UIS - Earnings call transcript Q2 2022

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Operator

Good day and welcome to the Unisys Corporation Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I'd like to turn the conference over to Courtney Holben, Vice President Investor Relations. ahead. go Please

Courtney Holben

by discuss Thomson results. Chair Mike and Altabef, Good President to operator. new participate will us. This Courtney XXXX is afternoon, Thank Investor in morning, Relations. McCann, morning session Peter Vice CFO; financial role quarter second of released joining in COO. joined Deb his our Thank our results Holben, those this and who CEO; Unisys the you, Q&A its everyone. I'm you Yesterday for as

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

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

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

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Peter Altabef

Courtney, and to joining you, quarter discuss and you for Thank thank results. morning, our us good second everyone,

second In all revenue within momentum our Unisys. ACV addition most her which on and showing currency results in pipeline. grew DWS, in earnings constant in with and the to to consensus clients significantly I'll grew And we business. or call focus we Starting and TCV key workplace quarter, welcome metrics on insight give signings exceeding Perhaps into first our are then detail few help all and Workplace. will as refer a solutions explain and we engagement, modern applications workplace infrastructure higher within the maximize growth, Deb cloud digital and Modern and her employee focus key in solutions financial terms applications we areas with to provide But of minutes. digital first those productivity that digital our platforms and collaboration, within solutions. a I margin as streamline workplace to optimize higher primary is solutions will of some

not experience-based DWS Modern proactive the workplace. elements these differentiates on in We refer to focus included Our solutions, us market. traditional as Workplace, in

of take sequentially revenue in mix and and Our second year-over-year to the constant Modern our as expect improve we shift to business share positioned market is year. DWS currency DWS profitability we to Workplace the for half and

and experience-based XE, Workplace preferred for management relationship Tachyon to the us through mobile offerings XE. consulting our and makes allows services with provider, for a software solutions our leverage platform Modern managed a us expanded During provider we quarter, their device which

also new And of in Premier Help six Support at Award as an Asia in Institute recently Lenovo, were Awards, we solutions. work the suite a we categories Desk client, traditional for for finalist our workplace with beverage Our won and with both named That large of two. American a full Workplace DWS in Pacific. logo In company. includes honored Modern quarter, a us which Excellence signed the we work second

scope services traditional services workplace. signed institution, contract a managed modern a large and involving financial with also We new also

will this As part Workplace the Shifting work quarter. systems help and to the infrastructure our platforms CA&I, Teams managing of continued hybrid leveraging transform this our or communication Microsoft collaboration a and software communications for solutions applications cloud to segment contract, within for during business. momentum we client's in environment, securing PowerSuite, Modern and

the and have an really right capabilities in and a in are bolster search cybersecurity, increasingly for the data revised and management, and of undertook cloud to growth of applications remaining December acquisition in part CA&I. applications mix sharpening multi-cloud we higher-margin, of important CA&I acquired the business. last We year. modernization, and of for higher-growth, fit this go-to-market and areas refinement digital applications are to shift presence as referring to the application our We're application revenue applications name market, because modern this and analytics part platforms of toward this of We thorough platforms the and of our we development are native piece CompuGain story. segment digital working which the focus segment the part our of our approach The now insights, and of hybrid and

constant and currency awareness year-over-year we both expect in profitability the for revenue As we sequentially upside, second and of increase CA&I, our capabilities half.

improvements services. our AWS the new automation our and features, we Azure, our prevention, version platforms monitoring during cloud and applications of tools, core applications, as cloud-native environment with enhanced second including platform to released Also automation. security within leveraging and and assessment well visibility incident offering, database part As a containerization quarter, as digital our our hybrid capabilities capabilities, cloud solutions, ticket to of migration and optimization platforms enhanced we operations and digital

in Private/Hybrid I'll the Data now U.S. We three Services XXXX are our quarter, a and in applications during ISG's sector quarter. digital U.S., and in platforms recognized signed Lens and for were contracts Solutions. industry public named for the highlight being leader And Brazil Center the we we solutions. within the Provider and in in the that Cloud during

with contract reimbursement K-XX logo of efficiency and the United one States new cloud-ready evaluating, public a systems largest of signed application of tracking a and claims needed provide effectiveness rendered services we for processing, the the in First, students. submitting to increase to school to

inmates, of applications. our growth one is as platforms key system South We based New also move Wales the signed system This within with Department and digital centers. and New South improve speed a Wales Stealth of and processing Australia win supportive the of of in biometric they identity. a new staff new their logo Justice visitors cybersecurity contract -- within security Communities This correctional will areas on for

from Finally, legacy we large to applications cloud. in the the public financial signed secondary to a new scope contract market its with transition mortgage support a on-prem institution

