Unisys Corporation (UIS) | The Buildout — AI Infrastructure
The Verdict
Unisys is a global IT solutions and services company that transforms and manages infrastructure, data, software, applications, devices and workflows for enterprises, financial institutions and public sector organizations. It participates in the AI buildout as a downstream services and software provider: field-services teams install and maintain AI data-center hardware, managed-services teams orchestrate AI agents, and the ClearPath Forward platform supports high-intensity transaction processing.
| Market Cap | — |
| Revenue (TTM) | $1.9B |
| Revenue Growth | −0.6% |
| EBITDA Margin (TTM) | 12.3% |
| Net Debt | $434M |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- New business TCV rose 57% y/y in Q2 2026 to $192M; H1 new business TCV reached $350M, up 52% y/y.
- Trailing 12-month book-to-bill is 1.2x for total company and TS&S.
- TS&S gross margin expanded 170 bps y/y to 19.3% in Q2 2026.
- ClearPath full-year outlook was raised from $415M to $425M, and management expects key large ClearPath deals close by year-end.
- AI data-center field services moved from small initial scope to a large OEM engagement with client-funded training.
What We’re Watching
- DWS gross margin fell to 10.8% from 16.9% y/y, and the company recorded a $47.2M non-cash goodwill impairment in DWS.
- Total company constant-currency revenue declined 5.2% y/y in Q2 2026; full-year TS&S guidance still assumes a 6% to 4% cc decline.
- Q4 ClearPath concentration is high: Q3 is guided to ~$80M, so Q4 must exceed $200M to reach the full-year target.
- Cash fell to $324M from $414M at year-end 2025, and full-year free cash flow is guided to approximately -$25M.
The thesis is strengthening on bookings and margin outside ClearPath, but not yet confirmed in reported revenue. The evidence leans toward an improving trajectory, yet the trailing revenue line still declines in constant currency and the year's profit case depends on a Q4 ClearPath renewal surge plus a DWS margin recovery that has not begun. The open question is whether signings convert to reported growth before the concentration risk resolves.
Earnings Beat
Q2 2026 revenue was $473.5M, down 2.0% y/y, with gross margin of 24.8%. Non-GAAP operating margin was 5.3%. New business TCV reached $192M, up 57% y/y, the standout demand indicator.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $474M | $438M | $483M | −2.0% |
| Gross margin | 24.8% | 25.7% | 28.1% | -330bps |
| EBITDA | $42M | $40M | $61M | −31.4% |
| EPS | $-1.33 | $-0.50 | $-0.28 | +370.8% |
| New business TCV | $192M | $158M | n/a | Up 57% y/y |
We view these investments as foundational to both the future margin expansion of the account and the successful execution of a flagship commercial deployment that can further differentiate Unisys in the market and illustrate our ability to deliver Agentic service desk at scale.— Deb McCann, Chief Financial Officer, July 30, 2026
Management tone: Management's tone shifted from cautiously positive in Q1 to more confident in Q2, particularly on ClearPath and the full-year guide. The CFO was direct about the DWS margin decline and the $47.2M goodwill impairment, framing the QSR agentic service desk investment as deliberate. The CEO expressed high confidence that key large ClearPath deals close by year-end.
Management Guidance
Management reaffirmed raised full-year 2026 guidance: total company constant-currency revenue down 5% to 3.5%, reported revenue down 2.6% to 1.1% at June 30 FX, TS&S revenue down 6% to 4% cc, ClearPath approximately $425M, non-GAAP operating margin 9% to 11%, and free cash flow approximately -$25M. Q3 guidance calls for total revenue around $450M, TS&S around $370M, ClearPath around $80M, and non-GAAP operating margin around 4%.
Trajectory
Total revenue was $438M in Q1 2026 and $473.5M in Q2, with gross margin of 25.7% then 24.8%. Reported y/y growth swung from +1.3% to -2.0%, and constant-currency declines were 4.5% then 5.2%. The forward book is firmer: new business TCV rose 45% y/y to $158M in Q1 and 57% y/y to $192M in Q2, with backlog at $2.96B then $2.8B and book-to-bill held at 1.2x.
The Model
The model projects FY+1 revenue of $1,926M and EBITDA of $283M (14.7% margin), then FY+2 revenue of $1,960M and EBITDA of $310M (15.8% margin). The near term is anchored by the second-half 2026 ClearPath renewal surge and a TS&S business guided to a constant-currency decline of 6% to 4%; FY+2 assumes modest revenue growth and continued margin expansion.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $2.0B | $1.9B | $2.0B |
| YoY Growth | — | −1.2% | +1.8% |
| EBITDA | $247M | $283M | $310M |
| EBITDA Margin | 12.7% | 14.7% | 15.8% |
Projections are the median of 5 independent model runs. The model’s revenue sits 0.4% above analyst consensus.
