Unisys Corporation Reports Impressive 2024 Financial Growth
Unisys Corporation Achieves Strong Financial Performance in 2024
Company Exceeds Profitability Guidance and Meets Revenue Guidance, Significantly Improves Operating and Free Cash Flow Year over Year
- Full-year gross profit margin of 29.2%, up 180 bps year over year (YoY); Excluding License and Support (Ex-L&S) gross profit margin of 17.6%, an improvement of 250 bps YoY
- Full-year operating profit margin of 4.8%, up 100 bps YoY; non-GAAP operating profit margin of 8.8%, improved by 180 bps YoY
- Revenue for 2024 reached $2,008.4 million, reflecting a 0.3% decrease YoY but aligned with the company's guidance
- Operating cash flow for 2024 was $135.1 million, significantly better than $74.2 million in 2023, marking a notable recovery in free cash flow to $55.3 million compared to a negative $4.5 million in 2023
- New Business Total Contract Value (TCV) hit $791 million, up 29% YoY, driven by enhanced new logo signings
- Full-year 2025 guidance indicates anticipated revenue growth between 0.5% to 2.5% in constant currency and a non-GAAP operating profit margin of 6.5% to 8.5%
In a recent announcement, Unisys Corporation (NYSE: UIS) reported its financial results for the fourth quarter and entire year of 2024. The company declared, "In 2024, we exceeded the top end of our upwardly revised profitability guidance range and met our revenue guidance," according to Chair and CEO Peter A. Altabef. "The profitability of our Ex-L&S solutions has improved, with a positive trend in consumption and strong client commitment to our profitable platforms. The foundation we established for future growth by signing 29% more New Business TCV validates the market growing awareness of our offerings."
Chief Financial Officer Deb McCann emphasized the firm’s ongoing commitment to enhance free cash flow while balancing pre-pension and post-retirement liabilities. She noted that the company's liquidity improved with a cash injection of $82 million for the year. The anticipated growth in Ex-L&S profit contributions, along with operational efficiencies and improved cash conversion, will facilitate funding future pension contributions and organic growth investments.
Financial Highlights
As indicated in the released financial overview, the revenue growth for the fourth quarter 2024 registered a decline of 2.2% YoY, which translates to a 1.5% decrease in constant currency. Ex-L&S revenue dropped by 4.7% YoY, exhibiting a 4.8% decrease when adjusted for constant currency, primarily attributed to reduced activity levels with existing clients.
The gross profit margin for this quarter showed a decline of 40 bps YoY, while the Ex-L&S gross profit margin fell by 80 bps YoY, mainly due to cost-reduction charges.
Segments Overview
Segment-wise performance indicates that Digital Workplace Solutions (DWS) revenues fell by 7.9% YoY. Meanwhile, Cloud, Applications & Infrastructure Solutions (CA&I) saw a modest decline of 4.9%. In a positive note, Enterprise Computing Solutions (ECS) recorded a slight increase of 2.9% YoY, aided by timing on software license renewals.
Balance Sheet Improvement
The balance sheet also showed encouraging signs with cash and cash equivalents standing significant at $376.5 million, compared to $387.7 million the year prior. The year concluded with a strong backlog of $2.84 billion against $3.01 billion the previous year, indicating relative stability and growth potential.
Future Outlook
Looking ahead, Unisys has provided guidance for 2025, projecting moderate revenue growth and profitability, along with continued emphasis on improving its financial metrics. The company anticipates some fluctuation due to currency conversions but remains optimistic about its strategic initiatives and commitment to driving value in the upcoming years.
Frequently Asked Questions
What were the key financial highlights for Unisys in 2024?
In 2024, Unisys reported a gross profit margin of 29.2% and a revenue of $2,008.4 million. The company also achieved significant improvements in cash flow.
How did Unisys' segments perform in the fourth quarter of 2024?
The DWS segment declined by 7.9% YoY, CA&I reported a 4.9% decline, while ECS registered a 2.9% growth.
What is the significance of the new business TCV reported by Unisys?
The New Business TCV reached $791 million, marking a 29% increase year-over-year, indicating a strong market demand for Unisys' solutions.
How does the company's cash position affect its operations?
Cash and cash equivalents of $376.5 million provide Unisys with liquidity to fund future investments and meet its obligations effectively.
What guidance has Unisys issued for 2025?
The company forecasts revenue growth of between 0.5% to 2.5% and non-GAAP operating profit margins of 6.5% to 8.5% for 2025.
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