UNISYS CORP
For the period ended Mar 31, 2026. Filed May 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
UIS$2.69+9.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0000746838-25-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0000746838-26-000018
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 114 previous paragraphs and 67 current paragraphs.
35 unchanged; 20 reworded; 11 added; 54 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
For the three months ended March 31, 2026, the company reported net loss attributable to Unisys Corporation of $35.8 million, or $0.50 per diluted share, compared with a loss of $29.5 million, or $0.42 per diluted share, for the three months ended March 31, 2025.
Current report
Revenue for the three months ended March 31, 2026 was $437.6 million compared with $432.1 million for the three months ended March 31, 2025, an increase of 1.3% from the prior-year period. Foreign currency fluctuations had a 6 percentage-point positive impact on revenue in the current period compared with the prior-year period, which was partially offset by the timing of software license renewals.
Current report
During the three months ended March 31, 2026, the company recognized net cost-reduction charges related to workforce reductions of $0.7 million, compared with a net credit related to workforce reductions of $0.3 million for the three months ended March 31, 2025. Additionally, for the three months ended March 31, 2026 and 2025, the company recorded charges of $0.8 million and $0.2 million, respectively, of lease abandonment and other costs related to cost-reduction efforts.
Current report
During the three months ended March 31, 2026, a transaction within the company's United Kingdom business process outsourcing consolidated joint venture generated approximately $3 million of gross margin benefit, resulting in a positive impact on gross profit margin and Ex-L&S gross profit margin of 50 basis points and 70 basis points, respectively. This transaction is expected to generate approximately $12 million of gross margin benefit for 2026.
Current report
For the three months ended March 31, 2026, the company reported an operating profit of $16.2 million compared with an operating profit of $5.1 million in the three months ended March 31, 2025. The increase was primarily driven by higher gross profit and lower selling, general and administrative expense as discussed above.
Current report
The loss before income taxes for the three months ended March 31, 2026 was $23.1 million, compared with a loss of $20.0 million for the three months ended March 31, 2025.
Current report
The net loss attributable to Unisys Corporation for the three months ended March 31, 2026 was $35.8 million, or $0.50 per diluted share, compared with a net loss of $29.5 million, or $0.42 per diluted share, for the three months ended March 31, 2025.
Current report
DWS revenue was $118.2 million for the three months ended March 31, 2026 and $118.6 million for the three months ended March 31, 2025, a decrease of 0.3%. Foreign currency fluctuations had a 6 percentage-point positive impact on DWS revenue in the current period compared with the prior-year period. This positive impact in DWS revenue was offset by lower volume due to client attrition. Gross profit percent was 13.5% in the current period compared with 14.2% in the prior-year period. The decrease in gross profit percent was primarily driven by lower volume due to client attrition.
Current report
During the three months ended March 31, 2026, cash used for operations was $4.4 million compared with cash provided by operations of $33.3 million during the three months ended March 31, 2025. This decrease was primarily driven by timing of cash interest payment associated with the 2031 Notes.
Current report
During the three months ended March 31, 2026, cash used for financing activities was $6.0 million compared with cash used for financing activities of $4.0 million during the three months ended March 31, 2025.
Current report
At March 31, 2026, total debt was $737.5 million compared to $741.7 million at December 31, 2025. During the three months ended March 31, 2026, the company repurchased $1.6 million of the 2031 Notes from the open market for $1.4 million.
Removed paragraphs (54)
Previous report
For the three months ended September 30, 2025, the company reported net loss attributable to Unisys Corporation of $308.9 million, or $4.33 per diluted share, compared with a loss of $61.9 million, or $0.89 per diluted share, for the three months ended September 30, 2024. The net loss for the three months ended September 30, 2025 included a U.S. pension plan settlement loss net of tax of $227.7 million. Additionally, the net loss for the three months ended September 30, 2025 and 2024 included goodwill impairment charges of $55.0 million and $39.1 million, respectively, related to the Digital Workplace Solutions (DWS) reportable segment.
Previous report
For the nine months ended September 30, 2025, the company reported net loss attributable to Unisys Corporation of $358.5 million, or $5.06 per diluted share, compared with a loss of $223.4 million, or $3.23 per diluted share, for the nine months ended September 30, 2024. The net loss for the nine months ended September 30, 2025 and 2024 included U.S. pension plan settlement losses net of tax of $227.7 million and $132.3 million, respectively, and goodwill impairment charges of $55.0 million and $39.1 million, respectively, related to the DWS reportable segment.
