 Zacks industries, suggesting a favorable industry backdrop [8]

Revenue Performance - Total company revenue for 3Q25 was $460.2 million, a decrease of 7.4% year over year (YoY) and 9.0% in constant currency[5] - Total revenue for Q3 2025 was $460.2 million, a decrease of 7.4% from $497.0 million in Q3 2024[31] - Revenue for the three months ended September 30, 2025, was $460.2 million, down from $497.0 million in the same period of 2024, representing a decrease of approximately 7.5%[49] - For the nine months ended September 30, 2025, total revenue was $1,375.6 million, a decrease of 6.0% from $1,463.0 million in the same period of 2024[35] - Excluding License and Support (Ex-L&S) revenue was $377.2 million, down 3.9% YoY and 5.8% in constant currency[5] - Excluding license and support revenue, the revenue for the three months ended September 30, 2025, was $377.2 million, compared to $392.5 million in 2024[37] - Services revenue was $404.1 million, down from $414.9 million year-over-year, while technology revenue decreased to $56.1 million from $82.1 million[31] Profitability and Loss - The company reported a net loss attributable to Unisys Corporation of $308.9 million, which included a non-cash pension settlement loss of $227.7 million[10] - The company reported a consolidated net loss of $309.2 million for Q3 2025, compared to a net loss of $61.9 million in Q3 2024[31] - The company reported a consolidated net loss of $359.8 million for the nine months ended September 30, 2025, compared to a net loss of $223.7 million in 2024[41] - Non-GAAP operating profit was $24.8 million, representing a margin of 5.4%, compared to 9.9% in 3Q24[7] - Non-GAAP operating profit for the three months ended September 30, 2025, was $24.8 million, down from $49.4 million in the same period of 2024[51] - Operating loss for the three months ended September 30, 2025, was $(33.5) million, compared to an operating profit of $7.5 million in the same period of 2024[51] - Adjusted EBITDA for the three months ended September 30, 2025, was $48.2 million, compared to $77.0 million for the same period in 2024, reflecting a decline of about 37.4%[49] - The percentage of revenue represented by net loss attributable to Unisys Corporation was (67.1)% for the three months ended September 30, 2025, compared to (12.5)% in the same period of 2024[49] Cash Flow and Liquidity - Cash provided by operations was $38.0 million, an increase from $32.0 million in 3Q24, with free cash flow of $19.9 million compared to $14.2 million in the prior year[15] - Free cash flow for the three months ended September 30, 2025, was $19.9 million, an increase from $14.2 million in the same period of 2024[47] - Cash and cash equivalents stood at $321.9 million, reflecting a 7.0% increase quarter over quarter[5] - Cash and cash equivalents decreased to $321.9 million as of September 30, 2025, from $376.5 million at the end of 2024[39] - Adjusted free cash flow for the nine months ended September 30, 2025, was $9.2 million, a decrease from $37.5 million in the same period of 2024[47] Future Outlook and Guidance - The company updated its full-year 2025 revenue growth guidance to a decline of 4.0% to 3.0% in constant currency[17] - The company anticipates revenue growth and margin expansion in the future, with specific guidance for full-year 2025 revenue growth[23] - Total Contract Value (TCV) for 3Q25 increased by 15% YoY, driven by the timing of renewals[16] - The total contract value (TCV) is a key metric for future revenue generation, reflecting the initial estimated revenue from contracts signed[22] - Backlog was $2.83 billion for 3Q25, compared to $2.80 billion for the same period in 2024[17] - Backlog represents future revenue to be recognized under contracted work, although it is subject to various factors affecting conversion to revenue[21] - Book-to-bill ratio is a critical measure, calculated as total contract value booked divided by revenue in a given period[21] Asset and Liability Management - Long-term debt increased to $723.2 million as of September 30, 2025, compared to $488.2 million at the end of 2024[39] - The company’s total assets decreased to $1,743.8 million as of September 30, 2025, down from $1,872.3 million at the end of 2024[39] - The company plans to reduce approximately $600 million of U.S. defined benefit pension plan liabilities by the end of 2026[10] - The company experienced a significant goodwill impairment of $55.0 million during the nine months ended September 30, 2025[41] - The company experienced a goodwill impairment of $55.0 million for the three months ended September 30, 2025, consistent with the same amount in 2024[49] Operational Highlights - Non-GAAP operating profit margin was not specified, but the company emphasizes the importance of non-GAAP measures for understanding ongoing operations[25] - Free cash flow was not detailed, but the company highlighted the significance of cash flow generation in its financial performance[25] - The company is focused on new business expansion and the development of new technologies to drive future growth[22] - Gross profit margin for the three months ended September 30, 2025, was 25.5%, down from 29.2% in the prior year[37] - The gross profit percentage excluding license and support for the nine months ended September 30, 2025, was 18.0%, slightly down from 18.2% in the prior year[37]

