- Earnings call transcript Q3 2022

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Operator

Welcome to Unisys Corporation Third Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode today. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded today. I would now like to turn the conference over to Ed [indiscernible], Investor Relations. ahead. go Please

Unidentified Company Representative

by Good our Yesterday operator. financial Thank for the CFO; those you I'm CEO; session. Chair Thank McCann, Q&A who Deb Unisys morning, will released us. our results discuss to afternoon this Mike XXXX Altabef, its joining our joined and Thomson you, and morning everyone. Peter COO, third results. in quarter participate

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

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

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

in are mentioned I website. that, Peter. call to that reports with available materials from to not the on then complementary statements are the the Unisys factors conference information earnings various necessary risks release, remind related the you regarding cause within performance, and filings. provided which from earnings to this manner presented The subject any the over the also all our guidance differ SEC call call, are measures. financial those presentation. with to complies expected release presentation, have on includes discussed uncertainties to non-GAAP update future measures, measures other only Unisys as in to today's These during that With color more fully deems results turn have to reconciled press non-GAAP Unisys SEC I'd reconciliations references forward-looking the I'd and the the we and could expectations. FD. of Third, is does been except some and and GAAP to Regulation like to or assume that obligation a materially the any Copies financial including Company's earlier, made actual this along like Investor SEC

Peter Altabef

results. Thank to morning, you and joining third everyone, Good Ed. thank for us you, quarter discuss our

to digital these as shifting demand Clients continue by in or platforms above value modern our progress of in in solutions areas solutions workplace revenue value business growth, and the high our make the higher focused to We and applications. of approximately focused seeing are evidenced of areas of both in them. at

focus of increased over time. Our margin indicator also are area solutions an higher profitability

and allow As next services ECS, last segment, discussed specialized their more us into we our by solutions enterprise we quarter, generation highlight providing computing and are to each strengths. will visibility support, differentiating which our licenses of compute our for solutions unique

will the a company brand It designed transformation market this levels, in our company total consideration I'll fortified beginning platform and Deb Our influence to by and be transformation. solutions. growth. catalyst our but campaign, hold. detail and and a We is to increase segment on awareness for new identity results provide will soon give our financial key take insight be believe into for the some first, will at our marketing

Let's start or DWS. Solutions with Workplace Digital

higher collaboration is year-over-year. of on faster Workplace. Modern this we and quarter that streamline, CAGR and growing believe margin annual employee me, in is excuse grow to modern We We growth, help in Our workplace the of optimize to than at market, approximately as the primary quarter, engagement, excess higher third did approximately and DWS focus refer we productivity the rate growth growth last three-year XX% to that market we driving compound $XX solutions and maximize revenue clients that in just plan market billion XX%. an a said

An me increase a in of momentum year-over-year ACV TCV value, in total more than XX%. will a and This that of by the of of quarter teams workplace than regardless financial of of expansion of year-over-year third excuse the in and communication provides in securing work XX% institution location. in the help success more improve modern signings between Modern quarter or solutions. is a signings or our digital large contract workplace our collaboration increase Workplace -- example contract of again, annual to accelerated also contract provide We value

to more XX% logos like mix versus We X% time DWS than these full for also our revenue of business signed helping we in specific in year. lead XX relationships. which toward for Workplace, Modern Workplace which solutions, are Wins to can shift in represent new expect approximately XXXX last scope Modern service

be XXXX. We expect in to approximately revenues DWS Workplace Modern of in half our

is our future, the to end the quarter, year-over-year. Workplace third the $XXX look million pipeline Modern doubling than more for we more As of as of than

Modern to expect the expect XXXX. DWS margin more range the more our we in Modern Modern leader for recognition Workplace, be Workplace to The Unisys Future Workplace quarter. by its XXXX the Quadrant in we a in a Provider from portfolio to We as XX% global in Lens. significant Of mid Services We become. Every earned analyst profitable ISG recognized move Work the leading in industry third

key Modern build to Workplace partnerships the continued with players also in market. We

a short, the we the strategy through is announced example, partnership. this very partnership feel Modern logo For in of recently about third quarter, our prospects new we with working. In XE. the good signed client We Workplace

margin to to market share. which we are and fast take growing positioned align higher Our one solutions a and in

of business. business DP&A approximately DP&A and Applications for growing market CA&I, Digital perspective CAGR billion, a revenue XX%. Turning to cloud three believe multi-cloud XX%. a we CA&I higher insights. CA&I From modernization, analytics general, DP&A. Infrastructure a and the and the grow development approximately to higher is revenue cybersecurity, and management, hybrid third continue Applications data piece or our we at quarter, of $XXX in to growth, shift the solutions this or market three-year over area application to native of expect year-over-year towards application We as of the is as Solutions value We refer and our we in This fast In as years. the Cloud business Platforms next growth saw mix this focus

XX% to We expect of represent XXXX. XXXX CA&I revenue DP&A approximately in XX% for versus

revenue CA&I year-over-year XXXX. our be year-over-year ACV in third the value to of of was signings in XX% are DP&A growth focus approximately also growth and solutions XXX% more than DP&A than TCV in expect XX% in the in more area seeing We for for our by evidenced Clients signings this quarter.

