Unisys Corp is engaged in the provision of technology solutions for clients across the government, financial services, and commercial markets. It operates through three business segments: Digital Workplace Solutions (DWS), Cloud, Applications & Infrastructure Solutions (CA&I), and Enterprise Computing Solutions (ECS). DWS provides solutions that transform digital workplaces securely and create exceptional end-user experiences. CA&I provides digital platform, applications, and infrastructure solutions. ECS provides solutions that harness secure, continuous high-intensity computing and enable digital services through software-defined operating environments.
Performance Overview
Unisys Corp (UIS, Financial) reported a revenue of $478.2 million for Q2 2024, slightly below the analyst estimate of $499.33 million. However, the company reported an earnings per share (EPS) of -$0.94, meeting the analyst estimate of -$0.94.
Financial Achievements and Challenges
Unisys Corp (UIS, Financial) achieved a year-over-year (YoY) revenue growth of 0.3%, with a 0.5% increase in constant currency. Excluding License and Support (Ex-L&S), revenue was flat YoY, with a 0.1% increase in constant currency. The gross profit margin improved by 290 basis points (bps) YoY to 27.2%, and the Ex-L&S gross profit margin increased by 270 bps YoY to 18.7%.
Operating profit margin stood at 4.9%, while the non-GAAP operating profit margin was 6.1%. New Business Total Contract Value (TCV) increased by 64% YoY and 17% quarter-over-quarter (QoQ), driven by more than doubling of new logo signings in both YoY and QoQ.
Segment Performance
| Segment | Revenue (2Q24) | Revenue (2Q23) | Gross Profit (2Q24) | Gross Profit (2Q23) |
|---|---|---|---|---|
| Digital Workplace Solutions (DWS) | $132.1 million | $135.0 million | $21.4 million | $18.4 million |
| Cloud, Applications & Infrastructure Solutions (CA&I) | $134.3 million | $132.6 million | $23.9 million | $22.4 million |
| Enterprise Computing Solutions (ECS) | $137.5 million | $134.6 million | $76.9 million | $72.8 million |
Income Statement Highlights
Unisys Corp (UIS, Financial) reported a gross profit of $129.9 million, up from $115.8 million in the same quarter last year. The operating profit was $23.6 million, a significant improvement from $0.1 million in Q2 2023. However, the net loss attributable to Unisys Corporation was $12.0 million, compared to a net loss of $40.0 million in Q2 2023.
Balance Sheet and Cash Flow
As of June 30, 2024, Unisys Corp (UIS, Financial) had cash and cash equivalents of $344.9 million, down from $387.7 million at the end of December 2023. Cash provided by operations was $2.7 million, a decline from $42.5 million in Q2 2023. Free cash flow was negative at -$18.5 million, compared to $24.7 million in the same period last year.
Commentary
"Unisys had another strong quarter of new logo signings, which more than doubled sequentially for the third consecutive quarter," said Unisys Chair and CEO Peter A. Altabef. "Overall New Business TCV grew double-digit year-over-year, which we believe signals strong marketplace momentum for our solution portfolio and recognition of the innovation we are bringing to our clients."
"Unisys reported another solid quarter, with slightly stronger than expected Ex-L&S revenue growth. Our second quarter Ex-L&S gross profit margin improvement of 270 bps compared to prior year extends a track record of execution against our plan to improve profitability," said Unisys Chief Financial Officer Deb McCann.
Analysis
Unisys Corp (UIS, Financial) demonstrated resilience with modest revenue growth and significant improvements in gross and operating profit margins. The increase in New Business TCV and new logo signings indicates strong market acceptance of its solutions. However, the company continues to face challenges with net losses and declining cash flow, which could impact its financial stability in the long term.
For more detailed insights and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Unisys Corp for further details.
