Unisys posted improved profitability with Q4 revenue of $575 million (up 5.3% YoY) and a Q4 non-GAAP operating margin of 18%; full-year non‑GAAP operating margin rose to 9.1% despite a GAAP loss driven by a one‑time $228 million pension annuity accounting charge.
The company materially de‑risked pensions and strengthened liquidity, reducing its global GAAP pension deficit by about $300 million to ~$450 million, executing annuity purchases that removed ~$320 million of U.S. pension liabilities, ending the year with $414 million cash and no major debt maturities until 2031.
For 2026 Unisys guides to a modest revenue decline but 9%–11% non‑GAAP operating margin and is positioning AI as a multi‑year demand driver with initiatives like the Service Experience Accelerator, intelligent operations architecture, and partner‑aligned AI services.
Unisys (NYSE:UIS) executives highlighted improved profitability, stronger pre-pension cash generation, and continued progress on the company’s pension de-risking strategy during the company’s fourth-quarter and full-year 2025 earnings call. Management also spent significant time outlining how it views artificial intelligence as a multi-year demand driver across its portfolio, from digital workplace services to its ClearPath Forward enterprise computing platform.
For the fourth quarter, Unisys reported revenue of $575 million, up 5.3% year-over-year as reported and up 2.7% in constant currency, which management said was driven by the timing of license and support (L&S) renewals. Non-GAAP operating margin was 18% for the quarter.
For the full year, revenue was $1.95 billion, down 2.9% as reported and down 3.3% in constant currency, coming in slightly above the midpoint of the company’s revised guidance range. Full-year non-GAAP operating margin was 9.1%, which executives said exceeded the top end of the company’s upwardly revised projections and represented 30 basis points of annual improvement.
On earnings, fourth-quarter net income was $19 million and $63 million on a non-GAAP basis, with diluted EPS of $0.25 and non-GAAP EPS of $0.86. For the full year, Unisys posted a GAAP net loss of $340 million, or a diluted loss of $4.79 per share, which the company said included an approximately $228 million one-time non-cash expense tied to a pension annuity purchase in the third quarter. Full-year non-GAAP net income was $68 million, with non-GAAP EPS of $0.93.
CFO Deb McCann emphasized results both including and excluding L&S, noting that revenue and profit recognition in that portion of the Enterprise Computing Solutions (ECS) segment can be uneven by quarter based on renewal timing. Excluding L&S, Unisys reported revenue of $388 million in the fourth quarter and $1.52 billion for the full year, both down 3.9% in constant currency.
Digital Workplace Solutions (DWS): Fourth-quarter revenue was $126 million, down 3.7% year-over-year; full-year revenue was $508 million, down 3.1%. Management attributed the declines primarily to PC-related revenue reductions, including lower third-party hardware and PC field services volumes, which it linked to Microsoft’s extension of Windows 10 support and recent higher PC prices due to memory chip shortages. The company said PC-related declines were partially offset by growth in higher-value infrastructure field services, such as enterprise storage and network infrastructure.
Cloud, Applications & Infrastructure (CA&I): Fourth-quarter revenue was $191 million, down 4.1% year-over-year; full-year revenue was $733 million, down 4.8%. Executives cited lower volumes of short-term project work at U.S. public sector clients amid federal funding disruptions and budget uncertainty, including a federal government shutdown during the first half of the quarter. McCann said Unisys still secured multiyear renewals with several large U.S. public sector clients, in some cases with new scope.
Enterprise Computing Solutions (ECS): Fourth-quarter revenue was $237 million, up 14% year-over-year; full-year revenue was $629 million, roughly flat. L&S revenue was $186 million in the quarter, up 19.8%, bringing full-year L&S to $428 million. Specialized Services and Next-Generation Compute revenue (ECS excluding L&S) was down 3.7% year-over-year in the quarter, while full-year SS&C revenue grew 4.9%, which management attributed to increased project work and business process solutions volumes at financial services clients in Europe, Latin America, and Asia Pacific.
CEO Mike Thomson described 2025 as an especially large renewal year. Unisys signed $1.7 billion of renewal total contract value (TCB) in 2025, with more than $1 billion signed in the fourth quarter alone. Thomson said the quarter included a three-year extension at improved economics with the company’s largest DWS client.
