UIS 10-K & 10-Q changes, risk factors and insider trading
Unisys Corp. · NYSE · Services-Computer Integrated Systems Design · CIK 746838 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our inability to effectively anticipate and respond to rapid technological innovation, such as artificial intelligence among others, in our industry could affect our results of operations.”
New heading “If we are unable to attract, retain, and develop skilled employees to align with global client demand and retain and develop strong leaders, our business may be adversely impacted.”
New heading “Inability to maintain our credit rating or access the financing markets may adversely impact our business, liquidity and cash flows.”
New heading “The terms of the credit agreement that governs our Amended and Restated Asset Based Lending (ABL) Credit Facility and the indenture that governs the 10.625% Senior Secured Notes due 2031 (the 2031 Notes) restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.”
New heading “Our global operations expose us to risks associated with an evolving international trade and tariff environment, which may adversely affect our business, results of operations and financial condition.”
New heading “AI and other machine learning technology are integrated into our services and solutions, which could present risks and challenges to our business, results of operations and financial condition.”
New heading “Global sustainability standards and expectations, including achieving our sustainability goals and complying with sustainability laws and regulations, expose us to potential liabilities, reputational harm and could adversely affect our business, results of operations, financial condition or reputation.”
Removed heading “Our inability to effectively anticipate and respond to rapid technological innovation, such as artificial intelligence among others, in our industry could affect our results of operations and cash flows.”
Removed heading “If we are unable to maintain our credit rating or access the financing markets, it may adversely impact our business and liquidity.”
Removed heading “If we are unable to align employees and their skills with global client demand around the world and retain and develop employees and management with strong leadership skills, our business may be adversely impacted.”
Removed heading “Global expectations relating to environmental, social and governance considerations expose us to potential liabilities, reputational harm and could adversely affect our business, results of operations, financial condition, stock price or reputation.”
Largest changes
“We conduct business globally and are subject to a complex, dynamic, and evolving international trade, tariff and regulatory environment. Our operations and client base span multiple countries, which subjects us to a broad range of risks arising from international trade laws and policies. …”see in full comparison
We have experienced, and will continue to experience, cybersecurity attacks and other security incidents and breaches that have and, in the future, could result in access to, or in some instances, loss or disclosure of, sensitive information that would require significant human and financial resources to respond. These include cybersecurity attacks from computer hackers, cyber criminals, including nation states and nation state-sponsored actors, insiders and other malicious internet-based adversaries. The sophistication and occurrence of cybersecurity attacks and other security breaches continue to increase globally, and our systems, including the systems of our outsourced service providers, have been and may in the future be targeted by attacks such as infiltration of “fake employees” enabling laptop farming schemes, Internet ofsee in full comparisonThings,Things based cybersecurityattacks, denial of serviceattacks, wireless network attacks, viruses and worms, malicious software, ransomware,malware,misconfigurationsmisconfigurations,exploitation, software supply chain attacks, application centric attacks, peer-to-peer attacks, phishing, vishing and smishing attempts, backdoor trojans, distributed denial of service attacks, social engineering, including deepfake attacks, business email compromises and cybersecurity-extortion, among other cybersecurity threats. As a known provider of IT solutions, we are andwillhaveremainbeenan attractivea target for suchattacks.attacks;Furthermore,oftenourtargetingindustrythesubjectsITusenvironmentstoofelevatedclientsriskweand,support.accordingly,Wesecurityhavevulnerabilities can occurexperienced and will continue tooccurexperienceacrosssociala broad range of hardware, software or other infrastructure, increasing for us the potential of occurrence and the cost of response and remediation. Theseengineering attackshave been successful against us and those ofon ourthird-partyserviceprovidersdeskandwherehavethreatresultedactorsin, and in the future could result in, misappropriation, misuse, alteration, theft, loss, corruption, leakage, falsification, and accidental or premature release or improper disclosure of confidential or other information, including intellectual property, personal information, and data of the company, third parties, employees, clients or others. For example, in 2022, the company disclosed a cybersecurity attack involvingimpersonate oursoftwareclient’slabemployeesenvironment,towhichgaincaused no service disruptions for our operations or,access to ourknowledge, to our clients, but resulted in the exfiltration of source code for our cybersecurity and product and platform software. The techniques used by computer hackers and cyber criminals to obtain unauthorized access to data or to sabotage computer systems change frequently and are growing in sophistication, which increases the risk and severity when they occur. Additionally, limitations in the ability of ourclient’s ITteams to remain up-to-date with the volume of common vulnerabilities and exposures that require constant patching that often compete with the availability of service to our customers. In addition, we rely on our suppliers’ tools and services to adequately detect, report and respond to cybersecurity incidents, cybersecurity attacks and other security incidents and breaches, which could affect our ability to report or address these incidents effectively or in a timely manner. An increase in consumption of public cloud services also elevates the risk to our environment, as securing cloud workload regularly involves new skills, tools and processes. The introduction of AI and quantum computing is also raising the risk level as it opens new possibilities for threat actors to launch complex attacks combining social engineering and new and classic hacking techniques, including quantum computing enabled “steal now decrypt later” schemes. Similarly, the threat of malicious cybersecurity activity from nation states and other sophisticated actors continues to increase, particularly with geopolitical turmoil and global conflicts like those in the Ukraine and Middle East.environments.
“Downgrades of our credit ratings have and could continue to adversely affect our access to liquidity and capital; particularly as we plan to refinance the 2027 Notes prior to maturity. A further adverse change in our credit ratings could significantly increase our cost of funds, decrease the number of investors and counterparties willing to lend to us or purchase our securities and impact our ability to utilize surety bonds or other financial instruments we use to run our business. …”see in full comparison
“Downgrades of our credit ratings have and could continue to adversely affect our access to liquidity and capital as well as our ability to gain and retain client business. A further adverse change in our credit ratings could also significantly increase our cost of funds, decrease the number of investors and counterparties willing to lend to us or purchase our securities and impact our ability to utilize surety bonds or other financial instruments we use to run our business. …”see in full comparison
“A breach of the covenants or restrictions under the indenture that govern the 2031 Notes or under the credit agreement that governs our Amended and Restated ABL Credit Facility could result in an event of default under the applicable indebtedness. Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. …”see in full comparison
“We have received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas or demands arising from, related to, or in connection with these matters, including as disclosed in Note 18, “Litigation and contingencies” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K. Professional costs resulting from litigation and contingencies have been significant and may be significant in the future. …”see in full comparison
Full comparison: every changed paragraph (89)
A significant portion of our revenue is derived from our installed base. FutureResults resultshave been and may continue to be adversely impacted if we are unable to maintain our installed base and sell new solutions and related services to existing and new clients.
A significant portion of our revenue is derived from our installed base, many of which are subject to long-term contracts. We continue to invest in our solutions to retain and extend our existing client base as well as attract new clients. If legacy clients do not believe in the value provided by our solutions and exit their contracts, or if they choose not to renew their contracts, or not to renew these contracts on terms at least as favorable as the current contracts, our revenue has and could continue to decline meaningfullysignificantly and there could be a material adverse effect on our business, results of operations or financial condition. We could also lose clients because of their merger, acquisition or business failure. We may not be able to replace the revenue and earnings from any such lost client. We are expecting revenue, margin and market share expansion due to our differentiated solutions and the decision by some of our competitors to exit or de-emphasize their focus on our targets markets.solutions. If some or all of these competitors focus on our target markets, it could adversely affect our ability to gain market share or otherwise adversely affect future results.
Additionally, we invest in and sell new solutions and related services. If we invest insufficiently or are unsuccessful in selling these other solutions and related services, there may not be a meaningful return on these investments. Further, the revenues generated by newer solutions and related services may be insufficient to offset any revenue declines causedfrom ifturnover we are unable to retain the revenues generated byin our installed base.
Future results may be materially adversely impacted if we are unable to grow revenue, expand profit margin and generate sufficient cash flows in our businesses.
Our strategy places an emphasis on growing revenue, including specifically from higher-value and higher-margin offeringsofferings, and our ability to profitably grow revenue and generate cash flows in our businesses depends on our ability to win contracts with clients for higher growth and higher-margin solutions. This in turn depends on our ability to offer solutions that meet demand, efficiently utilize delivery personnel and meet our clients’ technology needs. This revenue is expected to come from new and existing clients. Revenue from new and existing clients may not occur at the rate in which we expect or at all. Revenue and profit margin in these businesses are a function of both the portfolio of solutions sold and the rates we charge. The rates we charge for our solutions are affected by several factors, including clients’ perception of our ability to add value, introduction of new offerings by us or our alliance partners, market pricing pressure, and general economic conditions such as inflation or an economic downturn, or the perception of the risk of these occurrences. Chargeability is also affected by several factors, including our ability to transition resources from completed projects to new engagements, leveraging low cost locations, and our ability to forecast demand for services and thereby maintain appropriate resource levels. Our results of operations and financial condition mayand cash flows have and continue to be materially adversely impacted ifby sales of higher-margin offerings that do not offset declines in revenue and profitability of lower-margin offerings, including contracts that we voluntarily exit.
Our inability to effectively anticipate and respond to rapid technological innovation, such as artificial intelligence among others, in our industry could affect our results of operations.
Our success depends, in part, on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology and offerings to serve the changing needs of our clients. For purposes of definition, rapid technological innovation includes, but it is not limited to, AI. AI is meant to include any branch of computer science, including classical archetypes such as machine learning and symbolic logic, and emerging technologies such as generative and agentic AI frameworks, modern computing methods like quantum, and multi-layer computing. Our services and solutions are continually evolving because of AI, automation including AI enabled components, hybrid computing architectures, high performance and edge computing, infrastructure and network engineering and intelligent connected solutions. As we expand our services and solutions, we may be exposed to operational, legal, regulatory, compliance, ethical, technological and other risks specific to these new areas, which may negatively affect our results of operations, cash flows, reputation and demand for our services and solutions. Technological developments may materially affect the cost and use of technology by our clients and, in the case of cloud, data and AI solutions, could affect the nature of how we generate revenue. Some of these technological developments, especially AI, have reduced and replaced some of our historical services and solutions and will continue to do so in the future, which could also negatively impact revenue and gross margin due to cost savings gained from automation. This has caused, and may in the future cause, clients to reduce or delay spending under existing contracts or entering into new contracts while they evaluate new technologies. Furthermore, if we are unable to introduce new pricing or commercial models that reflect the value of technological innovation or if the pace and level of spending on new technological developments are not sufficient to make up any shortfall, it could adversely affect our results of operations. Furthermore, the rapid pace of AI evolution and the velocity at which new tools, platforms and required services offerings are emerging creates a capability-to-advisory mismatch as innovation could outpace our ability to react, causing us to advise clients on immature platforms that change faster than we can operationalize them.
Developments in the industries we serve, which may be rapid, could also shift demand to new services and solutions. If we are unable to offer new services and solutions that match client demand because of changes in the industries we serve, we may be less competitive and need to make significant investment to adapt. For example, if we fail to continue to develop leading AI services and solutions, we may lose future opportunities. Moreover, our investment in AI may not achieve the cost savings or efficiencies that we expect to achieve.
Our growth strategy focuses on responding to technological developments by driving innovation that will enable us to expand our business into new growth areas. We are continuously applying AI to our services, how we deliver work to our clients, and to our own internal operations. AI technologies are complex and rapidly evolving, and we face significant competition, including from our clients, who may develop their own internal AI-related capabilities, which can lead to reduced demand for our services and solutions. If we do not invest in new technology, adapt to industry developments, evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our results of operations and our ability to develop and maintain a competitive advantage, to execute on our growth strategy and achieve expected margins could be adversely affected.
