Unisys(UIS)2022-08-06 21:18Financial Data and Key Metrics Changes - Total company revenue grew 2.8% year-over-year in constant currency or remained flat as reported [43] - Total company ACV grew 25% year-over-year, with DWS ACV growing 15% and CA&I ACV growing 63% year-over-year [25][47] - Total company gross profit was $148 million, up 4.1% year-over-year, with a gross margin of 28.8%, up 130 basis points [54] Business Line Data and Key Metrics Changes - Digital Workplace Solutions (DWS) revenue decreased 11.7% year-over-year in constant currency, but excluding exited contracts, it grew 5.7% [48] - Cloud Applications and Infrastructure (CA&I) revenue grew 8.7% year-over-year in constant currency, driven by higher-margin digital platforms and applications [46] - Enterprise Computing Solutions (ECS) segment saw 11.3% year-over-year constant currency growth due to early renewals of ClearPath Forward licenses [44] Market Data and Key Metrics Changes - Total company pipeline grew 30% year-over-year, with DWS pipeline increasing by 20% and CA&I pipeline growing by 45% [26] - The pipeline for Modern Workplace and digital platforms and applications now amounts to approximately $1 billion of the total $6 billion pipeline [27] Company Strategy and Development Direction - The company is focusing on higher growth, higher margin solutions in digital workplace and cloud applications [8][14] - A brand transformation is planned to enhance awareness and engagement, launching in Q4 2022 [30] - The company aims to stabilize labor costs and improve internal talent deployment through career development programs [32] Management's Comments on Operating Environment and Future Outlook - Management noted that demand drivers such as digital transformation and hybrid work models remain robust, but signings have been slower than expected due to macroeconomic uncertainties [36][37] - Revenue and profitability guidance for the year has been lowered due to delayed signings and foreign exchange impacts, but growth is still expected in the second half [52][60] Other Important Information - The company announced a goal of net zero greenhouse gas emissions for Scope 1 and 2 by 2030 [35] - A recent cyberattack incident is being addressed with no service disruptions reported [35] Q&A Session Summary Question: Update on pension in light of market conditions - Management indicated that the accounting deficit for the pension plan is expected to improve due to higher discount rates, but cash contributions may be required depending on market conditions [70][72] Question: Causes of signing delays - Management attributed signing delays to macroeconomic uncertainties rather than internal processes, with a significant portion of revenue being long-term contracts [73][76] Question: Target margins on new contracts - Management confirmed that target margins for new contracts are higher than in previous years, driven by a shift to higher-margin work [82][85] Question: Distinction in customer needs for new deals - Management noted that successful deals often involve comprehensive solutions rather than one-off services, leading to richer contracts [107] Question: ECS renewals timing - Management explained that some ECS renewals were signed earlier than anticipated, contributing to better-than-expected results for the segment [110]