UIS - Earnings call transcript Q1 2018

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Operator

Good afternoon and welcome to the Unisys Corporation First Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Courtney Holben, Vice President of Investor Relations. ahead. go Please

Courtney Holben

results. Good President President operator. us. This Courtney our Peter XXXX is today, discuss afternoon Thank results CFO. CEO; those Investor afternoon, and Relations. Vice by financial quarter first of released our joining joined Thank Holben, this Unisys to Chairman, you, Altabef, its everyone. I'm and you Earlier Singh, for Inder

begin, like to details. I'd few we Before a cover

the the and Q&A are Unisys call Investor via website. conference today's First, being session webcast

and release guide press presentation earnings well visit. the (XX:XX:XX) find can on Investor using our to you we quarter that afternoon as to our to be fourth website, our the will year relating Second, slides as and which full performance you other we this information discussion, encourage

complementary reconciliations earnings some the presentation, the Third, to press non-GAAP have is provided today's financial non-GAAP related been which we've within includes the and measures reconciled The measures. presentation. measures release, GAAP to

to consist expense. of that results these items of evaluation be by Generally management, these the and to These often and following results. also under adjusted cash enhance period and and diluted Accepted order appropriate, that profit, to the constant presentation provided charges of its and ongoing prior Management each of free make its results. are indicative results enhance that believes future can its Although The believes liquidity by analysts the that can associated and items consistency company's and operations performance companies to or other as EBITDA the supplemental per company's anticipated industry: of the or our and operating EBITDA its earnings flow, pension periods results, Accounting company's with competitors' are to results flow with prior enhanced adjusted compare reduction other difficult Management in can cost trends distort free investors company's compare of non-GAAP in financial non-GAAP utilized of visibility of use impact well believes as future share, profitability exclude to and comparability the to ongoing the performance. not items reflect the results year-over-year measures cash and comparativeness currency. Principles, periods, company of

In had of measures under reporting addition, the will a this year be ASC to adjusted rules non-GAAP XXX previously and we in recognition recorded under revenue the been of XXXX revenue revenue XXX. ASC that adoption new exclude related result as

only release Peter. earlier, our or given. For company's Regulation necessary, turn the are effective Unisys SEC, to the other generally is over more like guidance information earnings and differ materially various filings. with Investor could regarding and remind to financial a reports the and the I'd our SEC These discussed then, the forward-looking performance. for on call from made all Copies time, comment now, you update, may more along during Form fully on any And subject I from only Unisys conference FD. those quarter. Unisys that expected our risks on From And XX-Q not time actual regarding in these otherwise guidance date earnings see will this are uncertainties and complies release as in to in deems available are expectations. Such specific adjustments, except please guidance, materials factors that cause SEC with website. the mentioned its to call and future the I'd that of manner to results statements the finally, prior reaffirm to like provide

Peter A. Altabef

key one-time was X.X% begin year-over-year discuss previously first of total X.X% the quarter. I revenue the helped by joining accomplishments by the a a revenue and us the changes, This profitability financial under strong remind of provide start you We changes that a accounting to recorded due in for results. will and our Courtney, thank to quarter adjusted I'll detail. Inder describe renegotiation detail revenue grew company Adjusting all year-over-year. that our faced first last revenue non-GAAP required throughout remove had first was Total my helped you, benefit remarks. more you we for will to year. required the down today and year-over-year would that compare some year. Thank to in highlighting difficult more quarter some contract accounting

Contract We continued grew also progress within industry Annual X.X% Value X% ACV using industries Contract in all continue industry to those and and or momentum Total believe marks year-over-year grew of revenue strategy. revenue support go-to-market year-over-year. or approximately our Focus TCV this Value. We within see Services

policies which third has revenue, growth up first our new been year-over-year impact in goal to the of up the consistency this the quarter saw this Technology revenue marking those XX.X% was Another annual I adjusted by of Non-GAAP In mentioned. removes accounting business accounting year-over-year, improve consecutive in quarter, changes, Technology changes related the revenue. required the to X.X% helped segment.

