UIS - Earnings call transcript Q1 2021

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Operator

Good day and welcome to the Unisys Corporation First Quarter 2021 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] 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. Please go ahead.

Courtney Holben

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

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

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

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

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

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

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

Peter Altabef

experience. results. flow, and our and quarter our and structure, laid strengthening further joining cash goals related XXXX, in for enhancing improving you thank and out everyone us growing sheet, At transforming January discuss Day our our afternoon, we solution portfolio, enhancing Investor expanding margins to our revenue Good our balance first associate organizational to

significant rest will on associate progress the profitability the solutions including of on experience and will and first during and each quarter, we flow made provide the quarter. of detail I Mike that the our our discuss cash to these. some the improvement these During made points, we organization,

Digital which This developed quarter structure, was of step or we to new implementing our a strategy, Workplace key our and Day. C&I XXXX CPF. first the the to out segment transitioned XXXX, During DWS, in and Services we ClearPath or or laid Cloud and Investor targets Forward Infrastructure in

We and running basis. business the on financials reporting are now our this

of DEI will us and have new joined Chief brought We will hired she in our February with ClearPath the co-lead businesses our leadership new enhance Wendy portfolio. on April our efforts. Reynolds-Dobbs joined April. Allen, business the leader new built leaders March overall. as to also Gene in these new Head in out and our team solutions Chao, We our DWS and company innovate and new partner Gilbert, and of our in Dwayne Officer of Leon that Head Technology also our unit ESG expand Forward

More Finally week, came our help Revenue key information leaders of across our each work will leverage our businesses identify on is last board. Maureen Maureen new growth. opportunities and Chief Sweeney on Officer website. available on these capabilities, drive to

significant These and that. our have are leaders already strengthening doing execute our sheet team balance to strategy. new last on the the year, now With fully just levers we of place the in

at to our we years discussed Investor three our plan Day, over is grow margin, As flow and cash next the revenue.

and through offering DWS based experience part in our and this achieve to to of transformation portfolio expansion our enhancement expect shifting solutions. We including

offerings. in in services all margin momentum Supporting a Additionally, are on in the CPF C&I which Within efficiency. improvements the focus targeting services our CPF higher-margin cloud highest of this continue are company. we operational to we to is expect growth with

will we progress metrics contributions have These earlier the we cash have see and focus and improvements we all pension a cash reduced While improved to expected margin from cash efficiency on flow. as benefiting already flow. on with revenue, and are margin strategy, further maintain flow at execute times

improved expect we efficiency and quarter, growth and and drive cloud by revenue further and rates flow We intelligence. growth well artificial with services as margin our our improvements as of automation XXXX. and to cost during and in DWS in and labor profitability transformation reducing DWS cash CPF increasing Within XXXX the total

As expanded and In contact We offerings our of desk management of AI-enabled with in have global talent the Within services DWS, legacy which management and a public business the we to profitability. emphasis in we beginning of contract user and will associates. help moved in the platform. for drive this our a support, experience public cloud-based our service within streamline and center solution onto journey our field helping and in our infrastructure April, all user company than clients InteliServe asset private EMEA and revenue hybrid growth. which we global publishing their we the quarter, desk signed help for service a particular will clients' clouds automate have improved of segment support we and sectors. improve the to This in C&I, clients is are to higher-margin see with work highly benefits regulated experience-based begun our

well of growth. We management increased and and monitoring, applications. as cloud are additional as modernization development for cloud operations These based and clients' opportunities improvements revenue represent pursuing also profitability

government administrative an at improve migrating significant Azure, cost services as we Oracle, state citizens effectiveness U.S. As to state operations. and cybersecurity the an services lower Microsoft agency IT are and to key and example, modernize initiative a to a cost clouds part reliability of of AWS

this these University additional During the signed have we CSU, opportunities seven State client. for higher during contracts a more California largest with new-scope first associated we also nation's pipeline quarter, quarter efforts Similarly work in several with transformation contract education and XXXX, with the signed system. or of the the

better XXX,XXX strategies of providing to that greater client this execute contract, and be the cloud part cloud agility and new will students. to digital As nearly Unisys improve student campuses serve for operations security financial, offer experience the the

