Unisys : Quarterly Reporting Document

News Release

Unisys Announces 2Q21 Results

Double-digit YoY Revenue Growth; Significant YoY Operating Profit Margin and Cash Flow Improvement; Continued Execution Against Strategic Goals

• Revenue grew 17.9% YoY, supported by YoY growth in all segments
• Operating profit margin increased 980 bps YoY to 7.9%; non-GAAP operating profit(5) margin increased 950 bps YoY to 9.7%, supported by YoY gross margin improvement in all segments
• Cash from operations improved $56.1M YoY to $41.9M; Free cash flow(8) positive, up $68.6M YoY to $19.0M; Adjusted free cash flow(9) improved $91.6M YoY to $54.5M
• Expanded and enhanced proactive experience capabilities within Digital Workplace Solutions with completion of Unify Square acquisition

BLUE BELL, Pa., August 2, 2021 - Unisys Corporation (NYSE: UIS) today reported second-quarter 2021 financial results. "We achieved double-digityear-over-year revenue growth and significant year-over-year improvements to profitability and cash flow in the second quarter," said Unisys Chair and CEO Peter A. Altabef. "We also continued executing on the strategic goals that we described during our January investor presentation for sustainable growth and margin expansion, including advancing the transformation of our Digital Workplace Solutions business, broadening our cloud capabilities, and expanding our enterprise computing solutions."

The segment formerly referred to as ClearPath Forward® (CPF) is now called Enterprise Computing Solutions (ECS). This reflects a name change only.

Summary of Second-Quarter 2021 Results

• Revenue:

• 1. Revenue grew 17.9% YoY to $517.3M vs. $438.8M in 2Q20 (11.5% YoY growth in constant currency(1))
  2. • Revenue growth was supported by YoY growth in each of the company's three segments
• Operating Profit:
• 1. Operating profit grew $49.3M YoY to $40.8M vs. $(8.5)M in 2Q20
  2. • Non-GAAPoperating profit grew $49.3M YoY to $50.1M vs. $0.8M in 2Q20

1. Operating profit margin improved 980 bps YoY to 7.9% vs. (1.9)% in 2Q20
2. • Non-GAAPoperating profit margin improved 950 bps YoY to 9.7% vs. 0.2% in 2Q20 o YoY operating profit margin increases were supported by YoY improvements in gross
     margin for each of the company's three segments

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• Adjusted EBITDA and Net Income:

1. Adjusted EBITDA(6) increased 124.8% YoY to $94.4M vs. $42.0M in 2Q20

• Adjusted EBITDA margin improved 860 bps YoY to 18.2% vs. 9.6% in 2Q20

1. The company completed its goal of $1.2B in gross pension liability reductions during the quarter, and recognized settlement charges of $210.7M ($2.37 per diluted share) related to its most recent pension liability-reduction initiatives
2. • Net loss from continuing operations was $140.8M vs. a net loss of $76.5M in 2Q20, with the noted settlement charges of $210.7M exceeding the size of the net loss
   • Net income margin of (27.2)% vs. (17.4)% in 2Q20 (980 bps decline)

• 1. Non-GAAPnet income from continuing operations(7) improved $55.7M YoY to $46.0M vs. $(9.7)M in 2Q20
  2. • Non-GAAPnet income margin improved 1110 bps to 8.9% vs. (2.2)% in 2Q20
• Earnings Per Share from Continuing Operations:
• 1. As noted above, the company completed its $1.2B pension liability-reduction goal during the quarter and recognized related settlement charges
  2. • Loss per share from continuing operations of $2.10 vs. a loss of $1.21 in 2Q20, with the noted settlement charges of $2.37 per diluted share exceeding the size of the net loss per share
     • Non-GAAPdiluted earnings per share from continuing operations(7) improved $0.83 to $0.68 vs. $(0.15) in 2Q20
• Cash Flow:
• 1. Cash from operations improved $56.1M to $41.9M vs. cash used in operations of $14.2M in 2Q20, helped by margin improvements

1. Free cash flow improved $68.6M to $19.0M vs. $(49.6)M in 2Q20, helped by capex being lower by 35.3% in 2Q21

• 1. Adjusted free cash flow improved $91.6M to $54.5M vs. $(37.1)M in 2Q20
• Backlog:
• 1. Total company backlog(2) of $3.3B vs. $3.4B as of 1Q21
  2. • Sequential decline in backlog due to a delay in signing of one large new DWS contract, which has since been signed.

Financial Highlights by Segment:

DWS:

• DWS revenue grew 9.7% YoY to $146.5M vs. $133.5M in 2Q20 (4.4% YoY growth in constant currency)
  o YoY growth reflects increased revenue from proactive experience solutions and improvement in businesses that were impacted by COVID-19
• DWS gross profit grew 144.9% YoY to $22.3M vs. $9.1M in 2Q20

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• 1. DWS gross margin improved 840 bps YoY to 15.2% vs. 6.8% in 2Q20
• During 2Q21, the company signed a contract with a consortium of U.S.-based energy companies (a new client for Unisys) to provide a full range of IT solutions including digital workplace, application support and cloud & infrastructure, all with security oversight and protection. The agreement highlights the use of Unisys' IP-led solutions, including InteliServe™ and CloudForte®, to improve productivity and deliver a superior employee experience.