anticipated. in Computing early Forward applications these Enterprise scope serverless in clients or than the contract speed licenses specific quarter, Also several and workloads transportation we to earlier to industry ECS a advancing this Forward interface Forward opportunities and compute services new its make to and released proprietary computing agency in with to quantum, renewed although data applications insurance Azure see modern to services upgraded edge of as deploy unemployment processing changes of software U.S. to enhanced legacy to Turning architecture and version in during licenses, migrate the segment which and improved ECS, to is related Solutions the insurance year exchange our compliance the a signed next-generation are growth ECS capability, applications state we a unemployment stages. opportunities new solution a cloud to We and automation, systems, our ClearPath services capabilities. ClearPath streamline of ClearPath travel and financial ClearPath with capabilities the related the to ahead for environment. Outside expectations its Forward agency's quarter, ability increased for

and for each platforms calls. also discuss I applications. the to provide Deb related our focus digital we modern some turn of of of additional and these metrics areas workplace provide And we expect on will focus and specific both future and in segments, to As to Company details metrics areas the

transformation DWS the XX% grew go-to-market year-over-year is company and solution Company, Total year-over-year. look grew portfolio ACV our C&I As we improvement driving of ACV revenue across indicators. XX% ACV year-over-year. the XX% in leading approach and grew

increasing duration clients higher than more margin with year gross focus the than TCV quarter we contracts associated also second was for but on contracts, average grew in TCV, expected signed ACV again Given preference The weighted in shorter prior those period. year-over-year. XX% the quarter

Workplace Company of our The XX% pipeline number now doubled Total XX% year-over-year initiatives company pipeline amplify the doubled upcoming ACV as $X billion will Modern applications as brand year-over-year. than of our more for our Modern made pipeline amounts contracts been increased have grow as marketing contributed While grew sales more DWS applications And pipeline and anticipated the and and delayed. transformation grew pipeline sign expecting a quarter XX% and digital and year-over-year. C&I year-over-year. we Workplace were platforms in in year-over-year. for these investments to $X to to than that, to that, and platforms did The and our approximately pipeline results we it pipeline. have billion total within grew, within not solutions. awareness digital much the

Event analysts Advisor XXX% increased On partner our we and advisor hosted include we sales, the completed management, in marketing network. June. we have third-party and our discussions. and client in direct an consulting front, respect the of of in advisors Unisys to sales Industry said in With Analyst post-event who and our team, have industry invested client they initiatives, would survey the size

interest the We the prospects campaign have engagement. our even XXXX, increased initiated solutions. before learning groups a end demonstrating these of in in progress about drive We and advertising clients targeting awareness And and are been and brand launch. to making marketing Unisys digital at

much we our seeing as respect and With are XXXX. levels more double the of in engaged from transformation for most than formation the are brand previously. benchmark engagement, industry as are Unisys to twice, brand, web content downloading significant since in the We nearly visitors site

created fourth everything recruiting Unisys target the social launch engaging sales will points, we and enhancing including building campaign think visual material. from and marketing all leadership content, extend results is sales, verbal awareness the that collateral, The we value and pitch demand of to our media, our touch We're brand will recruiting differentiation relations, include The quarter forward thought reputation, audiences this decks, materials and proposition. employer and rebranding, of the looking results culture. will our across keeping Unisys.com, have to our our generation, associates, corporate those brand to talent driving amplify a and new platform, year. new both campaign refresh advertising, While designed name, public in publications, our

efficiency. this a to aiming maximize taken to approach initiative targeted also have We impact

year, which development in the programs. parts XXXX leadership open the our attrition, and in Turning to prior competitive workforce the seeing development talent across roles. labor the remains the me, of management, earning period. in of of our of that accelerates to into career people off talent talent XX availability XX% the of excuse resulted business. cost half -- through improving and year In our market have efficiency and the cost second to of been first labor Redeployment process by of than These deployment of the certifications the our higher We're elevated improved year. talent first half We're in expect of enabled internal in the opportunities programs, signs open include movement automation the internal more also drove has internal certifications the industry. inflation half technical new roles earning fill level more attrition of

the combination labor the talent enhanced and cost attrition ability year. in the internal deploy the market of lower expect second We to stabilize of half forces, of to

focus campus our also our early are hiring weighted towards more transition to pyramid talent. on career as We labor heavily expanding we be lower-cost globally

XX Index. gain Employers are in of received We Best for and Forbes the Disability XXXX Women Equality top XXX Our DEI named by efforts traction. were on continuing a America's score the to of

involving centigrade Compact. and we time, not Turning cyberattack we XXXX. targets this for we but participation with ambition net This to Company's the lab business are by zero X science-based in recently much have our ESG, Scope builds emissions project aligns the for share, on and UN disclosure announced apparent At environment. the X Global software greenhouse initiative, of carbon aware and gas of the a information do X.X-degree to goal recent

leading internal is taking to incident. Our a actively steps of cyber assistance team this defense with security related firm the

authorities. for At are enforcement either We have our also with engaged law or time, no there this operations our for clients. disruptions service