ClearPath Services, margin have For a in representing slightly attractive the highest and Forward, at revenue C&I. the DWS operating is company. Forward different approach and Forward than already license ClearPath ClearPath with margins we with

services. here have to from Forward while the ClearPath strategy our client focused we solutions Forward clients So our on license base. CPF areas benefit better strategy additional while relationships this, our more do identify ClearPath services are growing can where to seen implementing To deep coordinated we in is utilizing technology stability a maintaining leverage those revenue the

managed and targeting application revenue. in we're both growth Specifically services services

As contracts services. provide new an application maintenance Forward relationship client ClearPath our market also of existing our pricing an expanding aligning renew ClearPath Forward to to example we are with as --

first people. and their Unisys million new-scope that a and with contract national also processing government began about European with now for ClearPath we quarter, scalable manages agency other ClearPath a two the to pensions is system work Forward make on more interoperable systems. more payment During services providing for public consulting Forward

strategies evolution pursue structure and our and specific unit our business on our the margin revenue most just been to it's sheet evolving of efficient This us enhanced new do build, based in growth. inorganic very our a gives solutions and described, of enhance acquire flexibility we future the the current capabilities able portfolio way will the In complement areas result activities. opportunities we're so, I not to partner have where and framework cases to in profile past. our the balance to Within in be

scale focus C&I DWS, help enhance and our companies consider that for further business our expect relatively initially to that us we leverage on opportunities As Within solutions that such more would the strategy. within small-scale have look opportunities we we experience-based solutions broadly. will

strategies we operational we of aiming all are our experience enhance to the associates. As these forward, of drive also

that associates business has alike and company at our towards and place efforts including increasingly ongoing forward. create are target Unisys conclusion, in develop There we a I'd doing results. inclusion to being make being which our to do proud drive and some call people to excitement associates, We're turn for to supplier In With working ESG that, important continue I'll investors goals we're right are some to the we to accelerating to retention and believe bolstering our to progress longer-term. related help other actively Mike? and Mike in and over opportunities so to as to to making and we goals a at ways this achieve we will workplace and recruiting, it the new team. can out more for also year XXXX. beginning financial attractive like is us laid shorter-term continuing their ESG equity the an efforts number our throughout been thing addition us since our discuss do partners and the to home, opportunities, this clients, clients. help and the In enhance support a diversity, our Unisys and to our thank our they to of important enthusiasm quantifiable Likewise partner of

Mike Thomson

both you Thank refer In and GAAP results. Peter, afternoon to I'll non-GAAP and my discussion everyone. today good

metrics As a reminder are reconciliations earnings of our available materials. in these

call savings financial This the to in our X% in cash $XXX from up $XX improved were And progress flow operating reminder million to and and As financial goals and margin $XX and company cash significant Starting a to strategic of attributable A $XX year-over-year driven up discussed completed took to balance noted and more EPS profit quarter reduced a basis in year charges positive to of and gross Peter portion year increased as actions quarter. points rate progress the basis targeting Peter of CapEx we ClearPath Forward. margins of We for improvements flat million profit first accomplishments operating approximately Non-GAAP XX%. first with positioning a DWS, negative significant first $XXX expansion improvement first ClearPath have place items in flow, flow million in us increased so start year-over-year the points growth improved quarter. achieve million margin million. and X,XXX to cash to gross in profit adjusted XXXX. made to to efforts to $XXX end the $XXX year-over-year related C&I the in these period contributed margin of it of a margins the strategic run including significant the rate exiting million to negative highlighted, period. run points We I'll We year free Cash up $X basis improved XX%. $X.XX $XX DWS the gross gross million XX%. million. year-over-year in increased points XX%. and we with required $XXX was up a profit the non-GAAP flow increased on $XX part strengthening to million gross $XX this a and a C&I between our additional of improvements, our the EBITDA, XXXX total And for sheet. to were C&I margin improved million operating the million margin of efficiency typical on Forward focus to with a increased the savings cash against to The each of operating during charges gross timing our pension we year-over-year and than was points on prior XXX% used front roughly improvements number as this that The also non-GAAP margins. less improvements with improvements which million year-over-year of by operations flow. XX%. margin outlined $X million. million to for also increased profit the EBITDA cash year and given the with the XXX additional program. XXX last both $XX is $X.XX goals Gross increased and with improvements year-over-year $XX in basis previously large XXX basis year-over-year revenue million at of negative cash from on to in expect prior to significant profit year-over-year margin the year-over-year throughout we to $XX our free XX% quarter. in through year-over-year million to XXX flow remainder contributions. DWS to Forward non-GAAP saw ClearPath Adjusted to flowed adjusted XX% complete portion generation usage. of was significantly cash