Previous report
In September 2025, the company purchased a group annuity contract, with plan assets, for approximately $316 million to transfer projected benefit obligations related to approximately 3,150 retirees of one of the company’s U.S. defined benefit pension plans. This action resulted in a pre-tax settlement loss of $227.7 million for the three and nine months ended September 30, 2025.
Previous report
Revenue for the three months ended September 30, 2025 was $460.2 million compared with $497.0 million for the three months ended September 30, 2024, a decrease of 7.4% from the prior-year period. Foreign currency fluctuations had a 2 percentage-point positive impact on revenue in the current period compared with the prior-year period. The decrease was primarily driven by the timing of software license renewals.
Previous report
Revenue from international operations for the three months ended September 30, 2025 was $280.0 million compared with $286.7 million for the three months ended September 30, 2024, a decrease of 2.3%. Foreign currency had a 3 percentage-point positive impact on international revenue in the current period compared with the prior-year period. Revenue from U.S. operations for the three months ended September 30, 2025 was $180.2 million compared with $210.3 million for the three months ended September 30, 2024, a decrease of 14.3%.
Previous report
During the three months ended September 30, 2025, the company recognized net cost-reduction charges of $1.0 million related to workforce reductions, which were comprised of: (i) a charge of $1.6 million for severance costs and (ii) a credit of $0.6 million for changes in estimates.
Previous report
During the three months ended September 30, 2024, the company recognized net cost-reduction charges and other costs of $1.6 million. The net charges related to workforce reductions was $2.0 million and was comprised of: (i) a charge of $2.5 million for severance costs and (ii) a credit of $0.5 million for changes in estimates. The company recorded a net credit of $0.4 million comprised of a credit of $0.7 million for net foreign currency gains related to exiting foreign countries and a charge of $0.3 million for other expenses related to other cost-reduction efforts.
Previous report
For the three months ended September 30, 2025, the company reported an operating loss of $33.5 million compared with an operating profit of $7.5 million in the three months ended September 30, 2024. For the three months ended September 30, 2025 and 2024, operating (loss) profit included goodwill impairment charges of $55.0 million and $39.1 million, respectively, related to the DWS reportable segment (see Note 10 of the Notes to Consolidated Financial Statements for details on the goodwill impairment).
Previous report
The loss before income taxes for the three months ended September 30, 2025 was $292.9 million, compared with a loss of $8.6 million for the three months ended September 30, 2024. The loss before income taxes for the three months ended September 30, 2025 included a U.S. pension plan settlement loss of $227.7 million. Additionally, for the three months ended September 30, 2025 and 2024, loss before income taxes included goodwill impairment charges of $55.0 million and $39.1 million, respectively, related to the DWS reportable segment.
Previous report
It is at least reasonably possible that the company’s judgment about the need for, and level of, existing valuation allowances could change in the near term based on changes in objective evidence such as further sustained income or loss in certain jurisdictions, as well as the other factors discussed above, primarily in certain jurisdictions outside of the United States. As such, the company will continue to monitor income levels and mix among jurisdictions, potential changes to the company’s operating and tax model, and other legislative or global developments in its determination. It is reasonably possible that such changes could result in a material impact to the company’s valuation allowance within the next 12 months. Any increase or decrease in the valuation allowance would result in additional or lower income tax expense in that period and could have a significant impact on that period’s earnings.
Previous report
The net loss attributable to Unisys Corporation for the three months ended September 30, 2025 was $308.9 million, or $4.33 per diluted share, compared with a net loss of $61.9 million, or $0.89 per diluted share, for the three months ended September 30, 2024. The net loss for the three months ended September 30, 2025 included a U.S. pension plan settlement loss net of tax of $227.7 million and a goodwill impairment charge of $55.0 million related to the DWS reportable segment. For the three months ended September 30, 2024, net loss attributable to Unisys Corporation included a goodwill impairment charge of $39.1 million related to the DWS reportable segment and a tax provision of $29.0 million established for certain foreign subsidiaries for which the company is no longer asserting indefinite reinvestment of earnings.
Previous report
Nine months ended September 30, 2025 compared with the nine months ended September 30, 2024
Previous report
Revenue for the nine months ended September 30, 2025 was $1,375.6 million compared with $1,463.0 million for the nine months ended September 30, 2024, a decrease of 6.0% from the prior-year period. The decrease was primarily due to the timing of software license renewals and lower volume with clients. Foreign currency fluctuations had a negligible impact on revenue in the current period compared with the prior-year period.
Previous report
For the nine months ended September 30, 2025, L&S revenue was $241.7 million compared to $279.8 million for the nine months ended September 30, 2024, a decrease of 13.6%. The decrease was primarily driven by the timing of software license renewals.