Progress That areas. Because is expected, foreign such our our also So strategy costs, profitability though, call deteriorated that, rates expect results. revenue we hybrid sequentially to constant we in digital labor work showing summary, in reported our half. and over our signings cloud both increased are for focus since as our year-over-year robust, of With and migration remain currency and this revenue demand drivers slower Deb last to models as year. call. as guidance discuss than profitability said, the to as in transformation, in have in exchange momentum second and I'll been and to has lowering well as and turn financial the the grow

Deb McCann

both and quarters. Thank you, my I discussion to forward and my morning, GAAP Unisys coming and everyone. and In I in know results. joining today, am first analysts be our since better May, here investors Peter, will to I for earnings non-GAAP to good call to excited the look today in refer getting

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

the revenue currency as-reported provide revenue on total on an level constant will as currency Additionally, will basis a constant I company and as segment provide well basis.

gain highlighted, strategy continues As Peter our to momentum.

delays all encouraged increases metrics. pipeline We ACV, than consensus constant and year-over-year TCV has due progress related business. in-year resulted year-over-year in the and on increased contract expansion in said, parts shifts beat That costs, to key which has expected, currency in are growth in revenue margin quarter our for labor slower in been we and the as that of profitability by mix fact grew and opportunity well in as the signings, in part impacted which to less revenue

we headwind. our expect strategy. in contract licenses anticipated revenue revenue ECS elements second half this profitability impact of long-term improvements additional half. these in the to-date signed And will sequential an and created our signings, including year drive exchange Foreign year-over-year and None second

sales and X.X% growing results. second ECS anticipated, and quarter year-over-year year currency flow in initiatives contribute a that full We and earlier backdrop, XX.X% revenue flat Workplace company platforms cash expect free or more improvement of as beat insight growth areas in year-over-year provide still grew Several second that half to Total marketing a year-over-year. applications further as the also Modern 'XX. our our our year-over-year we will for renewed anticipate that I'll licenses constant in With to signings, reported, improvement and constant consensus currency resulting year-over-year clients segment. digital in than focus and into

'XX in year-over-year than revenue to originally are indicated ECS full We low year now be anticipating with better down full results expected single-digits year constant currency.

ECS of of as contracts in next-generation timing majority applications size the upside believe remain renewal proprietary industry in the given compute which for services, there We over and themselves, depends reminder, a and on specific As opposed this future up a revenue XX%. ECS-related number is segment quarter to with capability. renewal rates in

and of which and We revenue see within year applications to approximately growth, period. year-over-year our platforms prior The increased related in X.X% CompuGain for platforms revenue CA&I, digital by to significantly enhanced the continues. approximately in our higher-margin capabilities. digital in meaningful growth specifically segment currency, constant Moving acquisition momentum segment, of our higher the our this applications, driven XX% which opportunity from to CA&I XX% incremental of

of We quarter in awareness along market, are these and growth forward CA&I accelerated to drive this our are year-over-year with efforts, expected the this in increasing increase year-over-year ACV XX% going second in segment. offerings

Next, successful. DWS, discuss the go-to-market tools right solutions is with be let's positioned to and which

helped has is XX% Our and to workplace growth. industry the being experience in differentiation focused modern year-over-year recognized in DWS ACV a drive

the totaled has we although impact as the traditional $XX of roll-off in XXXX, the, second been growing, workplace the also quarter. and contracts have contracts New to been the that business feel new exited within which in number million continuing of are DWS we than expected delayed, slower of

lighter year-over-year down DWS than was XX.X% revenue our in quarter, currency. As the constant in expected a result,

the and Excluding exited the currency, X.X% grew impact of DWS contracts revenue year-over-year.

We impact the by and million. expect QX exited QX million contracts $XX will by $XX

backlog. look quarter though to Solutions detail to quarter signing of in be the since primarily from billion, and third revenue June expectations approximately expect continue year-over-year ECS strong we the in for be our to FX. and leading revenue led points of logo Modern as positive overall. to of total is which our respect XX% constant currency up the why, and Solutions in quarter, on basis from With prior and while second revenue currency, $X.X now leading going year result impact backlog that the is exchange as approximately company reported. a encouraging points Of provided the up overall, X.X% DWS last the did ACV of our delays. it earnings first chain. points to or to to approximately delayed the down it negative year-over-year currency pipeline as not year, the exchange third as to deterioration to basis reported, the we encouraged year-over-year revenue versus Despite revenue X% XXX to to as renewal forward, the our XXX due are as in past, Company to QX reported, supporting revenue year Workplace at in for as XXX has constant highlights call revenue half current was X% Modern half, of the value increased We signing at XX of as FX end approximately are the with from revenue well guidance foreign a X.X% the range revenue basis already revenue rates foreign our have up due new was in have the guidance second declined XXX to constant part in to ability original of as growth, basis in to XXX will expected be momentum According points and signings second range basis change the period. contracts XX% to approximately contract our significant X% more constant reported the move we growth and half we original positive approximately quarter, impact in to a these a basis Total the XX large year-over-year, timing on X% billion currency point providing our growth indicators backlog. X% due both we XXX the us growth a $X.X In company fourth Workplace lower

