BLUE BELL, PA — Unisys Corporation (NYSE: UIS) raised its full-year 2026 revenue forecast after third-quarter sales increased 2.5% to $471.5 million and new business contract signings surged 78%, signaling stronger demand for the company’s technology services despite expectations for an annual revenue decline.
The Blue Bell-based technology services company reported $221 million in new business total contract value during the quarter, while improved software licensing revenue helped lift profitability.
Unisys now expects full-year revenue to decline between 1.5% and 3% in constant currency, an improvement from its previous forecast of a 3.5% to 5% decrease.
Based on exchange rates at the end of the third quarter, the revised outlook translates to reported revenue growth ranging from a 0.4% decline to a 1.1% increase.
The company maintained its full-year adjusted operating profit margin forecast of 9% to 11%, reflecting management’s expectations for profitability despite continued pressure on revenue.
Third-quarter revenue increased 0.6% in constant currency, which excludes the effects of foreign exchange fluctuations.
Technology Solutions & Services, the company’s largest business, generated $387.1 million in revenue, an increase of 2.6% from a year earlier and 0.9% in constant currency.
Unisys reported a gross profit margin of 26.7%, up 1.2 percentage points from the prior-year quarter, primarily reflecting a greater proportion of software licenses relative to hardware in renewals of its ClearPath enterprise computing platform.
Operating profit margin reached 5%, while non-GAAP operating profit margin increased 1.8 percentage points to 7.2%.
Chief Financial Officer Deb McCann said revenue exceeded the company’s expectations, supported by its Technology Solutions & Services business.
“Revenue came in ahead of our expectations, led by TS&S, and our non-GAAP operating profit margin of 7.2% was above what we had guided,” McCann said.
The stronger results and management’s expectations for the fourth quarter supported the revised annual revenue forecast.
Unisys also recorded a $151 million noncash pension settlement loss, net of tax, associated with transferring approximately $200 million in projected U.S. defined benefit pension obligations to a third-party insurer.
The transaction was funded with pension plan assets and represents another step in the company’s efforts to reduce its retirement liabilities.
Since July 2025, Unisys has reduced approximately $520 million in U.S. qualified defined benefit pension obligations, approaching its target of roughly $600 million.
The company expects to complete another pension settlement during the first half of 2027 to substantially achieve that objective.
Across its operating segments, Digital Workplace Solutions reported a 3.9% revenue increase, or 1.7% in constant currency, primarily driven by higher hardware sales.
However, the segment’s gross profit margin fell 6.7 percentage points to 9.5%, reflecting previously anticipated customer attrition and increased implementation and service delivery costs.
Cloud, Applications & Infrastructure revenue declined 0.1%, or 1.2% in constant currency, while its gross profit margin improved one percentage point to 20.6% as delivery operations became more efficient.
Enterprise Computing Solutions posted the strongest revenue growth among the three segments, increasing 5.6%, or 2.7% in constant currency.
Its gross profit margin rose 9.3 percentage points to 55.5%, benefiting from a greater concentration of software licenses in ClearPath renewals and increased specialized business processing project work.
The company’s overall gross margin improvement was partially offset by higher cost reduction charges, which also weighed on Technology Solutions & Services profitability.
Unisys reported that a transaction involving its United Kingdom business process outsourcing joint venture contributed approximately 0.5 percentage points to consolidated gross margin and 0.7 percentage points to Technology Solutions & Services gross margin during the quarter.
The transaction is expected to generate approximately $3 million in quarterly gross profit benefits and $12 million for full-year 2026, with the financial impact fully recognized by year-end.
Chief Executive Officer and President Michael Thomson pointed to new contract activity and the company’s expansion into artificial intelligence-related services as priorities for future growth.
“Our AI-First execution is transforming our delivery, opening new markets in agentic services, AI infrastructure and the ClearPath ecosystem,” Thomson said.
The revised annual forecast assumes approximately $425 million in ClearPath revenue and a constant-currency revenue decline of 1% to 3% for Technology Solutions & Services.
The outlook reflects improving business momentum and stronger contract activity, although Unisys continues to anticipate a modest decline in annual revenue when adjusted for currency movements.
Support the local news that supports Chester County. MyChesCo delivers reliable, fact-based reporting and essential community resources—free for everyone. If you value that, click here to become a patron today.