UIS - Earnings call transcript Q3 2018

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Operator

Good afternoon, and welcome to the Unisys Corporation Third Quarter 2018 Earnings Conference Call [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Courtney Holben, Vice President of Investor Relations. Please go ahead.

Courtney Holben

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

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

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

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

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

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

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

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

Peter Altabef

to you us for all our Courtney, results. today quarter discuss joining you, and financial thank Thank third

expansion that period. short last on EBITDA basis And and year basis quarter, year-over-year. new and momentum respectively. to and industry up XXX%, and that on adjusted have reaffirming TCV third expectations financial Focus This which expectations as TCV in was we XX%, in business In XX and company the consecutive our XX% become last XX% business had expanded Services ACV term, year-over-year. ACV the year-over-year new also and Year-to-date some more growing is continued new and boosted XX%. of in year-over-year, recent quarter's momentum grown segment quarter, third we by contracts revenue points in renewals several fourth revenue our grew Technology increased year-to-date part These for new X% grew We're go-to-market in large, seen able those to as and revenue by TCV our grew year-over-year in down were highest our came full X.X%, in year. quarter color improved contracts consecutive year-over-year, margin call, revenue scope guidance, ACV and a In Non-GAAP new is XXX% TCV. XXXX those margin Year-to-date we have of TCV growth Total Services new this year-over-year noted points will the have growth call. the we on that work the of which segment down discussed business, business sequentially. driven our quarter Subsequently, ACV new ACV operating total both but year-over-year Inder X% of third X% revenue business the bring revenue tough was Our federal results growth. at quarter saw level, also saw rate stronger this in XXXX, second profit also At contracts expanded our provide third business up the Services ACV we the this shortly. broader base and well revenue compare results profitability. X%. further quarters. X%, under grew exceeded and XX year-over-year, reflected were supported as of grew than quarter we

impact is are discussed, as the incurred contracts short we've during revenue and managed margins new As implementation before term costs in can services recognized.

down non-GAAP continue gross of new of business Services overall As accounted XX points this, with contracts operating was more during to our a Services basis Despite to But this a result the of margin. delivery engine. quarter. third work this efficiency for points of year-over-year margin increase impact the Services we XXX on on the of adjusted new negative all and margins, temporary basis impact business

user-centric equivalents, or ratio in a InteliServe, FTEs, quarter. allows our infrastructure have by helps of all launched service go-to-market the services intelligent, our as desk quarter, and securely in manner access Unisys experience for full across in workplace and and our digital workplace to business The Our recently support manage devices we and improved we personalized our channels solutions. cloud in users And differentiate efforts discussed XX% to digital InteliServe solution. year-over-year platform enhancing services simple time last

during X offering, with make the quarter. continue progress contracts We to clients this with including signing new

bringing interested begun of the platform additional the and We're transitioning already this these platform. the clients talks who process are months. within in onto full expect clients to in several have also with implementation We coming

represents our up Technology the segment. This X% on overall. to expectations sequentially. our discussed but last the the shift Moving our typical for third revenues for quarter Technology we change seasonality, does call, expectations versus ahead were the a year of not

our savings. a lost risk As security, segments, and during our on in security into emphasis is ongoing financial launched that which into quarter, TrustCheck, service both elements has the which potential translates Services Unisys we new dollars part of third controls and Technology

insurance engine security also a dashboard big year-over-year, grew respect and quarter. service analytics a posture XX% our further it constantly a on steps differentiating to is giving TCV recommended policies. revenue by XXX% their remediation. Stealth of is is third is Our With in the on over set the basis, our on for TCV provides solutions. an our by solution on managed information over year-to-date return offerings integrated up as with into insurance is TrustCheck for Stealth, based up used that XX% subscription issue annual Stealth organization's broader year-over-year data investment year-over-year. industry delivered security cybersecurity professionals cyber to updated as the

provides enables continue transformation the discussed as move missions States a full on CloudForte As our we and data application for consulting pipeline public But up software Army the the cloud biometric required hybrid as differentiate federal differentiator various flow starting for in We're achieving for and contract helping platform, an workplace helping year-over-year year this business third TCV call, X% with generation for the and in identity the identity example, domain leveraging a collection we and of good and applications CloudForte I'll in and deep down about to help our managed do grow accelerated last with data the Stealth by be U.S. launch the is revenue our field. sector U.S. revenue for of clients. ability the new multiple expertise And end-to-end sector to acted technology to Stealth quarter to of integration United to provide accelerate solution capable the process and the our phase businesses. XXXX. systems which in timing federal. capability. and services and significantly bid first On in CloudForte secure a our U.S. to feel support to just biometric infrastructure we our of the Army in Stealth driven digital matches our and in our management quarter. the to the InteliServe was to digital now solutions were sectors, operational comprehensive are efforts, in offerings color security some set renewals, and and quarter, same the of soldier year-over-year efficient of provide of signed to clouds.

