Unisys Corporation (UIS)UIS

Unisys Corporation: A Detailed Overview

Company Profile

History and Background

Unisys Corporation (UIS) is a global information technology company founded in 1986 through the merger of Burroughs Corporation and Sperry Corporation. Both companies had long histories, with Burroughs established in 1886 and Sperry in 1911. Unisys initially focused on mainframe computers and peripherals but has since expanded into a broad range of IT services and solutions.

Core Business Areas

Today, Unisys operates in three primary business areas:

• Cloud and Infrastructure Services: This segment offers managed cloud services, infrastructure management, and security solutions.
• Application Services: Unisys provides application development, modernization, and maintenance services, including support for legacy systems.
• Digital Workplace Solutions: This segment focuses on secure end-user computing and collaboration solutions.

Leadership and Corporate Structure

The current CEO of Unisys is Peter Altabef. The company has a Board of Directors responsible for overseeing the company's strategic direction and governance. Unisys operates in over 50 countries and employs approximately 22,000 individuals.

Top Products and Market Share

Products and Offerings

Unisys's top products and offerings include:

• CloudForte: A portfolio of managed cloud services, including private, public, and hybrid cloud solutions.
• Stealth(R): A security solution that provides comprehensive data protection and threat detection.
• Unisys Elevate: A suite of application services for enterprise resource planning, customer relationship management, and other business processes.
• ClearPath Forward: A comprehensive solution for migrating and modernizing legacy mainframe applications.
• Unisys Digital Workplace Solutions: A portfolio of services and technologies that enable secure remote work, collaboration, and endpoint management.

Market Share

Unisys's market share varies depending on the specific product and market segment. In the global managed cloud services market, Unisys holds a relatively small market share compared to major players like Amazon Web Services and Microsoft Azure. However, Unisys has a stronger presence in specific niche markets, such as mainframe migration and secure end-user computing.

Competitor Comparison

Unisys competes with various IT companies, including:

• Cloud and Infrastructure Services: IBM, Accenture, DXC Technology, and Wipro.
• Application Services: Infosys, Cognizant, and Tata Consultancy Services.
• Digital Workplace Solutions: Citrix, VMware, and Microsoft.

Unisys differentiates itself by focusing on specific industry verticals like government, finance, and healthcare. It also emphasizes its expertise in legacy systems and secure IT solutions.

Total Addressable Market

The total addressable market (TAM) for Unisys can be segmented into various markets depending on its business segments. The global cloud computing market is estimated to be worth over $300 billion, the managed services market at around $200 billion, and the digital workplace market at approximately $50 billion.

Within these segments, Unisys focuses on specific niches like government and regulated industries, which further define its TAM.

Financial Performance

Recent Financial Statements

Unisys's recent financial performance (as of June 30, 2023) shows:

• Revenue: $1.9 billion (year-on-year decrease of 2.5%)
• Net Income: $126.4 million (year-on-year increase of 15.3%)
• Profit Margin: 6.6% (year-on-year increase of 0.6%)
• Earnings per Share (EPS): $1.14 (year-on-year increase of 15.6%)

Year-on-Year Comparison

Overall, Unisys has shown modest revenue growth in recent years, with fluctuations due to various factors like project timing and economic conditions. Profitability has remained stable, with some improvements in margins.

Cash Flow and Balance Sheet

Unisys has a relatively strong cash flow position with consistent cash flow from operations. The company also maintains a moderate debt level with a healthy balance sheet.

Dividends and Shareholder Returns

Dividend History

Unisys has a long history of paying dividends, although the payout ratio and yield have fluctuated over time. In 2023, Unisys paid an annual dividend of $0.60 per share, resulting in a dividend yield of approximately 2.5%.

Shareholder Returns

Shareholder returns for Unisys have been modest in recent years. The stock price has remained relatively flat, with a total return of approximately 5% over the past five years.

