Financial Data and Key Metrics Changes - In Q2 2025, total revenue was $483 million, a 1.1% increase year over year and a 12% increase sequentially [26][9] - Non-GAAP operating profit margin increased to 7.6% from 6.1% in the prior period, driven by higher L and S revenue and improved operational efficiency [35] - Adjusted EBITDA was $61 million, with an adjusted EBITDA margin of 12.7%, representing a 50 basis point margin expansion year over year [35] Business Line Data and Key Metrics Changes - Digital Workplace Solutions (DWS) revenue was $138 million, a 4.6% increase year over year, with a 13% sequential growth driven by new business and ramping volumes in high-end storage field services [27][28] - Cloud Applications and Infrastructure (CAI) revenue was $185 million, a 4.9% decline year over year, but grew 2% sequentially [29] - Enterprise Computing Solutions (ECS) revenue was $140 million, an 8.2% increase year over year, with L and S revenue at $88 million, up 7.7% year over year [30] Market Data and Key Metrics Changes - The company reported a slight increase in total contract value (TCV) based on higher renewal levels, with first half new business TCV up 15% compared to 2024 [12] - The backlog at the end of Q2 was $2.9 billion, up 5% year over year, indicating a strong pipeline for future revenue [31] Company Strategy and Development Direction - The company is focused on enhancing long-term shareholder value by removing pension volatility and improving financial flexibility [8] - Continued investment in AI and operationalizing it to scale delivery, shifting from a labor-augmented model to a technology-led model [15][16] - The ClearPath Forward strategy aims to modernize hybrid infrastructure and applications while unlocking valuable data [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic and geopolitical uncertainties but expressed confidence in achieving full-year objectives [11] - The company expects a strong inflection in revenue growth in Q4, driven by increased L and S revenue and project work [47] - Management noted that while some revenue items may moderate in Q3, the overall contract value remains intact [11] Other Important Information - The company made a $250 million discretionary pension contribution, reducing its U.S. pension deficit dollar for dollar [7] - Cash balances were $301 million as of June 30, reflecting the use of cash for pension contributions [39] - The company received recognition as one of the Global Top 100 Most Loved Workplaces, highlighting its commitment to workforce empowerment [24] Q&A Session Summary Question: Can you break down the components of the change in your new revenue guidance for 2025? - Management indicated that the tempering of guidance was largely due to macroeconomic uncertainties and backlog conversion challenges, but they expect overall contract value to remain stable [51][54] Question: Can you elaborate on the DWS volumes and progress in ramping the high-performance compute business? - Management noted that DWS volumes have stabilized, with increased activity in high-end storage and network services, and they are well-positioned to capitalize on these trends [57][59] Question: What is your ability to add new logos in this environment? - Management expressed confidence in their pipeline for new logos, with a 15% increase in new business TCV in the first half of the year, indicating strong market resonance for their offerings [71][72]

Core Insights - Unisys Corporation (UIS) is experiencing strong bookings in its Digital Workplace Solutions (DWS) segment, driven by a market shift towards AI-driven solutions [1] - The company is focusing on innovations that meet client needs in cost optimization, data integration, security, productivity, and AI enablement [1] Group 1: Digital Workplace Solutions (DWS) - Since 2024, UIS has been developing a significant pipeline for its Device Subscription Service (DSS), which is expected to create value by reducing costs and enhancing efficiency [2] - In Q1 2025, UIS secured scalable DSS signings, including a major deal with a global tech supplier for 380,000 devices across 14 countries, enhancing long-term revenue visibility [3] - Despite a 7.5% year-over-year revenue decline in the DWS segment due to weak discretionary spending, UIS anticipates recovery in the second half of 2025 as DSS signings increase [4] Group 2: Market Performance and Valuation - UIS shares have increased by 6.5% over the past three months, underperforming compared to the Zacks Computers - IT Services industry and the S&P 500 index [5] - UIS is trading at a forward price-to-sales (P/S) ratio of 0.14, indicating a discounted valuation compared to peers, which may present an attractive entry point for investors [10] - Competitors Wipro and DXC Technology have forward P/S ratios of 2.86 and 0.22, respectively, highlighting UIS's relative valuation advantage [11] Group 3: Earnings Estimates - Earnings estimates for UIS for 2025 and 2026 suggest year-over-year growth of 28.9% and 120.7%, respectively, indicating strong long-term growth potential [12] - The current earnings estimates for 2025 and 2026 remain unchanged, reflecting stability in the company's growth trajectory [12]