We have experienced, and will continue to experience, cybersecurity attacks and other security incidents and breaches that have and, in the future, could result in access to, or in some instances, loss or disclosure of, sensitive information that would require significant human and financial resources to respond. These include cybersecurity attacks from computer hackers, cyber criminals, including nation states and nation state-sponsored actors, insiders and other malicious internet-based adversaries. The sophistication and occurrence of cybersecurity attacks and other security breaches continue to increase globally, and our systems, including the systems of our outsourced service providers, have been and may in the future be targeted by attacks such as infiltration of “fake employees” enabling laptop farming schemes, Internet of Things,Things based cybersecurity attacks, denial of service attacks, wireless network attacks, viruses and worms, malicious software, ransomware, malware,misconfigurations misconfigurations,exploitation, software supply chain attacks, application centric attacks, peer-to-peer attacks, phishing, vishing and smishing attempts, backdoor trojans, distributed denial of service attacks, social engineering, including deepfake attacks, business email compromises and cybersecurity-extortion, among other cybersecurity threats. As a known provider of IT solutions, we are and willhave remainbeen an attractivea target for such attacks.attacks; Furthermore,often ourtargeting industrythe subjectsIT usenvironments toof elevatedclients riskwe and,support. accordingly,We securityhave vulnerabilities can occurexperienced and will continue to occurexperience acrosssocial a broad range of hardware, software or other infrastructure, increasing for us the potential of occurrence and the cost of response and remediation. Theseengineering attacks have been successful against us and those ofon our third-party service providersdesk andwhere havethreat resultedactors in, and in the future could result in, misappropriation, misuse, alteration, theft, loss, corruption, leakage, falsification, and accidental or premature release or improper disclosure of confidential or other information, including intellectual property, personal information, and data of the company, third parties, employees, clients or others. For example, in 2022, the company disclosed a cybersecurity attack involvingimpersonate our softwareclient’s labemployees environment,to whichgain caused no service disruptions for our operations or,access to our knowledge, to our clients, but resulted in the exfiltration of source code for our cybersecurity and product and platform software. The techniques used by computer hackers and cyber criminals to obtain unauthorized access to data or to sabotage computer systems change frequently and are growing in sophistication, which increases the risk and severity when they occur. Additionally, limitations in the ability of ourclient’s IT teams to remain up-to-date with the volume of common vulnerabilities and exposures that require constant patching that often compete with the availability of service to our customers. In addition, we rely on our suppliers’ tools and services to adequately detect, report and respond to cybersecurity incidents, cybersecurity attacks and other security incidents and breaches, which could affect our ability to report or address these incidents effectively or in a timely manner. An increase in consumption of public cloud services also elevates the risk to our environment, as securing cloud workload regularly involves new skills, tools and processes. The introduction of AI and quantum computing is also raising the risk level as it opens new possibilities for threat actors to launch complex attacks combining social engineering and new and classic hacking techniques, including quantum computing enabled “steal now decrypt later” schemes. Similarly, the threat of malicious cybersecurity activity from nation states and other sophisticated actors continues to increase, particularly with geopolitical turmoil and global conflicts like those in the Ukraine and Middle East.environments.
Furthermore, our industry subjects us to elevated risk and, accordingly, security vulnerabilities can occur and will continue to occur across a broad range of hardware, software or other infrastructure, increasing for us the potential of occurrence and the cost of response and remediation over potential vulnerabilities, disruptions, or security incidents that could compromise the integrity and reliability of our products and services. These attacks have been successful against us and some of our third-party service providers and have resulted in, and in the future could result in, misappropriation, misuse, alteration, theft, loss, corruption, leakage, falsification, and accidental or premature release or improper disclosure of confidential or other information, including intellectual property, personal information, and data of the company, third parties, employees, clients or others. For example, in 2022, we disclosed a cybersecurity attack involving our software lab environment, which resulted in the exfiltration of source code for our cybersecurity and product and platform software. The techniques used by computer hackers and cyber criminals to obtain unauthorized access to data or to sabotage computer systems change frequently and are growing in sophistication, which increases the risk and severity when they occur. Additionally, limitations in the ability of our IT teams to remain comprehensively up-to-date with the volume of common vulnerabilities and exposures that require constant patching often compete with the availability of service to our customers. In addition, we rely on our suppliers’ tools, services and software to adequately detect, report and respond to cybersecurity incidents, cybersecurity attacks and other security incidents and breaches. A failure of our supplier’s tools, services or software could affect our ability to report or address incidents effectively or in a timely manner. An increase in consumption of public cloud services also elevates the risk to our environment, as securing cloud workload regularly involves new skills, tools and processes. The introduction of AI and quantum computing is also raising the risk level as it opens new possibilities for threat actors to launch complex attacks combining social engineering and new and classic hacking techniques, including quantum computing enabled “steal now decrypt later” schemes. Similarly, the threat of malicious cybersecurity activity from nation states and other sophisticated actors continues to increase, particularly with geopolitical turmoil and global conflicts.
Any disruption, termination or substandard provision of services, including by us or third-party cloud providers, has affected, and in the future could materially and adversely affect,affect our business by disrupting normal IT operations, customer service, accounting and technology functions, affecting our ability to comply with our financing arrangements and otherwise impacting our ability to manage our business. Disruption, termination or substandard provision of services could be the result of localized conditions (such as power outages, telecommunications failures, fire or explosion), failure of our systems to function as designed, or as the result of events or circumstances of broader geographic impact (such as storms, earthquakes, floods, epidemics, strikes, acts of war, civil unrest or terrorist acts). We have incurred such disruptions, which have resulted and could result in further substantial repair or replacement costs and/or data loss or other impediments that affect our ability to run our business. To date these disruptions have not had a material impact on our operations; however, there is no assurance that such impacts will not be material in the future, and such disruptions have in the past and may in the future have the impacts discussed below.
Cybersecurity incidents, security incidents and breaches and other disruptions in our IT systems have exposed, and in the future could expose, us to liability, litigation and regulatory or other government action, which could result in the loss of existing or potential clients, damage to our brand and reputation, damage to our competitive position and financial loss. In addition, the cost and operational consequences of responding to cybersecurity incidents and security breaches and implementing remediation measures is and could continue to be significant. These financial consequences include the costs associated with obtaining and maintaining cybersecurity insurance.insurance and the maintenance of our cybersecurity third party risk management program.
Our results of operations have been, and may in the future be, adversely affected by volatile, negative or uncertain economic, geopolitical orand political conditionsconditions, as well as acts of war, terrorism, natural disasters or the widespread outbreak of infectious diseases.
Approximately 57%59% of our total revenue for 20242025 was derived from international operations. Given our global operations, macroeconomic conditions - likesuch as foreign currency exchange rate fluctuations, currency restrictions and devaluations, increases in inflation rates, potential recessions and weaker intellectual property protections in some jurisdictions - as well as geopolitical and political conditions, affect us, our clients’ businesses and the markets they serve. Volatile, negative and uncertain economic and political conditions have in the past, and could in the future, undermine business confidence in markets where we operate or plan to operate, which could cause our clients to reduce, defer or eliminate spending on new initiatives and technologies or existing contracts, both of which could negatively affect our business. Growth in some markets we serve has slowed and could continue to slow, stagnate or contract. The same could occur in other markets where we do business or plan to do business. Because we operate globally and have significant businesses in many markets, an economic slowdown in any key markets such as in the United States or Europe could adversely affect our results of operations.
International trade disputes, including threatened or implemented tariffs imposed by the U.S. and threatened or implemented tariffs imposed by foreign countries in retaliation, could adversely impact our business. Tariffs or other trade restrictions could materially increase costs on us if such costs cannot be passed onto our clients. In addition, international trade disputes, including those related to tariffs, could result in inflationary pressures that directly impact our costs. Trade disputes could also adversely impact global supply chains, which could further increase costs for us and our customers or delay delivery of key inventories and supplies.
Our inability to effectively anticipate and respond to rapid technological innovation, such as artificial intelligence among others, in our industry could affect our results of operations and cash flows.
Our success depends, in part, on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology and offerings to serve the changing needs of our clients. Our services and solutions are continually evolving because of machine learning and AI, including generative AI, augmented and virtual reality, automation, Internet of Things, hybrid computing architectures like quantum, high performance and edge computing, infrastructure and network engineering and intelligent connected solutions. As we expand our services and solutions, we may be exposed to operational, legal, regulatory, compliance, ethical, technological and other risks specific to these new areas, which may negatively affect our results of operations, cash flows, reputation and demand for our services and solutions. Technological developments may materially affect the cost and use of technology by our clients and, in the case of cloud, data and AI solutions, could affect the nature of how we generate revenue. Some of these technological developments have reduced and replaced some of our historical services and solutions and will continue to do so in the future. This has caused, and may in the future cause, clients to delay spending under existing contracts and delay entering into new contracts while they evaluate new technologies. Furthermore, if we are unable to introduce new pricing or commercial models that reflect the value of technological innovation or if the pace and level of spending on new technological developments are not sufficient to make up any shortfall.
Developments in the industries we serve, which may be rapid, could also shift demand to new services and solutions. If we are unable to offer new services and solutions that match client demand because of changes in the industries we serve, we may be less competitive and need to make significant investment to adapt. For example, if we fail to continue to develop leading machine learning and AI services and solutions, including generative AI, we may lose future opportunities.
Our growth strategy focuses on responding to technological developments by driving innovation that will enable us to expand our business into new growth areas. We are applying machine learning and AI to our services, how we deliver work to our clients, and to our own internal operations. AI technologies are complex and rapidly evolving, and we face significant competition, including from our clients, who may develop their own internal AI-related capabilities, which can lead to reduced demand for our services and solutions. If we do not invest in new technology, adapt to industry developments, evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our results of operations and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be adversely affected.
A significant amount of our business comes from government and public sector clients. Our clients include national, provincial, state and local government entities, located in a variety of countries. This work carries various inherent risks, including, but not limited to,including the right to audit our contract costscosts, andto conduct inquiries and investigations of our business practicespractices, and to investigate our compliance with government and public sector contract requirements,requirements such as(e.g., security clearance, certifications,clearance and thecertifications). In addition, there are inherent limitations of internal controls that may not prevent or detect all improper or illegal activities. Negative findings in such audits, investigations or inquiries could affect our future sales and profitability due to a wide range of consequences, including breach and termination of contracts, forfeiture of profits, suspension of payments, loss of certifications, fines and suspensions or debarment from doing business with new and existing government and public sector clients. In the ordinary course of business, we have had findings in connection with client requests, audits, investigations and inquiries related to government work and public sector clients. We have experienced some adverse consequences, as a result, and may in the future experience further adverse consequences because of our work with government and public sector clients, which could materially affect our future results of operations.
Government and public sector clients typically fund projects through appropriated monies. While these projects are often planned and executed as multi-year projects, government and public sector clients usually reserve the right to change the scope of, or terminate these projects for lack of approved funding at their convenience. Changes in government or political developments, including changes in administrations or regimes, like the recent administration change in the United States, government closures or shutdowns, budget deficits, shortfalls or uncertainties, government spending reductions or other debt constraints have resulted in and could result in our projects being reduced in price or scope or terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the termination. Furthermore, if insufficient funding is appropriated to the government or public sector client to cover termination costs, we may not be able to fully recover our investments.
We have significant underfunded obligations under our U.S. and non-U.S. defined benefit pension plans. In 2024, we made cash contributions of $21.9 million, primarily for our international defined benefit pension plans. Based on current legislation, global regulations, recent interest rates, expected returns and current funding agreements, we estimate cash contributions of approximately $92 million in 2025, primarily for our U.S defined benefit pension plans. We estimate total cash contributions to our U.S. and non-U.S. defined benefit pension plans of approximately $120 million in 2026 and approximately $750 million in the aggregate from 2027 through 2034. Estimates for future cash contributions are likely to change based on several factors including volatility in the capital markets, discount rate changes, asset return changes, or changes in economic or demographic trends. There have been significant increases in forecasted contributions to our U.S. plans and non-U.S. defined benefit pension plans in the past and such forecasts can be significantly impacted in the future.
