UIS Q2 Earnings Call Highlights AI-Led Growth Push

UIS Expands AI-Focused Client Strategy

CEO Michael Thomson said AI investments are becoming a central part of Unisys’ strategy, with the company building AI capabilities across its platforms, workforce and client solutions.

Thomson highlighted growth in AI-enabled services, including Agentic solutions, hybrid infrastructure support and modernization offerings designed to help enterprises deploy AI in complex technology environments.

Management also pointed to stronger demand from existing customers as a key opportunity, with new business total contract value rising 57% year over year to $192 million during the quarter.

Unisys Sees Strength in New Business

Unisys reported improving sales momentum, with year-to-date new business TCV reaching $350 million, up 52% from the prior-year period.

Thomson said improved conversion rates on large and midsized opportunities are reflecting stronger competitive positioning and expanding client relationships.

The company also noted that pipeline growth accelerated, supported by demand for digital workplace services, cloud modernization and AI-related projects.

UIS Navigates Margin and Pricing Pressure

Management acknowledged continued pricing pressure across portions of the IT services market, particularly as customers adjust spending priorities around AI infrastructure.

Thomson said Unisys has worked through much of its renewal cycle pressure and has expanded relationships through additional service opportunities tied to existing contracts.

Financially, TS&S revenues increased 2% year over year to $403.8 million, while TS&S gross margin improved 170 basis points to 19.3%, supported by delivery improvements and labor cost savings.

Unisys Maintains 2026 Outlook

CFO Deb McCann reaffirmed the company’s full-year 2026 guidance, including a constant-currency revenue decline of 5% to 3.5% and non-GAAP operating margin of 9% to 11%.

The outlook includes expectations for approximately $425 million of ClearPath revenues, with management anticipating a stronger second half due to renewal timing.

For the third quarter, Unisys expects revenues of about $450 million and a non-GAAP operating margin of approximately 4%.

UIS Addresses AI Infrastructure Demand

During Q&A, a DeepDive Equity Research analyst asked about changing client spending priorities as companies increase AI infrastructure investments.

Thomson said Unisys is seeing similar market dynamics, with some discretionary projects being delayed while infrastructure spending receives greater focus. He added that the shift benefits offerings such as device subscription services, which help customers manage technology costs.

A Needham analyst also questioned pricing trends and contract structures. Thomson said pricing pressure remains present but noted that Unisys has been adding new scopes of work to preserve relationship economics.

Unisys Focuses on Long-Term Execution

Unisys closed the call by emphasizing operational execution, AI investments and financial discipline as core priorities.

Management highlighted improving pension metrics, liquidity strength and continued investment in workforce capabilities as part of its broader plan to support future growth.

The company ended the quarter with $324.3 million of cash and maintained its focus on reducing pension-related obligations while expanding higher-value technology services.

Zacks Rank and Style Scores Signal

Unisys currently carries a Zacks Rank #3 (Hold), indicating that earnings estimate revisions do not place the stock among the strongest-rated Zacks categories. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company has a Value Score of C, Growth Score of D, Momentum Score of A and a VGM Score of C. Zacks Style Scores measure characteristics such as value, growth and momentum, with higher scores representing stronger attributes. The Zacks Rank can change as analysts update earnings estimates following quarterly results.

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