Unisys (UIS) Q1 2026 earnings summary

Executive summary

• Revenue grew 1.3% year-over-year to $438 million, but declined 4.5% in constant currency due to timing of license renewals and foreign currency impact.

• Operating profit margin rose to 3.7%, up 250 basis points year-over-year, with non-GAAP operating profit margin at 4.5%, up 170 basis points.

• Net loss attributable to shareholders was $35.8 million, compared to $29.5 million a year ago.

• New business TCV increased 45% year-over-year to $158 million, driving improved book-to-bill ratios and backlog growth.

• AI adoption and workforce optimization contributed to profit improvement and margin expansion, with new product releases for the ClearPath Forward ecosystem.

Financial highlights

• Excluding License & Support, revenue was $372.1 million, up 3.1% year-over-year; gross margin improved by 80 basis points to 25.7%, and Ex-L&S gross margin rose 170 basis points to 19.5%.

• Adjusted EBITDA was $46.2 million (10.6% margin), up from $40.2 million (9.3%) year-over-year.

• Free cash flow was negative $25.5 million, impacted by timing of interest payments; pre-pension free cash flow was $2.9 million.

• GAAP net loss was $35.8 million, non-GAAP net loss was $9.9 million.

• Cash balance was $380 million as of March 31, 2026.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: constant currency revenue growth of (6.5)% to (4.5)% and reported revenue growth of (3.5)% to (1.5)%.

• Non-GAAP operating profit margin expected at 9%-11%; XLNS/Ex-L&S gross margin improvement of 100-200 basis points targeted.

• Free cash flow for 2026 projected at approximately ($25 million); pre-pension free cash flow at +$72 million.

• Second quarter revenue expected at ~$450 million, with non-GAAP operating margin of ~5%.

• Management expects to meet all debt covenants and maintain adequate liquidity for at least the next 12 months.