Previous report
Ex-L&S revenue for the nine months ended September 30, 2025 was $1,133.9 million compared with $1,183.2 million for the nine months ended September 30, 2024, a decrease of 4.2%. The decrease was primarily driven by lower volume with clients in the DWS and CA&I segments.
Previous report
Revenue from international operations for the nine months ended September 30, 2025 was $814.0 million, compared with $836.0 million for the nine months ended September 30, 2024, a decrease of 2.6% from the prior-year period. Foreign currency had a 1 percentage-point negative impact on international revenue in the nine months ended September 30, 2025 compared with the nine months ended September 30, 2024. Revenue from U.S. operations for the nine months ended September 30, 2025 was $561.6 million, compared with $627.0 million for the three months ended September 30, 2024, a decrease of 10.4% from the prior-year period.
Previous report
During the nine months ended September 30, 2025, the company recognized net cost-reduction charges and other costs of $3.0 million. The net charges related to workforce reductions were $2.2 million and were comprised of: (i) a charge of $6.8 million for severance costs and (ii) a credit of $4.6 million for changes in estimates. The company recorded net charges of $0.8 million comprised of a charge of $3.2 million for an asset write-off, a charge of $0.3 million for other expenses related to cost-reduction efforts and a net credit of $2.7 million for net foreign currency gains related to exiting foreign countries.
Previous report
During the nine months ended September 30, 2024, the company recognized net cost-reduction charges and other costs of $8.5 million. The net charges related to workforce reductions were $7.9 million and were comprised of: (i) a charge of $12.2 million for severance costs and (ii) a credit of $4.3 million for changes in estimates. The company recorded a net charge of $0.6 million comprised of a charge of $1.0 million for net foreign currency losses related to exiting foreign countries and a net credit of $0.4 million for changes in estimates related to other cost-reduction efforts.
Previous report
Gross profit and gross profit margin were $354.7 million and 25.8% in the nine months ended September 30, 2025, respectively, compared with $410.9 million and 28.1% in the nine months ended September 30, 2024, respectively. The decrease was primarily driven by the decrease in revenue previously discussed.
Previous report
Ex-L&S gross profit and gross profit margin for the nine months ended September 30, 2025 were $204.1 million and 18.0%, respectively, compared with $215.7 million and 18.2% for the nine months ended September 30, 2024, respectively.
Previous report
Selling, general and administrative expense in the nine months ended September 30, 2025 was $281.3 million (20.4% of revenue) compared with $305.5 million (20.9% of revenue) in the prior-year period. The decrease was primarily driven by lower expense due to realized benefits from the company’s previous cost reduction actions and reduced professional services expense.
Previous report
Research and development expense for the nine months ended September 30, 2025 and 2024 was $16.5 million and $17.5 million, respectively.
Previous report
For the nine months ended September 30, 2025, the company reported an operating profit of $1.9 million compared with an operating profit of $48.8 million for the prior-year period. For the nine months ended September 30, 2025 and 2024, operating profit included goodwill impairment charges of $55.0 million and $39.1 million, respectively, related to the DWS reportable segment.
Previous report
Other (expense), net was expense of $280.2 million for the nine months ended September 30, 2025 compared with expense of $159.7 million for the nine months ended September 30, 2024. For the nine months ended September 30, 2025 and 2024, other (expense), net included U.S. pension plan settlement losses of $227.7 million and $132.3 million, respectively. Additionally, for the nine months ended September 30, 2025, other (expense), net included a loss on debt extinguishment of $7.0 million related to the repurchase, satisfaction and discharge of the 6.875% Senior Secured Notes due 2027 (the 2027 Notes). See Note 5 of the Notes to Consolidated Financial Statements for details of other (expense), net.
Previous report
The loss before income taxes for the nine months ended September 30, 2025 was $312.9 million compared with a loss of $134.6 million for the nine months ended September 30, 2024. For the nine months ended September 30, 2025 and 2024, the loss before income taxes included U.S. pension plan settlements losses of $227.7 million and $132.3 million, respectively, and goodwill impairment charges of $55.0 million and $39.1 million, respectively. Additionally, the loss before income taxes for the nine months ended September 30, 2025 included a loss on debt extinguishment of $7.0 million related to the repurchase, satisfaction and discharge of the 2027 Notes.
