UIS - Earnings call transcript Q1 2024

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Operator

Good day, and welcome to the Unisys Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.I would now like to turn the conference over to Michaela Pewarski, Vice President of Investor Relations. Please go ahead.

Michaela Pewarski

Thank you, operator. Good morning, everyone. us. joining for you Thank Yesterday afternoon, financial first released its quarter results. Unisys Mike those this within Deb the Peter and session.As and a morning today's the joined statements statements call participate results who McCann, our laws. will COO, securities to CFO; reminder, CEO; I'm forward-looking Q&A and contain of discuss by estimates the in other President meaning Chair Altabef, our in certain Thomson, conference our and forming the beyond current for expectations, control We the caution beliefs many are basis forward-looking and that or listeners our include statements that our assumptions to estimate factors precisely. ability X-K This also in Forms recent and differ be to section our materially XX-Q, can the XX-K with the as in expectations.These Form forward-looking statements items release could SEC. and cause found earnings of most from results today's filed our on furnished this be by profit any light any as or excludes indicative We such also will particular including certain its cost operations, non-GAAP such postretirement expense, statement as to revise of referenced forward-looking are be do may other certain statement, herein activities in non-GAAP company financial of referring review that or and events.We adjusted or as reduction measures not assume not, to future expenses ongoing items non-recurring. the operating unusual they EBITDA obligation believes We believe these measures provide understanding of a financial performance. more our complete

that, be the for presentation. related Investor The over today's GAAP. the I with to substitute are accompanying non-GAAP been a reconciliations intended Peter. and measures, call on GAAP the presentation not we reconciled slides turn our to have are to they have website.And However, The available within measures provided

Peter Altabef

Ex-L&S in the based half signed the deliver as future Ex-L&S ramps gross expectations, start to joining expanding for future demand market gross Ex-L&S we a solutions on guidance, showed us thank revenue discuss on of elements improvement to margin financial client and morning, objectives. investments on saw year-over-year, quarter company's while profitability quarter, towards our positive the to signal in expect our and long-term logo both project growth ahead with Ex-L&S bodes to to meet are track and cash accelerate Good us enhance are and revenue continued quarters our for strategy solid of we business year results. of We year continued new our savings.During slightly the several as quarter.Ex-L&S We pipeline.First our profitability. progress profit from is and cost during near-term and efficiencies, we signings, continuing to Michaela. you work generation. cadence full making solutions growing momentum all delivery growth and revenue accelerated flow second to the expanded important and the of year, year-over-year, fronts keeping the new past first Growing over you, next-generation for achieve in Ex-L&S of additional which our margin had a to make revenue cash Thank on quarter we and well X% grew and this

of growth that increasing performance, We improving also efficiency markets, offerings Unisys to another expand believe operational as potential is addressable to Ex-L&S Optimization.In we cash accelerate important such have addition our Logistics the through element free flow. our enhancing

and working payments revenue year.Ex-L&S years. legal more to last significantly as favorable flow are had our few and of of we a Ex-L&S that TCV this primarily conversion in year-over-year decline.Looking quarter next we revenue with down year.New basis. client over a in expected half to environmental declined the total also towards and closely and for and due improving which company the of a general administrative as but in first doubled sequential next anticipate X% particularly During logo of part, new at free both contribute TCV year, signings, cash TCV percentage renewals first business excludes second declined to costs, SG&A, meaningful streamline continued the more a to are TCV, quarter, reduction renewal schedule this Beginning in year, will we we on year-on-year, given the TCV timing mix quarter X% renewal projects XX% more was up year-over-year, than the

opportunities is and workplace new we the a a contract an New and Ex-L&S signings. signed logos contract meaningfully our to data our to and and also management, a logo to infrastructure contribute This solutions. expansion, hybrid a see and discuss global multiple half clients platforms Within EMEA, storage logo few for provider for we prominent large integrating new quarter. U.K. and in access the future company digital more such we spend as gains business with efficiency signed new and go-to-market security In to wins cloud.We includes United modern faster addressable device the of segment our the IT offerings for of construction to new experience growth cross-selling. second in sustaining processes, secured in and BXB new proposals.I'll desk, digital a now first business our examples and years workplace in scope expanding application important services lead XXXX with solutions. are contract scoping including service new States and continuing expected component year by in are Adding base generation,