TCV and to Our first up increase differentiator, were in a more the versus from as ACV our go-to-market on focus which security rate. helped we than this in key With us strong period the to year Stealth several saw a respect XXX% efforts benefit quarter. and win contracts quarter prior specifically, win continue

margins points X. go-to-market our expanded non-GAAP operating illustrate XX.X%. one to As security year-over-year turn to saw points of the margin year-over-year improve further XX% you To for please in our to offerings profitability, pipeline we ongoing XX a efforts respect know, Stealth slide basis progress, With growth Adjusted basis expanded is to year-over-year X.X%. and overall. our to XXX security EBITDA component just

scope quarter, the total million. more business than new billion year-over-year $X.X first logo, year-over-year to to TCV, For than and more doubled TCV new new doubled which includes and also $XXX

$XXX year-over-year. would for quarter, first the have XXX% been year-over-year. the excluding still contract up in TCV largest Even was over decade. contract, signed XX% we During up more quarter, the logo ACV company than million new a that Total

business XX% was $XXX New million, ACV year-over-year. up

repeat don't an performance. quarter was this for especially to and TCV and This strong ACV one expect we

Services do we see of over expect year. continued backlog the However, the rest to momentum

total the $XX.X grew pipeline first of billion new pipeline year-over-year our to business at billion. $XX.X quarter and to year-over-year the XX% XX.X% Our grew end

security I XX% As our over pipeline year-over-year to noted, grew $XXX million.

with course, to was But look company as look our translate leading not in first we Of indicator to growth. revenue. for in the we is in that win In the quarter the all rate past, into a also points up opportunities said pipeline we will XX year-over-year connection which this, for overall. pipeline

call numbers, to for the last our newly social including products, and Investigator continued be that. application of those Elevate, of quarter. accounted $XXX earnings the such strong as a the industry is numbers to reflective portion launched believe million the we the revenue, start Q&A we're XXXX mentioned, would this, approximately noted I And Our saw growth of related pipeline of added quarter. comparison first refreshed all as Based industry industries purposes, year. in for we are Digital off of to I in used which first for and total And XX% focus of our that our services services focus XXXX. these in or on revenue as

by services and equivalents segment year to first managed infrastructure well year, based a implementing our results devices as few to year, staff. business. In Services, are starting year-over-year. XX% our achieved the in FTEs generally see on we ratio or this provide by cloud you process with on was of and result, to improvements as we will ratio full in of through this automation improved Inder quarter this and reaffirming improvements This we full to a our productivity At minutes. level, the more continue first progress. our on began time financial our As standardization Last with we guidance. color discuss

We to our service client with and programs position, and our and respect evolve those automation During to applications improving throughout in improvements and experience, automation implement in engineering to place workplace XXXX, will continue field quality, us improve digital to continue we while test services, expect this artificial and to including serve. to software advanced service intelligence have cost we show allow intelligent our solutions our new XXXX. also believe to competitive our approach

begun Services an have impact initiatives. percent we various Unisys first the In have of our of to our XX.X%. a lever a within to wanted points you with efficiency new quarter see to XX revenue year, basis these share year-over-year to this initiatives and We related as improved (XX:XX:XX) metric

quarters. in metric this to the coming year-over-year over We see improvement expect continued

Solution, prevention operationalize security companies and helps mid-single organizations quarter, as on We security. also security new overall. annual for account double-digit The well revenue expertise, prevention for Forward their have advisory services first These we advanced Services Unisys we strength those digit and roughly services tools the Endpoint saw quarter launched of services ClearPath help attacks margins Services threat incorporates against to as technology. with a in In our double and growth our endpoints. Protection malware first which to Leveraging AI cyber using prevent low revenue. percent gross managed solutions continue in consulting developed offerings services solution threats to protect Advanced Cylance the and threat

States Administration the protect some differentiate put the the and TCV remarks, Moving United TSA color on lower recently in provide in case made respect our differentiated now We've screening contract grew to quarter. first U.S. the basis Stealth in with press a year-over-year of to and a to our a built We we the progress provided solution which to our broader devices. Stealth non-GAAP IoT is with Safety to and offerings. beginning or with launched on ACV. client. This equipment. been new purpose secure, reported maintain on as revenue we these cost adjusted and a new microsegmentation mentioned, I various the with using significantly client Technology first release cybersecurity provided Transportation color that Federal. segment, version wins, Stealth on yesterday sectors as recent win, Stealth technology protection quarter on Earlier I'll set extends I operate, to a of out in also the

sector U.S. revenue decline X.X% Our Federal quarter. the saw for

with this identify that Protection signed present and significant that year. the advanced utilize a touch renewal automatically a those low recently for contract and Border differentiate XX% inspection. travelers to accounted analytics or and automated a U.S. this year-over-year higher X inclement Customs or shipments additional we investigation targeting and was low risk, for believe feel of indicative contracts. These year-over-year decline up about due late the appropriations, backlog to quarter. our and budget Federal was is points sector largely However, good for momentum this of timing continuing we impacting which weather factors approximately appropriate growing delays U.S. present business to risk in Services and expansion We've revenue clearance agency cost-plus requiring

