Unisys(US:UIS)2025-05-01 13:02Financial 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]