Unisys Swings to Loss as ClearPath Renewal Timing Weighs
New-business contract value climbed 57% to $192 million in the second quarter.
Technology-services provider Unisys Corp. (UIS) swung to a quarterly operating loss as a goodwill impairment and the timing of ClearPath license renewals weighed on results. The company recorded a $32.9 million GAAP operating loss, compared with a $30.3 million profit a year earlier, largely reflecting a $47.2 million noncash impairment that wrote off the remaining goodwill assigned to its Digital Workplace Solutions business.
The quarter marked a renewed deterioration in Unisys’s revenue trajectory after modest growth early in the year. Revenue fell 2.0% from a year earlier to $473.5 million, following a 1.3% increase in the first quarter. In constant currency, the decline widened to 5.2% from 4.5%. Revenue rose 8.2% sequentially, though it remained below the seasonally strong $574.5 million recorded in the fourth quarter.
Technology Solutions & Services revenue rose 2.0% to $403.8 million and declined 1.3% in constant currency. Sequentially, the business grew 8.5% from its comparable first-quarter total. ClearPath revenue fell 20.4% to $69.7 million, a sharper contraction than in the prior quarter, as renewal timing shifted sales between periods.
Segment margins showed a widening split. Cloud, Applications & Infrastructure revenue edged down 0.4% to $184.4 million, while its gross margin expanded 420 basis points to 25.0% on delivery improvements and labor-cost savings. Digital Workplace Solutions revenue increased 2.8% to $141.9 million, though its gross margin contracted 610 basis points to 10.8% amid client attrition, hardware mix and transition costs for new business. Enterprise Computing Solutions revenue dropped 10.1% to $126.0 million, and its gross margin fell 870 basis points to 44.8% because of the ClearPath renewal timing.
The pipeline for new work strengthened even as total contract value and backlog declined. Year-to-date new-business total contract value rose 52% to $350 million, extending an acceleration from the first quarter. Total company contract value fell 3% to $422 million as renewal bookings weakened, and backlog decreased about 3.4% to $2.82 billion.
Companywide gross margin contracted 210 basis points to 24.8%, reversing the prior quarter’s year-over-year expansion. Non-GAAP operating margin fell 230 basis points to 5.3%, though it improved from 4.5% sequentially, while adjusted EBITDA declined to $53.5 million. Operating cash outflow narrowed to $26.3 million from $316.2 million a year earlier, when Unisys made a discretionary $250 million pension contribution.
Unisys maintained its 2026 outlook for constant-currency revenue growth of negative 5.0% to negative 3.5% and a non-GAAP operating margin of 9.0% to 11.0%. The forecast assumes about $425 million of ClearPath revenue and a constant-currency decline of 4.0% to 6.0% for Technology Solutions & Services.
A U.K. business-process-outsourcing joint venture continued to contribute about $3 million of quarterly gross profit, adding roughly 50 basis points to companywide gross margin. The transaction is expected to provide about $12 million of gross profit for the full year.