Unisys Corp. Q1 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. Unisys Corporation (NYSE: UIS) operates in three reportable segments: Digital Workplace Solutions (DWS), Cloud, Applications & Infrastructure Solutions (CA&I), and Enterprise Computing Solutions (ECS). The company reported 72,905,170 shares of common stock outstanding as of the period end.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $437.6 million | $432.1 million |
| Operating Income | $16.2 million | $5.1 million |
| Net Loss (Attributable to Unisys) | $(35.8) million | $(29.5) million |
| Diluted Loss Per Share | $(0.50) | $(0.42) |
| Gross Profit Margin | 25.7% | 24.9% |
| Cash and Cash Equivalents | $380.2 million | $413.9 million (Dec 31, 2025) |
| Total Debt | $737.5 million | $741.7 million (Dec 31, 2025) |
| Operating Cash Flow | $(4.4) million | $33.3 million |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 1.3% year-over-year, driven by a 6 percentage-point positive impact from foreign currency fluctuations. Excluding License and Support (Ex-L&S) revenue grew 3.1%.
- Operating Profitability: Operating income improved significantly to $16.2 million from $5.1 million, aided by higher gross profit and reduced selling, general, and administrative (SG&A) expenses.
- Net Loss Expansion: Despite operating improvements, the net loss widened to $35.8 million. This was primarily due to a sharp increase in interest expense ($18.5 million vs. $8.2 million) following the issuance of 10.625% Senior Secured Notes in June 2025, and higher pension-related expenses in "Other (expense), net."
- Cash Flow: Operating cash flow turned negative ($4.4 million used) compared to $33.3 million provided in the prior year, largely due to the timing of cash interest payments on the new debt.
- Segment Performance: CA&I revenue grew 3.1% with improved margins (21.8% vs. 19.5%). DWS revenue was flat (-0.3%) due to client attrition. ECS revenue declined 2.9% due to the timing of software license renewals.
Guidance, Outlook, and Risks
- Pension Obligations: The company expects total cash contributions of approximately $97 million to global defined benefit pension plans in 2026, with $47 million allocated to U.S. plans. Future contributions remain sensitive to market volatility and discount rate changes.
- Backlog and TCV: Backlog stood at $2.96 billion as of March 31, 2026. Total Contract Value (TCV) for the quarter was $274 million, a 33% increase year-over-year, driven by a 100% increase in L&S renewals and a 45% increase in new business.
- Liquidity: The company maintains $79.1 million in availability under its Asset Based Lending (ABL) Credit Facility and expects adequate liquidity for the next 12 months.
- Risks: Key risks include the ability to meet underfunded pension obligations, exposure to foreign currency fluctuations, cybersecurity threats, and the impact of geopolitical conditions on government and public sector contracts. The company maintains a full valuation allowance on U.S. deferred tax assets.
Investor Verification Checklist
- Debt Service Capacity: Verify the company's ability to service the new $700 million 10.625% Senior Secured Notes, which significantly increased interest expense.
- Pension Funding: Monitor the $97 million expected pension contribution for 2026 and the potential for additional funding requirements if plan asset values deteriorate.
- License Renewal Timing: Assess the volatility of the ECS segment, where revenue is heavily influenced by the timing of ClearPath Forward software license renewals.
- Operating Cash Flow: Review the sustainability of operating cash flows given the shift from positive to negative in Q1 2026 due to debt service timing.
- Client Attrition: Evaluate the impact of client attrition noted in the DWS and CA&I segments on future revenue stability.