Unisys Corp (UIS) Raises Full-Year Guidance Despite Mixed 3Q23 Results
Unisys Corp (NYSE:UIS) reported a 0.7% YoY increase in total revenue for 3Q23, with Ex-L&S revenue growing by 6.2% YoY.
The company's gross profit margin declined to 20.5% from 22.6% in 3Q22, primarily due to lower software license renewals.
Unisys Corp (NYSE:UIS) reported a GAAP operating loss of $17.1M for 3Q23, compared to an operating loss of $8.0M in 3Q22.
The company raised its full-year guidance for 2023, now expecting constant currency revenue growth of 0% to 1.5%.
Unisys Corp (NYSE:UIS) released its 3Q23 earnings report on November 6, 2023, revealing mixed results. The company reported a 0.7% YoY increase in total revenue, amounting to $464.6M. However, when adjusted for constant currency, the revenue represented a decline of 1.4% YoY. Excluding License and Support (Ex-L&S), the revenue growth was more positive, with a 6.2% YoY increase, or 4.1% in constant currency.
Financial Highlights
Unisys Corp (NYSE:UIS) reported a gross profit of $95.3M for 3Q23, down from $104.3M in 3Q22. The gross profit margin also declined to 20.5% from 22.6% in 3Q22, primarily due to lower software license renewals. The Ex-L&S gross profit margin, however, increased by 230 bps YoY, driven by additional expenses associated with a contract included in the prior year period and delivery improvements.
The company reported a GAAP operating loss of $17.1M for 3Q23, compared to an operating loss of $8.0M in 3Q22. The GAAP net loss for the quarter was $50.0M, compared to a net loss of $40.1M in 3Q22. Adjusted EBITDA for the quarter was $37.0M, down from $52.5M in 3Q22.
Segment Performance
In terms of segment performance, the Digital Workplace Solutions (DWS) segment saw an 8.3% YoY increase in revenue, while the Cloud, Applications & Infrastructure Solutions (CA&I) segment reported a 9.2% YoY increase in revenue. The Enterprise Computing Solutions (ECS) segment, however, reported an 11.3% YoY decline in revenue.
Outlook and Guidance
Despite the mixed results, Unisys Corp (NYSE:UIS) raised its full-year guidance for 2023. The company now expects constant currency revenue growth of 0% to 1.5%, a non-GAAP operating profit margin of 5.0% to 6.0%, and an adjusted EBITDA margin of 12.5% to 13.5%.
Unisys Chair and CEO Peter A. Altabef commented on the results, stating,
We are raising our 2023 guidance ranges based on another solid quarter of revenue and profit results. We saw increased activity with existing clients in both Digital Workplace Solutions and Cloud, Applications & Infrastructure Solutions segments and our License and Support solutions saw increased consumption levels. Our pipeline is robust, with a significant portion of Next-Gen Solutions opportunities such as applications, cloud, data and artificial intelligence, and employee experience."
Explore the complete 8-K earnings release (here) from Unisys Corp for further details.
This article first appeared on GuruFocus.