Under by a next roll States of We In benefit advisory the experiences contract, contract the year. VA's federal, community. cloud, its out accelerate logo is expect goals during to U.S. the this signed new with CloudForte to quarter, to Unisys. to delivering we'll a cloud the the outside digital of the secure of Affairs, federal which for transition Department early to Veterans help client United we clients supporting veterans sector provide services third

be last for in support census. the Under logistics, U.S. at regional year-over-year, a I down Additionally, infrastructure the takers U.S. as six of other thousands million, of X% XXXX quarter. in local as quarter, census decennial we the more support noted continue the valued will than XXX XXX and revenue services Unisys in IT contract our IT was equipment, to we responsible signed public contract In all services offices with well upcoming mobile third bureau's the for workforce sector, centers. and Bureau maintenance trend the provide Census but

Technology $XXX State contract a signed we million infrastructure. the help quarter, this of Information Virginia's with Virginia technology to the Agency in As modernize

the as follows Hawaii contracts solutions government in resonating and Georgia Kansas, signed are state with Our Virginia with last XX months. clients

tools. tool quarter, also child at more the a During of protection our efficiently FamilyNow their we are child needs portal, more privacy children communicating child their for protected focus risk take workers on global and third easily our data availability action and outcomes. communications helps to by better with address that caseworkers All cybersecurity children welfare through clients. announced enables This the portal and

Our XX% revenue commercial both sector in grew saw overall in growth quarter. and and technology services the

quarter Building banking quarter, new more track we a in our to the And and good financial X%. digital which provide on services, In platform, revenue staff managing airport. the quickly analytics decisions, on about for Airport year be financial which the reporting better-informed more sector During revenues platform and a the this and enhance signed derivatives, color account well channel technology services excellence conclusion, make to as the travelers for full by as in omni faster for capabilities believe Inder our a we tactical quarter. designed on provide advanced its develop XXXX in consolidate include airport was in Society for business to we the grew International air down and feel driven strategic, third more performance new In of customers. general. and third to Bangalore operational experience flexibility to progress center signed But schedule enable to guidance. business during continued of Monmouthshire we're services The rationalize the process contract a quarter, the Elevate, provide current wallet customers their money. data this our intelligence in will will with with and support will platform contract services Monmouthshire our This customers.

over turn the him. call to I'll now So

Inder Singh

the I'll Peter. of we business drivers. rest X, which details us and across of comments, We're today. Slide key discuss detail turn very our the In for then key everyone, I'll you, quarter, momentum for to many some throughout takeaways, color discussion. provide my and saw quarter, provides and Thank results the GAAP non-GAAP shortly. for both Good and thank in business. you additional which continued pleased I'll Please discuss afternoon, results fronts our provide with financial our third in all In our joining the business third strong more

a reported the constant quarter grew marked of revenue Let QX a revenue consecutive these. million or grew of third $XXX X.X% by year-over-year Total the X.X% the me company third on quarter year-over-year for growth. X.X% quarter for fourth currency highlight basis. few year-over-year of by

and Importantly, color strength a number we EMEA of and view on this Asia in regional more as Pacific, saw geographies, I'll such provide shortly. our

the Services within or this revenue year-over-year growth our segment growth and marking constant Technology discussed biggest by of than smallest revenue call. earnings our better currency, Services third in on our results also These our infrastructure, BPO. Our for which grew segment. last X.X% expectations, X.X% segment, were in of and business line we of quarter in our cloud in came business, line had supported

an a was that quarter, marks improvement coming expenses revenue the had already. revenue into In segment processing venture. non-GAAP Services of which by related X.X%. this small But grew As that quarter, of $X.X to joint up our as This expected $XX.X of we at the reimbursement we the to check million, a revenue adjustment adjustment, Services even sequentially. million Peter seasonality mentioned net restructuring third versus was typical result, for

our With which GAAP revenue points to X.X%, expansion the performance Technology contributed profit was level year-over-year. QX, in basis margin an company XXX of stronger the of stronger-than-expected is profitability operating

up quarter comparison. points margin year complete points to this basis expanded XX XX%, charges, third restructuring as The as program Adjusted which profit was was QX of which the had helped basis of of end year-over-year year, X.X%, also EBITDA included operating we the XX margin year-over-year. is year-over-year. and discussed, last Non-GAAP in have higher last largely

compared versus year. the loss per last Lastly, quarter last the EPS significantly with respect in to the for $X.XX to $X.XX profitability, was was up diluted share Non-GAAP $X.XX diluted quarter year. $X.XX, third EPS

in saw earlier, metric our offerings. Services of that fourth quarter. In growth highest the we by addition consecutive that to our on and that in This year-over-year this revenue in momentum is cyber, $X.X continued noted XXXX. business since reach strategy rate the with Backlog growth gained the has the billion. grew in XX% to year-over-year for traction, backlog logical we go-to-market I growth been has our and reflect our securities physical seen differentiating broader have These emphasis results end QX our

