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UIS reported Q2 revenues of $483.3M and EPS of $0.19, beating estimates on both top and bottom lines.
Revenue rose 11.8% sequentially, led by License & Support gains and improved subscription renewals.
UIS raised 2025 operating margin guidance to 8%-9% and tightened revenue outlook to -1% to +1%.
Unisys Corporation (UIS - Free Report) stock jumped 8.4% in the after-hour trading session yesterday following its second-quarter 2025 earnings release. The company delivered second-quarter 2025 results that outperformed Wall Street expectations and were marked by sequential revenue growth, stronger profitability metrics, and strategic financial restructuring. Despite macro uncertainties and mixed segmental results, the company exceeded expectations and made key moves to reduce pension volatility.
Also, the company narrowed its 2025 constant-currency revenue guidance and raised non-GAAP operating profit margin guidance.
Unisys’ Revenues and Earnings Beat Discussion
Unisys reported revenues of $483.3 million, surpassing the Zacks Consensus Estimate of $443 million and marking a 1.1% year-over-year increase. The sequential growth of 11.8% was driven primarily by higher License and Support (L&S) revenue, which rose 6.7% year over year to $87.6 million, buoyed by the timing of software renewals and stronger support subscriptions. Excluding L&S, revenues were at $395.7 million, down 0.1% year over year.
On the bottom line, Unisys posted non-GAAP earnings of 19 cents per share, comfortably ahead of the expected loss of 34 cents per share. This result also improved from 16 cents per share in the year-ago period.
Margins and Profitability Show Solid Expansion for Unisys
Gross profit was $130 million, nearly flat from a year ago, while the gross margin dipped slightly to 26.9% from 27.2% due to higher cost reduction charges.
Notably, the adjusted EBITDA rose 5% year over year to $61.4 million, with the margin improving 50 basis points (bps) to 12.7%. On a non-GAAP basis, operating margin improved 150 bps to 7.6%, reflecting cost optimization initiatives, lower professional services spend, and improved delivery efficiency.
Unisys Corporation Price, Consensus and EPS Surprise
Enterprise Computing Solutions (ECS) remained the strongest unit, with revenue up 7.3% year over year to $140.2 million, thanks to license renewals and managed services volume. Gross margin improved 20 bps to 53.5%.
Digital Workplace Solutions (DWS) rose 4.5% year over year to $138.1 million, supported by higher hardware sales and operational improvements and gross margin expanded 70 bps from a year ago.
Cloud, Applications & Infrastructure (CA&I) fell 4.5% to $185.2 million, weighed down by softness in public sector demand. Yet, gross margin improved 10 bps from a year ago.
Total Contract Value and Backlog of UIS
Total contract value (TCV) for the quarter was $437 million, down 5% from a year ago, primarily due to timing delays in Ex-L&S new business signings. However, renewals were strong, with Ex-L&S renewals up 85% year over year. Backlog improved to $2.92 billion from $2.79 billion in the prior year, reflecting a stable long-term revenue base.
Unisys’ Balance Sheet and Liquidity Update
As of June 30, 2025, cash and cash equivalents were $300.8 million, down from $376.5 million at year-end 2024, largely due to a discretionary $250 million pension contribution. Total liquidity remained solid, and long-term debt rose to $692.7 million following the issuance of $700 million in senior secured notes due 2031, refinancing $485 million in 2027 notes.
Unisys reported adjusted free cash flow of negative $49.4 million in the second quarter, versus a loss of $8.0 million a year ago. The sharp decline reflected pension funding and the timing of working capital changes. However, pre-pension free cash flow was negative $58.3 million, highlighting normalized cash use patterns excluding the one-time contribution.
Unisys Outlook Raised on Profitability
Unisys narrowed its 2025 constant-currency revenue guidance to a range of -1% to +1%, citing timing effects and caution around macro demand. However, it raised non-GAAP operating margin guidance to 8%–9%, up from the prior range of 6.5%–8.5%, citing efficiency gains and a more favorable revenue mix.
The Zacks Consensus Estimate for DXC’s this year’s sales indicates a decrease of 4.5%, and the same for earnings implies a decrease of 11.1% year over year.
CDW currently holds a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 2.1%, on average. The stock has gained 12.1% in the past three months.
The consensus estimate for CDW’s 2025 sales and EPS implies an increase of 2.2% and 2.21%, respectively, from a year ago.
Leidos currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 23.7%, on average. The stock has gained 9.5% in the past three months.
The Zacks Consensus Estimate for Leidos’ 2025 sales and EPS implies an increase of 2.9% and 6.5%, respectively, from a year ago.