If we are unable to maintain our credit rating or access the financing markets, it may adversely impact our business and liquidity.
As of December 31, 2024, we had $485 million aggregate principal amount of our 6.875% Senior Secured Notes due November 1, 2027 (the 2027 Notes). Our business may not generate cash flows from operations sufficient to pay off these notes and we expect that we will need to refinance these notes prior to maturity or explore additional sources of debt and/or equity to repay these notes. The agencies rating our indebtedness regularly evaluate us and determine our credit ratings based on several factors. In 2024, for example, we were placed on negative watch by Moody’s and downgraded from B+ to B by Standard & Poor’s 500. These factors include our financial strength and ability to generate earnings and cash flows, as well as factors not entirely within our control, such as rising interest rates, conditions affecting the information technology industry and the economy and changes in rating methodologies.
Downgrades of our credit ratings have and could continue to adversely affect our access to liquidity and capital; particularly as we plan to refinance the 2027 Notes prior to maturity. A further adverse change in our credit ratings could significantly increase our cost of funds, decrease the number of investors and counterparties willing to lend to us or purchase our securities and impact our ability to utilize surety bonds or other financial instruments we use to run our business. Rising interest rates and other market conditions may also impact our ability to utilize surety bonds, letters of credit, foreign exchange derivatives or other financial instruments we use to conduct our business. These impacts could affect our growth, profitability, and financial condition, including liquidity. If we are unable to access the financing markets, we would be required to use cash on hand to fund operations and our required pension contributions and repay outstanding debt as it comes due. There is no assurance that we will generate sufficient cash to fund our operations, pension contributions and refinance such debt, including because of impaired access to financing markets, which could have a material adverse effect on our business.
If we are unable to align employees and their skills with global client demand around the world and retain and develop employees and management with strong leadership skills, our business may be adversely impacted.
Our success is dependent, in large part, on our ability to attract and retain employees with market-leading skills and capabilities like AI and machine learning in line with global client demand. We must re-skill, retain and inspire appropriate numbers of talented employees with diverse skills in order to serve our clients, respond quickly to rapid and ongoing changes in demand, technology, industry and the macroeconomic environment, and continuously innovate to grow our business. If we are unable to do so, we may not be able to innovate and deliver new services and solutions to fulfill client demand.
In addition, the unionization of certain of our associate populations results in higher costs and unique operational challenges. At certain times and in certain geographical regions, we can find it difficult to attract and retain enough employees with the skills or backgrounds to meet current and/or future demand. In these cases, we may need to redeploy existing employees or increase our reliance on subcontractors to fill certain labor needs. If we are not successful in these initiatives, our results of operations could be adversely affected. If our utilization rate of our employees is too high or too low, it could have an adverse effect on associate engagement and attrition, the quality of the work performed and our ability to staff projects.
We face aggressive competition, including competitors offering more aggressive pricing or contractual terms, which couldmay lead to reducedreduce demand for our solutions and related services and could have an adverse effect on our business.
Additionally, competitors have offered and may generally offer more aggressive pricing or contractual terms, which has and may affect our ability to win work. Even if we have potential offerings that address marketplace or client needs better than others,Our competitors may also be more successful at selling similar services they offer, including to our clients. Furthermore, some competitors are more established in certain markets, which may make executing our growth strategy to expand in these markets more challenging. Some may be better able to compete for skilled professionals, innovate and/or provide new services and solutions faster than us, or may be able to anticipate the need for services and solutions before we do. Our competitors may also team together to create competing offerings. If we are unable to compete successfully, we could lose market share and clients to competitors, which could materially adversely affect our results of operations.
If we are unable to attract, retain, and develop skilled employees to align with global client demand and retain and develop strong leaders, our business may be adversely impacted.
Our success is dependent, in large part, on our ability to attract and retain employees with market-leading skills and capabilities like AI and machine learning in line with global client demand. We must up-skill, re-skill, retain and inspire appropriate numbers of talented employees with diverse skills in order to serve our clients, respond quickly to rapid and ongoing changes in demand, technology, industry and the macroeconomic environment, and continuously innovate to grow our business. If we are unable to do so, we may not be able to innovate and deliver new services and solutions to fulfill client demand.
In addition, the unionization of certain of our employee populations results in higher costs and unique operational challenges. At certain times and in certain geographical regions, we have in the past and can in the future find it difficult to attract and retain enough employees with the skills or backgrounds to meet current and/or future demand. In these cases, we may need to redeploy existing employees or increase our reliance on subcontractors to fill certain labor needs. If we are not successful in these initiatives, our results of operations could be adversely affected. If our utilization rate of our employees is too high or too low, it could have an adverse effect on employee engagement and attrition, the quality of the work performed and our ability to staff projects.
In many of our long-term solutions and services contracts, revenue is based on the volume of solutions and services provided. As a result, revenue and total contract value anticipated at contract signing are not guaranteed. Some of our contracts may permit termination at the client’s discretion before the end of the contract term or may permit termination or impose other penalties if we do not meet the performance levels specified in the contracts, particularly for government and public sector clients. In addition, from time to time, theour company is involved in disputes and legal proceedings with our clients concerning solutions and services that thehave company hasbeen provided. Some of our commercial contracts require customized solutions, features, configurations and functions, and, in such a customized environment, there have been and may continue to be claims for failure to perform. In such cases, we have not, and in the future may not, achieve expected revenuerevenue, total contract value and profit from certain commercial contracts.
We maintain business relationships and transact with our alliance partners, suppliers and other third parties that have complementary solutions, services or skills. Future results will depend, in part, on the pricing, performance and capabilities of these third parties, including the use of services and solutions involving emerging technologies like AI. InflationAs we increase our reliance on these third parties, inflation may lead to higher labor and other costs charged by these third parties,them, and supply chain disruptions may make them unable to deliver in a timely manner, which could adversely affect our results of operations. Additionally, the financial condition of, and our relationship with, distributors and other indirect partners can impact our ability to serve current and potential clients and end users effectively and efficiently.
We have significant underfunded obligations under our U.S. and non-U.S. defined benefit pension plans. In 2025, we made cash contributions of $343.7 million, including a discretionary contribution of $250 million to our U.S. defined benefit pension plans. Based on current legislation, global regulations, recent interest rates, expected returns and current funding agreements, we estimate cash contributions to our U.S. and non-U.S. defined benefit pension plans of approximately $87 million in 2026, approximately $105 million in 2027 and approximately $241 million in the aggregate from 2028 through 2030. Estimates for future cash contributions may change materially based on several factors including market volatility, discount rate changes, asset return changes, or changes in economic or demographic trends. There have been significant increases in forecasted contributions to our U.S. plans and non-U.S. defined benefit pension plans in the past and such forecasts can be significantly impacted in the future.
Inability to maintain our credit rating or access the financing markets may adversely impact our business, liquidity and cash flows.
As of December 31, 2025, we had $741.7 million of total indebtedness, including $700 million aggregate principal amount of our 2031 Notes. Our business may not generate cash flows from operations sufficient to pay off these notes and we may need to refinance these notes prior to maturity or explore additional sources of debt and/or equity to repay these notes. The agencies rating our indebtedness regularly evaluate us and determine our credit ratings based on several factors.
These factors include our financial strength and ability to generate earnings and cash flows, as well as factors not entirely within our control, such as rising interest rates, conditions affecting the information technology industry and the economy and changes in rating methodologies. In 2024, we were downgraded from B+ to B by Standard & Poor’s 500, and in 2025 we were downgraded from B1 to B2 by Moody’s. Both rating agencies currently rate Unisys with a stable outlook.
Downgrades of our credit ratings have and could continue to adversely affect our access to liquidity and capital as well as our ability to gain and retain client business. A further adverse change in our credit ratings could also significantly increase our cost of funds, decrease the number of investors and counterparties willing to lend to us or purchase our securities and impact our ability to utilize surety bonds or other financial instruments we use to run our business. Rising interest rates and other market conditions may also impact our ability to utilize surety bonds, letters of credit, foreign exchange derivatives or other financial instruments we use to conduct our business. These impacts could affect our growth, profitability, and financial condition, including liquidity. If we are unable to access the financing markets, we would be required to use cash on hand to fund operations and our required pension contributions and repay outstanding debt as it comes due. There is no assurance that we will generate sufficient cash to fund our operations, pension contributions and refinance such debt, including because of impaired access to financing markets, which could have a material adverse effect on our business.
The terms of the credit agreement that governs our Amended and Restated Asset Based Lending (ABL) Credit Facility and the indenture that governs the 10.625% Senior Secured Notes due 2031 (the 2031 Notes) restrict our current and future operations, particularly our ability to respond to changes or to take certain actions.
The credit agreement that governs our Amended and Restated ABL Credit Facility and the indenture that governs the 2031 Notes contain a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to:
•incur additional indebtedness and guarantee indebtedness;
•pay dividends or make other distributions or repurchase or redeem capital stock;
•prepay, redeem or repurchase certain debt;
•issue certain preferred stock or similar equity securities;
•make loans and investments;
•sell assets;
•incur liens;
•enter into transactions with affiliates;
•enter into agreements restricting our subsidiaries’ ability to pay dividends; and
•consolidate, merge or sell all or substantially all of our assets.
In addition, the restrictive covenants in the credit agreement that governs our Amended and Restated ABL Credit Facility require us to maintain a minimum fixed charge coverage ratio if the availability under our Amended and Restated ABL Credit Facility falls below a specified level. Our ability to meet this financial ratio can be affected by events beyond our control, and we may be unable to meet it.
A breach of the covenants or restrictions under the indenture that govern the 2031 Notes or under the credit agreement that governs our Amended and Restated ABL Credit Facility could result in an event of default under the applicable indebtedness. Such a default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In addition, an event of default under the credit agreement that governs our Amended and Restated ABL Credit Facility would permit the lenders under our Amended and Restated ABL Credit Facility to terminate all commitments to extend further credit under that facility. Furthermore, if we were unable to repay the amounts due and payable under our Amended and Restated ABL Credit Facility, those lenders could proceed against the collateral granted to them to secure that indebtedness. In the event our lenders or noteholders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. As a result of these restrictions, we may be:
•limited in how we conduct our business;
•unable to raise additional debt or equity financing to operate during general economic or business downturns; or
•unable to compete effectively or to take advantage of new business opportunities.
These restrictions may affect our ability to grow in accordance with our strategy. In addition, our financial results, our substantial indebtedness and our credit ratings could adversely affect the availability and terms of our financing.
If we are unable to protect or enforce our intellectual property rights, prevent our services or solutions infringefrom infringing upon the intellectual property rights of others or if we lose our ability to utilize the intellectual property of others, our business could be adversely affected.