company profitability, year-over-year, gross Moving profit margins total the points. up XX.X%, led up points to up was was gross XXX year-over-year, from basis EPS up was gross XXX X.X% margin year-over-year. million, and profit be $XXX segment XX.X% basis to which

As a of key and the reminder, amortization to throughout support the relatively costs. year, ECS fixed, software year-to-year components are that platform the costs of and costs development are given the both labor the

of higher the have inflation. and market DWS impact to labor on gross year-over-year renewals timing a points can by So cost largely license also talent XXX decreased to competitive the due XX%, significant driven of basis profitability. margin

We improvements stabilizing prior more half future years. the higher expect period, of profit in year-over-year of to impacted Within drive second shift as by and and improvement models, gross X.X% mix labor costs. in 'XX margin was productivity XX.X% as the labor in margin cost efficient DWS well staffing versus CA&I, gross year

improve our the that scalability Adjusted points. noted of were points down solutions, year-over-year and cost being points. parts of and non-GAAP expectations XXX XXX that to and sales which but XX business margin our I The increased to by adding basis year-over-year by TCV future stated XXX impacts being of pipeline growth profitability relative increasing in year-over-year automation of expectation mentioned, EBITDA Total in basis down basis years. operating basis and our to XX.X%, impacted points those in the labor Peter and stated quarter. ACV, of marketing margin are of the company partially down was We C&I the XX signings and the relative higher level to XXX the offset X%, comparisons second investments contributed XXXX to standardization half was ECS profit efficiency, expected in the is across to down

timing labor, mix and to both of improvements, to contribute cost the I increased ECS is productivity year-over-year shift addition to In automation, in stabilizing licenses expected of and mentioned, sequentially improving profitability, the second the half.

However, the in two those the company expect we third be the to up points to to expect adjusted and the XXX quarter, fourth of these operating margin licenses between down the quarter. non-GAAP third to and meaningfully then ECS split quarter. metrics EBITDA approximately We XXX profit year-over-year be year-over-year due total in basis

real estate $X to that million as by on continue and primarily Based refine expect associated driven impacted the in the impacts, quarter. in cost the shift million footprint, delay to labor these we and inflationary expectations As margin of has of our higher $XX charges signing cost increased we solutions. third such structure and to

the in margin of to original our to non-GAAP from with margin Approximately delayed X.X% lowering X% adjusted this XX% signings. basis XX.X% cost EBITDA and labor XXX related original are to of We XX% XX.X%. points profit of full guidance year X.X% was guidance range operating of our increased to to the to related range to balance the XX% to

we providing increased environments Going sized similarly guidance given exchange. foreign a forward, in range to volatility continue include macroeconomic expect

share initiatives, million offset earned. the Non-GAAP driven diluted the largely versus pension diluted was prior due taking or Our year period, improved of the reduction $X.XX $XX.X to net jurisdictions tax-related which taxes $XXX.X year million diluted $X.XX by a share an net in to $X.XX $X.XX share prior versus largely in or prior diluted period the Company settlement due year income partially a to per in or the a related was per net or $XX.X income period, million $XX loss increase year-over-year in of per liability loss benefit. in per million by charge share

items, million related the licenses to the both versus Free $XX in million collections $XX quarter the of was impacted ECS periods. timing prior period. in to cash was in by flow Moving CapEx flow-related cash

million year-over-year. free down result, cash As a was was negative $XX flow which $XX million,

the year-over-year expansion continue metrics free for year to see We expect the full important as and in flow XXXX. improvement cash

not you XXXX, sense give a we million end expect give to cash range XXXX. of $XX do $XX to free of up relative in we guidance, where a which million, to flow million can we is $XX Although

CapEx be for our of excited of a is we to $XXX capital full We working Overall, year. cash the $XX about are we go-to-market the the seeing in quarter, million end to for healthy business above of momentum expectation current million which million needs. $XXX the as reflected the improvement have Our had is are noted. in we balance in metrics the

and it. in and our While profitability market some to demand drive. we of We turn over we and expect drivers forward the of we Peter? look underlying momentum the year see initiatives that planned the and second the signings, right the by to of additional Peter. of address for areas in completion these year the With half marketing that, the making to progress I'll we recognizing sales have focus, back call about revenue been has anticipate to the effectively good this point them in delayed, the believe our feel solution the

Peter Altabef

new for note Officer. Q&A we would would Thank open to session, in Mike in for today questions as you call are by happy you, I Chief Deb. may his you have. that, any to With Thomson Deb, that be to Operating We'll please joined Operator, role respond the the addition questions.

