Unisys Reports Strong Operational Growth in 1Q25 Amidst Market Challenges

Unisys Reports Impressive Financial Performance in 1Q25

Unisys Corporation, a major player in technology solutions, has unveiled its financial results for the first quarter of 2025. The report highlights significant growth in operational efficiency and free cash flow, marking a pivotal moment for the organization amidst a landscape of challenges in the tech sector.

Key Financial Highlights

In the first quarter, Unisys generated cash flows of $33.3 million from operations, substantially up from $23.8 million in the same quarter last year. The company also reported a hefty free cash flow totaling $13.2 million, representing a significant leap from the previous $3.9 million.

Total revenue for the quarter stood at $432.1 million, despite showing an 11.4% decline year-over-year. Excluding the License and Support (Ex-LS) revenue which contributes significantly to overall sales, the adjusted revenue was recorded at $361.0 million. Notably, this also indicates an 8.5% decrease when viewed on a constant currency basis.

The gross profit margin for the period was calculated at 24.9% (with Ex-LS margin at 17.8%), illustrating the continuing pressure and competitive landscape faced by the company. Operating profit margins were reported at 1.2%, while the non-GAAP operating profit margin sat at 2.8%.

Momentum in New Contracts

A brighter note in the earnings report was the surge in new business contracts, which saw an impressive increase of 83% year-over-year to a total contract value (TCV) of $337 million. Michael Thomson, CEO of Unisys, expressed optimism about the company's robust performance in acquiring new contracts and stressed the importance of delivering innovative solutions aligned with client priorities around efficiency, security, and data utilization.

Thomson stated, "We are pleased with the momentum in New Business signings we achieved during the quarter. Our commitment to enhancing client outcomes has driven significant new deals, which we believe will ultimately boost our long-term profitability."

Financial Guidance and Strategic Directions

Unisys management also reiterated its guidance for the full-year 2025, maintaining expectations for revenue growth in constant currency between 0.5% and 2.5%. They also forecast non-GAAP operating profit margins to hover between 6.5% and 8.5%, indicating a structured approach towards recovery amid fluctuating market conditions.

According to CFO Deb McCann, the positive strides made in profitability during the quarter can be attributed to strategic partnerships and long-term commitments from more clients within their software and application framework. McCann noted that the trends observed in License and Support solutions remained favorable, suggesting a stabilizing trend in their commercial relationships.

Profitability Analysis

While the first-quarter results revealed an overall net loss attributable to Unisys Corporation of $29.5 million, a significant decrease from last year’s loss of $149.5 million indicates progress in reversing the company's fortunes. The adjusted EBITDA was also noted at $40.2 million compared to $65.3 million from the prior fiscal year.

Sector Movements and Future Outlook

Looking forward, Unisys aims to enhance its portfolio through a focus on emerging technologies such as cloud services and artificial intelligence, reflecting a broader trend within tech industries to invest in advanced solutions for customer benefits.

Overall, these financial results showcase Unisys's resilience and strategic direction as it navigates through a dynamic technological landscape, positioning itself for potential growth and operational efficiencies in the quarters to come.

Conclusion

As Unisys moves deeper into 2025, stakeholders and investors will be keenly watching how the company leverages its current momentum to recover from revenue declines while capitalizing on emerging opportunities in the tech sector. Management's strategic focus on enhancing client collaborations appears vital for sustaining long-term growth and profitability.