Core Insights - Unisys Corporation (UIS) is experiencing early success with its Device Subscription Service (DSS), which is positively impacting its Digital Workplace Solutions (DWS) segment and contributing to new contract wins and long-term growth prospects [1][7] Group 1: Device Subscription Service (DSS) - DSS offers an all-in-one subscription model for devices, including procurement, deployment, intelligent refresh cycles, and support services, leading to increased field service volumes and higher-margin infrastructure demand [2] - Management anticipates a rise in PC refresh activity as clients prepare for AI integration and Windows 11 upgrades, which is expected to drive additional product work and new DSS signings [2][4] - DSS is being utilized to deepen customer relationships and expand into adjacent service areas, with cross-selling opportunities in high-margin offerings such as service desk and endpoint security [3] Group 2: Financial Performance and Market Position - Unisys' DWS segment backlog is growing at a double-digit rate year over year, positioning the company for sequential growth in the latter half of 2025, driven by DSS-related field services and new enterprise storage work [4] - Unisys shares have declined 6.9% over the past three months, contrasting with a 0.2% rise in the industry, while competitors like C3.ai, Dynatrace, and Fujitsu have seen gains [5][8] - The stock is currently trading at a forward price-to-sales (P/S) multiple of 0.15X, significantly below the industry average of 18.47X, indicating a potentially attractive investment opportunity [8] Group 3: Earnings Estimates and Growth Projections - The Zacks Consensus Estimate for Unisys' 2025 earnings per share has been revised upward from 25 cents to 58 cents over the past 60 days, reflecting strong analyst confidence [9] - Projections indicate a 28.9% rise in Unisys' earnings for 2025, while competitors are expected to grow at rates of 9.8%, 13.7%, and 42.3% respectively [11]

Financial Data and Key Metrics Changes - First quarter revenue was $432 million, down 11.4% year over year as reported and 8.5% in constant currency, primarily due to license and support renewal timing [24][25] - First quarter non-GAAP operating profit margin was 2.8%, compared to 7.1% in the prior period, in line with low single-digit expectations [32] - First quarter net income was negative $30 million, translating to a diluted loss of $0.42 per share [33] Business Line Data and Key Metrics Changes - Digital Workplace Solutions segment revenue declined 7.5% year over year to $119 million, driven by lower field service volumes and discretionary project work [26] - Cloud Applications and Infrastructure Solutions revenue declined 3.3% year over year to $177 million, impacted by lower volumes with existing clients [27] - Enterprise Computing Solutions revenue was down 11.2% year over year to $119 million, primarily due to license and support renewal timing [28] Market Data and Key Metrics Changes - First quarter total contract value was $434 million, including $337 million from new business signings, up more than 50% sequentially and more than 80% year over year [9][29] - Backlog was $2.9 billion, up 2% sequentially and 4% year over year, with double-digit year-over-year backlog growth in Digital Workplace Solutions [29] Company Strategy and Development Direction - The company continues to execute its ClearPath Forward 02/1950 strategy, focusing on expanding its ecosystem and enhancing client relationships [16][77] - Investments in technology, talent, and innovation are aimed at solidifying the company's operating systems at the core of clients' IT operations [16] - The company is actively monitoring market conditions to opportunistically expand its debt structure and advance its pension mitigation strategy [77] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue growth guidance and profitability guidance, citing resilience in diverse revenue streams [77] - The company anticipates a sequential ramp in revenue growth throughout the year, particularly in the second half due to renewal timing [48][39] - Management noted that macroeconomic factors are causing some delays in client decision-making but do not significantly impact the overall pipeline and backlog [60][62] Other Important Information - First quarter capital expenditures totaled approximately $20 million, relatively flat year over year [33] - Pre-pension free cash flow was $23 million, up $11 million year over year, while free cash flow was $13 million, more than doubling compared to the previous year [33][34] - The company achieved titanium partner status at Dell, enhancing growth incentives and access to resources [17] Q&A Session Summary Question: What is enabling the L and S upside in revenues? - Management indicated that increased consumption and longer contract extensions are driving the upside in license and support revenues [44][46] Question: What types of sequential growth assumptions are needed in ex L and S and L and S? - Management expects increasing growth assumptions every quarter, with significant contracts expected in Q3 and Q4 [49][51] Question: How confident are you in your 2026 targets? - Management remains confident in meeting cash flow expectations and has not changed its trajectory for 2026 [58] Question: Have you seen any hesitation among customers based on macro uncertainties? - Management acknowledged some delays in contract signing but noted that the pipeline and backlog continue to grow [60][62] Question: Any broader strategic changes since leadership transition? - Management confirmed that the strategic focus remains consistent, emphasizing market awareness, solution distinction, and associate development [68][70]