C&I:

• C&I revenue grew 9.9% YoY to $124.4M vs. $113.2M in 2Q20 (5.9% YoY growth in constant currency)
  o C&I revenue growth supported by 15.7% YoY growth in C&I revenue in the U.S. & Canada
• C&I gross profit grew 163.2% YoY to $15.6M vs. $5.9M in 2Q20

• 1. C&I gross margin improved 730 bps YoY to 12.5% vs. 5.2% in 2Q20
• During 2Q21 the company signed a contract that spans both DWS and C&I with the State of Wisconsin Department of Workforce Development, a new client, to provide a cloud-based contact center solution that will improve the experience of how citizens interact with government. Through this new solution, Wisconsin citizens will be able to contact various government programs more quickly, and all contacts they have with these programs will be seamlessly linked across platforms to improve access and ensure better customer service.

ECS:

• ECS revenue grew 40.2% YoY to $169.5M vs. $120.9M in 2Q20 (32.9% YoY growth in constant currency)
  o YoY revenue growth was supported by higher license renewal revenue than anticipated, driven by higher-volumes than expected
  o ECS services revenue also grew 2% YoY
• ECS gross profit grew 83.6% YoY to $104.2M vs. $56.8M in 2Q20

• 1. ECS gross margin improved 1430 bps YoY to 61.3% vs. 47.0% in 2Q20
• During 2Q21, the Company signed a contract expansion with one of the largest financial services institutions in Brazil for consulting and application services for their ClearPath Forward and related application environment, including development and modernization related to the integration of more than 90 systems to support the institution's mortgage processing operation across different states, channels and partners in the country. Unisys will also deploy Stealth™ software to secure multiple state applications.

Conference Call

Unisys will hold a conference call August 3 at 8:00 a.m. Eastern Time to discuss its results. The listen-only webcast, as well as the accompanying presentation materials, can be accessed on the Unisys Investor website at www.unisys.com/investor. Following the call, an audio replay of the webcast, and accompanying presentation materials, can be accessed through the same link.

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1. Constant currency - The company refers to growth rates in constant currency or on a constant currency basis so that the business results can be viewed without the impact of fluctuations in foreign currency exchange rates to facilitate comparisons of the company's business performance from one period to another. Constant currency is calculated by retranslating current and prior period results at a consistent rate.
2. Backlog - Represents future revenue associated with contracted work which has not yet been delivered or performed. Although we believe this backlog is firm, we may, for commercial reasons, allow the orders to be cancelled, with or without penalty.
3. Pipeline - Pipeline represents prospective sale opportunities being pursued or for which bids have been submitted. There is no assurance that pipeline will translate into recorded revenue.
4. Total Contract Value - TCV is the estimated total contractual revenue related to contracts signed in the period without regard for cancellation terms. New business TCV represents TCV attributable to new scope for existing clients and new logo contracts.

Non-GAAP and Other Information

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

1. Non-GAAPoperating profit - The company recorded pretax post-retirement expense and pretax charges in connection with cost-reduction activities, debt exchange/extinguishment and other expenses. For the company, non-GAAP operating profit excluded these items. The company believes that this profitability measure is more indicative of the company's operating results and aligns those results to the company's external guidance, which is used by the company's management to allocate resources and may be used by analysts and investors to gauge the company's ongoing performance.

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1. EBITDA & adjusted EBITDA - Earnings before interest, taxes, depreciation and amortization ("EBITDA") is calculated by starting with net income (loss) from continuing operations attributable to Unisys Corporation common shareholders and adding or subtracting the following items: net income attributable to noncontrolling interests, interest expense (net of interest income), provision for income taxes, depreciation and amortization. Adjusted EBITDA further excludes post-retirement, debt exchange/extinguishment, and cost-reduction and other expenses, non-cashshare-based expense, and other (income) expense adjustment. In order to provide investors with additional understanding of the company's operating results, these charges are excluded from the adjusted EBITDA calculation.
2. Non-GAAPnet income and non-GAAP diluted earnings per share - The company has recorded post-retirementexpense and charges in connection with debt exchange/extinguishment and cost-reductionactivities and other expenses. Management believes that investors may have a better understanding of the company's performance and return to shareholders by excluding these charges from the GAAP diluted earnings/loss per share calculations. The tax amounts presented for these items for the calculation of non- GAAP diluted earnings per share include the current and deferred tax expense and benefits recognized under GAAP for these amounts.
3. Free cash flow - The company defines free cash flow as cash flow from operations less capital expenditures. Management believes this liquidity measure gives investors an additional perspective on cash flow from on-going operating activities in excess of amounts used for reinvestment.
4. Adjusted free cash flow - Because inclusion of the company's post-retirement contributions, discontinued operations and cost-reduction charges/reimbursements and other payments in free cash flow may distort the visibility of the company's ability to generate cash flow from its operations without the impact of these non-operational costs, management believes that investors may be interested in adjusted free cash flow, which provides free cash flow before these payments. This liquidity measure was provided to analysts and investors in the form of external guidance and is used by management to measure operating liquidity.

About Unisys

Unisys is a global IT solutions company that delivers successful outcomes for the most demanding businesses and governments. Unisys offerings include digital workplace solutions, cloud and infrastructure solutions, enterprise computing solutions, business process solutions and cybersecurity solutions. For more information on how Unisys delivers for its clients across the commercial, financial services and government markets, visit www.unisys.com.

Forward-Looking Statements

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