to This CA&I, the digital government was consolidate internal This an our many streamline already clients' opportunity our a expand clients' We significant operations and of multiple to part the global clients supporting sector. services included access secure cost United States. new in the the identity companies banking contract with for of access and to of EMEA existing loan we internal location.Within vendors citizen-facing running our by management savings. ECS, were Latin state a application to with provide on facilitating government to a This its with largest in layer. in records offering financial the of our to wins servicing modernize We application services. financial large systems. their seeking modernization initial modernization scope, largest core contract attain of for employees, we to banks application the solutions also in Our signed X to any contract customers.In includes from services a had client support employees selected one expands one expansion clients' America

the X% pipeline scale, in sequentially layers an to pipeline. our now is selected analysis X% this quarter clients' and our small and that to at an ECS over services was first While project Ex-L&S demonstrates expand solutions. for platforms.Turning win into the of the application relatively our our incumbent surround potential in grew Total company Unisys

and complexity, our our clients cyber to pressure Our are are up AI cost was Workplace to fourth to and In facing XX% evolving goals.Moving growing Digital quarter. these a deliver aligned segments. of Solutions, well from and solutions risks the pipeline pipeline discussion our IT adopt in efficiencies

such We pipeline subscription more are where see strong sequentially. grew than continuing our drive client XX% to as interest device that solutions services, efficiencies, in

our field to spend.We device as as increasing where services services numerous environments, and include of infrastructure organization's be field utilization an places competitors sequentially. opportunity data modern the Our we services, service increasingly to subscription ancillary increase with higher-margin in pipeline gain seeing broader an device and remaining some and us our view related deprioritizing and consolidating to IT workloads the to & managing opens see now margin our as rates, DWS analytics sequential at the critical in cross-sell to workplace and share leverage typically opportunity servers IT may and saw upsell our services, a incremental pipeline performance a clients increased to by see multi-cloud heart also employee margins workplace optimize higher-margin We're related while and to stacks and of Applications well devices technology increase and experience an excellence Infrastructure continue we aligned shift solutions, modern into market. By portfolio.In success committed door Cloud services opportunities. Managing drive of the the segment, in enterprise. X% to operations to

industry within with both double-digit that a maps the range offer first systems in environment financial not and they sectors these expertise adoption partners require AI in was local modern regulated transforming, public service government next-gen sequential segment technology they ECS and highly in pipeline only in sector innovate management security to cargo discussions reservation portal. user road the signed the and within technology address freight specialized clients to are compute with growth are of the the to airlines within quarter, forwarders strongest operate deep a their cargo of on includes routes to a marketplace market, airlines continued used our managed by system and In logo our new in to adding transportation the now capacity.During in we compare specialized that advertise sequentially, and cargo by system, allowing by our and first search improving the and their education up state Our we with evolving which clients, list strategic strategies.Clients banking, solutions travel the momentum suite routes face.Our digital and cargo about pricing our but services and pipelines quarter, and portal and that airline having available IT threats more had skill they including X% quarter, functionality, the we gaps. have capabilities, and and services which interface

We're for innovating an industry with industry onboarded AI-infused marketing solution this cargo such capacity, client our go-to-market the and Logistics us and for channels optimizing advantage sales quantum and of deep and cargo for routing. Optimization, as give scaling out leaders deep expertise. Our have in solution Unisys decades offerings, our advanced emerging relationships and industry inventory already building actively industry

service one and most the intelligence, AI several be including partners. front detailed our across proposition into maps. deliver as can center formulate Unisys to sold to are We're AI-ready continuing encouraged our continues clients.More in face cloud, broadly, sectors as servers pressures generative value natively to Unisys of ways, of Logistics financial our integrated We in by for including Optimization artificial adoption will client Optimization our Logistics by commercial, conversations. Clients a road provide and the public well strategies and largest as in alliance