the flow to the over year. expect momentum We with cash continue

million we anticipate taxes $XXX cash is million Our million approximately $XX to between and spend $XXX for million. $XX to be the and expected year CapEx

noted, to which improve we $XX Investor million, currently approximately our time. is Additionally, in working capital we as over at a use run-rate to Day January, of at $XX expect million

down or expected As the transportation, positivity as and all year-over-year, revenue $X.X cloud We key in a to million we year-over-year revenue year and result the revenue travel be approximately driver decline. by free anticipating total and the The improvement profitability processing for remained cash in BPO XX% first the had this was increasing to of this, full modest we flow were driven of X.X% $XXX aspect XXXX. company a quarter, business strong year-over-year. $XX year-over-year services, million. million decline And a increased Cloud of field activities. Infrastructure of XX% expect

and and to the took improvement base for grew noted, X% to Peter Field quarter I the experience-based that of The that, key in Canada performance and to year-over-year. that have contributed a margin quarter all beat Forward transitioning. XX% Forward driven large with demonstrate this decline And than our segment legacy opportunities currency the revenue in are low-margin also ClearPath of to has Overall, stability over growth continue in Forward our XX% gross steps number that third-party we I ahead we in which the which line the ClearPath slightly our of to highlighted time key solutions, lower which results was a largely the U.S. DWS, in which some solutions segment. on and were revenue ClearPath expect improved this due down DWS contributed the continues consensus year-over-year, to divestiture of in-part C&I Additionally, growth. to see first out metrics. expectations profit internal contracts transformation. and we mentioned revenue fact in Services, decline or of was progress, to earlier. year-over-year by

we the to with the XX%, fourth half year, to first license quarter be ClearPath third the quarter rest you lightest to the of revenue and would the be Forward between the remind expected the second to be of year the expected strongest. Looking and split year, the XX% and of we that expect

distributed profitability, quarterly will year. This as impact ClearPath throughout Forward costs timing revenue also are evenly relatively the

the profit the backlog of $XXX first EBITDA ClearPath our revenue the Of new revenue second and the now legacy non-GAAP quarter was in billion the as company's we're the structure quarter. year ranges company result XX.XX% end margin the to quarter, XX.XX%. of end first billion, for the for year. we Forward and to in million to convert renewal BPO billion, X% this, X% operating of Total $X.X $X.X margin segment of includes reaffirming as a adjusted growth expect revenue our of of the zero year, our year-over-year to results As of given XX% expectations to our the $X.X license relative and to of full guidance of decline the sequential remainder The were businesses backlog. to contributors schedules the largest which

been signed weighted quarter near-term which has revenue is of the is Additionally, that than to the XXXX, in contracts backlog the which contracts expected quickly, length weighted means average of during positive growth. shorter XXXX, to more the average for of first length signed convert

to and backlog enhance improve the DWS with our over year, currently revenue and the particular gradual stack. we implement of materials in as market expect will the support expect move short-term, on material the we our We course to new building a our out that to which continue up And in focus segment solutions that a the revenue portfolio strategy. We're quarter. be this enables margin go-to-market strategy our

improvement for Additionally, Forward modernization in transformation development in C&I we in backlog. managed and and revenue and both, an increased cloud application services increase demand opportunities application and to expect in further ClearPath drive