Management's Discussion & Analysis (MD&A)
New heading “Total Contract Value and Backlog”
New heading “Senior Secured Notes due 2031”
New heading “Senior Secured Notes due 2027”
New heading “Asset Based Lending (ABL) Credit Facility”
New heading “Pension and Postretirement Benefits”
New heading “Other Commitments”
Largest changes
“At the end of each year, the company estimates its future cash contributions to its global defined benefit pension plans based on year-end pension data, assumptions and agreements. In 2024, the company made cash contributions of $21.9 million, primarily for its international defined benefit pension plans. Based on current legislation, global regulations, recent interest rates and expected returns, the company estimates future cash contributions of approximately $92 million in 2025, primarily for its U.S. defined benefit pension plans. …”see in full comparison
“Based on current legislation, global regulations, recent interest rates and expected returns, the company estimates future total cash contributions to its global defined benefit pension plans of approximately $87 million in 2026, including approximately $47 million to the company’s U.S. defined benefit pension plans and approximately $40 million primarily to the company’s international defined benefit pension plans. …”see in full comparison
“The indenture relating to the 2031 Notes contains covenants that limit the ability of the company and its restricted subsidiaries (as defined therein) to, among other things: (i) incur additional indebtedness and guarantee indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem its capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) make loans and investments (including investments by the company and the Subsidiary Guarantors in subsidiaries that are not guarantors); (v) sell assets; (vi) create or incur liens; …”see in full comparison
During the third quarter ofsee in full comparison2024,2025, the company reviewed its estimated long-term expected future cash flows for its DWS reporting unit as operating results were below estimated forecast due to the impact of the slower pace of client signings driven by the current economic environment and industry dynamics. Based on this, the company concluded that a triggering event existed and conducted a quantitative goodwill assessment for the DWS reporting unit as of September 30,2024.2025. The fair value of the DWS reporting unit was estimated using a combination of discounted cash flows and market-based valuation methodologies as noted above. The discount rate and the expected gross profit margin rate applied in determining the DWS reporting unit’s fair value were 15.5% and 16.0%, respectively, with gross profit margin expected to trend up through 2028. Based on the goodwill impairment analysis performed during the third quarter of2024,2025, the carrying value of the DWS reporting unit exceeded its respective fair value, resulting in the recognition of a goodwill impairment charge of$39.1$55.0 million. A hypothetical 1% increase in the discount rate used in the determination of the DWS reporting unit’s fair value could have resulted in an increase in the goodwill impairment recorded of approximately $11 million. A hypothetical 1% decrease in gross profit margin through all periods used in the determination of the DWS reporting unit’s fair value could have resulted in an increase in the goodwill impairment recorded of approximately $32 million.
“During 2024, the company recognized cost-reduction charges and other costs of $20.6 million. The net charges related to workforce reductions were $13.5 million, principally related to severance costs, and were comprised of: (a) a charge of $23.7 million and (b) a credit of $10.2 million for changes in estimates. …”see in full comparison
Insee in full comparison2024,2025, the company recorded a net loss attributable to Unisys Corporation of $339.8 million, or $4.79 per diluted share, compared with a net loss of $193.4 million, or $2.79 per diluted share,compared with a loss of $430.7 million, or $6.31 per diluted share,in2023.2024. The net loss in20242025 and20232024 included$130.6$228.2 million and$348.9$130.6 million, respectively, of defined benefit pension plan settlementlosses.losses and goodwill impairment charges of $55.0 million and $39.1 million, respectively, related to the Digital Workplace Solutions (DWS) reportable segment.
Full comparison: every changed paragraph (93)
In 2024,2025, the company recorded a net loss attributable to Unisys Corporation of $339.8 million, or $4.79 per diluted share, compared with a net loss of $193.4 million, or $2.79 per diluted share, compared with a loss of $430.7 million, or $6.31 per diluted share, in 2023.2024. The net loss in 20242025 and 20232024 included $130.6$228.2 million and $348.9$130.6 million, respectively, of defined benefit pension plan settlement losses.losses and goodwill impairment charges of $55.0 million and $39.1 million, respectively, related to the Digital Workplace Solutions (DWS) reportable segment.
The net loss in 2024 included a goodwill impairment charge of $39.1 million within the Digital Workplace Solutions (DWS) reportable segment and a tax provision established for certain foreign subsidiaries of $27.3 million as the company is no longer asserting indefinite reinvestment of the earnings of those foreign subsidiaries.
During 2024,2025, the company purchased a group annuity contract, with plan assets, for approximately $192$316 million to transfer projected benefit obligations related to one of the company’s U.S. defined benefit pension plans. This action resulted in a pre-tax settlement loss of $130.1$227.7 million infor 2024.the year ended December 31, 2025.
During 2023,2024, the company purchased twoa group annuity contracts,contract, with pension plan assets, for approximately $516$192 million to transfer projected benefit obligations related to one of the company’s U.S. defined benefit pension plans. TheseThis actionsaction resulted in a pre-tax settlement lossesloss of $348.2$130.1 million in 2023.2025.
Revenue for 20242025 was $2.01$1,950.1 billionmillion compared with $2.02$2,008.4 billionmillion for 2023,2024, a decrease of 0.3%.2.9%. The decrease was primarily due to lower volume with clients in the Digital Workplace Solutions (DWS) and Cloud, Applications & Infrastructure Solutions (CA&I) reportable segments. Foreign currency fluctuations had a negligible impact on revenue in 20242025 compared with 2023.2024.
License and Support (L&S) represents software license and related support services, primarily ClearPath® Forward, within the company's Enterprise Computing Solutions (ECS) reportable segment. Software license renewals tend to be significant and impactful to revenue and gross profit based on timing, which can fluctuate considerably from quarter to quarter. L&S revenue for 2025 was $428.1 million compared to $431.5 million for 2024, a decrease of 0.8%.
Excluding License and Support (Ex-L&S) measures exclude revenue, gross profit and gross profit margin in connection with software license and related support services within the ECS reportable segment. Ex-L&S revenue for 2025 was $1,522.0 million compared with $1,576.9 million for 2024, a decrease of 3.5%. The decrease was primarily driven by lower volume with clients in the DWS and CA&I reportable segments.
Revenue from international operations for 2024 was $1.14 billion compared with $1.13 billion for 2023, an increase of 1.6%. Foreign currency had a negligible impact on international revenue in 2024 compared with 2023. Revenue from U.S. operations was $864.1 million for 2024 compared with $889.0 million for 2023, a decrease of 2.8%.
During 2024, the company recognized cost-reduction charges and other costs of $20.6 million. The net charges related to workforce reductions were $13.5 million, principally related to severance costs, and were comprised of: (a) a charge of $23.7 million and (b) a credit of $10.2 million for changes in estimates. In addition, the company recorded net charges of $7.1 million comprised of a charge of $4.4 million for an asset impairment, a charge of $2.6 million for net foreign currency losses related to exiting foreign countries and a net charge of $0.1 million for other expenses and changes in estimates related to other cost-reduction efforts.
During 2023,2025, the company recognized net cost-reduction charges and other costs of $9.3$30.5 million. The net charges related to workforce reductions were $8.3$23.0 million, principally related to severance costs,million and were comprised of: (a) a charge of $15.2$27.6 million for severance costs and (b) a credit of $6.9$4.6 million for changes in estimates. In addition, the company recorded net charges of $1.0$7.5 million comprised of charges$4.3 million of $4.7lease millionabandonment primarily related to professional feescosts and otheran expensesasset relatedwrite-off to cost-reduction efforts and a creditcharge of $3.7$3.2 million for net foreign currency gains related to exiting foreign countries.million.
During 2024, the company recognized net cost-reduction charges and other costs of $18.0 million. The net charges related to workforce reductions were $13.5 million and were comprised of: (a) a charge of $23.7 million for severance costs and (b) a credit of $10.2 million for changes in estimates. In addition, the company recorded net charges of $4.5 million comprised of an asset write-off charge of $4.4 million and a net charge of $0.1 million for other expenses related to other cost-reduction efforts.
Gross profit and gross profit margin were $549.3 million and 28.2% in 2025, respectively, and $585.9 million and 29.2% in 2024, respectively, and $551.3 million and 27.4% in 2023, respectively. The increasesdecreases in gross profit and gross profit margin in 20242025 were primarily due to delivery modernization and labor cost savings initiatives, partially offsetdriven by a higher costproportion reductionof chargeshardware inrevenue 2024.within Priorthe yearECS grossreportable profit margin was negatively impacted by certain adjustments related to a previously exited contract.segment.
Ex-L&S gross profit and gross profit margin were $255.4 million and 16.8% in 2025, respectively, compared with $277.6 million and 17.6% in 2024, respectively. The decreases in Ex-L&S gross profit and gross profit margin in 2025 were primarily driven by lower volume with clients in the DWS and CA&I reportable segments.
Selling, general and administrative expenses were $391.2 million in 2025 (20.1% of revenue) and $424.2 million in 2024 (21.1% of revenue) and $450.3 million in 2023 (22.3% of revenue). The decrease in 2025 was primarily drivenattributable byto a reduction in variable compensation expense of $17.2 million and lower professional services.services expense of $7.4 million, in addition to cost savings achieved through prior cost reduction actions.
In 2024,2025, the company reported an operating profit of $97.4$78.5 million compared with an operating profit of $76.9$97.4 million in 2023.2024. The increasedecrease in 20242025 was primarily drivendue byto a higher gross profit and lower selling, general and administrative expenses as discussed above, partially offset by a goodwill impairment charge of $55.0 million in 2025, compared to $39.1 million in 2024, both related to the DWS reportable segment. See Note 1, “SummaryDescription of business and significant accounting policies” of the Notes to Consolidated Financial Statements for details on the goodwill impairment.impairments.
Interest expense was $53.4 million in 2025 compared with $31.9 million in 2024. The increase in 2025 was primarily due to increased long-term debt balance and higher interest rate following the issuance of $700 million aggregate principal amount of the 10.625% Senior Secured Notes due 2031 (the 2031 Notes) in June 2025.
Interest expense was $31.9 million in 2024 compared with $30.8 million in 2023.
Other (expense), net was expense of $140.8$297.3 million in 20242025, which included pension plan settlement losses of $228.2 million, compared with expense of $393.9$140.8 million in 2023.2024, Other (expense), net in 2024 and 2023which included $130.6pension millionplan andsettlement $348.9 million, respectively,losses of pension$130.6 settlementmillion. losses.In Additionally,2025, other (expense), net in 2024also included a gainloss on debt extinguishment of $7.0 million related to the repurchase, satisfaction and discharge of the 6.875% Senior Secured Notes due 2027 (the 2027 Notes). In 2024, other (expense), net included a $40.0 million gain related to a favorable settlement of a litigation matter and a net gain of $14.9 million related to a favorable judgment received in a Brazilian services tax matter. See Note 6,5, “Other (expense), net,” of the Notes to Consolidated Financial Statements for details of other (expense), net.
Pension expense in 2024 was $182.8 million compared with $391.3 million in 2023. Pension expense in 2024 and 2023 included $130.6 million and $348.9 million, respectively, of settlement losses primarily related to the company’s U.S. defined benefits plans. See Note 17, “Employee plans,” of the Notes to Consolidated Financial Statements for details of the settlement losses.
The loss before income taxes in 20242025 was $75.3$272.2 million compared with a loss of $347.8$75.3 million in 2023.2024. The net loss in 20242025 and 20232024 included $130.6pension plan settlement losses of $228.2 million and $348.9$130.6 million, respectively, of settlement losses related to the company’s defined benefit pension plans. Additionally, the loss before income taxes in 2024 included aand goodwill impairment chargecharges of $55.0 million and $39.1 millionmillion, respectively, related to the DWS reportable segment.
The provision for income taxes in 20242025 was $117.9$67.8 million compared with a provision of $79.3$117.9 million in 2023.2024. The change in the tax provision was primarily driven by a the geographic distribution of income, the prior year provision of $27.3$27.7 million established for certain foreign subsidiaries for which the company is no longer asserting indefinite reinvestment of earnings,earnings and net changes in the geographicvaluation distributionallowance. of income and theThe net change in the valuation allowancesallowance impacting the effective tax rate was a tax benefit of approximately$5.3 million in 2025, primarily related to the company’s German operations, compared to a tax expense of $7.9 million,million in 2024, primarily inrelated to the company’s United Kingdom.Kingdom’s operations. The effective tax rate in 20242025 and 20232024 was (156.624.9)% and (22.8156.6)%, respectively, primarily driven by U.S. operating losses with no tax benefit as the deferred tax assets are subject to a full valuation allowance andallowance, non-creditable withholding taxes in the U.S. andU.S., jurisdictions with no valuation allowance that are subject to tax.tax Additionally,and the effectiveprior tax rate in 2024 was impacted by ayear change in the company’s indefinite reinvestment assertion of the earnings in certain foreign subsidiaries. See Note 7,6, “Income taxes,” of the Notes to Consolidated Financial Statements for furtherdetails details.on the effective income tax rate reconciliation.
