BLUE BELL, PA — Unisys Corporation (NYSE: UIS), a global information technology company, recently released its financial figures for the first quarter of 2024, revealing a complex landscape of growth and challenges. The company experienced a 5.5% decline in revenue year over year, with a sharper 7.1% drop when adjusted for constant currency, indicating the impact of global exchange rate fluctuations on its earnings.
Despite these headwinds, Unisys highlighted areas of optimism, particularly in its Excluding License and Support (Ex-L&S) segment, which saw a 4.0% growth in revenue year over year, or 3.0% when adjusted for constant currency. This suggests a solid performance in the firm’s core operations outside of its traditional licensing and support services.
Gross profit margin contracted to 27.9%, down 290 basis points from the previous year, reflecting higher costs or lower revenues in some areas. However, the Ex-L&S gross profit margin surged by 420 basis points to 18.0%, signaling improved profitability in this key segment.
The company also reported a more robust operating cash flow of $23.8 million, up from $12.8 million in the first quarter of 2023, and a positive swing in free cash flow to $3.9 million, compared to a negative $7.5 million in the same period last year.
Highlighting the strategic shifts within Unisys, new logo total contract value (TCV) more than doubled year over year, which Unisys Chair and CEO Peter A. Altabef attributed to the market’s recognition of the company’s transformation and its portfolio of solutions and services. “Our focus on business outcomes is resonating with clients,” Altabef stated, expressing confidence in the company’s direction and client relationships.
CFO Deb McCann provided additional insights, acknowledging the quarterly revenue and profit decline due to the timing of License and Support renewals but emphasizing ongoing improvements in Ex-L&S performance and operational efficiency. “We are pleased to reiterate our full-year guidance and anticipate strong second-half performance,” McCann noted, pointing to the momentum with new logos and a promising sales pipeline.
Unisys maintains its full-year 2024 revenue growth and profitability outlook, expecting a slight contraction to modest growth in reported revenue and projecting Ex-L&S revenue growth between 1.5% to 5.0%, along with anticipated License and Support revenue of approximately $375 million.
The mixed first-quarter results accentuate the complexities of Unisys’ ongoing transformation amidst fluctuating global markets. With its strategic focus on expanding core service offerings and enhancing operational efficiencies, Unisys aims to stabilize its financial performance and secure a stronger footing in the competitive information technology landscape.
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