obligations. make Turning to we the on our significant sheet, pension balance progress continue to

the to current to Act the in are contributions future. As additional we Plan March qualified pension to the required Based we the changes resulted requirements. quarter, in benefit the has not first our contribution U.S. any our in pension signing calculations, make of disclosed during American plans Rescue defined on

cash expect contributions stronger future previously We year-end. may make for in the result, to with we've million expectations near-term at voluntary leaving the derisking we or than discussed, us elect to we in a even voluntary liquidity opportunities implement As had and make additional order contributions, flow, to $XXX strategies. no longer

we've removed. to been of from we've million with of collective domestic $XXX portion of actions in international achieve of relate transferring, multi-employer targeting two this approximately gross has program liabilities foundations. liabilities gross million reduction a billion pension pension completed As of to to $X.X two discussed, our plans liabilities, final been The The billion. $XXX our $X.X target

in and Our will final removing pension we point achieved work of of the end billion expect to to first which these first, complete these transactions have done was the quarter approvals goal gross and second at complete at we our quarter transactions the receive of instead $X.X the liabilities. of

As a non-cash settlement amount to plan to $XXX each will recognize of the reminder, approximately we for are The required related we the charges remove charge activity these second quarter as million. be liabilities.

turn with I'd implement to We're With back like XXXX, over flow. our for efforts profitability results cash call Peter. I team their and to and to ongoing of drive the the we new the in look exciting to Peter? that, Unisys over to strong back to strategy our Peter, turn start, And the I'll the call remainder thank continuing company's forward help continue Before transformation. an off to year.

Peter Altabef

Thank to the a And very Cole, let's so, we'll you the as open as get it. Mike, call. Question-and-Answer up to much. Session would And you questions, call with well that, open-up discussion, if

Operator

[Operator now will go ahead. will we first the question-and-answer Our and come from Certainly, Jon Tanwanteng Securities. Instructions] Please today CJS with being question session.

Jon Tanwanteng

nice for Thanks guys. and afternoon, my good quarter. questions Hi, taking

you in as couple to of of or did a year just clarify expect over to sequentially at Mike, here that you point? is the grow wanted course from points. say the some Just backlog

Mike Thomson

the backlog and for for the as hey, We're We're year for and – in quarter quarter, looking full Jon, year-to-date thanks the in growth well. the looking looking for the second Yes. growth both question. we're

quarter the would So I the in both the and answer year guess Jon. be

Jon Tanwanteng

wondering as business fluctuate? be hear. operating any That's great I projects how helpful. the the just revenue to – different or sustainable through Any as the get And the through we services is Got would in on go margin there it. as profile was to margin Are that you color year? changes your

Mike Thomson

So the Look what business as technology margin aspect a the aspect of of services little pretty plans Yes. solid that know bit around that. is right? Jon, is you our

I have quarter, pretty we So in services as quarter. feel the strongly margins tech they're in prepared that lighter very my noted third the sustainable. as as go, remarks we'll a But far

we from consistent as the services seen big step-up and quarter grow you've expect think lines in margins last along January to the us those maintain a quarters, to improvement in the continue at three and what in we over I Day. that discussed this and Investor

Jon Tanwanteng

of at that kind clarity give this percentage or usually like in point kind you quarter have per expect Do time? you And per half. that of in it. technology you of ballpark a Got revenue

Mike Thomson

Yes.

calling with XX% we're QX – what half XX% XX% second just the lowest quarter QX for in and flat the purposes. perspective the for from So again was Jon highest. the the the half licensing technology pretty first in XX% year a modeling being it's and and being From

Jon Tanwanteng

high Okay. Got it. And just then level. finally

the bill you know benefited any infrastructure for would as going benefit whether the that markets have stimulus you all? guys that potential I wondering to with I'm there in You a flow coming bill? any from to at variety insight you end you of there's if to serve, the pensions. Is funding