was increase pipeline DP&A It year-over-year also Our XX%. growing. quarter, is a in the more million than third more of than $XXX

access example of client's enables in This client Unisys including the As a Microsoft domain, to Azure we area, we contract DP&A signed product contract of secure applications. a and deliver excellent enterprise example cross-selling. DWS this quarter goods. third engineers to consumer current with a success An call that what through support

range Regarding as we become. profitability, more up in be Again, the Modern more we expect in recognize this Workplace, the and The well. market mid momentum XXXX. to the our to anticipate move our XX% as to continues leadership we the our to profitable CA&I with DP&A margin area DP&A, portfolio in

of AWS areas; cloud NelsonHall during in end-to-end For orchestration each five named us services, management XXXX example, firm, services, capabilities, in Cloud was Microsoft a leader a industry Infrastructure quarter its as recognized as Azure leader reports the analyst capabilities, Services overall focus the capabilities. Report. and cloud Management Unisys

areas earn experience expect and AWS migration in the designation, has DP&A. against across just AWS one to CA&I client achieved workloads. To bar will accelerate In a addition, proven validates success in cases, team and designation. competency industries, specialized our technical and AWS high achieve designation, this we must our use this candidates deep it demonstrate momentum

capabilities instance One overall we into we new introducing is CA&I significant DWS with where and Generation area quarter, SS&C. and did solutions, managed each intellectual area order a business. focus our services, covers industry it excited in in services, quarter are Next this This are additional call our within last air we insight Specialized managed focus Compute property. provide we industry application or We cargo for ECS about have As area Services SS&C and solution. compute to

clients many we have continue to management comprehensive our and cargo years. robust We as provide for to air

of capabilities the in further for is operations. richer and $XXX new expect the to fluctuate likely to given is annual any business ECS license support and value revenue revenue, more in efficiency This through improve quarter. We but enhance on already clients the to of cargo clients data represents existing approximately deployment of XX% million business. analytics based attract size this a SS&C percentage

between digits through We single the annually business SS&C mid-and-high expect to grow XXXX.

more of Our but of our we larger, typically that that in and but of year-to-year. other the the it ECS SS&C because support the renewal depending portion is can on licenses expect L&S is of attention IP it fluctuate quarter-to-quarter consists the which and our licenses in business the given do sell, even significant margin business of on typically it's you segment This is is conversations we and in variable portion some what expect ClearPath its schedules, Forward support. for is and also related L&S, range. and part not or gets timing mix remaining The we be growth. unchanged with more dependence low-to-mid XX% The market this to of

and be service that the services L&S was it model, more SS&C. In a possible to XX.X% revenue we third licensing more a renewals. of is While license as is due it believe traditional much a and solutions of the that or we new in drive likely growth could will capabilities part classified timing model in commercialized as quarter, down

low we schedule saw five-year with as XXXX we in renewal expect some schedule, expect and approximately coupled the low base, Based of negative the for client were renewals we will be in XXXX, renewal weighted with approximately year-over-year. down CAGR With current scheduled in XXXX expect heavily the driven on digits, revenue digits. XXXX that grow XXXX a Given to single X.X%. XXXX, its to early XX% in grow we XXXX double XXXX

for fixed volume, side, relatively the a fluctuate L&S cost based profit percentage base. because on the On margin of will the

low the this Both we're the be in our the forward. returning in XX% the XX% next then pleased clear them that years, to margin are and and you have going able expect two is business. We important and mid XXXX. for unique to mid for SS&C strengths in year, It XX% highlight L&S by to approximately

to as talent. how and brand the This transformation wins, to and addresses in is while for attract, and retain, sales also as key ultimately of the pipeline, margin. market, serving The a new leads, ability in believe the compelling occur meet new in which our of identity, our turn will last brand the fourth will help the life our in our Moving bring and We will is this campaign marketing the the way. will brand transformation awareness, increase mile market key to launch significant revenue XXXX. inspire our expect of company most identity meaningful, we clients a needs drive help metrics such the new solutions influential we year. Brand factor quarter changing since

and The We it are Unisys will is since market time, the revenue we taking profitability transformation some in challenges earnings year, to hold. led very excited the that will to Deb be about us same guidance and too. believe we call last call have her unexpected experienced the I'll the to our for our on results. lower that, remarks. discuss over With color which provide turn the Deb financial At

Debra McCann

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

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

our constant plans. will quarter Additionally, the on our I reported basis, on provide will I currency. now into will and pension third as benefit in provide a revenue I highlight basis. as segment results. on defined also company in level our changes I provide total providing as an update revenue will insight guidance constant well currency

$X growth look third XX%. we the year-over-year, up in the portfolio in our growth transformation in primarily quarter. Qualified value drove representing go-to-market the of of was across quarter or revenue approximately XX% XX% business and by ACV new billion, leading company, pipeline As year-over-year. improvement contract Annual solution driven is indicators the approach ACV of

of X.X% have excluding million down in but foreign This Total SaaS before, mentioned sequentially, our was in metric year-over-year up to $XXX up that seen is ACV contract industry. year-over-year. a the based constant our informative than in exchange. was offerings believe TCV and quarter Total move we X.X% and reduction we we revenue business, in the up more XX% remains was average quarter. value down company to given the X.X% contracts currency. in X% Backlog for As length preferences client's

