Unisys (UIS -4.84%), a world supplier of IT providers, consulting, and digital options for enterprises and authorities organizations, reported second quarter monetary outcomes on July 30, 2025. The corporate delivered greater than anticipated outcomes, with GAAP income reaching $483.3 million, far outpacing the $444.65 million forecast by analysts. Non-GAAP earnings per share got here in at $0.19, up from $0.16 in Q2 2024 and above expectations for a loss. Nonetheless, the corporate reported adverse free money move of $336.5 million, a swing largely attributable to a deliberate $250 million pension contribution funded by latest debt issuance. General, the interval confirmed enchancment in top- and bottom-line outcomes, however persistent money outflows and combined progress throughout segments sign persevering with operational challenges.
MetricQ2 2025Q2 2025 EstimateQ2 2024Y/Y ChangeEPS (GAAP)($0.28)($0.28)($0.17)(64.7 %)EPS (Non-GAAP)$0.19$0.1618.8 %Income$483.3 million$444.65 million$478.2 million1.1 %Working Revenue Margin (Non-GAAP)7.6 %6.1 %1.5 ppFree Money Circulate (Non-GAAP)($336.5 million)($18.5 million)(1,718.9 %)
Supply: Analyst estimates supplied by FactSet. Administration expectations primarily based on administration’s steerage, as supplied in Q1 2025 earnings report.
Firm Overview and Strategic Focus
Unisys helps shoppers modernize their IT infrastructure, handle digital transformation, and obtain operational effectivity. It serves enterprises and authorities companies with a portfolio starting from cloud migration and cybersecurity to superior computing and office providers. It delivers its choices by means of three main segments: Digital Office Options (DWS), Cloud, Functions & Infrastructure (CA&I), and Enterprise Computing Options (ECS).
Lately, Unisys has targeted on digital transformation, multi-cloud administration, cybersecurity options, and synthetic intelligence (AI) integration. Success for the corporate hinges on its capability to supply end-to-end IT modernization, leverage AI for higher operations, safe large-scale shopper environments, and preserve sturdy strategic alliances to increase its attain and expertise depth.
Quarterly Highlights and Phase Outcomes
GAAP income rose 1.1% to $483.3 million, topping consensus by $38.65 million. This achieve was tied to stronger efficiency within the DWS and ECS segments. Digital Office Options income grew 4.5% yr over yr, pushed by new shopper wins and better {hardware} gross sales. Optimistic impacts from labor price administration and improved service supply lifted DWS gross margins by 70 foundation factors to 16.9%.
Enterprise Computing Options, which gives specialised computing services together with software program licenses and managed platforms, noticed income climb 7.3% yr over yr. The bounce on this phase stemmed from the timing of software program license renewals and better demand for specialised managed providers. ECS gross margin (GAAP) improved barely to 53.5%, reflecting constant profitability regardless of the lumpy nature of license renewals.
Alternatively, the corporate’s Cloud, Functions & Infrastructure enterprise — which integrates cloud computing and cybersecurity options for shoppers — declined 4.5% yr over yr. The shortfall was attributed largely to decreased spending by public sector clients. Regardless of this, CA&I gross margin elevated to twenty.8% from 20.7% a yr earlier. Unisys continued to make progress integrating superior cybersecurity and generative AI capabilities into its cloud choices, rolling out options for risk detection and information unification in advanced IT environments.
Unisys additionally made strategic strikes to scale back threat related to its longstanding U.S. pension obligations. It contributed $250 million to its outlined profit pension plans, financed by a mixture of money and new long-term debt. its money reserves (GAAP) fell to $300.8 million. Free money move (GAAP) swung to a adverse $336.5 million attributable to these outflows.
Key Developments and Business Place
The interval featured positive aspects in working profitability, with company-wide working revenue margin as much as 6.3% (GAAP), and non-GAAP working revenue margin improved by 1.5 share factors to 7.6%. This margin enchancment was attributable to ongoing supply optimization and decrease skilled providers prices. Adjusted EBITDA, a measure of money revenue used within the expertise business, climbed to $61.4 million, representing a margin of 12.7%.
Unisys continued to put money into synthetic intelligence as a key a part of its expertise roadmap. The corporate launched new AI-enabled options in its Digital Office enterprise, such because the Service Expertise Accelerator for automating service desk operations and the Intelligence Accelerator for processing giant, unstructured datasets. Administration highlighted early adoption by shoppers and exterior recognition.
In multi-cloud and safety, Unisys reported combined efficiency. Whereas demand remained regular for cloud governance and safe entry administration providers, CA&I income declined attributable to a slowdown in public sector contract exercise. Phase profitability was maintained by means of strict price administration. Strategic partnerships with expertise suppliers (akin to Dell and EasyVista) have been cited as vital contributors to the DWS rebound, offering expanded service choices and quicker deployment for IT Service Administration options. Nonetheless, clear monetary contributions from these alliances haven’t but been individually damaged out.
Pension-related actions dominated the money move story. Along with the discretionary pension contribution, Unisys issued $700.0 million in new senior secured notes in June 2025 to refinance shorter-term debt and prolong its debt maturities to 2031. The corporate’s liquidity profile is now extra steady, however at the price of greater long-term curiosity funds.
Contract Developments, Monetary Well being, and Outlook
The corporate’s contract worth metrics introduced a combined image. Complete Contract Worth (TCV) — a key measure of recent enterprise signed — fell 5% yr over yr to $437 million, as weak point in new enterprise was solely partly offset by a surge in renewals. Excluding License & Help, new enterprise TCV fell sharply (down 43%), however renewals jumped 85 %. The backlog of contracted work grew to $2.92 billion, signaling a modestly enhancing long-term pipeline.
Unisys ended the interval with $300.8 million in money and equivalents, down $75.7 million from year-end 2024 because of the pension contribution and better working capital wants. Complete debt climbed by $205.2 million over the six months ended June 30, 2025. Regardless of the money utilization in pension restructuring, the discount in pension liabilities and extension of debt maturities present better visibility and reduce funding threat within the medium time period. GAAP earnings per share confirmed one other internet loss (at $0.28 per share adverse), whilst non-GAAP outcomes moved to constructive territory.
For the total yr 2025, administration revised its income outlook downward, now anticipating reported income progress between (0.5)% and 1.5%, in comparison with a earlier forecast of as much as 2.5%. Non-GAAP working margin steerage for full-year 2025 was raised to a variety of 8.0% to 9.0%, from 6.5% to eight.5% beforehand, reflecting anticipated additional price self-discipline and improved renewal exercise. The corporate anticipates License & Help income of about $430 million for FY2025, and flat income progress in its core providers enterprise exterior of license renewals.
Traders ought to look ahead to continued enchancment in natural income developments in Digital Office and cloud safety providers, in addition to the conversion of the rising backlog into future income. Additional progress in price controls, AI adoption charges, and stabilization in new contract signings will probably be vital markers for the subsequent a number of quarters.
Income and internet earnings introduced utilizing U.S. usually accepted accounting rules (GAAP) until in any other case famous.