Additionally, information to proof production partners. a a defense contract mission with for we conduct securely agency signed environment with in to share to their Stealth concept users a of enable

sector Our compare impacted year-over-year that for QX that public revenue helped was contract the year. last by renegotiation

in However, light non-GAAP even X%. was adjusted than of revenue down that, less

the of helping completion EMEA tier LineSight Asia quarter, the to already our draws We're this our America. governments of Pacific, application launched over domain LineSight, the in implement early in with than industry expertise Latin we products. around solution technology developed marking discussions and base have on years During protect that borders world. we of more XX and

The substantial and of for travelers. Australia's travelers. processing accelerate solution borders to Australia Affairs, biometrics of enter win threats non-threatening to potential the adding had a facilitate wishing the flow also identify help Stealth of secure travelers Australia's advanced uses Department and to legitimate Home We with

quarter commercial X%. Our sector of growth revenue first a non-GAAP year-over-year with had solid adjusted

pets as stress Digistics our expand the We Digi-Pet launched new is module This designed out pet continue devices products of pets a cargo holds to in several in to with personal take such the already solution transporting We're such to Digi-Pet. implement as their air in aircraft industry ability smartphones. previously cargo to owners the solution. application carriers by talks their with monitor providing via

non-GAAP year-over-year due sector Technology adjusted to services revenue X% part the down cycle. financial renewal in was Our

banking contract Argentina and about that, in omnichannel across to to start a with during We feel mobile Again, This regulatory will And meet and leading receptivity bank signing suite applications quarter. the of help This good to solution the to includes the bank positive Elevate transactions to quarter a online, to things continue Elevate. over also Inder. turn including including platform, with needs. a migrate channels, supporting our local all see solution the I'll we in-branch. of support real-time

Inder M. Singh

discuss detail Thanks, both discuss Peter. GAAP comments, in with thank the Hello, for shortly. We're today. us I'll which results adjusted and everyone, you first results. quarter, joining my pleased and In I'll for our non-GAAP

slide for provide key financial I'll on additional Moving by X, will results now some quarter, covering details. takeaways to the the and first then begin

we As by non-GAAP basis. compared Non-GAAP fronts multiple executed revenue slide about million company QX and million year X.X% level, GAAP revenue grew $XXX shows, decline At X of on across a strongly a was a to year-over-year. $XXX the adjusted X.X% year-over-year. ago,

As this disclosure, quarter. year-over-year. up Operating XXXX in X.X% year place year. comparison Adjusted XXX was margin XX.X%, were Services you a prior Non-GAAP points last our ago will making of was our for profit that by margin margin helped large took year-over-year. up from QX EBITDA basis up contract operating quarter XX.X%, up X.X% tougher points first XX was basis renegotiation the results recall from a a in

ongoing profitability We are prior cost our actions reduction to pleased contribute improvements. to that continue

XX% marks consecutive Services backlog. year-over-year the of growth $X.X third strongly grew also in quarter It consecutive and we sequentially. is now backlog. backlog in Our quarter This have that year-over-year seen up second XX% the growth billion, sequential to

more year-over-year. Our had operating strong Technology start up was from QX $XX.X from of quarter points revenue Technology margin last percentage to in the first segment X.X% margin XX.X% the million than XX profit Technology last adjusted year. Technology was a year. year. revenue Technology $XXX.X Non-GAAP XX.X% in up nearly year-over-year. also XX.X% to adjusted million, XX.X%, Non-GAAP was XX.X% doubled year-over-year year-over-year up operating

quarter. X, note by and so the won't total now Turning this trends, margin was repeat I our slide to covered helped already although revenue I currency revenue those, will that I

million the net $XX.X in first income in year. GAAP was of quarter a loss of quarter $XX.X first net to the million last compared Our

per compared earnings QX year. was $X.XX Our diluted $X.XX, share last on basis positive a a a to negative

that on $X.XX see period. slide EPS versus also non-GAAP in was year can You the $X.XX the prior

on to geography. note rates this to on adjusted by the start comparisons. side by revenue by sector. shows will shown non-GAAP geography left growth Please allow slide Turning you based first page all quarter make the X, the on trends year-over-year revenue and that to of for now are I revenue XXXX

can see, a supported U.S. U.S. the exception In our contract of you with mentioned all renegotiation first by of the the that is Technology saw quarter and that from As and growth Canada Services we we that regions had Canada. one XXXX, growth previously. and benefited region in have

did at in of not large has the in the one since contract but had U.S. also We that now end close QX. QX closed

results. side On XX performance sector the Peter Please page, which of already the the discussed. you to see has right turn slide for our segment