of have research, clients, effectiveness and campus AI capabilities to to a with conference We and new across company. panels our to capabilities leadership Applied accelerate as in At expanding our training RadarView clients, AI invest initiatives, our was as Internally, we're our associates talent. inclusion in AI most data, global continuing upscaling Avasant's wide for capabilities to industry and thought we these our that awareness logs, quarter, and our of efforts marketing services. regardless presentations adoption AI first AI own the prioritizing well role example of increased training, persona-based the clients, solution to had One all matter developing quarter, to associates. build associates projects AI and prospective is performance.During of AI an our event completed portfolio of commitment associates ongoing end result our and the XX% for industry with our our advisers and providing our analysts of efficiency of

quarter, the our first for year-over-year.In Our which in more trailing XX.X% XXX quarter, we pathing our provide enhanced internal attrition while XX-month the development career into will points for down framework, voluntary opportunities visibility better was mobility fulfillment. talent an bench basis and associates, first increasing launched

is associates. in can also development early demand experiences over a with and that, believe attracting, training retaining I'll and and Unisys training program its We turn associates approach.With planning, enhanced training the Deb. This tenet of onboarding processes. our campus a We hiring, to for program our wealth our strengthens call supporting career career central provide and

Debra McCann

for Ex-L&S and investors good will Thank we currency, I website. you, markets constant portion come Peter constant but will discussion timing, My innovations discussed long only. will as has with our addressable ECS, I in where a refer revenue awareness portfolio, and license presentation to the outside digital profit slides to information, and morning, making reference quarters.As allow company Logistics on posted market excluding revenue transforming is Peter, and with are discussed, revenue growth to progress for support revenue and supplemental which also reported up assess provide new year-to-year in building way recognition opening today the capabilities the our as renewal between our license Unisys of can in tied currency and uneven everyone. segment Optimization. be from to such

in moving as direction well. the profitability Our is right

Ex-L&S We delivery our and improving efficiency solution margin, gross while L&S gross margin are maintaining mix. through strong

to at environmental to improve and and also will year-over-year are Slide in lower total million payments you free next year, to SG&A We achieve execute flow beginning see these streamlining down generation.Looking $XXX time.First working revenue legal currency. ability and revenue million, was our X% due X.X% towards quarter more flow of costs cash improve going will $XXX conversion our and enhanced was cash renewals expected L&S results the constant constant areas presentation, forward. which increase over and Continuing in of of detail, currency X% X.X% of X increase cadence in can Ex-L&S on and our company an in

As concentration and ECS million and components and of The our specialized a prior high Ex-L&S to process next-gen the a fourth are compute period. business and Infrastructure addition new XXXX Digital particularly solutions Solutions segments was reminder, signings. of all within reported services solutions business Applications our to revenue had with quarter Cloud Workplace solutions $XXX other.DWS were of flat in

revenue services application we quarter our Canada revenue.CA&I deep grew due due new was This America.L&S are by the was within L&S in the million, where half signings of $XX to ECS expected the the revenue X.X%, which compares Ex-L&S grow education, renewal specialized support group Growth sector, so than an Upside million segment in was quarter with which expertise.ECS in and clients higher solutions, the quarter, revenue by contracts down and U.S. quarter. the particularly planned.Specialized to the million, to slightly more of including modern timing we and in first solutions, revenue of increase in the solutions led license $XXX begin to we signing including the those we XX.X% year, a that was public $XX development, second due the next-gen Latin had to second generate had renewals. our managed expected our compute service than higher $XXX higher-margin X.X%. in logo anticipated. led better segment this first was was expect We million to in and have

