Unisys Corporation reported third‑quarter 2025 results that showed total revenue of $460.2 million, a 7.4% year‑over‑year decline and a 9.0% drop in constant currency. Operating income was a loss of $33.5 million, driven largely by a $55.0 million goodwill impairment and a $227.7 million pension settlement charge. Despite the operating loss, the company’s non‑GAAP operating profit rose to $24.8 million, giving a margin of 5.4%. The non‑GAAP earnings per share of $0.08 beat the consensus estimate of a $0.27 loss by $0.35, a 130% upside that reflects disciplined cost management and a favorable mix shift toward higher‑margin License & Support (L&S) contracts.
Revenue fell 7.4% as Ex‑License & Support (Ex‑L&S) revenue declined 3.9% to $377.2 million, while L&S revenue dropped 20.6% to $83.0 million. The decline was largely a timing effect: a concentration of software license renewals in the first half of the year pushed revenue into the prior quarter, and the company’s enterprise computing solutions segment, which accounts for the bulk of Ex‑L&S revenue, experienced a 26% drop in renewal volume. Additional headwinds included a weaker PC cycle and paused U.S. public‑sector projects amid the federal shutdown, which further dampened demand for legacy hardware and support services.
Gross profit for the quarter was $117.2 million, a 25.5% margin that slipped 370 basis points from the 29.2% margin in the same period a year earlier. The margin compression was driven by the timing of license renewals, which shifted higher‑margin revenue into the prior quarter, and by the one‑time pension settlement that increased operating expenses. The goodwill impairment also reduced operating income, but the company’s cost‑control initiatives helped keep the non‑GAAP operating profit margin above 5% despite the headwinds.
The EPS beat can be attributed to a combination of factors. First, the company’s focus on operational efficiency kept variable costs in check, allowing it to maintain profitability even as revenue fell. Second, the mix shift toward L&S contracts—known for higher margins—offset the decline in Ex‑L&S revenue. Finally, the one‑time pension settlement, while large, is a non‑recurring charge that does not affect future earnings prospects, so analysts view the underlying earnings performance as stronger than the headline loss suggests.
Unisys lowered its full‑year constant‑currency revenue guidance to a decline of 4.0% to 3.0%, a change that signals management’s concern about near‑term demand softness. The company, however, maintained its non‑GAAP operating profit margin guidance of 8.0% to 9.0% and reiterated a target of $430 million in L&S revenue for the year. The guidance reflects confidence that the L&S platform will continue to generate cash flow, while the company’s pension de‑risking program—highlighted by the recent annuity purchase that transferred $320 million of U.S. defined‑benefit liabilities—reduces future pension expense volatility.
CEO Michael Thomson emphasized that the L&S platform remains a “powerful cash‑generation engine” and that the company’s AI initiatives in the Ex‑L&S segment are gaining traction. CFO Deb McCann highlighted the company’s steady focus on operational efficiency and its ability to deliver more than $100 million of pre‑pension free cash flow. Together, the comments underscore Unisys’s strategy of balancing short‑term cost discipline with long‑term investment in high‑margin technology solutions.
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