The realization of the company’s net deferred tax assets as of December 31, 2024 is primarily dependent on theits ability to generate sustained taxable income in various jurisdictions. Judgment is required to estimate forecasted future taxable income, which may be impacted by future business developments, actual operating results, strategic operational and tax initiatives, legislative, and other economic factors and developments. During 2024 and 2023, the company determined that a portion of its non-U.S. net deferred tax assets required an additional valuation allowance. The net change in the valuation allowance impacting the effective tax rate in 2024 was approximately $7.9 million, primarily in the United Kingdom, and in 2023, the net change was approximately $2.1 million, primarily in Latin America.
It is at least reasonably possible that the company’s judgment about the need for, and level of, existing valuation allowances could change in the near term based on changes in objective evidence such as further sustained income or loss in certain jurisdictions, as well as the other factors discussed above, primarily in certain jurisdictions outside of the United States. As such, the company will continue to monitor income levels and mix among jurisdictions, potential changes to the company’s operating and tax model, and other legislative or global developments in its determination. It is reasonably possible that such changes could result in a material impact to the company’s valuation allowance within the next 12 months. Any increase or decrease in the valuation allowance would result in additional or lower income tax expense in such period and could have a significant impact on that period’s earnings.
In 2021, theThe Organization for Economic CooperationCo-operation and Development introduced(OECD) and participating countries continue to work toward the enactment of a framework to implement a15% global minimum corporate tax ofrate. 15%, referred to as Pillar Two, effective January 1, 2024, and onward. While it is uncertain whether the U.S. will enact legislation to adopt Pillar Two, certainMany countries in whichwhere the company operates have adoptedenacted such legislation, and other countriesor are in the process of introducingenacting legislationlaws tobased implementon thisthe minimumOECD’s proposals. These tax directive. Pillar Twochanges did not have a material effectimpact onto the company’s globaleffective effectiveincome tax rate andin its consolidated financial statements.2025.
The netNet loss attributable to Unisys Corporation for 20242025 was $193.4$339.8 million, or $2.79$4.79 per diluted share, compared with a net loss of $430.7$193.4 million, or $6.31$2.79 per diluted share in 2023.2024. TheIn 2025 and 2024, the net loss in 2024 and 2023 included $130.6pension million and $348.9 million, respectively, ofplan settlement losses, net of tax, relatedof to$228.2 themillion company’sand defined$130.6 benefitmillion, pensionrespectively, plans. Additionally, the net loss in 2024 included aand goodwill impairment chargecharges of $55.0 million and $39.1 millionmillion, respectively, related to the DWS reportable segmentsegment. andAdditionally in 2024, the net loss included a tax provision of $27.3$27.7 million established for certain foreign subsidiaries for which the company is no longer asserting indefinite reinvestment of earnings.
The following table represents Ex-L&S and L&S financial measures:
The company evaluates the performance of the segments based on segment revenue and segment gross profit. Segment revenue and segment gross profit are exclusive of certain activities and expenses that are not allocated to specific segments relatedincluding to certain non-corethe business activities includingrelated to the company’s businessUnited process solutions, which primarily provides for the management of processes and functions for clients in select industries, and a U.K.Kingdom business process outsourcing consolidated joint venture.venture Additionally,and certain expenses such as restructuringcost reduction charges, amortization of purchased intangibles and unusual and nonrecurring items that are not allocated to specific segments. These amounts are combined within other revenue and other gross profit (loss) to arrive at consolidated revenue and consolidated gross profit (loss). See Note 20,18, “Segment information,” of the Notes to Consolidated Financial Statements for the reconciliations of segment revenue to total consolidated revenue and segment gross profit to total consolidated loss before income taxes.
InformationA summary of the company’s operations by reportable segment is presented below:
DWS revenue was $523.5 million in 2024 and $546.1 million in 2023, a decrease of 4.1%. The decline in revenue in 2024 was primarily driven by lower volume with existing clients, partially offset by revenue from expansion and new scope for existing clients and new logo contracts, as compared to the prior-year period. Foreign currency fluctuations had a negligible impact on DWS revenue in 2024 compared with 2023. Gross profit percent was 15.7% in 2024 and 14.0% in 2023. The increase in gross profit percent in 2024 compared with 2023 was primarily driven by delivery modernization and efficiency initiatives.
CA&IDWS revenue was $526.9$508.4 million in 20242025 and $531.0$523.5 million in 2023,2024, a decrease of 0.8%.2.9%. Foreign currency fluctuations had a negligible impact on CA&IDWS revenue in 20242025 compared with 2023.2024. Gross profit percent was 16.5%14.5% in 20242025 and 15.4%15.7% in 2023.2024. The increasedecreases in revenue and gross profit percent in 2024 compared with 2023 waswere primarily driven by laborlower costvolume savingswith initiatives.clients.
ECSCA&I revenue was $651.3$732.8 million in 20242025 and $648.0$764.4 million in 2023,2024, ana increasedecrease of 0.5%.4.1%. The decrease in revenue was primarily driven by lower volume with clients in the public sector. Foreign currency fluctuations had a negligible impact on ECSCA&I revenue in 20242025 compared with 2023.2024. Gross profit percent was 60.2%20.2% in 20242025 and 61.2%19.6% in 2023.2024. The decreaseincrease in gross profit percent in 2024 compared with 2023 was primarily driven by alabor highercost proportionsavings of hardware revenue, which has a lower gross margin relative to license renewals.initiatives.
ECS revenue was $628.9 million in 2025, which remained relatively flat compared to revenue in 2024 of $627.5 million. Foreign currency fluctuations had a negligible impact on ECS revenue in 2025 compared with 2024. Gross profit percent was 55.5% in 2025 and 58.0% in 2024. The decrease in gross profit percent was primarily driven by a higher proportion of hardware revenue, which has a lower gross margin profile relative to license renewals.
Total Contract Value and Backlog
Total Contract Value (TCV) represents the initial estimated revenue related to contracts signed in the period without regard for early termination or revenue recognition rules. Changes to contracts and scope are treated as TCV only to the extent of the incremental new value. New Business TCV represents TCV attributable to expansion and new scope for existing clients and new logo contracts. L&S TCV is driven by software license renewals, and as such, changes in timing or terms of renewals can lead to fluctuations from period to period. Measuring TCV involves the use of estimates and judgments and the extent and timing of conversion of TCV to revenue may be impacted by, among other factors, the types of services and solutions sold, contract duration, the pace of client spending, actual volumes of services delivered as compared to the volumes anticipated at the time of contract signing, and contract modifications, including, without limitation, contract nullification and termination, over the lifetime of a contract.
Backlog represents the estimated amount of future revenue to be recognized under contracted work, which has not yet been delivered or performed. The timing of conversion of backlog to revenue may be impacted by, among other factors, the timing of execution, the extension, nullification or early termination of existing contracts with or without penalty, adjustments to estimates in pricing or volumes for previously included contracts, seasonality and foreign currency exchange rates.
The following table summarizes the company’s TCV metrics.
(i) New Business relates to expansion and new scope for existing clients and new logo contracts.
(ii) In 2025, New Business TCV includes a mutually agreed-upon client termination adjustment of $228 million that was previously recorded in the first quarter of 2025. Accordingly, adjusted prior periods amounts for New Business TCV are $109 million for the three months ended March 31, 2025, $231 million for six months ended June 30, 2025, and $355 million for the nine months ended September 30, 2025.
In 2025, total TCV was $2,207 million and $1,946.0 million in 2024, an increase of 13%. The increase was primarily driven by a higher concentration of Ex-L&S renewals, partially offset by a decrease in New Business. The decrease in New Business reflects elongated sales cycles with prospective clients.
Backlog was $3.16 billion as of December 31, 2025 compared to $2.84 billion as of December 31, 2024. The increase was primarily due to Ex-L&S renewal signings.
The company believes that actual revenue reflects the most relevant measure necessary to understand the company’s results of operations, but TCV can be a useful leading indicator of the company’s ability to generate future revenue over time and backlog can be a useful metric and indicator of the company’s estimate of contracted revenue to be realized in the future, in each case subject to certain inherent limitations as explained above. TCV and backlog should not be relied upon as substitutes for, or considered in isolation from, measures in accordance with generally accepted accounting principles in the United States of America.
As of December 31, 2024,2025, $265.2$234.1 million of cash and cash equivalents were held by the company’s foreign subsidiaries and branches operating outside of the U.S. The company may not be able to readily transfer approximately one-fifthone-third of these funds out of the country in which they are located as a result of local restrictions, contractual or other legal arrangements or commercial considerations. Additionally,At anyDecember transfers31, 2025, the deferred tax liability on undistributed earnings was $31.3 million. Transfers of theseinternational fundscash and cash equivalents to the U.S. in the future maywill require the company to accrue or pay withholding or other taxes on a portion of the amount transferred. At December 31, 2024,2025, the company maintained cash balances in various operating accounts in excess of federally insured limits. The company monitors this risk by evaluating the creditworthiness of the financial institutions.
During 2024,2025, cash providedused byfor operating activities was $135.1$140.0 million compared with cash provided by operations of $74.2$135.1 million during 2023.2024. The increasedecline in operating cash in 20242025 was primarily duedriven by cash contributions to lowerthe internationalcompany's defined benefit pension contributionsplans, andincluding favorablea settlementsdiscretionary cash contribution of legal$250 andmillion otherto matters.its U.S. defined benefit pension plans, partially offset by changes in working capital.
CashDuring 2025, cash used for investing activities during 2024 was $97.4$31.8 million compared with cash used for investing activities of $69.6$97.4 million during 2023.2024. Net purchasesproceeds of foreign exchange forward contracts were $17.3$37.0 million in 20242025 compared with net proceedspurchases of $11.2$17.3 million in 2023.2024. Proceeds from foreign exchange forward contracts and purchases of foreign exchange forward contracts represent derivative financial instruments used to manage the company’s currency exposure to market risks from changes in foreign currency exchange rates. InDuring addition,2025, capitalthe additionscompany ceased its use of propertiesforeign werecurrency $16.0forward millioncontracts. inIn 2024the comparedcurrent with $21.3 million in 2023, capital additions of outsourcing assets were $16.3 million in 2024 compared with $11.4 million in 2023 andperiod, the investment in marketable software was $47.6 million in 2025 compared with $47.5 million in 2024 comparedand withcapital $46.0additions of properties and other assets were $30.0 million in 2023.2025 compared with $32.3 million in 2024.
CashDuring used2025, forcash provided by financing activities during 2024 was $18.1$186.0 million compared with cash used for financing activities of $17.3$18.1 million during 2023.2024, primarily driven by the net proceeds received from the issuance of the 2031 Notes, partially offset by the repurchase, satisfaction and discharge of the 2027 Notes, both of which are described below.
In March 2024, the company purchased a group annuity contract, with plan assets, for approximately $192 million to transfer projected benefit obligations related to approximately 3,800 retirees of one of the company’s U.S defined benefit pension plans. This action resulted in a pre-tax settlement loss of $130.1 million for the year ended December 31, 2024.
In March 2023, the company purchased a group annuity contract, with plan assets, for approximately $263 million to transfer projected benefit obligations related to approximately 8,650 retirees of one of the company’s U.S. defined benefit pension plans. This action resulted in a pre-tax settlement loss of $181.0 million for the year ended December 31, 2023.