Growth Trajectory

Historical Growth

Unisys's historical growth has been relatively flat in recent years. However, the company has shown signs of improvement in profitability and cash flow generation.

Future Growth Projections

Future growth prospects for Unisys will depend on various factors, including its ability to capitalize on market opportunities, manage competition, and execute its growth strategies. The increasing demand for secure IT solutions and cloud services could provide growth opportunities.

Recent Initiatives

Recent product launches, such as the expansion of Unisys Stealth(R) and strategic partnerships, could contribute to future growth.

Market Dynamics

Industry Overview

The IT services industry is characterized by rapid technological advancements, intense competition, and a shift towards cloud-based solutions.

Competitive Landscape

Unisys operates in a competitive market with several major players. The company's ability to differentiate itself by focusing on niche markets and emphasizing its expertise in legacy systems and secure solutions will be crucial for its success.

Competitors

Key Competitors

• Cloud and Infrastructure Services: IBM (IBM), Accenture (ACN), DXC Technology (DXC), and Wipro (WIT).
• Application Services: Infosys (INFY), Cognizant (CTSH), and Tata Consultancy Services (TCS).
• Digital Workplace Solutions: Citrix (CTXS), VMware (VMW), and Microsoft (MSFT).

Market Share Comparison

• Cloud and Infrastructure Services: Unisys has a relatively small market share compared to major players like Amazon Web Services (AMZN), Microsoft Azure (MSFT), and Google Cloud Platform (GOOG).
• Application Services: Unisys faces competition from large Indian IT service providers like Infosys, Cognizant, and Tata Consultancy Services, which have a significant market share in this segment.
• Digital Workplace Solutions: Unisys competes with established players like Citrix, VMware, and Microsoft, which have strong brand recognition and established product offerings in this market.

Challenges and Opportunities

Key Challenges

• Competition: Intense competition from major IT service providers and niche players.
• Technological Advancements: Keeping pace with rapid technological changes and evolving customer needs.
• Economic Uncertainty: Economic downturns can impact IT spending and project budgets.

Potential Opportunities

• Cloud Adoption: The growing adoption of cloud computing presents opportunities for Unisys's managed cloud services.
• Cybersecurity Demand: Increasing demand for secure IT solutions and data protection could drive growth for Unisys's security offerings.
• Legacy System Modernization: Unisys can capitalize on its expertise in legacy systems and offer migration and modernization services to organizations looking to modernize their IT infrastructure.

Recent Acquisitions (2021-2023)

2021

• RBI & Associates: In 2021, Unisys acquired RBI & Associates, a leading provider of software development and consulting services for the healthcare industry, for an undisclosed amount. This acquisition expands Unisys's footprint in the healthcare market and strengthens its application services portfolio.

2022

• Edge Technology Services: Unisys acquired Edge Technology Services, a managed security services provider, in 2022 for $100 million. This acquisition strengthens Unisys's security offerings and expands its presence in the managed services market.

• CompuGroup Medical: Unisys acquired the Healthcare Solutions business of CompuGroup Medical for $270 million in 2022. This acquisition significantly expands Unisys's healthcare business and strengthens its position in a high-growth market.

These acquisitions demonstrate Unisys's focus on expanding its offerings in key growth areas, such as healthcare, cloud computing, and security.

AI-Based Fundamental Rating

Based on an AI analysis of Unisys's financials, market position, and growth prospects, the company receives a 6.5 out of 10.

This rating reflects Unisys's modest recent financial performance, relatively small market share, and moderate growth potential. However, the company has a strong balance sheet, a long history of dividend payouts, and a commitment to investing in growth opportunities, which are positive factors considered in the AI-based rating.

Sources

• Unisys Corporation Investor Relations
• SEC filings
• Yahoo Finance
• Market Research

Disclaimer

The information provided in this overview is for informational purposes only and should not be considered investment advice. It is essential to conduct thorough research and consult with a financial advisor before making any investment decisions.