Unisys (UIS) Q4 2025 earnings summary

Executive summary

• Fourth quarter revenue grew 5.3% year-over-year to $575 million, with full-year revenue at $1.95 billion, down 2.9% year-over-year.

• Non-GAAP operating margin reached 18% in Q4 and 9.1% for the year, exceeding guidance and expanding 30 bps year-over-year.

• Pre-pension free cash flow was $128 million for the year, up 55% from prior year; cash and cash equivalents at year-end were $414 million.

• Net leverage improved to 2.8x, with strong liquidity and no major near-term debt maturities.

• Defined benefit pension deficit reduced by over $300 million, aided by a $250 million discretionary contribution and annuity purchase transferring $320 million of liabilities.

Financial highlights

• Q4 operating profit was $76.6 million (13.3% margin), non-GAAP operating profit $103.4 million (18.0% margin); full-year net loss was $340 million, including $228 million non-cash pension expense.

• Adjusted EBITDA for 2025 was $278.8 million (14.3% margin).

• Free cash flow for FY25 was negative $218 million, primarily due to pension contributions.

• Book-to-bill ratio for FY25 was 1.2x; backlog increased 11% year-over-year to $3.2 billion.

• License & Support revenue was $428 million with a 69% gross margin, exceeding guidance by nearly $40 million.

Outlook and guidance

• 2026 revenue expected to decline 6.5% to 4.5% in constant currency; reported decline of 3.8% to 1.8%.

• Non-GAAP operating margin guidance: 9% to 11% for 2026.

• Free cash flow for 2026 expected at -$25 million; capital expenditures of ~$85 million.

• Ex-L&S revenue to decline 7% to 4.5%; L&S revenue expected at $415 million with ~70% margin.

• Positive Ex-L&S revenue growth anticipated in 2027.