Unisys Corporation

Second-quarter revenue was $474 million, down 2% year over year and down 5.2% in constant currency. Gross profit was $117 million, with gross margin of 24.8% versus 26.9% last year. GAAP operating loss was $33 million, GAAP net loss was $95 million, and diluted loss per share was $1.31; adjusted net loss was $6 million, or $0.08 per share, and adjusted EBITDA was $54 million, an 11.3% margin. By segment, TS&S revenue was $404 million, up 2% year over year, with gross margin of 19.3% versus 17.6% last year, while DWS revenue was $142 million, down 1.1%, and CA&I revenue was $184 million, down 3.2%. ECS revenue was $126 million, down 13.2%, and ClearPath revenue was $70 million, down 22.9% because of renewal timing. Management reaffirmed full-year revenue guidance of down 5% to 3.5% in constant currency, or down 2.6% to down 1.1% on a reported basis at June 30 FX rates. Full-year non-GAAP operating margin guidance remains 9% to 11%, ClearPath revenue is expected to be $425 million for 2026, and free cash flow is still expected to be about negative $25 million. For Q3, Unisys expects about $450 million of revenue, including about $370 million of TS&S revenue and about $80 million of ClearPath revenue, and about 4% non-GAAP operating margin.

Michael Thomson said the quarter showed steady execution and that the business is being helped by strong new business signings, AI-related demand, and continued momentum in ClearPath consumption. He emphasized that Unisys is positioning itself as a platform-agnostic partner for hybrid AI environments, with investments in agentic tools, data center services, and workforce AI fluency. His tone was constructive and confident, but he repeatedly framed some of the demand shifts as timing-related and said the company is still working through a broader pricing and spend mix change across the market.

Debra McCann focused on the financial bridge from revenue to profitability and cash. She said revenue of $474 million was about $20 million above the prior outlook, TS&S gross margin improved to 19.3%, and the company remains on track for 2026 profitability and free cash flow expectations. She also highlighted a noncash goodwill impairment charge of $47.2 million tied to DWS, cash balance of $324 million at June 30, net leverage of about 3.1x including the pension deficit, and expected $40 million of pension contributions in the second half of 2026. She reiterated the full-year plan for about $85 million of capex, $70 million of cash taxes, $70 million of net interest, $30 million of environmental/legal/restructuring payments, and $100 million of pension and postretirement contributions.

Analysts focused on whether AI infrastructure spending and higher hardware costs were crowding out other client spending, and Mike said Unisys is seeing that dynamic too, but framed it as partly temporary and partly an opportunity, especially for DSS. On pricing, management said price pressure is real and baked into the model, but that the company has been able to add new scope to offset some of the pressure and is roughly 85%-ish successful in doing so. Questions also probed quarterly seasonality, and Deb said Q3 will be lighter mainly because ClearPath revenue is expected to be only about $80 million, implying a stronger Q4 to reach the $425 million full-year target. On AI model choice and competition, Mike said Unisys is agnostic between open-weight/private and frontier models, and sees competitive noise from boutiques and new entrants, but said they lack full-stack managed services capabilities.