Previous report
Net loss attributable to Unisys Corporation for the nine months ended September 30, 2025 was $358.5 million, or $5.06 per diluted share, compared with a net loss of $223.4 million, or $3.23 per diluted share, for the nine months ended September 30, 2024. For the nine months ended September 30, 2025, the net loss attributable to Unisys Corporation included a U.S. pension plan settlement loss net of tax of $227.7 million, a goodwill impairment charge of $55.0 million and a loss on debt extinguishment of $7.0 million related to the repurchase, satisfaction and discharge of the 2027 Notes. For the nine months ended September 30, 2024, the net loss attributable to Unisys Corporation included a U.S. pension plan settlement loss net of tax of $132.3 million, a goodwill impairment charge of $39.1 million and tax provision of $29.0 million established for certain foreign subsidiaries for which the company is no longer asserting indefinite reinvestment of earnings.
Previous report
DWS revenue was $125.3 million for the three months ended September 30, 2025 and $130.9 million for the three months ended September 30, 2024, a decrease of 4.3%. The decrease in revenue was primarily driven by lower volume with clients, partially offset by revenue from new business with both new and existing clients. Foreign currency fluctuations had a 2 percentage-point positive impact on DWS revenue in the current period compared with the prior-year period. Gross profit percent was 16.2% in the current period compared with 16.3% in the prior-year period.
Previous report
Nine months ended September 30, 2025 compared with the nine months ended September 30, 2024
Previous report
DWS revenue was $382.0 million for the nine months ended September 30, 2025 and $395.3 million for the nine months ended September 30, 2024, a decrease of 3.4%. The decrease in revenue was primarily driven by lower volume with clients, partially offset by revenue from new business with new and existing clients, as compared to the prior-year period. Foreign currency fluctuations had a negligible impact on DWS revenue in the current period compared with the prior-year period. Gross profit percent was 15.9% in the current period compared with 15.6% in the prior-year period.
Previous report
CA&I revenue was $542.2 million for the nine-months ended September 30, 2025 and $571.7 million for the nine months ended September 30, 2024, a decrease of 5.2%. The decrease in revenue was primarily driven by lower volume with clients in the public sector. Foreign currency fluctuations had a negligible impact on CA&I revenue in the current period compared with the prior-year period. Gross profit percent was 20.0% in the current period compared with 19.9% in the prior-year period.
Previous report
ECS revenue was $392.1 million for the nine months ended September 30, 2025 and $424.0 million for the nine months ended September 30, 2024, a decrease of 7.5%. Foreign currency fluctuations had a 1 percentage-point negative impact on ECS revenue in the current period compared with the prior-year period. Gross profit percent was 49.3% in the current period compared with 55.5% in the prior-year period. The decrease in revenue and gross profit was primarily driven by the timing of software license renewals.
Previous report
For the three months and nine ended September 30, 2025, total TCV was $415 million and $1.3 billion, respectively, an increase of 15% and 8%, respectively, compared to the prior-year periods. The increase in both periods was primarily driven by the timing of renewals.
Previous report
During the nine months ended September 30, 2025, cash used for operations was $244.9 million compared to cash provided by operations of $58.5 million during the nine months ended September 30, 2024, primarily driven by cash contributions to the company's defined benefit pension plans, including a discretionary contribution of $250 million to its U.S. defined benefit pension plans.
Previous report
Cash provided by financing activities during the nine months ended September 30, 2025 was $188.1 million compared to cash used for financing activities of $13.7 million during the nine months ended September 30, 2024, primarily driven by the net proceeds received from the issuance of the 2031 Notes, partially offset by the repurchase, satisfaction and discharge of the 2027 Notes, both of which are described below.
Previous report
At September 30, 2025, total debt was $734.9 million compared to $493.2 million at December 31, 2024. The increase in total debt as of September 30, 2025, is primarily due to the issuance of the 2031 Notes, partially offset by the repurchase, satisfaction and discharge of the 2027 Notes.
Previous report
Senior Secured Notes due 2031
Previous report
In June 2025, the company completed a private placement offering of $700.0 million aggregate principal amount of the 2031 Notes. The 2031 Notes will pay interest semiannually on January 15 and July 15, commencing on January 15, 2026. The 2031 Notes are fully and unconditionally guaranteed on a senior secured basis by Unisys Holding Corporation, Unisys AP Investment Company I and Unisys NPL, Inc., each a Delaware corporation that is directly or indirectly wholly owned by the company (the Subsidiary Guarantors). The net proceeds from the issuance of the 2031 Notes, together with cash on hand, were used to finance the company’s tender offer to purchase for cash any and all of its outstanding 2027 Notes and solicitation of consents from holders of the 2027 Notes to amendments to the indenture governing the 2027 Notes (the Tender Offer) and the payment of related premiums, fees and expenses. The company also used the net proceeds from the issuance of the 2031 Notes to redeem, on or about November 1, 2025, any 2027 Notes that remained outstanding following the Tender Offer, as explained under the Senior Secured Notes due 2027 section below, and to fund, together with cash on hand a portion of the company’s U.S. defined benefit pension plans deficit and postretirement liabilities.