less an driven continues billion, good license decline guidance backlog TCV.As to XX% quarter renewals, CA&I Ex-L&S a of of contracts.Trailing was profit year-over-year revenue, results X% resolution gross and in assume TCV, growth the basis a reversal total partially TCV a contracts. If XXXX. the percentage business year, solid. solutions.Ex-L&S of segment, growing XXXX flow due gross renewal of included profit, next-generation similar logos for in book-to-bill solutions, to impacts with total and We $XXX new new representing generally signed amount solution does TCV results.DWS basis This points. lower clients a of momentum support through year-over-year. for our of renewal The up Peter the TCV profit we in to and XXX total benefit to solutions.Moving increase nature margin profit margin for flat ago quarter, company seasonal in the related former to XX.X% XXX of more benefit business renewals This year was a was first quarter new as exited a are was in with Backlog have initiatives. XX% prior and we and were timing. by declined to quarter of to improvement, to a by company project more contractual due declined million our the $X.X savings due approximately improved a distribution expect cost from duration new revenue year to This offset did This and first compared the mix a in roughly with company previously the onetime gross X, the $XXX XX-month point work margin X.Xx was gross this basis a XX% dispute basis, gross full sequential and with reflecting year-over-year, from gross accretion than decline which revenue to of Ex-L&S margin. Ex-L&S year-over-year quarters.Total quarter largely ongoing point recognized shorter our first Slide quarter business business not The our XX.X% cost Our renewal. XX.X% to in next-generation close we a million of which on XX.X% be both solutions to nearly was delivery we year, excluding discussed, the improvement the Ex-L&S but new even to L&S license million, $XXX trends will XX primarily due but across due year the from segment XXX renewals largely for the a third resulting points still timing. compared our we gross in sign headwind when for TCV.We

XXX long-term We first in significant labor CA&I, costs to to ] incremental career continue segment pyramid. business workforce improve we [ quarter, were management XX.X% in gross open achieved solutions.CA&I margin improvement In points an significant hires and by roles of gross utilization see in was year-over-year. new related and margin opportunity margins basis the expansion our on we have the traditional and to initiatives, leveraging labor savings backfill early internal on attaining

We of in revenue standardized XX.X% to architectures, on contractor lower focus compares variable solution to prior was automation XXXX. building and the in first to continued the costs.ECS fully year. compared which our have L&S gross margin was to attributable quarter, decline The also the XX.X% increasing quarter first reducing

of term, was in renewal fluctuations gross portion As L&S by solutions full to reminder, license margin a slight in which a will margin.Lower base support we ECS impact license XX% contract of due be the the was $XX cost adjusted both contracts.Moving after adjusted which resolution compared our the EBITDA due leads in provided from profit in utilization onetime was increase L&S prior is for low to our first former increase profit labor short revenue a XX.X% and renewals This quarter profit cost this on and in from quarter the offset L&S representing to increased above and new margin single-digit operating margin higher adjust I our due quarter. the EBITDA the upon benefit margin to previously.First operating or call fairly Slide our margin better million, EBITDA of medium partially solutions and an to recognized of license which in and of the but year and consistent is reduction signing, year-over-year contractual on from gross The the year-over-year, X.X% adjusting signing mentioned Much margin ] early from primarily first a of managed expectation in legal to business, in revenue a support declines service our dispute margin. timing.GAAP with non-GAAP non-GAAP X.X% prior included were certain operating period. was client. adjusted our [ for X, SS&C expenses we renewal non-GAAP operating to due expenses, gross an specialized

plan. approximately to compares U.S. estate diluted had of $XXX to exclusively million Neither we are similar in incurred annuity purchase loss the settlement of premium net We and amount million do They full our removed loss of projected a any contributions. is million as centralize in corporate our are loss to purchase balances.These future annuity $XXX based pension of purchased also qualified due or our pension to actions cost $XXX was loss of and they net on one IT.We This and reduce benefit similar transaction This U.S. annuity a so, deficit future our our in $XXX planned a to This GAAP first a which contract to million group operations took had risk plan a company's cash volatility $XXX lower impact qualified annuity purchases reduce related assets. a in for in of transfer the non-cash we functions, liabilities expected defined certain settlement total on streamline defined to during benefit should plans related corporate per consolidate pension continuing to of XXXX, loss a liabilities. the quarter choose quarter several outsource real the $X.XX. a quarter almost annuity the the that million purchase. of cash non-cash of first pension the included share

Looking remainder the expenditures additional annuity $XX ahead, anticipate per to million $XX Slide quarter for the X. million per flat year-over-year income or XXXX.First on a to net or compared prior we share.Turning of approximately do adjusted in $X.XX the was $X.XX Capital year first million in purchases quarter, share totaled $X relatively any period not basis.

