Unisys Calls Q2 Revenue, Profit Drop A Sign Of ‘Continued Improvement’

‘Our [Next-Gen Solutions] are leading to new opportunities with existing and prospective clients who are increasingly viewing Unisys as an innovative solutions partner in employee experience and digital transformation. Our portfolio of Next-Gen Solutions, engineering capabilities and technology ecosystem position us to help transform enterprises and organizations and drive business outcomes using the full potential of data and AI,’ says Unisys Chairman and CEO Peter Altabef.

Peter Altabef

Global service provider Unisys Tuesday said a drop in its second fiscal quarter 2023 revenue and gross profit is actually a good sign that it is moving away from a dependence on software license and support towards a focus on next-generation solutions.

Unisys said it saw a double-digit growth in its sales pipeline thanks in large part to opening new customers, particularly with what it calls its Next-Gen Solutions including modern workplace, digital platforms and applications, specialized services and next-gen compute, and micro-market solution. All told, that category of solutions saw a 55-percent growth in revenue over last year.

Unisys Chairman and CEO Peter Altabef, in a prepared statement, said Unisys’ second quarter results reflect the improved performance of the company’s solutions outside its software license and support business.

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“These solutions experienced solid growth and margin expansion during the period,” Altabef said. “Our growth was driven by continued demand for our Next-Gen Solutions. These offerings are leading to new opportunities with existing and prospective clients who are increasingly viewing Unisys as an innovative solutions partner in employee experience and digital transformation. Our portfolio of Next-Gen Solutions, engineering capabilities and technology ecosystem position us to help transform enterprises and organizations and drive business outcomes using the full potential of data and AI.”

While Unisys, which is ranked No. 34 on CRN’s 2023 Solution Provider 500, released its second fiscal quarter financial results Tuesday after the close of the stock market, the company plans to hold its quarterly financial conference call early Wednesday morning.

For its second fiscal quarter 2023, which ended June 30, Unisys reported total revenue of $476.8 million, down 7.1 percent over the $515.0 million the company reported for its second fiscal quarter 2022.

The quarter’s revenue beat analyst expectations by $13.63 million, according to Seeking Alpha.

This included services revenue of $417.0 million, up from $400.3 million, and technology revenue of $59.8 million, down from $114.7 million.

However, what Unisys termed ex-L&S revenue, or revenue outside its license and support business, grew 4.9 percent year-over-year to $396.0 million.

On a segment by segment basis, Unisys reported digital workplace solutions revenue of $135.0 million, up from $127.2 million; cloud, applications, and infrastructure solutions revenue of $132.6 million, up from $130.1 million; and enterprise computing solutions revenue of $134.6 million, down from $185.8 million.

Unisys’ total company pipeline revenue was up in the quarter by 18 percent over last year, led by a 55-percent increase in next-gen solutions pipeline revenue, the company reported.

Unisys also reported a net loss of $40 million or 59 cents per share on a GAAP basis, which was significantly higher that last year’s net loss of $17.1 million or 25 cents per share. On a non-GAAP basis, Unisys reported a net loss of $6.1 million or 9 cents per share, down from last year’s net income of $16.2 million or 24 cents per share.

The non-GAAP earnings beat analyst expectations by 31 cents per share, according to Seeking Alpha.

Unisys also reiterated its full fiscal year 2023 guidance over last year, with constant currency revenue expected to fall between 3 percent and 7 percent, non-GAAP operating profit margin to be in the range of 2 percent to 4 percent, and adjusted EBITDA margin to be in the range of 9.5 percent to 11.5 percent.