In November 2023, the company purchased a group annuity contract, with plan assets, for approximately $253 million to transfer projected benefit obligations related to approximately 3,900 retirees of one of the company’s U.S. defined benefit pension plans. This action resulted in a pre-tax settlement loss of $167.2 million for the year ended December 31, 2023.
After considering the most recent group annuity contract purchase, the company has successfully reduced its global defined benefit pension obligations since December 2020 by approximately $2.2 billion, including approximately $1.5 billion in the U.S.
The company will continue to evaluate opportunities for additional reduction of its global defined benefit pension obligations in future periods depending on overall market conditions. Due to the company’s significant pension and postretirement plans accumulated other comprehensive losses, future group annuity contract purchases could result in material non-cash settlement losses.
At the end of each year, the company estimates its future cash contributions to its global defined benefit pension plans based on year-end pension data, assumptions and agreements. In 2024, the company made cash contributions of $21.9 million, primarily for its international defined benefit pension plans. Based on current legislation, global regulations, recent interest rates and expected returns, the company estimates future cash contributions of approximately $92 million in 2025, primarily for its U.S. defined benefit pension plans. The company estimates totaled cash contributions to its U.S. and non-U.S. defined benefit pension plans of approximately $120 million in 2026 and approximately $750 million in the aggregate from 2027 through 2034. If the company is not able to generate sufficient cash flows from operations, it may need to obtain additional funding in order to make these contributions. Any material deterioration in the value of the company’s global defined benefit pension plan assets, as well as changes in pension legislation, volatility in the capital markets, discount rate changes, asset return changes, or changes in economic or demographic trends, could require the company to make cash contributions in different amounts and on a different schedule than previously estimated.
Senior Secured Notes due 2031
In June 2025, the company completed a private placement offering of $700.0 million aggregate principal amount of the 2031 Notes. The 2031 Notes will pay interest semiannually on January 15 and July 15, commencing on January 15, 2026. The 2031 Notes are fully and unconditionally guaranteed on a senior secured basis by Unisys Holding Corporation, Unisys AP Investment Company I and Unisys NPL, Inc., each a Delaware corporation that is directly or indirectly wholly owned by the company (the Subsidiary Guarantors). The net proceeds from the issuance of the 2031 Notes, together with cash on hand, were used to finance the company’s tender offer to purchase for cash any and all of its outstanding 2027 Notes and solicitation of consents from holders of the 2027 Notes to amendments to the indenture governing the 2027 Notes (the Tender Offer) and the payment of related premiums, fees and expenses. The company also used the net proceeds from the issuance of the 2031 Notes to redeem, on or about November 1, 2025, any 2027 Notes that remained outstanding following the Tender Offer, as explained under the Senior Secured Notes due 2027 section below, and to fund, together with cash on hand a portion of the company’s U.S. defined benefit pension plans deficit and postretirement liabilities.
The 2031 Notes and the guarantees by the Subsidiary Guarantors rank equally in right of payment with all of the existing and future senior debt of the company and the Subsidiary Guarantors and senior in right of payment to any future subordinated debt of the company and the Subsidiary Guarantors. The 2031 Notes and the guarantees are structurally subordinated to all existing and future liabilities (including preferred stock, trade payables and pension liabilities) of the subsidiaries of the company that are not Subsidiary Guarantors. The 2031 Notes and the guarantees are secured by liens on substantially all assets of the company and the Subsidiary Guarantors, other than certain excluded assets (the collateral). The liens securing the 2031 Notes on certain Asset Based Lending (ABL) collateral are subordinated to the liens on ABL collateral in favor of the ABL secured parties, subject to certain limitations and permitted liens.
The company may, at its option, redeem some or all of the 2031 Notes at any time on or after January 15, 2028, at a redemption price determined in accordance with the redemption schedule, plus accrued and unpaid interest, if any.
Prior to January 15, 2028, the company may, at its option, redeem some or all of the 2031 Notes at any time, at a price equal to 100% of the principal amount of the 2031 Notes redeemed plus a “make-whole” premium, plus accrued and unpaid interest, if any. The company may also redeem, at its option, up to 40% of the 2031 Notes at any time prior to January 15, 2028, using the proceeds of certain equity offerings at a redemption price of 110.625% of the principal amount thereof, plus accrued and unpaid interest, if any. On or after January 15, 2028, the company may, on any one or more occasions, redeem all or part of the 2031 Notes at specified redemption premiums, declining to par for any redemptions on or after January 15, 2030. Prior to January 15, 2028, the company may redeem up to 10% of the aggregate principal amount of the 2031 Notes during each calendar year, commencing in 2025, at a purchase price equal to 103% of the principal amount of the 2031 Notes, plus accrued and unpaid interest, if any.
The indenture relating to the 2031 Notes contains covenants that limit the ability of the company and its restricted subsidiaries (as defined therein) to, among other things: (i) incur additional indebtedness and guarantee indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem its capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) make loans and investments (including investments by the company and the Subsidiary Guarantors in subsidiaries that are not guarantors); (v) sell assets; (vi) create or incur liens; (vii) enter into transactions with affiliates; (viii) enter into agreements restricting its subsidiaries’ ability to pay dividends; and (ix) consolidate, merge or sell all or substantially all of its assets. These covenants are subject to several important limitations and exceptions.
If the company experiences certain kinds of changes of control (as defined in the indenture), it must offer to purchase the 2031 Notes at 101% of the principal amount of the 2031 Notes, plus accrued and unpaid interest, if any. In addition, if the company sells assets under certain circumstances, it must apply the proceeds of such asset sales towards an offer to repurchase the 2031 Notes at a price equal to par plus accrued and unpaid interest, if any.
The indenture also provides for events of default, which, if any of them occur, would permit or require the principal, premium, if any, interest and any other monetary obligations on all the then outstanding 2031 Notes to be due and payable immediately.
Senior Secured Notes due 2027
What changed in the latest 10-Q
Risk Factors
New heading “Impairment of goodwill has negatively impacted our results of operations. If our goodwill or intangible assets are further or fully impaired in the future, our results of operations will be negatively impacted further.”
Largest changes
“Impairment of goodwill has negatively impacted our results of operations. If our goodwill or intangible assets are further or fully impaired in the future, our results of operations will be negatively impacted further.”see in full comparison
“On an annual basis, and whenever circumstances arise, we review goodwill and intangible assets for impairment. The impairment test is based on several factors, estimates and assumptions, including macroeconomic conditions, industry and market considerations, overall financial performance, market capitalization and relevant entity-specific events. Significant changes to these factors could impact the assumptions used in calculating the fair value of goodwill or intangible assets and may indicate potential impairment. …”see in full comparison
“We will continue to conduct an impairment analysis of our goodwill and intangible assets on an annual basis, as well as whenever there are events or changes in circumstances (triggering events), which indicate that the carrying amount may not be recoverable. We could be required to record additional impairment charges in the future if any recoverability assessments indicate that the carrying values of our goodwill or intangibles assets exceed their estimated fair values that or are otherwise not recoverable. …”see in full comparison
“Although the goodwill associated with the DWS reporting unit was fully impaired as of June 30, 2026, it is possible that future changes in circumstances or in the inputs and assumptions used in estimating the fair value of the company’s other reporting units could require the company to record an additional impairment charge.”see in full comparison
Full comparison: every changed paragraph (5)
There have been no material changes to the “Risk Factors” in Part I, Item 1A of the company’s Annual Report on Form 10-K for the year ended December 31, 2025.2025, except as follows:
Impairment of goodwill has negatively impacted our results of operations. If our goodwill or intangible assets are further or fully impaired in the future, our results of operations will be negatively impacted further.
On an annual basis, and whenever circumstances arise, we review goodwill and intangible assets for impairment. The impairment test is based on several factors, estimates and assumptions, including macroeconomic conditions, industry and market considerations, overall financial performance, market capitalization and relevant entity-specific events. Significant changes to these factors could impact the assumptions used in calculating the fair value of goodwill or intangible assets and may indicate potential impairment. As described in Note 12 of the Notes to Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, during the quarter ended June 30, 2026, we determined that a triggering event had occurred and therefore performed a quantitative goodwill impairment test for the Digital Workplace Solutions (DWS) reporting unit. As a result, we recorded a goodwill impairment charge of $47.2 million for the three and six months ended June 30, 2026. The impairment charge represented the entire remaining goodwill balance allocated to the DWS reporting unit, resulting in a full write-off of the reporting unit's goodwill. Additionally, during both the three and six months ended June 30, 2026, the company recorded an impairment charge of $1.5 million related to a customer relationship intangible asset. The impairment was triggered by revised expectations regarding future cash flows.
We will continue to conduct an impairment analysis of our goodwill and intangible assets on an annual basis, as well as whenever there are events or changes in circumstances (triggering events), which indicate that the carrying amount may not be recoverable. We could be required to record additional impairment charges in the future if any recoverability assessments indicate that the carrying values of our goodwill or intangibles assets exceed their estimated fair values that or are otherwise not recoverable. Further impairments of our goodwill or intangible assets would adversely affect our results of operations.
Although the goodwill associated with the DWS reporting unit was fully impaired as of June 30, 2026, it is possible that future changes in circumstances or in the inputs and assumptions used in estimating the fair value of the company’s other reporting units could require the company to record an additional impairment charge.
Management's Discussion & Analysis (MD&A)
New heading “Six months ended June 30, 2026 compared with the six months ended June 30, 2025”
New heading “Six months ended June 30, 2026 compared with the six months ended June 30, 2025”
Largest changes
see in full comparisonBasedForonthecurrentsixlegislation,months ended June 30, 2026, the company made cash contributions totaling $57.4 million to its globalregulations,definedrecentbenefitinterestpensionratesplans.and expected returns, forFor the remainder of 2026, the company expects to make cash contributions of approximately$69$40millionmillion,primarily to its U.S. defined benefit pension plans. This will resultresulting in total expected 2026 cash contributionsfor 2026of approximately $97 million to the company’s global defined benefit pensionplans,plans.includingThese contributions are expected to include approximately $47 million to the company’s U.S. qualified defined benefit pension plans and approximately $50millionmillion, primarily to the company’s international defined benefit pension plans.Additionally,Based on current funding requirements and assumptions, the company estimates future total cash contributions of approximately $104 million in 2027 to its global defined benefit pensionplansplans.ofActualapproximatelyfuture$105contributionsmillionmay differ based on changes in2027.regulatory requirements, interest rates, asset performance and other factors.
“During the second quarter of 2026, the company reviewed its estimated long-term expected future cash flows for its DWS reporting unit. DWS projected gross profit was below the previous estimated forecast primarily due to continued competitive pressure resulting from industry and macro-economic conditions. Based on this, the company concluded that a triggering event existed and conducted a quantitative goodwill assessment for the DWS reporting unit as of June 30, 2026. …”see in full comparison
“The company continuously monitors and evaluates relevant events and circumstances that could unfavorably impact the significant assumptions noted above, including changes to U.S. treasury rates and equity risk premiums, tax rates, recent market valuations from transactions by comparable companies, volatility in the company’s market capitalization, and general industry, market and macro-economic conditions. …”see in full comparison
“If, after completing the qualitative assessment, the company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the company proceeds to perform a subsequent quantitative goodwill impairment test. Alternatively, the company may elect to bypass the qualitative assessment and perform the quantitative impairment test. The quantitative goodwill impairment test compares each reporting unit’s fair value to its carrying value. If the reporting unit’s fair value exceeds its carrying value, no further procedures are required. …”see in full comparison
see in full comparisonOther (expense), net was expense of $20.8 million forFor the three months endedMarchJune31,30,20262026, the company reported an operating loss of $32.9 million compared withexpensean operating profit of$16.9$30.3 millionforin the three months endedMarchJune31,30, 2025.SeeFor the three months ended June 30, 2026, the operating loss included a goodwill impairment of $47.2 million related to the DWS reportable segment (see Note612 of the Notes to Consolidated Financial Statements for detailsofonotherthe(expensegoodwill impairment), net..