As we year-over-year QX faced said, our difficult have compare. a

on This to Technology. X.X%, more amount, a year reflects XXXX. to from result, of was convert operating than already profit had a revenue Services adjusted margin we quarter for operating XX.X% basis, ago. basis was versus second I $XXX this doubled a the margin quarter backlog than strong XX.X%. margin anticipated revenue an As approximately billion. growth Technology noted XX% XX.X% we operating our in first lower to increase $X.X Services points in Technology Of profit a into year-over-year. operating XX.X% with year-over-year year-over-year Non-GAAP of million and down expect stronger XXX was

we as expect And QX. compared just to be first versus $X second the year the the $XX about that quarter quarter for will this million million down reported we so

basis on seen Although high we the basis, operating we non-GAAP points. about that quarterly we a by think Capital consensus have for estimate margin be may don't that guide on IQ XX

margins on quarter our largely slightly negative check the at the to working better to flow $XX.X for our the joint Adjusted Slide we UK. our reimbursed in the associated more iPSL in JV expectations. million. with cash I spending discussed free was differences provides more in that increase expect margin our were Operating million flow. the negative was and cash QX this for than and We to reasons have cash Again, total Technology CapEx partners. timing year-over-year operating the Technology quarter investments venture largely $XX.X the our The business. be revenue capital get noted we of processing for this XX detail the X% just on principal are like by needs systems for flow quarter non-GAAP company the for expectations due high due

and many as we were required known well, you as all companies to recognition ASC new as adopt aware do have are XXX X, XXXX. other on As had requirements revenue to January

adjusted non-GAAP Our from ASC we numbers exclude gained the benefit XXX.

below presentation, Form the detail can required profit to further consistent You with post-retirement of in the the as detail ASC see well further expense line. changes, XX of filed on our our majority falls accounting now week. this slide of XX-Q the be of as impact our XXX operating Also,

we year provided. guidance financial that XXXX full Peter As we are noted, reaffirming previously

our GAAP X.X% We margin. operating for are basis, to a X.XX% this guidance of reaffirming be On X.XX% would XX.X%. range to

margin adjusted EBITDA remains XX.X% for guidance to Our XX.X%.

billion, adjusted plus revenue, remains guidance X% billion our $X.X For to non-GAAP growth representing range $X.XXX to X% minus year-over-year rate. a

still is far, we based out we in so it the and see year. play for we over could in a events positive we territory early the that chance what the for revenue adjusted will is good non-GAAP be there foresee in full macro can't on time, that year Although believe growth business

billion, remains representing for year-over-year range to GAAP revenue flat to billion Our $X.XX growth. $X.XXX X%

we with and call quarter the I'll second how the to during for relative quarter. look to are full to execute forward first these us to turn We that, position goals, they results pleased back continuing With our the and Peter. year

Peter A. Altabef

we'll questions. to now Operator, open ready (XX:XX:XX) for line you, Thank the Inder.

Operator

you. Thank

now We question-and-answer session. begin will the

go Frank from comes Atkins question first Our Please SunTrust. of ahead.

Frank C. Atkins

weakness or within questions. the to business. first infrastructure of any about the of component ask wanted my that? you taking Can I cloud strength services for and areas Thanks highlight

Frank C. Atkins

to initiatives, will between global so workplace our and those between what Yeah, and call We Frank. more it's if then cloud divide an tend cloud the really infrastructure you two. we Thanks for the question.

you at that you If number is or quarter-on-quarter entire the segregate biggest two, contract look we the the if to. really referred change

that the really driver well. of quarters as a two the big difference And between the revenue between that standpoint, quarters. operating an So from from the kind was margin was standpoint, two

you So would tell if feel you that we're I about progress we out, take there. good receiving the

mean underway I CIS become mentioned a would of market We're the and an expect standpoint, In beginning to standpoint, for workspace, build of Gartner by we'll effective considered grow in to market. we we're to and an of ways efficiency. efficiency are efficiency norms grow leader most But to what year. global efficiency space. the the already had workspace. have I still to course we go the over the from profitability to global an executer margin in get enormous CIS outside I the a really general, in to effort As really the from business a entire With have up leader respect the in profitability. get the we we call to