Management reaffirmed raised full-year 2026 guidance: total company constant-currency revenue down 5% to 3.5%, reported revenue down 2.6% to 1.1% at June 30 FX, TS&S revenue down 6% to 4% cc, ClearPath approximately $425M, non-GAAP operating margin 9% to 11%, and free cash flow approximately -$25M. Q3 guidance calls for total revenue around $450M, TS&S around $370M, ClearPath around $80M, and non-GAAP operating margin around 4%.
What Could Go Right — and Wrong
- TS&S returns to positive constant-currency growth, converting the 1.2x book-to-bill and double-digit pipeline growth into reported revenue.
- DWS gross margin recovers from 10.8% after the QSR agentic service desk transition without service disruption.
- Q4 ClearPath renewals close as expected, supporting the full-year target and renewal stickiness.
- AI data-center field services converts from small initial scope to a larger recurring revenue stream, supported by client-funded training.
- NQCC validates the Paysafe quantum fraud detection production instance.
- Large Q4 ClearPath renewals slip, undermining full-year revenue, margin, and cash flow.
- DWS gross margin stays depressed near 10.8%, turning the $47.2M impairment into a signal of structural competitive pressure.
- TS&S constant-currency revenue continues to decline into 2027 despite strong TCV, suggesting replacement rather than growth.
- Memory and hardware inflation makes hardware-heavy DSS deals dilute TS&S gross margin gains.
- Pension or tax contingencies worsen, pressuring already-negative free cash flow.
Looking Ahead
The next 12 months test whether Unisys's signings inflection reaches the income statement. Q3 2026 guided figures set up a Q4 ClearPath renewal test; management also expects a likely Q3 U.S. pension annuity purchase. By the end of 2026, management targets more than 40% of the legacy base using agentic service desk and full-year non-GAAP operating margin of 9% to 11%. Further out, 2027-2028 average annual ClearPath revenue of about $400M and the goal to fully remove U.S. pensions by 2030 frame the multiyear plan.
- Q3 2026Q3 results vs guidance — Tests ~$450M revenue, TS&S ~$370M, ClearPath ~$80M, ~4% op margin.
- Q3 2026Pension annuity purchase — Likely removes ~$200M U.S. pension liabilities; ~$200M noncash charge expected.
- Q4 2026ClearPath renewal surge — Tests whether Q4 ClearPath exceeds $200M and large deals close.
- FY2026Full-year guidance — Tests cc revenue -5% to -3.5%, 9%-11% op margin, and the raised ClearPath target.
- FY2026Agentic service desk adoption — Tests >40% of legacy base using agentic service desk by year-end.
- By 2030U.S. pension removal — Tests full removal of U.S. pensions through annual deficit updates.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $2.0B | $2.0B | $1.9B | -2.9% |
| Gross Margin | 29.1% | 27.9% | 27.6% | 127bps |
| EBITDA | $212M | $247M | $2.5B | +16.6% |
| EBITDA Margin | 10.5% | 12.7% | 12.3% | +212bps |
| Net Income | −$193M | −$340M | −$421M | -75.7% |
| Free Cash Flow | $60M | −$194M | −$805M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)27.6%
- EBITDA Margin (TTM)12.3%
- Net Margin (TTM)-21.7%
- ROIC147.5%
- FCF Conversion26.6%
- SBC / Revenue0.4%
The Company
Unisys provides IT solutions and services across three reportable segments: Digital Workplace Solutions, Cloud, Applications & Infrastructure Solutions, and Enterprise Computing Solutions. Its ClearPath Forward platform handles high-intensity transaction processing, and AI is embedded across service desk, application services, field services, and ClearPath. The company is positioning as a platform- and model-agnostic enterprise AI orchestration and infrastructure services partner.
Unisys operates through global delivery capabilities that support large-scale rapid technology migration and modernization. It owns no disclosed plants or data centers; its infrastructure exposure is customer-facing field services and deployment work. It works through partners such as Dell, Antenna, and Microsoft, and Unisys management says its field-services workforce spans most countries where the AI buildout is happening.
Business Segments
Competitive Landscape
The source material does not provide a named direct competitor set from Unisys's filings; the source material names Kyndryl and DXC as alternative providers for field services and managed AI engagements. Management's stated edge is its global field-services footprint, which it says is rare among data center field-service providers.
- KyndrylNamed in source as an inferred competitor for field services and managed AI engagements; not discussed in Unisys filings.
- DXCNamed in source as an inferred competitor; not discussed in Unisys filings.
Supply Chain
Unisys sits downstream of hyperscale and enterprise AI spend as a services and software provider, not a component or capacity seller. No neighbor transcript mentioned Unisys by name, and the only reciprocal direct mention was Unisys naming Dell.
More on UIS: Earnings recap