Total company TCV was $2.2 billion for the full year, driven by growth in Ex-L&S renewal signings and new scope bookings with existing clients. New Business TCV was $491 million, down 38% year-over-year, which Unisys attributed primarily to elongated sales cycles and public sector hesitancy. McCann also noted that New Business TCV included an approximately $200 million adjustment tied to a mutually agreed termination of a first-quarter 2025 new-logo DWS signing due to misaligned contractual terms; she said the outcome averted risk of future profit dilution while preserving the relationship with the prospective client.
Trailing twelve-month book-to-bill was 1.1x for the total company and 1.2x for Ex-L&S. Backlog ended the year at $3.2 billion, up 12% sequentially and 11% year-over-year.
Executives repeatedly returned to pension de-risking and liquidity. Unisys generated $128 million of full-year pre-pension free cash flow in 2025, up 55% from the prior year and above its stated expectation of $110 million. Full-year free cash flow was negative $218 million, reflecting a $250 million discretionary pension contribution and $95 million of required U.S. and non-U.S. post-retirement contributions.
Unisys ended 2025 with $414 million in cash, up from $377 million at the end of 2024. McCann said the company’s liquidity position includes no major debt maturities until 2031 and an undrawn $125 million asset-backed revolver. Net leverage was 2.8x inclusive of the global pension deficit, improving from 3.0x a year earlier.
On pensions, Unisys said it reduced its global GAAP pension deficit to approximately $450 million at year-end 2025 from roughly $750 million at the end of 2024, a $300 million improvement. The company also executed another annuity purchase in 2025 that removed approximately $320 million of gross U.S. defined benefit pension liabilities. McCann said Unisys forecasts approximately $350 million of remaining cash contributions to global pension plans in aggregate through 2029.
For 2026, Unisys guided to a constant-currency revenue decline of 6.5% to 4.5% (reported decline of 3.8% to 1.8% based on February 1 exchange rates). The company expects Ex-L&S revenue to decline 7% to 4.5% in constant currency. It also forecast full-year L&S revenue of $415 million at a growth margin of approximately 70% and reiterated expectations that 2027 and 2028 L&S revenue will average $400 million per year.
Non-GAAP operating profit margin guidance was 9% to 11% for 2026. For the first quarter, Unisys expects about $450 million of total revenue, including roughly $60 million of L&S, and said first-quarter non-GAAP operating margin should be slightly positive. The company expects full-year free cash flow of approximately negative $25 million, which implies $67 million of pre-pension free cash flow.
Thomson said the 2026 outlook reflects continued macro headwinds and competitive pricing pressure, including “several hundred basis points of growth headwinds for 2026” from a few significant renewal losses where competitors priced aggressively. However, he said the company is seeing clients place increased value on delivery quality, citing a DWS win-back of an Australian public sector client after a competitor’s delivery quality declined.
On AI, Thomson and McCann argued that demand for services should expand regardless of how clients deploy AI (private infrastructure, public cloud, or hybrid). Management pointed to initiatives including:
An agentic AI framework called Service Experience Accelerator for next-generation service desk, which management said is in production with some of Unisys’ largest clients and is planned to roll out to about one-third of the client base during 2026.
CA&I work on an intelligent operations architecture to develop and orchestrate AI agents to streamline IT operations and support financial operations decision-making related to design and compute.
Partner-aligned efforts such as standardizing SOC managed service delivery around Microsoft Sentinel and Defender, with AI agents in the service layer, and internal use of Salesforce’s Agentforce to optimize field service dispatch, with discussions about potentially offering the framework as a service.
In the Q&A, Thomson said Unisys does not view AI-driven code refactoring as a strategic threat to its ClearPath Forward ecosystem, arguing that modernizing code is “kind of the easy part” and does not address mission-critical workload requirements such as security, transaction integrity, runtime replacement, and performance tuning. He added that easier access to and movement of data can increase consumption and usage of the platform.
Unisys Corporation (NYSE: UIS) is a global information technology company that delivers a broad portfolio of digital workplace, cloud and infrastructure, application and security services. Formed in 1986 through the merger of Burroughs Corporation and Sperry Corporation, Unisys combines decades of experience in IT modernization with a focus on secure, data-driven transformations for government and enterprise organizations.
The company operates two core business segments: Services and Technology.
