Unisys (UIS) Q1 2025 earnings summary

Executive summary

• Revenue declined 11.4% year-over-year to $432.1 million, mainly due to timing of software license renewals and lower client volume, with a 3-point negative foreign currency impact.

• Net loss attributable to Unisys narrowed to $29.5 million from $149.5 million in Q1 2024, which included a $132.3 million pension settlement loss; non-GAAP net loss was $3.4 million.

• Gross profit margin decreased to 24.9% from 27.9% year-over-year, primarily due to software license renewal timing.

• New Business Total Contract Value (TCV) rose 83% year-over-year to $337 million, driven by new logo signings; total TCV reached $434 million, up 17%.

• Operating and free cash flow improved, with cash from operations at $33.3 million and free cash flow at $13.2 million, both up from 1Q24.

Financial highlights

• First quarter revenue was $432.1 million, down 11.4% year-over-year as reported and 8.5% in constant currency, mainly due to license and support (L&S) renewal timing.

• Excluding L&S, revenue was $361 million, down 8.5% year-over-year; L&S revenue was $71.1 million, down 23.7%.

• First quarter non-GAAP operating profit margin was 2.8%; adjusted EBITDA was $40.2 million (9.3% margin).

• Net loss was $29.5 million; adjusted net loss was $3.4 million.

• Backlog increased to $2.89 billion, up 4% year-over-year.

Outlook and guidance

• Reiterated full-year 2025 constant currency revenue growth guidance of 0.5% to 2.5%; reported revenue growth expected between (1.1)% and 0.9%.

• Full-year non-GAAP operating profit margin expected in the 6.5% to 8.5% range, with a path above the midpoint.

• L&S revenue for 2025 expected to be approximately $410 million.

• Pre-pension free cash flow guidance of approximately $100 million for 2025; positive free cash flow after pension funding.

• Sequential revenue and margin improvement expected through the year, with 65% of L&S revenue in the back half.