I say time a one good very, So year. that all contract would with to compare very last news difficult

Frank C. Atkins

Great. of count by terms give count update was business. Okay. And or the to people in and question be you head going commentary us geography total Can head side trends? about or my on utilization second the of attrition some some

Peter A. Altabef

can. I Yes,

we signed down. quarter new going back that reason quarter of begin count from signed the the largely started a first of So, staff will head which if you now, see the last the the year. up, is as about the business kind this we of to our in be of new in business in ended count we the quarter and a we all during head half we year is And of with count that to has of which to adding we at because head change that, of past, with bit part gone look the XX,XXX, we quarter, XX,XXX, the

at we of the head year, we on. as course two So have count really the things going look over

in business if which Inder result up slightly effective business, We on base mentioned, of down, will will the for as have business, the expect drive continue to year. we positive count to net drive you the base the the to head we head signed, get but more year revenue count new will, all over actually continue on

also or go that per revenue – we associate you saw, and up. giving we're that Now said, you metrics as on per revenue to expect

head of So contractor, signing reason, for net between contractor, a inflection we're per that But an not we really of expect having that's that effectively this the course do FTE. for a efficiency a sure to going good managing how business. all bit up who's this go new make and by is over us we're a little do to we more we're point who's more acting count the year, the but because be that's line

Frank C. Atkins

little What timing? factors last could for you the and for payables are operations me had maybe, bit one a Okay. of swing from cash about talk in a And We a driving EBITDA. flow between this if Inder of that relationship some little quarter. bit the

Inder M. Singh

And we're Yeah. going here it Most our all we as and year can the imagine you working think metrics you numbers capital the if into of the that especially to is momentum, backlog most begin as in to can of terms about talked that a we as little related. putting of more we're business. this drive Peter be starting capital years accelerate the working and to growth about, try revenue, of

conversion with continue play we it improve capital efficiency to headway That to cash capital that play us to expect the year, I've days at year. of out look call though, quarters, efficiency believe continue XX was you discussed working project, I Frank. that down to rest cycle. prior it for on, the good it, I really us do working from in for this and out, made XX we've As the for

very But the being for growth was I business. investment payables as of look I reflection saw think a inventory efficient. in at So of what the you our way quarter, the are we and AR spread, utilizing the the we're

Frank C. Atkins

you Thank very Great. Okay. much.

Peter A. Altabef

you, Frank. Thank

Operator

from Capital. go ahead. comes of Loop Joseph Vafi question next Our Please

Joseph A. Vafi

I your a the more had could process business, environment for that's on that the good if potentially logo given then, in And bookings good refinancing later. that guys, think a you a I repeatable earlier congratulations you thought XX% competitive was the debt afternoon, bit the wondering than new and go-to-market overall on Thanks. you. win, perhaps I'd about think love to question something may that of your why little and on color perhaps Hey, momentum numbers, kind rather get and there, that. maybe be on I and

Inder M. Singh

Thank very Yeah. much for you Joe. question, that

I think something debt. to actually I just want clarify We XX% have don't you said.

We have was wish I XX.XX% debt. it digit... single

Joseph A. Vafi

Sorry about that.

Inder M. Singh

need But ...no five-year needed not felt $XXX at look last worries. today, as tomorrow, We we build took It's capital that I But million year. that or of we on day we that, our after. as needed that it's window. the for the something something we strategy have investments working Peter for we like been period and team that R&D. have things and over in the business, we execute that the would capital, and like things strategy driving, need capital the we that felt of the use that to five-year

know, in you we As continue R&D. to invest

cloud in now. ClearPath driving we're we've drive rolled our make to to that as our well a also cybersecurity (XX:XX:XX) out and and this even across of fact, solution more innovation then the nine offer quite the money investing year Forward bit based, it In Stealth

so. financial expect want think, So the as And what balance finance of with Would strong to is as in think said, this that don't many be But I the provider clients. months more that down That's our enables of enough ended we very at more in it's would stronger position a having attractive I a candid, I thinking is last balance always year we be sometime quarter, we necessarily in possible we to as very that us to have capital. to good than at be it. ended sheet of even a to or future. be some point? look services here, it next way sheet strong XX the I that I and (XX:XX:XX)