Peter Digital X.X% negative our on primarily currency areas revenue in Applications revenue quarter. and focus constant the in Modern of contracts Platforms growth was the by offset Foreign exchange of by that a impact our and driven Workplace and The transformation XXXX this non-strategic described. workplace as traditional of had part impact exited partially

revenue company X.X% Excluding contracts, non-strategic in grew impact of constant these total the currency.

million Now I to an Workplace $XX our due Digital in XXXX. impact primarily starting segments contracts revenue with to exited from approximately non-strategic X% DWS will move Solutions. declined

The XX.X%. continued approximately $XX the impact will grew business. DWS grew sequentially, by X.X% quarter which demonstrated these, million. Excluding the contracts exited fourth in Revenue DWS progress

We growth QX. expect sequential see continued in to

encouraged are new quarter our in highlights that the We it as the driven year-over-year for third by aspect shift signing revenue grew contracts our logo to Solutions, growth CA&I higher growth, we continue X.X% higher DP&A. the ability Workplace Modern of in to industry.

currency We expect to sequentially quarter. for fourth growth see year-over-year constant both the and

For quarter, year-over-year decline. third which ClearPath quarter light ECS Forward the renewal was a X% drove a license

of of a over reduction for client revenue one I of for which are guidance. renewals some in revenue had a growth new Similar A to and in in that in but majority in from or a client a delays. in or ECS. project we We to caused down Two for in key which in upfront changes these scope our guidance revenue base, the for delays challenges specific, the reported. contracts seeing foreign for modification since these estimations exchange renewal earnings and opposed rates resulting over in existing low digits total quarter majority QX focus unexpected each last we and number quarter. to positive constraints of year-over-year license depends now we X.X% shifted XXXX have year more our the Despite full and were client themselves, anticipate remain our impacts in on an to logo as some nature, single client renewal that scope leading revenue our ECS our of revenue including X% contract, X.X% negative of the quarter, realize XXXX up the to signing constant time, encouraging led economic an discuss client still the some timing another growth indicators renewal will As that also new us existing basis, positive challenges year the year-over-year expansion were less than its for a and on challenges areas negative negative These XX%. experienced macroeconomic impact reminder, X% budget revenue steady challenges call. revenue positive cases stream more to scope. as existing will this provides anticipated. to to related experiencing lower size momentum growth currency SaaS to be

XX% profitability, year. down to XX.X% basis Moving total company was gross versus ClearPath the year points of we XXX profit margin last in versus to renewals quarter license because period, third the more Forward this year prior in primarily year-over-year had

our the XXX improvement DWS, Now from segment XXX sequentially. year-over-year by basis starting moving productivity margin DWS was efforts to points expanded XX.X%. an to XX.X% with level, points basis This to drive again of

to margin fourth drive both year-over-year improvements mix shift and sequentially continue the labor productivity ongoing expect in quarter. cost We improvement in models, efficient and more stabilizing of to our and staffing DWS

prior margin CA&I the to X.X% X.X% versus period. year was Moving in

capabilities expect we because profitability in As we the awareness we fourth ECS was continue productivity renewals primarily and of QX versus year. XXX asset execute ClearPath in year year-over-year quarter more points upside this labor our and both sequentially increase improvements. to CA&I last margin had we as down basis year-over-year for

EBITDA and has software given so the labor year-to-year throughout timing are costs, and the renewals down both was fixed components last that renewals ClearPath of this an platform of basis key costs profit because operating points QX than points relatively are non-GAAP primarily down year company Forward costs the of ECS basis was year-over-year. versus amortization margin Total support reminder, profitability. had development a XX.X%, XXX year. As the license the X.X%, we year, XXX margin on to Adjusted more year-over-year, impact

X% plan guidance on other to diluted economic operating expect or million the We versus million Non-GAAP pressures, and allowances. of $X.XX Based adjusted the per margin activities loss nonrecurring to part margin program cost by reversal a per be non-GAAP I'm we year-over-year to revenue. economic to continue offset environment, prior $X.XX sorry, non-GAAP improve accommodate assets, $XX.X reduction in revised and prior estate ongoing related our valuation off timing year expectations, pre-tax period. revised income and to revising profit are guidance, share in period, to right for expect of year quarter a $XX charge structure, million by and our write and EBITDA we cost diluted further per of and regards size revenue per productivity automation working by share $XX.X we $X.X and between pressures, X% in to million driven full of charges higher license operating year share profit million driven and the renewals. Forward fourth of fourth to real EBITDA guidance $X.X to up and quarter net reduction ECS the a labor fourth cost expenses XX.X%. benefit ongoing implement or or in to tax net adjusted diluted $X.XX net million take which our guidance With or a reported certain to partial XX.X% to margin $X.XX the loss the One-time a primarily $XX versus hybrid share We to in the diluted due footprint our quarter. ClearPath improvements

and capital. impacted was lower Turning third year-over-year $XX.X by adjusted flow, to cash down cash million, EBITDA working changes $XX.X quarter flow million free in

we Also, expect $XX to expect year. cash between million positive anticipate full for and this $X million million. of range flow free We capital $XX to $XX to be We year. be a continue now the to million expenditures

renewals, revenue flow the the now plan. and free same balance is which cash we'll in which license our pension end working For as the quarter. the earn benefit turn And of dependent third We typically above cash capital cash of $XXX timing is defined highly the had a collect quarter ECS to of million our on fourth quarter, of needs.