here, X. Slide repeat so covered won't already trends them. I've Turning the now I shown to

made key respect and the the growth progress metrics you on during However, with can clearly profitability. both see the quarter to

revenue you turn pound I left-hand Slide see in growth currency as impact constant and can company for X, geography sector. If saw the total the revenue the to to we currency again, was in euro trends a which to dollar the X.X%. real, were The will of side quarter. Brazilian by and geography. And basis the shows largest we I'll note, start the page, by our on the sterling the movement third the contributors on compared

quarter. by year-over-year our of the respect these is in in which real, Technology was growth growth by Brazilian regions Brazil. to The in decline was supported where shows, largest largest year-over-year currency, in With driven, Services. in specifically in this and strong segment our as all America, regions third the had to the slide Latin third of we our quarter grew As X each segment part, in I quarter very last a year renewals due the noted,

so our of the Please performance, won't results. side the already right-hand XX that. the see to On which I page, sector Peter's Slide segment discussed you turn repeat for

backlog, Services we metric said, that momentum respect quarters. have over seen year-over-year have recent to this improvement the saw we quarter revenue and we continuing As with in

a into which in already and a XXXX. of noted did of higher new which backlog to to our in XX% billion. of of approximately of business this million Technology mix compression phase margin transition of Services ramp quarter weighing also expect margins We as helped amount, convert points Services operating Of $X.X I revenue entirely margins. see software basis up segment. on fourth XX growth $XXX was saw our the year-over-year a year-over-year, slight revenue, We the result we

we revenue this operating expectations software points mix up I on just highlighted. significantly driven Technology revenue As the we last basis also higher the expanded year-over-year that profit higher than quarter call. year-over-year, quarter's with Margins in part by of saw segment Technology noted, the discussed that XXX

detail XX, EBITDA Turning provides now to and more Slide on which flow. cash

on were last results receive the increase for year. largely CapEx this not year EBITDA to As slide, on increase was both free we valuation $XX was third the quarter our in you the expenses. that largely Adjusted as can signed our timing analysis. these we a from which margin million to the in which With operations as Adjusted year-over-year of was discussed the EBITDA see related grew pension fact compared a third million $XX in driven the million receivables on cash flow were we Cash the adjusted margin EBITDA continue obligations, year-over-year consistent in dollars in quarter flow points in million basis third impact last million the rising managing we QX. focus used to have EBITDA by to beneficial technology with These in this by late use year for and expenditures. respect substantial expanded have cash an $X XXX year. negative affected discount last rates several the $XX in contracts of to quarter in metric more due past, cash restructuring of $XX was rates pension immediately to did quarter.

last higher trended is it continue that you assets. round pension international the pension remain for our which related to we impact a of also QX, volatile the payments to but negotiations know, XX our our of estimated just Interest can yet markets obligations, As to in on impact years. general in monitor. rates have some interest plans, required favorable call, during overall, we not since rates successfully triannual Also, which resulted latest cash the finalized return next

has the on year. at As provide update our been obligations we our typical pension plan full of a to the end practice,

this to guidance. beginning XXXX With year had at now behind Turning quarters we the we three provided that us, full of financial the guidance strong reaffirming are year.

billion, X% revenue, billion $X.XX our of guidance representing For range our are range for flat reaffirming also year to to $X.X we and revenue remains non-GAAP GAAP to billion, $X.XXX $X.XXX adjusted full growth. billion

As we of believe or while deals, that large can timing we our XXXX. impact grow predict we likely exact on have noted have tech results, prior which will in cannot factors the macro quarters, always it an revenue for full the year is

for We're to full improve to continue by team business, momentum encouraged year. with Peter. to back the focus quarter for for And are continuing XX.X%. We also the saw within profit during range to margin work another our are X.XX% results on the we will the continuing our performance our goals. lastly, And full a our financial XX.X%. efficiency third reaffirming to XX.X% execute the I'll revenue our X.XX% reaffirming that, our range On margin. X.X% forward of in our yet transformation step quarter this basis, Services be maintaining to this to the sharp guidance We EBITDA and believe to non-GAAP towards guidance of We operating would year look progress GAAP and turn and company it. important in quarter of fourth adjusted marks for the delivering call we

Peter Altabef

the now questions. open Operator, for Inder. you, line Thank we'll

Operator

Instructions] question First SunTrust. with Frank go comes [Operator ahead. Atkins from Please

Frank Atkins

you you and was briefly question But comment type first that coming of trajectory of profitability My work pipeline. work there in? terms see absolute the numbers. of in on could that the strong Very about

Peter Altabef

Sure.

of a is an all almost some all. first this those and signings. to last started but transition as So it's -- beginning sales, even our But have our a recognition little find going respect on experience year, business, profitable when last you're get going really had at expect not usually have we the the company this you're change year multiyear as uptick some in our in year that which that to was contract. contracts the for -- business, With the the revenue not obviously, and vast contracts periods, of different nearly majority perhaps we're software-only to recognition, period you doing of revenue for typically in you to