Core Insights - Unisys Corporation reported a decline in revenue and net loss for the third quarter of 2025, while reiterating its non-GAAP operating profit margin guidance of 8% to 9% and advancing its pension strategy through an annuity purchase transaction [2][6][17]. Financial Performance - Total revenue for 3Q25 was $460.2 million, down 7.4% year-over-year (YoY) and 9.0% in constant currency [5][6]. - Excluding License and Support (Ex-L&S) revenue, the total was $377.2 million, a decrease of 3.9% YoY and 5.8% in constant currency [5][6]. - The company reported a net loss attributable to Unisys Corporation of $308.9 million, compared to a loss of $61.9 million in 3Q24 [5][9]. - Non-GAAP operating profit was $24.8 million, down from $49.4 million in the same quarter last year [5][6]. Segment Performance - Digital Workplace Solutions (DWS) revenue decreased by 4.3% YoY to $125.3 million, while Cloud, Applications & Infrastructure Solutions (CA&I) revenue fell by 4.8% YoY to $180.4 million [10][11]. - Enterprise Computing Solutions (ECS) experienced a significant decline, with revenue down 13.5% YoY to $133.2 million [10][11]. Cash Flow and Liquidity - Cash and cash equivalents increased by 7.0% quarter-over-quarter to $321.9 million [6][12]. - Cash provided by operations was $38.0 million, up from $32.0 million in 3Q24, with free cash flow of $19.9 million compared to $14.2 million in the prior year [6][13]. Pension Strategy - The company purchased an annuity contract to transfer $320 million of projected U.S. defined benefit pension liabilities to a third-party insurer, marking the first step in a plan to reduce approximately $600 million in pension liabilities by the end of 2026 [9][6]. Guidance and Outlook - Unisys has lowered its full-year constant currency revenue growth guidance to a range of -4.0% to -3.0% and reiterated its non-GAAP operating profit margin guidance [17].

Core Insights - Unisys Corporation has secured a significant cybersecurity contract with the European Commission, enhancing its position in the European public sector market [1][2] - The contract is part of the FREIA framework agreement, where Unisys will lead the EUCybersafe Consortium to provide cybersecurity services across 71 EU institutions [1][2] - This win is crucial as it aligns with the increasing focus on digital defense in Europe amid rising cyber threats, positioning Unisys as a key player in the region's cybersecurity strategy [2] Company Overview - Unisys Corporation is a global IT services and solutions provider, specializing in digital workplace services, cloud infrastructure, enterprise computing, and cybersecurity [3] - The company serves both government and commercial clients on a worldwide scale [3]

Core Insights - Unisys has been recognized as a Leader in Everest Group's 2025 Cloud Services PEAK Matrix Assessment for Mid-market Enterprises, highlighting its strong delivery capabilities and focus on security for mid-market organizations transitioning to the cloud [1][4] Company Overview - Unisys is a global technology solutions company that provides cloud, AI, digital workplace, applications, and enterprise computing solutions, helping clients modernize their IT environments and enhance performance [8] Cloud Services and Solutions - The Everest Group report emphasizes Unisys's ability to support mid-market enterprises (with annual revenues up to $5 billion) in cloud transformation, showcasing its end-to-end integrated cloud transformation engagements and tailored solutions [2][4] - Unisys offers customized cloud strategies that align with clients' business goals, including a wide range of cloud AI services for integration and infrastructure setup [6] Security and Compliance - The company places a strong emphasis on cybersecurity and regulatory compliance, particularly in highly regulated industries such as government, healthcare, and financial services [6] Delivery Excellence - Unisys demonstrates reliable execution and operational strength across cloud segments, focusing on client collaboration for seamless migrations and enhanced performance [6][3]

Core Viewpoint - The market anticipates Unisys (UIS) will report a year-over-year decline in earnings due to lower revenues, with a consensus EPS estimate of a loss of $0.27 per share, reflecting a significant decrease of 237.5% compared to the previous year [1][3]. Financial Expectations - Revenues for Unisys are projected to be $485 million, which is a decline of 2.4% from the same quarter last year [3]. - The upcoming earnings report is scheduled for November 5, and the stock price may react positively if actual results exceed expectations, while a miss could lead to a decline [2]. Estimate Revisions - The consensus EPS estimate has been revised 21.28% higher in the last 30 days, indicating a reassessment by analysts [4]. - Unisys currently has an Earnings ESP of 0%, suggesting no recent differing analyst views from the consensus estimate [12]. Earnings Surprise History - In the last reported quarter, Unisys was expected to post a loss of $0.34 per share but instead reported earnings of $0.19, resulting in a surprise of +155.88% [13]. - Over the past four quarters, Unisys has beaten consensus EPS estimates three times [14]. Industry Comparison - Jack Henry (JKHY), another player in the IT services industry, is expected to report an EPS of $1.64 for the same quarter, indicating a year-over-year increase of 0.6% [18]. - Jack Henry's revenues are expected to be $636.69 million, up 5.9% from the previous year, but its consensus EPS estimate has been revised 0.9% lower recently [19].

Core Points - Unisys is set to release its third-quarter 2025 financial results on November 5, 2025, after the market closes [1] - A conference call to discuss the results will take place on November 6, 2025, at 8 a.m. EST [1] - The conference call will be accessible via a live webcast on the Unisys Investor Website and through specific phone numbers for domestic and international callers [2] Financial Communication - A replay of the conference call will be available shortly after the event on the Unisys Investor Website and through designated phone numbers until November 20, 2025 [3] - The company emphasizes its commitment to transparency and communication with investors [3] Company Overview - Unisys is a global technology solutions company that provides services in cloud, AI, digital workspace, applications, and enterprise computing [4] - The company has a long history of helping clients innovate and unlock their potential, having been in operation for over 150 years [4]