Operator

DeepDive first Equity Bourgeois Our Rod with Research. question Instructions] [Operator from comes

Rod Bourgeois

of conditions. kind a estimates Any about can be received as ask interim we've to So pension of on of latest if you round market wondering an light pension update questions your just I'd pension helpful definitely give I'm like the of late? would in pension.

Deb McCann

the valuation GAAP tri-annual each year defined For accounting deficit more the than contributions International determined the based calculations U.S. macroeconomic and benefit our on typically contributions end only based by upon cash well analysis at data. of of as negotiations are as year-end we -- pension are qualified factors. perform both plan, this for affordability

deterioration and offset Given trends, than due improve our asset using more higher will expect liabilities the rising from we 'XX because discount we rate calculations with should market in U.S. deficit to believe year-end rates, -- mark which the interest international combined value. accounting current

equities However, legislation, U.S. know benefit U.S. the as assets as contributions On our probably or make defined analysis the is we income next future. or in plan will and the we rates material as to us year, early in may pension QX cash on our these the call in economic plans trends But of once contributions, pension in complete, to additional you markets update value based make with, qualified to demographic in deterioration deterioration future. U.S. to changes this well contributions a regarding be qualified cash year, expectations. cash any plans -- pension benefit valuation could fixed required our require discount our both the our

Rod Bourgeois

to I signings want signings it to due contributing working our And delays causes changes carefully dig delays. what into the to of contractual Unisys the wonder, extent is and I I delays. signings guess to are some the of on the that macro possible terms pricing and

on helpful? would really be color that more Some

Peter Altabef

negotiations specific hard inside consider of a do all our actually amount We It's revenue relatively because long-term. pretty is what to dissect unique. we contract they're fair

project long-term our contracts, of are revenue are XX% So works. XX% only about

about we're in we not outside when a Europe, still in have revenue. recession, recession, So on the are more are not questions of particularly are there. represents And U.S. people a macroeconomic the XX% you who in side, there sure, our

So I that have I'm the of would delays, going say that head, my some the in delayed. through been as contracts

role pretty certainly, So big I macroeconomics a plays there. think

pricing I of in more we're how in those turn been the it think involved who for actually terms I'd that exactly has over Mike, to is. contracts, pricing

Mike Thomson

our with lot probably comment analysis really that quite would more it's echo the environment. in signings. the contract We've do to I the done a macroeconomic a bit of work of

of opposes contracting we spent But the know, right delaying lot got -- you that really call, of wouldn't we've signs. really I those a or As contracts. is process in ensuring not those things our time elongating and types our

be those signed like fast-track buckets, various also So get like things But right? clearly expedite of we're we extended and things really might effort large got you've fact have by contracts lot to into these more contracts those that. plenty contracts through. trying and which In to services, augmentation these a breaking that professional time contracts, take

lot Peter do So I in to with in probably and the a definitely around the our would than with it that it's of processes. contract uncertainty duration is concur thoughts more environment

Peter Altabef

both focus I workplace -- that the in has sort pipeline, our the in item isn't in focus the pipeline to areas about grown list. one digital as when would But your right? modern has The most add So those we significantly CA&I, software. we of we but Rod, pipeline when that to think significantly of that, and necessarily in and go we which back areas deals DWS think have, platforms doubled and on

about, not that's so but focus a as for Deb that talked fast say us. areas fast-growing are -- those that's to new, And

And think making those timely man. of I get does really all in a those a you're moving quickly higher But to so we're take in especially areas when growth a for into it little ourselves bit, that areas. name traction

I very say pipeline we're We're would happy the with growth. happy really areas. So growth those ACV in with the

I of solutions. think little go slowly is traditional some than more to some of that a the going

Operator

with question Jon from comes Tanwanteng CJS Securities. next Our

Lee Jagoda

Jagoda It's for Jon. actually Lee

So of macro. the delays just the signings -- starting lot appreciating contract a to that are related

the a question to of built be And new or you margins? you're that And new are you examples able the is, us higher piece type target last after and of my two to into kind to whether to share one, here versus or to part ago? inflation had As the those those going maintaining that get is some give target of years current the situation result you on work? that stuff then some the you're labor gaining, contracts the margins new of able growth, losing you then you are three signing, margins of transition way representative as situation have work, higher-margin target may stuff XX