So that to started continued we seeing we've and see year, this last that year.

signed year we achieve year than last become So year. have not the long obviously to to They're this that at less are still profitability the achieve. at we the profitable contracts more have we this we expect contracts term, expect and signed

the the so year, my ones So today, as well year we that this at in we signed online. comments those look contracts just are signed coming as last

about a that overwhelm XX a as You put XXX effect negative those had we which negative kind points, basis of fact of had together whole. that basis and the points

it positive that. So grow new the without works, that's the been and not our would've points business. industry really way were But for you XXX basis can't

point, at Now some this. we begin to grandfather

are point, you're business effect you So profitable. to some then, that existing new and continue maturing the at to more contracts by of negative yes, signing, getting will, have have going but

portfolio So a restarting when the grow versus have of yang. time from you you But yin you don't engine you are it, a the have long having not this always the really business. as

with profitability business. you're and that, we're right in our now. But seeing that's You only so but yin, even have what the increase new seeing the for

Frank Atkins

comment Does helpful. XQ? bit that could XQ. And than impact segment forward? then the expectations on bit cadence the a a you into maybe saw very more We That's little seasonality of in Technology going the Inder, for little

Inder Singh

do believe for quarter renewals the we opportunities us. those including did coming normally Frank. quarters, We a We ability see pipeline see, come guidance the for full the surprised It to view in the that our in of quarter. for the the by together doesn't of rich than the QX provided of we've pleasantly have renewals change see year. stronger fourth a were we business We

to as your to that see question. don't I trade-off another, So of get versus a one quarter

Frank Atkins

are and deliveries? on of doing in of the there? kind to you one the retention And can talent environment acquisition you current continued last What progress a global comment for little ensure mix bit me,

Peter Altabef

say would hiring I the that's Yes, actually have really fact we're more result people. and traditionally, the than had of is a different that that challenge we of

As more moves We're changing, world. is more and against digital that the players that are scope strongly hiring more mainstays into and in company are job doing from too, that so it, the least bit. of the those but but margins Not from of of term, talent is, we really at a this we're world, good pressuring in much those the a cost much of people. competing that short people, a timing

So slots, pretty of that sizable we new sign. digital to a have number have open we especially roles in

the we net years than skills what of existing we're are is reversed And employment so working and open we are now and for really anybody But increasing far hires. traditionally us, in team. the who call folks we our we're actually to trend of last we to business, wanting on had, and really our are because this of the transition couple increasing different and the call for business from us the hard please have some work

internal we So Unisys we an University. called So have called internal program program have an

I had X.XX last more think we've are year, focused really, on the people million their in taken and courses than upping skills. really

this learning very big actually is deal. organization transitioning what call very, a company into I So a

Operator

The next Joseph comes Capital. Vafi Loop from question with

Joseph Vafi

duration a in get I'm to extended getting what feel us to trying the for feel compressed bookings. feel on versus for Inder, Peter [in or the this could growth a or on just your revenue results overtime? give backlog a backlog. -- year? Is converts What Great how backlog quarter]? the was you duration of the that maybe

Inder Singh

look they a X proportion were What maybe a we little backlog number ago, turn that have they X you were bit we've than that that I as in that. see next has with Joe, at the have look, out length If backlog years years seen would've that would model we they're that historically. to any couple seen the of model. prepared the Yes, had is several performing saying the I'm a that commented should us shorter of you, with But before, I'm obviously contracts that a been been as long-term X greater over years, the it for maybe giving put that to this five that our comfortable not that at and last think next into time revenue sooner backlog allows the years that as pleased years ago. little to long years way builds, we we in about Not we're there of than do that, tell several to of we're growth guidance in year growth point more for years feel because think you now. you

you in next -- the will I the backlog do that do how that you the If from slightly can vary on of can math quarter. turn much quarter-to-quarter, revenue you but numbers around that gave It into the all not much.

expect -- in in this sure few you as it do revenue into the to quarters well. next few years. So without you, the turn can doing the We I'm do for math next

Joseph Vafi

And properly size, on do this have other of your globally similar do the have if bookings maybe you you business your wins, business feel opportunities you those in in geos, then of more you resources say, at growth allocated global you than feel looking your new companies a kind at global look versus because into year? basis next -- point a

Peter Altabef

in those each this we of as year got growth long great a of quarter Obviously, Yes, evolves change. Peter. about the good and obviously we've X this feel going the to We America. had question. next And into term. evolve Joe, and it that Latin geographies X opportunities pretty is That's

it the I was explained that of think, was hit Inder grow. didn't reason both by really why some which technology,