Peter Altabef

quarter. about had out take as in the current this thanks quarter I Yes. This prior Maybe year Jon we good for very in as a want bills results than infrastructure bill on add recognizing my the track at much to well itself. in rolled that in and its we feel is the and that to broader form Mike a way We I'll minute. this And January. is thanks we're – least also of plan infrastructure for defining

and So all as in active access are bill front this center cybersecurity, parts. integral broadband

a and our our bill, local, we us and around on in we sector, passed given visibility. we define other evolution infrastructure increased help that the to see Given sector the platforms in local that anything state around cybersecurity new state public opportunities States focus for federal, think the than way public if which United fulsome as would

Mike Thomson

case throw the this infrastructure well, Peter the just to of as But tax gave maybe know wanted piece I here. aspect in Jon that's We in of didn't not it And ask the it. of issues of mind in it to tax and the piece I you on other or regards the any do your of analysts perspective. negative any mind discussions some on from a expect of

we've of DTAs. As quite you got know bit a

about We billion billion shelter of income. have will of about $X.X $X worth DTAs that

any not of or expecting the any whether from tax being really we're items corporate the the taxes fallout So dialogue B the discussed, it's on rate rate, GILTI [ph]. tax the

I no as in think really So we're regard to that change well. –

Jon Tanwanteng

to issue Maybe your with issues Got one your The much issue well-publicized technology of semiconductors an not have given it. been as That's chain that good of know. Is final all, much and hardware that capacity? one associated or if supply and just cloud is all services deliver I that. ability – and on of limiting as offloading could. on migration just – the the at that might to it an to

Peter Altabef

are sectors issue That's Obviously, automobile very hit us. not certain It like Yes. an sector exactly as the much right, of is for being directly. Jon.

the issues that availability we're have providing significant We not seen in hardware clients. to

Some but significant. nothing

Jon Tanwanteng

Thank Great. Okay. you.

Mike Thomson

you. Thank

Operator

And our Joseph ahead. question will come next go Please Vafi Canaccord. with from

Joseph Vafi

the Good kind – C&I to Thanks. results. And have clearly follow-up. the I'll kind of so segment and doing about sales at like segment three where see performance the a prioritizing segments just moving of Good driver growth forward. the that? emerging how of reporting the strategy I of Hey, of now? then And kind and some and do expense you're guys. of and relative you ROI it's – looking new thinking quarter the marketing in on afternoon. kind looks well And

Peter Altabef

Yes.

of come of We to from three a DWS, feel expect into when of those, January the back we from strategy, take very Joe And go Cloud that revenue very I Infrastructure this. – start. very that to we services segment growth you So all much probably good congratulations I'll our feel few and will thanks bulk about we from will the again. for months and Forward. ClearPath tell the

year-to-year. some in Workplace revenue see you Services Digital reduction So

we up it pick expect full expect We positive revenue and year. be DWS to the to for

DWS. In expect pick relatively fact to modest full but losses Again be three expect positive we the from those for we of the all up revenue to year.

of We expect over year. the course pipeline for the increase the markedly DWS to

have fourth very that positioning We and the visibility some feel good those. We about out will our quarter. of in third for large come deals

So I piece larger strategy, in Infrastructure, would is over in we to had very little that of that much head compared of expect and that and play. larger our DWS to On which share time have tell bit really a Cloud you a we start a of DWS.

course, CPF us. very interesting On you, Gene would Infrastructure who DWS Forward, perspective has been several for business. who Leon leading and on in little seeing ClearPath think leading particularly the tell this Very, is and team those Morrison, Infrastructure here And cloud I new and So Gilbert, again, joined Cloud numbers, of March the Mike in a leader us quarter. more February. maturity years. in who Cloud I for mentioned, is I Chao the started you're a

have to that, take but entire to ClearPath Early that for on is vitality We about a looking the think days Gene revenue very really And from to the opportunities he's that bringing software a on like January I Forward. the where good services view us. at revenue. hard segment increase

expected feel really we're we that point. where on Joe track So at to with we be this

Joseph Vafi

so would Got guess, what million margin congressional to to of about place, your think like and business? that deployment but of It love think hear cash combined thoughts. should Act. Plan American of M&A to that -- it. with there's that back that to Thanks ongoing then the we How freed relative means of the feels Peter. the kind kind And kind if about -- it's up" $XXX Rescue in right the fair "got may we be say restructurings some I