a and the have research restructuring payments, primarily in cash development million to on focused period. are the well as ] a As free cash quarter which other $XXX related for was pension our which free flow to are plans.Excluding certain of and flow the well $XXX environmental, adjusted of at and quarter year-end. expenditures a to portion funding intensity Slide adjusted pre-negotiated period.Moving our [ and $X million $XX in X, a contributions, on technology based the up mainly due capital we business the compared The of flow cash are our legal quarter, million million cash our similar free balances capital-light first as the to postretirement in capital capital to year million prior contributions, platforms.First end is reminder, $XX as lower strategy, was year dynamics, was prior from million, $X improvement international negative working as limiting

ratio our compared end due slightly actuarial change up financial impact pension plans, in leverage have renewal of defined March which as our in was in of net at estimate Including modest leverage regulations we Based net from and XXXX. essentially our XXst, not our million on this a global the XXXX our detailed to secured as until Each updates update our November for against I update leverage plans. and pension based period L&S projections X.Xx, to contributions recent year-end an and last net XXXX in unchanged beginning Our projections. do decline global contributions not market X.Xx provide adjusted major all will of was returns X.Xx our we in at is deficit, conditions, debt timing, X.Xx XXXX.I no from $XXX senior estimate, million, end, Quarterly strong liquidity increase The assumptions. and now now plans benefit our year-end. the conditions, come resulting ratio level to global factors provide on due revolver pension XX notes pension of pension months EBITDA.Our cash is year the detail.Based with for X-year same funding GAAP no global estimated borrowings market such cash our on expected that maturities financial rates, of has deficit ranges. changed XXXX, on from discount guidance $XXX are X, year-end our XXXX.Turning will Slide we approximately as materially discuss asset to the

We our year ranges. guidance financial full are reiterating

We X.X% X.X% negative and in X.X%. continue total operating positive revenue profit to margin currency of of expect company X.X% growth to constant non-GAAP to

guidance also flow to Ex-L&S X% cash the $XXX approximately revenue to million range full and Our assumes the $XX free million.We approximately revenue of growth solutions continue L&S year, assumptions. following in for expect approximately our embeds of X.X% positive which of

for approximately expect We to $XX expenditures interest in international expected the plans the line and approximately million to be Net our for full million. strategy. primarily $XX full with postretirement million payments in of of million CapEx contributions, light capital are year, year $XXX pension our $XX

Unisys elevated total.Our which for next primarily expected a in anticipate to to legal payments million legal and and matter XXXX payments payments continue also decline beginning are We matters for in related is XXXX the other legal to and million year. now environmental, to in are certain matters restructuring of certain plaintiff payments and cash $XX $XX

we to year-over-year benefit costs has approximate been taxes, tax our million We of this Utilization flow the our assets the is also $XXX work assets coming these will expect United taxes the growth, to to declines in overview Ex-L&S assets. we States years, reimbursement revenue free these expected in and potential tax second and which we an $XXX of approximately company an in cleanup and $XX geographies.Looking partial are certain are which as for year and the approved quarter, and improving cash million Slide cash at majority find XX, expect increase On assumes our cash payments million see of support $XX to during of $XX environmental be The expected of also years EMEA. finalized.Lastly, once revenue conversion, year. in of tax profitability economic improve in the the future our revenue million. flat million total limit in approximately of relatively expect thereby license you

component growth stronger half our the ranges second The second solutions, in the Ex-L&S lower the which beginning fourth new ] solid, due important quarter and logo and largely revenue an quarter project imply expect visibility of important into pickup exclusive growth. revenues later also this both in with that included dip accelerate into Ex-L&S of DWS For is approximately half typically third-party This that and of levels seasonally the quarter to a to means [ slight strong good and note quarter budgets decline our X%. are CA&I implies year a is to we year-over-year work. a as we stronger the signings, cycle is back weighting deals year-end.It in expected have full second components shorter quarter, guidance of this year.The pipeline XXXX

We new third to that begin which first expect contracts have TCV in revenue will second in managed largely already primarily larger generate quarter, the logo we signed quarter.Finally, the meaningful quarter service I are now quarter turn operating the Peter of lowest you. which profit.Thank our operating closing for expected call will digits, in any to be the low non-GAAP non-GAAP to is profit over single remarks. the