(XX:XX:XX) logos. win day. your are good I me, Joe. tomorrow love you And what's is rate for expect to logo one XX.XX% we'd don't have let Peter (XX:XX:XX) But about happen always new point, allowing that'll to that get answer to I'll structure that So, us I question. unless strong where feel I now we some listen. down the capital new and

Peter A. Altabef

you quarter was new – Well, you of the half business, dramatic in new clearly scope. Yeah. both you continuation of includes general, obviously And you it pretty what logos, when really in half a begin Joe, thank first begin, back at And didn't in toward in last look, and performance, of new year you, sales you saw in back increase Inder. Obviously, compares saw hold. a year. good which absolutely This security contract the I increasing going last because tell is look the The we new I logos of the is pretty increasing that last – effort building but you feel going about taking relevancy. half such be our the quarter-to-quarter, in strong solutions competitiveness discussed back are we idea harder to and very one. of get But of differentiated this into to had stuff would our year. very is you, TSA feel good kind about really lumpy

Central really it of – now that the Defense last inserting and we Department end a of becoming very, this these year so recall European at us is may Stealth of in something kind with we Stealth year, deals. won large is a Bank You and it very is contract win similar. the of Australian Obviously, large capable contract Immigration with really deals are and helping

had we in two very deals large Now the quarter.

And but in proud deals have last number of resulted only one expand with the been of Protection project as year. our longer-term Customs an ACV to extraordinarily to Border work for, work RFP there will and was this was a largest footprint of very somewhat you in interesting, of That of deal out year, was logo that, the was sign very, around contracts to is That sale. very, the was tell although renewals Because that Even consultative expect. a contract of It with different. leading very trying very we you With win, I last went one conformed a And our moved indicators full the alone this high long them. would out States. of as Customs new very effective. which will new as would the mindshare year. will year. an would expansion really expect, larger. our the especially RFP. are terms the respect ACV of were time the and it ordinary but from not willing the was an as even renewal kind to we It was of very tell competition kind we really you RFP, get the for one of approach We and kind difficult them, Protection the Border and it the was to we boxes you we to much client's was relationship with it to signed approached though a to compares United go continue deal. the and approach have be in I in we Joe. agency here boxes deal significant So, we logo

And interesting with smaller even deals, seeing about the that more approach. Hutto consultative number as here. context. smaller in you deals that of RFP we're with that's are the helping a new That's that an logos. what work Eric clearly deal the actually larger It's heard You've deals we're of speak us saw increasing

that the dynamics changing more consultative. very we was important, large kind of it I to into about the yes, But deal, it actually put it make could these of sales would the Yes, was contracts. capabilities. more due some of case So due to being security in

going deals we not yes, it So think but win we we think more only kind of can sustainable, do forward. its is

Joseph A. Vafi

the nice helpful side any news of last wondering a further this updates Is That's had I congrats there, at share the pension Great. to else business time? positive you of that. I on amount know there's if quarter want us. on may with we anything and there was that

Inder M. Singh

for Joe. end as pensions the our an basis that talk update question, our annual on we you you know, about year. Thank of calculations, pension effective We and the

that point, we from were go XX-year we is GAAP what standpoint go to very And year recalculation sure. the each last to right them year a of that as pensioners see make those from striking of and sure in at we a XX/XX a So, as leadership for both team help obligations balance the through for actually XX% to actions your of of that pleased a down and are the way standpoint. actually took when well proactive was a the our through deficit manage lot end were frankly by

We continue those. manage in we of to very act thoughtfully how terms

looking certain by noted you the we can are at of follow. sure that earnings, quarter that there for As in other of well. we like that portfolio liabilities done and are helping can familiar with I'm strategies assets investment volatility we companies strategies the areas that do you're LDI as and things the the manage at fourth have other way other and call

managing as of So deficit entire including the we're actuarial on course, GAAP end that obligations. assumptions the more number on interest those this of other focused and year we'll time proactive remain course is team trying and into you depend leaning a the how so to At be obligations pensions the rate it course, of we which year. also sure behaved and forward very on. But the things making and over but we calculate on cash thoughtful of this frankly of one on sensitive, focused update the is

and to short give thoughtful So thought it fulsome answer. long answer your a but was question, I to a question I wanted

Joseph A. Vafi

again much, solid Thanks the Congrats on Inder. Great. bookings. very

Inder M. Singh

you. Thank

Peter A. Altabef

Joe. Thanks

Operator

from Our next of SIG. question Jamie Please go ahead. comes Friedman

James Eric Friedman

make first in Thank I had Jamie any a the for Peter help your like in prepared two Hi it's mentioned Susquehanna. metric. could about it you analytical apply if we're upfront two that callouts we then remarks, And then seasonal jump the with the Thank and aware how labor, you us wondering model the So, point labor financial from of as that one. my was That's just about you. Inder, But you I'll that. about should view. just one should us forward? and related you back ask building going think the queue. the seasonality. of

Peter A. Altabef

Right.