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Unisys Stock Gains on Q2 Earnings & Revenue Beat, Lifts 2025 View
Key Takeaways
Unisys Corporation (UIS - Free Report) stock jumped 8.4% in the after-hour trading session yesterday following its second-quarter 2025 earnings release. The company delivered second-quarter 2025 results that outperformed Wall Street expectations and were marked by sequential revenue growth, stronger profitability metrics, and strategic financial restructuring. Despite macro uncertainties and mixed segmental results, the company exceeded expectations and made key moves to reduce pension volatility.
Also, the company narrowed its 2025 constant-currency revenue guidance and raised non-GAAP operating profit margin guidance.
Unisys’ Revenues and Earnings Beat Discussion
Unisys reported revenues of $483.3 million, surpassing the Zacks Consensus Estimate of $443 million and marking a 1.1% year-over-year increase. The sequential growth of 11.8% was driven primarily by higher License and Support (L&S) revenue, which rose 6.7% year over year to $87.6 million, buoyed by the timing of software renewals and stronger support subscriptions. Excluding L&S, revenues were at $395.7 million, down 0.1% year over year.
On the bottom line, Unisys posted non-GAAP earnings of 19 cents per share, comfortably ahead of the expected loss of 34 cents per share. This result also improved from 16 cents per share in the year-ago period.
Margins and Profitability Show Solid Expansion for Unisys
Gross profit was $130 million, nearly flat from a year ago, while the gross margin dipped slightly to 26.9% from 27.2% due to higher cost reduction charges.
Notably, the adjusted EBITDA rose 5% year over year to $61.4 million, with the margin improving 50 basis points (bps) to 12.7%. On a non-GAAP basis, operating margin improved 150 bps to 7.6%, reflecting cost optimization initiatives, lower professional services spend, and improved delivery efficiency.
Unisys Corporation Price, Consensus and EPS Surprise
Unisys Corporation price-consensus-eps-surprise-chart | Unisys Corporation Quote
Unisys’ Segment-Level Highlights
Enterprise Computing Solutions (ECS) remained the strongest unit, with revenue up 7.3% year over year to $140.2 million, thanks to license renewals and managed services volume. Gross margin improved 20 bps to 53.5%.
Digital Workplace Solutions (DWS) rose 4.5% year over year to $138.1 million, supported by higher hardware sales and operational improvements and gross margin expanded 70 bps from a year ago.
Cloud, Applications & Infrastructure (CA&I) fell 4.5% to $185.2 million, weighed down by softness in public sector demand. Yet, gross margin improved 10 bps from a year ago.
Total Contract Value and Backlog of UIS
Total contract value (TCV) for the quarter was $437 million, down 5% from a year ago, primarily due to timing delays in Ex-L&S new business signings. However, renewals were strong, with Ex-L&S renewals up 85% year over year. Backlog improved to $2.92 billion from $2.79 billion in the prior year, reflecting a stable long-term revenue base.
Unisys’ Balance Sheet and Liquidity Update
As of June 30, 2025, cash and cash equivalents were $300.8 million, down from $376.5 million at year-end 2024, largely due to a discretionary $250 million pension contribution. Total liquidity remained solid, and long-term debt rose to $692.7 million following the issuance of $700 million in senior secured notes due 2031, refinancing $485 million in 2027 notes.
Unisys reported adjusted free cash flow of negative $49.4 million in the second quarter, versus a loss of $8.0 million a year ago. The sharp decline reflected pension funding and the timing of working capital changes. However, pre-pension free cash flow was negative $58.3 million, highlighting normalized cash use patterns excluding the one-time contribution.
Unisys Outlook Raised on Profitability
Unisys narrowed its 2025 constant-currency revenue guidance to a range of -1% to +1%, citing timing effects and caution around macro demand. However, it raised non-GAAP operating margin guidance to 8%–9%, up from the prior range of 6.5%–8.5%, citing efficiency gains and a more favorable revenue mix.
UIS Stock’s Zacks Rank & Key Picks
Unisys currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Computers - IT Services industry are DXC Technology Company (DXC - Free Report) , CDW Corporation (CDW - Free Report) and Leidos Holdings, Inc. (LDOS - Free Report) .
DXC presently has a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 22.3%, on average. The stock has lost 11.5% in the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for DXC’s this year’s sales indicates a decrease of 4.5%, and the same for earnings implies a decrease of 11.1% year over year.
CDW currently holds a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 2.1%, on average. The stock has gained 12.1% in the past three months.
The consensus estimate for CDW’s 2025 sales and EPS implies an increase of 2.2% and 2.21%, respectively, from a year ago.
Leidos currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 23.7%, on average. The stock has gained 9.5% in the past three months.
The Zacks Consensus Estimate for Leidos’ 2025 sales and EPS implies an increase of 2.9% and 6.5%, respectively, from a year ago.