Peter Altabef

in software hand Well, and detail work so higher margins the workplace more infrastructure both the for I'll for the in applications higher start, of higher the that modern are mentioned of the margins, Mike in to platforms is questions. and remarks, we're to margin. respect they're quarter part the of before. are are higher a signing and because target target than deals the margins selling as then and I'll digital first over I in my reason second a DWS, With some And it and and we the margin group both sub target quarter mix period in cloud higher little on of

we those we to higher going sell and forward. expect items, we depends from preferences get of area let pressure. we I'll about those So dealing we to are, inflation client with are it our the ourselves are focused because Mike talk different several but as on are inflationary margins, get pricing going ways, specifically more higher margins largely what covering and And in

expected of through opposes, pricing some deal adjustments are to I'll that. are with Mike But Some and those in those of time. through call, over let

Mike Thomson

the cost profile think you base, a period, on one through is labor prior year right? pricing the the weighted to higher we our I proper here. are they're are that paying we labor margin obviously the good gross cost. us gave in with And meaning you than at higher highlights look when look, Yes, the average regards the expected passing quarter clients getting of I Peter the tells associated we're So that contracts note would things higher that signed margin in

Now think couple $XX being looking increased approximately the year-over-year. it of focused pipeline than contract the at of areas. when noted times, to growth, ACV and it you important a we look growth labor we doubled in at and target more is those, it's cost both labor costs We're million new our work. But -- support here, an do the increased of have factor I

for so, of think margin it don't you've new is seen because those mix And yet in some higher still the the the signings pipeline. at shift I actually

new and it have the us. And labor hit already of ACV is costs some

to a the is mix between of bit pressure cost timing the labor you're seeing hits when pricing we there through, a now. that and bit of when that's a little So see that come

is we I'd by they change XX% a a is other bit the some the sector. sector short-term. the That insulated bit thing conditions do a of lot more and that little do pricing budgets we from driven it's in mention around in of because the public little The macro-economic work, of public roughly don't is work necessarily

[Audio more backlog. a of XX% is revenue mentioned in that So Gap] lot of roughly next have already that in quarter, our think backlog, returning or a XX% there. are I bit in little the prevention Peter and is revenues we

to the we in profile the see that over seeing business margin improve expect continue to we're improvement. on time multiples So would based that new

Peter Altabef

Lee, clear just I scenes stuff being can because are we otherwise, I your tie I so in then and though want make some of question because think let me Yes, lose to together question and Rod's the answers. all be the that and sure clear Mike

the were, since, early IT I of we from, first go on of increasing I I think the et seeing first to is everybody to I want Mike say, environment. in recognize indications that are Everybody our would and may happening expecting it in when was of we What's were and right? that, and were since particularly the so be shortage, What's this labor were putting our clients two think back because coming seeing and it idea So clients is and field, inflation, and opposes, things. I when discussion the relatively you receptive happening. happened Rod I because quarter also quarter, call, prices were the seeing inflationary where was having to So indications cetera.

think I loosened. that believe we First, is all market that, labor

So April was inflationary right? it not August. as pressure, lot and between A it's much in still back April, is happened as

eager they willing into because addition, have bit workforce going Gap] back a in inflationary pressure to clients [Audio to potentially the providers are [Audio think a So their help out little decreased more a worry less which we are work people environment, Gap] little themselves. are people I for as a recessionary has

of that agree [Audio changes, yes. in changes, pricing. to to timing That's said. sure of It's contracts, because the to is that that clients we getting question that there's we delay Rod's mix and of of labor answer. So we part Gap] inflation all your Do covered answer recession think of and currency question changes, changes, part a what a the think affecting that bit of the

that I attribute you is it that's that a We is very a of yes. of is But the But about on deal causing once, think some to believe specific motives not actually us maintain, delay. or our the those do when hard likely any all again, it's making think pricing to quite answer deal. to that, to efforts at not competitive. things client

not if a that question, I a have seeing well. helps. that as So helps we don't so And are decrease misunderstood of don't if in Rod, site in contract your may we're period of you I longer Lee, that win know rates, that I know seeing but

Operator

The next from comes Canaccord. question Joseph with Vafi

Joseph Vafi

go -- just new of the we'll Mike, first. CA&I. I you on kind maybe on of the Congrats know applications of the added quick Deb role, pieces I I your of some know may rates your faster-growing of And there? cloud up overall growth perhaps kind there. is to now into more and how Could you a little big the mean, a follow-up? stack and how detail kind I is have just business start A then one it

Peter Altabef

I want is It that start only. a you're with saying right. change exactly to name

revenue and applications and in stuff. was long-term, growing side providers we now piece of the and IT the cloud but infrastructure will of We the there Frankly, faster. with hold with for will that because the applications changes in cloud infrastructure. applications marketplace. although the grow, is be cloud large cloud exactly larger had segment the the same ourselves, be infrastructure the we of and solutions acquisition December that always and the think have will CompuGain So word the formally in added It's like applications

that to the we felt enough with year of CompuGain. worked really scale on had we acquisition led and side, the sure the last we that right make So or application

we're and there. have what doing not there focus now area what the applications. -- is platforms within So to is We've signaling and what of just area And done we're say, larger we're applications, right? out applications a now we infrastructure of is digital what so segment actually okay, created focus the calling cloud called

went consider of of digital the the of growth pure we So than it that broader elements that remarks, as space. cloud very, the as is applications because of as is platforms really well overall my and just what I -- higher of through definition well applications very and some infrastructure kind piece