So, actually as last started a something the labor I when on actually of out, we Jamie, that's numbers. continuation started reporting year's pointed on and expansion we at

get You more to can expect more granular and see numeric. us

grown Inder which year, expect sales, company it's to the heard now – new as the years. into and for in to each as positive is the you've grow past building continues we two As the turn profitability the revenue from past of

into working that that because which kind you're as grow. opposed that all to crisper off play, getting driving metrics the as of growth from to foundation bit comes of the get So of are a to to working off kind your –

FTEs of badged continuing business. revenue. is metric. and a very There's an on a the managed And you level. level That's new a that of a important absolute started ways two about relative that now device. added kind part with last with metric that's of deal important we We're as to a our to So metric that to kind per saw is to report other at us, the we've labor at is one why percent which year of

code I working writing cetera, what pure it an simply That's more that the that efficiencies we at And it a doing getting revenue. The whether cetera, at create absolute are is people is the making whether hard very of on engineers calls, efficiency at is as our So is mean labor to we're level, badged working is percent what et doing. we're relative at kind field efficient of by mix. that absolute. et

while of to the see, focus an work is area tied number have us. really and is the And even match only get you number who you a than little So you look Because Solutions, the is is also part you mix at moving blending interesting of absolutely and get get at But doesn't much. do that that when way. Enterprise number it at opportunity don't underneath to the not badged the be a for more to is Federal so better a covers but you hire It's team, our it you really contractor. corporate we're level. at really, giving necessarily really that who heads between Federal powerfully better a that is as business quite

expect do I Jamie. in So over Those that year. guys, two percentage front the entire of the to of now, continue are we're kind to of course putting metrics you improve

by, us preview. so a You goes just add the as as to can expect year more

Inder M. Singh

what that on on full to at we think as guidance And I make that non-GAAP obviously question, our X.XX% and X.XX% our basis. were we I the operating reaffirm wanted heard your year, margin sure clear we that seasonality a was just part you to with we of adjusted look margin for operating

So, that that of sure that one it it ahead to we make aspect feel stay you always where about of as thinking is we are the we range. The of seasonality want good well.

was our pleased for in Technology very that a So the QX. see a million. QX. had We with I number that We're shared $XX specific about revenue you strong quarter very to

than numbers we to saw QX quarter Street operating that margin, we're from $XX-ish fact, was where we at was blended we would a and be. just And around that it Technology volume was off you basis that combined. and told our points higher thought that that look operating That margin just for million we that out the is XX I is you total X%. about In the would as X%. thinking Services like in does it point it what thought down we $X That so And it, standpoint, means call million. mean? it from

full for seasonality still what is we at look to you. it's highlight wanted range, As the the year, but we same the

Peter A. Altabef

quarter. several the done we've I the that, third over business see in more the area. is we much the our inherent we this about could pretty business, when from at year you under talk little a first think to I'd is quarter, Inder's range seasonal the operate talk at sense be Particularly quarter, which numbers in consistent kind getting little Technology the better when a and just in about And gotten the clearly of really that Yeah. that to understanding we finance a and the second some year. expect it analysis Jamie. team past if seasonality to add And leadership you fourth in off general quarter, seasonality it the we years, plot where And about and the obviously again we've that

a be And so, ordinarily a where it we much little it a the see has second the it's comes actually would you above understood in here But swing better long time. out and first of of than been quarter bit into quarter.

James Eric Friedman

Yeah.

it Okay. I in and smart the context that way. you're appreciate doing

So thank color. for the you

Inder M. Singh

Thank Jamie. you,

Peter A. Altabef

Thanks, Jamie.