Previous report
The 2031 Notes and the guarantees by the Subsidiary Guarantors rank equally in right of payment with all of the existing and future senior debt of the company and the Subsidiary Guarantors and senior in right of payment to any future subordinated debt of the company and the Subsidiary Guarantors. The 2031 Notes and the guarantees are structurally subordinated to all existing and future liabilities (including preferred stock, trade payables and pension liabilities) of the subsidiaries of the company that are not Subsidiary Guarantors. The 2031 Notes and the guarantees are secured by liens on substantially all assets of the company and the Subsidiary Guarantors, other than certain excluded assets (the collateral). The liens securing the 2031 Notes on certain Asset Based Lending (ABL) collateral are subordinated to the liens on ABL collateral in favor of the ABL secured parties, subject to certain limitations and permitted liens.
Previous report
The company may, at its option, redeem some or all of the 2031 Notes at any time on or after January 15, 2028, at a redemption price determined in accordance with the redemption schedule, plus accrued and unpaid interest, if any.
Previous report
Prior to January 15, 2028, the company may, at its option, redeem some or all of the 2031 Notes at any time, at a price equal to 100% of the principal amount of the 2031 Notes redeemed plus a “make-whole” premium, plus accrued and unpaid interest, if any. The company may also redeem, at its option, up to 40% of the 2031 Notes at any time prior to January 15, 2028, using the proceeds of certain equity offerings at a redemption price of 110.625% of the principal amount thereof, plus accrued and unpaid interest, if any. On or after January 15, 2028, the company may, on any one or more occasions, redeem all or part of the 2031 Notes at specified redemption premiums, declining to par for any redemptions on or after January 15, 2030. Prior to January 15, 2028, the company may redeem up to 10% of the aggregate principal amount of the 2031 Notes during each calendar year, commencing in 2025, at a purchase price equal to 103% of the principal amount of the 2031 Notes, plus accrued and unpaid interest, if any.
Showing the first 40 of 54 passages. Open the source sections for the rest.
Reworded paragraphs (20)
Previous wording
License and Support (L&S) represents software license and related support services, primarily ClearPath Forward®, within the company's Enterprise Computing Solutions (ECS) segment. Software license renewals tend to be significant and impactful to revenue and gross profit based on timing, which can fluctuate considerably from quarter to quarter. For the three months ended September 30, 2025, L&S revenue was $83.0 million compared to $104.5 million for the three months ended September 30, 2024, a decrease of 20.6%. The decrease was primarily driven by the timing of software license renewals.
Current wording
License and Support (L&S) represents software license and related support services, primarily ClearPath® Forward, within the company's Enterprise Computing Solutions (ECS) segment. Software license renewals tend to be significant and impactful to revenue and gross profit based on timing, which can fluctuate considerably from quarter to quarter. For the three months ended March 31, 2026, L&S revenue was $65.5 million compared to $71.1 million for the three months ended March 31, 2025, a decrease of 7.9%. The decrease was primarily driven by the timing of software license renewals, partially offset by foreign currency fluctuations, which had a 5 percentage-point positive impact on revenue in the current period compared with the prior-year period.
Previous wording
Excluding License and Support (Ex-L&S) measures exclude revenue, gross profit and gross profit margin in connection with software license and related support services within the ECS segment. Ex-L&S revenue for the three months ended September 30, 2025 was $377.2 million compared with $392.5 million for the three months ended September 30, 2024, a decrease of 3.9%. The decrease was primarily driven by lower volume with clients in the DWS and Cloud, Applications & Infrastructure Solutions (CA&I) reportable segments.
Current wording
Excluding License and Support (Ex-L&S) measures exclude revenue, gross profit and gross profit margin in connection with software license and related support services within the ECS segment. Ex-L&S revenue for the three months ended March 31, 2026 was $372.1 million compared with $361.0 million for the three months ended March 31, 2025, an increase of 3.1%. Foreign currency fluctuations had a 6 percentage-point positive impact on revenue in the current period compared with the prior-year period, partially offset by lower volumes in Digital Workplace Solutions (DWS) and Cloud, Applications & Infrastructure Solutions (CA&I) reportable segments.
Previous wording
The charges (credits) were recorded in the following statement of income (loss) classifications:
Current wording
The charges (credits) related to cost reduction actions were recorded in the following statement of income (loss) classifications:
Previous wording
Gross profit and gross profit margin were $117.2 million and 25.5% in the three months ended September 30, 2025, respectively, compared with $145.0 million and 29.2% for the three months ended September 30, 2024, respectively. The decrease was primarily driven by the timing of software license renewals.