plan to benefit not reported year year future rates of that other we pension its likely Unisys discount end items U.S. conditions based rates. earnings defined to are the changes on on asset in reports benefit required pension the least at cash while noting requirements end, each discount as change expected qualified that years. During funding anticipate and We contributions based funding for full estimated XX returns among next year did U.S. call qualified our market defined XXXX plans and that during contributions our

given based However, estimate providing the has become period. U.S. during that in deterioration with capital plans the material XX, are as on XX, likely tenure since XXXX benefit you market XXXX, to the the September December be increasingly qualified defined will pension conditions interim market contributions an this it we required

and Our are estimated XX, of mortality, current as assumptions based not upon interest actuarial as projected assumptions assets, of but rates incorporate with to only updates on along estimates other discount assets year future do updated rates plan return such which are any several September end. updated actuarial or XXXX, expected the at

While in estimate continue can of period. benefit through expected XXXX. change beginning to qualified are the markets are be end no in currently significantly now estimate contributions expected pension payments to begin and XXXX or U.S. plans XXXX plans, cash when to The will we these XXXX between contributions and our the XXXX required

plan approximately million are are in annual other of each U.S. the each average years. contributions for the for XXXX for to the estimated $XXX note plans. that However, XX estimate qualified contributions million plans, average the subsequent requirements these next which Please addition benefit we of years that year will these defined starting still funding eight $XX approximately in per defined to for benefit

always closely our to pension actuaries liability we do, work As we transaction with to assess reduction continue opportunities.

Form of in not return XXb-XX to certain to of an the a this defined finance defined defined mentioned estimates narrowed liability liabilities. thereafter. rates also Now yesterday matters, pension our internal greater I committee benefit plan deficit release. the at defined interest decline from U.S. are estimates disclosure GAAP of requires let's XXb-XX. Board deficit $XXX and to million benefit time in We estimate At all degree dissemination that such in rates communication The deficit we interest reduced conducting GAAP the investigation, may filed regarding an Rising plan which end but has quarter GAAP over in information the almost to year is want cadence of to to the annual filed turn certain Unisys year-to-date in liabilities. update to estimate investigation the GAAP earnings the asset update the as liability within weaknesses our our parts assets. benefit XXXX. press our speak provide filing we'll we increase the pension reporting. limited reduction more and as pension audit a controls, Due based of in values Accordingly, procedures, including and pension to lower internal of than additional the estimated one the and Unisys to result disclosed benefit determine or control end, on to reported at organization. that third and $XXX Unisys plan and financial final as actuarial ongoing material XX-Q these the time, our million total there the file

we to released statements any or yesterday the results changes any financial not expect the Importantly, result do statements. the in financial in previous to we investigation

to these Form the to We position as as file complete in five within are not date. working to calendar be soon due the days expect prescribed a do processes XX-Q of possible, but

Modern that Workplace of front, above growth each Digital solutions them. progress As demand setbacks the we driven the focus shifting in despite through make revenue up value of our and by seeing or are Peter macroeconomic quarter. value last at evidenced by in approximately in these focus introduced our market higher high Platforms Clients of to solutions primarily areas revenue continue as and we in Applications conditions, areas noted

Peter? time. margin to With higher back I'll the over that, over call profitability Our and of Peter. indicator turn increased area solutions focus are

Peter Altabef

to and pleased the Mike Thank Deb. addition will Operating that The Q&A Thomson. us you have. to note call Deb Chief please you questions joined are in today to would for questions? session, may be respond Joe, Officer we would I for myself, by the of open any you, three

Operator

go question [Operator Instructions] come Soderstrom here from Our ahead. Please first will Anja Sidoti. with

Anja Soderstrom

for thank questions. taking you my and Hi,

just So taking in slowdown they about you guidance. or there? what the you delaying are seeing or curious the the revenue first I'm customers Are smaller contracts rather seeing are contracts

Peter Altabef

So, Deb join Anja, let me and answer a and Mike can It's bit little that in. obviously of both.

We have seen quarter. which expected it some sign quarter, expect now sign contracts. the contract We saw to we to one in third the we in fourth

than So come expected, change. seen that's because contracts out economic we've I in of the have We've some slippage. smaller really, contracts there makeup actually the seen a and that some a little think uncertainty of we

contract, a a has more mentioned that, was out licensed actually contract it Deb a of really get contract. instance, which what to to thought working with wanted be become client for the of and we SaaS So, instead and going client the

revenue recognize time So up that will be and front. will over instead paid revenue time the over the recognizing of

So little all Mike bit it's a more for answer to little of defer I'll a that. about there.