Operator

Galinko of Sidoti. question go Please comes from ahead. next Our Matthew

Matthew Galinko

Hey. Good afternoon. Thanks for taking my question.

especially of rate the Stealth more of little expand into the so injecting context you're in was Stealth in think you you growth now. deals win hoping I highlighted could I that, You on your a bit mentioned

a just for driving individually there? of then So drill you the into what's that do rate expansion kind Stealth and how win

Peter A. Altabef

Yeah.

using in really Stealth we're So, discrete ways. three pretty

worked in And And then evolved mind right? context, it an right? private. pure of and finally, was license. ways. a public years in keep think you evolving, center and So as very become cloud cloud is few use and to all in advanced has from robust biometrics evolved Stealth evolved, data Internet between public that inside data center, itself then three data One really So Things moving into we a private of inside itself the a So that also a private month, that cloud now Stealth microsegmentation right? ago, has it and microsegmentation. is as well it if really now has product as but way identity really And this it past it that

if and to wants we're So, or Stealth put into in their into to there. whether environment, center a applications, whether it's put it somebody Stealth data certain it's license happy

The broader part second is security that of offering. services

those using as one several have offerings. we heard we LogRhythm. you partnerships today our have So are contributions we with about Stealth with of And of our Cylance, offerings, into partnerships

advances managed And seeing is the right probably in we're at relatively Stealth larger our has it's offering it's Bank as got work. a modest for equation as kind as cloud Stealth you in to differentiator in a migration where the us larger think significant So not where I the whether differentiate becomes of contract, revenue initially, Stealth law large Central well. of I such it's managed TSA now, used then security deal. but part it's on whether So global whether there, it's actually they're network, least inherent data deals whether center, which much most the right? numbers the a infrastructure, the European contracts helping such workspace, pure third, and third, as security the it's of is whether tell

good a So, we small, things see of clients that's because in not that of Stealth is as only those but clip still revenue for the while are package. very part pretty expanding And with that of numbers go clients. in business Stealth, expansion part for for the

quite big is course because deal, what substantial win really seeing based number rate it we're to us. and that's drive beginning that much rate point the on for really value, larger is seeing is value. we're what of a So win actually because is is That XX

Inder M. Singh

And I'll just piggyback on that.

of you're right I us on billion potentially, to product to it go to differentiate the Stealth focus and brings to terms market. allows we as frankly revenue $X differentiation think our in of us

spear the a one So a the there's our now Stealth original is which tip there's product, core cloud Stealth on. think portfolio about security a but cybersecurity, version yes, version, there's in mobile a strong so solution, cybersecurity Stealth as version, things, but we is the not and aspects, is it's three business of and of just obviously a

in We logical we that. very had high and which security, is the in talked analytics. And of Peter that also end that about his have remarks some wins

of we've And clients strong in offer started and other U. in it S. world. now to analytics Canada so while around our that much were and we productized very, deploying very to capability, the

deal where Australia bring other the with win we long-term world. to You a geographies already able contract saw are to also, we around capability and now our LineSight were product, to And this able a in there.

as is So, logical it involves call capabilities. security, many advanced and as just security IoT of physical I add other and which I would would our then

on to and day at basis, business the look the many the outcomes that but that you about. and necessarily of and day by talked I driving when what's the win way outcomes of – of not drive win we things, manage it's basket the would a basket helping rate is So of that capabilities TCV way, many we

Peter A. Altabef

on with governments there Australia. the governments around in respect security talked no. new the Inder. agree, world, in is the Yeah, contract ability we haven't are Obviously, CBP new to contract the border believe leading we discussed, now to the that But our this help I about with and really has right quarter about a and and it's adopt It that. welcome we believe the U.S. time just the will very coming very in to a take while we LineSight getting past the development but at been interest quickly for time weeks. governments in it's very released for for significant, market. been long And edge. six it, we're

is that of security. element So a whole

it's of Stealth. touch the of some larger some might than also quite that revenue Stealth, Stealth. numbers are independent but And of And honestly,

we So security. truly building our one-trick really, not to security And are a it when comes we pony are throughout portfolio.

Matthew Galinko

All right. Appreciate the color.

Inder M. Singh

Thanks for Matt. the question,

Operator

remarks. over would Altabef the conference Peter closing concludes for to turn our like question-and-answer back session. This any I to

Peter A. Altabef

quarter. We and appreciate the thank Thank And during and you, to questions operator. available questioners greatly the about we're We're Inder the look speaking with to call. Courtney and remain the seeing time of to business, you and next you the throughout answer I, throughout quarter. to forward our your momentum focus each team excited I'd us. on like

to see we detail Relations our you continue urge in to look more detail a website Investor also that will You and well. take as at

very So, thanks much.

Operator

presentation. The you today's for conference has Thank concluded. attending now

now disconnect. may You

Unisys (UIS) 1 May 182018 Q1 Earnings call transcript