Current wording
Gross profit and gross profit margin were $112.5 million and 25.7% in the three months ended March 31, 2026, respectively, compared with $107.5 million and 24.9% for the three months ended March 31, 2025, respectively.
Previous wording
Ex-L&S gross profit and gross profit margin for the three months ended September 30, 2025 were $70.2 million and 18.6%, respectively, compared with $70.3 million and 17.9% for the three months ended September 30, 2024, respectively.
Current wording
Ex-L&S gross profit and gross profit margin for the three months ended March 31, 2026 were $72.7 million and 19.5%, respectively, compared with $64.2 million and 17.8% for the three months ended March 31, 2025, respectively. The increases in Ex-L&S gross profit and gross profit margin were primarily driven by delivery improvement and labor cost savings initiatives in the CA&I segment.
Previous wording
Selling, general and administrative expense in the three months ended September 30, 2025 was $90.9 million (19.8% of revenue) compared with $91.9 million (18.5% of revenue) for the three months ended September 30, 2024.
Current wording
Selling, general and administrative expense in the three months ended March 31, 2026 was $91.5 million (20.9% of revenue) compared with $96.8 million (22.4% of revenue) for the three months ended March 31, 2025. The decrease was primarily attributable to a reduction in compensation expense of $6.2 million, partially offset by higher cost reduction charges of $1.7 million.
Previous wording
Research and development expense for the three months ended September 30, 2025 and 2024 was $4.8 million and $6.5 million, respectively.
Current wording
Research and development expense for the three months ended March 31, 2026 and 2025 was $4.8 million and $5.6 million, respectively.
Previous wording
Interest expense for the three months ended September 30, 2025 and 2024 was $18.2 million and $7.9 million, respectively. The increase was primarily due to increased long-term debt balance and higher interest rate following the issuance of $700.0 million aggregate principal amount of 10.625% Senior Secured Notes due 2031 (the 2031 Notes) in June 2025.
Current wording
Interest expense for the three months ended March 31, 2026 and 2025 was $18.5 million and $8.2 million, respectively. The increase was primarily due to increased long-term debt balance and higher interest rate following the issuance of $700.0 million aggregate principal amount of 10.625% Senior Secured Notes due 2031 (the 2031 Notes) in June 2025.
Previous wording
Other (expense), net was expense of $241.2 million for the three months ended September 30, 2025 compared with expense of $8.2 million for the three months ended September 30, 2024. Other (expense), net for the three months ended September 30, 2025 included a U.S. pension plan settlement loss of $227.7 million. See Note 5 of the Notes to Consolidated Financial Statements for details of other (expense), net.
Current wording
Other (expense), net was expense of $20.8 million for the three months ended March 31, 2026 compared with expense of $16.9 million for the three months ended March 31, 2025. See Note 6 of the Notes to Consolidated Financial Statements for details of other (expense), net.
Previous wording
The provision for income taxes was $16.3 million for the three months ended September 30, 2025 compared with a provision of $53.3 million for the three months ended September 30, 2024. The change in the tax provision was primarily driven by the geographic distribution of income and the prior year provision included a provision of $29.0 million established for certain foreign subsidiaries for which the company is no longer asserting indefinite reinvestment of earnings. The effective tax rate for the three months ended September 30, 2025 and 2024 was (5.6)% and (619.8)%, respectively, primarily driven by U.S. operating losses with no tax benefit as the deferred tax assets are subject to a full valuation allowance, non-creditable withholding taxes in the U.S., jurisdictions with no valuation allowance that are subject to tax and the prior year change in the company’s indefinite reinvestment assertion of the earnings in certain foreign subsidiaries.
Current wording
The provision for income taxes was $13.7 million for the three months ended March 31, 2026 compared with a provision of $10.6 million for the three months ended March 31, 2025. The change in the tax provision was primarily driven by the geographic distribution of income. The effective tax rate for the three months ended March 31, 2026 and 2025 was (59.3)% and (53.0)%, respectively, primarily driven by U.S. operating losses with no tax benefit as the deferred tax assets are subject to a full valuation allowance, non-creditable withholding taxes in the U.S., and jurisdictions with no valuation allowance that are subject to tax.
Previous wording
CA&I revenue was $180.4 million for the three months ended September 30, 2025 and $189.4 million for the three months ended September 30, 2024, a decrease of 4.8%. The decrease in revenue was primarily driven by lower volume with clients in the public sector. Foreign currency fluctuations had a 2 percentage-point positive impact on CA&I revenue in the current period compared with the prior-year period. Gross profit percent was 19.6% in the current period compared with 19.5% in the prior-year period.