I to I next I It replacing year. U.S. into for the EMEA some is, EMEA this a forward grew the fact continues will also quarter-to-quarter biggest battleground to year, is interestingly, think it Going industry. in think, industry. for We extent the a think, the the continue. that be challenge, as challenge,

with pricing U.S., the their lot side The the in need making compete ability of discipline discipline the players to deals. immigration and some long-term try is we harder and the U.S., sign you're And tougher. business sure the in to a of have are seeing the deals to in Europe even focus there So on terms in good focused I think we make that reverse European U.S. pricing we and that's

I here. business you're in terms faster new relevant us growing and think seeing of signings more be

because there's and some those less it's a also immigration of I think competition that's of our concerns. offerings, because because of little

are EMEA bit So in dynamic. that the U.S. and changing a

teams some more your we Latin at Pacific, right two And are allocation will forecast think to we stories in to that America I sure we've but weighed looking did we've sales and this If make ago. we're two for really additional has Obviously, regions. certainly we When year do, next that we anything, here as well that the got as require both make question, currency. in support Specifically got of delivery the force to us. all time. those Asia akin currency and years at long-term changes growth Brazil to year, us what can't heavily took but respective

Joseph Vafi

business that I'd backlog when get look think on at comments what you've a quarters to negative on versus on I if before, year have receivables. a heard been you better Inder's then cash in turns. this And secondly, look at that. I you some -- if all think in comments flow flow was And the But at X on interested intensity was and I we be this quarter, capital I'm Cash maybe you -- look feel just flow. signed your trying the year, for technology its couple this negative. and think cash

Inder Singh

Yes, couple of so a things.

processing. for calculus this started you venture in systems. we IT year. more that our I check a and use there course, you're This a that news of talked items And was flow for upgrade was is, of time. this couple venture that of the the in joint upgrading year, a venture. uses banks costs about recall. that think frankly, within when should less and European One The X into to that put also, And project both it your we a the we it processing you restructuring majority them -- automated, that venture them as news does caused over if good is restructuring very vast have actually, large that the manual the iPSL, is the called it down banks, big bad with U.K.-based of U.K. for the The cash doing area. cash IT drives and

lag those there's reimbursed the we're CapEx. time for we actually between that and cost things for sometimes the we like costs. were actually us, incur a But the For especially actually time that on it, reimbursed

the beginning what and pointed in the half of second at one see the you're year, to So as starting that things of you'll that's year, the to the of see. I

had said, we restructuring last of that. we S. in recall, second other in the effect is if The partly outlays would and our and but some next cash year you're plan non-U. the completed headcount essentially, year in of this year, European result you reductions seeing region and

the complete out, get to obviously we point I'd was quarter, that comments, is of I as QX, couldn't in and renewal thing same alluded the third in The relative tech very and for collection end as this quarter. a which large to the at work cash frankly, my there the well that

expect the to in We quarter. fourth that be

get context, is here quarter just help but years zooming that you typically the It highest quarter, course, out is tech little quarter fourth seen. historically. a the strong our for flow we've us some most not also, So year, of to cash this bit

terms see well. few that So years last at of the not as we unusual looked to in pattern the have

last at the as We've the obligations. years So pension working on way focusing I in that our add over been couple the would cash you you're look looking I very following. at. hard, it of also know, on

sources we So we talked did. cash, as about just of the

end We those some in question reported, on provided the to quarter when uses time we favor also next working cash. is the $XXX color million. we beyond on The course, fortunate, plans. level of plan. does meaning about have and the obligations. for of cash knock we our improvement there's June of future improved. we've for saw some cash money of flow up wood, the some projections in I And on those we But at improvement And between obligations talked cash the of value call, that XXXX, the least that about look the cash of of this, cash some that flow, our mean is the environment, pension international XXXX, those plans years XX essentially that and obligations the years, over been as now you XX that for on for the asking the at the also thanks next for in mentioned

But managed the So cylinders on our hope and markets are as pension answer are I around higher, role perspective. at go markets from are I'd go, capital structure in we your It's like question can drive better we that to flow way we to obligations the look long which the you're our have look at same I quarter, at able operating term, volatility guessing and say to working which of time, was right hard way to a I the cash that. at maybe always a way. and day-to-day. longer-term from sure it than all course, appreciate making and

we'll year. least at the which part, question. favorable of through, the $XXX and of some go you helps improvements million, is in we give so the hopefully, at And your answer a negotiated the end resulted to full triannual update that But negotiation

Joseph Vafi

that maybe intensity? this on of trajectory year. some same of then intensity just signed on the business what's the as And capital improving? it been? capital Is Is it's Or the

Peter Altabef

this Joe, Peter. Yes, is

what a does very projects, I I signing deals depend of sensitive think it and on to which that, intensity the very capital we're know it, to you at sensitive the time. I am are bit

in million saw of with the the Virginia. deal sign us You quarter a $XXX State

XX state the to but sector. with the to Hawaii, government the sector, months. U.S. successful in that In didn't win public, tend last sense sector these, our We mean, and they we hugely surprisingly general, little in have I more, Virginia say more say really very now I is public the we think have more not surprising a little if to in be been don't I Kansas, capital-intensive, necessarily work would in but signings out been, government be Georgia of a by significant our tend which successful. and federal we I look want and deals not would say, the

sector. are So we these We're -- that really successful good and really in have been deals.