So my workplace on but rates focus I different. some call not of the going we're if look -- mean, information we I and breaking the But and rates more are workplace very we're the question of and the out so as on focus area modern revenue forward, areas. more you want growth DPA all remarks, the beat we give -- classic infrastructure is going we the CA&I we these alone, growth for the gave market but we and rates, in to you to breaking of because growth out are applications to answer understand, as market a said intend DP&A market In traditional and are to in specifics modern between between different. very the you really

brought insights was break the out we Deb the this really one for you to Company of So to have guys. that

on elements elements we're but CA&I, going because all to kind very all if faster and we're missing which of to that we grow those show aggregate within both of different. those are just So believe is segments, DWS you of story, the

how has So as of portion Deb, of think DPA if grown, to what I percent a right? we gave a year CA&I look is at a quarter compared that ago, this it just you and

Deb McCann

about, yes, last this true. revenue this Right, XX%. the CA&I time that's of for quarter year, was business This The it it's XX%. right year, now, and

continue, his time definitely growing, as we'll So it's more give on, and Peter even goes script, mentioned on in that. we'll as metrics

Peter Altabef

for We area the need Right of traditional is and so to it out different. break versus you. just growth market that infrastructure

Joseph Vafi

you're then some year just work intensity to And to some great. further down that know thoughts continuing that's bring capital of sure CapEx get just for just kind to of wanted Sure, topic? the the I on

Deb McCann

for year, put on typical CapEx, the about $XX revenue more we our X% yes, which our to in us which for Right I area, to as more being does industry is mentioned plan peers. I million think related of had so $XXX million that

in think it X%. the was X% I So closer to past, higher, to

will I forward. we're where in range most we be going moving be So of think more likely the should and

Operator

Maxim from with Our Matthew question Group. Galinko next comes

Matthew Galinko

in distinguishing anything from need services It is pipeline mix like the your the through, that customers, through deals are getting there -- the of versus the delayed? the are about getting sounds new or macro them by you being customer that's issues? The view, stuff that

Mike Thomson

the that But signed, elongated they we had where of We've you've modern his the to would we're in customers, success, take the of deals are the this signed the offer. or wouldn't aspect of little across continue been the right? one and signed taken data the as stack, segments, in sides So CA&I the the got hear also are I deeper to that the for right? that right? it, we've several modern for deals So in and that and the both have to full specifically well to as from thing demographic ones say coin, the traditional I I signed we've you. is where richer the right? I'll Mike. thing, getting guess they've demographic deals there and everything of I would being a DWS have the contracts that it's a the actually ones first where a component good distinction experience ones we through interesting workplace. Peter that illustrate the I is workplace have and and DWS prepared they've earlier think elements Matt, our a of think And they're inclusive process. say remarks, I in can about that workplace, talk started we alluded actually component. more we And and the been say when much

on been rate and we And and invited we're has whether it. and getting we deals. a quantity not what's It's And those It's is for solutions, think what have facilitate more So we can to particular of more asked really seem at the invited or good win in offerings being a success areas, that's when we strategically, our can because wanted. the those consistent quality real feel right? how like the many pretty get our and providing. to matter we about focus look what turnaround deals more that, of rate we quicker to I

these the rate think workplace. that full it's driving So versus a I the little success bit in Matt, into tied that one-off modern components are deal more,

Matthew Galinko

answer Yes, and that everything. was on great a hit

the So on of that. ECS guess from I that or Is earlier. I pulling that forward renewals my second is is from little pulling year half the a beyond the more XXXX? follow-up appreciate

Peter Altabef

quarter, And just Yes, the the fooled. on details particular the in We answer needs signing of some had were renewals be we We that is don't some this. can this on let's into And year. had Matt, we control so a depending it's that that. get both. obvious The little clients, we we wanted not this year and -- we're the in to sign. that extensions anticipating future the anticipating that at were this signing all even and signing pretty client

especially it Deb? all of business. we're importance client that's we the -- given hope those in to And very we the contracts responsive. of our what happened ECS, quarter. So comes we're and size client this When responsive are

Deb McCann

is Peter. that, add, currencies no to more expectation. but year will reiterate, remarks, full year-over-year as right, single-digits I be for in expectation our ECS think the too low I down just in Yes, mentioned much that Not my our to just constant that's is

factors before gave stand Now because I decline, a that's you the mentioned, we bigger we of but think Peter right now. where