Current wording
CA&I revenue was $182.0 million for the three months ended March 31, 2026 and $176.6 million for the three months ended March 31, 2025, an increase of 3.1%. Foreign currency fluctuations had a 5 percentage-point positive impact on CA&I revenue in the current period compared with the prior-year period. This positive impact in CA&I revenue was partially offset by reduced volume due to client attrition. Gross profit percent was 21.8% in the current period compared with 19.5% in the prior-year period. The increase in gross profit percent was primarily driven by delivery improvement and labor cost savings initiatives.
Previous wording
ECS revenue was $133.2 million for the three months ended September 30, 2025 and $154.0 million for the three months ended September 30, 2024, a decrease of 13.5%. Foreign currency fluctuations had a negligible impact on ECS revenue in the current period compared with the prior-year period. Gross profit percent was 46.2% in the current period compared with 58.2% in the prior-year period. The decrease in revenue and gross profit percent was primarily driven by the timing of software license renewals.
Current wording
ECS revenue was $115.2 million for the three months ended March 31, 2026 and $118.7 million for the three months ended March 31, 2025, a decrease of 2.9%. Foreign currency fluctuations had a 5 percentage-point positive impact on ECS revenue in the current period compared with the prior-year period. Gross profit percent was 46.9% in the current period compared with 47.7% in the prior-year period. The decreases in revenue and gross profit percent were primarily driven by the timing of software license renewals.
Previous wording
Backlog was $2.83 billion as of September 30, 2025 compared to $2.80 billion as of September 30, 2024.
Current wording
Backlog was $2.96 billion as of March 31, 2026 compared to $2.89 billion as of March 31, 2025.
Previous wording
Cash and cash equivalents at September 30, 2025 were $321.9 million compared to $376.5 million at December 31, 2024.
Current wording
Cash and cash equivalents at March 31, 2026 were $380.2 million compared to $413.9 million at December 31, 2025. The decrease in cash and cash equivalents is primarily due to the timing of cash interest payment associated with the 2031 Notes.
Previous wording
As of September 30, 2025, $221.7 million of cash and cash equivalents were held by the company’s foreign subsidiaries and branches operating outside of the U.S. The company may not be able to readily transfer approximately one-quarter of these funds out of the country in which they are located as a result of local restrictions, contractual or other legal arrangements or commercial considerations. At September 30, 2025, the deferred tax liability on undistributed earnings was $30.6 million. Transfers of international cash and cash equivalents to the U.S. will require the company to pay withholding or other taxes on a portion of the amount transferred. At September 30, 2025, the company maintained cash balances in various operating accounts in excess of federally insured limits. The company monitors this risk by evaluating the creditworthiness of the financial institutions.
Current wording
As of March 31, 2026, $266.7 million of cash and cash equivalents were held by the company’s foreign subsidiaries and branches operating outside of the U.S. The company may not be able to readily transfer approximately one-quarter of these funds out of the country in which they are located as a result of local restrictions, contractual or other legal arrangements or commercial considerations. At March 31, 2026, the deferred tax liability on undistributed earnings was $31.3 million. Transfers of international cash and cash equivalents to the U.S. will require the company to pay withholding or other taxes on a portion of the amount transferred. At March 31, 2026, the company maintained cash balances in various operating accounts in excess of federally insured limits. The company monitors this risk by evaluating the creditworthiness of the financial institutions.
Previous wording
Cash used for investing activities during the nine months ended September 30, 2025 was $21.6 million compared to cash used for investing activities of $54.0 million during the nine months ended September 30, 2024. Net proceeds of foreign exchange forward contracts were $37.0 million for the nine months ended September 30, 2025 compared with net proceeds of $5.2 million in the prior-year period. Proceeds from foreign exchange forward contracts and purchases of foreign exchange forward contracts represent derivative financial instruments used to reduce the company’s currency exposure to market risks from changes in foreign currency exchange rates. During the third quarter of 2025, the company ceased its use of foreign currency forward contracts. In the current period, the investment in marketable software was $36.1 million compared with $36.7 million in the prior-year period and capital additions of properties and other assets were $22.4 million compared with $22.2 million in the prior-year period.
Current wording
During the three months ended March 31, 2026, cash used for investing activities was $21.2 million compared with cash used for investing activities of $20.3 million during the three months ended March 31, 2025. In the current period, the investment in marketable software was $10.4 million compared with $11.2 million in the prior-year period and capital additions of properties and other assets were $10.7 million compared with $8.9 million in the prior-year period.
