Unisys(US:UIS)2025-11-06 21:33Financial 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].