Mike Thomson

The slightly think Anja it's as of scope, general, there And no, seen facing de-scoped anything that macroeconomic all there's strong. contracts of happy to And very pipeline from than solutions. engagement lot anything perspective, been with I it increased couple there. was would others in The pertinent of we've scope a more think concerns I I'd think we've with you've I the a Yes, of where Peter, I the more Peter base. as mix a really continue. remains their think conversations that client So it mentioned, the do a the right? else. probably, it's characterize with I is market say deferral hit and out than a points good the exception actually

Peter Altabef

for the Anja, question. you thank

Anja Soderstrom

just you Okay. And how know much of contract the currency due is this guidance also versus curious, thing? to

Debra McCann

Yes.

reported So foreign the the basis exchange thank The guidance. on revenue a point as you for had impact question. XXX about

Anja Soderstrom

mean, talk you the any, can most also to better And do you. challenges holding or Thank there verticals? any verticals are Where or Okay. see are others? up standout that I you than there if

Debra McCann

question? I'm repeat hear you asking? the sorry, were you can I what couldn't

Anja Soderstrom

verticals on based the anything there verticals, up than better Is are that others? holding

Debra McCann

are verticals saying? I'm Oh you sorry…

Anja Soderstrom

yes. market, End

Debra McCann

Okay.

Peter Altabef

as would What than to know, Yes. none anything Mike, say there? you I either mind expectations. specifically or is, come there lower higher

Mike Thomson

look, differentiation, No, Yes. in Anja verticals. frankly see any the I don't

and margin consistent. I has profile actually to that maintain pretty and able been think improve been the we've the demand

So out I to be stands anyone any wouldn't honest. say

Anja Soderstrom

Okay. That Thank from you. all was me.

Peter Altabef

Thanks, Anja.

Operator

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

Rod Bourgeois

Hey guys.

having So that pipeline it your impact activity good. sounds makes macro on deal of some your and commentary sense is

pipe more in of the you're with as or what about noteworthy changes in the But in immediately composition encouraged seem any pipe pipeline, even the recent also seeing is in are in front back that loaded You you're deals wrestling has your these things? of the the you terms to in the become ask, and want upcoming in or the signings. macro some I months the of pipeline pipe of more becoming other ripe

Mike Thomson

No, in And general. that as and Mike. significant you again, Rod, really one. in it's take in about I'll increase question. Rod, think in focus We're actually Hey, encouraged, actually the both growth. TCV pipeline backlog and the is pipeline I the had Thanks we ripe. would of say, more mentioned I in areas, our for

ripe And dialogues we're it's we Modern is ripe want think that client volume, the it having which of in great, of in deals we I DP&A. Workplace to the of the us, think which pursue. types sense I the And expectations so is to want about have, not sense is of about only the and

I the quality of but what's rich only think in in ripe in So, not volume, there.

Rod Bourgeois

fourth months aggressive or due are your there quarter. seeing sort reduction more little mentioned today cost plan that causing is, wondering talk a have latest are the factors about other plan the for can overall than to ago plan? Okay. I'm plan? cost then you you're And that reduction you challenges I that three update to Is it cost And reduction the more been guess would macro you of

Debra McCann

Yep.

we're impact the know, at but there always Now reduce as our evaluating well, thanks right are as in is that, for you're the some that. question. opportunities structure. macro I cost But always looking from you further to mean, we

impact, far about third related and balance As a estate then retirement, is actions. real about the as sizing, workforce to about to XX%, the XX% right asset

Rod Bourgeois

And final to in Forward any clarification helpful through you've changes your on model, it. the licensing mix even side, think business, terms to be ask, that changes want was a helpful? ECS your got and model that considered of licensing it Okay, outlooks, there, the of the any I you opportunities just and one that color some on provided I your XXXX. you growth mentioned some In would ClearPath are very about just and

Peter Altabef

Yes.

this Rod, is Again, Peter. of thanks the all So questions. for

have as know, areas and SS&C two licensing support. You those and is L&S so between we L&S, segmented

that open the licensing has in piece always come a L&S segment. clients support. that Forward of from model. as licenses much to the and model possible It's always is Historically and to service a of So ClearPath we're revenue more moving

about years nature too of are they're don't contract out as the changes SAS think, do, means governments, they you lower it see of revenue and services change. can't of means financial in might pricing which as to client move more in cost they tend to have mean have think to which L&S, banks, interested to SS&C, think moving be a we a way service. you commercial sensitive clients is Government model, value than we money, the which is a The I our they doesn't happen. a such, not a a model. That as get to deferring to capital always of been which of of could true the that and for about As and service years. more, that's type where large time

that. open time. our to long So always of set, been we're has It's for part offering a

And so I see that guess over time. we'll have much if of to changes

Rod Bourgeois

it. Got Thank you.