“For the six months ended June 30, 2026, the company reported an operating loss of $16.7 million compared with an operating profit of $35.4 million for the prior-year period. For the six months ended June 30, 2026, the operating loss included a goodwill impairment of $47.2 million related to the DWS reportable segment (see Note 12 of the Notes to Consolidated Financial Statements for details on the goodwill impairment).”see in full comparison
Full comparison: every changed paragraph (78)
For the three months ended MarchJune 31,30, 2026, the company reported net loss attributable to Unisys Corporation of $35.8$95.3 million, or $0.50$1.31 per diluted share, compared with a loss of $29.5$20.1 million, or $0.42$0.28 per diluted share, for the three months ended MarchJune 31,30, 2025.
For the six months ended June 30, 2026, the company reported net loss attributable to Unisys Corporation of $131.1 million, or $1.81 per diluted share, compared with a loss of $49.6 million, or $0.70 per diluted share, for the six months ended June 30, 2025.
For the three and six months ended June 30, 2026, the net loss attributable to Unisys Corporation included a goodwill impairment charge of $47.2 million related to the Digital Workplace Solutions (DWS) reportable segment.
Three months ended MarchJune 31,30, 2026 compared with the three months ended MarchJune 31,30, 2025
Revenue for the three months ended MarchJune 31,30, 2026 was $437.6$473.5 million compared with $432.1$483.3 million for the three months ended MarchJune 31,30, 2025, ana increasedecrease of 1.3%2.0% from the prior-year period. The decrease was primarily driven by the timing of ClearPath license renewals. Foreign currency fluctuations had a 63 percentage-point positive impact on revenue in the current period compared with the prior-year period, which was partially offset by the timing of software license renewals.period.
Effective in the second quarter of 2026, the company updated the naming conventions used to describe certain solution groupings to better reflect the nature of its offerings. The company renamed License and Support to ClearPath® and Excluding License and Support to Technology Solutions & Services (TS&S). These changes did not impact the company’s reportable segments, the recognition or measurement of revenue and expenses or the consolidated financial statements. As such, previously reported financial information has not been adjusted.
License and Support (L&S)ClearPath represents software license and related support services, primarily ClearPath® Forward,ForwardTM, within the company's Enterprise Computing Solutions (ECS) segment. Software license renewals tend to be significant and impactful to revenue and gross profit based on timing, which can fluctuate considerably from quarter to quarter. For the three months ended MarchJune 31,30, 2026, L&SClearPath revenue was $65.5$69.7 million compared to $71.1$87.6 million for the three months ended MarchJune 31,30, 2025, a decrease of 7.9%.20.4%. The decrease was primarily driven by the timing of softwareClearPath license renewals,renewals. partially offset by foreignForeign currency fluctuations, whichfluctuations had a 52 percentage-point positive impact on revenue in the current period compared with the prior-year period.
Excluding License and Support (Ex-LTS&S) measures excludeinclude the revenue, gross profit and gross profit margin inof connectionthe withcompany’s DWS segment, Cloud, Applications & Infrastructure Solutions (CA&I) segment and ECS segment, excluding ClearPath software license and related support servicesservices. within the ECS segment. Ex-LTS&S revenue for the three months ended MarchJune 31,30, 2026 was $372.1$403.8 million compared with $361.0$395.7 million for the three months ended MarchJune 31,30, 2025, an increase of 3.1%.2.0%. Foreign currency fluctuations had a 63 percentage-point positive impact on revenue in the current period compared with the prior-year period, partially offset by lower volumes in Digital Workplace Solutions (DWS) and Cloud, Applications & Infrastructure Solutions (CA&I) reportable segments.period.
During the three months ended MarchJune 31,30, 2026, the company recognized net cost-reduction charges related to workforce reductions of $0.7$4.1 million, compared with a net credit related to workforce reductionscharges of $0.3$1.5 million for the three months ended MarchJune 31,30, 2025. Additionally, forduring the three months ended MarchJune 31,30, 2026 and 2025,2026, the company recorded charges of $0.8 million and $0.2 million, respectively, of lease abandonment charges and other costs related to cost-reduction efforts.efforts of $2.0 million. During the three months ended June 30, 2025, the company recorded an asset write-off and other costs related to cost reduction charges of $3.3 million. See Note 3 of the Notes to Consolidated Financial Statements for details of the cost reductions actions.
Gross profit and gross profit margin were $112.5$117.3 million and 25.7%24.8% in the three months ended MarchJune 31,30, 2026, respectively, compared with $107.5$130.0 million and 24.9%26.9% for the three months ended MarchJune 31,30, 2025, respectively. The decreases were primarily driven by the timing of ClearPath license renewals.
Ex-LTS&S gross profit and gross profit margin for the three months ended MarchJune 31,30, 2026 were $72.7$77.8 million and 19.5%,19.3%, respectively, compared with $64.2$69.7 million and 17.8%17.6% for the three months ended MarchJune 31,30, 2025, respectively. The increases in Ex-L&S gross profit and gross profit margin were primarily driven by delivery improvement and labor cost savings initiativesinitiatives, inpartially offset by lower-margins generated by DWS during the CA&Icurrent segment.period.
Additionally, during the three months ended June 30, 2026, gross profit margin and TS&S gross profit margin benefited by 50 and 60 basis points, respectively, from a first quarter transaction within the company’s United Kingdom business process outsourcing consolidated joint venture. This transaction is expected to generate gross margin benefit of approximately $3 million quarterly and $12 million for the full 2026 year.
During the three months ended March 31, 2026, a transaction within the company's United Kingdom business process outsourcing consolidated joint venture generated approximately $3 million of gross margin benefit, resulting in a positive impact on gross profit margin and Ex-L&S gross profit margin of 50 basis points and 70 basis points, respectively. This transaction is expected to generate approximately $12 million of gross margin benefit for 2026.
Selling, general and administrative expense in the three months ended MarchJune 31,30, 2026 was $91.5$95.7 million (20.9%20.2% of revenue) compared with $96.8$93.6 million (22.4%19.4% of revenue) for the three months ended MarchJune 31,30, 2025. The decreaseincrease was primarily attributable to a reduction in compensation expense of $6.2 million, partially offset by higher cost reduction charges of $1.7 million.charges.
Research and development expense for the three months ended MarchJune 31,30, 2026 and 2025 was $4.8$5.8 million and $5.6$6.1 million, respectively.
For the three months ended March 31, 2026, the company reported an operating profit of $16.2 million compared with an operating profit of $5.1 million in the three months ended March 31, 2025. The increase was primarily driven by higher gross profit and lower selling, general and administrative expense as discussed above.
Interest expense for the three months ended March 31, 2026 and 2025 was $18.5 million and $8.2 million, respectively. The increase was primarily due to increased long-term debt balance and higher interest rate following the issuance of $700.0 million aggregate principal amount of 10.625% Senior Secured Notes due 2031 (the 2031 Notes) in June 2025.
Other (expense), net was expense of $20.8 million forFor the three months ended MarchJune 31,30, 20262026, the company reported an operating loss of $32.9 million compared with expensean operating profit of $16.9$30.3 million forin the three months ended MarchJune 31,30, 2025. SeeFor the three months ended June 30, 2026, the operating loss included a goodwill impairment of $47.2 million related to the DWS reportable segment (see Note 612 of the Notes to Consolidated Financial Statements for details ofon otherthe (expensegoodwill impairment), net..
Interest expense for the three months ended June 30, 2026 and 2025 was $18.3 million and $8.2 million, respectively. The increase was primarily due to increased long-term debt balance and higher interest rate following the issuance of $700.0 million aggregate principal amount of 10.625% Senior Secured Notes due 2031 (the 2031 Notes) in June 2025.
Other (expense), net was expense of $28.6 million for the three months ended June 30, 2026, compared with expense of $22.1 million for the three months ended June 30, 2025. The increase in other (expense), net was primarily driven by higher pension and postretirement expense. See Note 6 of the Notes to Consolidated Financial Statements for details of other (expense), net.
The loss before income taxes for the three months ended MarchJune 31,30, 2026 was $23.1$79.8 million, comparedwhich withincluded a lossgoodwill impairment charge of $20.0$47.2 million related to the DWS reportable segment. The company had no income or loss before income taxes for the three months ended MarchJune 31,30, 2025.
The provision for income taxes was $13.7$15.8 million for the three months ended MarchJune 31,30, 20262026, compared with a provision of $10.6$20.0 million for the three months ended MarchJune 31,30, 2025. The change in the tax provision was primarily driven by the geographic distribution of income. The effective tax rate for the three months ended MarchJune 31,30, 2026 and 2025 was (59.319.8)% and (53.0)%, respectively, primarily driven by U.S. operating losses with no tax benefit as the deferred tax assets are subject to a full valuation allowance, non-creditable withholding taxes in the U.S., and jurisdictions with no valuation allowance that are subject to tax. The effective tax rate for the three months ended June 30, 2025 is not a meaningful measure due to the lack of pre-tax income or loss.
The netNet loss attributable to Unisys Corporation for the three months ended MarchJune 31,30, 2026 was $35.8$95.3 million, or $0.50$1.31 per diluted share, compared with a net loss of $29.5$20.1 million, or $0.42$0.28 per diluted share, for the three months ended MarchJune 31,30, 2025. The net loss for the three months ended June 30, 2026 included a goodwill impairment charge of $47.2 million related to the DWS reportable segment.
Six months ended June 30, 2026 compared with the six months ended June 30, 2025
Revenue for the six months ended June 30, 2026 was $911.1 million compared with $915.4 million for the six months ended June 30, 2025, a decrease of 0.5% from the prior-year period. Foreign currency fluctuations had a 4 percentage-point positive impact on revenue in the current period compared with the prior-year period.
For the six months ended June 30, 2026, ClearPath revenue was $135.2 million compared to $158.7 million for the six months ended June 30, 2025, a decrease of 14.8%. The decrease was primarily driven by the timing of ClearPath license renewals. Foreign currency fluctuations had a 3 percentage-point positive impact on revenue in the current period compared with the prior-year period.
TS&S revenue for the six months ended June 30, 2026 was $775.9 million compared with $756.7 million for the six months ended June 30, 2025, an increase of 2.5%. Foreign currency fluctuations had a 5 percentage-point positive impact on revenue in the current period compared with the prior-year period.
During the six months ended June 30, 2026, the company recognized net cost-reduction charges related to workforce reductions of $4.8 million, compared with net charges of $1.2 million for the six months ended June 30, 2025. Additionally, during the six months ended June 30, 2026, the company recorded lease abandonment charges and other costs relating to cost reduction efforts of $2.8 million. During the six months ended June 30, 2025, the company recorded an asset write-off and other costs related to cost reduction charges of $3.5 million. See Note 3 of the Notes to Consolidated Financial Statements for details of the cost reductions actions.
The charges (credits) were recorded in the following statement of income (loss) classifications:
Gross profit and gross profit margin were $229.8 million and 25.2% in the six months ended June 30, 2026, respectively, compared with $237.5 million and 25.9% in the six months ended June 30, 2025, respectively.
TS&S gross profit and gross profit margin for the six months ended June 30, 2026 were $150.5 million and 19.4%, respectively, compared with $133.9 million and 17.7% for the six months ended June 30, 2025, respectively. The increases were primarily driven by delivery improvement and labor cost savings initiatives.
During the six months ended June 30, 2026, gross profit margin and TS&S gross profit margin benefited by 50 and 60 basis points, respectively, from a first quarter transaction within the company’s United Kingdom business process outsourcing consolidated joint venture.