Peter Altabef

we of first a feel hole it. any have Well, not do urgency spend not to it pocket. We it because is our burning in all,

we passage the contributions. out, grateful Mike of for make the with as million very no $XXX longer laid expect to right You're Act that. the of And we're

I act all really So now. feel we like, levers said in really my can at we comments, as

for us most the and and the have time. piece and hard that cloud of We the at that over Infrastructure change looked is DWS businesses Cloud will

really Some to businesses have last actually complete DWS that we're classic It's a all do bit. And with both With Mckenzie less next respect of some and I for two little that in is AlixPartners have of or specific at in for pricing We're businesses, a little businesses if We right aggressive three. very the been those to we pricing strategy. is the to our buy seeing kinds of multiples look the be DWS the would some that a we you than to very did intend pricing is that and of those consistent the with work tell different now of void. to expect players the a over and would and We into you I bundles business then years. terms rush for current analysis, year looking the de-emphasizing the Cloud the that can cloud industry us. good created get That look at bundles offerings at we with of of in very how we -- evolve business that few analysis. how build-by-partner next couple years. over We've kind analysis. tell the of

solutions DWS. specific you'll share think acquisitions for on grow acquisitions solutions revenues multiplier I those our we But a and on in DWS will see smaller in effect really So niche market specific that will to us fill probably ability have us. focus think

are think be that a to Situation in little a cloud, is in next-generation will in cloud our the to offerings, an our believe we're our a subscale terms make in again, a it's some prices we in over acquirer. in have be where we little higher. And that So or filling acquisitions. Those more efficient good offerings of for multiplier in scale little different very some advisory largely expect some given effect, cloud of shape of we mature or geography, that do services. we some but time of asking our

think acquisitions. the the approach I So way that's cloud we'll

Joseph Vafi

Thanks as much focused for great really makes DWS I in color that Yes, as that scale sense. others results. the that so. kind a of much one Peter. Thanks Great. call big you what player aren't on see becoming perhaps opportunity is Unisys could

Peter Altabef

Thanks, Joe.

Mike Thomson

Okay. Thanks, Joe.

Operator

Sidoti. will Galinko Matthew our go ahead. And next come Please with question from

Matthew Galinko

to question. any component towards I my we're days Hey, early still macro as be push cloud if segment? the existing customers and Thanks. a supply from in around in whether you question just extra realize there's of curious taking but and could migration or towards for catalyst chain macro any thanks that, for follow-up any Maybe the push that I'm shortages.

Peter Altabef

more hard own Yes, well first to really push in point, your need managing bear it perspective the accelerated one for why hand you you their COVID-XX imagine take then the did right? don't it's people and So over people as data And I or mind. already to several, at who this the center. of Mike So not people right? cloud involved it's don't if to to want that cost

the available as of ultimately at productive Services, that the putting DWS around that more So very, and with The clients a least work-from-home client, around be effort that for people with latency we're it in world, push the largely employees was a revolves very anywhere lot our into which making which came capabilities anywhere along to are cloud. Digital is also cloud. having means push. toward Workplace The has low to the COVID of acted around doing our the advances they work, what

a issues, cloud -- already. the why I of people think to I chain bunch were So reasons think Supply two in accelerating on it you've ways. do had

is of There obviously we security. And need of there's not our the or that environment. element of a kind second it is determine you hosted hardware and you you that which you someone the Azure the software cetera. chain about that being do hardware managing you're provenance the a Google still or the very servers, AWS supply the core of are secure obviously else, networked of et right of or to clients. do around right as that availability obviously, provenance? And is secondly it how But for buying to a needs in manage carefully environment run has buy. is First, concerned And by

have what think a is about midsized you're companies that finding willingness not And that let providers big cloud I so to work. here provenance. to do And especially, worry public the

time element security added that agree I around thoughts side the especially So over please? that's Mike an that. your of do