Peter Altabef

Thank you, Deb.

there emphasize. with information shared I are lot a points to X you we While have today, important want of

our our to of with expect achieving to solutions we higher-margin market.Second, and as CA&I enhancing and an free operator, in our long-term Unisys such growth to accelerate as in and where in Logistics signings building is DWS environmental development as flow improved toward on for generation, performance such a by recognition and especially our to Ex-L&S of profitability intelligent we're legal application device and tax for success to have improve the portfolio industry the with new that, we're significant have we solutions in opportunities number newer Optimization.And continuing momentum ECS, are quantum assets.With continuing and in markets on questions. refresh modernization we're and sign our cash see logo we is growing First, progress payments solutions, that and track our declining important open may the AI-infused we targets, line achieve the third, you

Operator

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

Rod Bourgeois

hear here. update your to into It's your as you reduce Good on see lowering legal wanted to All the encouraging elaborate costs, connect costs. environmental XXXX? right, and of move on those potential the especially emphasis the if to plans you guys. magnitude to could I and

Peter Altabef

this part. much and for is the Deb of Thanks attending thanks very question, quantified call. Peter. both kind Rod, in for the Yes.

are side, is significant most -- is currently On the we've trial far, not had lawsuit, the legal legal expect the and we set, I XXXX. say would is And date that, work. that but plaintiff we the expense an we where by ongoing IP defense that in around

basically of the So that expenses, our legal those -- predominant will we XXXX. expect expenses which outside after off represent tail amount legal do

forward.And cash going have then remaining things So to that allowance X the environmental. that's going on really increase we

of We environmental where have being expected and costs and incurred our the majority XXXX. cleanup XXXX one are situation, current in

may We're that reimbursement paying not and sure the actually going XXXX. expect that will not from to mentioned, again, XXXX. but receive in standpoint, happen about case to Deb And thinking it's million. as be we're that reverse cash up expenses we're for to a we we'll the that because happen, exactly we when partial a expect flow that starting in $XX So that

that helps, Rod. hope I So

Rod Bourgeois

Yes. year. Are in the And heightened L&S wanted to in last volume I expectations upside back that consumption seeing And I go Definitely you wonder on some to L&S helpful. to L&S reported. then your the contributed climbed and just trend you that that quarter follow-through volumes? if in

Peter Altabef

you Mike -- defer been that But Yes. another by Rod, can one. we great encouraged on it's general, I'll question. to L&S. really have in

more L&S we last than recall, had year. you As we revenue will expected

to issue. due of an this timing transaction. the quarter We Most But versus consumption have addition, have L&S we a increase this slight of was expectations. in revenue L&S that in

Mike, about that, thought So please?

Michael Thomson

Rod, and to good Thanks, Peter, talk to Sure. you.

upon as over think renewal, kind consumption. years, see typically, a right? reminder, is basis. the we've is the So to where extend of their consumption, higher larger when trying our clients, of contractual byproduct over think the reductions actually client I Rod, least it's several the of in course that. of for years the in that saw can't we because for know, a than would ultimately client you fairly anticipated.I the And we've say, course consistent early just of couple last seen last As increase increased consumption the And a I life renewal, at consumption general, we of seen just

pretty been it's consistent. think I So

elements that in it's the today consistent pretty think consistent on data over with primary having early just I what's for going knock-on renewals. larger last consumption. out of the world again, years there impact to couple and in and reason a fairly But the

Peter Altabef

comment... follow to on up just And Mike's Yes.

Debra McCann

[indiscernible].