Operator

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

Joseph Vafi

and extra Good guys. for the segment Hey color. morning thanks

keep follow moving into your forward there's thought And the I any decision into or obviously or turning here given play did on a how because your reinvigorated or macro macro there a the brand there Just or the, a have to to up. too? delaying maybe that rebranding thoughts then are play there your cost perhaps your campaign,

Peter Altabef

it just much really, doing I we the I your Rand. of merger mentioned interesting we're the everybody this marketing name and sure have question. important to campaign. and Unisys old believe understands want new the In That was Joe, XXXX. for the most done with really branding Yes. the the It's that old I question. actually one to a very since is use thanks Sperry question Burroughs make came what into XXXX place. And

so to we're going not are the the Unisys Unisys, name keeping of name. We change

name. the done equity. What more the and research and have meaning Unisys has lot solutions to do That that We campaign of the and more name, our name really modern about attach association name will a name will this has specific value. with

in would my Now, XX expectation. to timing, be. specific I have expect throughout we in to with about we when mentioned that is quarter. working think I the And the we've respect your last, question for have remarks That launch really timing fourth months. still run right our the worked we this on been

as that on in but quarter. is might up or us, here, expecting any we're fourth to You to whether not, sit Mike, we know, thoughts that? launch still we change the

Mike Thomson

prepping the question. connection I about for has delaying cost it's thanks the I this third provide the that since industry that our It but the in catalyst not connection is Joe, advisors, our of the that for are conditions really but actually services time. what provide Joe, so all Hey, intertwined this help been it, camp to is So of to a benefits they and we're I'm mentioned, mean, selling, are, think macroeconomic not clients as long continued of growth XXXX. been part a macroeconomic The to the the Peter granted we to for we of in. and the strategy we've the early scenario analyst, the the right? party would, much in here, Yes. will that connection aspect

here. forward hands me to all So, it's

this a perspective, it from an our mentioned, super mile know aspect pull important together. real the we're internal And of as I think kind about to strategy excited Peter of it. I is and all last

Peter Altabef

Joe. And Yes. if more onto comment that, I one to add just could,

clients, there them. perspective, appeal that element all my You of are this. just mentioned to third One will remarks, two to I know, covered, advisors, is that and analysts, clients' elements stuff Mike we the this experts, think in party industry

join to, frankly whether is to that be at people at people be to work a who The more And attracted to that, to We are the other who of more mean aspect are who this currently work. likely as and company the be by company, really the likely enhance will will the company. I people would people and people the company work at that will Unisys place of value think stay. considering this who

as some reaction looking groups there So, and area got that said, been Mike to so And with element to internally incredibly very forward also we're externally. is positive, tell to has we've previewing people focus I the we're And both excited this it. about. a you, been this

Joseph Vafi

kind I'm followup. seeing you've there year. last enough to then may deemed results perhaps here Thanks of not know looking look to continue Is in And or I types evolving macro as myself. tough it macro exited great. next still you one that's that Yes, that year up be those their a the any into forward the on is you if environment? just head contracts contracts risk some profitable of more some guys. renewals popping of

Mike Thomson

remainder in schedule. look two Sure. the we that Hey, up very this ilk year. only Look, thanks of Joe. at coming are our There obviously closely contracts renewal of

as positive concerned, far both now. renewal extremely are dialogues right schedule is As

like of So that. we expect anything no impact

to Joe, regards concern that Looking in year the nothing out on renewal those the to us a gives schedule contracts. horizon, year, entire next for again

area. and that relationships has with been got power steady we've pricing been we've So that in the comfortable

that the XX would I we're in at next anything not seeing months or say gives XX renewal least So to cycle, for that so us concern.

Joseph Vafi

Thanks Mike. Great. questions. everyone taking Thanks my for

Peter Altabef

you, Thank Joe.

Operator

Jon Our Securities. next go ahead. with Please come Tanwanteng CJS question will from

Jonathan Tanwanteng

uptake than could disconnect expectations signed? quarters. the is have more. had slower I How is couple CA&I obviously Thanks Hi, just DWS and ACV in, was guess taking talk I strong headwinds if a little already questions. on the contracts bit good for there? you about of growth your expected the in wondering what ramp I'm wondering been my over to morning. much past that that of weaker You

Mike Thomson

think you it? how I contracts don't for doing the used to are with we really term do Jon, you Mike. already Yes, it's wouldn't we're say It's the signed. been has I see different. really uptake, contracts no much working that The volumes

is renewing right? logo In making and new another contract full-term I it's deferral I pushed And of five think think necessarily maybe delayed already fact, a extension we're some to out that on little you three case, the seeing value renewal a decision increases. what quarter, mean, is to have. contracts the providing that even a we our backs year a even for we've the more on perhaps strategy years, So de-scoping. we're client. about bringing bit in the actually instead What or or one solutions seen if it's of are in we're of being market of general, kind of of cycle, But to seeing

productivity even what how And our the doing up from margin ultimately a play they specifically perspective dialogue end so in can of saving in about through we're money experience paying higher because DWS. a our, is actually

it's to a wide. more uptake of we're that's do say I deferral I base, decision anything and something wouldn't think with the again, So making on industry existing seeing

Jonathan Tanwanteng

today? where margins are the them signings understood. new you Okay, on the And want

Debra McCann

getting, DP&A. pleased and are Yes. We've value margins Modern been moving those as with we're higher Workplace especially more towards we the

Jonathan Tanwanteng

Got especially you last I your to earnings, make? to expectations for thoughts the on drive just one, just targets long-term it. preliminary your guess, pension and contributions ability and free One and new, cash the any with flow need that

Peter Altabef

tried What was have add to Peter. were those our growth these we kind of have. highlight a and now in expectations We do question, great around that's that's, three, one so remarks areas. quarter really right? you now Yes, to to told And Jon. This we we we focus from last is going ECS,

have in Investor we've next year We've expect XXXX our to a So the of through what margin expect in areas. those of Day. focus quarter first in revenue highlighted focus areas. expectation well terms full to We as tried highlight do as we of kind those of

those so. so we our just the giving three focus out expect and years a three of And to company as do whole areas going really talking go beyond about view or

you time first put for quarter your in calendar the of on So some XXXX. can that

Jonathan Tanwanteng

queue. Okay, great. the Thank you. I'll jump back in

Peter Altabef

Thanks, Jon.