Previous wording
Concurrently with the issuance of the 2031 Notes, the company entered into an amendment of the company’s Amended and Restated ABL Credit Facility that extended the maturity date from October 2027 to June 2030 and modified certain other terms and covenants. The secured revolving credit facility continues to provide for revolving loans and letters of credit up to an aggregate amount of $125.0 million (with a limit on letters of credit of $40.0 million), with an uncommitted accordion feature provision allowing for the aggregate amount available to be increased up to $155.0 million upon the satisfaction of certain specified conditions.
Current wording
The company has a secured revolving credit facility (the Amended and Restated ABL Credit Facility), which matures in June 2030. The Amended and Restated ABL Credit Facility provides for revolving loans and letters of credit up to an aggregate amount of $125.0 million (with a limit on letters of credit of $40.0 million), with an uncommitted accordion feature provision allowing for the aggregate amount available to be increased up to $155.0 million upon the satisfaction of certain specified conditions.
Previous wording
Availability under the credit facility is subject to a borrowing base calculated by reference to the company’s receivables. At September 30, 2025, the company had no borrowings and $9.5 million of letters of credit outstanding. Availability under the credit facility was $90.6 million, net of letters of credit issued. Any borrowings under the facility will be subject to variable interest rates.
Current wording
Availability under the Amended and Restated ABL Credit Facility is subject to a borrowing base calculated by reference to the company’s receivables. At March 31, 2026, the company had no borrowings and $13.5 million of letters of credit outstanding. Availability under the Amended and Restated ABL Credit Facility was $79.1 million, net of letters of credit issued. Any borrowings under the Amended and Restated ABL Credit Facility will be subject to variable interest rates.
Previous wording
For the remainder of 2025, the company expects to make cash contributions of approximately $24 million primarily to its U.S. defined benefit pension plans. This will result in total expected cash contributions for 2025 of approximately $342 million to the company’s global defined benefit pension plans, including approximately $309 million to the company’s U.S. defined benefit pension plans and approximately $33 million primarily to the company’s international defined benefit pension plans.
Current wording
Based on current legislation, global regulations, recent interest rates and expected returns, for the remainder of 2026, the company expects to make cash contributions of approximately $69 million primarily to its U.S. defined benefit pension plans. This will result in total expected cash contributions for 2026 of approximately $97 million to the company’s global defined benefit pension plans, including approximately $47 million to the company’s U.S. qualified defined benefit pension plans and approximately $50 million primarily to the company’s international defined benefit pension plans. Additionally, the company estimates future total cash contributions to its global defined benefit pension plans of approximately $105 million in 2027.
Previous wording
For the nine months ended September 30, 2024, the company made cash contributions of $17.6 million primarily to its international defined benefit pension plans. In 2024, the company made cash contributions of $21.9 million primarily to its international defined benefit pension plans.
Current wording
For the three months ended March 31, 2025, the company made cash contributions of $9.2 million primarily to its international defined benefit pension plans.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the three months ended March 31, 2026, the company made cash contributions totaling $28.2 million, primarily to its international defined benefit pension plans.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
The charges (credits) were recorded in the following statement of income (loss) classifications:
Previous report — wording carried elsewhere
Interest expense for the nine months ended September 30, 2025 was $34.6 million compared with $23.7 million for the nine months ended September 30, 2024. The increase was primarily due to increased long-term debt balance and higher interest rate following the issuance of $700.0 million aggregate principal amount of the 2031 Notes in June 2025.
Previous report — wording carried elsewhere
The provision for income taxes was $46.9 million for the nine months ended September 30, 2025 compared with a provision of $89.1 million for the nine months ended September 30, 2024. The change in the tax provision was driven by the geographic distribution of income and the prior year provision included a provision of $29.0 million established for certain foreign subsidiaries for which the company is no longer asserting indefinite reinvestment of earnings. The effective tax rate for the nine months ended September 30, 2025 and 2024 was (15.0)% and (66.2)%, respectively, primarily driven by U.S. operating losses with no tax benefit as the deferred tax assets are subject to a full valuation allowance, non-creditable withholding taxes in the U.S., jurisdictions with no valuation allowance that are subject to tax and the prior year change in the company’s indefinite reinvestment assertion of the earnings in certain foreign subsidiaries.
Previous report — wording carried elsewhere
A summary of the company’s operations by segment is presented below:
Previous report — wording carried elsewhere
Based on current legislation, global regulations, recent interest rates and expected returns, the company estimates future total cash contributions to its global defined benefit pension plans of approximately $78 million in 2026.