programs child a will, support. services welfare Hawaii social around you net by we're in have well parents Kansas of and if payments these the putting enforcing in to states State that hardware forth putting different and being able So and for child modernization in we're cloud and between system new, back the putting into family Georgia, as the In and data platforms move modernizing managing from the and go cloud as who up Hawaii, all for to care software infrastructure to to and Virginia clouds. way

have prefer in work. as But is sector tends good would state public more really the be to to of of operating. and capital-intensive some capitalized costs the the So this little a not U.S. governments the all costs

some what at year, spend last will compared year's a that thought So to bit. least we this signings tick-up of

banks capital be services, that of do. banks whether into what a I as cost not year you're of capital-intensive other we those not into dealing next Elevate, mixture in lower year. the when with sell of or much than financial Now depends course, offerings, mentioned get have continues next on Certainly, you we Elevate because, to tend

little on but depends So sales this selling, year's we're were a really just capital-intensive. more what

Operator

Bill ahead. comes Smith question Smith from Wm Co. go with next The Please &

Bill Smith

bit It's to results. see and congratulations on the Peter, this, your and line great Courtney you're top congratulations, the and the marketing A a and how good and Inder Well, on job what able question of on so margin expansion. success success. Is you you've to on it Could that an indirect of it sales force? that Peter, little your partnership achieve with comment, on terms had? direct comment a kind other entities? the is in you this Can

Peter Altabef

it's words. those you thank for actually And both. kind question, Bill, Yes, to answer your

sales is X think to items. due I actually the different So success

actually a is first marketing way. big the So in

about marketing for when instance, We of year -- we that is that the important. the more advertising. of may have some before. seen we resurgence and brand, Unisys of we you the terms So have talk Unisys That's than this of did brand in obviously

is news. it of just Some in Unisys the

of and release and ago. it the days, So consumer over coverage days results we media in called security XX and countries its outlets index Security have in we we security we focus. XXX have in the in into done perfectly which do pieces around last world now fits the monitored Index, something the around world. have the had XX X,XXX the XX of XX broadcast the it Unisys world, about And coverage. years, It's We kind continuously for longest-running, our

the will, our kind really is People marketing if advertising, So sales in Unisys, connection paid and helping getting really with efforts. security. branding understand they're you addition, nonpaid to this of

the be is better the workspace creating think that's to use this easier, it it's some launched easier story sell getting areas two more. a say more And success. understands cloud sales two doing. we're as you final our two offerings solutions and Number would why infrastructure of the the what for a a that's then I partners stuff. engineered about. yes, we're to we mean, from better. force focus I'd lot just we're that simply I industries, years specific So one. cleaner Yes, specifically where industries is software then And go to seeing much global talked The the to are those you number using it's couple development integrated that application all ago, way of and

and and much So in Microsoft's kind partners to using Dell partners, the addition more EMCs global the really our ServiceNows, effectively. the are of alliance and AWSs the we targeted

difference. Palo we're jointly the you're on and get And -- with using those Alto specific Cylance, marketing we're solutions, we're So working with working makes you with level Networks, solution when working some fintechs. we're that a LogRhythm, it we're working with a to of

yes, long to the I So Bill. I question the really haul is, answer the for axes, those see think

Bill Smith

looking some sales of direct a effort new the of then at a that's would effort? the result business say that partnership-type a and you And logos won, or you

Peter Altabef

really space. our security the work around in has us. sales Palo in And direct. of LogRhythm in sales important you, and the Ignite are -- Networks us Alto point Palo between conference been Alto we with to very doing their at this to joint of continue our was effort a new, be one sales will important Most Latin tell both. America very Really But I

a So to I you're going time over think see shift.

to going our other revenue. to I expand able us you're we see sales. call majority costs We kind and dependency sales relative important. the to although people for force, I our That's on our But what really think our leverage will as going of expanding lead journey, distribution our want really to SG&A becomes some think be of to pipe important be take going less that I represent this forward. of the direct reduce

to to So it's there, I stages see continue early think that evolve. relatively to going you're but Bill,

Bill Smith

out the a So accurate? strategy on Would sales force. internal own is go-forward your building be more versus partnership-oriented that basis

Peter Altabef

more with done work be is focused specific would Palo I AWS I We've a very Azure are you're in with by work very the solutions. exception Dell our that expansion we then of way. our but also Altos the focused they're partnership the partner these and getting the of drive do, One way, important important. wonderful global there some what work partnerships with be, across those would with it's with because LogRhythms, think the more partners, will mean, and into of the that's us. world, say It to But Cylances solutions board. I with the fintechs, excellent with would very them, really And the the really, an amazing EMC. for and and

board. the across good see So to it's

Bill Smith

terms on Yes. Peter, thoughts a industry the comment you whole? transaction? Unisys as the any the Red of on in Hat-IBM And And and could there on impact