Operator

Group. next question will Galinko Our with [Operator ahead. here from come Instructions] Matthew Maxim Please go

Matthew Galinko

how we think plans Can environment, your touched I go can rolling questions. XXXX? a see my you expectations that with, depth and into you for the taking but for more bit into start Thanks morning. on of you labor little the good Hey,

Peter Altabef

Yes, Matt, thanks very much for question. the

the voluntary in third slightly is So attrition our down quarter.

in So XX.X%. while is down the I don't rest in that our going think and that's X.X% there's up really third sequentially down. attrition the quarter voluntary any That's is significantly the about across moving board down geographies. geography is

moving kind the a different, all So geographies but they're are slightly of little down.

of combination of couple a a it's things. think I

be been in environment First view affected a appear does industry. But hitting industries, act contrary across in both that our is sector our in margins. of in inflationary has tech recessionary that particularly -- geographies, And an to there development has that right and a our contrary now. act the

kind force, that's that And kind each earlier one inflation, that other. So, result think was year of attrition. than there different kind and seeing two me-pull now, you're of a -- the rather just in you against which push of of more decrease is you have was this that I forces is a and where a going

You're the decrease in seeing a wage of some pressure.

increased with staying You're about value seeing of the an company. understanding actually the

sense would just an modest belonging. why part be would at over increasing to Outside pretty environments, means hard, the been join, it say community to of stay. this have we're you company Unisys, of want identity and of year, decrease attrition worked And what that. those creating to not I'd macro past couple because really but of why a We've seeing years we really in as you our really very focused of of so, a want

although works is, it is about analysts, question about we the administrators party helpful also is that was Matt, very not that's for prospective it's branding, a really in overnight, not It's that. is, third It's that. clients, us. I again, And about notice hope we're say and about or something feel advisors and it and of just quick the our our certainly think working long the will marketing and angles I about. part not time, important people. You about help to just this although that's people for new making they're clients to that in branding excited all so And you. been that's of it

Matthew Galinko

would sale up Yes very cross or Peter, was I be, sale. my question That follow helpful. guess sizable I about thank talked you. cross you one think

cover But pipeline sell back and cross I identify you that opportunities how think cross was, genesis what like the go can and you looks from maybe for deals? of of sorts sell to the what to CA&I. DWS went the those

Mike Thomson

data DWS. I'll if that a Thank really I If one. it's Mike. business primarily roughly I think sell, we Matt, of talk Hey, sell you look in the already about Look, about and arena. cross at we're general, across it's and in cross the embedded, for between take CA&I our XX% talking question. is BU about set,

if we whitespace base in I'm whitespace existing looking the cross opportunity the we at our on at and an So client look CA&I. is sell at look client, clearly when DWS opportunities,

client, we So we CA&I I'll have scenarios, early offerings in either in entry So specifically of offerings existing if and early vice say and have versa. those DWS an entry right? you're

level I'll generated what sell really is approach doing the white-space, opportunity. looking well targeted we're and what for entry, the at at through say the So is the client offering cross

that cross sell XX% client base only current tremendous we've a know So and that of our well way better there's that, client happier today. client, a embedded got you penetration right? doing considering As a in a creates that stickier to continue amount opportunity opportunity profile, margin

forward. we think going a our that's strategy So of part big

Peter Altabef

done a we what find and than our to that to while this the we was get of tend did years one use analysis because clients you business to than that question be what last add obviously few have and more this about, underneath and that ago that been in the aware he's that unit I answer more is rush and it we've that. so taken for year that it, you Yes, is, units. general, a one clients to to tend while. a really did a has We've been would if do work in stickier, will. Mike saw But to to And business the been talking attempting we least level. We new be him for have involved really time clients more of at that profitable

of kind to So we than you about I, on better it a whitespace? little what say want exactly just give more year, Mike, do we've how really are really because update done focusing this you that on

Mike Thomson

of the I we've a yes. BU. one give are to throughout first. talking been least I the in year multi logos analysis definitely the just at mind, had of have want will. on them even to top been color whitespace those four would embedded Matt, thing The other or third Yes, new about a interesting signing BUs The base. two BU. is that is some and point say last our piece we've here five that I all in in ones significant coming existing

to market we're logo the side going it, the and the connectivity So our solutions new really way almost between it's to are tied. on interesting naturally

there's right? and tailored like entry we and that look how we bring our what a to and our to to client that have, want already CA&I their tailored begin renewal whatever the into, want you look like focus analysis a cybersecurity I then So I if whitespace get an for assets, and is entry a that DWS mentioned, rogue way you BU easy existing existing multi in that's deeper locating the it's also It's there. to real strategy they client the something into like. relationship, the an into And offering client So, schedule as think, looks base. offering to at

excited right? and at those So, it's It's point, really that a and we've client our about big all a So our can for aligned components big executives focus selling of XXXX. executives, bring got of this what client team. we're delivery focus our of

Peter Altabef

the Thanks for question.