Mike Thomson

that Look question. increases for you themselves, thanks materials complexity. cover think, didn't the only there is talked seeing component chain the Peter from about cost just right? Yes. the we there supply And I other cost. and covered maybe Matt Peter elements of the main the the We're availability security

mean, just out. years clients years, we're into And a I we're strategy capital-light three this when we've that about perspective, probably three five or really Matt, having now. thinking that years four cloud been plays discussions years with the look So pursuing from for our

term. Now year in near out now one the certainly those discussions around are or

really the into or I So path. adoption know Peter another to just business are on the things digitization and the in plan. And think our fits that our catalyst get of cloud you nicely mentioned as the prelude that here all very strategy folks

Peter Altabef

said. add just what would Mike I And to just exactly

back -- of sure that our into Stealth built of it would the have beyond our focus part is to secure going area Forward or that things one clients have decided security all really have. But that Our can the our we on makes a directly. XXXX, they that internally making they were most ClearPath we environment is environment is us the security that. in solutions. as cut well this operating most -- as clients We distinctive goes for Obviously, with environment. have secure even Unisys we both

private overstate world. governments. the around the is It's become to a affecting and It's in to seeing where ransomware ransomware whatever affecting want you're plague word organizations you affecting world it's a As IT local pandemic, hard use, state going. governments

systems. -- wherever public of have where from data when it know the that in having affect so the can environment protect more cloud And you does doesn't but buck ransomware. ransomware again, and attack. does a within backup, really handle possible they that focus the they companies of resiliency really have their ransomware allow they scope have the have making most control They can to individual secure your you XXX% a best We it stop on sure is,

ransomware again bigger cloud, to going the I'm what I the So in say my table, to focus put you I think, Unisys and specifically going I'm cybersecurity seeing this well of us in helps claim it as sure cloud. I as that retaining this that we in capabilities have growth some cloud making on what That quarter. protected seeing in I to am and brings are the folks showed the about you're think the

Matthew Galinko

comprehensive quarter. Well, answer and nice thanks for

Peter Altabef

Thanks, Matt.

Mike Thomson

you, Thank Matt.

Operator

question go from Bourgeois And our Rod with next Equity Research. ahead. DeepDive will come Please

Rod Bourgeois

say in And the new for reporting to three out trends clear segments liking your Unisys Hi, also should guys. seems better on how a And lay it I'm your profitability. progress marketplace. financials the nice in very just to look Hey, me that it at I way. I ties

revival work on business. I nice a growth there. the workplace So digital plan have the about question story the in

in out actual its some there to proposition. and flavor that us revive you Can experience You messages the Can move about mentioned give the out rolling plan that taking market? you're so you're on. the a there's market new end-user talk messages clearly DWS And just some on the material to rolling to you growth? to value the

Peter Altabef

last more of do earlier a become obligation of wasn't I it more look looks the having Joe's I is as of our especially as part decision. and DWS mirror. things obvious. you the question, -- it normal pension a thanks you rearview pretty to question, further It's believe of kind to until it clarity I it's long -- further right? for into at about it really and the Yes. how finally as it's It's to kind And we important done of it gives the And company with Rod a very one do investors talked things mentioned agree of respect when With in one it's for those and those and future. obvious, you. Mike But I obvious time But year. great segment. supportive being the it made

revenue -- the We a things work those And time. We've for that this did have but not show this preparation With respect uplift last is for one detailed been of lot that really the side -- seeing was thing. to the the of very in said capabilities. the what we we are economies exactly of really the gotten for kind a of year and the as a quarter of have house you're map long planning have a quarter we up we certainly margin I numbers have been efficiencies -- you're seeing. in

we are the of from we understanding is have they Now the going think year same market a now But a to changing and now. do as not things be industry are lot of full and to the well a size reach expect do capabilities. geographic as marketplace be as -- We as both both fact marketplace. well in in leader the as of in in

DWS for focused it -- to in in bullish we us begin probably as before cloud, for very revenues to also that there I space. just And will believe, good so I DWS, because take exactly about we out we Joe's are So we opportunities grow is there. in a pipeline need you question, what feel leader to a see cloud very on mentioned role over do acquisitions time.