Peter Altabef

Yes.

that I think one, probably Bill. on comments three

inside First, tend I wish this. IBM industry luck be industry for and that any We good the successful whole. are on as moves a that success our good think to

and business and in other, is IBM that holding each clients like a say also it industry, you be is companies onto is whether making companies acquiring I efforts tend I new to see when second success, like too. wish that's that, whether The from splitting, the our we they big luck distracted change would of while little And and them their this, winning a thing welcome whether business companies movement and frankly distraction. that's a day-to-day that

are digital. those our of kind of seeing I talk, both same me and cloud really CloudForte that has points cloud at I distraction in that in success infrastructure you Unisys. thirdly, and at some and do of in had think both it And the applications our heard growing not combined company, sentence about the development importance have my the and because you next-generation resulted platform. think this solution We of to remarks. use That And is a Bill, it's I And then platform.

You're kind and infrastructure seeing services security you're dev services. seeing DevOps next and ops of really generation the of be application of

have in real very we pretty success future. still, And standing we as IBM our future those, and client. together, react solution, to you're one of seeing that just with excited those putting that's well. about and as but solution, So we're that CloudForte is big think kind U.S. is But the a I of we're it. have seen not CloudForte Army The

are those think out I I things acquisition. X that of So see the

Bill Smith

a some I for be be time unsettling because it's Well, going while, could that, closes. think, maybe year this to up maybe before a to

could be some a sounds it this opportunity it So of result as time, like. for

Peter Altabef

that. I agree with

Operator

next comes & from The Doug question of Gabelli Company. Thomas

Doug Thomas

his they I "Well, send recruiting," say an from Unisys?" something. first said, resume IBM Tysons I wanted of couple my Peter, weren't position or I'm have to just It's a guess." Corner. I D.C., have son figure way. fix He to said, how you to brought of that, campus to "Did talk some up. him, out going to kind said, your offer digital, to in I And transformation you analyst business guess, we'll "Well, and -- He said on I it since this I got

Peter Altabef

a couple we Tysons Reston, look in yes, down the open great ton place, Corner have position. and of road but Well, a miles we're is a

news, that's great Doug. So

Doug Thomas

you. I'll have him call

of can and face bit Just things it's in quickly, earlier mentioned couple ago. ACV you ones that can year -- stuff pointed tough sort little some year? put course a quick out, contracts misleading. you irrelevant the federal other as of and in of you renewals But year in and which into ago, in rightly short-term -- the went those a provide as putting of -- obviously, a from perspective, some And this around you large color normal business, the the call, perspective? you in the did on from kind or that TCV the those put That's backlog business the some comps and

Peter Altabef

Doug, opportunity, to that. good a sure it's for make people and understand me Yes,

which calls, with and about in only of contract We ACV value, been to we actually annual we of are sales and want contract value pretty contract. contract, over and the sure a the the disciplined expect pretty expected make months we've the in we TCV. these these consistent on contract course TCV first is total value. is and we're consistent over XX revenue call the ACV, things the average not talk numbers time we

a have in So TCV, ACV a last TCV. our what us really very, signings was in very, in This year federal starting is year, tell both TCV. pipeline up really and been very ACV our very strong for nice strong. both And business, began happened you, has tick in for federal will federal to year federal and we I the

certainly anything In like going have fact, my next year. into company, in seen experience our I federal never pipeline at this

you done year, some in to you lot and around where decision we Customs getting so the on actually work And if was there short lead focus big a specifically making was you caution did it were, of frankly, last kind about that the into us about compare this that. Border when business excited very will the about? I What the very in growth that, a of ACV in already was that But excited of we clients, term. could of Protection, of push what The short-term is back one work on quarter Well, our last we're year going go a signed. delayed item all done. last position found we've forward. did think was CBP in that long-term little quarter. good it to we're to revenue contracts that large federal what And a get So

it going were and the then they short-term work you normalcy competitions made the was work. spiked go because into year into the back What change, those -- to year was Homeland kinds annual this short-term clients, heavily for saw spike we contract after average have short-term Security. That in increased longer-term of they value last contracts, our successful. very So that been those and have for specifically

with last kind spike we in year's a ACV followed TCV of federal year. spike this So

really it's for good So all news us.