Peter Altabef

the Thanks, you're of I comment. L&S said, X expected. that at was of Mike's asking, higher we L&S another on as an average average up than question that $XXX our follow take Deb. one the about we higher And we to a about as increased this face even year, we year, The expected million, revenue Rod, did number was where as thought things -- the revenue period, consumption beginning look Just X-year ] that hard [ last revenue year We had expected. in the to million. last $XXX years than an of for

XXXX, X-year all encouraging.Deb, sorry, For bit little I But frankly, $XXX average. is, so the very to a million, spoke over of I'm we're you. expecting currently about that above

Debra McCann

that was to QX -- because mostly all $XXX still that and No. thing, going the to a similarly to X-year was holding [indiscernible] holding we're what million $XXX we're I that timing That's I million say year that's going to average. the was for say. and

Operator

comes Paribas. question Arun next the from with Seshadri BNP And

Arun Seshadri

it's I Just that much of -- the a not but you're think so guess, more I you that, terms would next environmental of over do do the half at reduction legal decline? couple years? able this to guess, point, being payments in of quantify willing to and like than expense how

Peter Altabef

So Peter. this is

would or you function half. don't I about quantify it, environmental, than may legal also Deb, by I expect know external own way, legal and But less than have that in not just to about that. can Deb, did. our talking to expense, may we quantify talking we a you're the internal more If I be if position be obviously,

Debra McCann

Right.

think I that's probably about right.

We haven't just there given exact because the quantification uncertain are still some things.

So that's ballpark. the in probably

Peter Altabef

one it's yes, and of one -- we're reasons reasons a -- question. great bringing that And -- of the the

is of things time, flow changes we've we plaintiff, up had cash with is environmental as the over where you that to we're we're because costs. as at bringing flow it those look if the, cash that as One lawsuit, and reasons well deal as one of will, the

cash just and revenue those so, And flow very business or fall increasing as decrease without other cost our that initiatives. away without or significantly, increases things

because We is X of because flow But lawsuit are to cash of all that of planning losing do automatic. those the environmental almost things. and drain

Arun Seshadri

X terms that, adjustment backs net for you of trend other for the $XX add they expense that so. that or together, balance see like in this should the million Is something linked and year? and then the Thank -- EBITDA quarter, Peter. of for And the represented adjusted we just cost the how for reduction

Peter Altabef

want to you speak to do that? Deb,

Debra McCann

Sure.

I for something think don't backs, add was think be as more the EBITDA expense I I then a higher it's the of QX, other a cost there is continue for for the should well, the think, And that high. So to onetime. little that reduction.

of we But for year. So a those the would would numbers. I little remainder out elevated, but exact are say the I X expect higher you haven't those than given think are those

Arun Seshadri

of in expecting TCV the project down broadly, then I business Ex-L&S renewals and you're half itself, more was, about terms back think, the revenue. excluding was weighting in X%, And

So would services. Or it actually it? what renewals opportunities just terms related mechanical to broadly -- it is to and just little would just a slowdown affecting Is is say think, and in terms you taking customers bit in you all you that, say to broader longer? just of of just speaking, managed a convert into

the trend of managed this signings, to the wanted of XXXX in signings it's -- sort all any this just the sort and of Just services seeing? mechanical lack if just timing ramp in line is understand you're of change is just and in Or 'XX? there's

Peter Altabef

a Yes. great It's question.

over of beginning the take and that new second business new really turn as half me it with to Mike Let question. of business the that for happy We're the the pipeline. then signings, well as

for new on expect on quarter, clients, And that part scope the of year, a we extensions, increasingly bigger one well the in very the and first clients.But new we happened expansion, also we expansions So is of that a existing did new fairly That to and it's logo. with and to work business scope the component of and new new it's new well of extension, sure course last continue over us is making things very, are business existing of becomes and logo mix. our picks up that the the year. focused

land to logos strong you time.Mike, very a year. detail year more revenue we more expect full largely X% really the over on important So the we than ability and the way is is is is to to, and have for and increasing compared the new this really That think significant And at to one a the for over expand you logos. or our of negative due least more harbinger important good new more number think more doubling doubling last not timing.But other than if we and year create number that. on more to --

Michael Thomson

Peter, Thanks, Arun, for and question. thanks the Great.