Selling, general and administrative expense in the six months ended June 30, 2026 was $187.2 million (20.5% of revenue) compared with $190.4 million (20.8% of revenue) in the prior-year period. The decrease was primarily driven by a reduction in compensation expense of $8.0 million, partially offset by higher cost reduction charges of $5.3 million.
Research and development expense for the six months ended June 30, 2026 and 2025 was $10.6 million and $11.7 million, respectively.
For the six months ended June 30, 2026, the company reported an operating loss of $16.7 million compared with an operating profit of $35.4 million for the prior-year period. For the six months ended June 30, 2026, the operating loss included a goodwill impairment of $47.2 million related to the DWS reportable segment (see Note 12 of the Notes to Consolidated Financial Statements for details on the goodwill impairment).
Interest expense for the six months ended June 30, 2026 was $36.8 million compared with $16.4 million for the six months ended June 30, 2025. The increase was primarily due to increased long-term debt balance and higher interest rate following the issuance of $700.0 million aggregate principal amount of the 2031 Notes in June 2025.
Other (expense), net was expense of $49.4 million for the six months ended June 30, 2026, compared with expense of $39.0 million for the six months ended June 30, 2025. The increase in other (expense), net was primarily driven by higher pension and postretirement expense. See Note 6 of the Notes to Consolidated Financial Statements for details of other (expense), net.
The loss before income taxes for the six months ended June 30, 2026 was $102.9 million compared with a loss of $20.0 million for the six months ended June 30, 2025. For the six months ended June 30, 2026, the loss before income taxes included a goodwill impairment charge of $47.2 million.
The provision for income taxes was $29.5 million for the six months ended June 30, 2026, compared with a provision of $30.6 million for the six months ended June 30, 2025. The change in the tax provision was driven by the geographic distribution of income. The effective tax rate for the six months ended June 30, 2026 and 2025 was (28.7)% and (153.0)%, respectively, primarily driven by U.S. operating losses with no tax benefit as the deferred tax assets are subject to a full valuation allowance, non-creditable withholding taxes in the U.S., and jurisdictions with no valuation allowance that are subject to tax.
Net loss attributable to Unisys Corporation for the six months ended June 30, 2026 was $131.1 million, or $1.81 per diluted share, compared with a net loss of $49.6 million, or $0.70 per diluted share, for the six months ended June 30, 2025. For the six months ended June 30, 2026, the net loss attributable to Unisys Corporation included a goodwill impairment charge of $47.2 million.
The following table represents Ex-L&SClearPath and LTS&S financial measures:
Three months ended MarchJune 31,30, 2026 compared with the three months ended MarchJune 31,30, 2025
DWS revenue was $118.2 million for the three months ended March 31, 2026 and $118.6 million for the three months ended March 31, 2025, a decrease of 0.3%. Foreign currency fluctuations had a 6 percentage-point positive impact on DWS revenue in the current period compared with the prior-year period. This positive impact in DWS revenue was offset by lower volume due to client attrition. Gross profit percent was 13.5% in the current period compared with 14.2% in the prior-year period. The decrease in gross profit percent was primarily driven by lower volume due to client attrition.
CA&I revenue was $182.0 million for the three months ended March 31, 2026 and $176.6 million for the three months ended March 31, 2025, an increase of 3.1%. Foreign currency fluctuations had a 5 percentage-point positive impact on CA&I revenue in the current period compared with the prior-year period. This positive impact in CA&I revenue was partially offset by reduced volume due to client attrition. Gross profit percent was 21.8% in the current period compared with 19.5% in the prior-year period. The increase in gross profit percent was primarily driven by delivery improvement and labor cost savings initiatives.
ECSDWS revenue was $115.2$141.9 million for the three months ended MarchJune 31,30, 2026 and $118.7$138.1 million for the three months ended MarchJune 31,30, 2025, aan decreaseincrease of 2.9%.2.8%. Foreign currency fluctuations had a 54 percentage-point positive impact on ECSDWS revenue in the current period compared with the prior-year period. Gross profit percent was 46.9%10.8% in the current period compared with 47.7%16.9% in the prior-year period. The decreasesdecrease in revenue and gross profit percent werewas primarily drivendue byto known client attrition, a greater proportion of lower-margin hardware revenue, and increased delivery costs incurred during the timingtransition phase of softwarenew licensebusiness renewals.implementation.
CA&I revenue was $184.4 million for the three months ended June 30, 2026 and $185.2 million for the three months ended June 30, 2025, a decrease of 0.4%. Foreign currency fluctuations had a 3 percentage-point positive impact on CA&I revenue in the current period compared with the prior-year period. Gross profit percent was 25.0% in the current period compared with 20.8% in the prior-year period. The increase in gross profit percent was primarily driven by delivery improvement and labor cost savings initiatives.
ECS revenue was $126.0 million for the three months ended June 30, 2026 and $140.2 million for the three months ended June 30, 2025, a decrease of 10.1%. Foreign currency fluctuations had a 3 percentage-point positive impact on ECS revenue in the current period compared with the prior-year period. Gross profit percent was 44.8% in the current period compared with 53.5% in the prior-year period. The decreases in revenue and gross profit percent were primarily driven by the timing of ClearPath license renewals.
Six months ended June 30, 2026 compared with the six months ended June 30, 2025
A summary of the company’s operations by segment is presented below:
DWS revenue was $260.1 million for the six months ended June 30, 2026 and $256.7 million for the six months ended June 30, 2025, an increase of 1.3%. Foreign currency fluctuations had a 5 percentage-point positive impact on DWS revenue in the current period compared with the prior-year period. Gross profit percent was 12.0% in the current period compared with 15.7% in the prior-year period. The decrease in gross profit percent was primarily driven by known client attrition and a greater proportion of lower-margin hardware revenue.
CA&I revenue was $366.4 million for the six months ended June 30, 2026 and $361.8 million for the six months ended June 30, 2025, an increase of 1.3%. Foreign currency fluctuations had a 4 percentage-point positive impact on CA&I revenue in the current period compared with the prior-year period. Gross profit percent was 23.4% in the current period compared with 20.2% in the prior-year period. The increase in gross profit percent was primarily driven by delivery improvement and labor cost savings initiatives.
ECS revenue was $241.2 million for the six months ended June 30, 2026 and $258.9 million for the six months ended June 30, 2025, a decrease of 6.8%. Foreign currency fluctuations had a 4 percentage-point positive impact on ECS revenue in the current period compared with the prior-year period. Gross profit percent was 45.8% in the current period compared with 50.8% in the prior-year period. The decreases in revenue and gross profit percent were primarily driven by the timing of ClearPath license renewals.
Total Contract Value (TCV) represents the initial estimated revenue related to contracts signed in the period without regard for early termination or revenue recognition rules. Changes to contracts and scope are treated as TCV only to the extent of the incremental new value. New Business TCV represents TCV attributable to expansion and new scope for existing clients and new logo contracts. L&SClearPath TCV is driven by software license renewals, and as such, changes in timing or terms of renewals can lead to fluctuations from period to period. Measuring TCV involves the use of estimates and judgments and the extent and timing of conversion of TCV to revenue may be impacted by, among other factors, the types of services and solutions sold, contract duration, the pace of client spending, actual volumes of services delivered as compared to the volumes anticipated at the time of contract signing, and contract modifications, including, without limitation, contract nullification and termination, over the lifetime of a contract.
Backlog was $2.96$2.82 billion as of MarchJune 31,30, 2026 compared to $2.89$2.92 billion as of MarchJune 31,30, 2025.
Cash and cash equivalents at MarchJune 31,30, 2026 were $380.2$324.3 million compared to $413.9 million at December 31, 2025. The decrease in cash and cash equivalents is primarily due to the timing of cash interest paymentpayments associated with the 2031 Notes.Notes and pension and postretirement cash contributions.
As of MarchJune 31,30, 2026, $266.7$197.6 million of cash and cash equivalents were held by the company’s foreign subsidiaries and branches operating outside of the U.S. The company may not be able to readily transfer approximately one-quarterone-third of these funds out of the country in which they are located as a result of local restrictions, contractual or other legal arrangements or commercial considerations. At MarchJune 31,30, 2026, the deferred tax liability on undistributed earnings was $31.3$31.5 million. Transfers of international cash and cash equivalents to the U.S. will require the company to pay withholding or other taxes on a portion of the amount transferred. At MarchJune 31,30, 2026, the company maintained cash balances in various operating accounts in excess of federally insured limits. The company monitors this risk by evaluating the creditworthiness of the financial institutions.
During the threesix months ended MarchJune 31,30, 2026, cash used for operations was $4.4$30.7 million compared withto cash providedused byfor operations of $33.3$282.9 million during the threesix months ended MarchJune 31,30, 2025. ThisThe decreaseimprovement was primarily drivenattributable byto timinga discretionary cash contribution of cash$250 interestmillion payment associated withto the 2031company’s Notes.U.S. defined benefit pension plans in the prior-year period.
During the threesix months ended MarchJune 31,30, 2026, cash used for investing activities was $21.2$44.2 million compared with cash used for investing activities of $20.3$10.0 million during the threesix months ended MarchJune 31,30, 2025. In the current period, the investment in marketable software was $10.4$21.1 million compared with $11.2$23.6 million in the prior-year period and capital additions of properties and other assets were $10.7$22.7 million compared with $8.9$16.8 million in the prior-year period. During the six months ended June 30, 2025, net proceeds of foreign exchange forward contracts were $30.5 million. Proceeds from foreign exchange forward contracts and purchases of foreign exchange forward contracts represent derivative financial instruments used to reduce the company’s currency exposure to market risks from changes in foreign currency exchange rates. During the third quarter of 2025, the company ceased its use of foreign currency forward contracts.
During the threesix months ended MarchJune 31,30, 2026, cash used for financing activities was $6.0$14.6 million compared with cash usedprovided forby financing activities of $4.0$190.3 million during the threesix months ended MarchJune 31,30, 2025. During the six months ended June 30, 2025, cash provided by financing activities included the net proceeds received from the issuance of the 2031 Notes, partially offset by the repurchase of the 2027 Notes.
At MarchJune 31,30, 2026, total debt was $737.5$733.5 million compared to $741.7 million at December 31, 2025. During the threesix months ended MarchJune 31,30, 2026, the company repurchased $1.6 million of the 2031 Notes from the open market for $1.4 million.
UIS insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 5 filings (3 insiders, 5 trade dates, 164,399 shares, about $666.9K). Net open-market shares: -164,399 (purchases minus sales); net value about -$666.9K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-04 | Brown David Lawrence |
Open-market sale | 10,553 | $2.54 | $26.8K |
| 2026-08-03 | Bundy David J. |
Grant/award | 58,529 | $2.99 | $175.0K |
| 2026-07-31 | Prohl Kristen |
Shares withheld for tax | 2,282 | $2.87 | $6.5K |
| 2026-06-04 | Germond Philippe |
Open-market sale | 20,000 | $4.15 | $83.0K |
| 2026-06-03 | Richardson Troy |
Open-market sale | 110,000 | $4.40 | $484.0K |
| 2026-05-15 | Germond Philippe |
Open-market sale | 16,080 | $3.02 | $48.6K |
| 2026-05-11 | Brown David Lawrence |
Open-market sale | 7,766 | $3.16 | $24.5K |
Well-known investors holding UIS (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| D. E. Shaw & Co. | 2026-06-30 | 3,117,334 | $11.4M | 0.01% | Reduced 7% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 2,501,607 | $9.2M | 0.0% | Added 82% |
| Millennium Management (Israel Englander) | 2026-06-30 | 1,217,555 | $4.5M | 0.0% | Reduced 47% |
| Renaissance Technologies | 2026-06-30 | 927,700 | $3.4M | 0.0% | Added 2% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 23,025 | $84.3K | 0.0% | Reduced 96% |