BLUE BELL, PA — Unisys Corporation (NYSE: UIS) has announced its financial results for the fourth quarter and full year of 2024, showcasing significant progress in key metrics. The company exceeded its profitability guidance while meeting revenue expectations and achieving remarkable improvements in both operating and free cash flow.
For the full year 2024, Unisys reported a gross profit margin of 29.2%, an improvement of 180 basis points (bps) year over year, with its Ex-License and Support (Ex-L&S) solutions showing even stronger growth, achieving a gross profit margin increase of 250 bps to 17.6%. Operating profit margin also rose by 100 bps to 4.8%, while non-GAAP operating profit margin improved by 180 bps to reach 8.8%.
Unisys saw full-year revenue of $2.01 billion, reflecting a slight decline of 0.3% year over year but staying in line with guidance. Free cash flow saw remarkable growth, climbing to $55.3 million from a loss of $4.5 million in 2023. Meanwhile, new business total contract value (TCV) surged by 29% year over year, driven by new logo signings.
“In 2024, we exceeded the top end of our upwardly revised profitability guidance range and met our revenue guidance,” commented Unisys Chair and CEO Peter A. Altabef. “We laid a strong foundation for future growth, signing 29% more New Business TCV… which we believe validates the increasing recognition our solutions are receiving from our clients, prospects, industry analysts, and advisors.”
Fourth Quarter Performance
For the fourth quarter of 2024, Unisys recorded a 2.2% year-over-year revenue decline, or 1.5% in constant currency, driven by reduced volumes with existing clients. Ex-L&S revenue fell 4.7%, while gross profit margin declined by 40 bps due to higher cost reduction charges.
The Enterprise Computing Solutions (ECS) segment delivered robust growth, with fourth-quarter revenue rising 2.9% year over year, or 6.2% in constant currency, aided by the timing of license renewals. Gross profit margin was 64.7%, reflecting a shift in revenue mix toward hardware, which carries a lower margin.
Delivery and efficiency initiatives drove margin improvements in Digital Workplace Solutions (DWS). The segment saw a 170 bps increase in gross profit margin to 15.7% for the full year, though its fourth-quarter revenue declined 7.9%. Similarly, Cloud, Applications & Infrastructure (CA&I) revenues dropped 4.9% in Q4, despite an annual gross profit margin increase of 110 bps.
Enhancing Cash Flow and Strengthening Finances
Free cash flow grew substantially in 2024, supported by reduced international pension contributions and favorable legal settlements. Deb McCann, Unisys Chief Financial Officer, noted, “We are continuing to execute our strategy to enhance pre-pension and postretirement free cash flow, which nearly doubled to $82 million for the full year. We believe we have a solid liquidity position and expect rising Ex-L&S profit contribution, operational efficiency, and improved cash conversion will allow us to fund our future pension contributions and organic investments for profitable growth.”
2025 Guidance
Looking ahead, Unisys forecasts a promising year, with 2025 revenue expected to grow between 0.5% and 2.5% in constant currency, alongside a non-GAAP operating profit margin of 6.5% to 8.5%. The company aims to leverage favorable trends in client engagement and operational efficiencies to continue driving profitability.
Outlook
Unisys showcased a strong recovery in 2024, cementing its financial footing with strategic adjustments and key client achievements. With an increased focus on cash flow, profitability, and new business growth, the company is well-positioned to continue building momentum in 2025 and beyond.
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