Peter of color I'll little answered but just add it I well, there. a bit maybe pretty think

starters, from necessarily think negative that a little market of you're right, not perspective. that Arun, a I a bit we're any there is trends pause For seeing. do

it's to pipeline think the bit a general. of we're But with more the the seeing in you're mechanics signing.The I encouraging. do what is in little extremely certainly, deal seeing that industry, I think

we've As and our signings have year-on-year new about, talked significantly sequential. increased we logo

that to of expect and new the another And that throughout [ we knock-on logo kind a signing. scope, new pick a ], continue gives to new expand it We after opportunity traditionally new logo the year. add the because and to see being logos up has us signing impact, enhance that right,

for incumbents, they're So the if time we're work up revenue, very the growth a forward signings back transition expecting some at an But to for we X new in months transition both of accelerated into first, logo on taking with signs reception again, is to of the to get the which revenue half looking the to it's it's to encouraged improvements why some X to tail revenue.Typically, market get that last business. picking back end year. had and half, in and

Operator

with next question Anja the Soderstrom And Instructions] from [Operator comes Sidoti.

Anja Soderstrom

already. addressed Workplace new Some the gross margins of been solutions But have businesses, any of given for sort the you CA&I? them the and for have targets

Peter Altabef

gross also that because the with business; on profitable, in if the saw quarter more external is expect fees we that margin specifically which it, expect Yes. become and gross plan rolled stressed I'll going and the I is encouraged business expect dollars which we business, an come Peter. margin, and Thanks. to Ex-L&S little This by majority where amount One year, the just and is on to second to start and really X in, in on last profitable. second we in expect things we it's on that, a little within We're really bit important, to more expansion hit of very Deb one growth defer the what because DWS that's after is question. actually decreasing we this the CA&I.The a is Again, ways. you the we you business of expand Great multi-year will, that. and to do element like that this of we out on that our When legal one of environmental. becoming that

And has Some as by that is of which into more what last showed it model, in in least as I revenue, mean And the built our more this and that so they per year, Canada again, profit dollars majority relatively of stuff at dollars. grows, business is but is, becomes we revenue and the that EMEA that profit that -- U.S. profitable, historically. are business automatic. more

tax our referred we of to in also you. tax loss chart EMEA. our in materials very situation Deb asset, in carryforwards and in our U.S. X you significant In provided countries revenue the detailed we both at fact, as Canada is have look that those in and we the areas.And and net in That have certain XX% a

we not taxes of we and the will, value of on typical, only business not do the think to NOLs. you expect our expect that increase, about profitability because cash modeling, profit pay of if as do a but So we increased that to

again, relatively exist. automatic -- it's those And so, think NOLs we because that

and forward.Deb, any So we us, expect model as comments going that further to well that? -- in the help on

Debra McCann

just gross I have the asked about had target. think we also No, Anja, given explicit you margin target, an -- think I

had maybe mentioned. you think I

haven't XXX we XXX saying. did points the this DWS given about but that Ex-L&S overall, this CA&I XXX we're basis and seeing margin year we progress say basis specifically up points XXX to segments, basis at I basis what with think the of by I think you're quarter, points. points And is

we're So showing progress. all those businesses taking within and taking hold, of the we're cost actions definitely are

Peter Altabef

to if solution gross XX% on range. the recall Day, if Anja, I we our next-gen in Investor had Yes. just being from you tie could about -- to a targeted margin in point, talked Deb's

have from perspective, of XX% talked course, about -- to well, we next-gen given targets fairly looking gross as take a, Day. with already solutions, b, I what think range modeling approximately for all them at of we've a we consistent on consistent at solutions market. our that's Investor it we internal I think so, probably But and And if the that margin you're in

Operator

And to any comments. to concludes this would you. session. Altabef I for Thank the closing over back our turn like question-and-answer conference Peter

Peter Altabef

joining us. Thanks very for to and everybody thank much, like operator, I'd

and are good profit. a are was find the about As quarter. the both and the responses I XXXX is we your report any We're in thank I guidance gave, did clear TCV, actively year.You -- remarks ] for for our [ was We while reaffirming and call. hope ] are I doing investor I company ago, that, that not as ahead expectations we with next had a able for the forward We're will as review, We and joining in us Deb and new I meeting this revenue headway of you, look company to little Deb investor more making thought and Q&A on base. those that performance, substantial and a of questions everyone slightly our the shareholder well encourage very to want taped for to available So of on do that it. we our that that made website. a from and who [ well information Mike as logo opening

Operator

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

You may now disconnect.

Unisys (UIS) 8 May 242024 Q1 Earnings call transcript