Matthew Galinko

you. Thank

Operator

follow up is our Please Securities. a next ahead. go CJS with question And from Jon Tanwanteng

Jonathan Tanwanteng

just I about ECS was guys. Hi wondering segment. the

renewals license much there the the on wondering couple coming over to next you was because how system. mentioned essential it power businesses are You seems pricing years. the I have their just that down

Just you for help every me understand the how this? pricing set year

Peter Altabef

I'm this. be to just to going clear, to Deb and on defer Yes,

L&S are we XXXX next revenue expecting but slightly in L&S then think I higher and revenue XXXX. lower year,

Debra McCann

that's Yes, right.

Peter Altabef

respect relationship. that And complicated. I'll one well. we know them to these is defer will we're time what we've renew pricing And value of It I some we always There treat for license word in have to I as to into that We clients are clients very really like of this to think year, we We the well. next to renewal so numbers want And think Mike. But we year, power, we expected clients them we it that many I the how to think work. think understand going pretty for extended cannot that cycle, on were is relationship. best our and that's long that clients we say an not thought can It's to variables bringing Mike? expected. know the Deb but are I those going clients gave that. tied you renewing know don't of been there really advance, transactional want it's the pretty a a had specific With are, the time and them go that. many We a very some and to all do. stay year this long underline our

Mike Thomson

Yes look, for sure. that the would and has Jon, pricing I say held

of in that up. route. some those not ClearPath closed been to clients some and fact to what Forward a client another go there pricing penetration In think let's that Peter just We're able is the But with at the cases we've drive in I looking way. this is, actually gouge

only from stickier deal about price need are So services to right? services of to increase to application there's of a it and managed other to grow as that ecosystem, relationship, that we time. able managed entry can ClearPath are maintain related using not the to with talk the just we we're have that every of So modernization, opportunity pricing modernized, related the again make not licensing, an that but Forward applications a it perspective lot to we

services So at I'll our we're really consistent pricing looking We say continue I grow thing to type increased a means ancillary think as the that again, model. we've cost to and with base. get been normal, of living pretty of

Jonathan Tanwanteng

That's it. growth what your expectations Got say side, for and services were helpful. in just terms application were that that of you Did rates?

Peter Altabef

and a digits did was the single We Deb and in XXXX think I low digits it in comeback. said double is XXXX

Mike Thomson

I think it was, ahead, go second the one.

Debra McCann

in Yes, expect we XXXX. much. I growth XX% about rate a we don't for may revenue as out gave know we revenue revenue said be if of

Peter Altabef

and did, so that… We

Debra McCann

well yes, revenue… Oh gave we QX

Peter Altabef

Let to that eExactly. give me remarks. I pull I to sure within that want it just math make my you

Jonathan Tanwanteng

We follow up. okay. It's can

Debra McCann

margin Where range. XX% you the said was mid

Peter Altabef

on. Hold It's… that? Anybody have

Debra McCann

was the said three-year CAGR XX% as… fast Yes, and as we to grow approximately expect we

Peter Altabef

that's sorry, I'm DP&A.

Debra McCann

I thought he DP&A. asked

Peter Altabef

was. for ECS? I Are part Yes Matt, what you thought just a of quick that's SS&C asking clarification. your question the

Jonathan Tanwanteng

part? The non-licensed

Peter Altabef

Yes.

Mike Thomson

okay. Oh,

Debra McCann

[indiscernible]. just you thought I sorry. I'm

Peter Altabef

my as data that, for I'm pulling so out… And

Debra McCann

We mid high expected grow to said we XXXX. through annually and digits single

Peter Altabef

There we go. That's right.

Debra McCann

I apologize.

Jonathan Tanwanteng

it. Got you. Thank

hard Sorry for question. the

Peter Altabef

you Not at a know… of, lot all. There's

Debra McCann

Yes, numbers. insight. we of a lot gave more gave We

Peter Altabef

in provide a advance of I gives specific more we and an so, effort But information again, and information but that, did focus you is for it and very really this company we've driving. areas, out We a does really that how of that you. apologize we breaking that to good giving on the really mean three hopeful some where lot by focusing were the are we're indication on numbers to got and

Jonathan Tanwanteng

call. turn Altabef remarks. like conference any would Peter over you. to for our concludes this Good back worries. Thank And No question-and-answer closing the session. I to

Peter Altabef

the and I'd that evolving. I'd will level our the thank general, new questions everyone helped the tell to us on joining like Website welcome and inspired folks And campaign, in and and have will how thank put of effort as in of be information really call. I who the business And way information the there. advance. on call we website a you enlighten launch I on everyone we is branding And thought particularly we our see the bunch on of everybody the very the think by changes a about we Investor to I as business always, Relations you and lot change that that telling you'll to that the to we're like next asked I website. of want in and put story some website information for our

hope see us it. you you'll it So that and know I when for to again pay some attention joining today. you Thanks

Operator

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

now You your may disconnect lines.

Unisys (UIS) 8 Nov 222022 Q3 Earnings call transcript