Unisys(US:UIS)2025-07-31 20:24PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (Unaudited) This section presents Unisys Corporation's unaudited consolidated financial statements for Q2 and H1 2025 and 2024, including income, balance sheet, cash flow, and equity statements Consolidated Statements of Income (Loss) The company reported a net loss of $20.1 million for Q2 2025, while the H1 2025 net loss significantly narrowed to $49.6 million due to a prior-year pension settlement loss Consolidated Statements of Income (Loss) Highlights (in Millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $483.3 | $478.2 | +1.1% | $915.4 | $966.0 | -5.2% | | Operating Income | $30.3 | $23.6 | +28.4% | $35.4 | $41.3 | -14.3% | | Net Loss Attributable to Unisys | $(20.1) | $(12.0) | +67.5% | $(49.6) | $(161.5) | -69.3% | | Diluted Loss Per Share | $(0.28) | $(0.17) | +64.7% | $(0.70) | $(2.34) | -70.1% | Consolidated Balance Sheets Total assets decreased to $1.80 billion by June 30, 2025, driven by reduced cash, while total liabilities also decreased due to lower pension obligations despite increased long-term debt Key Balance Sheet Items (in Millions) | Account | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $300.8 | $376.5 | $(75.7) | | Total Assets | $1,796.6 | $1,872.3 | $(75.7) | | Long-term debt | $692.7 | $488.2 | $204.5 | | Long-term pension and postretirement liabilities | $551.9 | $816.4 | $(264.5) | | Total Deficit | $(206.9) | $(269.3) | $62.4 | Consolidated Statements of Cash Flows H1 2025 saw a $282.9 million cash outflow from operations, primarily due to pension contributions, while financing activities provided $190.3 million from new debt issuance Six Months Ended June 30, Cash Flow Summary (in Millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used for) provided by operating activities | $(282.9) | $26.5 | | Net cash used for investing activities | $(10.0) | $(46.8) | | Net cash provided by (used for) financing activities | $190.3 | $(11.9) | | Decrease in cash, cash equivalents and restricted cash | $(81.6) | $(44.0) | Notes to Consolidated Financial Statements Notes detail a $287.2 million pension contribution, a $700 million debt refinancing, and a reorganization of reportable segments (DWS, CA&I, ECS) - In June 2025, the company issued $700.0 million of 10.625% Senior Secured Notes due 2031. The proceeds were used to repurchase its 6.875% Senior Secured Notes due 2027, resulting in a $6.8 million loss on debt extinguishment, and to fund a portion of its U.S. pension deficit7688 - The company made cash contributions of $287.2 million to its global defined benefit pension plans in the first six months of 2025, including a discretionary contribution of $250 million to its U.S. plans34 - In January 2025, the company reorganized its business, integrating its business processing solutions into the Enterprise Computing Solutions (ECS) and Cloud, Applications & Infrastructure Solutions (CA&I) segments. Application development capabilities were centralized within CA&I109 - As of June 30, 2025, the company had approximately $0.9 billion of remaining performance obligations, with about 22% expected to be recognized as revenue by the end of 202563 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations) Management discusses Q2 2025 revenue growth and H1 2025 decline, segment performance (DWS, CA&I, ECS), and the June 2025 financial restructuring involving new debt and a significant pension contribution Results of Operations Q2 2025 revenue increased 1.1% to $483.3 million, while H1 2025 revenue decreased 5.2% to $915.4 million, with H1 net loss significantly improving due to prior-year pension settlement Q2 2025 vs Q2 2024 Performance (in Millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $483.3 | $478.2 | | Gross Profit | $130.0 | $129.9 | | Operating Profit | $30.3 | $23.6 | | Net Loss Attributable to Unisys | $(20.1) | $(12.0) | H1 2025 vs H1 2024 Performance (in Millions) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | $915.4 | $966.0 | | Gross Profit | $237.5 | $265.9 | | Operating Profit | $35.4 | $41.3 | | Net Loss Attributable to Unisys | $(49.6) | $(161.5) | - Total Contract Value (TCV) for H1 2025 increased 5% YoY to $871 million, driven by growth in Ex-L&S New Business and Renewals. Backlog increased 5% YoY to $2.92 billion as of June 30, 2025166 Financial Condition Liquidity relies on cash and ABL facility; cash decreased to $300.8 million due to a $282.9 million operating cash outflow, while total debt increased to $698.4 million from new note issuance - Cash used for operations was $282.9 million for H1 2025, primarily due to a discretionary pension contribution of $250 million171 - In June 2025, the company completed a private offering of $700.0 million of 10.625% Senior Secured Notes due 2031 to refinance its 2027 Notes and fund pension liabilities175 - The company amended its ABL Credit Facility, extending the maturity to June 2030. As of June 30, 2025, availability under the facility was $99.1 million186187 - Total expected cash contributions to global defined benefit pension plans for 2025 are approximately $342 million. The estimated contribution for 2026 has been reduced to approximately $82 million from a previous estimate of $122 million196197 Item 3. Quantitative and Qualitative Disclosures about Market Risk) There have been no material changes in the company's market risk sensitivity since its 2024 Annual Report on Form 10-K - There has been no material change in the company's market risk profile since its 2024 Annual Report203 Item 4. Controls and Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025204 - No material changes were made to the company's internal control over financial reporting during the second quarter of 2025205 PART II - OTHER INFORMATION Item 1. Legal Proceedings) Legal proceedings, referenced from Note 12, include ongoing litigation in Brazil for indirect taxes and labor claims, with unreserved tax matters estimated at $97 million - The company is involved in various litigation in Brazil concerning taxes and labor, with an estimated $97 million in unreserved tax-related matters101 - The company settled a trade secrets lawsuit against a competitor, Atos, for $40 million. $15 million was received by Dec 31, 2024, and the remaining $25 million was received after June 30, 2025102 Item 1A. Risk Factors) No material changes to risk factors from 2024 Annual Report, except for new risks from debt refinancing, including restrictive covenants in new notes and ABL facility - A new risk factor has been added concerning the restrictive covenants in the new 10.625% Senior Secured Notes due 2031 and the Amended ABL Credit Facility208 - These covenants restrict the company's ability to, among other things, incur additional debt, pay dividends, sell assets, and make investments, which may limit operational flexibility and growth212 - A breach of these covenants could result in an event of default and acceleration of the company's debt210 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds) The company reported no unregistered sales of equity securities during the reporting period - None216 Item 5. Other Information) No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers, and the 2026 annual stockholders' meeting is scheduled for May 1, 2026 - The company's 2026 annual meeting of stockholders is scheduled for May 1, 2026217 Item 6. Exhibits) This section indexes exhibits filed with Form 10-Q, including corporate governance, debt agreements for new 2031 Notes, ABL facility amendments, and officer certifications