think we this is So our about timing we're very fortuitous. space. But bullish

Rod Bourgeois

– yes. And it. Got

Mike Thomson

much to thanks the of Rod there so and little going couple add just was a for I elements question.

to VDI this and we areas. the putting be to that's the an dominant player we and, a feel we about lot we've and got talking about us which our the view want about in UCaaS on space be think an can it's we for opportunity holistic this taking. about to space where And area messaging we've your mentioned, we're the materials, this transition UEM or EUX You only for and about context as know But a on of it's think in dominant we're years bit, the exiting be really whether Investor type us able specifically is space now, January us to them not maybe that a talked is quite that EUS Day journey. to Peter in from that. now in really But the focus ripe there. And from year clients as but it's really this how being our or you question, player heard a say the people the of of deepening of take three solutions

Rod Bourgeois

particularly demand that we the just question I of part you you challenges, it. or through could in And your as lower know driving you existing down seeing more Very uptick that, work and at of a Hey, helpful. mentioned that some dynamic backlog, Got the is are uptick in trends, different the duration add-on COVID general work the in about duration add-on a seeing accounts, a was are general an get crisis backlog? that's add-ons? be the additional in

Peter Altabef

finish. Infrastructure, segment it Mike Well, that Cloud of quarter, for and this and take that lot and Infrastructure had so When instance, let is. that then was existing cloud in a the ours clients. work the and of Cloud came specifically and again, talking, Absolutely, growth which most start about I'll you're from

was Some setting of them that it logo. very clouds some all vigorous were migrating from up public not of clouds, new of private were to hybrid but clouds,

in add-on back all or So -- a extension very go deep the from DWS we very specifically think what so end has experience big those got such Rod, playing work. relationships again, out strong that are a new installed call engagements. to that you come end-user work user from come services us, we question what is to even that It much base the to during stronger can clients. COVID-XX to of in of advantage that call fact have not would base we And in

all the intelligent when are way are user things collaboration workplace, that those and going. as are doing end really where is end-user workplace-as-a-service, modern device in integral think in things not UCaaS, we to the where to of but we're talking seamless when about some extent So going experience, we you're same the about market services, management, that

So of much our an very think we this part integral of existing future. is extending idea relationships do

Mike Thomson

within public it. that call echo Rod, sector would work, seen and and as within quite really of you that business, we've and I specifically Cloud say, our bit a Infrastructure Yes, just add-on

that long-term they and walking really the the And need beauty are chip done. you're that contracts getting work In with And lot we're of of there, clients. the other opportunities, you're halls a right? got that's blue the relationships unsolicited fact we've

we that's couple it here. tenet our point. expand solutions But new from solutions, not and this more more our perspective, that been think core our they're at that's a of strategy, we'll of the that the of really we really to a our we can more right, for a wholesome others get, for now, So because lot there's be think years right? deepen as paying And necessarily

well. So it's a with clients us opportunity existing to for good as wallet expand our

Rod Bourgeois

Thanks, guys. stuff. Good

Peter Altabef

Thank you, Rod.

Mike Thomson

Thanks, Rod.

Operator

will And to remarks. closing for like session. question-and-answer our the Peter over any this I'd conclude to turn conference back

Peter Altabef

think and we've Thanks for Mike thank explain help We in joining very business much. Courtney I'd on call gotten. our beyond level questions prepared those of like the remarks. what's the We to on really me the today. appreciate going

We in also website that put February. call think investor business Relations up that the we after the what is explain the which refreshed went helps Investor have up, actually

our you'll some time of one increasingly think hope that transparent, find We helpful that. is which on spend and So that goals. we you

We at forward by in-person in the calls year, meetings well, we through are to. as some obviously available also and also look which to you point through and phone Zoom

forward visiting Courtney, to Mike So thank on again to you look of And I'd everybody. like next quarter. and with behalf

Operator

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

and have time this at a lines day. great your disconnect now may You

Unisys (UIS) 9 May 212021 Q1 Earnings call transcript