Doug Thomas

other might? you had than would, you've thought think correct? so on that And if last ask And talk you more opportunity, wanted since I $XXX to success you so forth. fact I you a off you -- little quite position you of the you this, I in a some thing I to market more you've can also progress the sometimes just Inder, you hedges maybe, sort don't decline. only the had a -- know the want the million, I the mentioned first place have I more people you're is And I last XX about can accomplished year, mean, thought on since of mentioned, this the -- but in and believe, just than negotiations, the I those triannual wondering and that's about think call to pleased months. I pension quarter and And timing vagaries year everything you all -- you'd put could for talk have the that clear, you. be that top you understand if was you the just whether to paid of so, do in once how for can the I'm broadly made is yourself

Inder Singh

a That's I'll sort great of Yes. unpack Thank you. Doug. question. that,

in a at that about in our course of in it's our time. the obligations, end U.S. this -- actually an about hadn't in we that at international other we practice, over rates didn't we improvement interest use gilts measure talking seen do -- quarters, we point the use If rise currencies to rates XX-year I'm reported And subsequent of you pension the to year, least million think progress our reported We couple remember, really of $XXX XXXX, obligations, plans. contribution improvement much we and in normal to measure cash pension that the and and of an started the cash interest then once of obligation at

proactive those quarter. time, was actions U.S. rising so side, that And rates I've the of not XXX result the fourth took. at end company so on And much but at the that million in about talked the of the point

$XXX For the by administrative example, of has that one $XX between we to able were We to international million in another plans one European to able contributions drove that our plan of million. to successfully that so split plan were no freeze something our were in right. down to cost We into top our the up that go able one. more plan third

So were a help the interest taken number of actions of rates. without

about payments, the reduction. plan-related. XX key we've following XX years. it's interest me, so money I we you Remember, really In five hypothetical. sense that XX we're every now?" beyond talking was but our $XXX done This And from a of period getting million peak here it's And do of at of don't a we that years, obligations. it you a were wouldn't where questions on next that million about. rates a In of and of rising had did a in $XXX gone the a way, $XXX things this we years talked to what earnings following for consideration I that fact, well time. wrong executing today to value even deferral this additional beyond rates talked know, I'm it about the the so total the from plan, million that that, stood. valuation improvement time for In investors a is the an pension quarter, about we because about XXXX. the us call way midyear in just have get we asked, because and year look is were "Well, call To is of European as and June,

is could it stop of at Interest and number things beyond When that between now keep So this volatile. going could a doing I I'm can't happen look control to Any happen. doesn't trying could mean of that could rising. what things that. do. Markets then, be happen. glad we we've that been But to well what we're number rates could

year, show but of And that not updated that period. this everything, we look we work on time that which it quarter, next this rise advisers the a number it period, us. the the see for XX-year as make you'll those to but that outside owed us updated of help show begin this up XX the this will still at and to for So at to of other gives making and years following yet improvement people, things you quarter, sense? that have including we virtually worked it sure for as is every charts in end in yes, Does XX-year be rates we

Doug Thomas

great. that's No, Yes.

as -- we'll way. the straight with it's And XX changes, basically basically would earlier same line over you So XXXX a over then in years. put it after

million to XXX from million. So XXX

Inder Singh

down Yes, five five five years it chart years from plan that. years. a years. first the show years, would hard XX be breakout out actually really the XX-year don't predict there. we're We'll It putting the over the exact pension on five next year-end at second you planning to steps by think I to

Doug Thomas

with and you in -- follow, want rapid struggling. I with are you recovery decline. lot Obviously, mentioned The the some yesterday. XXX-point of And this me great. move general, that had those, a had payments I the this help We negotiate companies future markets then we mid-cap to small to of on be that'd still the volatility. regard companies, significant S&P

half low. S&P of still think the at XX-week I is

made in last faired that invested, have with market moves of you the risk moves and made managing you the risk in know volatility you in but the I terms those? how where year, terms you're market don't So managing of that exactly

Inder Singh

done Yes, to valuation. XX/XX. We're going it year-end, we so of we haven't that that at do do only as and

across to think at are, income of markets on the markets frankly, the are different depends investments -- that performs, markets our you equity a and way, trying to that or a benefit. perform least maybe the answer three on where if we And in one your But see markets. about, equity fixed So day. extent question generally

equity we else the if direction, sees course, Of markets as everyone then go opposite well. see what

do are wait a June benefits stock need that is They went and don't why for to on volatile plan. markets? day mean that's I'd difficult equity portfolio, correlation. becomes But some credit has for spreads from recovered, always day. it us, way. yes, that, it the predict that have begin XX/XX to markets They was rather seem in right. see, one-to-one income fixed income to till right. our we pension also fixed quarter really example, to So down. If perform positive a the markets in it's What so all right Where direct but to the help say, You're the by we did our

Operator

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

Peter Altabef

well. that rest thanks, Well, go-to-market over year in ongoing to Okay. and about Doug, full to our the I execute seeing momentum forward our everyone. as XXXX. want looking efforts, the continuing goals toward you for excited are we're of those We're questions you to thank

and Courtney and full very results. We in we'll discuss behalf next -- look with quarter. you result with be and With forward also year to again to to speaking myself, the much, of thanks that, on Thanks, Inder you again.

Operator

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

You disconnect. may now

Unisys (UIS) 10 Nov 182018 Q3 Earnings call transcript