Peter Altabef

of each I again we're bit these the think, are, I The at other way a thing we point is, as would becoming out sophisticated in more looking segments.

what a serve as ECS today We tied our -- We're just past three in industry-specific streams. or those about have streams of in ECS, clients. And advantage we customers Forward the offerings applications. on big services applications, if it's and more will, top We've on market calls services We've are our that it's And we mentioned a future, are talked the anymore. As maintenance powerful about doing with call talked to for whether expect then of is side. those I to One and revenue associated ClearPath the example. ECS can what we've specific renewals revenue to an these modernization the identified offerings. and we other Forward and that only Think that there's in do way those call proprietary take ClearPath we of think for that applications. sit that. Forward services of you of not in ClearPath more about of applications clients on fraction a more two the

for or share is serverless cargo, the the services that to those a looking defensive really had of to like as organizations is and third There things And our that invigorating clients quantum, the those while, we've applications. then really revenue And air are as few some capable of both are traffic, compute. really well attached like positioned Now et and cetera. as element financial help on journey offensive technologies, to those. that things a we're to around things next-generation like market at and ours

restructuring And get us. these down so of growth further kind as areas and the of we again, Deb isolating kind road this as here start for is

hear You'll our be about us future. a lot than that's to talk talking Debra for way about going ECS and important of in an broader renewals, just part

Operator

comes Soderstrom from Sidoti. Anja question with next Our

Anja Soderstrom

from? the that have of mentioned coming you improved. talent Where been see curious already. Most them addressed I'm do But just availability you has

Peter Altabef

really Well, geographies. almost it's would so coming all from I say

stuff because of Some it macroeconomics is, is some we're think, of it and doing. of I

of are number not people all paper, there who the shrinking. the And tech see So that actually between is of that the because, we hiring on macroeconomic decreasing qualified stuff, of in and the the number do in there the -- there's that are a I organizations people. realization are marketplace are think gap the as jobs some available that's are

us. making that but easier. it's a macroeconomic It's is that's event not easy, So little life a easier on

about pickup it only picked points, think sequential attrition since a the smallest this we sequential quarter up on that a we but up our continued As of is basis, our and on the tick basis XXXX. bit, basis had little own to XX have attrition, a first quarter

are not kind that, of off And leveling that. it's then all really of about the flip a we of macroeconomics. seeing So side

Some of it is what we're doing.

very called innovation had a a out India remarkable and competition. and XX% projects throughout number the of students we them we get to much program a we that into and to years used XX really India entries issued we program processes involved job release about this where submitting had is go that But increase press offers. it's about program. and called be Unisys not in it's then offers the have It's so winners, the innovative Well in year, earlier it prestigious Unisys about we So XXXX. for quarter in an almost -- in a as program the job give that people we've

jobs talk them And and retrain can so efforts had we from that's other really candidates steroids. think game people as for we're and mentioned And really outside. our about that by we're hard filled were working retention. openings programs, That's organization recruiting something doing of but would to internal I it quarter. positioning up in job for we've next-generation we more highest rather XX% And as outreach we're number get to at hire retraining programs people remember. our much a while, of doing our well this just when an our similarly, I goes that I I our that of more work, as the kind the internally on say we putting the campus be as of than kind clients terms

on So that? it's hope think what doing a internally. helps. macroeconomics, other combination we're I Mike, that any thoughts I and of

Mike Thomson

only marketplace. the But other every the in just covered attraction branding add of talent ourselves element how of think clear the would I I and focus on is it. positioning we're other The you element and

Peter Altabef

talked on piece, come. the going frankly. you to is really now would, the And up know campaign refer that to thing I We the branding fourth like. We all what back kind We're know really exactly Mike we work to a the on just held remarks. start done, the branding statements said, as is good quarter. to visually what in be. setting of my going We is that look the whatever that if the, of about will, is Domino's to following But

will branding only prospective kind about We of remarks that's important as of but and a doing, and do, that weighted what our we of It's do. Mike clients pointed our we're associates, our employees What perspective. clients. campaign we to As also particularly will we don't call show really what prospective in that We part at see show prospective out. kind campaign very employees how much I plans. believe equally my talked as we

Operator

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

Peter Altabef

that Deb much, questions for so appreciate want you I all to really Thank operator. as thank I the also using Financial as opportunity thank Mike Operating to to Chief Officer. really joining Officer. Chief want today. I excel us for

We have a leadership pretty team. awesome

power thank those our be Deb We call. always everyone we our I mentioned, shareholders how we're to joining focus information you going us, what will to to available want the think little give more future. those both like for we're of as that, bit would about to investors ongoing more on I basis means areas, as you about and show in an And are. to and more And I it the areas. again and With trying focus you those a for

Operator

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

may You now disconnect.

Unisys (UIS) 6 Aug 222022 Q2 Earnings call transcript